Congress enacted the Equal Access to Justice Act in 1980. The attorneys often refer to this law simply as the EAJA. This law applies to cases before the U.S. Court of Appeals for Veteran’s claims. This law levels the playing field and gives ordinary citizens easier access to the courts when fighting the federal government. The idea is that it is normally very expensive to fight a legal case against the U.S. government and the average person would not be able to afford the legal fees to undertake such a litigation. However, the EAJA allows the winning party to have his attorney’s fees paid by the government.
In the case of a veteran, this means that if he prevails at the U.S. Court of Appeals for Veterans Claims, his attorney can apply to have the VA pay the legal fee. To prevail, the attorney would have to get the claim remanded or reversed. The payment of attorney fees under the EAJA works like a contingency fee–that is, the attorney can collect a fee only if he prevails in the appeal at the U.S. Court of Appeals for Veterans Claims. So, there is no risk of owing an out-of-pocket attorney fee when a veteran hires a lawyer to represent him at the U.S. Court of Appeals for Veterans Claims. There is no cost to the veteran.
Also, if an attorney represents a veteran at the Board or Regional Office level as well, and attorney fees were collected under the EAJA, then there is usually an offset of the amount already paid by the EAJA. Here’s an example: The attorney gets paid $5,000 by the EAJA for winning the appeal at the U.S. Court of Appeals for Veterans Claims. The attorney then gets the case sent back to the Board where he wins the claim. The veteran eventually receives $100,000 in past due benefits. Normally, a 20 percent contingency fee would equal $20,000, but the previous $5,000 payment under the EAJA would be deducted or “offset”. In our example, this would mean that the attorney fee for representation at the Board and Regional Office level would be only $15,000. ($20,000 minus $5,000 = $15,000).
A veteran must remember that the EAJA applies only to the part of the case at the U.S. Court of Appeals for Veterans Claims. All the talk about 20 or 30 percent of back pay only applies to representation at the Board or Regional Office level. So, you can hire an attorney just to represent you at the Court and there would be no charge to you–win or lose. And the money paid to the attorney under the EAJA would not affect your potential back pay. If you then hired the attorney after the U.S. Court of Appeals for Veterans Claims returned (or remanded) the case to the Board, then the attorney could charge a percentage of back pay as a contingency fee.
How Much Do Attorneys Charge?
As noted above, for representation at the U.S. Court of Appeals for Veterans Claims, there is no risk of owing an attorney fee. If a veteran hires the lawyer to represent him at the BVA or Regional Office level, there is no EAJA to pay the fee. The EAJA exists only at the U.S. Court of Appeals for Veterans Claims. So, at the BVA or Regional Office level, most attorneys charge a contingency fee. This means that there is no fee unless money is recovered for the veteran. But the VA regulations provide that an attorney fee can be based on a flat fee, hourly rate, a percentage of past due benefits, or some combination of these types of fees. The main issue is that the fee must be reasonable.
As I mentioned, at the BVA or Regional Office level, the most common type of fee arrangement between veterans and their attorneys is the contingency fee. A contingency fee is where the attorney charges a percentage of any past due benefits (sometimes called the “back pay”) contingent upon winning past due benefits. This means that the attorney will not charge an up-front fee, but will get paid a percentage of the back pay only if he wins. So, if the attorney does not win back pay for the veteran, there is no fee owed. In other words, there is no money owed unless the attorney wins.
But what is considered a “reasonable fee”? Generally, the rules provide that a contingency fee of 20 percent is considered reasonable. And a contingency fee of more than 33 1/3 percent is considered unreasonable. So fees ranging from more than 20 percent to less than 33 1/3 percent could be considered reasonable. In practice, most attorneys charge from 20 to 30 percent as a contingency fee. In other cases, the VA determines “reasonableness” of an attorney fee by several factors, such as:
- Rates charged by other attorneys
- Whether the fee is contingent upon the results achieved
- The complexity of the case
- The level of skill required
- The amount of time spent
- The results achieved
The VA will split a past-due-benefits check between the veteran and his attorney so long as the fee is no more than 20 percent. If the agreement between the veteran and his attorney charges a fee of more than 20 percent, then the VA will not split the check and the veteran will pay his attorney directly himself. Usually, this means that once the veteran receives his back-pay check, he will then write a check to his attorney for the contingency fee plus any expenses.
At this point let me say a word about expenses. In most cases, for an attorney to work on a case there are certain expenses that he is required to pay. This could be the expense of hiring a medical expert or paying to reproduce medical records. Usually, the attorney will advance the cost of the expenses and the veteran will pay him back once he receives his past-due-benefits check. The attorney cannot charge “normal office overhead” as an expense, but anything paid to directly develop a veteran’s case is considered an appropriate expense and the veteran will re-pay the attorney. In most cases, the primary expense would be to pay for the services of a medical expert or travel costs to go to a hearing before the BVA or Regional Office. So, even if the VA splits the past-due-benefits check, the veteran will have to send the attorney a separate check to reimburse him for the expenses incurred in developing the veteran’s case. The method of how expenses will be reimbursed is determined by the agreement between the attorney and his client. The VA will not withhold expense money and pay it to the attorney. The veteran will always have to pay the attorney separately for expenses.
What is “reasonable” in terms of expenses? Again, there are several factors that determine what is reasonable. For example:
- The complexity of the case
- Whether the expenses are consistent with what other representatives charge
- The potential size of any past-due-benefits check