The False Claims Act has been very good to some trial lawyers.
Firms such as D.C.’s Phillips & Cohen have won billions since the mid-1980s by bringing whistle-blower suits against government contractors.
“A lot more has been saved in deterrence,” Phillips & Cohen lawyer Peter Chatfield said.
Some law firms have carved out niches by bringing False Claims Act cases in single government agencies.
Take Ashcraft & Gerel, a D.C. personal injury firm that has cornered the market on fraud litigation stemming from General Services Administration contracts. In March, the firm obtained a record $128 million settlement from Network Appliance Inc.
John Boese, a lawyer who defends companies from False Claims Act litigation, said the rewards provision confuses the public interest with lawyers’ interests.
“People who deal with public money should recognize that if they cheat the taxpayer — truly cheat the taxpayer — there are serious ramifications to that,” he said.
“If you leave it to a Justice Department lawyer, they don’t have a financial interest in bringing a qui tam case,” he added.
“Once you put that in the hands of a private lawyer, it becomes not about what’s just but about how much they can recover,” Boese said.
Patrick Burns, spokesman for the D.C. nonprofit advocacy group Taxpayers Against Fraud, said that the False Claims Act is “a great free market innovation.”
“Theft is always ‘incentive-ized,’ ” he said. “What we’ll do is ‘incentive-ize’ integrity.”
