In a previous blog posting, we explained why a “win” at the Court of Appeals for Veterans Claims (CAVC) most often does not result in immediate award of benefits by the VA, but instead in a remand, i.e. the case being sent back to VA to be redone, sometimes with further development. Clients sometimes wonder why it is, then, that their lawyer who prosecuted the appeal at the court gets paid.
How is it that a lawyer would be paid for a “win” at the court but the client not see any money? Most lawyers who represent clients at the CAVC do so without charging a fee to the clients. This is possible because the lawyer – who is not a charity, after all, but must pay the rent and light bill like everyone else – will be paid, if successful on the appeal to the court, by the government under the Equal Access to Justice Act (EAJA). Note the emphasis: the lawyer gets paid only if successful, so she is still gambling, since she could spend a great deal of time and effort and still not get paid if she loses. That is why lawyers offer such representation only where they believe there are errors in the Board decision that the court will wish to correct. The money paid to lawyers under EAJA is not taken from the client in any way; indeed, if benefits are eventually awarded by VA and the veteran is represented by the lawyer under a contingent fee agreement, the lawyer must refund to the client a portion of the fee equal to the EAJA payment the lawyer received.
Here is how that works. VA regulations permit lawyers to represent veteran claimants at VA under contingent fee arrangements. This means that whether and how much the lawyer gets paid depends (is “contingent”) upon the amount of benefits awarded, specifically the past-due benefits accrued from the date of the claim up to the date of the decision awarding benefits. So if a veteran is granted a new or increased rating, VA computes the monthly payments as changed by the award and then adds up all those payments that would have been made from the date of the claim had the award been in effect all that time. That amount is paid in lump sum to the veteran, but with a maximum of 20% (depending on the client-attorney agreement) deducted and paid directly to the lawyer. This is how the lawyer gets paid for her work in getting the award for the client from VA. But the court has ruled that the work at the court, which was paid for by the government under EAJA, and the work at the VA is in some sense the “same work,” so if the contingent fee is more than the amount paid under EAJA, the lawyer is required to refund to her client the amount of the EAJA.