Veteran Claims & Attorneys Do Mix: Maybe... Part I

Director (00/21)
All VA Regional Offices and Centers
In Reply Refer To: 211A
Fast Letter 07-15

Subject: Public Law 109-461

This letter provides information concerning the new legislation governing the recognition of agents and attorneys representing claimants before VA. Enclosure One provides general answers to questions employees may receive during interviews or when answering telephones.

Background

On December 22, 2006, the President signed Public Law 109-461. Section 101 of Public Law 109-461, the Veterans Benefits, Health Care, and Information Technology Act of 2006, amends chapter 59 of title 38, United States Code, governing the recognition of individuals for the preparation, presentation, and prosecution of claims for benefits before VA. The provisions shifting the entry point for paid representation are effective on June 20, 2007, and the provisions relating to fee assessments and review of fee agreements are effective upon publication of VA's final rule.

Summary of New Legislation

Section 101 of Public Law 109-461 makes the following amendments to 38 U.S.C. 5902, 5903, 5904 and 5905:

- Eliminates the current prohibition on the charging of fees for services of an attorney or agent provided before the Board of Veterans' Appeals (Board) makes its first final decision in the case. As amended, section 5904 will allow accredited attorneys and agents to charge fees for services provided after a notice of disagreement (NOD) has been filed with the VA Regional Office (RO) in the case.

- Authorizes the Secretary to collect an assessment from an individual recognized as an agent or attorney under section 5904 in any case where VA pays the agent's or attorney's fees from past-due benefits owed to a claimant. The amount of the assessment shall be equal to five percent of the amount of the fee paid to the agent or attorney from past-due benefits. The assessment may not exceed $100. An agent or attorney who is charged an assessment may not receive reimbursement for such assessment from the claimant. VA will deposit the amounts collected in an account available for administrative expenses for veterans' benefits programs.

- Authorizes VA to regulate the qualifications and standards of conduct applicable to agents and attorneys.

- Adds four additional categories to the list of grounds for suspension or exclusion of agents or attorneys from further practice before VA.

- Authorizes VA to review fee agreements between agents or attorneys and claimants and order a reduction in the fee if the Secretary finds that the fee is excessive or unreasonable, although a fee that does not exceed 20 percent of the past due amount of benefits awarded on the claim will be presumed to be reasonable.

- Eliminates fee matters as grounds for criminal penalties under 38 U.S.C. 5905.

- Subjects Veterans Service Organization representatives to suspension on the same grounds as apply to agents and attorneys.

Regulations

VA is amending its regulations governing the representation of claimants for veterans' benefits in order to implement provisions of Public Law 109-461. VA published its proposed regulations in the Federal Register for notice and comment on May 7, 2007. After the proposed regulations are finalized, we will issue further guidance on the new regulations. Enclosure Two provides interim guidance for adjudicating attorney fee decisions after the entry point for paid representation changes on June 20, 2007, and the date the final regulations are effective.

Questions

Questions concerning this fast letter and other issues related to agent and attorney representation should be submitted to the VAVBAWAS/CO/21Q&A; mailbox.

/S/
Bradley G. Mayes, Director
Compensation & Pension Service

Enclosure One - Guidelines for Answering Inquiries on Agent and Attorney Representation

When did the law change? On December 22, 2006, the President signed Public Law 109-461. The provisions shifting the entry point for paid representation are effective on June 20, 2007.

What forms do I need to complete to authorize an agent or attorney to represent me? Under current law, a claimant must provide VA with a signed VA Form 21-22a to appoint an agent or individual VSO representative for purposes of representation. Attorneys may continue to provide representation based on a letterhead declaration of representation or may use a VA Form 21-22a. No signature is required for claimants to appoint attorneys; however, VA still requires a VA Form 21-22a, signed by the claimant, to authorize the disclosure of claimant information to an agent or attorney.

May I limit the scope of the agent's or attorney's representation? You may limit the scope of your agent's or attorney's representation regarding a particular claim by describing the limitation on VA Form 21-22a. As an example, you may limit your agent's or attorney's representation to only your claim for Post Traumatic Stress Disorder.

When is an agent or attorney allowed to represent me on a fee basis? Prior to this new law, an accredited agent or attorney was only permitted to charge fees for services after the Board of Veterans' Appeals issued a first final decision in the case. Under the new law, an accredited agent or attorney may charge fees for services after a notice of disagreement (NOD) has been filed with respect to the case. Such notice of disagreement must have been filed on or after June 20, 2007.

How does VA accredit agents and attorneys? VA's Office of the General Counsel is responsible for managing VA's accreditation program. Prospective agents must submit a written application to the Office of General Counsel on which they provide background information relevant to a determination of good character and reputation. Following a satisfactory determination of character and fitness, agents must successfully complete a written examination administered by the Regional Counsel of jurisdiction. To be accredited under current law, attorneys must be a member in good standing of a State bar and indicate in writing that they are authorized to provide representation. Proposed regulations would add additional requirements for attorney accreditation to represent claimants before VA, but these have not been published as final rules, and, as a result, are not effective at this time.

