Payment of attorney or agent fees (U. S. Department of Veteran Affairs)

Section C. Payment of Attorney or Agent Fees

Overview

In this Section

This section contains the following topics:

Topic	Topic Name
1 (old 14)	General Information on Fees
2	Process for Paying Fees Directly From Past Due Benefits
3 (old 15)	Withholding From Claimant’s Past-Due Benefits and Authorizing the Claimant’s Award
4 (old 16)	Making an Attorney or Agent Fee Eligibility Decision and Sending Notification
5 (old 17)	Releasing Funds Withheld for Fees and Appeals of Eligibility Determinations
6	Reasonableness Review of Fees by Office of General Counsel (OGC)
7 (old 18)	Failure to Withhold Past-Due Benefits
8	Exhibit 1: Decision Notice – No Valid Power of Attorney (POA)
9	Exhibit 2: Decision Notice – No Fee Agreement and/or Valid POA (Survivor)
10	Exhibit 3: Decision Notice – No Notice of Disagreement (NOD) Filed (Survivor)
11	Exhibit 4: Decision Notice – No Cash Payment to the Claimant
12	Exhibit5: Notice – Direct-Pay Fee Agreement Filed by More Than One Attorney/Agent
13	Exhibit 6: Fee Recoupment Procedures – Final Notice

1. General Information on Fees

Introduction

This topic contains general information on fees, including the authority for payment of fees unauthorized solicitation of fees appointment of the Agent and Attorney Fee Coordinator (AAFC) primary duties of the AAFC additional duties of the AAFC determining whether a valid fee agreement has been submitted, and determining whether direct payment of fees is at issue.

Change Date

July 31, 2015

a. Authority for Payment of Fees

38 CFR 14.636 authorizes Department of Veterans Affairs (VA) to make direct payment of fees to accredited agents and accredited attorneys. Under this regulation, accredited attorneys and agents may charge reasonable fees for representation provided before VA in a case only after an agency of original jurisdiction (AOJ) has decided a claim, and a notice of disagreement (NOD) has been filed the agent or attorney has complied with the power of attorney (POA) requirements in 38 CFR 14.631, and the fee agreement requirements in 38 CFR 14.636(g) have been satisfied. Notes: The Office of General Counsel (OGC) is responsible for accrediting attorneys and agents. E-mail questions regarding accreditation to the OGC at [e-mail]. Attorneys need not have been accredited under the current requirements in 38 CFR 14.626-14.637 if representation that was valid under the prior law was initiated, and the claim was filed, before the effective date of those regulations, June 23, 2008. Do not accept a NOD signed by an attorney or agent without a VA Form 21-22a, Appointment of Individual as Claimant’s Representative already on file or received at the same time as the NOD. Administrative debt collection proceedings and proceedings involving requests for waiver of indebtedness are considered proceedings involving Veterans’ benefits before VA. References: For more information on eligibility for direct payment of attorney or agent fees, see M21-1, Part I, 3.C.4 who can file a NOD, see 38 CFR 20.301(a) extent of authority and duties of representatives, see M21-1, Part I, 3.A.4, and OGC’s list of accredited attorneys and agents, see http://www.va.gov/ogc/apps/accreditation/index.asp.

b. Unauthorized Solicitation of Fees

Individuals who are not accredited by VA as an attorney or agent may not solicit fees. Unauthorized representation of claimants and unlawful solicitation of fees is a serious matter and should be reported to the Outreach Staff Mailbox (VAVBAWAS/CO/OUTREACH).

c. Appointment of the AAFC

Each Veterans Service Center Manager (VSCM) and Pension Management Center Manager (PMCM) must appoint at least one AAFC. Notes: A list of AAFCs can be found on the Compensation Service web site at http://vbacodmoint1.vba.va.gov/bl/21/CapLists/afc/afc_index.asp. Offices should e-mail changes in AAFCs to the webmaster shown at the top of the AAFC webpage.

d. Primary Duties of the AAFC

The primary duties of the AAFC are to serve as the liaison between accredited attorneys and agents and the Veterans Service Center (VSC), Pension Management Center (PMC), or other VA entities review each case in which an agent or attorney has filed a VA Form 21-22a,, to determine whether the individual is accredited enter the applicable POA code for each agent or attorney who is accredited, and code the case as sensitive level 7 per Office of Field Operations Letter 20F-12-04. Notes: If the agent or attorney is not accredited, the AAFC will return the VA Form 21-22a to him/her with a letter of explanation, and notify the claimant of this action in a separate letter. The sensitive level 7 code (and any flashes that are required) should remain in place until the fee agreement is withdrawn by the representative or otherwise no longer requires withholding a portion of past-due benefits for possible payment of fees. Fees may be payable even if the agent or attorney who signed the fee agreement is no longer the current representative. References: For more information on accreditation as a requirement to represent claimants, see M21-1, Part I, 3.A.2.a VA Form 21-22a and handling appointments, see M21-1, Part III, Subpart ii, 3.C.4 and Updating electronic systems with representative information, seeM21-1, Part III, Subpart ii, 3.C.5.

