The False Claims Act Rewards the First Filer

The False Claims Act allows qui tam plaintiffs to recover a percentage of damages if they can show government related fraud or false statements to receive or retain government funds. The Act only rewards, at most, one plaintiff. If the government found out about the fraud from a source other than the first whistleblower to file and filed an action, you probably won’t be able to recover anything if you “blow the whistle.”

If two plaintiffs file a claim, the government only is required to reward one whistleblower, the “first to file”. Sometimes the “first to file” whistleblower and subsequent whistleblowers can reach an agreement to share or divide the award. This occurs when the subsequent filers, in the opinion of the “first to file” whistleblower and his/her attorney believes that it is in the interest of the claim to work together with those subsequent filers.  Sometimes the subsequent filers can move on legal grounds to disqualify or dismiss the “first to file” claim, thus making themselves the “first to file”

For these reasons and others, many times agreements are reached to share the award amongst two or more whistleblowers. However only the “first to file”, is protected by the law and is entitled to recover an award if the government collects money from the information presented by the whistleblower.  The reason for the “first to file” stipulation is simple: it encourages speedy action. The government wants to hear about fraud issues right away. Delays not only waste time but also cost the government more money when fraud lingers longer than it needs to exist.

The effect of the first filing rule is that there is a race to the courthouse. It doesn’t matter if you have more knowledge about the fraud or more documents. If another person files first and meets all the standards, that person will be the only one, the only relator, who can proceed as a matter of right with the qui tam claim. If you believe you have a fraud claim to file, speak to a knowledgeable qui tam attorney who can advise you on how to file quickly and correctly.

How are competing claims reviewed?

  • Who makes the call?

When there are two or more competing claims, the government may make an initial decision, but is also likely to ask the filers to get together and reach an agreement. The subsequent whistleblower(s) have the right to ask the court that has jurisdiction over the matter to make the final call.  Also the wrongdoer Defendant who submitted the false claim can move to dismiss subsequent filers unless an agreement is reached with the “first to file”.

  • Are the claims similar?

If the elements of the fraud are different and the essential facts of the claim vary, the first filing rule shouldn’t be an issue because the claims are not the same.

Is the first claim defective?

Sometimes the first claim is defective or filed incorrectly. Some courts will let the second filer proceed with the action.

Practical Issues about Filing Qui Tam Claims

There is simply no way to know what the government knows before a claim is filed. Only the government will have all the claims and all the documentation. Prior claims are sealed and not recorded anywhere for the public to inspect before they are filed.

The larger the fraud, in terms of people involved, the more likely it is someone else will know about the fraud and file a claim.  Begelman & Orlow, P. C. handle qui tam cases nationally. If you or a loved one need a qui tam attorney contact our experienced attorneys or call 866-627-7052 for a free initial consultation.

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