General Practice, Solo & Small Firm DivisionMagazine
Volume 17, Number 5
VETERANS BENEFITS LAW
A WIDE-OPEN AREA OF PRACTICE
BY Barton F. Stichman
Regis Philbin could undoubtedly stump most of his contestants trying to become millionaires with the following question: Which independent federal agency enjoyed complete immunity from lawsuits and was able to prevent lawyers from practicing before it during most of the twentieth century?
Need a hint? This same agency has long had the largest budget in the federal government and each year decides more than 5 million individual claims for benefits, resulting in payment of more than $15 billion in disability benefits, education allowances, and housing assistance. The surprising answer is the U.S. Department of Veterans Affairs, a cabinet-level agency more widely known as the VA.
From the U.S. Civil War to 1988-a span of 125 years-Congress kept the VA and its predecessors off bounds to lawyers by making it a crime punishable by up to two years at hard labor for a lawyer to charge more than $10 as a fee for prosecuting a claim for veterans benefits. During the last half of this period, Congress expressly prohibited federal courts from reviewing VA benefit decisions.
This "splendid isolation"-as the House Committee on Veterans Affairs referred to it-came to an end with the passage of the Veterans' Judicial Review Act of 1988. The Act eliminated the bar to judicial review by creating a new Article I court-the U.S. Court of Appeals for Veterans Claims-to review the factual and legal bases for decisions of the Board of Veterans' Appeals (BVA)-the highest of the two tiers of VA administrative bodies that decide claims for veterans benefits. Veterans Court decisions can be further appealed on issues of law to the U.S. Court of Appeals for the Federal Circuit.
The Veterans' Judicial Review Act also allows lawyers to represent veterans for a reasonable fee, but only after the claimant has reached a certain point in the process. Paid legal representation is still banned while the claim is before the VA. But once the BVA denies the claim, lawyers may charge a reasonable fee to represent the claimant on an appeal to the Veterans Court or on a reopened claim filed at a VA regional office with new and material evidence.
As a result of the partial lifting of the fee limitation, the 15,000 veterans who annually receive a final BVA denial can hire a lawyer. But they have had a difficult time convincing lawyers to represent them. More than two-thirds of the nearly 20,000 veterans who have appealed to the Veterans Court since its doors opened a decade ago have proceeded pro se. Nobody knows how many others have chosen not to appeal or file a reopened claim due to lack of representation.
The short supply of lawyers practicing veterans law cannot be explained by economics. There are approximately 100 private lawyers around the nation who regularly represent veterans. They are financially able to maintain a practice in this field in part because the Veterans Court has consistently overturned more than 60 percent of the BVA decisions it reviews. When the veteran is represented, the success rate is significantly higher. In most of the successful appeals prosecuted by a lawyer, the Veterans Court also forces the VA to pay attorney fees under the Equal Access to Justice Act. And because tens of thousands of dollars in retroactive benefits are at stake in some of these cases, lawyers have also been able to earn significant fees on a contingency basis.
So why the dearth of willing lawyers? The probable answer is an unfortunate legacy of the longstanding limit on attorney fees. This is an entirely new area of law for the private bar and the upfront costs of becoming proficient can seem daunting. This article provides an overview of veterans benefits law, describes the similarities that exist with Social Security and workers compensation law, and identifies the significant resources that are available to lawyers who have never before represented a veteran.The VA Disability Benefit System
Most veterans eligible to hire a lawyer have been denied one of the two types of disability benefits available from the VA. The lion's share of the disability claims is for "compensation" for service-connected injuries or diseases. Of the nation's 26 million veterans, more than 2 million currently receive more than $12 billion each year in VA compensation. A small percentage of the disability claims are for "pension"-a needs-based program similar to supplemental Social Security Income (SSI) that is available to veterans with total and permanent disabilities, wartime service, and financial need.
VA compensation is paid to veterans who have disabilities related to the period of their military service, whether or not the disabilities resulted from performance of military duties. Injuries or diseases are considered service-connected if they began or were aggravated between the date of entry into, and the date of discharge from, military service. This means that a soldier who incurs a seriously disabling knee condition by jumping from a helicopter during combat is treated no differently for purposes of VA compensation than a soldier who develops an equally disabling knee condition as a result of sliding into second base during a baseball game played while on leave, off base, and off duty.
