Corporate-insider whistleblowers have been awarded more than $3 billion in lawsuits against companies for defrauding the government. By filing lawsuits in the name of the government under the Civil War-era False Claims Act, these qui tam whistleblowers (called “relators” under the statute) can recover up to 30 percent of the proceeds. This powerful financial incentive has enabled the government to recover more than $20 billion from health care companies and government contractors that committed fraud.
Should lawyers — like other corporate insiders — be able to take advantage of these financial incentives for blowing the whistle on corporate fraud? That is the question that the U.S. Court of Appeals for the Second Circuit wrestled with on August 23 at an oral argument in U.S. ex rel. Fair Laboratory Practices Associates v. Quest Diagnostics.
