From our offices in the Detroit area, Akeel & Valentine, PLC serves clients nationwide.

From our offices in the Detroit area, Akeel & Valentine, PLC serves clients nationwide.

When the feds step in — qui tam settlements and dismissals

On Behalf of | May 2, 2023 | Qui Tam

There are many rules to avoid fraud on federal contracts. That said, the government is not in a position to obtain insight into the inner workings of every contractor it uses.

This is where qui tam actions come in. However, potential relators (those who bring and largely manage qui tam actions) should remember that the government could still exercise significant power in these cases.

Qui tam basics

This discussion pertains mostly to suits under the False Claims Act. Under this law, individuals have an opportunity to pursue cases on behalf of the federal government.

This type of action is known as a “qui tam” suit. The name comes from the first two words of a longer Latin phrase which roughly translates to “one who sues in this case for the king and for oneself”.

Federal power in settlements and dismissals

Despite the fact that someone else is suing for the king (or the government, in the case of the United States), that person does not have complete control over the case. One notable example is that the federal government has the option to step in and settle or dismiss the case in a reasonable way as it sees fit.

This has the potential to be extremely frustrating for someone who has taken personal and professional risks to expose fraud or other wrongdoing. That is to say nothing of the time and effort involved in qui tam cases. While the relator might have some recourse, the argument against the government’s motion to dismiss or settle would typically have to be strong.

It is often most efficient to understand and plan for all of the intricacies of these types of cases from the very beginning. That way, the relator might potentially avoid unhappy surprises.