Qui Tam & the False Claims Act: How Whistleblower Lawsuits Work
By Steve Levine · Updated June 21, 2026 · 7 min read
Quick Answer
Qui tam is the part of the federal False Claims Act (31 U.S.C. §§ 3729–3733) that lets an ordinary person — a relator, or whistleblower — sue on behalf of the United States against someone who knowingly billed the government for false claims, such as fraudulent Medicare or Medicaid charges or defense-contract fraud. The relator files the complaint under seal and gives it to the Department of Justice, which investigates and decides whether to intervene and take over the case. A defendant found liable owes treble (triple) damages plus a penalty for each false claim, and the relator collects a share of the money recovered — generally 15–25% if the government joins and 25–30% if it does not. The law also shields whistleblowers from being fired or punished for reporting fraud.
What "Qui Tam" Means and Where It Comes From
Qui tam is short for a Latin phrase — qui tam pro domino rege quam pro se ipso in hac parte sequitur — meaning roughly "he who sues in this matter for the king as well as for himself." It describes a lawsuit in which a private person enforces the law on the government's behalf and shares in any recovery. In the United States the mechanism lives in the False Claims Act, the government's central weapon against fraud on the public purse.
Congress first passed the False Claims Act in 1863, during the Civil War, to combat suppliers who sold the Union Army defective goods and padded invoices — which is why it is sometimes called the "Lincoln Law." Major 1986 amendments revived it, raising the penalties and increasing the whistleblower's share to give insiders a real incentive to come forward. Today it is the source of billions of dollars in annual fraud recoveries, much of it in health-care and Medicaid billing.
The False Claims Act in Brief
The False Claims Act, codified at 31 U.S.C. §§ 3729–3733, imposes civil liability on anyone who knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government — or who knowingly makes a false record or statement material to such a claim. "Knowingly" reaches not just actual knowledge but also deliberate ignorance and reckless disregard of the truth, so a contractor cannot escape liability simply by avoiding asking questions.
The conduct the statute targets is broad. Common examples include:
• Health-care fraud. Billing Medicare or Medicaid for services never provided, "upcoding" to more expensive billing codes, or paying kickbacks for referrals.
• Procurement fraud. Overcharging on government contracts, delivering substandard goods, or falsely certifying compliance with contract terms.
• Grant and program fraud. Misusing federal grant funds or falsely certifying eligibility for a government program.
How a Qui Tam Case Works, Step by Step
The qui tam procedure is unusual, and its sequence matters:
1. File under seal
The relator files the complaint under seal in federal court and serves it, along with a written disclosure of the evidence, on the U.S. Department of Justice — not on the defendant. The defendant usually does not yet know it has been sued.
2. Government investigates
The case stays sealed for an initial 60 days — routinely extended for months or years — while the government investigates the allegations.
3. Intervention decision
The government decides whether to intervene (take over and lead the case) or decline. If it declines, the relator may continue the suit on the government's behalf.
4. Seal lifts, case proceeds
The seal is lifted, the defendant is served, and the case litigates like other civil litigation — toward settlement, dismissal, or judgment.
Two gatekeeping rules shape who can bring such a case. The first-to-file rule means only the first relator to file on a given set of facts can generally pursue it. The public-disclosure bar blocks a case built only on already-public information unless the relator is an "original source" with independent, direct knowledge of the fraud.
Damages, Penalties, and the Relator's Share
A defendant found liable under the False Claims Act owes treble damages — three times the amount of the government's actual loss — plus a separate civil penalty for each false claim, an amount set by statute and adjusted for inflation. Because a fraudulent billing scheme can involve thousands of individual claims, the per-claim penalties alone can be substantial.
The relator's reward depends on whether the government joins the case:
• Government intervenes. The relator generally receives 15% to 25% of the recovery, depending on how much they contributed to the case.
• Government declines and the relator wins alone. The share rises to generally 25% to 30%, reflecting the greater risk and effort the relator carried.
• Relator involved in the wrongdoing. A relator who planned or initiated the fraud can have the share reduced, and one convicted of crime arising from it can be barred from any award.
The bulk of the money — whether the government intervenes or not — goes to the United States Treasury or the defrauded program, with the relator's percentage carved out and attorney's fees often recoverable from the defendant.
Anti-Retaliation Protection
Because relators are frequently employees reporting their own employers, the False Claims Act includes an anti-retaliation provision (31 U.S.C. § 3730(h)). An employee, contractor, or agent who is fired, demoted, harassed, or otherwise discriminated against for lawful efforts to stop a False Claims Act violation can sue for relief — including reinstatement, double back pay, and litigation costs. This protection applies even if the underlying qui tam case is ultimately unsuccessful, so long as the employee acted in good faith.
