[Federal Register: May 22, 2008 (Volume 73, Number 100)]
[Rules and Regulations]
[Page 29851-29880]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22my08-12]
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Part II
Department of Veterans Affairs
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38 CFR Parts 1, 14, 19 and 20
Accreditation of Agents and Attorneys; Agent and Attorney Fees; Final
Rule
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Parts 1, 14, 19 and 20
RIN 2900-AM62
Accreditation of Agents and Attorneys; Agent and Attorney Fees
AGENCY: Department of Veterans Affairs.
ACTION: Final rule.
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SUMMARY: The Department of Veterans Affairs (VA) is amending its
regulations governing the representation of claimants for veterans
benefits in order to implement provisions of the Veterans Benefits,
Health Care, and Information Technology Act of 2006, and to reorganize
and clarify existing regulations. As amended, the regulations establish
the procedures and rules necessary for VA to facilitate the paid
representation of claimants by accredited agents and attorneys after a
Notice of Disagreement has been filed with respect to a case. The
purpose of these regulations is to fulfill Congress' direction that
agents and attorneys may be paid for services rendered after a Notice
of Disagreement is filed with respect to a decision by an agency of
original jurisdiction while ensuring that claimants for veterans
benefits have responsible, qualified representation.
DATES: Effective Date: The final rule is effective June 23, 2008. See
SUPPLEMENTARY INFORMATION for initial compliance dates.
Applicability Dates: Some amendments in this final rule are for
prospective application only. For more information concerning the dates
of applicability, see the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Michael G. Daugherty, Staff Attorney,
Office of the General Counsel (022G2), Department of Veterans Affairs,
810 Vermont Avenue, NW., Washington, DC 20420, (202) 461-7699. (This is
not a toll-free number.)
SUPPLEMENTARY INFORMATION: In a document published in the Federal
Register on May 7, 2007 (72 FR 25930), VA proposed to amend its
regulations governing the representation of claimants for veterans
benefits, accreditation of individuals who may provide representation,
and limitations on fees charged for representation. The public comment
period ended on June 6, 2007. VA received 44 comments from interested
individuals and organizations, including agents, attorneys, law firms,
pro bono groups, and veterans service organizations (VSO). The comments
generally concerned VA's proposed attorney accreditation requirements
and the centralization of attorney accreditation and disciplinary
proceedings in the Office of the General Counsel (OGC). The comments
are discussed below. Based on the rationale described in this document
and in the notice of the proposed rulemaking, VA adopts the proposed
rule as revised in this document.
Section 14.627--Definitions
Noting some confusion in the comments concerning accreditation of
individuals and when those individuals would be considered to be
providing representation in a proceeding before the Department for
purposes of charging fees, we modified the definitions in 38 CFR
14.627(a) and (n) to clarify that ``accreditation'' means authority to
assist claimants in the preparation, presentation, and prosecution of
claims for VA benefits, and that ``representation'' means the acts
associated with representing a claimant in a proceeding before the
Department pursuant to a properly executed and filed VA Form 21-22
(appointment of service organization) or VA Form 21-22a (appointment of
individual).
In Sec. 14.627(d), we amend the definition of ``attorney'' to mean
a member in good standing of a State bar who has met the requirements
prescribed in 38 CFR 14.629(b) for practice before VA. One commenter
opined that changing the definition of ``attorney'' as proposed in
Sec. 14.627(d) was unnecessary. Another commenter, without taking a
position on the appropriateness of the proposed definition, suggested
VA address the question of whether the Agency Practice Act, 5 U.S.C.
500(b), prohibits VA from regulating attorney practice before the
Department. We discuss VA's authority to regulate attorney practice
before VA below under Sec. 14.629.
We disagree that a change in the definition of ``attorney'' is
unnecessary. Prior to the enactment of Public Law 109-461, VA
accredited attorneys for practice before the Department based solely
upon being a member in good standing of a State bar. However, Public
Law 109-461 amended 38 U.S.C. 5904(a) and directed VA to prescribe, in
regulations, qualifications and standards of conduct for practice
before the Department. As discussed in greater detail below, the final
rule does not require attorneys to submit to a character and fitness
evaluation or pass a written exam to be accredited. Nonetheless,
attorneys must apply for accreditation, certify their standing
annually, and complete continuing legal education (CLE) requirements
established by VA. Because these are requirements beyond bar membership
we retain the definition of ``attorney'' as proposed.
Four commenters suggested that VA amend the definition of ``claim''
in Sec. 14.627(g). One commenter suggested that we place the
definition in 38 CFR part 3.
We agree that clarification is necessary concerning when a fee is
payable for representation, especially in circumstances where more than
one representative, agent, or attorney is involved. A number of
commenters requested that we reconcile the definition of ``claim'' in
Sec. 14.627(g) with case law, including Carpenter v. Nicholson, 452
F.3d 1379 (Fed. Cir. 2006). Because the definition of ``claim'' in
Sec. 14.627(g) is identical to the prior definition we will retain it
as proposed but will address commenters' concerns and reconcile the
case law in Sec. 14.636(c), the section pertaining to the
circumstances under which fees may be charged.
One commenter recommended that the definition of ``service'' under
Sec. 14.627(o) include a proof of receipt component. We disagree. The
commenter makes this suggestion based upon the alleged failure of VA to
properly deliver correspondence related to benefit claims. However,
requiring proof of service under part 14 does not address the
commenter's concerns about benefit claims. Under part 14, claimants and
attorneys are required to ``serve'' documents related to claimants' or
the General Counsel's motions for review of fee agreements. Such
service is not related to the manner in which VA mails or proves
mailing of documents related to claims. Furthermore, we modeled our
proposed service rules after the rules of practice and procedure
generally followed by litigants, practitioners and courts, such as Rule
5(b) of the Federal Rules of Civil Procedure and Rule 25(c) of the
Federal Rules of Appellate Procedure, both of which provide that
service by mail is complete on mailing.
Section 14.629--Requirements for Accreditation of Representatives,
Agents, and Attorneys
In 38 CFR 14.629, we proposed to continue administering VA's
accreditation program in OGC and to clarify that the Assistant General
Counsel has primary responsibility for the program. We received
numerous comments regarding the requirements for accreditation. Several
commenters suggested that it was a conflict of interest and a violation
of due process
[[Page 29853]]
for OGC to administer the accreditation program because the General
Counsel is the Secretary's legal advisor and represents the Secretary
in benefits matters that are appealed to the U.S. Court of Appeals for
Veterans Claims. These commenters asserted that OGC might use the
accreditation program to screen out opposing counsel or to retaliate
against parties in benefits litigation.
We agree that individuals seeking accreditation have the right to a
timely decision based solely on the merits of their application by an
impartial and unbiased decision maker. However, the argument that VA's
accreditation program, as clarified by the amendments in 38 CFR 14.629,
creates a conflict of interest and violates due process is not
supported in law or in fact.
The VA General Counsel or his designee may lawfully determine
whether an applicant satisfies the requirements for accreditation. In
38 U.S.C. 5904, Congress granted the Secretary of Veterans Affairs the
authority to accredit agents and attorneys for practice before VA. See
also 38 U.S.C. 5901 (``[N]o individual may act as an agent or attorney
in the preparation, presentation, or prosecution of any claim under
laws administered by the Secretary unless such individual has been
recognized for such purposes by the Secretary.''). Congress has also
authorized the Secretary to delegate authority to act and to render
decisions under the laws administered by VA as he deems necessary. See
38 U.S.C. 512. The Secretary, then the Administrator of Veterans
Affairs, first delegated the authority for the accreditation program to
the General Counsel in 1954 in a new 38 CFR part 14.19 FR 5556, Aug.
31, 1954. The United States Supreme Court has held that such
delegations, involving the combination of functions in a single
decision maker, do not violate due process. See Withrow v. Larkin, 421
U.S. 35 (1975). Further, general allegations of conflict are not
sufficient to rebut the strong presumption ``that public officers
perform their duties correctly, fairly, in good faith, and in
accordance with law and governing regulations.'' Haley v. Department of
the Treasury, 977 F.2d 553, 558 (Fed. Cir. 1992) (quoting Parsons v.
United States, 670 F.2d 164, 166 (Ct. Cl. 1982)), cert. denied, 508
U.S. 950 (1993). See also Assoc. of Nat'l Advertisers v. FTC, 627 F.2d
1151, 1170 (D.C. Cir. 1979) (agency decision-maker ``should be
disqualified [for a conflict of interest] only when there has been a
clear and convincing showing that the agency member has an unalterably
closed mind on matters critical to the disposition of the
proceeding'').
In a case in which a corporation regulated by a Federal agency
asserted that an agency decision maker participating in an
investigation of a regulatory violation had prejudged its claim
resulting in a violation of procedural due process, the U.S. Court of
Appeals for the Federal Circuit held that the corporation could prevail
on its claim ``only if it can establish that the decision maker is not
`capable of judging a particular controversy fairly on the basis of its
own circumstances.' '' NEC Corp. v. United States, 151 F.3d 1361, 1373
(1998) (quoting United States v. Morgan, 313 U.S. 409, 421 (1941)). See
also Hortonville Joint Sch. Dist. No. 1 v. Hortonville Educ. Ass'n, 426
U.S. 482, 493 (1976). ``This standard is met when the challenger
demonstrates, for example, that the decision maker's mind is
`irrevocably closed' on a disputed issue.'' NEC Corp., 151 F.3d at 1373
(other citations omitted).
The commenters have not alleged any facts indicating an actual
conflict of interest in OGC's administration of the accreditation
program. The comments also suggest a misunderstanding of VA's
organizational structure and the scope of VA's authority under 38
U.S.C. Chapter 59. Claims for VA benefits are adjudicated by agencies
of original jurisdiction within one of the Department's administrations
(Veterans Benefits Administration, Veterans Health Administration, or
National Cemetery Administration) and those decisions are generally
subject to review by the Board of Veterans' Appeals (Board), which
makes the final agency decision on benefit claims. Although the Board
is obligated by law to follow precedent opinions of the General
Counsel, the Chairman of the Board is appointed by the President and is
directly responsible to the Secretary, not the General Counsel. 38
U.S.C. 7101(a), 7104(c). Staff attorneys assist Board members in
rendering decisions on benefit claims, but these attorneys are
employees of the Board, not OGC. Also, VA's authority is to regulate
agents' and attorneys' practice before the agencies of original
jurisdiction and the Board, not practice before Federal appellate
courts. See 38 U.S.C. 5904 (authorizing suspension or exclusion from
``practice before the Department''). Although OGC attorneys represent
the Department before the Court of Appeals for Veterans Claims, they
are not involved in the adjudication of claims before VA's agencies of
original jurisdiction or the Board, the two forums in the Department
where the accreditation provisions in 38 CFR part 14 are applicable.
Under its limited accreditation authority, OGC cannot control or
otherwise limit attorney admission to practice before the courts. In
our view, continuing administration of the accreditation program in OGC
is necessary to avoid conflicts that might arise from involvement of VA
officers with claim adjudication responsibility and to ensure that only
individuals with the appropriate legal expertise are involved in
accreditation determinations.
We received four comments regarding the process for appealing an
adverse initial accreditation decision of the Assistant General Counsel
to the General Counsel. One commenter stated that although a final
decision of the General Counsel may not be appealable within VA, ``it
is clearly appealable under the Administrative Procedure Act [(APA)]
and the Department should revise proposed Sec. 14.629 to so state.''
We agree. A decision to deny accreditation under 38 U.S.C. 5904(a) is
based solely upon a determination of whether an applicant has satisfied
the requirements prescribed in regulations for accreditation. VA did
not propose to deny judicial review of these decisions, only to clarify
that review is in the U.S. District Court under the Administrative
Procedure Act (5 U.S.C. 701-706) rather than in the administrative
review system that Congress designed for adjudicating veterans benefit
claims.
Although the Court of Appeals for the Federal Circuit held in Bates
v. Nicholson, 398 F.3d 1355 (Fed. Cir. 2005), that section 5904 is a
law that affects the provision of veterans benefits for purposes of the
Board's jurisdiction, the court did not address the distinction between
decisions denying accreditation under section 5904(a) and decisions
cancelling accreditation under section 5904(b). Whereas a decision to
cancel or suspend accreditation may indirectly affect the provision of
benefits because it may result in withdrawal of representation and
delay in adjudication, a decision to deny accreditation has no affect
on pending adjudications. An unsuccessful accreditation applicant has
had no lawful contact with VA's benefits system as a representative,
agent, or attorney. Moreover, we do not interpret section 5904(a) as
expressing congressional intent to extend VA's informal and
nonadversarial adjudication process to individuals seeking admission to
practice before VA. As such, an initial decision to deny accreditation
to practice before VA under 38 CFR 14.629 is separate and
[[Page 29854]]
distinct from a decision to suspend or cancel accreditation under 38
CFR 14.633, which may be appealed to the Board under Bates. We will
amend the introduction to Sec. 14.629 to clarify that the General
Counsel's decision denying accreditation is a final agency action for
purposes of 5 U.S.C. 702.
Another commenter recommended that VA adopt a procedure for appeal
of initial accreditation decisions similar to that provided in 38 CFR
14.633 for suspension or cancellation of accreditation because a denial
of accreditation would impact a VSO representative's ability to remain
employed. We disagree and will not make any changes based on this
comment.
A service organization representative may not represent claimants
before VA without VA accreditation under Sec. 14.629(a); therefore,
any employment by a VSO of an individual for purposes of providing
representation before VA must be conditional. Procedural due process
requires that an individual receive notice and an opportunity to
respond before being deprived of a protected property or liberty
interest. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542
(1985). However, an applicant does not have a protected liberty or
property interest sufficient to warrant notice and opportunity for a
hearing prior to VA making a decision on an accreditation application.
See White v. Office of Pers. Mgmt., 787 F.2d 660, 663-64 (D.C. Cir.
1986) (``before the right to a hearing attaches, a deprivation greater
than the denial of a particular job application must be involved'').
To the extent the commenter suggests that a decision of the General
Counsel to deny accreditation warrants some procedural due process, the
process provided in the introduction to Sec. 14.629 provides both
notice and an opportunity to respond adequate to the nature of the
interest involved. In the event the Assistant General Counsel denies an
application for accreditation, the Assistant General Counsel will
notify the applicant of the reasons for disapproval and provide the
applicant with an opportunity to submit additional information. If the
Assistant General Counsel continues to deny the application, the
applicant may appeal the decision, in writing, to the General Counsel
for a final decision. For the reasons discussed above, the appropriate
forum for review of the General Counsel's decision denying initial
accreditation is the U.S. District Court under the provisions of the
APA.
One commenter expressed concern with the provision in the
introduction to Sec. 14.629 restricting the General Counsel's review
of a determination to deny accreditation to the evidence of record
before the Assistant General Counsel at the time the decision was made.
The commenter suggested that this requirement would deny the
appellant's right to due process because the rationale underlying the
decision may not be apparent until the applicant receives notice of the
decision.
It is not our intent to prevent individuals from submitting
additional evidence necessary to satisfy the accreditation requirements
or to limit the General Counsel's review of a decision denying
accreditation to the initial application for accreditation. Under the
introduction to Sec. 14.629, the Assistant General Counsel will notify
the unsuccessful applicant of the decision and provide the applicant an
opportunity to submit additional information for the purpose of
correcting any deficiencies or omissions. If, after receiving and
considering the additional information, the Assistant General Counsel
continues the denial of accreditation and the applicant appeals the
decision to the General Counsel, the record forwarded to the General
Counsel for review will include the additional information submitted by
the applicant in response to the initial denial. Timely decisions on
accreditation are important to both applicants and the Department;
consequently, this provision is designed to encourage applicants to
provide information in a timely manner to facilitate final resolution
of the matter by the General Counsel.
We received many comments regarding the proposed requirement in
Sec. 14.629(b) that attorneys achieve a score of 75 percent or higher
on a written examination as a condition of accreditation. We received
eight comments in favor of testing, and 27 comments opposed to testing.
Among those commenters generally favoring testing, four stated that
testing alone was insufficient to ensure continued competency to
represent veterans before VA and recommended that VA require some form
of CLE to ensure continued competency. Three commenters, while
acknowledging the value of testing as a means to ensure competency,
expressed concern that such a requirement would discourage pro bono
representation of indigent veterans. Similarly, the two most prevalent
reasons provided for opposition to testing was that CLE was necessary
to maintain competency and that testing would discourage pro bono
representation of indigent claimants. The majority of the remaining
comments expressing opposition to testing as a requirement for attorney
accreditation fell into one of four general categories: (1) The
proposed rule failed to consider other alternatives to testing; (2)
testing is contrary to Congressional intent; (3) testing is contrary to
5 U.S.C. 500, the Agency Practice Act; and (4) a testing requirement is
redundant because attorneys have already demonstrated competency by
passing a bar examination.
In drafting the accreditation provisions in the proposed rule, VA
was required to reconcile the competing interests reflected in section
101 of Public Law 109-461. In section 5904(c), Congress directed that
veterans were to be provided the option of retaining paid
representation earlier in the administrative appeals process, after a
Notice of Disagreement was filed with respect to a case. However, in
section 5904(a), Congress introduced a new requirement that VA
establish in regulations qualifications for practice before VA to
ensure that agents and attorneys have specialized training or
experience where VA had previously only required membership in good
standing with a State bar as a requirement for attorney accreditation.
Sections 5904(a) and (c) require VA to develop a program of agent and
attorney accreditation that ensures competent representation while
facilitating choice of representation.
In section 5904(a)(2), Congress gave VA the choice of prescribing
in regulations a requirement that, as a condition of accreditation as
an agent or attorney, an individual must have either a specific level
of experience or specialized training. In drafting the proposed rule,
we considered alternative means including practical experience through
which applicants for accreditation could demonstrate either experience
or training and concluded that testing provided balance between
ensuring competence and providing choice of representation. After
weighing all the options and considering the comments, we decided, with
respect to attorneys, that a law degree, bar membership in good
standing, and CLE in veterans benefits law and procedure is the best
method to fulfill congressional intent as expressed in section 101 of
Public Law 109-461. Although VA has authority under section 5904(a)(2)
to ensure attorney competence through testing, we considered the formal
education and testing already required of licensed attorneys, the
potential chilling effect of further testing on pro bono representation
of indigent veterans, and the absence of complaints concerning
[[Page 29855]]
attorney competence in representation before the Department under
former law, and concluded that completion of CLE requirements is a
better choice for veterans, their attorneys, and VA. Accordingly, we
will take a measured approach in regulating the practice of attorneys
before the Department and will amend the rule to remove the testing
requirement and instead require the completion of State-bar-approved
CLE credits to maintain accreditation. We will evaluate this method of
ensuring competent attorney representation and may revisit the issue of
testing at a later date.
After drafting the proposed rule, we learned that several State bar
associations have offered, currently offer, or will offer CLE courses
in veterans benefits law and procedure, some of which are available in
formats capable of supporting distance learning for persons outside the
jurisdiction. Other organizations offer veterans benefits law and
procedure training that has been approved for CLE credit by some
States. Accordingly, we will amend Sec. 14.629(b) to provide that an
initial 3 hours of State-bar-approved CLE in veterans benefits law and
procedure is required for agents and attorneys. Additionally, to
maintain accreditation, agents and attorneys would be required to
periodically complete 3 hours of State-bar-approved CLE in veterans
benefits law and procedure. VA will review available training as
necessary to ensure sufficiency. Agents and attorneys applying for
accreditation must satisfy the initial CLE requirement during the first
year of accreditation and must satisfy the follow-on CLE requirement
every 2 years thereafter. Upon completion of the initial and follow-on
CLE requirements, agents and attorneys must certify in writing to OGC
that they have completed qualifying CLE, such certification to include
the date and time of the CLE and identification of the CLE provider. VA
intends that agents and attorneys will include information concerning
their compliance with the CLE requirements in the annual certification
required by Sec. 14.629(b)(4).
Even though we will not require testing for accreditation of
attorneys under Sec. 14.629(b), the question remains whether any
additional requirements for attorney accreditation, such as the CLE
requirement, are contrary to the Agency Practice Act, 5 U.S.C. 500, as
some commenters asserted. Until Congress enacted Public Law 109-461,
VA's attorney accreditation requirements were limited to those
prescribed in the Agency Practice Act, bar membership in good standing
and a written declaration of representation. However, in amended
section 5904(a), Congress expressly directed VA to prescribe in
regulations additional requirements for practice before the Department.
In amending section 5904(a), Congress is presumed to have been aware of
the Agency Practice Act, and, as a result, section 5904(a) as
implemented by VA in Sec. 14.629(b) should not be read as being in
conflict with that act or the intent of Congress. See 2A Norman J.
Singer, Statutes & Statutory Construction Sec. 45.12 (6th ed. 2000)
(In construing legislation, we must presume that Congress was aware of
existing law and the rules of statutory construction.).
