News Brief

Law360 Quotes Thurston on Limited Impact of SCOTUS Review of “Objectively Reasonable” Explanations under the False Claims Act

March 7, 2023

James Thurston (Partner-Chicago, IL) was quoted in “FCA Review’s Coverage Impact Likely Will Be Limited,” an article in Law360 Employment Authority on March 6, 2023. Defense and coverage attorneys interviewed on the subject indicated the U.S. Supreme Court's review of whether the False Claims Act covers compliance lapses with "objectively reasonable" explanations will likely have limited impact on issues of insurance coverage despite its potential to significantly affect the underlying litigation. According to Jim, "[t]he Biden administration has certainly been friendly to the FCA," noting that the DOJ obtained 351 settlements and judgments in 2022, the second-highest number in history. Jim commented, if FCA suits increase and settlements become more expensive, insurers might think about adding FCA claims-specific retentions, sub-limits for FCA claims, as well as language specifying that they will only cover defense costs, "[t]hat way, the insurers can contain and cap their liability to only defense costs, and only up to a certain amount."

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