How Qui Tam Differs From a Class Action
A qui tam suit and a class action are sometimes confused because both let private parties pursue large-scale wrongdoing, but they work very differently:
• Who is recovering. In a qui tam case the government is the injured party and the main recipient of any money; the relator is rewarded for bringing the fraud to light. In a class action, a group of similarly situated people recover their own losses.
• Who brings it. A qui tam case is driven by a single relator (often an insider) on the government's behalf; a class action is led by representative plaintiffs on behalf of an absent class that must be certified under Rule 23.
• The payout. A qui tam relator collects a statutory percentage of the government's recovery; a class member files a claim form for a share of a settlement fund.
The same misconduct can occasionally spawn both — a False Claims Act recovery for the government and separate consumer litigation — but they are independent tracks with different plaintiffs, standards, and remedies.
As always, being named in a qui tam complaint is an allegation, not a finding of wrongdoing. False Claims Act defendants are presumed not liable until the government or a court proves the claims, and many cases resolve through settlements in which the defendant does not admit wrongdoing.
Frequently Asked Questions
What is a qui tam lawsuit?
A qui tam lawsuit is a case brought under the federal False Claims Act (31 U.S.C. §§ 3729–3733) in which a private person, called a relator or whistleblower, sues on behalf of the United States against someone who allegedly defrauded a government program. The relator files the complaint under seal and serves it on the Department of Justice, which investigates and decides whether to intervene. If the case succeeds, the relator shares in the money the government recovers. The term comes from a Latin phrase meaning "who sues for the king as well as for himself."
What is the False Claims Act?
The False Claims Act, 31 U.S.C. §§ 3729–3733, is the federal government's primary tool for fighting fraud against public funds. First passed during the Civil War and strengthened by amendments in 1986 and later, it imposes liability on anyone who knowingly submits, or causes to be submitted, a false or fraudulent claim for payment to the government — for example, false Medicare or Medicaid billing, defense-contract fraud, or misuse of grant money. Violators owe three times the government's damages plus a civil penalty for each false claim, and the law lets private whistleblowers enforce it through qui tam suits.
Who can be a relator in a qui tam case?
A relator is the private person or entity who brings a qui tam case on the government's behalf. It is often an insider — an employee, former employee, contractor, or competitor — who has direct, non-public knowledge of the alleged fraud. The False Claims Act discourages opportunistic suits through a "public disclosure bar" that can block a case built only on already-public information, unless the relator is an "original source" with independent knowledge. There can generally be only one relator case on a given set of facts; the first to file usually controls.
How much does a whistleblower receive in a qui tam case?
If a qui tam case recovers money, the relator receives a share of it. When the government intervenes and takes over the case, the relator's share is generally 15% to 25% of the recovery, depending on how much the relator contributed. When the government declines and the relator pursues the case alone and wins, the share is generally 25% to 30%. The exact percentage is set within those ranges by the court and the statute, and a relator who planned or initiated the fraud can have the share reduced or eliminated.
What does it mean that a qui tam complaint is filed under seal?
A qui tam complaint is filed under seal, meaning it is kept secret from the defendant and the public for an initial 60 days (routinely extended) while the Department of Justice investigates and decides whether to intervene. During the seal period the relator cannot publicize the case, and the defendant typically does not know it has been sued. After the government makes its decision, the court usually lifts the seal and the case proceeds either with the government leading it or with the relator continuing on the government's behalf.
How is a qui tam case different from a class action?
A qui tam case and a class action are different tools. In a qui tam suit, a single relator sues on behalf of the government to recover money the defendant allegedly took from public funds, and the relator — not a class of consumers — shares in the recovery. A class action is brought by representative plaintiffs on behalf of a group of similarly situated people to recover their own losses. The same misconduct can sometimes lead to both a government False Claims Act recovery and separate consumer litigation, but the qui tam recovery goes mainly to the government, with the relator's share carved out.
Related Terms
Class Certification — the Rule 23 test that defines a class action, the tool qui tam is most often confused with
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About This Page
General legal-information about qui tam suits and the False Claims Act, not legal advice. OpenClassActions.com is a consumer news site and is not a law firm. Statutes and their interpretation change, and how the False Claims Act applies depends on the facts of a particular case; for the controlling text, see the statute itself (31 U.S.C. § 3729 and § 3730) and the controlling court decisions. If you believe you have knowledge of fraud against the government, consult a qualified attorney in your jurisdiction.
More on How Class Actions Work
Class Certification: The Rule 23 test that defines a true class action — and how it differs from a qui tam suit. Read the guide →
Wage & Hour Class Actions: How workers recover unpaid wages and overtime under federal and state law. How it works →
ERISA: The federal law behind retirement-plan and fiduciary-breach class actions. What it means →
Class Action Claim Form: How class members actually collect once a case settles or wins. How to file →
Class Action Fairness Act (CAFA): The jurisdictional statute that decides which court hears a class action. Learn more →