One commenter noted that, in amending 38 U.S.C. chapter 59,
Congress did not remove provisions regarding the Agency Practice Act
from 38 U.S.C. 5901. Section 5901 provides, ``[e]xcept as provided by
section 500 of title 5, no individual may act as an agent or attorney
in the preparation, presentation, or prosecution of any claim under
laws administered by the Secretary unless such individual has been
recognized for such purposes by the Secretary.'' The commenter went on
to suggest that because Congress did not amend section 5901, it did not
authorize VA to exceed the requirements in 5 U.S.C. 500, specifically
bar membership in good standing and a written declaration of
representation.
Congress did not remove the reference to 5 U.S.C. 500 in section
5901; however, to give effect to the commenter's suggestion would be to
ignore Congress' amendment to section 5904(a) requiring VA to establish
as a condition of accreditation a specific level of experience or
specialized training, either of which goes beyond section 500's
requirements for attorney practice before Federal agencies. The
commenter incorrectly reads section 5901 in isolation from section 5904
and does not account for an applicable rule of construction. The
provisions of chapter 59 must be read as a whole to give effect to
amended section 5904. See Splane v. West, 216 F.3d 1058, 1068 (Fed.
Cir. 2000) (``We must construe a statute, if at all possible, to give
effect and meaning to all its terms.'') (citing Lowe v. Securities &
Exch. Comm'n, 472 U.S. 181, 207-08 n.53 (1985)); see also Gonzales v.
Oregon, 546 U.S. 243, 273 (2006) (statutes ``should not be read as a
series of unrelated and isolated provisions'') (citation omitted);
Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 809 (1989) (``It is
a fundamental canon of statutory construction that the words of a
statute must be read in their context and with a view to their place in
the overall statutory scheme.'').
As discussed above, 5 U.S.C. 500 is a statute of general
applicability, enacted in 1965 and binding on nearly all Federal
agencies. In 1969, Congress amended former 38 U.S.C. 3401, now section
5901, to incorporate a reference to section 500. Public Law 91-21,
Sec. 12(a), 83 Stat. 34 (1969). Section 5904 is applicable only to VA
and was amended in 2006. See Food and Drug Admin. v. Brown & Williamson
Tobacco Corp., 529 U.S. 120, 133 (2000). (``The meaning of one statute
may be affected by other acts, particularly where Congress has spoken
subsequently and more specifically to the topic at hand.''); see also
Pioneer Hi-Bred Int'l, Inc. v. J.E.M. AG Supply, Inc., 200 F.3d 1374,
1376-77 (Fed. Cir. 2000) (It is a basic principle of statutory
construction that ``a general statute must give way to a specific
one.''). Because provisions incorporating section 500 were added to
section 5901 over 37 years before the last amendment to section
5904(a), and because Congress expressly directed VA in section 5904(a)
to establish attorney accreditation requirements that exceed those in
section 500, a reasonable harmonization of sections 5901 and 5904 is
that the reference to section 500 in section 5901 is for the purpose of
establishing attorney practice requirements for VA to the extent
Congress has not specifically provided otherwise in chapter 59.
One commenter stated that the proposed testing requirement for
attorney accreditation was inconsistent with the requirement in section
5904(a)(2) that VA prescribe in regulations qualifications and
standards of conduct consistent with the American Bar Association's
Model Rules of Professional Conduct (Model Rules). The commenter noted
that the comment to Model Rule 1.1 states, ``a lawyer need not
necessarily have special training or prior experience to handle legal
problems of a type with which the lawyer is unfamiliar.'' Although we
have decided to remove testing as a requirement for attorney
accreditation, we do not agree that VA's authority to prescribe
qualifications standards for agents and attorneys is limited by the
comment to Model Rule 1.1.
The comment fails to distinguish between the general provision in
section 5904(a)(2) and subsequent specific provisions modifying the
general provision. In section 5904(a)(2), Congress directed VA to
prescribe in regulations qualifications for accreditation consistent
with the Model Rules. In section 5904(a)(2)(B), Congress further
directed VA to establish as a condition of accreditation, a
[[Page 29856]]
requirement that an individual must have ``such level of experience or
specialized training as the Secretary shall specify.'' Section
5904(a)(2)(B), as a specific provision, must be given effect as against
the general provision provided in section 5902(a)(2). Thus, to the
extent testing, or CLE, or any or any other accreditation requirement
related to level of experience or specialized training may be
inconsistent with the comment to Model Rule 1.1, it is consistent with
the specific provision in section 5904(a)(2)(B).
Several commenters stated that testing of attorneys would be
unnecessary and redundant because attorneys, as a condition of
licensing, have already established a minimum level of competency by
completing formal legal training and passing a State bar examination.
One commenter questioned why VA would require the same testing for
attorneys as is required for agents who have not completed similar
legal education or passed a State-bar administered examination. To the
extent the comments are limited to the proposed testing requirement, VA
agrees that it is appropriate at this time to limit the regulation of
attorney practice before the Department to membership in good standing
with a State bar and subsequent completion of CLE requirements.
Although Congress did not distinguish between agents and attorneys
in amending chapter 59 and directing VA to establish standards of
conduct and qualifications as conditions for accreditation, formal
legal education and State bar membership requirements for attorneys
clearly distinguish them from agents. As discussed above, Congress
intended that the legislation would increase standards for all
individuals who provide paid representation before VA. Consequently, to
ensure that claimants receive the same level of competence regardless
of whether they are represented by an agent or an attorney, VA will
continue to test agents as a condition of initial accreditation to
verify their competence to represent claimants and will require both
agents and attorneys to complete veterans benefits law and procedure
CLE as a condition of maintaining accreditation. We will amend the
final rule to incorporate these changes.
One commenter remarked that VA should consider a system for
accreditation similar to that used by the Social Security
Administration in its pilot program. The commenter suggested that VA
should accept bar membership in good standing as sufficient for
attorney accreditation and should test non-attorney representatives and
require that they possess liability insurance as a condition of
accreditation. VA's representation regulations, like those of Social
Security, are limited by the authorizing statutes unique to each
agency. As discussed earlier, the statute governing VA's accreditation
of agents and attorneys requires a specific level of experience or
specialized training in addition to membership in good standing in a
State bar, as qualification requirements for accreditation. The pilot
program to which the commenter refers is authorized by a specific
statutory directive to the Commissioner of Social Security enacted in
section 303 of Public Law 108-203. Clearly, if Congress had wanted VA
to adopt a pilot program similar to that used by the Social Security
Administration, it could have enacted similar authorizing legislation.
Because VA's authority to regulate representation is limited to that
provided in chapter 59, we will make no changes to the final rule based
on the comment.
We received two comments stating that it is not necessary to
evaluate the character of attorneys who are members in good standing of
a State bar because they have already met the State's character and
fitness requirements. VA agrees that a State bar's comprehensive
character and fitness determination, which is a prerequisite to
licensure, is generally sufficient for practice before VA. To fairly
recognize the comprehensive nature of a State bar character and fitness
evaluation, VA will generally accept an attorney's certification of
membership in good standing with a State bar under Sec.
14.629(c)(1)(B) as satisfactory proof of fitness to practice. Absent
information to the contrary, VA will presume an attorney's continued
fitness to practice upon the receipt of a completed VA Form 21a and
self-certification of membership in good standing in those
jurisdictions in which he or she is licensed under Sec. 14.629(b).
Accordingly, we will amend the final rule to reflect these changes.
Additionally, in regard to character and fitness, VA finds it
necessary to differentiate between agents and attorneys. Because agents
have not completed a background investigation comparable in scope to a
State bar character and fitness evaluation, VA will conduct an expanded
inquiry consisting of additional personal history questions on the VA
Form 21a to provide a more complete basis for the Department's
determination of good character and reputation. VA's experience with
agent applications supports this decision, as several applications have
omitted mention of circumstances that required further inquiry before
we had enough information necessary to make a decision regarding
accreditation. Agents, unlike representatives, work without the
oversight and monitoring required of recognized organizations under
Sec. 14.628(d)(1). Additionally, without such an expanded inquiry, OGC
simply cannot verify that an agent is who he or she claims to be.
One commenter requested that we clarify whether Sec. 14.629(b)(4)
permits self-certification of the State bars, courts, and agencies
before which an attorney is authorized to practice. The commenter also
asked us to clarify whether certification is an annual requirement.
Pursuant to 38 U.S.C. 5904(a)(3), VA must prescribe regulations
requiring that ``each agent or attorney * * * provide annually * * *
information about any court, bar, or Federal or State agency * * * to
which such agent or attorney is admitted to practice or otherwise
authorized to appear * * * and a certification by such agent or
attorney'' that they are in good standing. We interpret the phrase ``by
such agent or attorney'' to mean that self-certification is
appropriate. Requiring certified statements from every bar, court, or
agency to which an agent or attorney is admitted might be onerous, and
some agencies and courts might not routinely provide such
certification. We believe self-certification is sufficient, provided
that the certification advises VA of any change in status. VA may
verify such information as necessary, and false certification of good
standing would be grounds for initiating disciplinary proceedings under
38 CFR 14.633. Concerning the requirements for periodic
recertification, the plain language of section 5904(a)(3) is clear that
Congress intended to require annual re-certification. We will amend
Sec. 14.629(b)(4) to clarify these certification requirements.
Finally, we amended the regulation to clarify that an agent or attorney
must notify VA within 30 days of any change in status in any
jurisdiction in which he or she is admitted to practice. This is
necessary because 38 U.S.C. 5904(a)(4) prohibits VA from recognizing an
agent or attorney who has been suspended or disbarred and VA may not
otherwise become aware of the suspension or disbarment until many
months after the fact.
One commenter expressed concern that Sec. 14.629(b)(5), which
provides that VA will not accredit an agent or attorney ``if the
individual has been suspended by any court, bar, or Federal
[[Page 29857]]
or State agency in which the individual was previously admitted and not
subsequently reinstated,'' is overbroad in that lack of reinstatement
in one jurisdiction following suspension and reinstatement in another
jurisdiction may simply reflect an attorney's decision not to practice
in a given jurisdiction. The commenter recommended that VA should
accredit individuals as long as they are licensed to practice in one
state.
The plain language of section 5904(a)(4) prohibits VA from
recognizing an individual as an agent or attorney if such individual
has been suspended or disbarred by any court, bar, or Federal or State
agency to which the individual was previously admitted to practice and
has not been subsequently reinstated. The statute contemplates a
situation in which an attorney has not been reinstated after suspension
or disbarment because he or she has been deemed ineligible for
reinstatement by the admitting authority. The situation described by
the commenter presents a slightly different situation in that
suspension in one jurisdiction may be purely derivative of the action
taken by another jurisdiction. The suspended attorney has subsequently
demonstrated fitness to practice in one jurisdiction and has been
reinstated in that jurisdiction, and the attorney voluntarily chooses
not to seek reinstatement in the other jurisdiction. We do not
interpret section 5904(a)(4) as precluding accreditation in these
derivative suspension or disbarment situations. Accordingly, we will
amend the rule to distinguish between an independent suspension or
disbarment proceeding and a derivative disbarment proceeding for
purposes of VA accreditation. In a situation where an attorney is
suspended or disbarred in jurisdiction B solely based upon suspension
or disbarment in jurisdiction A and the attorney is reinstated in
jurisdiction A, the General Counsel may accredit such individual based
on an evaluation of the particular facts and circumstances of the
situation. However, in situations where an attorney is suspended or
disbarred in jurisdictions A and B, and neither action is derivative of
the other, reinstatement in both jurisdictions is a prerequisite to VA
accreditation.
One commenter objected to VA asking an agent or attorney seeking
accreditation for information relevant to whether the applicant has any
physical limitation that would interfere with the completion of the
written accreditation exam without further explanation of the purpose
and relevancy of this information. This is not a new requirement as it
applies to agents. Prior Sec. 14.629(b)(viii) required individuals to
submit relevant information concerning physical limitations as part of
the application process for claims agents. VA uses this information to
determine whether appropriate accommodations are necessary for
administering the accreditation exam to individuals with disabilities
who seek accreditation as a claims agent.
We proposed to revise Sec. 14.629(c)(3) to clarify the nature of
consent required by the claimant to permit a legal intern, law student,
or paralegal to assist an attorney in representing the claimant.
Several commenters expressed concern that requiring a claimant to
provide written consent specifically identifying the names of the legal
interns, law students, or paralegals assisting in the case would be
overly burdensome. One commenter objected to the provision claiming it
violated equal protection because the requirement does not apply to a
VSO's support staff. A final commenter recommended that we exempt
accredited legal interns, law students, and paralegals from this
requirement.
We disagree that requiring a claimant to specifically identify any
legal intern, law student, or paralegal assisting in the claim is
overly burdensome. The purpose of this requirement is to ensure that a
claimant affirmatively acknowledges that a specific individual will be
working in a representative capacity on his or her claim and will have
access to the claimant's private information. Section 14.629(c)(3)
authorizes legal interns, law students, or paralegals to assist in the
preparation, presentation, or prosecution of a claim under a duly
appointed attorney. This authority allows legal interns, law students,
and paralegals, under the direct supervision of an attorney, to
directly engage claimants, review files, and appear on a claimant's
behalf at any hearing. Current law, 38 U.S.C. 5701(a), makes files,
records, reports, and other papers related to a claim confidential and
privileged except when disclosure is authorized. Section 5701(b)(1)
authorizes disclosure to a ``duly authorized agent or representative of
a claimant.'' Given that legal interns, law students, and paralegals
are authorized to represent a claimant in a limited capacity when
supervised by an accredited attorney, we believe it is appropriate to
require the claimant to identify by name any legal intern, law student,
or paralegal authorized to represent the claimant.
We note that Rule 606 of the Board's Rules of Practice, 38 CFR
20.606, requires written consent by a claimant specifically
identifying, by name, any legal intern, law student, or paralegal
assisting in their claim. Thus, Sec. 14.629(c)(3) merely applies
current rules for practice before the Board to practice before VA's
agencies of original jurisdiction. For the foregoing reason, we also
decline to exempt any legal intern, law student, or paralegal, who is
separately accredited by VA, from this requirement.
We also disagree that requiring a claimant to specifically identify
a legal intern, law student, or paralegal assisting an accredited
attorney violates the Due Process Clause of the Fifth Amendment, and in
particular its equal protection component. The comment is based upon
the commenter's mistaken belief that VSO support personnel may assist
in the representation of a claimant without the claimant's consent and
are thus similarly situated but treated differently. Under Sec.
14.629(c)(3), legal interns, law students, and certified paralegals may
assist in the preparation, presentation, and prosecution of a claim
under the direct supervision of an attorney of record, provided that
the attorney obtains the claimant's consent on a VA Form 21-22a. These
individuals are deemed qualified to represent claimants under an
attorney's supervision as a result of their specialized legal training.
VSO support personnel, unlike legal interns, law students, and
paralegals assisting accredited attorneys, are not authorized to assist
in preparing, presenting, and prosecuting claims. Accordingly, the
commenter's equal protection concern, that we require claimants'
consent for legal interns, law students, or paralegals assisting
accredited attorneys in providing representation but do not require
claimants' consent for VSO administrative personnel assisting
accredited VSO representatives, is unfounded.
One commenter opposed to testing stated that the quality of the
examination would be dependent on the competency of VA Regional Counsel
administering the examination and would introduce inconsistency in
accreditation. Another commenter expressed concern about the format of
the examination, the manner in which it would be developed, and the
manner in which it would be graded. Although we have amended the rule
to remove the testing requirement for attorneys, we will address these
comments to the extent that they can be construed as relating to the
testing of agents.
The role of Regional Counsel is limited to administering the
examination to prospective agents. To ensure nationwide access to the
[[Page 29858]]
examination, it will be offered at the Regional Counsel of jurisdiction
upon receipt of a complete application at the VA Central Office. To
ensure uniformity, the Regional Counsel will administer the examination
according to OGC's standard procedures. To ensure objectivity, the
examination will be offered in a multiple-choice format and be graded
by OGC personnel at VA's Central Office.
The sole purpose of VA's accreditation examination is to
objectively determine whether an agent has the qualifications necessary
to provide competent representation before the Department. To that end,
VA's accreditation examination has been developed to fairly assess the
minimum level of competence required for practice before the
Department. Examination questions have been centrally developed by
OGC's subject matter experts before incorporating them into the
examination.
We received one comment regarding the term ``agency of original
jurisdiction'' as it is used in Sec. 14.629. The introduction to Sec.
14.629 provides that upon a determination that an individual meets the
requirements for accreditation in paragraph (a) or (b) of this section,
VA will provide notification of accreditation authorizing the
preparation, presentation, and prosecution of claims before ``an agency
of original jurisdiction and the Board of Veterans' Appeals.'' One
commenter, a VSO, expressed concern that language in the introduction
to Sec. 14.629 was not sufficiently broad to authorize practice before
the Veterans Benefits Administration's Appeals Management Center and
Resource Centers where claims may be forwarded for disposition. The
commenter misunderstands VA's intent.
In drafting the introduction to Sec. 14.629, VA's intent was to
clarify that representation of claimants, and the rules governing such
representation, were not limited to claims before the Board. VA's
current policy is that authorization to provide representation on a
claim decided by an agency of original jurisdiction includes the
inherent authority to provide representation before other VA facilities
to which the claim may be forwarded for disposition, including, but not
limited to the Appeals Management Center and Resource Centers. We will
amend the final rule for greater clarification.
Section 14.630--Authorization for a Particular Claim
A number of commenters recommended revising Sec. 14.630 to
authorize any individual to represent an unlimited number of claimants.
These commenters seemed to interpret Sec. 14.630 as a pro bono
attorney representation provision. Two commenters recommended that we
amend Sec. 14.630 to authorize any unaccredited individual to
represent an unlimited number of individuals so long as a fee is not
charged. We will not make any changes to the rule based on these
comments.
VA has long interpreted 38 U.S.C. 5903, the statutory authority for
Sec. 14.630, as a provision under which ``any individual'' may
represent a claimant on a one-time-only basis on a ``particular claim''
for benefits. The individual must generally seek accreditation under 38
U.S.C. 5902 (service organization representatives) or 5904 (agents and
attorneys) to provide representation for a claimant on any other claim.
VA does not have authority under section 5903 to permit individuals to
represent an unlimited number of claimants without VA accreditation as
the commenters suggest. See 38 U.S.C. 5901 (``no individual may act as
an agent or attorney in the preparation, presentation, or prosecution
of any claim * * * unless such individual has been recognized for such
purposes by the Secretary'') and 5903 (authorizing VA to permit
representation on a ``particular claim'' only). We addressed the issue
of attorney representation of claimants on a pro bono basis above
regarding Sec. 14.629.
Section 14.630(a) requires a person authorized to provide
representation on one claim to file a VA Form 21-22a ``with the agency
of original jurisdiction where the claim is presented.'' One commenter
requested that we clarify the filing requirement because the case may
be pending at a Resource Center, the Appeals Management Center, or the
Board when the claimant seeks representation. The commenter recommended
that the form be filed with the VA facility in possession of the claim.
We decline to change Sec. 14.630(a) to require a claimant to file
a representation form with the VA facility in possession of the claim.
When a claimant files a claim with their local VA regional office they
presumably know where they filed the claim and may have established
contacts with VA personnel. We recognize that there will be instances
in which the claim has been temporarily moved to another VA facility.
However, it will be easier for the claimant if he or she files the
representation form with the agency of original jurisdiction where the
claim was presented. We understand that slight delay may result because
of processing and forwarding. This section in no way prohibits a
claimant from also forwarding a copy of the form to the VA facility
that is handling the claim. A final situation may arise where a
claimant moves from the jurisdiction of one regional office to the
jurisdiction of another regional office. In that instance, the claim
and case file will be transferred to the new regional office of
jurisdiction, and the claimant should treat the new regional office as
the ``agency of original jurisdiction where the claim is presented.''
Section 14.631--Powers of Attorney; Disclosure of Claimant Information
We received five comments regarding proposed Sec. 14.631. One
commenter expressed concern that under Sec. 14.629(b), claimants
currently represented by attorneys would have their representation
revoked on the effective date of the new regulations unless and until a
VA Form 21-22a is completed by the claimant. The commenter, while
recognizing VA had good reasons to have a standardized consent form,
stated that requiring the form to allow representation is a different
matter because the claimants have a contract, on file with VA,
indicating appointment of an attorney as their representative. The
commenter recommended that we amend the rule to eliminate the
requirement that a VA Form 21-22a be submitted as a requirement for
representation, particularly for claimants represented by attorneys as
of the effective date of the rule. We will not make any changes to the
rule based on this comment.
Section 14.631(a) requires that claimants use a standard form, VA
Form 21-22a, to appoint individuals providing representation on a
particular claim under Sec. 14.630, representatives, agents, and
attorneys, and to authorize the disclosure of claimant information. We
have authority under the amendments to 38 U.S.C. Chapter 59 in Public
Law 109-461 to regulate agent and attorney practice before the
Department, and we interpret this authority as permitting us to exceed
the limitations in 5 U.S.C. 500 by, among other things, requiring the
use of a standard form to indicate appointment. See 38 U.S.C.
