Whistle blowing

For law enforcement purposes corruption and fraud are hard battles. Because of the highly secretive and premeditated nature of these crimes, prime witnesses are themselves often implicated in the fraudulent transaction. Promises of immunity and whistle blowing rewards are often required to resolve these information asymmetries. These insights have set a trend, both in scholarship and law enforcement practice, towards reward-based approaches (carrots), as an alternative or complement to punishment based deterrence (sticks). Applying the U.S. False Claims Act (FCA) as an analytical framework, we provide a critical review of the efficiency limitations of whistle blowing. More specifically, the formal model developed in this contribution, reveals a gap between social and private incentives in whistle blowing, both with regard to the decision to pursue litigation and the timing of whistle blowing. First, while an insider will blow the whistle whenever his expected recovery exceeds the expected costs of litigation, enforcement agencies seek to optimise enforcement in the long run. The autonomy of whistle blowers to pursue claims without government involvement, weakens the government’s bargaining position and obstructs the government’s ability to weigh in wider factors of enforcement (the effect of an individual case on a multiple claim suit, etc.). Second, whenever rewards are tied to recovery, bounty awards create a perverse incentive whereby fraudulent practices are not terminated at a socially optimal point in time. The potential race among whistle blowers cannot mitigate this effect fully because the stigma and loss of opportunities on the job market act as internal constraints on whistle blowing

When you build it, they will come : the promise and pitfalls of a copyright small claims process

Copyright law provides fertile ground for small claims adjudication: an- abundance of straightforward infringements claims remains unpursued because the costs of litigation in federal courts outweigh the monetary value at stake in many individual disputes. This Article explains how a small claims process can infuse accountability and deterrence into copyright law by bringing to life meritorious infringement claims that otherwise remain negative value lawsuits, while discouraging dubious, opportunistic infringement allegations. Applying incentive analysis, this Article then examines Congress's most recent proposal to institute a small claims board. It finds that the CASE Act's statutory damage provisions are mismatched with the voluntary nature of the small claims process. The CASE Act is likely to induce opportunistic claims as well as bluff opt-outs by defendants, rendering the small claims board ineffective. Ironically, the ambitious nature of the CASE Act system inadvertently pushes out adjudication of the very small claims that it seeks to salvage