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
  • Lighting the Way: FCA Reform and Compliance Program Credit

    Lighting the Way: FCA Reform and Compliance Program Credit

    June 27, 2018

    This paper contends that in order to encourage companies to create and sustain a culture of consistent compliance, particularly with regard to the federal False Claims Act, the U.S. Department of Justice should formalize a policy of offering credit for companies that implement effective compliance and ethics programs. Read More

  • The Great Myths of State False Claims Acts

    The Great Myths of State False Claims Acts

    February 28, 2018

    The 2018 update to "Great Myths of State False Claims Acts" shows that the whistleblowers' bar is continuing to capitalize on state qui tam False Claims Acts (FCAs), harvesting windfall awards from states and the federal government. The paper also points out that the dubious benefits of implementing a state FCA turn into a clear financial net negative when states allow their FCAs to fall out of compliance with federal standards. Read More

All Results for False Claims Act (FCA)

  1. DOJ Moves to Dismiss False Claims Lawsuits Driven By Stock Short Seller

    February 06, 2019 | News

    The U.S. Department of Justice (DOJ) has moved to dismiss two whistleblower False Claims Act lawsuits that were filed by a former hedge fund manager who shorted stock in the companies he sued, Legal Newsline reports in Forbes. ... Read More

  2. In the News Today - February 4, 2019

    February 04, 2019 | News

    The Granston Memo, One Year Later; Are New Data Rules Fueling Securities Litigation in Europe?... Read More

  3. In the News Today - January 29, 2019

    January 29, 2019 | News

    "Can Judges Bar Class Action Settlement Talks Before Certification?;" "Can 'Bundle' Payment Plans Shield Against FCA Liability?"... Read More

  4. In the News Today- January 15, 2019

    January 15, 2019 | News

    "Drop the Climate Lawsuit;" What To Make Of DOJ's 2018 False Claims Act Report"... Read More

  5. In the News Today - January 3, 2019

    January 03, 2019 | News

    "Manufacturers Face The Rise Of Global Class Actions;" "New Strategies to Help False Claims Act Health Care Defendants"... Read More

  6. WSJ Editorial Board: "False Claims Falsehoods"

    December 27, 2018 | News

    The Wall Street Journal Editorial Board called on judges to "sanction the false claimers" who were responsible for the 11 False Claim Act (FCA) lawsuits that the U.S. Department of Justice (DOJ) asked to dismiss last week.... Read More

  7. ILR's EVP Harold Kim Calls DOJ Motion a "Bombshell"

    December 26, 2018 | News

    In a report on the U.S. Department of Justice's (DOJ) move to seek dismissal of several qui tam False Claims Act (FCA) lawsuits, the Pink Sheet, a leading Pharmaceutical news outlet, says the use of the Granston memo should "be a morale booster" to those who have pointed to abuse of the whistleblower system.... Read More

  8. "DOJ: Company Wasted 1,500 Hours of Gov't Time Filing Meritless Suits"

    December 19, 2018 | News

    The U.S. Department of Justice (DOJ) announced it was looking to dismiss 11 False Claims Act lawsuits after learning a company used a cookie-cutter-style model and major plaintiffs' lawyers to file qui tam lawsuits that were "essentially cloned," Law360 reports.... Read More

  9. ILR Research Review - Fall 2018

    November 20, 2018 | Research

    ILR's Fall 2018 research cycle was about two things: spotting new, destructive legal trends before they become unstoppable, and highlighting concrete progress in addressing long-standing litigation challenges. The 2018 Fall Research Review reveals the exploding costs of the U.S. tort system, and examines developments in securities litigation, forum shopping, False Claims Act policy reform, and the European Commission's project to implement class actions.... Read More

  10. How Escobar Is Affecting False Claims Act Litigation

    November 01, 2018 | News

    Two years after the U.S. Supreme Court handed down its landmark Universal Health Services v. Escobar decision, Law360 looks at how courts across the country are interpreting and applying it to False Claims Act (FCA) litigation.... Read More