5904(a)(2) (``[t]he Secretary shall prescribe in regulations * * *
qualifications and standards of conduct for individuals recognized
under this section''). We also interpret current law as requiring a
claimant's written authorization before VA can release information
protected by the Privacy Act, and 38 U.S.C. 5701 and
[[Page 29859]]
7332, and we have determined that VA Form 21-22a is legally sufficient
to authorize release of such information. This is reflected in VA's
current policy of releasing claimant information to attorneys only upon
receipt of a VA Form 21-22a signed by the represented claimant.
We understand the need to ensure continuity of representation, and
it is not our intent to revoke representation on the effective date of
this rule if we do not have a VA Form 21-22a signed by the agent or
attorney on file. Rather, the requirement pertains to claimants'
designation of agents and attorneys occurring on or after the effective
date of this rule. Accordingly, for all representation before the
Department initiated on or after the effective date of this regulation,
June 23, 2008, VA will not recognize the designation of an agent or
attorney for purposes of representation or disclose claimant
information to the agent or attorney without a properly executed VA
Form 21-22a on file. As to representation initiated before the
effective date of the regulation, because Federal law prohibits release
of claimant information without claimants' written authorization, VA
will not disclose such information to a claimant's attorney unless the
claimant has authorized the disclosure on a Form 21-22a.
We also disagree with the suggestion that VA should accept non-
standard authorizations for the release of claimant information and
will not make any changes based upon the comment. VA has previously
accepted non-standard authorizations for the release of claimant
information from attorneys, but found many of these to be legally
insufficient requiring additional review and communication with
attorneys delaying both the processing of the claim and the release of
information to attorneys.
One commenter approved of the requirement in Sec. 14.631(a) that a
person providing representation under Sec. 14.630, or an accredited
representative, agent, or attorney must sign the VA Form 21-22a to
indicate acceptance of appointment for purposes of representation. The
commenter stated that this provision would help to ensure that
claimants contact VSOs in a timely manner if they need assistance.
We received a comment concerning the circumstances under which an
attorney may terminate representation. The commenter requested that we
add language similar to that provided in Model Rule 1.6 requiring an
attorney to withdraw from representation when ``representation will
result in a `violation of the rules of professional conduct or other
law.' '' We note that under State bar rules attorneys will generally
have duties in addition to those prescribed by VA and that these rules
typically contain the Model Rule 1.6 provision. Section 14.632(d)
prohibits attorneys, in representing claimants before VA, from
violating the rules of professional conduct of the jurisdictions in
which they are licensed to practice law. Accordingly, we do not agree
that it is necessary to add the model language and will not make any
changes to the rule based on the comment.
One commenter disagreed with the requirements in Sec. 14.632(c) to
notify the agency of original jurisdiction of withdrawal from
representation and to surrender of documents provided by VA in the
course of the representation. Concerning the requirement to notify the
agency of original jurisdiction in the event of withdrawal from
representation, the commenter stated, among other things, that the
provision does not account for the fact that the claim or appeal could
be at a facility other than the agency of original jurisdiction. The
commenter's experience also indicates that the agency of original
jurisdiction ``does not notify other VA facilities or update the
necessary databases in a timely manner.'' The commenter suggested that
VA amend the final rule to require the individual or organization
desiring to withdraw from representation to notify the VA facility in
possession of the claim or appeal in addition to the agency of original
jurisdiction and the claimant. VA agrees that additional notification
upon withdrawal from representation would be helpful. Accordingly, we
will amend the final rule to incorporate the suggestion.
Concerning the requirement for surrender of documents provided by
VA upon withdrawal of representation, the commenter expressed support
for the requirement in the proposed rule and suggested that it be
extended to all documentation belonging to the claimant. The commenter
also suggested that VA provide guidelines for situations in which an
individual providing representation under Sec. 14.630, representative,
agent, or attorney loses contact with a clamant, and how long the
documentation should be maintained for the protection of the claimant
and the representative. Another commenter suggested it might not be
appropriate to require that individuals withdrawing from representation
return all documents to the claimant because several provisions in 38
CFR part 1 proscribe disclosing information to claimants if it would
affect their physical or mental health. We agree that VA's withdrawal
provisions should not conflict with other provisions intended to
protect claimants from harmful information. Accordingly, we will amend
Sec. 14.630 to provide that upon withdrawal from representation, all
documents provided by VA must be returned to the agency of original
jurisdiction or pursuant to the claimant's request, provided to the
organization or individual taking over the representation. See Model
Rules of Prof'l Conduct R. 1.16(d) (steps to take upon termination of
representation). However, we do not agree with the commenter's
suggestion that we expand the rule to require individuals to provide
all documents, including those obtained from the claimant and other
sources, to the agency of original jurisdiction. We intend that
individuals providing representation will maintain or dispose of these
documents according to State law.
Two commenters stated that Sec. 14.631(c) and (d) fails to
``address VA's role once a power of attorney has been withdrawn or
revoked.'' The commenters suggested that the final rule should address
whether VA intends to provide timely notice to all concerned parties in
such situations and, if so, describe how VA would provide such notice.
Commenters further stated that without timely notice by VA, claimants
may be confused as to who represents them on a particular claim and
seek advice from a party who is no longer their representative.
When a power of attorney is withdrawn or revoked, VA's role is to
ensure that that communications regarding an affected claim or claims
are provided only to the appropriate representative of record. It is
the responsibility of the claimant and the organization, individual
providing representation on a particular claim under Sec. 14.630,
representative, agent, or attorney to ensure that the claimant fully
understands the scope of representation, particularly when an agent or
attorney is providing limited representation on a particular claim
under Sec. 14.631(f)(2). Moreover, a claimant and his or her
organization, individual providing representation on a particular claim
under Sec. 14.630, representative, agent, or attorney are in a better
position than VA to understand who represents whom on a given claim.
Therefore, VA will not provide additional notification of withdrawal or
revocation to claimants or representatives. Additionally, the rule is
not intended to preclude withdrawal from representation until a
claimant obtains alternative representation. After
[[Page 29860]]
an organization, individual providing representation on a particular
claim under Sec. 14.630, representative, agent, or attorney complies
with Sec. 14.631(c), in part by providing time for the claimant to
obtain alternative representation or proceed pro se, the organization
or individual may withdraw from representation.
The commenters also expressed concern about Sec. 14.631(f)(1) and
(f)(2), under which agents and attorneys may limit the scope of their
representation to a particular claim. They suggested that the final
rule address VA's provision of timely notice to all individuals that a
new power of attorney is limited to a particular claim and that the new
power of attorney does not pertain to the veteran's other claims. VA
disagrees with the premise that the responsibility for notifying
claimants and other interested parties of arrangements to provide
limited representation rests with VA and will not make any changes
based on the comments. In enacting the amendments to 38 U.S.C. chapter
59, Congress provided claimants for VA benefits choice in
representation. It is the claimant who designates the source and scope
of representation on VA Form 21-22a and enters into fee agreements, not
VA. Moreover, Sec. 14.631 clearly identifies the effect of withdrawal
from representation and the effect of a revocation of a power of
attorney, a concept that organizations and accredited individuals are
obligated to follow.
Under Sec. 14.631(f)(1), receipt of a new power of attorney by VA,
without limitation, revokes existing powers of attorney. Generally,
there can be only one power of attorney. As a result, the organization
or individual is appointed for representation on any and all claims the
claimant has before the Department. Under Sec. 14.631(f)(2), however,
an agent or attorney may limit the scope of his or her representation
to a particular claim by describing the limitation on VA Form 21-22a.
Under this section, organizations or individuals with an unlimited
power of attorney retain representation for all claims before VA with
the exception of the particular claim indicated on the VA Form 21-22a.
Agents and attorneys advising claimants concerning limited
representation are obligated to exercise care in ensuring that
claimants understand the precise scope of the representation to be
provided by the agent or attorney, and that which will be provided by
other individuals or organizations, if any. In such cases, the agent or
attorney should inquire whether the claimant has an existing power of
attorney appointing a VSO as his or her representative, and, when
necessary, communicate with the other individuals or organizations
representing the claimant before the Department. In the event that an
agent or attorney withdraws from representation on a particular claim
and the claimant has an existing power of attorney in favor of a VSO,
representation on the particular claim defaults to the VSO, and, as a
result, VA would send future information on the particular claim to the
VSO. It is the shared obligation of the claimant and the organization,
representative, agent, or attorney, to fully communicate concerning any
modification to the scope of representation.
Commenters also expressed concern that VA lacked the capacity to
distinguish between a claimant represented by an agent or attorney for
all purposes and one represented by an agent or attorney only on one
particular claim. Because such inability could result in
miscommunication between VA, the claimant, and the representative, the
commenters suggested that VA develop such capability. VA's current
benefits delivery database does not have the capability described by
the commenter, but VA has procedures in place to communicate with
organizations and individuals providing a claimant with representation
on different claims. VA is currently developing a replacement database,
but it is unknown at this time whether the capability described will be
included in the final version.
Section 14.632--Standards of Conduct for Persons Providing
Representation Before the Department
We received a number of comments opposing the requirement in Sec.
14.632(a)(2) that individuals representing claimants ``conduct
themselves in accordance with the non-adversarial nature of the
practice before the agency of original jurisdiction and the Board.''
One commenter suggested that attorneys are by nature adversarial and
that VA incorrectly assumed Congress intended them to act in a non-
adversarial way before VA. The same commenter also suggested that an
attorney's ethical obligation to represent a client with ``zeal'' and
the proposed regulation's mandate that attorneys adhere to the non-
adversarial procedure cannot co-exist. Two commenters recommended that
agents be permitted to represent claimants with ``zeal,'' presumably,
in an adversarial manner.
We agree that Congress did not intend to prohibit ``adversarial''
conduct to the extent that such conduct meets the standard established
by VA in 38 CFR 14.632 and is consistent with ethical advocacy on
behalf of a claimant contesting an initial VA decision on a claim.
However, we do not interpret the amendments to chapter 59 as expressing
Congress's intent to create a new adversarial system of adjudication.
In amending section 5904, Congress specified that claimants may pay for
the ``services'' of agents and attorneys with respect to proceedings
before the Department after the date on which a Notice of Disagreement
is filed in the case. Congress did not define the scope of the services
provided by agents and attorneys, except to specify that they involve,
among other things, assisting claimants who challenge a VA decision. We
interpret these provisions to mean that VA's adjudication system shall
be flexible enough to permit agents and attorneys to act as advocates
for their client in contested matters. Accordingly, we will modify
Sec. 14.632(a)(2) to remove the requirement that individuals providing
representation shall conduct themselves in accordance with the non-
adversarial nature of practice before VA. The remaining provisions in
Sec. 14.632, which are comprehensive in prohibiting disruptive
conduct, are sufficient to protect the VA system.
One commenter suggested that we amend Sec. 14.632(c) to proscribe
``knowing'' violations. The commenter speculated that VSO
representatives are not familiar with the Model Rules and could
unknowingly violate them.
First, the Model Rules have not been adopted, nor do they govern
practice before VA. Section 5904(b) requires VA to prescribe
regulations concerning standards of conduct for practice before VA that
are consistent with the Model Rules. In other words, Congress directed
VA to take them into account when establishing standards of conduct and
qualifications for practice before VA. While 38 U.S.C. 5902 and 5903
subject representatives and individuals to suspension or exclusion from
practice before VA as prescribed by 38 U.S.C. 5904(b), neither section
adopts the Model Rules. Rather, in implementing the statute, VA is
establishing standards of conduct for all persons representing
claimants before VA in Sec. 14.632. These standards are based upon the
Model Rules and we intend to look to the commentary to the Model Rules
and relevant administrative and judicial opinions on the Model Rules
when interpreting them. Section 14.632(d) is clear that attorneys must
additionally comply with the rules of professional conduct of any
jurisdiction in which they are admitted to practice to the extent that
those rules do not conflict with VA's regulations. Because the Model
Rules have not been adopted, the
[[Page 29861]]
commenter's concern that a non-attorney representative may unknowingly
violate them is unfounded.
The commenter also expressed concern that the General Counsel would
discipline a representative based upon an unknowing violation of the
Model Rules and recommended that we amend Sec. 14.633(c) to clarify
that disciplinary action is appropriate only for knowing violations. An
individual representing a claimant before VA should be capable of
comprehending what is required of them under the standards of conduct
in Sec. 14.632 and act accordingly. However, upon further review, we
believe that the General Counsel should consider the circumstances
surrounding a violation of those standards and have sufficient
discretion to impose the proper remedy. While we opt not to add a
knowledge element Sec. 14.632(c), we will address the General
Counsel's discretion in suspension and cancellation of accreditation
proceedings in Sec. 14.633(c).
One commenter expressed concern that Sec. 14.632(b)(2), which
requires individuals representing claimants before VA to ``act with
reasonable diligence and promptness in representing claimants,'' fails
to clearly define what constitutes a ``prompt'' response. The commenter
also sought clarification of ``good cause'' under Sec. 14.632(c)(7)
and as it relates to Sec. 14.632(b)(2). The meaning of ``prompt'' and
``good cause'' for purposes of this provision cannot be defined
according to a set of criteria, such as particular number of days,
given the variety of circumstances that may arise in claim
adjudication. Rather, we intend only that individuals interacting with
VA in a representational capacity be ready and quick to act as the
occasion demands. We expect individuals representing claimants before
VA will make reasonable efforts to expedite the administrative process
and not use dilatory tactics. When VA requests information from a
claimant or his or her representative, reasonable efforts should be
made to respond to VA's request as soon as practicable as this is in
the best interest of the claimant. This section is intended to put all
representatives on notice that unreasonable delay will not be
tolerated.
One commenter stated that Sec. 14.632(c)(5), which prohibits
agents and attorneys from entering into fee agreements that are
``clearly unreasonable [or] excessive,'' is ambiguous. We agree in part
and disagree in part. First, the term ``excessive'' is redundant
because any excessive fee will be ``unreasonable.'' Therefore, we will
remove ``excessive'' from the regulation text.
We disagree, however, that there is ambiguity in our use of the
term ``unreasonable'' and will not change the rule based upon the
comment. As an initial matter, 38 CFR 14.636(e) lists eight factors
that VA considers when reviewing a fee agreement for reasonableness.
They are the same factors that the Board considered under former law,
and we did not intend any substantive change when we moved those
criteria to 38 CFR Part 14. Second, Sec. 14.636(f) implements the
statutory presumption that fees of 20 percent or less are presumed
reasonable. The presumption of reasonableness, combined with the
criteria for reviewing fee agreements, provides agents and attorneys
sufficient notice concerning the reasonableness of fees.
A number of commenters also expressed concern about Sec.
14.632(c)(9) and requested clarification of the ``acts or behavior
prejudicial to the fair and orderly conduct of the administrative
proceedings before VA.'' While Sec. 14.632(c)(7) concerns an
individual's obligation to provide prompt representation to a claimant,
Sec. 14.632(c)(9) concerns an individual's use of dilatory or
obstructive tactics during representation. Such tactics might include
advising a claimant to withhold cooperation, filing duplicative
pleadings, unnecessarily disrupting hearings, intentionally misleading
adjudicators, or other tactics that cause unnecessary delay. In our
view, this provision is sufficiently clear to put individuals on notice
that they cannot employ such tactics when providing representation in a
proceeding before the Department. Accordingly, we will not make any
changes based upon the comments.
One commenter recommended that we amend Sec. 14.632(c)(10) to
clarify that disclosure of a claimant's information to paralegals and
other support staff is not prohibited and not a violation of VA's
standards of conduct. We disagree and will not make any changes based
on the comment. As discussed above regarding Sec. 14.629(c)(3), a
claimant must specifically authorize a legal intern, law student, or
paralegal to assist an attorney in providing representation. The change
recommended by the commenter would conflict with Sec. 14.629(c)(3) and
interfere with our obligation to protect the confidentiality of
claimants' information.
One commenter opposed Sec. 14.632(c)(11), which prohibits, among
other things, a claimant's representative from engaging in
``unprofessional'' conduct. The commenter suggested that there is no
universal definition of ``professional'' and that determining what is
``unprofessional'' for purposes of enforcing VA's standards of conduct
would be difficult absent precise guidance. We agree and will remove
engaging in ``unprofessional'' conduct as violation of VA's standards
of conduct.
Section 14.633--Termination of Accreditation or Authority To Provide
Representation Under Sec. 14.630
We received numerous comments regarding the proposed regulations
governing suspension and cancellation of accreditation under 38 CFR
14.633. In general, commenters expressed concern about the role of OGC
in suspension and cancellation proceedings, suspension and cancellation
procedures, the types of sanctions that could be imposed, and the
grounds for suspension and cancellation of accreditation.
We received ten comments expressing concern about OGC's role in
accreditation matters. Under proposed Sec. 14.633, the Assistant
General Counsel managing VA's accreditation program investigates and
presents disciplinary matters to a hearing officer and forwards the
hearing officer's findings to the General Counsel with a recommendation
for a final decision. A commenter questioned whether the Assistant
General Counsel should have responsibility for both the prosecutorial
function and the adjudicative function, recommending a final decision,
in disciplinary proceedings. According to the commenter, the procedure
in Sec. 14.633 ``raises the perception of unfairness or conflict of
interest in cancellation proceedings.'' The commenter recommended that
we amend the rule to provide a more independent disciplinary counsel to
investigate and present VA's case in suspension and cancellation
proceedings. The commenter also recommended that the rule explicitly
provide that the presiding hearing officer ``not directly or indirectly
report to, or be employed under, the General Counsel or others
designated to decide disciplinary matters'' and ``that the hearing
officer not be a VA employee.''
Other commenters also expressed concern about the General Counsel's
broad authority in accreditation matters. One commenter stated that
there was an inherent conflict with the same entity making
accreditation and disbarment decisions. Another commenter suggested
that OGC, as his ``adversary,'' would use the authority under Sec.
14.633 to find that he was not competent to represent claimants before
the Department. One individual generally
[[Page 29862]]
suggested that concentration of accreditation authority in OGC invited
abuse. To remedy the potential for and/or perception of conflict, one
commenter suggested that VA appoint an independent body, not under the
supervision of the General Counsel, to conduct initial investigations,
hold hearings, and make accreditation decisions. Another commenter
stated that the General Counsel, as the Secretary's counsel of record
before the U.S. Court of Appeals for Veterans Claims, would be biased,
or at least conflicted, in making disciplinary determinations as to
whether an attorney's conduct was unprofessional or that an attorney's
representation lacked competence; therefore, such decisions should be
decided by an independent third party, not the commenter's opposing
counsel.
It is well-settled that a Federal agency may police the behavior of
attorneys and other professionals practicing before it. See Polydoroff
v. Interstate Commerce Comm'n, 773 F.2d 372, 374 (D.C. Cir. 1985).
Moreover, the combination of investigative and adjudicative functions
in a single entity to regulate the conduct of professionals, as
proposed in Sec. 14.633, without more, does not violate due process.
In Withrow v. Larkin, 421 U.S. 35, 56 (1975), the Supreme Court held,
``[i]t is also very typical for the members of administrative agencies
to receive the results of investigations, to approve the filing of
charges or formal complaints instituting enforcement proceedings, and
then to participate in the ensuing hearings. This mode of procedure
does not violate the Administrative Procedure Act, and it does not
violate due process of law.'' The Secretary of Veterans Affairs may
lawfully delegate authority for accreditation matters to OGC. 38 U.S.C.
5904 (Secretary's authority to recognize individuals for practice
before the Department); 38 U.S.C. 512 (Secretary's delegation authority
concerning decisions under laws administered by VA). The General
Counsel has made the final decision on matters of accreditation
concerning representatives, agents, and attorneys since 1954 without
being challenged based upon evidence of actual conflict of interest or
bias. See 38 CFR 14.629 (1954) (``[a]ny cause considered sufficient to
reject the application of an attorney or agent or to cancel recognition
previously granted will be reported through the Chief Attorney to the
General Counsel for final determination''); 38 CFR 14.637 (1954)
(``[i]f the charge or charges be sustained, the General Counsel if he
concurs in the recommendation, will suspend or revoke the recognition
of such attorney or agent'').
Management of VA's accreditation program is a proper function of
OGC. The office is staffed by attorneys who have the necessary
expertise to administer the program and these attorneys are not
involved in the adjudication of claims before VA's agencies of original
jurisdiction or the Board where accredited individuals provide
representation. Further, VA does not have authority to regulate the
practice of individuals before the Court of Appeals for Veterans Claims
and the OGC attorneys that represent VA before that court are under the
supervision of a separate Assistant General Counsel who is not involved
in administration of the accreditation program. The commenters did not
raise any issue of actual conflict or bias sufficient to disturb VA's
long-standing practice of managing the accreditation program in OGC.