The skills and knowledge developed by lawyers who practice Social Security disability law or workers compensation law are transferable to the practice of veterans law. To qualify for service-connected disability compensation, a veteran must submit:
- A medical diagnosis of a current disability;
- Medical, or in certain circumstances lay evidence, of an in-service disease, injury, or precipitating event, or of the aggravation of a disease or injury; and
- Medical evidence of a nexus between the in-service disease, injury, or precipitating event and the current disability.
The unfortunate fact is that many disability claims fail because the disabled veteran doesn't understand or appreciate the importance of the need to submit strong medical, as opposed to lay, evidence addressing the foregoing criteria.
VA regulations eliminate the need to submit medical nexus evidence for some diseases. For example, if symptoms of multiple sclerosis appear within seven years of discharge, the disease is presumed to be service-connected. If a veteran who served in Vietnam develops prostate cancer at any time after service, the cancer is presumed to be service-connected due to exposure to Agent Orange.Degree of Disability Determinations
Once the VA grants a claim for disability compensation, the next step is to determine the degree of disability. Unlike Social Security disability benefits, which require a total disability, the amount of monthly compensation a veteran will receive depends on the severity of the veteran's service-related disabilities and the number of dependents. The VA rates the severity of a disability in increments of 10 percent. For example, in 2000, the VA pays $98 per month in tax-free compensation to veterans with a service-connected disability rated as 10 percent disabling, regardless of the number of dependents the veteran has. The VA pays $2,036 per month in tax-free compensation if the veteran is totally (100 percent) disabled, single, and without dependents.
Part IV of the VA's regulations in 38 C.F.R. contains the criteria for rating disabilities (called the rating schedule). These criteria vary from disability to disability, and they attempt to approximate the average impairment caused by the disability to the veteran's earning capacity. The VA pays even more than the 100 percent disability compensation rate if, for example, the veteran is housebound or in need of regular aid and attendance.The Claims Adjudication Process
The initial decision-making authority in the VA claims adjudication system is the VA regional office (the RO). There are 58 ROs, including one in Puerto Rico and one in the Philippines. Whether the claim is an original one (where the veteran cannot hire a lawyer) or a reopened claim filed after a final BVA denial and accompanied by new and material evidence (where the veteran can pay for the services of a lawyer), the claim will be routed to the VA regional office nearest to the veteran's residence for a decision.
After the initial RO decision, the veteran has an opportunity for an evidentiary hearing at the RO before a hearing officer with authority to overrule the initial decision. Whether or not the veteran exercises this right, the RO denial can be appealed to the next and highest tier in the VA adjudication system: the BVA.
The BVA reviews appeals de novo. This means that new evidence can be presented at this appellate stage, and the BVA considers the case without giving any deference to the RO's denial. The veteran also has the opportunity for an evidentiary hearing before the Board member who will decide the appeal. At the claimant's option, the Board member will travel to the RO closest to the veteran for the hearing; hold the hearing in Washington, D.C.; or in some cases hold a videoconference hearing in which the Board member in Washington, D.C., interacts with the veteran, the veteran's representative, and any witnesses sitting in the RO.
Over the last decade, the success rate experienced by veterans at the BVA has changed dramatically. In the nine years prior to the Veterans' Judicial Review Act, the BVA ruled in favor of the claimant in 13.1 percent of all appeals, a percentage that varied so little from year to year that VA skeptics thought the BVA used a 13 percent quota system. By fiscal year 1992, the rate of success had risen to 15.7 percent. It continued to rise thereafter, and by FY 1999, reached 22.1 percent.
An even more dramatic rise has occurred in the rate at which the BVA remands appeals to the RO for additional evidentiary development. Prior to the Veterans' Judicial Review Act, the BVA remanded between 13 percent and 20 percent of all appeals. Over the last five years, the BVA has sent back nearly 43 percent of all the appeals it received from the RO. Many of these remands undoubtedly resulted in an award of benefits.
These pro-veteran changes are directly attributable to the Veterans Court. The court's decisions have generated an era of administrative reform by forcing the agency to live up to the rules that have long been on the books.Practice Before the U.S. Court of Appeals for Veterans Claims
The Court of Appeals for Veterans Claims is an appellate court located in Washington, D.C. Its review is based exclusively upon the administrative record created before the BVA, under a scope of review similar to that provided in the Administrative Procedure Act. No new evidence may be submitted to the court.
