How Whistleblower Payouts Are Determined in North Carolina Cases
Uncovering fraud against the government takes courage. When an individual steps forward to report misuse of state funds, theft, or false claims, they are not only protecting taxpayer money but also upholding integrity within our systems. Recognizing the risks involved in coming forward — which often include fears of retaliation or professional blacklisting — North Carolina law provides significant financial incentives for those who blow the whistle on corruption.
The North Carolina False Claims Act (NCFCA) allows private citizens to file lawsuits on behalf of the state. If funds are recovered as a result of the information provided, the whistleblower (often called a “relator”) is entitled to a portion of that recovery. However, understanding exactly how these whistleblower payouts are calculated can be complex, involving various factors ranging from the quality of information to the level of government involvement.
At Barrett & Farahany, we understand that reporting illegal actions is never easy. Our North Carolina whistleblower attorneys break down how rewards are determined in North Carolina whistleblower cases so you can better understand your rights and potential compensation.
Factors Influencing Whistleblower Payouts
The core of a whistleblower reward is a percentage of the funds recovered by the state. While the law provides a general range for these percentages, where a specific case lands within that range depends on several variables. Courts and government entities look at the “value add” the whistleblower brought to the table.
1. Quality and Originality of Information
Not all tips are created equal. To qualify for a reward under the NCFCA, the information provided generally must be original — meaning it cannot be derived from public disclosures (like news reports or public hearings) unless the whistleblower is the source of that information.
Beyond originality, the quality of the information is paramount. Vague allegations of “something fishy” rarely lead to substantial recoveries. Specific, timely, and actionable intelligence — such as internal emails, financial records, or detailed accounts of fraudulent billing practices — enables the state to build a stronger case. The more detailed and irrefutable the evidence you provide, the more likely you are to see a payout on the higher end of the spectrum.
2. Role of the Whistleblower
The government rewards active participation. A whistleblower who drops a tip and disappears may receive a lower percentage than one who remains engaged throughout the process. “Substantial assistance” can involve explaining complex billing schemes to investigators, deciphering internal documents, or testifying during proceedings. Your level of cooperation is a key metric courts use when deciding your final share of the settlement or judgment.
3. Government Intervention
Perhaps the single most significant factor in determining the reward percentage is whether the North Carolina Attorney General’s office decides to intervene in the case.
When you file a qui tam lawsuit, the state has the option to “take over” the litigation. If they do, they bear the primary burden of prosecuting the case. If they decline, you and your attorney have the right to pursue the case independently on behalf of the state. This distinction triggers different statutory payout ranges.
Payout Percentages in North Carolina
The North Carolina False Claims Act sets specific statutory guidelines for how rewards are split. These figures are calculated based on the total amount the government recovers, which can include treble damages (three times the actual damage sustained) and civil penalties.
State Intervention (15-25%)
If the Attorney General’s office intervenes and takes the lead on the prosecution, the whistleblower is typically entitled to receive between 15% and 25% of the proceeds.
In these scenarios, the state uses its own resources to litigate, reducing the financial risk and workload for the whistleblower. Because the government is doing the “heavy lifting” in court, the whistleblower’s percentage share is slightly lower, though the likelihood of a successful recovery often increases with state backing.
Whistleblower Pursues Alone (25-30%)
If the state declines to intervene, the whistleblower may choose to pursue the action alone. Because the whistleblower (and their legal counsel) assumes the full burden, risk, and expense of the litigation, the reward percentage increases.
In successful cases where the state did not intervene, the whistleblower is generally entitled to between 25% and 30% of the recovery. This higher percentage acknowledges the significant effort and risk required to litigate a fraud case without direct government assistance.
The Role of Legal Representation
Navigating a qui tam lawsuit is legally technical and procedurally strict. Attempting to file a claim without experienced counsel can result in procedural errors that might disqualify you from receiving a reward entirely.
Importance of Experienced Attorneys
An experienced whistleblower attorney does more than just file paperwork. They help package your information in a way that is compelling to the Attorney General, increasing the odds of government intervention. They also shield your identity during the initial phases of the investigation and ensure that your rights are protected against retaliation.
Furthermore, when it comes time to determine the reward, your attorney argues on your behalf. They present evidence of your cooperation and the value of your information to justify a payout at the top of the statutory range.
Payment of Attorney’s Fees and Expenses
A common concern for potential whistleblowers is the cost of litigation. Under the North Carolina False Claims Act, if the lawsuit is successful, the defendant is typically required to pay reasonable attorney’s fees and legal expenses. This is in addition to the whistleblower’s share of the recovery, meaning your legal costs generally do not eat into your percentage of the reward.
Maximizing Your Whistleblower Payout
Ultimately, the goal of the legislation is to incentivize the recovery of stolen public funds. Therefore, the math is simple: the more money recovered for the state, the larger the potential payout for the whistleblower.
Maximizing Recovery for the State
Because your reward is a slice of the total pie, increasing the size of the pie is in your best interest. This underscores the importance of being thorough. A well-documented case that proves systemic fraud over a long period will result in a larger settlement than a case proving a single instance of misconduct.
Treble damages — where the court orders the defendant to pay three times the amount of the fraud — can significantly inflate the total recovery, and by extension, your payout.
Vital Role of the Whistleblower
To push your payout toward the 25% or 30% upper limits, you must demonstrate your indispensability. Courts look favorably upon whistleblowers who provide the “smoking gun” evidence or who help uncover fraud that would have otherwise gone completely undetected.
The more vital your role in the successful outcome of the case, the stronger your argument for a maximum percentage share.
The Importance of Protection
Whistleblowers perform an essential civic duty. They protect innocent individuals from harm — whether that involves patients receiving substandard care due to Medicaid fraud or taxpayers paying for ghost employees. Despite this, whistleblowers often face hostility. This is where attorneys can come in to help.
Taking the Next Step
At Barrett & Farahany, we believe you should be celebrated for your integrity, not punished. Retaliation against whistleblowers is illegal. If you have been fired, demoted, harassed, or discriminated against because you reported fraud or refused to participate in illegal actions, you may have grounds for a separate claim for damages, including reinstatement and back pay.
Understanding how whistleblower payouts are determined is the first step in a longer journey toward justice. If you possess information regarding fraud against the state of North Carolina, time is often of the essence. The “first-to-file” rule generally means that only the first whistleblower to file a claim is eligible for the reward.
Do not try to navigate this complex legal landscape alone. Seek counsel who can guide you through the process, ensure your information is presented effectively, and fight for the maximum reward available under the law.
Contact Barrett & Farahany today to discuss your situation confidentially.
