A qui tam action is one in which a private party, currently known as a “relator,” brings an action “under a statute which establishes a penalty for the commission or omission of a certain act, and provides that [this penalty’ shall be recoverable in a civil action, part of the penalty to go…” to the relator. The term “qui tam” is short for the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” which translates to “he who as much for the king as for himself.” Such actions have a long history, originating in the Middle Ages in England at a time when there were no police to enforce laws. Instead, the king relied on private citizens to prosecute qui tam actions, and to encourage these actions successful private prosecutors were paid a bounty. One of the earliest examples of a qui tam provision is from 695 C.E., long before the Norman Conquest, a declaration stating, “If a freeman works during the forbidden time [Sunday], he shall forfeit his healsfang, and the man who informs against him shall have half the fine, and [the profits arising] from the labour.” The person bringing the suit was known as the informer, and over the centuries several acts of Parliament specifically allowed informer suits.
The qui tam concept was carried over to American colonies, many of which adopted certain English statutes which could be enforced by qui tam procedures. The newly independent United States of America continued the practice of enabling qui tam suits. Even before independence from England was secured, the First Continental Congress enacted several laws with qui tam provisions. In fact, what might well be the earliest example of a “whistleblower” statute was an enactment of the Continental Congress in 1778 allowing two wrongfully jailed men to bring a suit alleging that the American Navy’s commander-in-chief was corrupt. There were several early federal statutes where Congress provided for qui tam actions.
However, it was the False Claims Act that Congress enacted in 1863 that is the most significant historical basis for contemporary qui tam procedures. Congress enacted this statute during the Civil War to combat war profiteering fraud by businesses that were committing massive fraud in selling supplies to the Union Army. For example, the so-called “shoddy” millionaires supplied the Union Army with uniforms made of reprocessed “shoddy” wool that fell apart almost immediately, cardboard shoes for soldiers, sawdust in boxes supposed to contain muskets, and resold the same horses to the Army over and over. Aware that the best way to catch profiteers was to encourage those who observed fraud in action to report it, and also aware that the resources allowing the government to prosecute all the claims that might be reported were severely limited, this Act contained qui tam provisions allowing private citizens to sue, on the government’s behalf, companies and individuals that were defrauding the government. The original False Claims Act assessed wrongdoers double damages and a $2,000 civil fine for each false claim submitted. Those who filed lawsuits, now known as “relators” instead of “informers,” were entitled to receive fifty percent of the amount the government recovered as a result of their cases.
The Act remained in force and essentially unchanged for eighty years until, during World War II, Congress changed its qui tam provisions significantly, most notably by drastically cutting the relator’s award. The statute also prevented a whistleblower from bringing a qui tam claim on his or her own if a government employee already had received a tip about the fraud or if any information about the fraud was contained in any government file—even if that whistleblower was the source of that government knowledge.
The World War II amendments to the Act definitely reduced the incentives for bringing a qui tam action, but fortunately for whistleblowers Congress again revised the False Claims Act in 1986. The 1986 changes set the framework still in place. Successful qui tam relators are now able to receive from fifteen up to thirty percent of the government’s recovery and to have the defendant pay the relator’s attorneys’ fees. As those who defraud the government are liable under the Act for treble damages and penalties for each false claim, the relator’s percentage could be quite large. Moreover, Congress eliminated the ban on qui tam claims brought after the government possesses information about the fraud. There were further revisions to the Act in 2009 and 2010, but the 1986 revisions remain largely intact.
Though there are many different statutes that purport to provide protection to whistleblowers and to encourage them to report wrongdoing, there are only two currently in force with qui tam provisions—the False Claims Act, and a so-called “Indian Protection Act,” codified at 25 U.S.C. § 201, that provides for qui tam actions alleging fraudulent dealings with the First Nations. Of the two, though, only the False Claims Act is much used. Therefore, though statutes often pay great lip service to encouraging and protecting whistleblowers, this most obvious tool for encouraging them—allowing them to share in the recovery—is essentially restricted to the False Claims Act.
Sources:
BLACK’S LAW DICTIONARY 1251 (6TH ed. 1990)
3 W. BLACKSTONE, COMMENTARIES ON THE LAWS OF ENGLAND 160 (1st ed. 1768).
See Beck, “The False Claims Act and the English Eradication of Qui Tam Legislation,“78 NORTH CAROLINA LAW REVIEW 539, 567 (2000).
A list of some of these acts can be found, for example, in Blackstone’s Commentaries, 3 BLACKSTONE 161.
One such statute, “ The Miller's Toll,” established the price of flour in Connecticut, was originally enacted in 1672 and was still being enforced in 1828. State v. Bishop, 7 Conn. 181 (1828).
Kohn, Stephen Martin The Whistleblower’s Handbook 190 (2011).
For example, see the Act of March 1, 1790, ch. 2, § 3, 1 STAT. 101, 102 (1790) (failure return census reports); Act of July 20, 1790, ch. 29, § 4, 1 STAT. 131, 133 (1790) (harboring runaway seaman); Act of July 22, 1790, ch. 32, § 3, 1 STAT. 137, 138 (1790)(trading with indigenous tribes without a license); Act of March 2, 1791, ch.15, § 44, 1 STAT. 198, 209 (1791) (evading customs).
This statue is currently codified at 31 U.S.C. §§ 3729 – 3733.
The American Pageant, 14e. Wadsworth Cengage Learning. ISBN 978-0-547-22761-0.
Pub.L.213 (1943).