Legal Definitions - Qui tam action

A qui tam action is a type of lawsuit initiated by a private individual, known as a relator, on behalf of the government. The term "qui tam" is an abbreviation of a Latin phrase meaning "who sues on behalf of the King as well as for himself." This legal mechanism allows a private citizen with direct knowledge of fraud or wrongdoing against the government to bring a lawsuit to recover funds or penalties. Although the individual files the suit, the government is considered the primary party, or plaintiff. If the lawsuit is successful and the government recovers money, the relator who exposed the misconduct receives a share of the award as an incentive.

• Example 1: Healthcare Billing Fraud

  Imagine a medical billing specialist working for a large hospital. They discover that the hospital is systematically submitting false claims to government healthcare programs like Medicare and Medicaid for medical procedures that were never performed, or for more expensive services than those actually provided to patients.

  How this illustrates a qui tam action: The billing specialist, acting as a relator, could file a qui tam action against the hospital. They would be suing on behalf of the federal government (Medicare) and state governments (Medicaid) to recover the fraudulently obtained funds. If the lawsuit leads to a successful recovery for the government, the specialist would be entitled to a percentage of that recovery as their reward for bringing the fraud to light.

• Example 2: Government Contractor Misrepresentation

  Consider an engineer employed by a company that manufactures specialized parts for military aircraft. The engineer uncovers evidence that the company is knowingly using substandard, cheaper materials for critical components, but is billing the Department of Defense as if they were using the higher-grade, more expensive materials specified in the contract.

  How this illustrates a qui tam action: The engineer could initiate a qui tam action against the defense contractor. In this scenario, the engineer is the relator, bringing the suit on behalf of the U.S. government (specifically, the Department of Defense) to expose the fraud and recover the overpaid funds. If the government successfully recovers money from the contractor, the engineer would receive a portion of that settlement or judgment.