What is a Relator?
Understanding the Role in Legal and Ethical Contexts
In modern legal systems, particularly in the United States, the term relator has a specific legal connotation, one that is primarily associated with lawsuits under the False Claims Act (FCA) and other statutes that allow private individuals to sue on behalf of the government. At its core, a relator is a private party who initiates a lawsuit, usually to expose fraud or wrongdoing against the government, particularly in cases involving false claims for government funds.
To fully understand the role of a relator, it’s essential to first delve into the concept of a qui tam lawsuit, under which most relator actions are filed. The term qui tam comes from a Latin phrase, qui tam pro domino rege quam pro se ipso in hac parte sequitur, which translates to “he who brings an action for the king as well as for himself” . This centuries-old legal concept allows private individuals, often whistleblowers, to act as relators in exposing fraud against the government. In return, relators are entitled to a share of the financial recovery that results from the lawsuit.
The most common law under which a relator might file a lawsuit is the False Claims Act. Passed during the American Civil War, the False Claims Act was designed to combat fraud by suppliers to the government. It empowers private citizens, typically insiders with knowledge of the fraud, to bring lawsuits on behalf of the government when they have reason to believe that a person or company has defrauded the government . In such cases, the relator’s role is to initiate the legal process by providing critical information, and if the government recovers money through a settlement or judgment, the relator is entitled to receive a percentage of the recovered amount, often ranging between 15% to 30% .
The Legal Process of a Relator
The process begins when the relator files a lawsuit, usually under seal, meaning that the details of the case are kept confidential while the government investigates the claims. The Department of Justice (DOJ) will then review the allegations and decide whether to intervene in the case. If the DOJ chooses to intervene, it takes over the case from the relator, although the relator remains involved and entitled to a portion of any recovery . If the DOJ declines to intervene, the relator can still pursue the case independently, though this is typically a more difficult path to a successful outcome.
Relators are crucial to the enforcement of the False Claims Act because they often possess insider knowledge that would be difficult for the government to obtain otherwise. For example, a relator might be an employee of a healthcare company that is billing Medicare for services that were never provided. The employee, recognizing the fraud, might gather documentation and report the fraud through a qui tam action, triggering the government’s investigation and eventual recovery of improperly paid funds .
In addition to the False Claims Act, relators also play a role in other contexts, such as environmental or tax fraud cases, though the structure of qui tam lawsuits under the False Claims Act is the most well-known framework for relator actions.
What is a Whistleblower?
While the role of a relator is largely confined to the legal sphere, particularly in relation to lawsuits involving government funds, the term whistleblower is much broader in its application. A whistleblower is any individual who exposes unethical, illegal, or otherwise improper activities within an organization. Whistleblowers can report a wide range of issues, including financial fraud, regulatory violations, safety hazards, environmental damage, or abuses of power . They might report these activities internally (to company management or compliance officers), externally (to regulatory agencies or law enforcement), or even publicly (through the media).
Whistleblowers can emerge from any industry and any sector, whether it is the private, public, or nonprofit sector. Their actions are not confined to filing lawsuits or seeking legal recourse. Whistleblowers may simply want to alert authorities to wrongdoings without getting involved in any legal proceedings. For instance, an employee might report unsafe working conditions to the Occupational Safety and Health Administration (OSHA) or inform a federal regulator of financial malfeasance within a publicly traded company .
Differences Between a Relator and a Whistleblower
Although the terms relator and whistleblower are sometimes used interchangeably, they represent distinct roles, with key differences in their legal standing, objectives, and processes. The following sections highlight these differences across various dimensions.
1. Legal Standing and Role in Litigation
The primary distinction between a relator and a whistleblower is their role in the legal process. A relator is a specific type of whistleblower who is involved in a legal action, typically under a statute like the False Claims Act, where they act as a plaintiff. In this role, the relator sues on behalf of the government to expose fraud or misconduct, usually related to government funds or contracts. The lawsuit often results in financial recovery for the government, and the relator may receive a portion of that recovery as a reward .
A whistleblower, on the other hand, may or may not be involved in any legal action. Whistleblowers are more generally defined as individuals who report unethical or illegal conduct, but their actions do not necessarily lead to a lawsuit. For example, a whistleblower might report fraud to a regulatory agency like the Securities and Exchange Commission (SEC), but they are not necessarily a party to any subsequent litigation. In many cases, whistleblowers are simply individuals who report wrongdoing and have no further involvement in the legal process .
2. Scope of Misconduct Exposed
Another key difference lies in the scope of the wrongdoing that relators and whistleblowers expose. Relators typically focus on fraud involving government funds, contracts, or programs. The False Claims Act, for example, is intended to combat fraud against the federal government, so relators usually expose wrongdoing such as healthcare fraud, defense contractor fraud, or tax evasion involving public funds .
Whistleblowers, by contrast, can expose a much broader range of unethical or illegal activities. While they might report government fraud, they could also report issues such as environmental violations, corporate fraud, workplace discrimination, or public health and safety hazards . A whistleblower’s focus is not confined to fraud against the government, and their actions might not involve financial misconduct at all.
3. Potential for Financial Reward
One of the notable features of being a relator is the potential for financial compensation. If a relator’s lawsuit is successful and results in a recovery of funds, the relator is entitled to a percentage of that recovery, which can be substantial. For instance, in large healthcare fraud cases, the government may recover millions or even billions of dollars, and the relator could receive 15% to 30% of that amount .
Whistleblowers, on the other hand, do not always receive financial compensation for their actions. While some laws, such as the Dodd-Frank Act, offer financial incentives for whistleblowers who report securities fraud, most whistleblowers act without the expectation of monetary reward . Their primary motivation is often to correct wrongdoing or expose unethical behavior, rather than to benefit financially.
4. Government Involvement
Relators specifically act on behalf of the government when they file qui tam lawsuits. In these cases, the relator is bringing the action in the name of the government and seeks to recover funds on its behalf. The government may choose to intervene in the case and take over the litigation, or it may allow the relator to pursue the case independently .
Whistleblowers, however, do not necessarily act in the government’s interest. While they may report illegal activities to government authorities, they are not legally representing the government or pursuing a lawsuit in its name. Whistleblowers might report issues to internal company authorities, to regulatory agencies, or to non-governmental organizations, and their actions may or may not lead to government intervention .
Conclusion
In summary, while both relators and whistleblowers play critical roles in exposing wrongdoing, they differ in several key respects. A relator is a specific type of whistleblower who files a lawsuit on behalf of the government, often under the False Claims Act, to recover funds obtained through fraud. Relators are legally involved in the process, acting as plaintiffs, and may receive a financial reward for their efforts. Whistleblowers, by contrast, may expose a broader range of unethical or illegal conduct, and they do not always become involved in legal action or receive financial compensation. Both, however, are essential to ensuring accountability and transparency in both the public and private sectors.