Understanding the False Claims Act

by Lori L. Pines, Weil, Gotshal & Manges LLP with Practical Law Litigation

A Practice Note providing an overview of the False Claims Act (FCA), the US government's primary tool for combating fraud. This Practice Note highlights crucial issues for counsel when defending an FCA action, explaining key liability provisions, the broad knowledge standard, and contractor liability. It examines the main differences between government-initiated cases and qui tam suits brought by whistleblowers, in which the government may intervene. This resource also discusses potential defenses, such as failure to plead fraud with particularity under Federal Rule of Civil Procedure (FRCP) 9(b). It explores complex topics like the implied false certification theory of liability and the rigorous materiality standard. Furthermore, this Practice Note details the significant damages and penalties a defendant faces, including mandatory treble damages and substantial civil penalties per claim, and outlines how corollary state FCAs may apply. Finally, this resource provides guidance on minimizing FCA exposure through robust compliance programs and strategic self-disclosure.