ABA Publishes Robert Salcido Article on Qui Tam Suits and Litigation Funding
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“Blowing the Whistle on Qui Tam Suits and Third-Party Litigation Funding: The Case for Disclosure to the Department of Justice,” an article by Akin Gump health care and life sciences partner Robert Salcido and former government contracts partner Robert Huffman has been published by the American Bar Association.
The article discusses a scenario in which a third-party litigation funder is brought into a qui tam suit to provide funding to the relator—who is alleging false or fraudulent claims presented to the U.S. government for payment—in exchange for part of the recovery.
The article begins by outlining the False Claims Act (FCA), under which private parties, or “relators,” are authorized to bring qui tam suits on behalf of the United States, and the general risks in litigation of having a third-party litigation funder “wrest control of the litigation away from the parties and gain access to privileged information.” In the qui tam context, the authors note, these concerns are heightened.
The article then examines those concerns, looking at what it calls the “perfect storm” intersection of qui tam litigation and third-party litigation funding (TPLF), tracing the development of TPLF and its associated concerns and describing the distinctive issues posed by TPLF in the qui tam context.
The authors then explore the government’s role under the FCA, reviewing the question of disclosure to the Department of Justice and examining the possibility of conflicts of interest, including the possibility of confidentiality and privilege issues as sources of conflict.
Finally, the article explores the constitutionality of qui tam suits and disclosure of TPLF arrangements.
The authors conclude, “The introduction of TPLF into qui tam actions creates the potential for conflicts of interest on the part of the relator, as well as breaches of confidentiality that could undermine the government’s ability to carry out its statutorily allotted role under the FCA… When it comes to an action brought in the government’s name, the [Department of Justice] should not be forced to fly blind.”
To read the full article, click here.
