Incentives For Whistleblowers

Blowing the whistle is a courageous and necessary action to fight fraud. By creating financial incentives for whistleblowers, the government encourages those with real information to come forward and makes it possible to pursue such cases. If you want to know more about what incentives exist for whistleblowers and hat right you may have, consult an experienced whistleblower lawyer today.

Why Was Whistleblower Law Created?

Originally the False Claims Act, the was created to incentivize the act of blowing the whistle on wrongdoing. The action to report wrongdoing in and of itself, was enough to satisfy Congress when they created the initial False Claims Act. Indeed, they set a very high percentage for awards in that law for the express purpose of attempting to incentivize whistleblowers to come forward.

Some supporters of the law wanted to be sure the award was enough to make it so that co-conspirators would come forward and report wrongdoing. The initial creators of the False Claims Act were not particularly concerned about the purity of the whistleblower’s overall personal activity. They simply wanted to incentivize the action of blowing the whistle and get the information to a forum, which could provide the opportunity for the government to collect against the fraudsters.

Origins of Whistleblower Incentives

There are several laws which provide incentives for whistleblowers to report wrongdoing. The idea of whistleblower incentives is a very old one, and it originated in this country during the Civil War when the first version of the Federal False Claims Act was enacted.

The law was enacted in 1863. The debate around that law about whistleblower incentives at that time was explicit as to the purpose of financial incentives. The creators of the law simply wanted high financial rewards to provide incentives to report fraud. Now that the law has succeeded those who attack it would seek to confuse that purpose through a modern interpretation of whistleblower cases.

Value of Whistleblowing

It is worth remembering that the act of blowing the whistle, in and of itself, is important, heroic, and necessary. It does not make the person blowing the whistle otherwise without sin. The original enactors of the False Claims Act came to understand that a lot better than people do today.

Today, people are constantly fighting over what a relator’s share in a False Claims Act case should be.  That is they want to consider how great the relator’s actions were beyond the act of whistleblowing. That, however, is contrary to the original intent of the laws in which whistleblowing was supposed to be in and of itself worthy of the reward.

Potential Whistleblower Rewards

Under the amended and current False Claims Act, incentives for whistleblowers start at 15%, and according to the statute can go as high as 30% when the whistleblower pursues a case that the Government declined to pursue. If it is a case that the Government decides to pursue, the maximum the whistleblower can get is 25%.

The reward is clear and the incentive to blow the whistle is part of that reward, even though the percentages are less than in the Civil War era version of the law and even though the actual amounts awarded are debated along lines, which might have been unfamiliar to those who initially enacted the law.

Do Incentives Matter?

The incentives for whistleblowers do matter to modern whistleblowers. Yet, in almost every lawyer’s experience, whistleblowers act because they are upset about wrongdoing often without even knowing what their rights are with respect to any financial incentive.

However, these award incentives end up making it possible for the whistleblower to pursue a case with professional help and to pursue a case to the extent of fully informing the government and working with the government to prosecute the allegations involved.

Without the incentives, the professional ability to handle such cases would be almost obliterated. It is simply not possible for whistleblowers to hire attorneys and pursue these cases against major government contractors without the ability to collect such an award.