Nonetheless, we agree that the process for suspending or cancelling
accreditation can be improved to minimize the appearance of conflict
and bias. To that end, we will amend the rule to clarify that the
hearing officer will not directly or indirectly report to, or be
employed under, the General Counsel or the head of any VA agency of
original jurisdiction before which the individual provides
representation.
To further insulate the General Counsel's adjudication of
suspension or cancellation decisions from investigation, prosecution,
and fact finding, we will amend the rule to remove the procedural
requirement in proposed Sec. 14.633(f) that the Assistant General
Counsel provide a recommendation on a final decision to the General
Counsel after reviewing the record provided by the hearing officer.
Instead, the rule provides that the hearing officer shall submit the
entire hearing transcript, any pertinent records or information, and a
recommended finding to the Assistant General Counsel within 30 days
after closing the record. Participation of the Assistant General
Counsel following the investigation and prosecution of any disciplinary
matters will be limited to providing administrative support to the
hearing officer in compiling the record and forwarding it to the
General Counsel with the hearing officer's recommendation.
The amendments described above, which ensure a neutral hearing
officer and insulate the General Counsel's adjudicative decision from
the investigative and prosecutorial functions of the Assistant General
Counsel, are sufficient to minimize the appearance or perception of a
conflict of interest. Accordingly, we will not make further changes to
the proposed rule based on the comments.
We received three comments concerning the Assistant General
Counsel's notice in disciplinary proceedings under Sec. 14.633. One
commenter suggested that we amend the rule to provide notice and
opportunity to respond to allegations of misconduct or incompetence
prior to initiating an inquiry. Another commenter suggested that we
additionally provide ``remedial notice'' under Sec. 14.633. Such
notice would advise the individual of the infraction and provide an
opportunity for the individual to correct the offending behavior in
lieu of formal disciplinary proceedings. Finally, a commenter stated
that an individual who requests a disciplinary hearing should receive
all information about the complaint, including its source.
We agree that the notice provided to individuals in disciplinary
proceedings could be expanded to improve the process and, consistent
with current practice, may reduce the number of formal inquiries
resulting from inadvertent acts or technical violations. Accordingly,
we will amend the rule to provide that the Assistant General Counsel,
before deciding whether to conduct an inquiry under Sec. 14.633, will
inform the individual of the allegations, potential violations of law,
and the source of the complaint, and will provide the subject with an
opportunity to respond. Additionally, we will amend the rule to provide
that when appropriate, including but not limited to situations when the
seriousness of the violation does not justify an inquiry because no
harm results to the claimant or VA, the Assistant General Counsel will
provide an opportunity for the subject to correct the offending
behavior before deciding whether to conduct an inquiry. This
clarification reflects current practice in that the Assistant General
Counsel provided notice and opportunity for remedial actions prior to
initiating formal inquiries in some cases under former law.
We received two comments regarding the absence of suspension as a
sanction in proposed Sec. 14.633. One commenter questioned the
omission of suspension from proposed Sec. 14.633 because section
5904(b) expressly provides that VA may suspend or exclude individuals
from practice before the Department and stated that VA's failure to
include the lesser sanction of suspension is an unreasonable
interpretation of the statute. Another commenter disagreed with VA's
use of terms ``cancel'' and ``terminate'' in Sec. 14.633 when the
statute
[[Page 29863]]
provides that ``the Secretary may suspend or exclude.'' The commenter
recommended that VA use the statutory terms and specify several kinds
of discipline with the most severe sanction being exclusion from
practice before VA. This commenter also recommended that the timing and
methods of seeking reaccreditation be specified.
We agree that suspension may be appropriate in cases involving
extenuating circumstances or where the misconduct is not so severe as
to warrant the harsher penalty of canceling accreditation. On October
12, 2007, VA published in the Federal Register (72 FR 58009) a final
rule amending Sec. 14.633 to provide for suspension of accreditation
as a lesser sanction for conduct prohibited by section 5904. The
amendments provide that the General Counsel may suspend accreditation
for a definite period or until the individual satisfies the conditions
established by the General Counsel for reinstatement. The General
Counsel will reinstate suspended accreditations at the end of the
period of suspension or upon verification that the individual has
satisfied the conditions for reinstatement. The General Counsel's
decision to suspend or cancel an individual's accreditation will be
based on the facts and circumstances of the particular case, with
suspension being appropriate in cases involving extenuating
circumstances or less egregious conduct not warranting permanent
cancellation.
VA's use of the terms ``cancel'' or ``terminate,'' instead of
``exclude,'' in Sec. 14.633 is intentional. In section 5904(b), the
terms ``suspend'' and ``exclude'' refer to the General Counsel's
decision to temporarily or permanently prohibit an individual from
providing representation before the Department. Accreditation is
analogous to a license to practice before VA, which the General Counsel
suspends, cancels or terminates. The General Counsel does not
``exclude'' an accreditation.
Two commenters disagreed about the provisions in Sec. 14.633 that
subject VSO representatives to suspension or exclusion from practice
before VA on the same grounds as apply to agents and attorneys. The
commenters found it ``inherently inequitable'' that the proposed
regulation did not distinguish between individuals who provide paid
representation and those who do so without charge. We disagree and will
not change the rule based on these comments.
All claimants for VA benefits are entitled to responsible,
qualified representation, and VA did not propose any change to Sec.
14.633 to the extent that it treated VSO representatives and agents and
attorneys the same for purposes of discipline. In amending section
5904(b), Congress did not distinguish between paid and unpaid
representation. Further, under the plain language of 38 U.S.C.
5902(a)(2), VSO representatives ``shall be subject to the
[disciplinary] provisions of section 5904(b) of this title on the same
basis as'' an agent or attorney accredited under section 5904(a).
Several commenters expressed concern with Sec. 14.633(c)(4), which
adds the submission of a frivolous claim, issue, or argument as grounds
for suspension or exclusion from practice before VA. Two commenters
stated that all veterans are entitled to representation and that it is
VSO policy to present all claims to VA for processing, even if the
claimant does not have evidence supporting a grant of benefits. These
commenters are concerned that VSO representatives might be held
responsible for claims and arguments submitted by claimants directly to
VA without the knowledge of the representative or VSO. They also
expressed concern about the definition of ``frivolous'' in VA's
regulation. Two commenters complained that the rule does not clearly
define ``good faith argument'' and questioned whether an argument could
shift from being non-frivolous to frivolous. The commenters all noted
the tension between the need to file a claim to gain the earliest
possible effective date and the need to determine whether a claim,
issue, or argument is frivolous.
A veteran's right to representation under 38 U.S.C Chapter 59 does
not include the right to representation for frivolous claims. The plain
language of section 5904(b)(6), made applicable to representatives by
section 5902(b)(2), provides that the Secretary may suspend or exclude
agents and attorneys who present a frivolous claim, issue, or argument.
In the Committee Report accompanying the predecessor bill to S. 3421,
S. 2694, the Senate Committee on Veterans' Affairs specifically
recognized the adverse impact that frivolous claims filed by service
organizations have on VA's system of adjudication. See S. Rep. No. 109-
297, at 17 (2006) (``service organizations must ensure that * * *
frivolous claims are removed so that valid claims are not needlessly
delayed''). Noting the growth in the number of claims filed with VA,
the Committee resolved that ``requiring all veterans' representatives
to advocate responsibly, by avoiding frivolous claims, arguments, or
issues, could be of significant help in ensuring that `valid claims are
not needlessly delayed.' '' Id. at 19 (citations omitted).
VA's definition of ``frivolous'' in Sec. 14.633(b)(4) is based on
Model Rule 3.1. In our view, the regulation is sufficiently clear to
provide notice of prohibited conduct. Additionally, were VA to
discipline a representative, agent, or attorney for filing a frivolous
claim, and such action were appealed to the Board, precedent opinions
of the Court of Appeals for Veterans Claims and Court of Appeals for
the Federal Circuit would control. In the Senate Committee's report, it
quoted Abbs v. Principi, 237 F.3d 1342, 1345 (Fed. Cir. 2001), in
defining frivolous arguments or issues as those `` `that are beyond the
reasonable contemplation of fair-minded people.' '' S. Rep. No. 109-
297, at 19-20. In Abbs, the court also noted that an action is
frivolous when the individual providing representation ``has
significantly misrepresented the law or facts, or has abused the
judicial process by repeatedly litigating the same issue in the same
court.'' Abbs, 237 F.3d at 1345.
Comment 2 to Model Rule 3.1 is instructive concerning whether
filing a claim when all the facts are not known or all the evidence is
not fully developed can be regarded as frivolous:
The filing of an action or defense or similar action taken for a
client is not frivolous merely because the facts have not first been
fully substantiated or because the lawyer expects to develop vital
evidence only by discovery. What is required of lawyers, however, is
that they inform themselves about the facts of their clients' cases
and the applicable law and determine that they can make good faith
arguments in support of their clients' positions. Such action is not
frivolous even though the lawyer believes that the client's position
ultimately will not prevail. The action is frivolous, however, if
the lawyer is unable either to make a good faith argument on the
merits of the action taken or to support the action taken by a good
faith argument for an extension, modification or reversal of
existing law.
Model Rules of Prof'l Conduct R. 3.1 cmt. (2000) (emphasis added). Like
agents and attorneys, VSO representatives must inform themselves about
the facts of each case and the applicable law, and before providing
further representation, determine whether they can make a good faith
argument in support of a claim. In this context, VA interprets ``good
faith'' as ``honesty of purpose'' and ``freedom of intention to
defraud.'' Black's Law Dictionary 477 (6th ed. 1991). In the event that
a good faith argument cannot be made, representatives, agents, and
attorneys must withdraw from representation or assume the risk of
[[Page 29864]]
suspension or exclusion from further practice before VA.
The commenters also asserted that certain unspecified State and
County veterans agencies are prohibited by State and local law from
refusing to represent veterans seeking benefits. As a result, the
commenters claim that VA's regulation would be in conflict with State
law. Without reviewing the specific State and local laws in question,
it is difficult to respond to this comment. However, to the extent that
the existence of a State or local law requiring an organization to
provide representation conflicts with the prohibition on the filing of
frivolous claims under section 5904(b)(6) and 38 CFR 14.633(c)(4), we
do not agree that a change is necessary. Federal law generally preempts
the application of State law by virtue of the preemption doctrine. See
U.S. Const. art. VI, cl. 2. Despite the fact that Congress did not
expressly command that State laws regarding representation would be
superseded by those in 38 U.S.C Chapter 59, Congress' intent can be
inferred ``because `[the] scheme of federal regulation may be so
pervasive as to make reasonable the inference that Congress left no
room for the States to supplement it.' '' Fidelity Federal Savings &
Loan Ass'n v. De la Cuesta, 458 U.S. 141, 153 (1982) (quoting Rice v.
Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)). Unless otherwise
specified in statute, Congress has left no room for the States to
supplement the law related to the provision of Federal veterans
benefits. Federal regulations have the same preemptive effect as
Federal statutes. Id. at 154. Accordingly, we will make no changes to
the rule in this area based on the comments.
Two commenters recommended that VA discipline an individual for
presenting a frivolous claim, argument or issue only if it was a
knowing violation of the law. One commenter stated that adding a
knowledge requirement would bring the proposed rule in line with the
standard expressed in Sec. 14.633(c)(2) that limits sanctions for
presenting or prosecuting a fraudulent claim to those made
``knowingly.'' The other commenter suggested that we amend the rule to
provide that a service officer must have acted intentionally or
recklessly in providing representation before VA takes disciplinary
action. We agree that a violation of Sec. 14.633(c)(4) should include
a requirement that such violation was made knowingly and will amend the
rule to add such language.
One commenter expressed concern that Sec. 14.633(c)(7), which
states that ``any other unlawful, unprofessional, or unethical
practice'' may be grounds for suspension or exclusion from practice
before VA, is too broad and allows VA to disaccredit representatives
for any unlawful practice, such as speeding.
Section 14.633(c)(7) is intended to provide the General Counsel
with authority to cancel accreditation for any unlawful,
unprofessional, and unethical practice adversely affecting an
individual's fitness for practice before VA. Despite the fact that
current Sec. 14.633(c)(4) has contained similar language for many
years, VA has never used this authority to disaccredit individuals for
traffic violations or other conduct unrelated to fitness to practice
before VA. However, for the reasons expressed above, we will strike the
term ``unprofessional'' and amend the final rule to clarify that that
the General Counsel's authority to cancel accreditation for unlawful
and unethical practices is limited to conduct adversely affecting an
individual's fitness for practice before VA.
Three commenters were concerned that in proposed Sec. 14.633(d)
providing that accreditation shall be cancelled when the General
Counsel finds that the performance of an individual providing
representation under Sec. 14.630, representative, agent, or attorney
demonstrates a lack of the degree of competence necessary to adequately
prepare, present, and prosecute claims for veterans benefits, was too
vague and would lead to inconsistent disciplinary decisions. They
suggested that VA establish specific and objective criteria in an
effort to better define the concept. VA agrees that further explanation
would improve understanding of the concept.
Competent representation encompasses many factors, among others,
the level of knowledge and skill required for a particular case, the
degree of preparation required for a particular case, and the analysis
of the facts and issues required in a particular case. See Model Rules
of Prof'l Conduct R. 1.1 cmt. (2000). A representative, agent, or
attorney demonstrates a lack of the degree of competence necessary to
adequately prepare, present, and prosecute a claim for veterans
benefits when his or her performance indicates a lack of the knowledge,
skill, or preparation required for a particular case. At a minimum,
individuals representing claimants before VA must be familiar with the
facts of the particular case, applicable law, and the procedures for
filing claims and appeals. Because the facts and circumstances of a
particular case and the skills possessed by a representative, agent, or
attorney are unique, a checklist of specific criteria demonstrating a
lack of competence would necessarily be incomplete; however, we will
amend the final rule to provide that a lack of the degree of competence
required will be based on the factors discussed in the current
commentary to Model Rule 1.1.
Concerning consistency in determining whether a representative
demonstrates a lack of the degree of competence required to prepare,
present, and prosecute a claim, the investigation of such allegations
is centralized with the Assistant General Counsel managing VA's
accreditation program under Sec. 14.633. Centralization will result in
uniform application of the disciplinary standards in Sec. 14.633.
One commenter expressed concern about the provision in Sec.
14.633(e) requiring VA to initiate an inquiry ``upon receipt of
information from any source.'' According to the commenter, without
specific guidelines as to what type of information VA would act upon,
VA will be overwhelmed with allegations of incompetent representation,
some of which could be unfounded. To better balance the interests of
individuals providing representation before the Department with the
interests of the Department in ensuring the competent representation of
claimants, we will amend the rule to specify that VA will initiate an
inquiry under Sec. 14.633 only upon receipt of credible, written
information, including e-mail messages, indicating improper conduct or
incompetence. As discussed earlier, when VA receives information
concerning misconduct or incompetent representation of claimants before
the Department, the Assistant General Counsel will provide notice to
the individual concerned and an opportunity to respond before
initiating a formal inquiry. Consistent with current practice, we
believe that requiring written complaints and providing notice to the
individual concerned will reduce the potential for unfounded
complaints.
Two commenters stated that the 30-day period for an individual to
respond to the Assistant General Counsel's notice of intent to suspend
or cancel accreditation is an unreasonably short period of time to
respond to such notice and request a hearing. One commenter stated that
the 30-day period is ``arbitrarily short'' and ``does not meet the
standard for meaningful due process.'' The other commenter suggested
that the final rule address whether time periods are based on calendar
or business days and whether a response is deemed timely based on the
date of mailing or date of receipt. It was also suggested that a 45-day
time
[[Page 29865]]
period would avoid forcing individuals to chose between attending to
client representation and responding to VA. We do not agree that the
30-day period for responding to the Assistant General Counsel's notice
is unreasonable and will not make any changes to the rule based on
these comments.
As we discussed above, procedural due process under the U.S.
Constitution is a flexible concept depending upon the demands of the
particular situation. VA is obligated under its accreditation authority
to ensure the responsible, qualified representation of claimants for
benefits. In our view, it would be unreasonable and prejudicial to
claimants to provide accredited individuals more time than is
reasonably necessary to respond in these disciplinary matters.
Accordingly, we will not provide more than 30 days for responding to
the Assistant General Counsel's notice of intent to suspend or cancel
accreditation. The 30-day period is appropriate and fair because it
strikes a balance between VA's interests in protecting claimants and
the interests of individuals responding to a notice of intent to cancel
accreditation. We note that Sec. 14.633(e)(1)(i) requires the
Assistant General Counsel to provide notice concerning the right to
submit additional evidence during disciplinary proceedings and to
request a hearing. Further, under Sec. 14.633(f), individuals may
present evidence at a hearing and may supplement that evidence during
the 10-day period following the hearing. In our view, these measures
reasonably balance VA's obligations to claimants and individuals who
are the subject of disciplinary proceedings. Finally, should the 30-day
period be insufficient to formulate an answer, Sec. 14.633(e)(2)(iii)
provides that the Assistant General Counsel ``may extend the time to
file an answer or request a hearing for a reasonable period upon a
showing of sufficient cause.''
We agree that we need to clarify the scope of the 30-day response
period in Sec. 14.633(e)(2)(i). Accordingly, we will amend the rule to
provide that an individual providing representation under Sec. 14.630,
representative, agent, or attorney has 30 calendar days from the date
on which the Assistant General Counsel mails notice of intent to
suspend or cancel accreditation to file an answer and to request a
hearing. In computing the time period for filing a response, the date
on which the notice was mailed by the Assistant General Counsel shall
be excluded from the 30-day period. A response postmarked prior to the
expiration of the 30-day period shall be accepted as having been timely
filed. If the 30th day falls on a weekend or legal holiday, then the
first business day thereafter shall be included in the computation. We
define ``legal holiday'' consistent with Rule 6 of the Federal Rules of
Civil Procedure.
Two commenters disagreed with the General Counsel's discretion
under Sec. 14.633(f) to hold disciplinary hearings at a VA Regional
Office or at the VA Central Office. One commenter suggested that the
individual who is the subject of the disciplinary proceeding should be
allowed to choose where the hearing is held. The other commenter
suggested that the final rule prescribe criteria for deciding the
location of a hearing. According to this commenter, requiring a
representative, agent, or attorney to travel to Washington, DC for a
hearing would be a hardship and potentially impair the individual's
ability to produce evidence or compel the appearance of witnesses. The
commenter also noted that VA's regulation providing subpoena authority
to officials in designated positions prescribes a 100-mile radius from
the place of a hearing for such authority and questioned whether VA
would extend the 100-mile limit for purposes of this regulation. See 38
CFR 2.2(b).
We agree that in promulgating regulations designating the location
of hearings under Sec. 14.633 we must consider the interests of
individuals defending allegations of misconduct or incompetence.
Individuals defending allegations of improper conduct or incompetence
would indeed suffer costs in traveling to VA's Central Office and may
be unable to compel the attendance of witnesses or the production of
evidence outside the 100-mile radius provided in 38 CFR 2.2(b). The
General Counsel, claimants, and those accused of improper conduct or
incompetence have an interest in the consistency of the hearing
process. To ensure equity and consistency in the hearing process, VA
will amend the language of Sec. 14.633(f) to provide that if a hearing
is requested, it will held at the VA Regional Office nearest the
individual's principal place of business. If the individual's principal
place of business is in Washington, DC, the hearing will be held at the
VA Central Office.
Another commenter recommended that VA add provisions to Sec.
14.633(f) prescribing the authority of the hearing officer. The
commenter recommended that the regulation expressly provide the hearing
officer with authority to change the time or place of a hearing and to
deal with the conduct of the hearing. We believe that the hearing
officer currently has the inherent authority necessary to conduct an
efficient and orderly hearing. We will make no changes to the final
rule based on this comment.
One commenter stated that it would be unfair for the Board to use
or seek General Counsel opinions during its review of the General
Counsel's disciplinary decisions and suggested that we amend Sec.
14.633(g) to prohibit the Board from doing so. We disagree and will not
change the rule based on this comment.
The General Counsel is the Department's chief legal officer and is
responsible for advising the Secretary concerning VA programs and
policies. 38 U.S.C. 311; 38 CFR 14.500(b). A written legal opinion of
the General Counsel involving laws administered by VA is binding as to
all VA employees and officials, 38 CFR 14.507(a), to include the Board.
