Harvard Study Finds Benefits for False Claims Act Whistleblowers

Harvard Study Finds Benefits for False Claims Act Whistleblowers

A recent Harvard Business School Study analyzed thousands of cases brought under the False Claims Act, and found that increasing the financial rewards for whistleblowers results in higher quality cases being filed.  The study undercuts the view of critics who assume that increased incentives lead to more meritless suits.

The False Claims Act penalizes people and businesses that defraud the government.  It allows private persons—whistleblowers—to file lawsuits on behalf of the government.  Most whistleblowers are employees, but they also include business partners, suppliers, contractors, and even competitors.

A whistleblower can receive a reward of between 15% and 30% of the amount the government recovers, if he or she satisfies the various requirements of the FCA.  And according to the study, since 2000, the FCA whistleblower-regime has resulted in over 12,000 lawsuits and over $50 billion in recoveries.

The study examined over 5,000 FCA suits filed between 1994 and 2012.  It analyzed the impact of appellate court decisions that interpreted the FCA in ways that increased the financial rewards for whistleblowers. The study found that whistleblowers file more lawsuits when the financial incentives are greater.  Good lawsuits: The improved incentives increased the percentage of cases intervened by the government, and increased the percentage of cases that resulted in a settlement.

People have understandable concerns about the financial costs of blowing the whistle. And the study confirmed that retaliation against whistleblowers is distressingly common. But the study found that, on average, whistleblowers are adequately compensated for those costs. It did not find any evidence that filing an FCA case results in a higher likelihood of divorce, bankruptcy, or legal violations.  In other words, the benefits generally outweigh the costs.

Blowing the whistle pays off.  Literally.

In the past decade, Kennedy Vuernick attorneys have been involved in False Claims Act recoveries totaling well over $100,000,000.  At Kennedy Vuernick, we use our nearly 30 years of combined experience as white-collar prosecutors—and well over 50 years of combined experience fighting fraud in general—to bring about justice for those who have been defrauded.

If you have information about fraudulent claims being submitted to the government, you may have a case under the False Claims Act.  You need attorneys with the skill and knowledge to help you pursue a recovery.  Call 201.636.9980 or email info@kvlawllc.com to find out if we are the right attorneys for you.