False Claims Act (FCA)

The False Claims Act (FCA) penalizes those who knowingly submit false claims seeking government funds or to avoid paying government debts. Although well intentioned, the law has transformed into a profitable enterprise for plaintiffs’ lawyers and their clients, while hurting American businesses. Total monetary damages under the False Claims Act have risen from $272 million in 1992 to over $2.8 billion in FY 2018. Read More...

The law allows the government to pursue any government contractor suspected of making “false claims” about their goods or services to the government. The law also allows third-party whistleblowers (called qui tam relators) to sue in the name of the government and to keep a large part of any recovery. The statute also allows for treble damages (damages three times the amount of the alleged fraud) as well as significant penalties. Recently the DOJ moved to dismiss some qui tam FCA cases, signifying a positive change in an attempt to address substantial abuse regarding FCA cases. The DOJ has also made several important and helpful policy changes that provide credit to companies that have appropriate compliance programs, self-report FCA violations, assist the investigation and remediate any harm done to the government.

While the need for an anti-fraud statute is clear, plaintiffs’ lawyers have benefited enormously from these FCA lawsuits. Broad language and over-enforcement practices have stimulated significant abuse, turning, in some cases, what should be simple disagreements and paperwork errors into claims for fraud. The U.S. Chamber Institute of Legal Reform (ILR) actively works to promote reforms that will restore fairness and transparency.

01/01/2019

Suggested Resources

Research
  • ILR Briefly: Third Party Litigation Funding in Qui Tam False Claims Act

    ILR Briefly: Third Party Litigation Funding in Qui Tam False Claims Act

    July 17, 2020

    In addition to investing in portfolios of private lawsuits, third party litigation funders have started financing qui tam False Claims Act cases brought on behalf of the U.S. government. The catch is that up until very recently, the government had no insight into whether funders were involved or the level of control they exerted. That changed in June 2020, when the Department of Justice announced a policy change to start shedding some light on this opaque practice. Read More

  • ILR Briefly COVID-19 Series: Federal Liability Problems and Solutions

    ILR Briefly COVID-19 Series: Federal Liability Problems and Solutions

    May 07, 2020

    As the public health and economic consequences of COVID-19 continue to mount, plaintiffs' lawyers are looking for ways to expand upon their legal theories and bring opportunistic litigation. This edition of ILR Briefly explores four projected hot spots of COVID-19 litigation: exposure liability, product liability, medical malpractice, and securities litigation. The paper goes on to recommend targeted federal legislative and administrative solutions to combat abusive lawsuits in these areas and protect the economic recovery. Read More

All Results for False Claims Act (FCA)

  1. In the News Today - November 2, 2016

    February 16, 2011 | News and Blog

    What do you get when you mix two of the most pro-litigation tools in America today?... Read More