February 13, 2024
On February 12, 2024, the Government updated the Civil False Claims Act penalties to account for inflation. Now, for violations assessed after February 12, 2024, the civil False Claims Act penalties will range from $13,946 to $27,894.
False Claims Act penalties are mandatory for each separate violation of the law. Moreover, the law requires that the penalty amounts increase for inflation each year. As a result of these two factors, total penalty assessments can range from the millions to the tens of millions of dollars.
Whistleblowers and even other lawyers mistakenly think that the False Claims Act limits the civil penalty amount to $10,000 per violation. As a result, they often ignore the possibility of penalties when valuing a case. But this is a mistake.
Penalties are a possibility in every False Claims Act case. Understanding these nuances is key to properly assessing the impact that penalties may have on a case. If you are interested in learning more about False Claims Act penalties, we have a complete guide for you.
The False Claims Act, 31 U.S.C. §§ 3729, provides that anyone who violates the law “is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, . . . plus 3 times the amount of damages.” But how does that apply in practice?
The False Claims Act imposes a penalty for each violation of the statute. These penalties can add up considerably. For example, in some cases courts have awarded thousands or even tens of thousands of penalties. This can result in tens or even hundreds of millions of dollars in False Claims Act Penalties awards.
The 1986 law set penalties at $5000 to $10,000 per violation. Later federal law changed these amounts to account for inflation. In 1999 Congress increased the penalties to $5,500 to $11,000. In 2015, the inflation adjustment law was amended again and now federal agencies are responsible for updating the penalties annually. Now, both the date of violation and assessment matter for penalties. Since February 12, 2024, the penalties range between $13,946 to $27,894 for each claim.
As a result, both the date of violation and the date of assessment matter for penalties.
Violations Occurring before November 2, 2015:
Violations after November 2, 2015 the date of assessment matters:
On February 12, 2024, DOJ adjusted False Claims Act penalties for 2024 and beyond. 89 CFR 9764. As a result, after February 12, 2024, False Claims Act Penalties, for conduct after November 2, 2015, will be from $13,946 to $27,894.
Civil penalties under the False Claims Act can amount to a huge portion of the recovery. When evaluating whether or not to bring a case, understanding False Claims Act penalties calculation is vital. Contact us for a free and confidential consultation.