Qui tam’s earliest history can be traced to 13th century England. In that era, qui tam writs were widely employed to enforce the laws of the Crown. Private citizens commonly used qui tam actions to access the King’s Court. The overwhelming motivation therefore was redress of personal wrongs inflicted by lawbreakers. Qui tam complainants received monetary rewards known as “bounties” for bringing wrongdoers to justice.

Earliest US roots

Given this historical backdrop, it is not surprising that British settlers transplanted the roots of
qui tam into the new Colonies‘ legal landscape. Even after British independence was achieved, the Founding Fathers retained English common law. Qui tam was incorporated into many early American statutes. The Continental Congress enacted twelve penal statues-ten of which included
qui tam provisions. See "Vermont Agency of Natural Resources v. United States ex. rel. Stevens (98-1828) 529 U.S. 765 (2000)" for an excellent historical overview of qui tam.

Civil war era

Congress first enacted the False Claims Act in 1863 during Abraham Lincoln‘s tenure as US President. Citing endemic fraud among private suppliers to the Union Army, the original 1863 version of the FCA included civil and criminal penalties. The law also integrated qui tam features and allowed informants to collect of up to half of any recovered damages. The following quote by Lincoln summarizes prevailing public sentiment of those times:

“Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the nation while patriotic blood is crimsoning the plains of the south and their countrymen are moldering in the dust.” — Abraham Lincoln

World War II

As in Civil War days, unscrupulous World War II profiteers repeatedly defrauded the government. Motivated by greed, many whistleblowers exploited the resulting Federal indictments. Each time criminal charges were publicly disclosed, many parties with no first-hand knowledge of fraud would rush forth to file FCA suits.

In response, Congress amended the FCA in 1943. These amendments significantly reduced informants’ share of recovered damages and imposed a “personal knowledge” requirement for whistleblowers. This last stipulation proved a nearly insurmountable procedural obstacle to initiating FCA suits.

The Reagan Years

To counteract widespread fraud among private defense contractors, Congress strengthened the FCA in 1986. These amendments removed prior restrictions wherein FCA informants had to bear litigation costs. Whistleblowers’ share of recovered damages increased to 30 percent. Most importantly, the threshold “knowledge” requirement was reduced. FCA suits were maintainable even if the government already knew about fraudulent conduct prior to an action being filed.

The statute of limitations for FCA suits was lengthened and employee informants were granted formal protection against reprisals. Very significantly, the government was allowed treble recovery of proven damages. Primarily due to these 1986 amendments, qui tam actions have dramatically increased.

Since 1986, the FCA has been the most successful and effective legal apparatus for the disclosure and deterrence of procurement and program fraud. Total government-recovered qui tam damages have been in excess of $1 billion USD since the 1986 statutory overhaul. The majority of cases have involved health care and defense providers.

Into the new millennium

Since 2000, pharmaceutical companies have paid over $4 billion USD for Medicaid and Medicare fraud. In the Federal fiscal year which ended September 2007, the US government had secured a total of $2 billion USD in FCA judgments and settlements. About 75 percent of this sum was derived from FCA qui tam provisions.

The evidence is clear and the verdict is in: qui tam actions are firmly entrenched in American jurisprudence. Significant informer incentives and fraud deterrence insure qui tam’s continued vitality. Thus far, history has shown this to be a dynamic combination in combating fraudulent business activities against the government.