Qui tam is a very interesting niche practice in the law. It has a long history in the United States and today is widely used by the Government.
The qui tam provisions started in the 1800’s during the United States Civil War. President Abraham Lincoln was getting his army requisitions ripped off and he was buying things that were not coming through once he bought them. For instance, the Union army would pay for rifles and instead of getting a thousand rifles they would get 100 rifles and they wouldn’t work.
So, they wanted to figure out a way of making sure that what they were purchasing was what in fact what they were trying to buy. They created a reward system called qui tam, which is short for a Latin phrase which means “he who sues on behalf of the king sues for himself as well.” In other words, if you as someone who knows that a deal is going through, and also knows that the person doing business with the government is going to rip off the government, and you turn them in, commonly called a whistleblower, that you will be included in part of the savings, reward, or recovery that the government gains in that transaction.
In today’s environment fraud schemes are incredibly complex. But here’s a very simple example.
Corporation A makes a deal with the government to sell them a million paperclips a month and that works for a couple of months, but that corporation realizes that nobody on the governments end is trying to count the paperclips or do anything to make sure that they are getting their million paperclips. Instead they decide “you know what, we are going to send them 900,000 paperclips a month.” Since nobody is counting, they are getting away with 10% of the deal. Then they decide to send 800,000. This goes on for five years. Five years go by of ripping off the government 20% on that contract until someone in the company finds out, and when they do and look back and realize that millions of dollars of purchased paperclips have never been sent to the government, they can tell the government about that. When the government recovers, they can recover a reward with the government.
Unfortunately, it doesn’t happen easily. First off, the schemes are very complex, so one needs the paperwork, documentation, etc. Second, the government is very apt to listen to you, and then in the end if you are not properly secured in your claim, the government may not allow you to keep that claim and not give 15-30% of that money.
That’s why it’s necessary to have an qui tam attorney to represent them in going to the government. The people that they should hire for that job should be attorneys with governmental prosecutorial experience. You would want somebody who understands how the government works and to bring the case to them in a format they understand, in a significant organized fashion. In doing so, the person who gives them the claim, the professional name for that is "relator", the "relator" secures their claim so that they can then recover in the end.
It’s a long and arduous process. It can be risky for the "relator" They have to be willing to go out and do these things. But usually, if they have a really valid claim, it can be extremely lucrative.