What Does a Typical False Claims Act Settlement Agreement Look Like?

Much like most areas of civil law, False Claims Act lawsuits often result in a settlement agreement between the whistleblower, defendant(s), and the federal government. These agreements are often quite lengthy, containing dozens of provisions to be followed by all parties involved. If the defendant’s actions were especially egregious, the government may place restrictions or probationary measures in the agreement – as well as corporate compliance measures, which are meant to cast an additional watchful eye over the defendant’s business methods moving forward.

If you are considering a False Claims Act lawsuit and are curious about the way these cases settle, the following list examines the terms and conditions often found in a False Claims Act settlement agreement:

#1 – No Admission of Liability: Probably one of the most integral aspects of a False Claims Act settlement agreement – at least in the eyes of the defendant – is the all-important clause stating that the defendant is not admitting any liability or implying misconduct by virtue of opting to settle the matter. This clause is found in every settlement agreement and is meant to protect the defendant from the inevitable collateral damage that often follows an admission of fault.

Here’s an example:

“This Settlement Agreement and the payment described herein are neither an admission of liability by [Defendant] nor a concession by the United States that their claims are not well founded or a concession by the Relator that his claims are not well founded. To avoid the delay, uncertainty, inconvenience and delay of protracted litigation, the Parties agree as follows.”

#2 – Statement of Facts – Also known as “recitals,” a False Claims Act settlement agreement sets forth the general underlying facts giving rise to the lawsuit. The recitals are typically much less detailed than the factual assertions found in the Complaint. However, recitals generally set forth the date range of the alleged fraud, the parties involved, the general nature of the fraud (i.e., kickbacks or “upcoding”), and the amount in controversy.

#3 – Government’s Take – The Settlement Agreement must set forth the amount of money the defendant agrees to pay the federal (and state, if applicable) government to settle the matter. This amount may not be the total amount of calculated damages, but usually comes close.

#4 – Whistleblower’s Reward – The whistleblower’s reward or “relator’s share” must be included in the Settlement Agreement – and can reach up to 30 percent of the government’s settlement amount.

#5 – Corporate Integrity Agreements – The Settlement Agreement may contain a Corporate Integrity Agreement (“CIA”), or it may reference a CIA already in place. These agreements may contain any of the following requirements, the violation of which could result in removal from federal healthcare or contracting opportunities:

• Hiring a compliance officer or convening a compliance committee
• Writing and publishing written standards of conduct and policy procedure manuals
• Implementing comprehensive employee training
• Retaining an independent compliance firm to conduct an annual review or audit
• Establishing an internal, confidential disclosure protocol
• Restricting employment of any ineligible individuals
• Procedures for reporting overpayments, reportable events, or investigations, or
• Providing annual reports to the federal government regarding any matters of concern

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Do you need a Whistleblower Lawyer or want to know more information about Qui Tam Law and your rights under the False Claims Act?

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