Civil false claims act: an effective anti‑corporate fraudremedy?

This book chapter analyses the effectiveness of the US Civil False Claims Act (FCA) as a remedy for combating corporate fraud, a historical problem that causes significant global financial losses. The chapter details the crucial role of whistle-blowers in uncovering fraud, specifically through the FCA's qui tam provisions, which allow private citizens to sue on the government’s behalf for fraudulent claims involving federal funds. Significant attention is paid to the Fraud Enforcement and Recovery Act of 2009 (FERA), which expanded FCA liability to increase corporate accountability. However, the chapter also critically assesses the limitations of qui tam suits, citing challenges like the FCA's narrow scope to industries where the government is a major buyer, the harsh retaliation faced by employee whistle-blowers, and the strict pleading standards required to file a successful claim. Ultimately, the chapter concludes that while the FCA and FERA have enhanced whistle-blowing, the current legal framework fails to adequately protect and compensate employee whistle-blowers, hindering its overall effectiveness against corporate fraud.