When I discussed incentives, I addressed one important aspect of how the attorney fees drive the system toward more procedural complexity. However, I omitted a second, key aspect of attorney fees in veterans law: how the case law makes it financially difficult for lawyers to actually help veterans.
If you are trying to build a veterans law practice, then you have two potential sources of income. The first is Equal Access to Justice Act (EAJA) fees available at the U.S. Court of Appeals for Veterans Claims (CAVC), and the second is contingency fees available if a claim is granted by the agency. The problem is that you cannot keep both in the same case. A majority of the CAVC held in Carpenter v. Principi, 15 Vet. App. 64 (2001) (en banc), that work at the court and work at agency level are part of the same ball of wax, so that if you are an attorney, you have to offset your EAJA award against any contingency fee that you might earn. In fact, the court cited the Gardner presumption of veteran-friendly interpretation to conclude that it would be unreasonable to allow attorneys to keep EAJA awards that rightfully belong to veterans.
Although the holding in Carpenter was meant to be veteran friendly, in actual practice it is not. I go through the math in some detail elswewhere, but the basic problem is that if an offset is always required, then a great many veterans claims are not worth enough for an attorney to continue representation after collecting an EAJA fee because the attorney is essentially working for free or peanuts from that point onward. Of course, such representation is noble work, but you cannot eat nobility nor pay your staff with it. Through my work with the CAVC Bar Association, I know a great many attorneys who handle veterans claims. They are uniformly great people, but most of the work they do has to generate income to pay the bills. The effect of Carpenter has been to create a dramatic decline in the percentage of veterans who have attorney representation at the agency level. This is terrible because that is the point at which an attorney is most needed.
Having a skilled attorney obtain a procedural remand from the CAVC just prolongs the agony if a veteran with a difficult claim does not have assistance at the Board of Veterans’ Appeals level in developing the evidence needed to prevail on the claim. A rule that strongly discourages attorneys from continuing representation until the claim is resolved is not veteran friendly. Accordingly, Carpenter should be overruled or abrogated, and replaced with a rule that says that if a lawyer stays with a case on remand to where the record is open again and assists him or her in submitting new evidence that leads to benefits, then that is different work and the contingency fee will not be offset by any EAJA award.
However, creating a fee system that is tailored to the veterans benefits system is a much bigger project than just fixing Carpenter. EAJA is not a comfortable fit for the system. In most courts of general jurisdiction, it is construed narrowly to limit the incentives of third parties to attempt to run agencies through litigation. At the CAVC, the statute is interpreted very broadly to encourage attorneys to represent veterans. In fact, almost every single decision by the CAVC that is not an affirmance leads to an award of fees. Although the court has artfully cherry-picked from binding Supreme Court case law, I suspect that a thorough analysis would show that “prevailing party” and “substantially justified” are interpreted very differently in veterans law cases than they are anywhere else.
I am certainly not advocating reconciling EAJA case law by making fees dramatically harder to obtain in veterans cases. I do not think there is any question that Congress wants to encourage such representation and that attorney appearances would dry up without the fees provided by EAJA. Instead, I am suggesting removing the veterans benefits system from EAJA altogether, and replacing it with a system tailored to the types of activity that we want to encourage.
The number one activity we want to encourage is making it financially attractive for attorneys to help veterans develop the evidence needed to bring resolution to their claims, instead of fostering a system of procedure whack-a-mole. I am not sure exactly what such a system would look like, but I have taken a first crack at the problem in my prior work. Still, there is a lot that could be written in this area about EAJA, veterans law, and using fees to align the incentives of attorneys and veterans.
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