38 U.S.C. 7104(c) (``[t]he Board shall be bound in its decisions by the
regulations of the Department, instructions of the Secretary, and the
precedent opinions of the chief legal officer of the Department''). The
Board is responsible for providing one administrative review on appeal
after considering all of the evidence of record and applicable
provisions of law. 38 U.S.C. 7104(a). Accordingly, in reviewing the
General Counsel's disciplinary decisions, the Board applies the law to
the facts of the case and is bound by any precedent opinion of the
General Counsel that interprets that law. VA does not have authority to
create an exception to section 7104(c) as the commenter appears to
suggest. This does not mean that the Board is bound by the General
Counsel's decision in the matter on appeal. In fact, Sec. 14.633(g)
provides ``[n]othing in this section shall be construed to limit the
Board's authority to remand a matter to the General Counsel under 38
CFR 19.9 for any action that is essential or a proper appellate
decision or the General Counsel's ability to issue a Supplemental
Statement of the Case under 38 CFR 19.31.'' Additionally, we note that
the Board is required to provide in its decision a written statement of
the reasons and bases as to its findings on the material issues of fact
based on the entire record and without deference to any factual
findings of the General Counsel. See 38 U.S.C. 7104(d). Moreover, any
reviewing appellate court would not be bound by a General Counsel
precedent opinion. Therefore, the suggestion that the Board could use a
General Counsel opinion to unfairly influence its review of a General
Counsel accreditation decision is unfounded.
Another commenter asked whether General Counsel's disciplinary
[[Page 29866]]
decisions may be appealed to the Board and the Veterans Court and
whether normal appeal procedures would apply. Under Sec. 14.633(g),
the General Counsel's decision to suspend or cancel accreditation ``is
a final adjudicative decision of an agency of original jurisdiction and
may be appealed to the Board of Veterans' Appeals.'' Notwithstanding
provisions for closing the record, ``appeals shall be initiated and
processed using the procedures in 38 CFR parts 19 and 20.'' Because the
proposed rules address the commenter's concerns, we will not change the
rule based on the comment.
Section 14.636--Payment of Fees for Representation by Agents and
Attorneys in Proceedings Before the Agency of Original Jurisdiction and
Before the Board of Veterans' Appeals
One commenter urged us to clarify the effect delayed implementation
of the regulations will have on fee agreements entered into on or after
June 20, 2007. We agree that clarification is necessary. The new
regulations apply to fee agreements entered on or after June 23, 2008.
They do not apply to fee agreements entered before June 23, 2008.
One commenter expressed concern that Sec. 14.636(b), which
authorizes only accredited agents and attorneys to charge fees for
representation, conflicts with the standards of conduct in Sec.
14.632(c)(5). Section 14.632(c)(5) prohibits individuals recognized
under Sec. 14.630, representatives, agents, and attorneys from
entering into unreasonable or unlawful fee agreements.
We disagree that this section needs clarification. Section 14.632
establishes standards of conduct applicable to all persons authorized
to represent claimants before VA. Section 14.636(b) implements 38
U.S.C. 5904, which permits agents and attorneys to charge fees for
representation under specified circumstances. Individuals authorized
under 38 U.S.C. 5902 and 5903 are prohibited by law from charging fees
for representing claimants. Therefore, any attempt by these individuals
to charge, solicit, or receive a fee for representation is a violation
of the standards of conduct prescribed in Sec. 14.632(c)(5). We will
not change the rule based upon the comment.
Three commenters recommended that Sec. 14.636(c) be amended to
reflect the General Counsel's May 24, 2004, letter to the former
Ranking Member of the U.S. House of Representatives Committee on
Veterans' Affairs, which concluded that 38 U.S.C. 5904 permits
attorneys to charge fees for pre-filing consultation. In his letter to
the Secretary, the former Chairman described two factual situations
involving attorneys and requested the General Counsel's legal opinion
as to whether the attorneys violated former 38 U.S.C. 5904. We do not
believe that it is appropriate to incorporate the legal conclusions of
that letter in this regulation. The General Counsel's response was
based on two detailed, yet similar, fact patterns. There may be other
fact patterns which the General Counsel did not consider that might
result in a different legal conclusion. Therefore, we decline to
include the legal conclusion reached in the May 24, 2004, letter to
apply generally in all cases. Further, the law is clear that VA's
authority to regulate is limited to accreditation for purposes of
preparation, presentation, and prosecution of claims, and to reviewing
the fees that agents and attorneys charge for representing claimants in
``proceedings before the Department.'' See 38 U.S.C. 5904(a), (c). We
do not think that it is necessary to expand the scope of VA's
regulations to address the legal services that occur outside a
proceeding before the Department on a claim for benefits.
One commenter, citing the potential for abuse, recommended that we
limit the circumstances in which hourly or flat fees can be charged by
agents or attorneys. We did not propose limiting claimants' options for
contracting with agents and attorneys for representational services. In
our view, it would be prudent to revisit the issue in a later
rulemaking if we receive information concerning agents' and attorneys'
abuse of hourly or flat-rate fees. Without such information, the
current options (fixed fee, hourly rate, percentage of past-due
benefits recovered, or a combination thereof) appear to provide
claimants, agents, and attorneys flexibility in negotiating the
appropriate compensation structure, and appear to promote choice in
representation. Accordingly, we will not change the rule based on the
commenter's recommendation.
Contingent fee agreements, however, present a more specific risk of
exploitation. Attorneys who litigate before the VA have, on average, a
better sense of the value of a particular veteran's claim than the
veteran does. Contingent fees also provide attorneys with an incentive
to take cases that can be easily resolved at the administrative level.
Finally, a veteran may lack sufficient bargaining power to negotiate a
fair deal on fees. Thus, contingent fees give rise to the potential
that a significant portion of a veteran's past-due benefits could be
transferred to a lawyer for less work than was expected by the client
at the time of the agreement. Indeed, experts such as the American Bar
Association, while concluding that contingent fees are ethical, have
noted such agreements must be individually evaluated to determine
whether the final payment is appropriate and reasonable.
One commenter, citing Silverman v. Brown, 7 Vet. App. 487, 488
(1995) (fee of 50 percent of benefits awarded is patently
unreasonable), recommended that we establish a regulatory presumption
that a fee in excess of 33\1/3\ percent of the past-due benefits
awarded is unreasonable. The commenter went on to assert that ``VA need
only determine whether the fee called for is more or less than one-
third of the past due benefits'' when reviewing a non-direct-pay fee
agreement for reasonableness. Public Law 109-461 amended 38 U.S.C. 5904
to provide that a fee that does not exceed 20 percent of the past-due
benefits awarded ``shall be presumed reasonable.'' Congress also
authorized VA to ``prescribe in regulations reasonable restrictions on
the amount of fees that an agent or attorney may charge a claimant''
for representation before the Department. In practice, agents and
attorneys appear to agree with the commenter that any fee in excess of
33\1/3\ percent of the past-due benefits awarded by VA to a claimant
would generally be unreasonable. No fee agreement filed with the
Department since the June 20, 2007, effective date of amended section
5904 has called for a fee in excess of 30 percent of past-due benefits.
Accordingly, we will clarify in Sec. 14.636(f) that fees which exceed
33\1/3\ percent of any past-due benefits awarded shall be presumed to
be unreasonable. We will also clarify that the presumptions prescribed
in Sec. 14.636(f) for fees that do not exceed 20 percent of any past-
due benefits and fees that exceed 33\1/3\ percent of any past-due
benefits may be rebutted by clear and convincing evidence relating to
the factors in Sec. 14.636(e). As evidenced by the presumption for
fees that exceed 33\1/3\ percent, and the absence of such fees in the
current market, we are not currently of the mind that such fees are
justified. Accordingly, only in the rare case where there is clear and
convincing evidence relating to the factors in Sec. 14.636(e) would
such fees be justified.
For fees above 20 percent but below 33\1/3\ percent, additional
scrutiny may be necessary if VA or the claimant or appellant challenges
the reasonableness of the fee under the procedures in Sec. 14.636(i).
Under those procedures, the
[[Page 29867]]
burden is on the agent or attorney to demonstrate that this fee is
reasonable under the individual circumstances. Such fees may not
always, in every circumstance, be reasonable. Rather, VA will apply the
factors in Sec. 14.636(e) in a review that considers all of the
individual circumstances of the representation.
Although we agree with the commenter's suggestion that some
administrative efficiency will result from prescribing a presumption
for fees which exceed 33\1/3\ percent of any past-due benefits, we do
not agree that VA need only determine whether a fee exceeds the 33\1/3\
percent threshold when reviewing non-direct-pay fees for
reasonableness. The commenter appears to suggest that we would create
an implied presumption of reasonableness for non-direct-pay fees
between 20 percent and 33\1/3\ percent. However, in section
5904(c)(3)(A), Congress authorized VA to review any fee agreement filed
with the Department under section 5904(c)(2) and to order a reduction
in the fee if it is excessive or unreasonable. Therefore, we have
adopted a three-tier system. In accord with the statute, fees of 20
percent or less are presumed reasonable, absent specific evidence to
the contrary. Fees above 33\1/3\ percent are presumptively
unreasonable, absent specific evidence to the contrary. We interpret
section 5904(c)(3)(A) to mean that any fee agreement, regardless of any
applicable presumption, may be reviewed for reasonableness upon VA's
own motion or upon the motion of the claimant or appellant.
Accordingly, the presumptions in Sec. 14.636(f) must be construed in
the context provided by Sec. 14.636(i) regarding motions for review of
fee agreements.
We received two comments regarding Sec. 14.636(g). One commenter
objected to requiring the filing of fee agreements with OGC suggesting
the provision is unnecessarily intrusive, unconstitutional, and that
compliance would violate professional ethical standards. The second
commenter suggested we could improve communication between the claimant
and the attorney and ensure only reasonable fees are charged by
requiring additional information in fee agreements; this commenter,
however, made no recommendation as to what kinds of information VA
should require, and we believe that we have prescribed sufficient
information to permit us to determine whether a fee is reasonable.
We disagree that requiring an agent or attorney to file fee
agreements with OGC is intrusive, unconstitutional, or violates ethical
standards of conduct. First, 38 U.S.C. 5904(c)(2) expressly provides
that agents and attorneys must file a copy of any fee agreement with
VA. Therefore, VA has no choice but to implement the statutory
requirement. Second, with respect to the constitutionality of the
statute, given the requirement to file fee agreements with VA is
current law properly passed by Congress and signed by the President, we
presume its constitutionality. Finally, the commenter merely states
that requiring fee agreements to be filed with OGC is a violation of
professional ethical standards without further explanation. We do not
see how such a requirement violates ethical standards. Furthermore,
thousands of fee agreements have already been filed with VA, and we are
unaware of any attorney having been found to have violated his or her
rules of professional conduct for having done so. Therefore, we will
make no change to the rule based on the comments.
We did not receive any comments with respect to Sec. 14.636(g)(2)
but have determined that changes pertaining to the presumption of
reasonableness under Sec. 14.636(e) warrant changes in this section.
We still require fee agreements to clearly specify whether the agent or
attorney is to be paid by VA directly out of an award of past due
benefits. However, the regulation will be clarified to provide that any
fee agreement that fails to clearly specify whether it is a direct-pay
fee agreement will be deemed an agreement for which the agent or
attorney is responsible for collecting fees for representation.
We received a number of comments on Sec. 14.636(h). Two commenters
expressed concern that Sec. 14.636(h)(3) improperly permits paid
representation in cases in which a Notice of Disagreement has not been
filed. One commenter recommended that Sec. 14.636(h)(3) be amended to
clarify that ancillary benefits are not ``past-due benefits.'' Two
commenters recommended amending Sec. 14.636(h)(3)(iii) and adopting a
consistent definition of the terms ``case,'' ``claim,'' and ``issue.''
We disagree that Sec. 14.636(h)(3) improperly permits paid
representation in cases in which a Notice of Disagreement has not been
filed. Congress amended 38 U.S.C. 5904(c)(1) to permit paid
representation after the claimant files a Notice of Disagreement.
Congress further amended section 5904(c)(1) to remove the requirement
that an agent or attorney be hired within a year of a final Board
decision in a case. We interpret this to mean that Congress wanted
claimants to have the option to hire an agent or attorney at any time
so long as an agency or original jurisdiction has rendered a decision
on a claim and a Notice of Disagreement has been filed with respect to
that decision. Therefore, Sec. 14.636(h) properly reflects
congressional intent and we decline to amend it.
An agent or attorney may receive fees for representing a claimant
before VA pursuant to a direct-pay fee agreement or an agreement
specifying payment by the claimant. To the extent that an agent or
attorney seeks payment from the claimant, there is no limitation on the
parties' ability to include fees for representation on ancillary
benefit claims in the fee agreement. Clearly, Congress generally
intended that claimants would have choice in representation with
respect to all claims for benefits when it enacted Public Law 109-461.
However, under 38 U.S.C. 5904(d), VA's authority to honor direct-pay
fee agreements is limited to payment out of ``past-due'' benefits.
Section 14.636(h)(3), interprets VA's authority in 38 U.S.C. 5904
to pay fees out of ``past-due'' benefit awards as being limited to
payment out of ``nonrecurring payment resulting from a benefit, or
benefits, granted on appeal or awarded on the basis of a claim reopened
after a denial by an agency of original jurisdiction or the Board of
Veterans' Appeals or the lump sum payment that represents the total
amount of recurring cash payments that accrued between the effective
date of the award, as determined by applicable laws and regulations,
and the date of the grant of the benefit by the agency of original
jurisdiction, the Board of Veterans' Appeals, or an appellate court.''
Most ancillary benefits are not recurring cash payments and, therefore,
fall outside the definition of ``past-due'' benefits for purposes of
determining the amount to be paid directly to an agent or attorney
under a direct-pay fee agreement.
As discussed with regard to Sec. 14.627(g) above, we must
reconcile our rules prescribing permissible fees with Federal Circuit
case law. To accomplish this, we will amend Sec. 14.636(c) to clarify
when agents or attorneys may charge fees. However, we will not create
new universal definitions for ``case'' and ``claim'' because the terms
may have different meanings in contexts other than agent and attorney
fees.
As an initial matter, we note that the Veterans Judicial Review Act
of 1988 (VJRA) removed the long-standing limitation on fees but also,
for the first time, restricted claimant's access to paid representation
to the point after which the first administrative appeal of a claim is
complete. In limiting fees to services
[[Page 29868]]
rendered after a first final Board decision, Congress ensured that VA
would initially decide a matter and, upon request, review that decision
before the Board without encountering paid representation. In this
context, the Federal Circuit issued its opinions in Stanley v.
Principi, 283 F.3d 1350 (Fed. Cir. 2002), and Carpenter v. Nicholson,
452 F.3d 1379 (Fed. Cir. 2006), both of which concerned the payment of
fees after a first final Board decision.
Under the amendments to chapter 59, Congress shifted the entry
point for paid representation to the filing of a Notice of
Disagreement. Thus, paid representation is available in the
administrative appeal process, which includes the Decision Review
Officer process, the process for developing an appeal for certification
to the Board, and the Board proceedings. We interpret this significant
change as an expression of congressional intent to remove all
restrictions on paid representation, provided that an agency of
original jurisdiction has rendered a decision on a benefits matter and
the claimant has filed a Notice of Disagreement with respect to that
decision. In our view, Congress balanced claimants' choice in
representation with its interest in ensuring that claimants' benefits
are not unnecessarily reduced by payment of agents' and attorneys'
fees. In balancing these competing interests, Congress concluded that
an agency of original jurisdiction should have an opportunity to
consider the merits of a claim on the basis of the available evidence
of record and render a decision. Only if a claimant disagrees with that
decision would the balance tip in favor of choice of representation.
We interpret Congress' designation of the Notice of Disagreement as
the entry point for paid representation in section 5904(c) to mean that
an agency of original jurisdiction must be allowed to initially decide
a matter before a claimant seeks paid representation. Accordingly, with
respect to claims to reopen based upon new and material evidence or
claims for increase in rate of a benefit being paid based upon a change
in disability or other circumstances, a claimant must seek an agency of
original jurisdiction decision on the claim and file a Notice of
Disagreement with respect to that decision before hiring an agent or
attorney to provide representation before the Department. By
definition, evidence that is new and material was not considered in any
prior agency of original jurisdiction decision. See 38 CFR 3.156(a)
(``new evidence means existing evidence not previously submitted to
agency decisionmakers''). The same rationale applies to claims for
increase. VA must have the opportunity to consider new evidence and, if
appropriate, award the claimant the full amount of benefits due under
law. Congress has determined that claimants for VA benefits should have
the option of diverting benefits or other personal funds to agents and
attorneys only after the claimant has expressed disagreement with an
agency of original jurisdiction decision on a matter.
The rationale for proscribing paid representation for claims to
reopen and for increase in rate of a benefit does not apply to requests
for revision of decisions based on clear and unmistakable error. When a
claimant asserts that the correct facts were not before an agency of
original jurisdiction or the Board at the time of a decision, or the
appropriate law or regulations extant at the time of the decision were
incorrectly applied by an agency of original jurisdiction or the Board,
he or she seeks to attack the prior decision based upon alleged error,
not to obtain a new decision based upon new and material evidence or
other change in circumstance. VA had an opportunity to initially decide
the claim based on the same law and evidence, and under our
interpretation of the amendments to chapter 59 there is no reason to
preclude paid representation if the claimant filed a Notice of
Disagreement with respect to the original, allegedly erroneous,
decision on or after June 20, 2007.
For the reasons stated above, we will modify Sec. 14.636(c) to
clearly state the general rule that VA must have an opportunity to
decide a matter before paid representation is available, and to clarify
application of the rule in claims to reopen, claims for increase, and
requests for revision based upon clear and unmistakable error.
We will also modify Sec. 14.636(c) to clarify that it is generally
the agency of original jurisdiction that issued the decision on a claim
or claims identified in the Notice of Disagreement that will decide
whether an agent or attorney is eligible for fees under the criteria in
that section. In Scates v. Principi, 282 F.3d 1362, 1367 (Fed. Cir.
2002), the Court noted that the line between entitlement to and
reasonableness of fees under former 38 U.S.C. 5904 was not always clear
and might require a factual determination by an agency of original
jurisdiction concerning eligibility for fees before the Board of
Veterans' Appeals could consider the issue of reasonableness under its
original jurisdiction. Under current section 5904, the Board has only
appellate jurisdiction over fee matters and all initial decisions
regarding eligibility for and the reasonableness of fees are made by
VA's agencies of original jurisdiction. See 38 CFR 14.627(b)
(definition of agency of original jurisdiction). Whether an initial
eligibility determination is made by the agency of original
jurisdiction that decided the benefit claim or claims identified in the
Notice of Disagreement, as will generally occur in the case of a
direct-pay fee agreement filed with an agency of original jurisdiction
under Sec. 14.636(h)(4), or by the Office of the General Counsel as
the agency of original jurisdiction with authority to review fee
agreements for reasonableness, will depend on the facts of each case.
Regardless, agency of original jurisdiction decisions concerning
eligibility for fees under Sec. 14.636(c) are appealable to the Board.
One commenter objected to Sec. 14.636(h)(3)(iv), in which we
proposed to clarify VA's policy of calculating agents' and attorneys'
fees based on past-due benefits awarded and reduced due to certain
conditions, such as incarceration. The Court of Appeals for the Federal
Circuit recently interpreted 38 U.S.C. 5904 to mean that payment of
agents' and attorneys' fees from past-due benefits must be based upon
the amount of benefits awarded, not the amount actually paid to the
claimant. Snyder v. Nicholson, 2007 U.S. App. LEXIS 13302 (Fed. Cir.
2007). The Snyder decision was issued after the proposed rule was
published. In light of the need to further consider the scope of
Snyder, we will remove Sec. 14.636(h)(3)(iv).
We received numerous comments regarding Sec. 14.636(i), which
prescribes the procedures for seeking review of fee agreements. Three
commenters, citing a conflict of interest, objected to OGC's authority
to review fee agreements on its own motion. One commenter requested
that we describe when VA could unilaterally review fee agreements. Two
commenters asserted that the procedures for reviewing fee agreements
are unfair because they do not provide for an increase in agents' and
attorneys' fees. Two commenters also recommended that VA establish a
set period of time in which VA or a claimant could seek review of a fee
agreement. Finally, two commenters expressed concern that claimants
will not know what it means to ``serve'' a motion for review and
recommended that claimants merely ask for a fee review at the agency of
original jurisdiction. These commenters also suggested that VA, not the
claimant, should have the responsibility of notifying the agent or
attorney of the claimant's request for review.
[[Page 29869]]
For the reasons discussed at length above regarding Sec. 14.629,
we disagree that there is a conflict of interest in OGC's review of fee
agreements. With respect to the commenter's request that we clarify
under what circumstances OGC will review fee agreements on its own
motion, we believe Sec. 14.636(e) and (f) are sufficiently clear.
Section 14.636(e) describes in detail the fees that are permitted under
current law. Section 14.636(f) implements the statutory presumption
that fees that do not exceed 20 percent of past-due benefits awarded
are reasonable. We interpret these provisions to mean that VA is not
required to initiate the review of a fee that is less than or equal to
20 percent of past-due benefits awarded, and that any fee in excess of
20 percent does not benefit from the presumption and is subject to
review by OGC on its own motion.