e. Additional Duties of the AAFC

In addition to the primary duties shown above, the AAFC will determine, prior to authorizing an award whether there is a valid direct-pay fee agreement as provided in 38 CFR 14.636(g) whether direct payment of fees can be honored as provided in 38 CFR 14.636(h) the appropriate amount to withhold from past due benefits (if any), and if the agent or attorney is eligible to payment of fees from any past due benefits ensure that the fee agreement is appropriately filed in the claims folder For a paper claims folder, back file the fee agreement on the right side of the claims folder along with VA Form 21-22a. For an electronic folder (eFolder), use the ACTIONS drop down in Veterans Benefits Management System (VBMS) to edit properties and select the AGENT FEE AGREEMENT document type, and enter the “Attorney fee” and “Potential attorney fee” flashes in Share (which also shows in VBMS). References: For more information on withholding past-due benefits, see M21-1, Part I, 3.C.3 making a fee eligibility decision, see M21-1, Part I, 3.C.4 the appropriate notice to send when the representative is not accredited, see Attorney Not Acknowledged in the Letter Creator on the Rating Job Aids page of the Compensation Service website, and handling POA appointments, see M21-1, Part III, Subpart ii, 3.C.4.

f. Determining Whether a Valid Fee Agreement has Been Submitted

To be valid under 38 CFR 14.636(g) a direct-pay fee agreement must meet all requirements applicable to fee agreements generally. There are additional specific requirements for direct-pay fee agreements. The agreement must be written and signed by the claimant or appellant, and the agent or attorney include the name of the claimant or appellant the name of any disinterested third party payer and the relationship between that individual and the claimant or the appellant the VA file number the specific terms under which the amount to be paid for the services of the agent or attorney will be determined, and specify or recite that VA is to pay the agent or attorney directly out of past due benefits When a fee agreement is received at the Regional Office (RO) the AAFC will determine whether the agreement satisfies the requirements in 38 CFR 14.636(g). only one individual accredited agent or attorney has signed the direct-pay fee agreement, and the accredited agent or attorney who signed the fee agreement also signed the VA Form 21-22a, and the agreement was filed with the RO within 30 days of its execution. Important: The AAFC must evaluate available documentation to determine whether a request for direct payment of fees has been submitted. In the eFolder review documents in the category REPRESENTATION – PRIVATE ATTORNEY/ATTORNEY FEE AGREEMENT. Where there is a paper claims folder evaluate the documents on the right hand flap of the folder. Notes: If the fee agreement is signed by more than one accredited agent or attorney, signed by an individual who did not sign the VA Form 21-22a, or is otherwise not in compliance with 38 CFR 14.636, return it to the agent or attorney, with a letter advising him/her the fee agreement is not acceptable because it does not comply with 38 CFR 14.636, and explaining how it does not comply. The term execution, as used in 38 CFR 14.636(g) and (h)(4), means the act of signing. VA applies the postmark rule of 38 CFR 20.305 to determine when the fee agreement is received. If the direct-pay fee agreement is filed at the RO beyond 30 days of its execution (compute the time period per 38 CFR 3.110), return it to the representative, with a letter explaining that it does not comply with the direct-pay fee agreement filing requirements of 38 CFR 14.636(h)(4). As provided by M21-1, Part I, 3.A.5.a, VA does not honor requests for exclusive contact with a representative.

g. Determining Whether Direct Payment of Fees Is at Issue

Direct payment of fees is at issue when A valid fee agreement has been timely received as provided in 38 CFR 14.636(g) and M21-1, Part I, 3.C.1.f, and the fee agreement can be honored by VA as provided in 38 CFR 14.636(h)(1) and this block. The table below provides guidance on how to proceed depending on whether or not direct payment of fees is at issue.

If ...	Then ...
direct payment of fees is at issue	follow the process for determining whether to pay fees from past due benefits as provided in M21-1, Part I.3.C.2.
direct payment of fees is not at issue	a decision regarding eligibility for direct payment of fees, or attorney/agent fee is not required; process the claimant’s award.

As provided in 38 CFR 14.636(h)(1)) a request for direct payment of fees, commonly referred to as a “direct-pay fee agreement,” will only be honored by VA when the total fee payable (excluding expenses) does not exceed 20 percent of the total amount of past-due benefits awarded the fee is contingent on a favorable outcome for the claimant, and the award of past due benefits results in a cash payment to the claimant or appellant from which the fee may be deducted. Notes: The “total fee payable” includes the fee to be paid by VA from past due benefits and any fee the claimant will pay the attorney directly. Example: If the fee agreement provides that VA will pay a 20 percent fee to the attorney or agent out of past due benefits and the claimant will pay direct to the attorney or agent an additional 5 percent fee, the total fee payable is 25 percent of the total amount of past due benefits awarded. As a result, the fee agreement would not qualify for direct payment. Expenses are not payable directly to the attorney or agent out of past due benefits. In Hanlin v. Nicholson, 474 F.3d 1355 (Fed. Cir. 2007), the United States Court of Appeals for the Federal Circuit determined that one claimant cannot bind another claimant to an attorney fee agreement. References: For more information on circumstances in which attorneys and agents may seek reimbursement from claimants for expenses related to representation, see 38 CFR 14.637, and who must be parties to a fee agreement in order for fees to be payable from a specific award of benefits, see VAOPGCPREC 5-96 and Who must sign a fee agreement for the attorney or agent to be considered hired or retained, see M21-1, Part I, 3.C.4.k.