Recent Trends in False Claims Act Litigation
The False Claims Act (FCA) allows the federal government, and private whistleblowers suing on behalf of the federal government, to recover money lost to false and fraudulent claims for government payment.
The FCA is a powerful enforcement tool, and it allows for treble damages and numerous civil penalties. Under the FCA’s qui tam provisions, whistleblowers can receive 15% and 30% of the total award.
Several key trends in FCA litigation suggest that whistleblowers will have ample opportunities in the coming years to bring meritorious qui tam claims under the FCA.
Trends in Case Resolutions
Recent reports indicate that an overwhelming majority of un-sealed FCA cases result in settlement agreements. In some cases, these settlements can amount to tens of millions of dollars. In every case, however, settlement agreements represent an alternative to a lengthy and costly trial, while still providing a reasonable recovery to both the government and the whistleblower.
Trends in Damage Awards
While the overall annual damages awarded in un-sealed FCA cases (excluding fees, costs, interest, and whistleblowers’ share) has fluctuated over the last ten years, from a low of $82 million in 2013 to a high of $1.7 billion in 2019, the general trend has been an increase in the average award.
Types of Parties Facing FCA Actions
Because the health care industry is one of the single-largest recipients of federal spending, it is unsurprising that medical and pharmaceutical companies were among the most common FCA defendants between 2016 to 2020. Based on un-sealed federal cases, the ten most commonly-sued companies under the FCA are all medical and pharmaceutical companies.
Insights for Future FCA Actions
Based on these recent trends, we at Price Armstrong believe that the False Claims Act will be as powerful a tool as always in the fight against fraudulent government contractors in the coming years.
With respect to the trends showing high settlement rates and increased average damages awards, we believe that fraudsters are becoming fearful of the strong enforcement arm of the FCA. And with evidence showing that medical and pharmaceutical companies lead the way in terms of government fraud, we expect even more whistleblowers from the health care industry to come forward and help combat this invidious form of fraud.
If you know of potential fraud against the government, you may have a claim as a whistleblower under the FCA. At Price Armstrong, we make it our mission to protect whistleblowers every step of the way and to maximize their recovery. Contact us today for a free initial consultation and review of your case.