Qui Tam Lawsuits: how whistleblowers earn 15% to 30% under the False Claims Act

Qui tam lets a private citizen sue on the government’s behalf when someone defrauds a federal program, and keep a cut of whatever the lawsuit recovers. You file the complaint under seal through an attorney, the Justice Department investigates and decides whether to join the case, and if it succeeds, the relator’s share runs 15% to 25% when the government intervenes and 25% to 30% when it declines and your lawyer carries the case alone. Fiscal year 2025 set records on both sides of this equation: settlements and judgments hit $6.8 billion, the highest in the statute’s history, and whistleblowers filed 1,297 qui tam suits, also a record. Since Congress strengthened the law in 1986, total recoveries now top $85 billion. Here is who can bring one, what it pays, how filing under seal actually works, the wait, retaliation protection, and the mistakes that sink cases.

Who qualifies

Any private person with knowledge of fraud against the federal government can bring a qui tam suit as a “relator,” even without having personally lost money, because you are suing in the government’s name as well as your own. But you cannot do it alone: courts have consistently held that a relator must be represented by an attorney, since you are asserting the government’s claim rather than only your own, and a non-lawyer cannot represent another party’s interest in federal court. A licensed attorney can act as their own relator, but a layperson cannot self-represent one.

Two doctrines can shut a case down before it starts. The first-to-file bar means that once one relator files on a given set of facts, no later relator can bring a related action on the same facts, even with better evidence. The public disclosure bar requires dismissal of a case based on allegations already publicly disclosed, whether through a government hearing, report, audit, investigation, or the news media, unless the Attorney General brings it or you qualify as an “original source”: someone with knowledge independent of, and materially adding to, the public disclosure, who voluntarily gave that information to the government before filing.

The False Claims Act carves out an entire category of fraud: it does not apply to claims, records, or statements made under the Internal Revenue Code. If your case is actually about tax underpayment rather than false billing to a federal program, qui tam is the wrong vehicle. See the IRS whistleblower program instead. A relator’s own share can also be reduced if they planned or initiated the violation, and anyone convicted of a crime arising from the fraud is dismissed from the case and gets nothing.

What it pays

The underlying liability is steep by design: three times the government’s actual damages, plus a per-claim civil penalty currently running $14,308 to $28,619 (as adjusted for inflation in 2025), applied separately to every false claim submitted. In a case built on thousands of individual billing submissions, the penalties alone can dwarf the actual damages.

Out of whatever the government recovers, the relator’s statutory share is 15% to 25% “of the proceeds of the action or settlement” if the government intervenes and takes over primary responsibility for litigating the case, or 25% to 30% if it declines and the relator’s own counsel pursues it without government resources. Either way, a court can cap the share at 10% if the case rests mainly on public disclosures, even for a relator who otherwise qualifies as an original source. On top of the percentage, a successful relator is also typically entitled to reasonable expenses, litigation costs, and attorney’s fees, paid separately by the defendant rather than carved out of the relator’s own share.

The scale of this program dwarfs the SEC and CFTC’s reward programs. Of the $6.8 billion recovered in fiscal 2025, more than $5.7 billion involved health care fraud, chiefly Medicare, Medicaid, and TRICARE billing. If that is your case, how to report Medicare and Medicaid fraud lays out the federal and state channels and where a qui tam suit fits. Settlements and judgments in qui tam suits, both filed that year and carried over from earlier years, accounted for more than $5.3 billion of the total. The Justice Department itself describes the typical relator payout as running “between 15% and 30%” of the recovery. For a sense of scale against the SEC and CFTC’s individual award figures, see our award tracker, though qui tam recoveries are not itemized there.

How to file, step by step

1. Retain a qui tam attorney before you do anything else. You need one to file at all, and an experienced one will shape how the evidence gets built and disclosed.

2. Gather evidence without tipping off the target. Do not alert the company, destroy records, or break other laws to get documents. How you gathered the evidence can become an issue in the case.

3. File the complaint in camera and under seal, in the appropriate federal district court, along with a confidential written disclosure statement laying out substantially all the material evidence and information you have. The disclosure statement is separate from the public complaint and is not served on the defendant.

4. Serve the government, not the defendant. A copy of the complaint and disclosure statement goes to the U.S. Attorney for that district and to the Attorney General in Washington. The defendant gets nothing and does not even know the suit exists.

5. Wait out the seal. The case must stay sealed for at least 60 days while the government investigates and decides whether to intervene. In practice, the government routinely asks for, and gets, extensions for good cause, so the seal period is often much longer than 60 days.

6. Learn the government’s decision. If it intervenes, it takes over as the lead plaintiff and your relator share settles into the 15% to 25% range. If it declines, your attorney can still pursue the case, and your potential share rises to 25% to 30%, though declined cases lose access to the government’s investigative leverage and settle or win less often as a result.

Timeline reality

The seal alone commonly runs into years, not months, once routine extensions are factored in. Unlike the SEC, CFTC, and IRS programs, there is no fixed post-notice claim deadline waiting for you at the end. Instead, the open-ended front end is the whole game: investigation, a decision to intervene or decline, then litigation or settlement, then a court’s determination of your exact percentage inside the statutory range. Three to six years from filing to resolution is common, and complex health care or defense-contracting fraud cases can run longer. Because the case is under seal for most of that time, you generally cannot discuss it publicly, including with coworkers, family, or the press, until the court lifts the seal.

Retaliation protection

Section 3730(h) protects employees, contractors, and agents from being discharged, demoted, suspended, threatened, harassed, or otherwise discriminated against for lawful acts done in furtherance of a False Claims Act case or other efforts to stop a violation of the statute. Remedies include reinstatement with the seniority you would have had, two times your back pay, interest on that back pay, compensation for special damages, and your litigation costs and attorney’s fees. You generally have three years from the date of the retaliation to bring that claim, separate from and not dependent on how the underlying fraud case turns out.

Common mistakes

Filing without a lawyer, or waiting too long to get one. You cannot bring the case yourself, and building a strong disclosure statement before filing matters more than moving fast without one.

Talking about the case while it is sealed. Discussing a sealed qui tam suit publicly, or tipping off the defendant, can jeopardize the case and your position in it.

Assuming you have more time than you do. Once someone else files on the same facts, the first-to-file bar shuts out every later relator, regardless of whose evidence is stronger.

Building a case on news coverage or public records alone. The public disclosure bar can end a case that looks strong on paper unless you can show you are an original source with independent, material knowledge.

Treating a declined case as a lost case. A government decision not to intervene is not a verdict on the merits. It means your attorney has to carry the litigation without the government’s resources, in exchange for a larger potential share if you win.

Reaching for qui tam on a tax fraud claim. The False Claims Act explicitly excludes claims made under the Internal Revenue Code. If the fraud you are reporting is tax underpayment rather than false billing to a federal program, use the IRS whistleblower program and Form 211 instead.