Monday, 22 July 2013

G4S shows it’s time for a UK False Claims Act

My article from Labourlist last week

The latest G4S scandal, currently being investigated poses the question: are there enough safeguards against the public purse being ripped off?

With the government pressing a privatisation and outsourcing agenda, the public need to be reassured that taxpayers’ money can be protected against wrongdoers.  

Emily Thornberry MP’s paper on Serious Fraud and White Collar Crime, based on experience from U.S. states, certainly advances Labour’s position – but do we need to consider further steps?

The False Claims Act is an American federal law that imposes liability on federal contractors who defraud the government during the course of their work.

Also called the "Lincoln Law", it was initially passed in the 1860s as a response to the government being ripped off by unscrupulous contractors during the Civil War. Subsequent amendments and modifications have expanded the scope following scandals in military and civilian procurement.

The law includes a "Qui Tam" provision, actually based on our own 14th century English Common Law, ordinary citizens to file actions on behalf of the government.  Qui tam is an abbreviated form of the Latin legal phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur ("he who brings a case on behalf of our lord the King, as well as for himself"). 

Those filing under the Act stand to receive a portion (usually about 15–25%) of any recovered damages.  Claims under the Act have typically involved healthcare, military, or other government spending programs, as well as large pharmaceutical settlements.

A total of £22 billion was recovered under Qui Tam suits during the last decade, sending a strong signal to actual and potential wrongdoers.

In 1998 Labour brought in the Public Interest Disclosure Act, which protected public interest whistleblowers against detriment after similar laws in America.  In America whistleblower laws are supplemented by the False Claims Act – so why don’t we do it here?

The answer is that at some point the policy makers and judges decided that providing incentives for whistleblowers was an ‘un-British’ thing to do.  Despite having a firm foundation in the English Common Law going back to decisions in 1318, Qui Tam was effectively eradicated her between the end of the 19th century and 1950.

The opinions about whistleblowing from the middle of the last century may not be useful in a public services arena with large and expanding corporate players.

Whether the private sector expands into further public sector work or not, the sheer extent to which the NHS, Whitehall and local authorities already purchases billions of pounds of services from the private sector calls for more concrete action to secure value for money and prevent scams from happening in the first place. 

It’s time for Labour to bring the False Claims Act home.

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