We also disagree with the commenters who suggested that OGC should
also review fees to determine whether an agent or attorney is entitled
to an increase in fees notwithstanding fee agreement terms. First, we
note that in imposing fee limitations, Congress intended to protect
veterans' benefits from unscrupulous lawyers. S. Rep. No. 109-297, at 6
(2006). Second, section 5904(c)(3)(A) clearly expresses Congress'
intent that only VA or a claimant may seek review of a fee agreement
and only for the purpose of reducing the fee called for in an
agreement. Accordingly, VA does not have authority to review fees as
the commenter suggests, and we will not make any changes based on the
comment. We agree with the commenter's recommendation that we limit the
period during which a fee agreement may be reviewed by OGC and have
amended Sec. 14.636(i) to prescribe that VA or a claimant may seek
review of the fee agreement within 120 days of the final VA decision on
the claim.
We disagree with the commenter who suggested that claimants will
not know what it means to ``serve'' an agent or attorney with a motion
for review of a fee agreement because they lack access to regulations.
The predecessor provision, 38 CFR 20.609(i), required a party
contesting the fee agreement to file the motion for review with the
Board and certify that a copy was mailed to the other party. While the
procedure for filing a motion for review is changing, the substance of
what is required of the claimant seeking review is not. We note that VA
regulations are available to the public through a variety of sources,
including electronic media. To the extent that a claimant is unaware of
the fee-agreement-review provisions and seeks a review at an agency of
original jurisdiction, the agency of original jurisdiction will forward
the request to OGC for a decision. Therefore, we do not believe the
provisions requiring claimants to complete service of documents are too
onerous or confusing or in any way prejudice claimants. Further, we
have defined ``service'' in Sec. 14.627(o) to clarify the notice
requirements applicable to individuals seeking review of fee
agreements.
We also decline to change the procedure for filing motions for
review of fee agreements. Under prior law, claimants mailed a copy of
the motion and supporting evidence to the agent or attorney; this rule
merely retains that requirement. Furthermore, disagreements are often
the result of a communication breakdown between the parties to an
agreement. We believe the notice requirements will help parties resolve
fee disputes without getting VA actively involved. Finally, it is
appropriate to place some burden on a claimant challenging an agreement
he or she entered into. Requiring a claimant to serve the agent or
attorney concerning their contract, as opposed to having VA do the
work, will force the claimant to assume some of the effort required to
dispute a fee agreement and to determine whether it is worth their time
and effort. In our view, this procedure is reasonable in light of
Congress' decision to expand choice of representation.
Section 14.637--Payment of the Expenses of Agents and Attorneys in
Proceedings Before the Agency of Original Jurisdiction and Before the
Board of Veterans' Appeals
One commenter objected to Sec. 14.637(c), which establishes the
types of reimbursable ``expenses'' that an agent or attorney may charge
a claimant, and essentially disagreed with our determination that
overhead costs are not reasonable expenses. Although we proposed to
reorganize parts 14 and 20 of VA's regulations governing accreditation
and fee matters, we did not make any substantive change to former 38
CFR 20.610(c), which we redesignated as Sec. 14.637. In any event, we
continue to believe that it would be unreasonable for agents and
attorneys to charge claimants for costs that are not directly incurred
as a result of providing representation in the case. Accordingly, we
will not make any changes based on this comment.
General Matters; Applicability of Accreditation Provisions
We received five comments expressing concern with the lack of a
stated transition plan to implement the proposed changes in VA's
accreditation program. More specifically, the commenters expressed
concern that VA's implementation of new accreditation standards,
without a transition plan for claimants currently represented by agents
and attorneys before agencies of original jurisdiction and the Board,
would potentially deny representation to such claimants.
We agree that implementation of its new accreditation rules should
not impede or otherwise interfere with ongoing representation before
agencies of original jurisdiction and the Board. To avoid that result,
agents and attorneys providing representation in cases as of the
effective date of the final rule need not meet the new accreditation
requirements, unless the agent or attorney intends to provide
representation in cases in which a Notice of Disagreement is filed
after the effective date. An agent or attorney will be deemed to be
providing representation on a claim before an agency of original
jurisdiction or the Board if VA has evidence that the agent or attorney
complied with the accreditation and power of attorney requirements in
former 38 CFR 14.629 and 14.631 prior to the effective date of this
final rule. Further, agents and attorneys providing representation as
of the effective date may continue to do so through the final
resolution of the claim. Agents and attorneys seeking to provide
representation in a claim in which the Notice of Disagreement was filed
after the effective date of the final rule, however, must file an
application with OGC as provided in Sec. 14.629(b) and receive notice
of accreditation before providing representation. The delayed effective
date, prospective application, and phased initial compliance dates for
CLE will ensure that agent and attorney representation is uninterrupted
during the transition period between the old and new accreditation
programs. Accordingly, we will not make further changes based on these
comments.
Several commenters also suggested that VA limit its authority to
review applications for accreditation after a specified period of time
has expired. OGC cannot commit to reviewing accreditation applications
in a specific time period and will not establish a deadline following
which an application must be approved notwithstanding that it may be
incomplete or that the individual does not meet the standards in Sec.
14.629. VA could not meet its obligation to ensure responsible,
competent representation without sufficient administrative flexibility.
While some applications may
[[Page 29870]]
be reviewed and approved very quickly, others may be delayed due to
legitimate administrative concerns. However, we recognize that
representation cannot begin without accreditation and that attorney
applications may generally be approved upon submission of the
supporting documents identified in Sec. 14.629; therefore, we will
attempt to review and respond to complete applications in less than 30
days.
We received one comment regarding section 101(c)(2) of Public Law
109-461, which requires VA to report to Congress on the effects of
allowing agents and attorneys to charge fees for representation after a
Notice of Disagreement has been filed. The commenter suggested that VA
``begin gathering data now to provide Congress with a proper
assessment'' and ``urged the Secretary to set forth specifically in
regulation what data will be used to provide Congress with the
assessment.''
VA agrees that data gathering must begin as soon as possible to
provide an accurate assessment of the effects of Public Law 109-461 and
has already taken affirmative steps to measure the impact of the new
law. However, the development and gathering of such information are
internal agency procedural matters exempt from notice and comment. See
5 U.S.C. 553(b)(3)(A). Accordingly, we will make no changes based on
this comment.
Paperwork Reduction Act
This final rule contains provisions that constitute collections of
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521) in 38 CFR 14.629 and 14.631. The collections are approved under
Office of Management and Budget control number 2900-0605 and 2900-0321.
We display the control numbers under the applicable regulation text in
this final rule.
Regulatory Flexibility Act
The Secretary hereby certifies that this rule would not have a
significant economic impact on a substantial number of small entities
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. At a minimum, this rule would affect the 117 attorneys who filed
fee agreements with the Board under the predecessor law and the 47
agents currently accredited by VA. However, it would not have a
significant economic impact on these individuals because it would only
impose accreditation and reasonable fee requirements the costs of which
would not be significant. Therefore, pursuant to 5 U.S.C. 605(b), this
amendment is exempt from the initial and final regulatory flexibility
analysis requirements of sections 603 and 604.
Executive Order 12866
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, when regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety,
and other advantages; distributive impacts; and equity). The Executive
Order classifies a ``significant regulatory action,'' requiring review
by the Office of Management and Budget (OMB) unless OMB waives such
review, as any regulatory action that is likely to result in a rule
that may: (1) Have an annual effect on the economy of $100 million or
more or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities; (2) create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency; (3) materially alter
the budgetary impact of entitlements, grants, user fees, or loan
programs or the rights and obligations of recipients thereof; or (4)
raise novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive
Order. VA has examined the economic, legal, and policy implications of
this rule and has concluded that it is a significant regulatory action
under Executive Order 12866.
Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C.
1532, that agencies prepare an assessment of anticipated costs and
benefits before issuing any rule that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any year. This final rule would have no such effect on
State, local, and tribal governments, or on the private sector.
Catalog of Federal Domestic Assistance Numbers and Titles
There are no Federal Domestic Assistance programs associated with
this final rule.
List of Subjects
38 CFR Part 1
Administrative practice and procedure, Archives and records,
Cemeteries, Claims, Courts, Crime, Flags, Freedom of information,
Government contracts, Government employees, Government property,
Infants and children, Inventions and patents, Parking, Penalties,
Privacy, Reporting and recordkeeping requirements, Seals and insignia,
Security measures, Wages.
38 CFR Part 14
Administrative practice and procedure, Claims, Courts, Foreign
relations, Government employees, Lawyers, Legal services, Organization
and functions (Government agencies), Reporting and recordkeeping
requirements, Surety bonds, Trusts and trustees, Veterans.
38 CFR Parts 19 and 20
Administrative practice and procedure, Claims, Veterans.
Approved: May 9, 2008.
Gordon H. Mansfield,
Deputy Secretary of Veterans Affairs.
0
For the reasons set forth in the preamble, the Department of Veterans
Affairs amends 38 CFR parts 1, 14, 19 and 20 as follows:
PART 14--LEGAL SERVICES, GENERAL COUNSEL, AND MISCELLANEOUS CLAIMS
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1. The authority citation for part 14 continues to read as follows:
Authority: 5 U.S.C. 301; 28 U.S.C. 2671-2680; 38 U.S.C. 501(a),
512, 515, 5502, 5902-5905; 28 CFR part 14, appendix to part 14,
unless otherwise noted.
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2. Remove the undesignated center heading ``Expanded Remote Access to
Computerized Veterans Claims Records by Accredited Representatives''
that precedes Sec. 14.640 and redesignate Sec. Sec. 14.640 through
14.643 as Sec. Sec. 1.600 through 1.603, respectively.
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3. Revise Sec. 14.626 to read as follows:
Sec. 14.626 Purpose.
The purpose of the regulation of representatives, agents,
attorneys, and other individuals is to ensure that claimants for
Department of Veterans Affairs (VA) benefits have responsible,
qualified representation in the preparation, presentation, and
prosecution of claims for veterans' benefits.
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4. Amend Sec. 14.627 by:
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a. Revising the introductory text.
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b. Revising paragraph (a).
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c. Redesignating paragraphs (b) through (l) and (m) and (n) as
paragraphs (c) through (m) and (p) and (q), respectively.
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d. Adding new paragraphs (b), (n), and (o).
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e. Revising newly redesignated paragraphs (d), (e), (g), (l), and (m).
[[Page 29871]]
The revisions and additions read as follows:
Sec. 14.627 Definitions.
As used in regulations on representation of VA claimants:
(a) Accreditation means the authority granted by VA to
representatives, agents, and attorneys to assist claimants in the
preparation, presentation, and prosecution of claims for VA benefits.
(b) Agency of original jurisdiction means the VA activity or
administration that made the initial determination on a claim or matter
or that handles any subsequent adjudication of a claim or matter in the
first instance, and includes the Office of the General Counsel with
respect to proceedings under part 14 of this chapter to suspend or
cancel accreditation or to review fee agreements.
* * * * *
(d) Attorney means a member in good standing of a State bar who has
met the standards and qualifications in Sec. 14.629(b).
(e) Benefit means any payment, service, commodity, function, or
status, entitlement to which is determined under laws administered by
VA pertaining to veterans, dependents, and survivors.
* * * * *
(g) Claim means application made under title 38 U.S.C., and
implementing directives, for entitlement to VA benefits, reinstatement,
continuation, or increase of benefits, or the defense of a proposed
agency adverse action concerning benefits.
* * * * *
(l) Recognition means certification by VA of organizations to
assist claimants in the preparation, presentation, and prosecution of
claims for VA benefits.
(m) Representative means a person who has been recommended by a
recognized organization and accredited by VA.
(n) Representation means the acts associated with representing a
claimant in a proceeding before VA pursuant to a properly executed and
filed VA Form 21-22, ``Appointment of Veterans Service Organization as
Claimant's Representative,'' or VA Form 21-22a, ``Appointment of
Individual as Claimant's Representative.''
(o) Service means the delivery of a motion, response, or reply to a
person or entity to which it is directed. Proof of service consists of
a statement by the person who made service certifying the date and
manner of service, the names of the persons served, and the addresses
of the place of delivery. For service by mail, proof of service shall
include the date and manner by which the document was mailed.
* * * * *
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5. Amend Sec. 14.629 by:
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a. Revising the introductory text.
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b. In paragraph (a)(1), removing ``the Department of Veterans
Affairs'', and adding, in its place, ``VA''.
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c. Revising the paragraph (b) heading.
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d. Redesignating paragraph (b)(2) as (b)(6), and paragraph (b)(1) as
new paragraph (b)(2).
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e. Adding a new paragraph (b)(1).
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f. Revising newly redesignated paragraph (b)(2) introductory text and
paragraph (b)(2)(i).
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g. Redesignating paragraphs (b)(2)(vii) and (viii) as paragraphs
(b)(2)(viii) and (ix), respectively.
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h. Adding a new paragraph (b)(2)(vii).
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i. Revising newly redesignated paragraph (b)(2)(ix).
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j. Adding new paragraphs (b)(2)(x), (b)(3), (b)(4), and (b)(5).
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k. Revising newly redesignated paragraph (b)(6).
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l. Revising paragraph (c) heading.
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m. Revising paragraphs (c)(1) and (c)(3).
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n. Revising the note following paragraph (c)(4).
The additions and revisions read as follows:
Sec. 14.629 Requirements for accreditation of service organization
representatives, agents, and attorneys.
The Assistant General Counsel of jurisdiction or his or her
designee will conduct an inquiry and make an initial determination
regarding any question relating to the qualifications of a prospective
service organization representative, agent, or attorney. If the
Assistant General Counsel or designee determines that the prospective
service organization representative, agent, or attorney meets the
requirements for accreditation in paragraphs (a) or (b) of this
section, notification of accreditation will be issued by the Assistant
General Counsel or the Assistant General Counsel's designee and will
constitute authority to prepare, present, and prosecute claims before
an agency of original jurisdiction or the Board of Veterans' Appeals.
If the Assistant General Counsel determines that the prospective
representative, agent, or attorney does not meet the requirements for
accreditation, notification will be issued by the Assistant General
Counsel concerning the reasons for disapproval, an opportunity to
submit additional information, and any restrictions on further
application for accreditation. If an applicant submits additional
evidence, the Assistant General Counsel will consider such evidence and
provide further notice concerning his or her final decision. The
determination of the Assistant General Counsel regarding the
qualifications of a prospective service organization representative,
agent, or attorney may be appealed by the applicant to the General
Counsel. Appeals must be in writing and filed with the Office of the
General Counsel (022D), 810 Vermont Avenue, NW., Washington, DC 20420,
not later than 30 days from the date on which the Assistant General
Counsel's decision was mailed. In deciding the appeal, the General
Counsel's decision shall be limited to the evidence of record before
the Assistant General Counsel. A decision of the General Counsel is a
final agency action for purposes of review under the Administrative
Procedure Act, 5 U.S.C. 701-706.
* * * * *
(b) Accreditation of Agents and Attorneys. (1) No individual may
assist claimants in the preparation, presentation, and prosecution of
claims for VA benefits as an agent or attorney unless he or she has
first been accredited by VA for such purpose.
(i) For agents, the initial accreditation process consists of
application to the General Counsel, self-certification of admission
information concerning practice before any other court, bar, or State
or Federal agency, an affirmative determination of character and
fitness by VA, and a written examination.
(ii) For attorneys, the initial accreditation process consists of
application to the General Counsel, self-certification of admission
information concerning practice before any other court, bar, or State
or Federal agency, and a determination of character and fitness. The
General Counsel will presume an attorney's character and fitness to
practice before VA based on State bar membership in good standing
unless the General Counsel receives credible information to the
contrary.
(iii) As a further condition of initial accreditation, both agents
and attorneys are required to complete 3 hours of qualifying continuing
legal education (CLE) during the first 12-month period following the
date of initial accreditation by VA. To qualify under this subsection,
a CLE course must be approved for a minimum of 3 hours of CLE credit by
any State bar association and, at a minimum, must cover the following
topics: representation before VA, claims procedures, basic eligibility
for VA benefits, right to appeal, disability compensation (38 U.S.C.
Chapter 11), dependency and indemnity compensation (38 U.S.C. Chapter
13), and pension (38 U.S.C. Chapter 15).
[[Page 29872]]
Upon completion of the initial CLE requirement, agents and attorneys
shall certify to the Office of the General Counsel in writing that they
have completed qualifying CLE. Such certification shall include the
title of the CLE, date and time of the CLE, and identification of the
CLE provider, and shall be submitted to VA as part of the annual
certification prescribed by Sec. 14.629(b)(4).
(iv) To maintain accreditation, agents and attorneys are required
to complete an additional 3 hours of qualifying CLE on veterans
benefits law and procedure not later than 3 years from the date of
initial accreditation and every 2 years thereafter. To qualify under
this subsection, a CLE course must be approved for a minimum of 3 hours
of CLE credit by any State bar association. Agents and attorneys shall
certify completion of the post-accreditation CLE requirement in the
same manner as described in Sec. 14.629(b)(1)(iii).
(2) An individual desiring accreditation as an agent or attorney
must establish that he or she is of good character and reputation, is
qualified to render valuable assistance to claimants, and is otherwise
competent to advise and assist claimants in the preparation,
presentation, and prosecution of their claim(s) before the Department.
An individual desiring accreditation as an agent or attorney must file
a completed application (VA Form 21a) with the Office of the General
Counsel (022D), 810 Vermont Avenue, NW., Washington, DC 20420, on which
the applicant submits the following:
(i) His or her full name and home and business addresses;
* * * * *
(vii) Information concerning the applicant's level of education and
academic history;
* * * * *
(ix) Information relevant to whether the applicant for
accreditation as an agent has any physical limitations that would
interfere with the completion of a comprehensive written examination
administered under the supervision of a VA Regional Counsel (agents
only); and
(x) Certification that the applicant has satisfied the
qualifications and standards required for accreditation as prescribed
by VA in this section, and that the applicant will abide by the
standards of conduct prescribed by VA in Sec. 14.632 of this part.
(3) Evidence showing lack of good character and reputation
includes, but is not limited to, one or more of the following:
Conviction of a felony, conviction of a misdemeanor involving fraud,
bribery, deceit, theft, or misappropriation; suspension or disbarment
from a court, bar, or Federal or State agency on ethical grounds; or
resignation from admission to a court, bar, or Federal or State agency
while under investigation to avoid sanction.
(4) As a further condition of initial accreditation and annually
thereafter, each person seeking accreditation as an agent or attorney
shall submit to VA information about any court, bar, or Federal or
State agency to which the agent or attorney is admitted to practice or
otherwise authorized to appear. Applicants shall provide identification
numbers and membership information for each jurisdiction in which the
applicant is admitted and a certification that the agent or attorney is
in good standing in every jurisdiction in which admitted. After
accreditation, agents and attorneys must notify VA within 30 days of
any change in their status in any jurisdiction in which they are
admitted to appear.
(5) VA will not accredit an individual as an agent or attorney if
the individual has been suspended by any court, bar, or Federal or
State agency in which the individual was previously admitted and not
subsequently reinstated. However, if an individual remains suspended in
a jurisdiction on grounds solely derivative of suspension or disbarment
in another jurisdiction to which he or she has been subsequently
reinstated, the General Counsel may evaluate the facts and grant or
reinstate accreditation as appropriate.
(6) After an affirmative determination of character and fitness for
practice before the Department, applicants for accreditation as a
claims agent must achieve a score of 75 percent or more on a written
examination administered by VA as a prerequisite to accreditation. No
applicant shall be allowed to sit for the examination more than twice
in any 6-month period.
(c) Representation by Attorneys, Law Firms, Law Students and
Paralegals. (1) After accreditation by the General Counsel, an attorney
may represent a claimant upon submission of a VA Form 21-22a,
``Appointment of Attorney or Agent as Claimant's Representative.''
* * * * *
(3) A legal intern, law student, or paralegal may not be
independently accredited to represent claimants under this paragraph. A
legal intern, law student, or certified paralegal may assist in the
preparation, presentation, or prosecution of a claim, under the direct
supervision of an attorney of record designated under Sec. 14.631(a),
if the claimant's written consent is furnished to VA. Such consent must
specifically state that participation in all aspects of the claim by a
legal intern, law student, or paralegal furnishing written
authorization from the attorney of record is authorized. In addition,
suitable authorization for access to the claimant's records must be
provided in order for such an individual to participate. The
supervising attorney must be present at any hearing in which a legal
intern, law student, or paralegal participates. The written consent
must include the name of the veteran, or the name of the appellant if
other than the veteran (e.g., a veteran's survivor, a guardian, or a
fiduciary appointed to receive VA benefits on an individual's behalf);
the applicable VA file number; the name of the attorney-at-law; the
consent of the appellant for the use of the services of legal interns,
law students, or paralegals and for such individuals to have access to
applicable VA records; and the names of the legal interns, law
students, or paralegals who will be assisting in the case. The signed
consent must be submitted to the agency of original jurisdiction and
maintained in the claimant's file. In the case of appeals before the
Board in Washington, DC, the signed consent must be submitted to:
Director, Management and Administration (01E), Board of Veterans'
Appeals, 810 Vermont Avenue, NW., Washington, DC 20420. In the case of
hearings before a Member or Members of the Board at VA field
facilities, the consent must be presented to the presiding Member of
the hearing.
