The Average Whistleblower Settlement as reported by the US Department of Justice in 2016: Over last 30 years there has been an average of 377 new federal False Claims Act (FCA) cases filed under the act’s Qui Tam provisions each year. The mathematical average of the total recoveries (settlements and judgments) for this time period is approximately $3.3 million, with an average whistleblower award of $562,000. In the last five years the figures have gone up across the board: with an average of 693 new cases filed annually, with average recoveries of $4.8 million and whistleblower awards of $837,000. It should be noted that the average recovery in healthcare fraud cases (which is the biggest single industry listed in the government’s statistics) in the last five years is over $5 million, with average whistleblower awards of nearly $865,000.

Of course, the numbers don’t tell the whole story. At one time most FCA whistleblower settlements tended to be similar in nature, although the amount of the settlement always varied depending on the size of the case. It was common to have a simple agreement between a whistleblower (known technically as the "relator"), the government and the defendant. The defendant agreed to pay the government a certain amount of money for resolving the relator’s “Qui Tam” allegations and the defendant agreed to pay the whistleblower's attorneys their statutory fees (essentially the attorneys' hourly rate times the hours worked). Concurrently, the government agreed to pay the whistleblower a share of any proceeds it recovered from the defendant (usually between 15% and 25%). All three parties typically released the others from all future claims.

Increasingly there are now many more moving parts in a typical FCA settlement than there once were. It is not unusual to have more than one relator in the case. Sometimes there are co-relators working together and often there are competing relators who may have conflicting interests, particularly over their respective share of any whistleblower award. It is also becoming more common to have multiple defendants in FCA cases, including, individuals and not just the corporations or organizations that they work for. There has also been a noticeable increase in the number of government authorities involved in a given FCA matter. For example, in a Medicaid fraud case there might be 20 or even 30 states participating in the lawsuit.

The issues that have to be addressed in a settlement process have also gotten more complex over time. It is not unusual for the relator to have retaliation, breach of contract or other personal claims against the defendant that have to be resolved and included in the settlement agreement. It is also no longer rare for the government and the relator to disagree over the percentage for the whistleblower award. The trend in recent years has been for the government to push for a number between 15% and 20%, rather than between 20% and 25%, and this has complicated settlement negotiations.

That said there are at least two features about FCA settlements that remain as true today as they were in the past. First, the length of time between the filing of an FCA complaint and the date when the settlement is finalized is measured in years, not months. And second, the vast majority (perhaps 70%-80%) of the FCA cases that are filed conclude without a settlement or judgment in favor of the relator. The unfortunate reality is that the government declines to join in most FCA cases and the ones that relators pursue on a "non-intervened" basis end up being dismissed, either voluntarily or by court order. This is why most successful relators and their attorneys cherish their settlement victories and seldom regard their cases as “just average.”

 Whistleblower Law Team at: Phone: 800-777-0356 Email: info@wblteam.com