Whistleblower lawsuits will no longer be a source of easy income for those who regularly scan published information for loopholes in government procedures and accounts. A recent Supreme Court judgment has imposed limits on such cases if the information used for the lawsuit is collected from government sources. These cases are often used to uncover financial frauds.
There are different opinions on what all sources the judgment covers. This is significant because it could determine the framework of what will or will not be admissible as a valid whistleblower case. The interpretation varies – either to be taken as encompassing only information made public via Federal reports or as that contained in state or local reports. The Justice Department holds that lawsuits based on both kinds of reports should be barred.
In yet another twist to the tale, President Obama’s new health care reforms have also added their own bit to the restriction. Along with the reforms, the lawmakers also ushered in modifications to the False Claims Law so that only information revealed through Federal Reports is barred from being used by whistleblowers in a lawsuit of their own. While this point has been noted by the Justice Department, it has also been clearly stated that pending lawsuits will not be impacted by the recent reforms.
The new Supreme Court judgment hopes to curtail opportunist whistleblowers who make use of public information to bring in lawsuits which may not even save the government significant sums by unveiling frauds. Whistleblowers can pursue a case on the behalf of the government and collect up to 30% of the damages payable by those found guilty in a court of law in such cases.
The act was strengthened in 1986 following which almost $20 billion has been recovered through such cases by the Justice Department. This also indicates the substantial sums that the whistleblowers have made out of these lawsuits over the years. With the new restrictions, people will no longer find it as easy to read up information in government reports or elsewhere and slap a case on an allegedly fraudulent individual in power or an institution.
The court decision was passed by a 7 to 2 majority. It is hoped that with this change, bona fide cases will be brought out into the open while those who wish to make a quick buck will be deterred from going ahead with lawsuits and taking up the judiciary’s valuable time and resources.
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