What is Qui Tam?
Qui Tam is a Latin phrase meaning “who brings a case on behalf of the king as well as himself”. It is a legal term that may refer to a lawsuit brought by a private individual (known as a relator) on behalf of the government. The relator is incentivized to do so by the prospect of a financial reward if the case is successful.
Qui Tam in More Detail
Qui Tam actions are a type of False Claims Act lawsuit. These are civil actions brought against individuals or companies that make false claims or use fraud to secure government funds or property. The relator is allowed to initiate the action on behalf of the government and to share in any recovery. In the case of a successful Qui Tam action, the relator may be entitled to receive a reward of up to 30% of the amount recovered.
Qui Tam actions are a powerful tool for fighting fraud. They are often used to uncover fraudulent activities that otherwise might not be detected. In some cases, the government may join in the action and take on a larger role in the prosecution of the case.
In addition to False Claims Act lawsuits, Qui Tam may also refer to a type of Directors and Officers (D&O) liability insurance. This type of insurance provides protection for directors and officers of a company against the costs associated with defending against a Qui Tam action. D&O policies generally include coverage for the company’s legal expenses, as well as any financial losses that may result from a successful Qui Tam action.
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