Page 24 - "The Committee's overall intent in amending the qui tam section of the False Claims Act is to encourage more private enforcement suits."

Page 24 - "Additionally, much of the purpose of qui tam actions would be defeated unless the private individual is able to advance the case to litigation. The Committee feels that sealing the initial private civil false claims complaint protects both the Government and the defendant's interests without harming those of the private relator. "

Page 25 & 26 - "Subsection (c)(1) provides qui tam plaintiffs with:

• a more direct role not only in keeping abreast of the Government's efforts and

• protecting his financial stake, but also in

• acting as a check that the Government does not neglect evidence,

• cause unduly delay, or

• drop the false claims case without legitimate reason.

Specifically, paragraph (1) provides that when the Government takes over a privately initiated action, the individual who brought the suit will be served, upon request, with copies of:

• all pleadings filed

• as well as deposition transcripts.

Additionally, the person who brought the action may formally object to any:

• motions to dismiss or

• proposed settlements between the Government and the defendant.

Any objections filed by the qui tam plaintiff may be accompanied by a petition for an evidentiary hearing on those objections.

The Committee does not intend, however, that evidentiary hearings be granted as a matter of right. We recognize that an automatic right could provoke unnecessary litigation delays. Rather, evidentiary hearings should be granted when the qui tam relator shows a "substantial and particularized need" for a hearing.

Such a showing could be made if the relator presents:

• a colorable claim that the settlement or dismissal is unreasonable in light of existing evidence,

• that the Government has not fully investigated the allegations, or

• that the Government's decision was based on arbitrary and improper considerations. "

Page 2 - "The proposed legislation seeks...to encourage any individual knowing of Government fraud to bring that information forward. In the face of sophisticated and widespread fraud the Committee believes only a coordinated effort of both the Government and the citizenry will decrease this wave of defrauding public funds. S. 1562 increases incentives, financial and otherwise for private individuals to bring suits on behalf of the Government. The False Claims Reform Act also modernizes jurisdiction and venue provisions, increases recoverable damages raises civil forfeiture and criminal penalties, defines the mental element required for a successful prosecution and clarifies the burden of proof in civil false claims actions. "

Page 26 - Subsection (c)(1) also provides that the qui tam plaintiff may request that the court allow him to take over the suit if the Government has not proceeded with "reasonable diligence" within 6 months of intervening in the action. While this provision reflects current law, the Committee reaffirms the right of the qui tam plaintiff to intervene if the Government fails to adequately pursue the individual's allegations of false claims. To date, there is no known case law guidance on how courts should evaluate "reasonable diligence" in civil false claims suits. The Committee believes "reasonable diligence" should be evaluated in light of the amount of Government investigative and prosecutive activity in relation to the length of time the Government has been aware of the allegations as well as the magnitude of the alleged fraud. Additionally, courts should weigh the resources willing to be devoted by both the Government and the individual who brought the action as well as the relative experience and expertise possessed by each party. While in most cases the Government's resources will likely appear to exceed the qui tam plaintiff's resources, the Committee recognizes that the often heavy, sporadic workload of Government attorneys may create a situation where a qui tam plaintiff is better able to conduct the litigation in a timely manner.

Page 16 - "The subcommittee substitute also added a provision authorizing the Attorney General to grant awards to informants who contribute to successful false claims suits."