Lawyers can effectively represent appellants before the court no matter where they are located because the advocate's presence in Washington, D.C., is rarely required. There are no evidentiary hearings and oral argument is rarely granted. Practice before the court consists essentially of drafting briefs and motions.
The appeals brought to the court generally challenge one of the following types of adverse agency conclusions: the disability is not service-connected; the disability rating should be reduced; the disability rating should not be higher than it is; and the claimant does not deserve any additional retroactive benefits.Getting Paid to Represent Veterans
Most disabled veterans do not have the financial resources to pay a lawyer on a fixed-fee or rate-per-hour basis. But in many disability claims the amount of money at stake warrants representation on a contingency basis.
After the VA awards compensation and sets the disability rating (or after it increases the rating of a disability that is already service-connected), the VA begins to send the claimant payments (or increased payments) on a monthly basis. But the first check the veteran receives after a favorable decision is for the total amount of retroactive benefits owed.
The amount of retroactive benefits the VA owes depends upon the "effective date" the VA assigns after granting the claim. This date governs when the change in benefit payments goes into effect. The general rule is that the effective date is the date the VA initially received the claim that it ultimately grants.
Thus, the amount of retroactive benefits owed is generally a function of the length of time the claim has been pending and the severity (or increase in severity) of the veteran's disability. In most BVA decisions denying benefits, more than three years has elapsed between the filing of the claim and the BVA denial. Because of the high BVA remand rate, it can sometimes take nearly a decade for a claim to be finally decided by the BVA.
If the BVA denies the claim, and the veteran retains a lawyer to prosecute an appeal to the Court of Appeals for Veterans Claims, it takes another year on average for the judicial appeal to be resolved. Most appeals do not result in an outright reversal and order to pay the veteran the benefits sought. Rather, the large majority of the successful appeals result in a finding that the BVA decision contains legal error; an order vacating the BVA decision and remanding for further administrative proceedings; and, if the veteran was represented, a court award of attorney fees under the Equal Access to Justice Act.
Significantly, the Veterans Court has ruled that veterans have a right to submit additional evidence during the remand proceedings. The remand proceedings may take a year or more to complete. If they result in an award of the benefits sought, the effective date assigned is usually the date the RO received the claim that was denied by the BVA and appealed to and remanded by the Veterans Court. This is true even if the major reason the claim was granted was due to evidence developed by the lawyer and submitted after the court remand.
Accordingly, it is not unusual for the effective date to be more than five years earlier than the date the VA grants the claim on remand from the Veterans Court. When this is the case, the veteran will generally receive more than five years of retroactive benefits. If the claim remanded by the Veterans Court is for service-connected disability benefits, and if the VA agrees on remand to grant service connection and thereafter rates the disability as 100 percent disabling during the five-year period, the veteran will receive a check for more than $120,000 in tax-free retroactive benefits (five years times the 100 percent disability compensation rate, which, during 2000 for a single veteran with no dependents, was $24,432 per year).
Obviously, not all successful claims result in this much money in retroactive benefits. For example, a claim for an increase in disability rating originally rated as 20 percent disabling, which is later remanded by the Veterans Court and results in the retroactive award of a 40 percent rating, will result in approximately $13,000 in retroactive benefits, assuming the claim for an increased rating was filed five years earlier than the date the VA granted the claim. Nonetheless, in many of these cases, a lawyer who is retained on a contingency basis can receive both attorney fees awarded by the Veterans Court under the Equal Access to Justice Act and later, when the claim is ultimately granted, a percentage of the retroactive benefits awarded as compensation for the services provided on remand.
The demand by veterans for lawyers to represent them may increase even further in the future. Bills are pending in Congress to repeal the existing bar to paid attorney representation prior to a final BVA decision. But even without repeal, the fact remains that the demand for lawyers willing to represent veterans exceeds the supply.
Barton F. Stichman is Joint Executive Director of the National Veterans Legal Services Program. His practice for the past 24 years has been devoted to representing veterans and their dependents before federal agencies and courts. His litigation efforts as lead counsel have forced the federal government to pay more than $100 million in retroactive disability and death benefits. He is co-chair of the ABA Section of Administrative Law and Regulatory Practice's Veterans Affairs Committee and co-author of the Veterans Benefits Manual.