FCA whistleblower lawsuits have become a problem across the country. In light of the growing number of False Claims Act (“FCA”) suits brought by qui tam FCA whistleblowers in 2014, it’s important for a company to have internal strategies to address potential lawsuits and boost EPLI Coverage. In 2014, more than 700 FCA whistleblower suits were filed in the United States. The Department of Justice (“DOJ”) recovered over $5 billion from target businesses in qui tam litigation.
FCA Whistleblower Lawsuits
More importantly, the “original source” precedent holding that whistleblowers must play a direct role in public disclosures in order to file suit has been abandoned. The legal precedents that once discouraged whistleblowers to file lawsuits have been reversed by a decision by the 9th circuit court. As a result, many shark-in-the-water lawyers are now encouraging employees to file such lawsuits. The floodgates have opened for more whistleblower lawsuits to be filed.
Such qui tam suits are a real danger to many mid-sized companies, particularly if they file claims with the government for payment of money. Qui tam is an abbreviation from the Latin phrase meaning, “who as well for the king as for himself sues in this matter.” Qui tam cases are different from other types of lawsuits that involve a personal stake. In qui tam lawsuits like whistleblower cases, the person bringing the lawsuit is not the one who has been harmed.
False Claims Act Challenges
This intensifying storm of FCA litigation is reason for concern to any business that files claims with the government for payment of money. By choosing to accept money from the government, a business exposes itself to potential FCA liability. With this growing risk of claims brought under the FCA’s whistleblower provisions, the stakes of losing FCA litigation are significant.
Faced with ever-increasing liability, insurance carriers are now desperately trying to close the floodgates by denying FCA insurance recovery claims. Policyholders who fail to recognize insurance company denial tactics can make the mistake of failing to believe they are covered. Luckily, by working with a professional employer organization, you can avoid such problems.
With the EPLI coverage provided by Total HR Management, such coverage is provided. It is even more essential is to develop internal strategies within your company to avoid FCA whistleblower lawsuits.
Three Internal Strategies To Address Potential FCA Whistleblower Lawsuits:
- Proceed with the understanding that FCA whistleblower claims are covered.
If you work with a professional employer organization, proceed with the understanding that FCA claims are covered. In order to gain such confidence, discuss the issue with your HR manager.
- Implement appropriate internal procedures to flag and address qui tam-related events.
Government inquiries often arise in the course of whistleblower litigation. Evidence of such an investigation may be a very informal or seemingly run-of-the-mill request for information. Such inquiries, no matter how routine, flag an immediate need to evaluate insurance. The best time to devote legal resources to FCA insurance issues is at this early stage.
Companies should analyze the implications of complex and often contradictory notice obligations. Companies cannot conduct such a review, however, unless qui tam related inquiries are directed to appropriate personnel. To do this, policies and procedures should be put in place for employees at all company levels to identify and report qui tam-related events.
- Conduct annual review of policies for qui tam and FCA coverage.
A company should assess and develop a working qui tam internal strategy long before it is faced with a qui tam claim. Policies should include provisions that accommodate the unique aspects of qui tam claims, such as the fact that whistleblower lawsuits can be filed under seal, and a policyholder may not learn that a lawsuit has even been filed for several years.
To learn more about EPLI coverage for your business and FCA whistleblower lawsuit protection, contact the human resources managers and professionals at Total HR Management by calling (800) 975-5128 today.
No Legal Advice Intended: This blog includes information about legal issues and legal questions. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.