Can Whistleblowers Bring Group Qui Tam Claims?
Yes, whistleblowers can bring group claims in qui tam cases. Indeed, this is a somewhat frequent occurrence and often is a successful strategy once the pros and cons are considered.
What are the pros of bringing a group qui tam claim?
A number of pros exist for bringing a group qui tam claim with one or more other whisteblowers. First, having more than one whistleblower allege similar wrongdoing can strengthen the credibility of the facts alleged because the allegations stem from multiple sources. Second, the wrongdoing reported by multiple whistleblowers often is broader in scope and may spark an investigation of more than one scheme that can strengthen a case. Third, with more than one claimant and multiple schemes alleged, the probabilities increase of alleging a successful claim. This is because the Government often picks and chooses specific schemes that bear out after its investigation. Fourth, with more than one claimant and multiple schemes alleged, the damages often are higher than they would be with a single claimant. Fifth, because there is a first-to-file rule in qui tam cases, filing a case jointly on behalf of multiple claimants prevents a race to file competitive claims between whistleblowers where one claim may bar another. Finally, when there is more than one whistleblower involved, once the defendants learn the whistleblowers’ identities, it becomes more difficult for the defendants to challenge a specific whistleblower’s credibility or motive as the defendants now have to focus on multiple whistleblowers.
What are the cons of bringing a group qui tam claim?
Several cons exist for a whistleblower to join claims with other whistleblowers in a qui tam case. First, the whistleblower will have to share the award with the other whistleblowers, which is 15 to 25% of the Government’s recovery in cases where the Government intervenes in the action. For example, if the Government agrees that two whistleblowers jointly should receive 20% of a Government settlement, after the attorney’s contingency fee is deducted, the two whistleblowers typically each would receive 6% of the Government’s settlement (instead of 12% with one whisteblower). Second, having more than one whistleblower can present conflicts of interest between the whistleblowers that can harm the potential success of the case or require the withdrawal of the attorney jointly representing the whistleblowers. Third, whistleblowers may have different expectations as to what they deem to be a reasonable settlement, which can create conflicts in settlement strategy and challenges in working with the Government in a cohesive manner. Fourth, when multiple schemes are alleged and the whistleblowers have varying knowledge about each scheme, it may create entitlement issues between whistleblowers when the Government recovers a settlement on one whistleblower’s scheme but not on the other’s.
Bringing a joint qui tam claim on behalf of multiple whistleblowers is permitted in most circumstances. The whistleblowers, however, need to be consulted on the pros and cons of joining forces in the same action. The whistleblowers also need to be counseled on existing or possible conflicts of interest and waive such conflicts after an informed consultation from counsel. While there are compromises that come with filing a joint qui tam claim, often the likelihood of success from filing a joint claim increases and outweighs the downside.