Qui Tam is basically a legal action which encourages whistleblowing around government waste. It works well in America, where individuals can earn massive payouts for reporting rip-offs. Should we have it here, Tony Nikolic asks?
Qui Tam…taking action for the good of the community
Qui Tam is an abbreviated Latin term “qui tam pro domino rege quam pro sic ipso in hoc parte sequitur” meaning “who as well for the king as for himself sues in this matter”. 1
Qui Tam – QT for short – is a legal action brought under legislation which, basically, allows a private person to sue in the name of the government against an organisation (usually a government contractor) for acting or failing to act in relation to fraud in areas such as health care, defence, pharmaceutical research (and reporting of results), human services, environment, energy and education to name a few.2
QT allows ordinary persons to be informers in legal actions against contractors from various business streams and sectors that may defraud government. Essentially a QT case will involve a normal person becoming an informant (or whistleblower). Under the QT system, these people are referred to as “relators”. A relator is someone other than the plaintiff upon whose information, knowledge, or telling (relating) of facts an action is brought, when the right to bring the action actually vests in someone else (that is, the government). For instance, a relator is private person who brings a QT action, and who becomes the ‘real’ party in interest “in whose name, a state or an attorney general brings a lawsuit”.3
Generally, the relator is a person with knowledge, information or facts about a particular issue of government contractors and their business. Essentially, relators are whistleblowers who use the information they possess to inform states and attorneys-general of possibly fraudulent activity against government organisations. If an individual (or organisation) acts as a relator, they may take action under what is termed QT legislation. In return, the relator may be able to receive a portion of, or all, of the civil damages awarded in the case. The most common type of relator is an employee or former employee[s].
There is no QT-style legislation, or False Claims Act, in Australia yet.
Here, while whistleblowers have contributed positively to society in many ways whistleblowing is perceived by the public rather negatively, not because of what the “whistler” may have done, but for the attention given to them for making the moral and ethical decision to disclose information, facts and knowledge. Often whistleblowers are demoted, harassed, intimidated and ostracised by exposure in the mass media machine, which tends to chew up little people and leave organisations relatively unscathed. Frequently, the whistleblower suffers, even if the organisation suffers a little as well.4
Whistleblowers can play an important positive role in society, exposing corruption, malpractice and fraud.5 The Australian Federal Police is one body pushing for the introduction of a federal False Claims Bill. Such a bill would a positive step for future matters brought under QT and relator actions: it would mirror provisions in the USA, which has a False Claims Act (dating back to Abraham Lincoln and the rapacious Civil War contractors) that includes QT and relator provisions.6
The False Claims Act, 18 U.S.C. § 287, allows private citizens called ‘relators,’ to sue alleging violations of the False Claims Act. These QT or ‘whistleblower’ cases tend to be sealed by the court at the time of filing and only parties involved in the complaint – the ‘relator’, the ‘federal government’ and the ‘presiding court’ – are permitted to see the papers.
The potential for QT in Australia is to rein in the fraudulent acts or inactions of private organisations that defraud local, state and federal governments, which can be compensated for their loss. For instance, in the USA, cases under the False Claims Act in the USA since 1987 have recovered $US6.38 billion.7 Relators on average receive nearly 20% of the payout, or about a total of $US1.2bn in the past 23 years in America.
With recoveries such as these, government finances can be better used across areas of importance to the community. The idea of giving relators a share of the compensation is to act as a reward, and to encourage citizens to be vigilant on behalf of their communities and their governments. Indeed, with fiscal constraints representing a large part of government policy, the necessity to protect the community and government from exploitation, fraud and misrepresentation should become a priority of the new millennium. Some of the ways we can go about this is to introduce new laws that specifically encourage allow ‘relators’ (whistleblowers) to disclose information in a safe but efficient manner. This is so we can insure that detection, prevention, investigation and enforcement/sanctions become priorities.8 One way we can bring this agenda to the forefront, is to introduce Qui Tam (False Claims) legislation in Australia with substantiative provisions for relators to be included.
* Tony Nikolic is a law student at the University of Western Sydney and a member of CLA. He also holds a Degree in Social Science/Criminology (Hons) from University of Western Sydney and contributes to the Pro Bono Law Students Australia Program working with Youth Off the Streets.
1 Bryan . A Garner, Black’s Law Dictionary (8th Ed, 2004), 1282. In Legal terminology “acting” or “failing to act”
2 Ibid, 1282 – In Legal terminology “acting” or “failing to act” is also referred to as “act” or “omission” respectively.
3 Bryan . A Garner, Black’s Law Dictionary (8th Ed, 2004), 1315.
4 Tom Faunce and Tim Vines, ‘Whistleblowers deserve more carrots and less stick’. (24 September 2008)<https://www.cla.asn.au/News/change-culture-encourage-whistleblowing/> Civil Liberties Australia. [at 17/11/2010].
6 Tom Faunce and Tim Vines, ‘Whistleblowers deserve more carrots and less stick’. (24 September 2008) <https://www.cla.asn.au/News/change-culture-encourage-whistleblowing/> Civil Liberties Australia. [at 17/11/2010].
7 Associate Professor Kim Sawyer, ‘Why Australia needs a Public Interest Disclosure Agency and False Claims Act’. < http://www.transparency.org.au/documents/ksawyerpres31jul03.pdf> 13 November 2010.
8 Peter, N Grabosky ‘Controlling Fraud, waste and abuse in the public sector’. (January, 1991) < http://www.aic.gov.au/en/publications/previous%20series/other/1-20/controlling%20fraud%20waste%20and%20abuse%20in%20the%20public%20sector.aspx> at 16/11/2010.