* * * * *
Note to Sec. 14.629: A legal intern, law student, paralegal, or
veterans service organization support-staff person, working under
the supervision of an individual designated under Sec. 14.631(a) as
the claimant's representative, attorney, or agent, may qualify for
read-only access to pertinent Veterans Benefits Administration
automated claims records as described in Sec. Sec. 1.600 through
1.603 in part 1 of this chapter.
* * * * *
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6. Amend Sec. 14.630 by:
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a. Revising paragraph (a).
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b. Revising paragraph (b)(1) introductory text.
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c. Adding paragraphs (c) and (d) immediately preceding the authority
citation at the end of the section.
The revisions and additions read as follows:
Sec. 14.630 Authorization for a particular claim.
(a) Any person may be authorized to prepare, present, and prosecute
one claim. A power of attorney executed on VA Form 21-22a,
``Appointment of Attorney or Agent as Claimant's Representative,'' and
a statement signed
[[Page 29873]]
by the person and the claimant that no compensation will be charged or
paid for the services, shall be filed with the agency of original
jurisdiction where the claim is presented. The power of attorney
identifies to VA the claimant's appointment of representation and
authorizes VA's disclosure of information to the person representing
the claimant.
(b) * * *
(1) The number of accredited representatives, agents, and attorneys
operating in the claimant's geographic region;
* * * * *
(c) Persons providing representation under this section must comply
with the laws administered by VA and with the regulations governing
practice before VA including the rules of conduct in Sec. 14.632 of
this part.
(d) Persons providing representation under this section are subject
to suspension and or exclusion from representation of claimants before
VA on the same grounds as apply to representatives, agents, and
attorneys in Sec. 14.633 of this part.
* * * * *
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7. Amend Sec. 14.631 by:
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a. Revising the section heading.
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b. Revising paragraph (a) introductory text.
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c. Adding paragraph (a)(1)(iv).
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d. In paragraph (a)(2), removing ``Department of Veterans Affairs'' and
adding, in its place, ``VA''.
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e. Removing paragraph (b).
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f. Redesignating paragraphs (c) through (g) as paragraphs (b) through
(f).
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g. Revising newly redesignated paragraphs (b) and (c).
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h. In newly redesignated paragraph (e)(1), removing ``the Department of
Veterans Affairs'' and add, in its place, ``VA''.
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i. Revising newly redesignated paragraph (f).
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j. Adding a parenthetical at the end of the section.
The revisions and addition read as follows:
Sec. 14.631 Powers of attorney; disclosure of claimant information.
(a) A power of attorney, executed on either VA Form 21-22,
``Appointment of Veterans Service Organization as Claimant's
Representative,'' or VA Form 21-22a, ``Appointment of Attorney or Agent
as Claimant's Representative,'' is required to represent a claimant
before VA and to authorize VA's disclosure of information to any person
or organization representing a claimant before the Department. Without
the signature of a person providing representation for a particular
claim under Sec. 14.630 of this part or an accredited veterans service
organization representative, agent, or attorney, the appointment is
invalid, and the person appointed to provide representation is under no
obligation to do so. The power of attorney shall meet the following
requirements:
(1) * * *
(iv) An individual providing representation on a particular claim
under Sec. 14.630 of this part or an accredited veterans service
organization representative, agent, or attorney; and
* * * * *
(b) VA may, for any purpose, treat a power of attorney naming as a
claimant's representative an organization recognized under Sec.
14.628, a particular office of such an organization, or an individual
representative of such an organization as an appointment of the entire
organization as the claimant's representative, unless the claimant
specifically indicates in the power of attorney a desire to appoint
only the individual representative. Such specific indication must be
made in the space on the power-of-attorney form for designation of the
representative and must use the word ``only'' with reference to the
individual representative.
(c) An organization, individual providing representation on a
particular claim under Sec. 14.630, representative, agent, or attorney
named in a power of attorney executed pursuant to paragraph (a) of this
section may withdraw from representation provided before a VA agency of
original jurisdiction if such withdrawal would not adversely impact the
claimant's interests. This section is applicable until an agency of
original jurisdiction certifies an appeal to the Board of Veterans'
Appeals after which time 38 CFR 20.608 governs withdrawal from
representation before the Board. Withdrawal is also permissible if a
claimant persists in a course of action that the organization or
individual providing representation reasonably believes is fraudulent
or criminal and is furthered through the representation of the
organization or individual; the claimant fails to uphold an obligation
to the organization or individual providing representation regarding
the services of the organization or individual; or other good cause for
withdrawal exists. An organization or individual providing
representation withdraws from representation by notifying the claimant,
the VA organization in possession of the claims file, and the agency of
original jurisdiction in writing prior to taking any action to withdraw
and takes steps necessary to protect the claimant's interests
including, but not limited to, giving advance notice to the claimant,
allowing time for appointment of alternative representation, and
returning any documents provided by VA in the course of the
representation to the agency of original jurisdiction or pursuant to
the claimant's instructions, to the organization or individual
substituted as the representative, agent, or attorney of record. Upon
withdrawing from representation, all property of the claimant must be
returned to the claimant. If the claimant is unavailable, all documents
provided by VA for purposes of representation must be returned to the
VA organization in possession of the claims file. Any other property of
the claimant must be maintained by the organization or individual
according to applicable law.
* * * * *
(f)(1) A power of attorney may be revoked at any time, and an agent
or attorney may be discharged at any time. Unless a claimant
specifically indicates otherwise, the receipt of a new power of
attorney executed by the claimant and the organization or individual
providing representation shall constitute a revocation of an existing
power of attorney.
(2) If an agent or attorney limits the scope of his or her
representation regarding a particular claim by so indicating on VA Form
21-22a, or a claimant authorizes a person to provide representation in
a particular claim under Sec. 14.630, such specific authority shall
constitute a revocation of an existing general power of attorney filed
under paragraph (a) of this section only as it pertains to, and during
the pendency of, that particular claim. Following the final
determination of such claim, the general power of attorney shall remain
in effect as to any new or reopened claim.
* * * * *
(The Office of Management and Budget has approved the information
collection requirements in this section under control number 2900-
0321.)
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8. Revise Sec. 14.632 to read as follows:
Sec. 14.632 Standards of conduct for persons providing representation
before the Department
(a)(1) All persons acting on behalf of a claimant shall faithfully
execute their duties as individuals providing representation on a
particular claim under Sec. 14.630, representatives, agents, or
attorneys.
(2) All individuals providing representation are required to be
[[Page 29874]]
truthful in their dealings with claimants and VA.
(b) An individual providing representation on a particular claim
under Sec. 14.630, representative, agent, or attorney shall:
(1) Provide claimants with competent representation before VA.
Competent representation requires the knowledge, skill, thoroughness,
and preparation necessary for the representation. This includes
understanding the issues of fact and law relevant to the claim as well
as the applicable provisions of title 38, United States Code, and title
38, Code of Federal Regulations;
(2) Act with reasonable diligence and promptness in representing
claimants. This includes responding promptly to VA requests for
information or assisting a claimant in responding promptly to VA
requests for information.
(c) An individual providing representation on a particular claim
under Sec. 14.630, representative, agent, or attorney shall not:
(1) Violate the standards of conduct as described in this section;
(2) Circumvent a rule of conduct through the actions of another;
(3) Engage in conduct involving fraud, deceit, misrepresentation,
or dishonesty;
(4) Violate any of the provisions of title 38, United States Code,
or title 38, Code of Federal Regulations;
(5) Enter into an agreement for, charge, solicit, or receive a fee
that is clearly unreasonable or otherwise prohibited by law or
regulation;
(6) Solicit, receive, or enter into agreements for gifts related to
representation provided before an agency of original jurisdiction has
issued a decision on a claim or claims and a Notice of Disagreement has
been filed with respect to that decision;
(7) Delay, without good cause, the processing of a claim at any
stage of the administrative process;
(8) Mislead, threaten, coerce, or deceive a claimant regarding
benefits or other rights under programs administered by VA;
(9) Engage in, or counsel or advise a claimant to engage in acts or
behavior prejudicial to the fair and orderly conduct of administrative
proceedings before VA;
(10) Disclose, without the claimant's authorization, any
information provided by VA for purposes of representation; or
(11) Engage in any other unlawful or unethical conduct.
(d) In addition to complying with standards of conduct for practice
before VA in paragraphs (a) through (c) of this section, an attorney
shall not, in providing representation to a claimant before VA, engage
in behavior or activities prohibited by the rules of professional
conduct of any jurisdiction in which the attorney is licensed to
practice law.
(Authority: 38 U.S.C. 501(a), 5902, 5904)
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9. Amend Sec. 14.633 by:
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a. Revising the section heading.
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b. Revising paragraphs (a), (b), (c) introductory text, and (c)(1).
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c. Redesignating paragraph (c)(4) as paragraph (c)(7).
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d. Revising newly redesignated paragraph (c)(7),
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e. Adding new paragraphs (c)(4), (c)(5), and (c)(6).
0
f. Revising paragraphs (d) through (f).
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g. Revising paragraph (h).
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h. Adding new paragraph (i).
The revisions and additions read as follows:
Sec. 14.633 Termination of accreditation or authority to provide
representation under Sec. 14.630.
(a) Accreditation or authority to provide representation on a
particular claim under Sec. 14.630 may be suspended or canceled at the
request of an organization, individual providing representation under
Sec. 14.630, representative, agent, or attorney. When an organization
requests suspension or cancellation of the accreditation of a
representative due to misconduct or lack of competence on the part of
the representative or because the representative resigned to avoid
suspension or cancellation of accreditation for misconduct or lack of
competence, the organization shall inform VA of the reason for the
request for suspension or cancellation and the facts and circumstances
surrounding any incident that led to the request.
(b) Accreditation shall be canceled at such time as a determination
is made by the General Counsel that any requirement of Sec. 14.629 is
no longer met by a representative, agent, or attorney.
(c) Accreditation or authority to provide representation on a
particular claim shall be canceled when the General Counsel finds, by
clear and convincing evidence, one or more of the following:
(1) Violation of or refusal to comply with the laws administered by
VA or with the regulations governing practice before VA including the
standards of conduct in Sec. 14.632;
* * * * *
(4) Knowingly presenting to VA a frivolous claim, issue, or
argument. A claim, issue, or argument is frivolous if the individual
providing representation under Sec. 14.630, representative, agent, or
attorney is unable to make a good faith argument on the merits of the
position taken or to support the position taken by a good faith
argument for an extension, modification, or reversal of existing law;
(5) Suspension or disbarment by any court, bar, or Federal or State
agency to which such individual providing representation under Sec.
14.630, representative, agent, or attorney was previously admitted to
practice, or disqualification from participating in or appearing before
any court, bar, or Federal or State agency and lack of subsequent
reinstatement;
(6) Charging excessive or unreasonable fees for representation as
determined by VA, the Court of Appeals for Veterans Claims, or the
United States Court of Appeals for the Federal Circuit; or
(7) Any other unlawful or unethical practice adversely affecting an
individual's fitness for practice before VA.
(d) Accreditation or authority to provide representation on a
particular claim shall be canceled when the General Counsel finds that
the performance of an individual providing representation under Sec.
14.630, representative, agent, or attorney before VA demonstrates a
lack of the degree of competence necessary to adequately prepare,
present, and prosecute claims for veteran's benefits. A determination
that the performance of an individual providing representation under
Sec. 14.630, representative, agent, or attorney before VA demonstrates
a lack of the degree of competence required to represent claimants
before VA will be based upon consideration of the following factors:
(1) The relative complexity and specialized nature of the matter;
(2) The individual's general experience;
(3) The individual's training and experience; and
(4) The preparation and study the individual is able to give
veterans benefits matters and whether it is feasible to refer such
matters to, or associate or consult with, an individual of established
competence in the field of practice.
(e) As to cancellation of accreditation under paragraphs (c) or (d)
of this section, upon receipt of credible written information from any
source indicating improper conduct, or incompetence, the Assistant
General Counsel of jurisdiction shall inform the subject of the
allegations about the specific law, regulation, or policy alleged to
have been violated or the nature of the alleged incompetence and the
source of the complaint, and shall provide the subject with the
opportunity to respond. If the matter involves an accredited
[[Page 29875]]
representative of a recognized organization, the notice shall include
contact with the representative's organization. When appropriate,
including situations where no harm results to the claimant or VA, the
Assistant General Counsel will provide the subject with an opportunity
to correct the offending behavior before deciding whether to proceed
with a formal inquiry. If the subject refuses to comply and the matter
remains unresolved, or the behavior subsequently results in harm to a
claimant or VA, the Assistant General Counsel shall immediately
initiate a formal inquiry into the matter.
(1) If the result of the inquiry does not justify further action,
the Assistant General Counsel will close the inquiry and maintain the
record for 3 years.
(2) If the result of the inquiry justifies further action, the
Assistant General Counsel shall:
(i) Inform the General Counsel of the result of the inquiry and
notify the individual providing representation under Sec. 14.630,
representative, agent or attorney of an intent to cancel accreditation
or authority to provide representation on a particular claim. The
notice will be sent to individuals providing representation on a
particular claim by certified or registered mail to the individual's
last known address of record as indicated on the VA Form 21-22a on file
with the agency of original jurisdiction. The notice will be sent to
accredited individuals by certified or registered mail to the
individual's last known address of record as indicated in VA's
accreditation records. The notice will state the reason(s) for the
cancellation proceeding and advise the individual to file an answer, in
oath or affidavit form or the form specified for unsworn declarations
under penalty of perjury in 28 U.S.C. 1746, within 30 days from the
date the notice was mailed, responding to the stated reasons for
cancellation and explaining why he or she should not be suspended or
excluded from practice before VA. The notice will also advise the
individual of the right to submit additional evidence and the right to
request a hearing on the matter. Requests for hearings must be made in
the answer. If the individual does not file an answer with the Office
of the General Counsel within 30 days of the date that the Assistant
General Counsel mailed the notice, the Assistant General Counsel shall
close the record and forward it with a recommendation to the General
Counsel for a final decision.
(ii) In the event that a hearing is not requested, the Assistant
General Counsel shall close the record and forward it with a
recommendation to the General Counsel for a final decision.
(iii) The Assistant General Counsel may extend the time to file an
answer or request a hearing for a reasonable period upon a showing of
sufficient cause.
(iv) For purposes of computing time for responses to notices of
intent to cancel accreditation, days means calendar days. In computing
the time for filing this response, the date on which the notice was
mailed by the Assistant General Counsel shall be excluded. A response
postmarked prior to the expiration of the 30th day shall be accepted as
timely filed. If the 30th day falls on a weekend or legal holiday, the
first business day thereafter shall be included in the computation. As
used in this section, legal holiday means New Year's Day, Birthday of
Martin Luther King, Jr., Washington's Birthday, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving
Day, Christmas Day, and any other day appointed as a holiday by the
President or the Congress of the United States, or by the State in
which the individual resides.
(f) If a hearing is requested, it will be held at the VA Regional
Office nearest the individual's principal place of business. If the
individual's principal place of business is Washington, DC, the hearing
will be held at the VA Central Office or other VA facility in
Washington, DC. For hearings conducted at either location, the
Assistant General Counsel or his or her designee shall present the
evidence. The hearing officer shall not report, directly or indirectly
to, or be employed by the General Counsel or the head of the VA agency
of original jurisdiction before which the individual provided
representation. The hearing officer shall provide notice of the hearing
to the individual providing representation under Sec. 14.630,
representative, agent, or attorney by certified or registered mail at
least 21 days before the date of the hearing. Hearings shall not be
scheduled before the completion of the 30-day period for filing an
answer to the notice of intent to cancel accreditation. The hearing
officer will have authority to administer oaths. The party requesting
the hearing will have a right to counsel, to present evidence, and to
cross-examine witnesses. Upon request of the individual requesting the
hearing, an appropriate VA official designated in Sec. 2.1 of this
chapter may issue subpoenas to compel the attendance of witnesses and
the production of documents necessary for a fair hearing. The hearing
shall be conducted in an informal manner and court rules of evidence
shall not apply. Testimony shall be recorded verbatim. The evidentiary
record shall be closed 10 days after the completion of the hearing. The
hearing officer shall submit the entire hearing transcript, any
pertinent records or information, and a recommended finding to the
Assistant General Counsel within 30 days of closing the record. The
Assistant General Counsel shall immediately forward the record and the
hearing officer's recommendation to the General Counsel for a final
decision.
* * * * *
(h) The decision of the General Counsel is a final adjudicative
determination of an agency of original jurisdiction and may be appealed
to the Board of Veterans' Appeals. The effective date for cancellation
of accreditation or authority to provide representation on a particular
claim shall be the date upon which the General Counsel's final decision
is rendered. Notwithstanding provisions in this section for closing the
record at the end of the 30-day period for filing an answer or 10 days
after a hearing, appeals shall be initiated and processed using the
procedures in 38 CFR parts 19 and 20. Nothing in this section shall be
construed to limit the Board's authority to remand a matter to the
General Counsel under 38 CFR 19.9 for any action that is essential for
a proper appellate decision or the General Counsel's ability to issue a
Supplemental Statement of the Case under 38 CFR 19.31.
(i) In cases where the accreditation of an agent or attorney is
cancelled, the Office of the General Counsel may notify all agencies,
courts, and bars to which the agent or attorney is admitted to
practice.
* * * * *
0
10. Add Sec. 14.636 to read as follows:
Sec. 14.636. Payment of fees for representation by agents and
attorneys in proceedings before Agencies of Original Jurisdiction and
before the Board of Veterans' Appeals.
(a) Applicability of rule. The provisions of this section apply to
the services of accredited agents and attorneys with respect to
benefits under laws administered by VA in all proceedings before the
agency of original jurisdiction or before the Board of Veterans'
Appeals regardless of whether an appeal has been initiated.
(b) Who may charge fees for representation. Only accredited agents
and attorneys may receive fees from claimants or appellants for their
services provided in connection with representation. Recognized
[[Page 29876]]
organizations (including their accredited representatives when acting
as such) and individuals recognized under Sec. 14.630 of this part are
not permitted to receive fees. An agent or attorney who may also be an
accredited representative of a recognized organization may not receive
such fees unless he or she has been properly designated as an agent or
attorney in accordance with Sec. 14.631 of this part in his or her
individual capacity as an accredited agent or attorney.
(c) Circumstances under which fees may be charged. Except as noted
in paragraph (c)(2) and in paragraph (d) of this section, agents and
attorneys may charge claimants or appellants for representation
provided: after an agency of original jurisdiction has issued a
decision on a claim or claims, including any claim to reopen under 38
CFR 3.156 or for an increase in rate of a benefit; a Notice of
Disagreement has been filed with respect to that decision on or after
June 20, 2007; and the agent or attorney has complied with the power of
attorney requirements in Sec. 14.631 and the fee agreement
requirements in paragraph (g) of this section.
(1) Agents and attorneys may charge fees for representation
provided with respect to a request for revision of a decision of an
agency of original jurisdiction under 38 U.S.C. 5109A or the Board of
Veterans' Appeals under 38 U.S.C. 7111 based on clear and unmistakable
error if a Notice of Disagreement was filed with respect to the
challenged decision on or after June 20, 2007, and the agent or
attorney has complied with the power of attorney requirements in Sec.
14.631 and the fee agreement requirements in paragraph (g) of this
section.
(2) In cases in which a Notice of Disagreement was filed on or
before June 19, 2007, agents and attorneys may charge fees only for
services provided after both of the following conditions have been met:
(i) A final decision was promulgated by the Board with respect to
the issue, or issues, involved in the appeal; and
(ii) The agent or attorney was retained not later than 1 year
following the date that the decision by the Board was promulgated.
(This condition will be considered to have been met with respect to all
successor agents or attorneys acting in the continuous prosecution of
the same matter if a predecessor was retained within the required time
period.)
(3) Except as noted in paragraph (i) of this section and Sec.
14.637(d), the agency of original jurisdiction that issued the decision
identified in a Notice of Disagreement shall determine whether an agent
or attorney is eligible for fees under this section. The agency of
original jurisdiction's eligibility determination is a final
adjudicative action and may be appealed to the Board.
(d) Exceptions--(1) Chapter 37 loans. With respect to services of
agents and attorneys provided after October 9, 1992, a reasonable fee
may be charged or paid in connection with any proceeding in a case
arising out of a loan made, guaranteed, or insured under chapter 37,
United States Code, even though the conditions set forth in paragraph
(c) of this section are not met.
