Hawaii and Delaware enact whistleblower ("qui tam") laws

Aug. 1, 2000 — Hawaii and Delaware this year have enacted whistleblower laws similar to the federal False Claims Act to allow whistleblowers to file "qui tam" lawsuits against companies or individuals defrauding the state or a local government.

"This bill reflects the historical reality that one of the least expensive and most effective means of preventing frauds on the state's treasury is to make the perpetrators of them liable to actions by private parties," said the synopsis of the Delaware bill by its sponsors.

Hawaii's law passed May 26. The Delaware statute was signed into law June 30. At least seven other states and the District of Columbia have similar false claims laws in place.

The new law, said a Hawaii legislative committee report, "will promote lawsuits which the state is not equipped to bring on its own. This bill will allow for qui tam actions against contractors and suppliers who, due to their close relationships with the Executive Branch, would not otherwise be investigated or prosecuted, and it will encourage and provide an incentive for those with knowledge of fraud to come forward."

The Delaware law stipulates that liable defendants sued under the false claims law may be required to pay $5,500 to $11,000 for each false claim plus triple the government's losses as a result of the fraud.

Hawaii's penalties are the same as in the federal law: $5,000 to $10,000 for each false claims, and as much as three times the government's losses.

Under the new state laws, whistleblowers who bring successful qui tam lawsuits are entitled to a reward:

  • 15 percent to 25 percent if the government joins the case.
  • 25 percent to 30 percent if the government does not join the case.
  • Up to 10 percent if the lawsuit is based primarily on information disclosed in other litigation or in the news media.

Links to the text of state "qui tam" laws are on the "State laws" page.