Sunday, November 22, 2009

Obtaining A Lawsuit Loan In The Whistleblower (Qui Tam) Action

By Dr. Tom Rhudy

Qui tam, according to the Qui Tam Information Center, is a provision in the Federal Civil False Claims Act (1863) that permits private citizens to file a lawsuit on behalf of United States government. Such claims allege fraud in which government contractors and/others have either in gauged war from which received government funds. Furthermore, the act permits private citizens to share any amount recovered.

In Law, the term qui tam connotes whistleblower protection laws. Such protection is provided to individuals who notify the government of their suspicions that entities have engaged in fraud and/or abuse. The etymology of the term is a Latin expression, viz., "qui tam pro domino rege quam pro se ipse." The phrase actually means "he who sues the king as for himself."

In many instances, these claims arise when employees report fraud and/or abuse in which their employers have engaged. The False Claims Act (1863, revised'86), is the federal law out of which whistleblower protection emerged. The Act was intended to combat fraud during the Civil War, at a time during which suppliers often attempted to cheat the federal government. The government derives sufficient benefit from it these actions to justify sharing a percentage of either of monies recovered or damages identify in exposing such fraud.

These suits are generally filed by private citizens, acting on behalf of the government's interest, in an attempt to prevent abuse. A settlement loan may be required to assist the individual bringing such an action with expenses incurred during the process of the litigation.

Individuals who bring such suits are also called relators. When such cases are filed, the relator need not have been personally harmed by the defendant's conduct. Additionally, the False Claims Act allows the relator to recover 15-30% of any settlement amount. Furthermore, the statute provides for payment of attorney's fees. (Attorneys are required to bring such lawsuits, due to the fact that these cases are brought on behalf of the government and may only be prosecuted by an attorney.)

Although this is a very successful tool in combating fraud and abuse, arming private citizens with knowledge of fraud and/or abuse with a weapon to pursue such an action, individuals who bring such actions are often subjected to persecution by the entity against which such action is brought. Individuals who are willing to step forward and bring such actions should be commended. These deeds are acts of courage and, assuming such actions are well-intended, actions in which every good citizen should get involved.

Unlike customary claims, these are actions that the government may elect to pursue against the entities identified. If this is a situation, the relator who initially brings the action to the government's attention would undoubtedly serve as a great resource for the government and the prosecution, but would not dare the legal expenses incurred with bringing such an action. The lawsuit loan may not be appropriate in such cases.

However, if the government elects not to prosecute the case, individual bringing the situation to the government's attention may still be able to pursue a claim against the abusers, if that is the case, a lawsuit loan is often required to assist the individual in handling the legal expenses incurred.

One should also bear in mind that many expenses arise when such claims are filed. Although it is true that the whistleblower does have protection under the law from wrongful termination etc., employers often ignore this requirement. In such instances, the relators resources may quickly diminish.

The law was enacted to effectively identify and prosecute government fraud and abuse. However, it was also enacted to address issues related to fraudulent activity in which government-related entities engaged. To determine whether a lawsuit loan would be required in such instances, it would be necessary to thoroughly investigate the issues involved. One should bear in mind that while awaiting the government's decision and action, the individual who filed such an action has expenses that continue to mount, in many cases following the loss of employment pending the government's determination.

Under the Act, whistle-blowers also receive protection from wrongful termination. Additionally, the Act allows for reinstatement with seniority, double back pay, interest on back pay, compensation for discriminatory treatment, and reasonable legal expenses. Once again, it is the delay between the date on which the wrongful termination occurred and the date on which reinstatement is achieved that creates a tremendous financial burden on the claimant. It is during this interval that a lawsuit loan may be required.

In'78, Congress adopted legislation that barred reprisals against those who expose government fraud and abuse. Due to the widespread harassment and dismissal of employees who reported fraud and abuse against employers, Congress found that it had to strengthen its position to protect whistleblowers in'89. Subsequently, many states have adopted specific employment laws addressing the issue of discrimination against such employees.

As the legal expenses continue to roll in, you may find it necessary to obtain a lawsuit loan to provide necessary financial-relief. Ensure that you do your homework and find settlement funding designed to meet your needs. - 29904

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