How do I pay my agent or attorney his or her fees? Fee agreements must be in writing and signed by both the claimant and agent or attorney. Generally, there are two types of fee agreements. If you sign a fee agreement that indicates you wish VA to pay attorney fees directly out of past-due benefits, VA will pay the agent's or attorney's fees out of any past-due benefits awarded to you. If you sign a fee agreement that indicates otherwise or is unclear whether VA is to pay past-due benefits directly to an attorney, you are responsible for paying the attorney's fees.

What is the maximum fee that an agent or attorney is allowed to charge me? The agent's or attorney's fees must be reasonable. Fees may be based on a fixed fee, an hourly rate, a percentage of benefits recovered, or a combination of such bases. Fees that do not exceed 20 percent of any past-due benefits are presumed to be reasonable. However, agents and attorneys may charge more than 20 percent for their services.

If I think that the fee is unreasonable or excessive, can I request VA to take action? If you believe that your agent's or attorney's fee is unreasonable or excessive, you may contact the Office of General Counsel (OGC) at the following address: Office of General Counsel (022D), 810 Vermont Avenue, NW, Washington, DC 20420. OGC will review the fee agreement and determine whether the fee is unreasonable or excessive.

May I terminate my agent's or attorney's representation? You may terminate your agent's or attorney's representation at any time. However, your agent or attorney may still be entitled to a fee.

Do I need to hire an agent or attorney to represent me before VA? You do not need to hire an agent or attorney to represent you before VA. Specifically, VA has a duty to notify you of the information and evidence necessary to substantiate a claim and to assist you in obtaining such evidence. Veteran Service Organization (VSO) representatives are also available to guide you through the claims process, without charge. VSO representatives are well-versed in veterans benefits law and are well-equipped to successfully assist you through the claims process.

Is my attorney or agent allowed to call the regional office and speak with a VA employee? Each regional office has an Attorney Fee Coordinator who is designated to serve as a liaison for attorney and agent matters. Please refer the attorney or agent to the regional office's Attorney Fee Coordinator.

Enclosure Two - Interim Guidance for Adjudicating Agent and Attorney Fee Decisions

Beginning June 20, 2007, agents and attorneys may charge fees for representation provided after a notice of disagreement has been filed with respect to a case. This provision applies only to those notices of disagreement filed on or after June 20, 2007. VA is amending its regulations governing the representation of claimants for veterans' benefits in order to implement provisions of Public Law 109-461. On May 7, 2007, VA published its proposed regulations in the Federal Register for notice and comment. However, until VA publishes the final Representation Regulations, continue to follow the current regulations and manual chapters with the following exceptions outlined below.

Overview of Exceptions

1. When an attorney or agent may charge fees for services. The new legislation eliminates the current prohibition on charging fees for services of an attorney or agent provided before the Board of Veterans' Appeals (Board) makes its first final decision in the case. As amended, section 5904 will allow an attorney or agent to charge fees for services provided after the date on which the claimant files a notice of disagreement with the VA regional office in the case. This amendment applies to those cases in which a notice of disagreement is filed on or after June 20, 2007.

2. When the attorney or agent must be hired. The new 5904 eliminates the requirement that the attorney or agent is retained within one year from the date of Board's first final decision in the case. Under the new legislation, there is no requirement that the attorney or agent be hired within a specified time frame.

3. To whom may VA directly pay fees. Under the previous 5904, VA was only authorized to directly pay an attorney his or her fees from past-due benefits. VA was not authorized to pay fees directly to an agent. Under the new 5904, VA is authorized to pay both attorney's and agent's fees from past-due benefits owed to a claimant. Until new regulations implementing this change are published, VA regional offices should administer direct-pay fee agreements involving agents in the same manner as attorney direct-pay fee agreements are administered.

Process for Determining Agent or Attorney Eligibility for Direct-Fee Agreements

Follow the four criteria below to determine whether VA is authorized to directly pay fees to an attorney or agent from the claimant's past-due benefits.

1. Has the claimant filed a notice of disagreement with respect to the case?
- If yes, go to Step 2.
- If no, the attorney or agent is not eligible for fees to be paid by VA.

2. Will the past-due benefits result in a cash payment?
- If yes, go to Step 3.
- If no, the attorney or agent is not eligible for fees to be paid by VA.

3. Is the fee agreement wholly contingent on whether or not the matter is resolved in a manner favorable to the claimant?
- If yes, go to Step 4.
- If no, the attorney or agent is not eligible for fees to be paid by VA.