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Explaining the False Claims Act and How Insurers Can Take Advantage of  it to Deter Fraud   

https://zalma.com/blog

The False Claims Act, also known as the \\u201cLincoln Law,\\u201d dates back to the  Civil War. President Lincoln signed the act into law in 1863 because  war profiteers were selling the Union Army shoddy supplies at inflated  prices. The original law included qui tam [\\u201cQui tam\\u201d is an abbreviation  of the Latin phrase \\u201cqui tam pro domino rege quam pro si ipso in hac  parte sequitur\\u201d meaning \\u201cWho sues on behalf of the King as well as for  himself.\\u201d  There are a number of pronunciations of the Latin  abbreviation qui tam.  The simplest is key tam (rhymes with \\u201cham.\\u201d)  Black\\u2019s Law Dictionary suggests kweye (rhymes with \\u201ceye\\u201d) tam.provisions  that allowed a private person (plaintiff) to sue those who defrauded  the federal government. If the suit was successful the plaintiff would  receive 50% of any recovery from the defendant.]  

The qui tam provisions were weakened greatly as a result of  congressional amendments in 1943, and qui tam legislation became  virtually nonexistent. However, in 1986, Sen. Charles Grassley, R\\u2013Iowa,  and Rep. Howard Berman, D Calif., joined forces to amend the law and  strengthen the incentives for citizens to uncover and fight fraud as qui  tam relators. (Relators are the private plaintiffs under the False  Claims Act).  The 1986 False Claims Act amendments received widespread bi-partisan  support, and were signed into law by President Reagan. Since the  revitalization, the qui tam provisions have increasingly been used.  If the government does intervene, it assumes primary responsibility for  the prosecution of the case, and is not bound by any act of the relator.  31 U.S.C. \\xa7 3730(c)(1). 

The relator remains as a party to the action,  however, subject to certain limitations set forth in the Act. Id.  Specifically, the government may dismiss the action notwithstanding the  objections of the relator, provided, however, that \\u201cthe person has been  notified by the Government of the filing of the motion and the court has  provided the person with an opportunity for a hearing on the motion.\\u201d  [31 U.S.C. \\xa7 3730(c)(2)(A).; U.S. ex rel. Atkins v. EEOC, 1993 U.S.  Dist. LEXIS 21268.]  Since the qui tam provisions were added to the Act in 1986, the US  Department of Justice calculates that the government has recovered more  than $1.09 billion in qui tam cases, with whistleblowers receiving  nearly 18% (or $184 million) of the government\\u2019s recovery. When  considering a qui tam action be certain, however, that the authorizing  statute authorizes the action.  ZALMA OPINION  Insurance fraud is ever growing with estimates from $80 billion to $300  billion a year. The Qui Tam suit is a method to deter insurance fraud by  hitting the fraud perpetrator in the pocket book and deter the crime  when the state or federal government refuses to file criminal actions.     

\\xa9 2021 \\u2013 Barry Zalma