The U.S. Senate is debating changes to the federal False Claims Act that will increase the likelihood that unintentional mistakes by companies — that are immaterial to a service or product purchased by the government — will result in plaintiffs’ lawyers filing highly questionable, even meritless cases that will be costly and wasteful to defend. This legislation even makes it difficult for the U.S. Department of Justice to dismiss frivolous suits.
No one doubts that fighting fraud against the federal fisc is a worthy goal. The federal False Claims Act, through its qui tam provision, allows private plaintiffs lawyers to file lawsuits on behalf of the federal government alleging fraud against the government. These plaintiffs’ lawyers can obtain a substantial bounty out of any settlement or recovery, up to 30%. In each qui tam, DOJ must investigate and decide, often with another federal agency, whether to litigate the case, decline to intervene and let the private plaintiff litigate the case, or move to dismiss the case.
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