Legal Definitions - Qui tam

Qui tam is an abbreviation of the Latin phrase "qui tam pro domino rege quam pro se ipso in hac parte sequitur," which translates to "Who sues on behalf of the King as well as for himself."

In legal terms, a qui tam action is a type of lawsuit brought by a private individual, known as a "relator," who acts on behalf of the government. While the relator initiates the case, the government itself is considered the primary plaintiff. The purpose of such a lawsuit is typically to recover funds that were defrauded from the government. If the lawsuit is successful and the government recovers money, the relator who brought the action receives a predetermined share of the award as an incentive for exposing the wrongdoing. These actions are sometimes also referred to as "popular actions."

Here are some examples illustrating how qui tam actions work:

• Healthcare Billing Fraud: Imagine a medical equipment supplier that knowingly sells refurbished, faulty medical devices to hospitals, but bills Medicare and Medicaid as if they were new, high-quality devices. A former sales manager for the supplier discovers this fraudulent practice, which causes the government healthcare programs to overpay significantly. The sales manager could file a qui tam lawsuit against the supplier on behalf of the federal government. If the government intervenes in the case and successfully recovers the overpaid funds from the supplier, the sales manager, as the relator, would receive a percentage of that recovered amount for bringing the fraud to light.

• Defense Contractor Overbilling: Consider a company that holds a contract to supply specialized parts to the Department of Defense. An internal auditor at the company discovers that for years, the company has been systematically inflating the prices of these parts, charging the government far more than their actual cost, and falsifying invoices to cover it up. The auditor decides to become a relator and files a qui tam lawsuit against the defense contractor. This action would allege that the contractor defrauded the U.S. government through false claims. Should the government join the lawsuit and ultimately recover the fraudulently overcharged funds, the auditor would be entitled to a portion of that financial recovery.

• Pharmaceutical Marketing Fraud: A large pharmaceutical company promotes one of its drugs for "off-label" uses – purposes for which the drug has not been approved by the Food and Drug Administration (FDA). The company actively encourages doctors to prescribe the drug for these unapproved conditions, knowing that federal programs like Medicare and Medicaid will then pay for these prescriptions. A former marketing executive, aware of the company's deceptive practices and possessing internal documents, could initiate a qui tam lawsuit. This lawsuit would assert that the pharmaceutical company caused false claims to be submitted to government healthcare programs. If the government successfully pursues the case and recovers substantial penalties or damages from the company, the executive, as the relator, would receive a share of that financial award.