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Skirmish Over Fees

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For 145 years now, lawyers have not been welcome at administrative proceedings to decide benefits claims by retired members of the U.S. military.

Congress first sent that message in 1862, in the midst of the Civil War. It came in the form of a law imposing a maximum fee of $5 on lawyers who represented veterans, their widows and orphans seeking benefits from the federal government. The idea was that proceedings shouldn’t be complicated, and awards shouldn’t have to be shared with counsel–many of whom were considered unscrupulous or ill-trained, or both.

A few years later, the fee cap was raised to $10, and there it stayed for the next century as a practical bar to veterans hiring lawyers to represent them in seeking benefits from the federal government.

Congress eliminated the fee cap in 1988, when it created the Court of Appeals for Veterans Claims. But Congress only allowed attorneys to represent veterans for a fee once their cases reached the appeals court. Throughout the administrative process–where most cases are decided–veterans were entirely on their own unless assisted by advocates from veterans ser­vice organizations or represented by lawyers working pro bono.

Finally on Dec. 8, 2006, Congress opened the door for veterans to retain lawyers to represent them in administrative appeals of rulings on their benefits claims by the Department of Veterans Affairs.

The Veterans Benefits, Health Care and Information Technology Improvement Act of 2006 (Public Law No. 109-461) gives veterans the option to hire a private lawyer or nonattorney agent as soon as their administrative claims start to wend their way through the complex appeals structure within the VA. Veterans still are barred, however, from retaining counsel to represent them at the initial hearing stage.

Enacted with support from numerous veterans organizations and bar associations, including the ABA, the law becomes effective in early June.

Proponents of the law say allowing veterans to retain lawyers should give them a better shot at obtaining more favorable benefits. Some also predict that bringing lawyers into the process will help streamline it, speed up the payment of awards and reduce the current backlog of claims.

Estimates generally put the number of veterans benefits claims filed annually at around 800,000. Mean­while, there is a backlog of approximately 400,000 pending claims that have not been resolved.

But the veterans service organizations aren’t able to provide enough help to keep up with the claims, says Barton F. Stichman, joint executive director of the National Veterans Legal Ser­vices Program in Wash­ington, D.C.

“They’re overloaded. Some of them have caseloads of up to 1,000 claimants at one time,” Stichman says. “They’re well-meaning, but nobody can adequately represent 1,000 people at one time.”

Time for a Change

Moving a claim through the initial review and then into the appeals pipeline usually is a painstakingly slow pro­cess, says William S. Mailander, general counsel to the Paralyzed Veterans of America, based in Wash­ington, D.C.

“Probably a quick claim would be decided in several years,” Mailander says. “And some of these claims can take up to a decade.”

James C. McKay, a lawyer in Washington, D.C., who routinely represents veterans on a pro bono basis, says one of his cases “went four times to the Veterans Court of Appeals, and now I’m in the Federal Circuit–and his claim was filed in 1985. There are veterans that literally have died while their claims are pending.”

It’s time to change the old rules about involving lawyers in the process, the ABA said in a letter sent to mem­bers of Congress in September by Robert D. Ev­ans, then-director of the association’s Governmental Af­fairs Office. (Evans retired in March.)

“The prohibition was written when claims were simpler, claimants were defrauded by persons who did not attend law school, and there was no organized bar to regulate legal representatives,” Evans wrote.

“While we appreciate that not every claimant will require formal legal representation,” Evans wrote, “some veterans whose cases are more complex, or that may involve a prolonged process, may benefit from a lawyer’s assistance. Ultimately, the decision of whether to hire a lawyer in a particular case should reside with the veterans whose rights are at stake and not be precluded by the government.”

But the new law won’t go into effect without difficulties. And some veterans organizations and members of Congress don’t want it to go into effect at all. On March 5, Rep. Ron Lewis, R-Ky., filed a bill in the House of Representatives that would reinstate the prohibition against private lawyers representing veterans in administrative appeals on their benefits claims.

“Bringing lawyers, whose primary goal is their own financial gain, into the system will only complicate the process and lead to inequities in a system that we count on to care for those who have served,” Lewis states in a press release announcing his bill.

The 1.3 million-member Disabled American Veterans is one of the strongest proponents of keeping the role of lawyers limited in the benefits claim process.

The act “is unnecessary, and involvement of lawyers would increase costs to veterans and to the VA without significantly improving the process,” said DAV National Commander Bradley S. Barton in a news release issued in August.

The VA, Barton said, “would have to create a substantial new bureaucracy to perform the additional accreditation and oversight responsibilities” with more lawyers involved in the process. Instead, he said, the department “should use its scarce resources to hire more claims adjudicators and provide them with the training needed to improve the quality as well as timeliness of decisions.”

Even if opponents of greater lawyer involvement in veterans benefits claims fail in their efforts to throw the barriers back up, the transitional period of implementing the new system is likely to be bumpy, experts in the field say.

“In the short term, I think it’s going to cause chaos,” says Elinor Roberts, legal director of Swords to Plow­shares, a veterans service organization based in San Francisco. But “in the big picture, I think it’s a tremendous thing. Veterans have been desperate for representation for many decades.”

The VA still is drafting regulations to implement the law, and no one knows, for example, what will be considered a reasonable attorney fee. Several practitioners suggest that a 20 percent contingency fee, the same formula applied in Social Se­curity disability cases, is a likely benchmark. Fees presumably would be paid out of total awards to successful claimants.

Basic Training

Meanwhile, a broad array of bar associations and veterans organizations are gearing up in anticipation of the new regime.

The ABA has committed itself to the effort, but the association still is formulating its plans. A first step already under way is helping to draft new regulations and standards of practice that will govern private lawyers representing veterans in administrative appeals, says Ronald L. Smith, who co-chairs the Veterans Affairs Com­­mittee in the ABA Sec­tion of Administrative Law and Regulatory Practice. He is also deputy general counsel of Disabled American Veterans.

The ABA has pledged to help train private lawyers to represent veterans in administrative benefits appeals at the VA, and a number of state and local bar associations are also expected to be involved in this effort.

Stichman, who is also a co-chair of the section’s Veterans Affairs Committee, predicts that the ABA and other bars will work with veterans service organizations that have existing lawyer training programs.

Nevertheless, at least initially, “I don’t see a ton of lawyers getting involved,” Mailander says. “Just the fact that it’s been a closed system for 100 years” means “there are not a lot of lawyers that have any exposure or experience with this area,” he adds.

Handling veterans benefits claims is likely to be a particularly good fit for a lawyer whose practice currently focuses on Social Security disability or workers’ compensation cases, Roberts says. There should be plenty of cases to go around, she says, noting that it already is her organization’s policy to look for private attorneys to handle certain claims. Joseph Morrison, a lawyer in Dallas who now largely does Social Security disability and personal injury work, is anticipating the possibility of taking referrals from local veterans service organizations looking to reduce their caseloads and pass along particularly challenging cases to private attorneys.

“The veterans service organizations do a great job, especially here in Texas. We’ve got a strong network,” Morrison says. “We just want to work beside them, to really complement the work they’re doing, in no way supplanting them.”

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