(2) Payment of fee by disinterested third party. (i) An agent or
attorney may receive a fee or salary from an organization, governmental
entity, or other disinterested third party for representation of a
claimant or appellant even though the conditions set forth in paragraph
(c) of this section have not been met. An organization, governmental
entity, or other third party is considered disinterested only if the
entity or individual does not stand to benefit financially from the
successful outcome of the claim. In no such case may the attorney or
agent charge a fee which is contingent, in whole or in part, on whether
the matter is resolved in a manner favorable to the claimant or
appellant.
(ii) For purposes of this part, a person shall be presumed not to
be disinterested if that person is the spouse, child, or parent of the
claimant or appellant, or if that person resides with the claimant or
appellant. This presumption may be rebutted by clear and convincing
evidence that the person in question has no financial interest in the
success of the claim.
(iii) The provisions of paragraph (g) of this section (relating to
fee agreements) shall apply to all payments or agreements to pay
involving disinterested third parties. In addition, the agreement shall
include or be accompanied by the following statement, signed by the
attorney or agent: ``I certify that no agreement, oral or otherwise,
exists under which the claimant or appellant will provide anything of
value to the third-party payer in this case in return for payment of my
fee or salary, including, but not limited to, reimbursement of any fees
paid.''
(e) Fees permitted. Fees permitted for services of an agent or
attorney admitted to practice before VA must be reasonable. They may be
based on a fixed fee, hourly rate, a percentage of benefits recovered,
or a combination of such bases. Factors considered in determining
whether fees are reasonable include:
(1) The extent and type of services the representative performed;
(2) The complexity of the case;
(3) The level of skill and competence required of the
representative in giving the services;
(4) The amount of time the representative spent on the case;
(5) The results the representative achieved, including the amount
of any benefits recovered;
(6) The level of review to which the claim was taken and the level
of the review at which the representative was retained;
(7) Rates charged by other representatives for similar services;
and
(8) Whether, and to what extent, the payment of fees is contingent
upon the results achieved.
(f) Presumptions. Fees which do not exceed 20 percent of any past-
due benefits awarded as defined in paragraph (h)(3) of this section
shall be presumed to be reasonable. Fees which exceed 33\1/3\ percent
of any past-due benefits awarded shall be presumed to be unreasonable.
These presumptions may be rebutted through an examination of the
factors in paragraph (e) of this section establishing that there is
clear and convincing evidence that a fee which does not exceed 20
percent of any past-due benefits awarded is not reasonable or that a
fee which exceeds 33\1/3\ percent is reasonable in a specific
circumstance.
(g) Fee agreements. All agreements for the payment of fees for
services of agents and attorneys (including agreements involving fees
or salary paid by an organization, governmental entity or other
disinterested third party) must be in writing and signed by both the
claimant or appellant and the agent or attorney.
(1) To be valid, a fee agreement must include the following:
(i) The name of the veteran,
(ii) The name of the claimant or appellant if other than the
veteran,
(iii) The name of any disinterested third-party payer (see
paragraph (d)(2) of this section) and the relationship between the
third-party payer and the veteran, claimant, or appellant,
(iv) The applicable VA file number, and
(v) The specific terms under which the amount to be paid for the
services of the attorney or agent will be determined.
(2) Fee agreements must also clearly specify if VA is to pay the
agent or attorney directly out of past due benefits. A direct-pay fee
agreement is a fee agreement between the claimant or
[[Page 29877]]
appellant and an agent or attorney providing for payment of fees out of
past-due benefits awarded directly to an agent or attorney. A fee
agreement that does not clearly specify that VA is to pay the agent or
attorney out of past-due benefits or that specifies a fee greater than
20 percent of past-due benefits awarded by VA shall be considered to be
an agreement in which the agent or attorney is responsible for
collecting any fees for representation from the claimant without
assistance from VA.
(3) A copy of the agreement must be filed with the Office of the
General Counsel within 30 days of its execution by mailing the copy to
the following address: Office of the General Counsel (022D), 810
Vermont Avenue, NW., Washington, DC 20420. Only fee agreements and
documents related to review of fees under paragraph (i) of this section
and expenses under Sec. 14.637 may be filed with the Office of the
General Counsel. All documents relating the adjudication of a claim for
VA benefits, including any correspondence, evidence, or argument, must
be filed with the agency of original jurisdiction, Board of Veterans'
Appeals, or other VA office as appropriate.
(h) Payment of fees by Department of Veterans Affairs directly to
an agent or attorney from past-due benefits. (1) Subject to the
requirements of the other paragraphs of this section, including
paragraphs (c) and (e), the claimant or appellant and an agent or
attorney may enter into a fee agreement providing that payment for the
services of the agent or attorney will be made directly to the agent or
attorney by VA out of any past-due benefits awarded in any proceeding
before VA or the United States Court of Appeals for Veterans Claims. VA
will charge and collect an assessment out of the fees paid directly to
agents or attorneys from past-due benefits awarded. The amount of such
assessment shall be equal to five percent of the amount of the fee
required to be paid to the agent or attorney, but in no event shall the
assessment exceed $100. Such an agreement will be honored by VA only if
the following conditions are met:
(i) The total fee payable (excluding expenses) does not exceed 20
percent of the total amount of the past-due benefits awarded,
(ii) The amount of the fee is contingent on whether or not the
claim is resolved in a manner favorable to the claimant or appellant,
and
(iii) The award of past-due benefits results in a cash payment to a
claimant or an appellant from which the fee may be deducted. (An award
of past-due benefits will not always result in a cash payment to a
claimant or an appellant. For example, no cash payment will be made to
military retirees unless there is a corresponding waiver of retirement
pay. (See 38 U.S.C. 5304(a) and 38 CFR 3.750)
(2) For purposes of this paragraph (h), a claim will be considered
to have been resolved in a manner favorable to the claimant or
appellant if all or any part of the relief sought is granted.
(3) For purposes of this paragraph (h), ``past-due benefits'' means
a nonrecurring payment resulting from a benefit, or benefits, granted
on appeal or awarded on the basis of a claim reopened after a denial by
a VA agency of original jurisdiction or the Board of Veterans' Appeals
or the lump sum payment that represents the total amount of recurring
cash payments that accrued between the effective date of the award, as
determined by applicable laws and regulations, and the date of the
grant of the benefit by the agency of original jurisdiction, the Board
of Veterans' Appeals, or an appellate court.
(i) When the benefit granted on appeal, or as the result of the
reopened claim, is service connection for a disability, the ``past-due
benefits'' will be based on the initial disability rating assigned by
the agency of original jurisdiction following the award of service
connection. The sum will equal the payments accruing from the effective
date of the award to the date of the initial disability rating
decision. If an increased evaluation is subsequently granted as the
result of an appeal of the disability evaluation initially assigned by
the agency of original jurisdiction, and if the agent or attorney
represents the claimant or appellant in that phase of the claim, the
agent or attorney will be paid a supplemental payment based upon the
increase granted on appeal, to the extent that the increased amount of
disability is found to have existed between the initial effective date
of the award following the grant of service connection and the date of
the rating action implementing the appellate decision granting the
increase.
(ii) Unless otherwise provided in the fee agreement between the
claimant or appellant and the agent or attorney, the agent's or
attorney's fees will be determined on the basis of the total amount of
the past-due benefits even though a portion of those benefits may have
been apportioned to the claimant's or appellant's dependents.
(iii) If an award is made as the result of favorable action with
respect to several issues, the past-due benefits will be calculated
only on the basis of that portion of the award which results from
action taken on issues concerning which the criteria in paragraph (c)
of this section have been met.
(4) In addition to filing a copy of the fee agreement with the
Office of the General Counsel as required by paragraph (g) of this
section, the agent or attorney must notify the agency of original
jurisdiction within 30 days of the date of execution of the agreement
of the existence of an agreement providing for the direct payment of
fees out of any benefits subsequently determined to be past due and
provide that agency with a copy of the fee agreement.
(i) Motion for review of fee agreement. Before the expiration of
120 days from the date of the final VA action, the Office of the
General Counsel may review a fee agreement between a claimant or
appellant and an agent or attorney upon its own motion or upon the
motion of the claimant or appellant. The Office of the General Counsel
may order a reduction in the fee called for in the agreement if it
finds by a preponderance of the evidence, or by clear and convincing
evidence in the case of a fee presumed reasonable under paragraph (f)
of this section, that the fee is unreasonable. The Office of the
General Counsel may approve a fee presumed unreasonable under paragraph
(f) of this section if it finds by clear and convincing evidence that
the fee is reasonable. The Office of the General Counsel's review of
the agreement under this paragraph will address the issues of
eligibility under paragraph (c) of this section and reasonableness
under paragraph (e) of this section. The Office of the General Counsel
will limit its review and decision under this paragraph to the issue of
reasonableness if another agency of original jurisdiction has reviewed
the agreement and made an eligibility determination under paragraph (c)
of this section. Motions for review of fee agreements must be in
writing and must include the name of the veteran, the name of the
claimant or appellant if other than the veteran, and the applicable VA
file number. Such motions must set forth the reason, or reasons, why
the fee called for in the agreement is unreasonable and must be
accompanied by all evidence the moving party desires to submit.
(1) A claimant's or appellant's motion for review of a fee
agreement must be served on the agent or attorney and must be filed at
the following address: Office of the General Counsel (022D), 810
Vermont Avenue, NW., Washington, DC 20420. The agent or attorney may
file a response to the motion, with any relevant evidence,
[[Page 29878]]
with the Office of the General Counsel not later than 30 days from the
date on which the claimant or appellant served the motion on the agent
or attorney. Such responses must be served on the claimant or
appellant. The claimant or appellant then has 15 days from the date on
which the agent or attorney served a response to file a reply with the
Office of the General Counsel. Such replies must be served on the agent
or attorney.
(2) The Assistant General Counsel shall initiate the Office of the
General Counsel's review of a fee agreement on its own motion by
serving the motion on the agent or attorney and the claimant or
appellant. The agent or attorney may file a response to the motion,
with any relevant evidence, with the Office of the General Counsel
(022D), 810 Vermont Avenue, NW., Washington, DC 20420, not later than
30 days from the date on which the Office of the General Counsel served
the motion on the agent or attorney. Such responses must be served on
the claimant or appellant.
(3) The Office of the General Counsel shall close the record in
proceedings to review fee agreements 15 days after the date on which
the agent or attorney served a response on the claimant or appellant,
or 30 days after the claimant, appellant, or the Office of the General
Counsel served the motion on the agent or attorney if there is no
response. The Assistant General Counsel may, for a reasonable period
upon a showing of sufficient cause, extend the time for an agent or
attorney to serve an answer or for a claimant or appellant to serve a
reply. The Assistant General Counsel shall forward the record and a
recommendation to the General Counsel for a final decision. Unless
either party files a Notice of Disagreement with the Office of the
General Counsel, the agent or attorney must refund any excess payment
to the claimant or appellant not later than the expiration of the time
within which the General Counsel's decision may be appealed to the
Board of Veterans' Appeals.
(j) In addition to whatever other penalties may be prescribed by
law or regulation, failure to comply with the requirements of this
section may result in proceedings under Sec. 14.633 of this chapter to
terminate the agent's or attorney's accreditation to practice before
VA.
(k) Notwithstanding provisions in this section for closing the
record at the end of the 30-day period for serving a response or 15
days after the date on which the agent or attorney served a response,
appeals shall be initiated and processed using the procedures in 38 CFR
Parts 19 and 20. Nothing in this section shall be construed to limit
the Board's authority to remand a matter to the General Counsel under
38 CFR 19.9 for any action that is essential for a proper appellate
decision or the General Counsel's ability to issue a Supplemental
Statement of the Case under 38 CFR 19.31.
(Authority: 38 U.S.C. 5902, 5904, 5905)
(The Office of Management and Budget has approved the information
collection requirements in this section under control number 2900-
0085.)
0
11. Add Sec. 14.637 to read as follows:
Sec. 14.637. Payment of the expenses of agents and attorneys in
proceedings before Agencies of Original Jurisdiction and before the
Board of Veterans' Appeals.
(a) Applicability of rule. The provisions of this section apply to
the services of accredited agents and attorneys with respect to
benefits under laws administered by VA in all proceedings before the
agency of original jurisdiction or before the Board of Veterans'
Appeals regardless of whether an appeal has been initiated.
(b) General. Any agent or attorney may be reimbursed for expenses
incurred on behalf of a veteran or a veteran's dependents or survivors
in the prosecution of a claim for benefits pending before VA. Whether
such an agent or attorney will be reimbursed for expenses and the
method of such reimbursement is a matter to be determined by the agent
or attorney and the claimant or appellant in the fee agreement filed
with the Office of the General Counsel under Sec. 14.636 of this part.
Expenses are not payable directly to the agent or attorney by VA out of
benefits determined to be due to a claimant or appellant.
(c) Nature of expenses subject to reimbursement. ``Expenses''
include nonrecurring expenses incurred directly in the prosecution of a
claim for benefits on behalf of a claimant or appellant. Examples of
such expenses include expenses for travel specifically to attend a
hearing with respect to a particular claim, the cost of copies of
medical records or other documents obtained from an outside source, and
the cost of obtaining the services of an expert witness or an expert
opinion. ``Expenses'' do not include normal overhead costs of the agent
or attorney such as office rent, utilities, the cost of obtaining or
operating office equipment or a legal library, salaries of the
representative and his or her support staff, and the cost of office
supplies.
(d) Expense charges permitted; motion for review of expenses.
Reimbursement for the expenses of an agent or attorney may be obtained
only if the expenses are reasonable. The Office of the General Counsel
may review the expenses charged by an agent or attorney upon its own
motion or the motion of the claimant or appellant and may order a
reduction in the expenses charged if it finds that they are excessive
or unreasonable. The Office of the General Counsel's review of expenses
under this paragraph will address the issues of eligibility under Sec.
14.636(c) and reasonableness. The Office of the General Counsel will
limit its review and decision under this paragraph to the issue of
reasonableness if another agency of original jurisdiction has reviewed
the fee agreement between the claimant and the agent or attorney and
determined that the agent or attorney is eligible for reimbursement of
expenses. Motions for review of expenses must be in writing and must
include the name of the veteran, the name of the claimant or appellant
if other than the veteran, and the applicable VA file number. Such
motions must specifically identify which expenses charged are
unreasonable; must set forth the reason, or reasons, why such expenses
are excessive or unreasonable and must be accompanied by all evidence
the claimant or appellant desires to submit. Factors considered in
determining whether expenses are excessive or unreasonable include the
complexity of the case, the potential extent of benefits recoverable,
and whether travel expenses are in keeping with expenses normally
incurred by other representatives.
(1) A claimant's or appellant's motion for review of expenses must
be served on the agent or attorney and must be filed at the following
address: Office of the General Counsel (022D), 810 Vermont Avenue, NW.,
Washington, DC 20420. The agent or attorney may file a response to the
motion, with any accompanying evidence, with the Office of the General
Counsel not later than 30 days from the date on which the claimant or
appellant served the motion on the agent or attorney. Such responses
must be served on the claimant or appellant. The claimant or appellant
then has 15 days from the date on which the agent or attorney served a
response to file a reply with the Office of the General Counsel. Such
replies must be served on the agent or attorney.
(2) The Assistant General Counsel shall initiate the Office of the
General Counsel's review of expenses on its own motion by serving the
motion on the agent or attorney and the claimant or appellant. The
agent or attorney may file a response to the motion, with any
accompanying evidence, with the Office
[[Page 29879]]
of the General Counsel (022D), 810 Vermont Avenue, NW., Washington, DC
20420, not later than 30 days from the date on which the Office of the
General Counsel served the motion on the agent or attorney. Such
responses must be served on the claimant or appellant.
(3) The Office of the General Counsel shall close the record in
proceedings to review expenses 15 days after the date on which the
agent or attorney served a response on the claimant or appellant, or 30
days after the claimant, appellant, or the Office of the General
Counsel served the motion on the agent or attorney if there is no
response. The Assistant General Counsel may, for a reasonable period
upon a showing of sufficient cause, extend the time for an agent or
attorney to serve an answer or for a claimant or appellant to serve a
reply. Unless either party files a Notice of Disagreement with the
General Counsel's decision, the attorney or agent must refund any
excess payment to the claimant or appellant not later than the
expiration of the time within which the General Counsel's decision may
be appealed to the Board of Veterans' Appeals.
(e) In addition to whatever other penalties may be prescribed by
law or regulation, failure to comply with the requirements of this
section may result in proceedings under Sec. 14.633 of this part to
terminate the agent's or attorney's accreditation to practice before
VA.
(f) Notwithstanding provisions in this section for closing the
record at the end of the 30-day period for serving a response or 15
days after the date on which the agent or attorney served a response,
appeals shall be initiated and processed using the procedures in 38 CFR
parts 19 and 20. Nothing in this section shall be construed to limit
the Board's authority to remand a matter to the General Counsel under
38 CFR 19.9 for any action that is essential for a proper appellate
decision or the General Counsel's ability to issue a Supplemental
Statement of the Case under 38 CFR 19.31.
(Authority: 38 U.S.C. 5904)
(The Office of Management and Budget has approved the information
collection requirements in this section under control number 2900-
0085.)
PART 1--GENERAL PROVISIONS
0
12. The authority citation for part 1 continues to read as follows:
Authority: 38 U.S.C. 501(a), and as noted in specific sections.
0
13. Amend newly redesignated Sec. 1.600 by:
0
a. Adding an undesignated center heading before the section heading .
0
b. In paragraph (a) introductory text, removing ``14.640 through
14.643'' and adding, in its place, ``1.600 through 1.603''.
0
c. In paragraph (b)(1), removing ``14.640 through 14.643'' and adding,
in its place, ``1.600 through 1.603''.
0
d. In paragraph (b)(4), removing ``14.640 through 14.643'' and adding,
in its place, ``1.600 through 1.603''.
0
e. In paragraph (d) introductory text, removing ``14.640 through
14.643'' and adding, in its place, ``1.600 through 1.603''.
The addition reads as follows:
Expanded Remote Access to Computerized Veterans Claims Records by
Accredited Representatives
Sec. 1.600 Purpose.
* * * * *
Sec. 1.602 [Amended]
0
14. Amend newly redesignated Sec. 1.602 by:
0
a. In paragraph (b), removing ``14.643'' and adding, in its place,
``1.603''.
0
b. In paragraph (c)(3), removing ``14.640 through 14.643'' and adding,
in its place, ``1.600 through 1.603''.
Sec. 1.603 [Amended]
0
15. Amend newly redesignated Sec. 1.603 by:
0
a. In paragraph (b)(1), removing ``14.640 through 14.643'' and adding,
in its place, ``1.600 through 1.603''.
0
b. In paragraph (c), removing ``14.643'' and adding, in its place,
``1.603''.
PART 19--BOARD OF VETERANS' APPEALS: APPEALS REGULATIONS
0
16. The authority citation for part 19 continues to read as follows:
Authority: 38 U.S.C. 501(a) unless otherwise noted.
0
17. Amend Sec. 19.31 by adding a paragraph (d) and revising the
authority citation at the end of the section to read as follows.
Sec. 19.31 Supplemental statement of the case.
* * * * *
(d) Exception. Paragraph (b)(1) of this section does not apply in
proceedings before the General Counsel conducted under part 14 of this
chapter to cancel accreditation or to review fee agreements and
expenses for reasonableness.
(Authority: 38 U.S.C. 7105(d); 38 U.S.C. 5902, 5903, 5904)
0
18. Amend Sec. 19.36 by adding a sentence at the end of the paragraph
and revising the authority citation to read as follows:
Sec. 19.36 Notification of certification of appeal and transfer of
appellate record.
* * * Provisions in this section for submitting additional evidence
and references to Sec. 20.1304 do not apply in proceedings before the
General Counsel conducted under part 14 of this chapter to suspend or
cancel accreditation or to review fee agreements and expenses for
reasonableness.
(Authority: 38 U.S.C. 7105; 38 U.S.C. 5902, 5903, 5904)
0
19. Amend Sec. 19.37 by adding a paragraph (c) and revising the
authority citation at the end of the section to read as follows:
Sec. 19.37 Consideration of additional evidence received by the
agency of original jurisdiction after an appeal has been initiated.
* * * * *
(c) The provisions of this section do not apply in proceedings
before the General Counsel conducted under part 14 of this chapter to
cancel accreditation or to review fee agreements and expenses for
reasonableness.
(Authority: 38 U.S.C. 7105(d)(1), 5902, 5903, 5904)
PART 20--BOARD OF VETERANS' APPEALS: RULES OF PRACTICE
0
20. The authority citation for part 20 continues to read as follows:
Authority: 38 U.S.C. 501(a) and as noted in specific sections.
0
21. Amend Sec. 20.608 by revising paragraph (a) to read as follows:
Sec. 20.608 Rule 608. Withdrawal of services by a representative.
(a) Withdrawal of services prior to certification of an appeal. A
representative may withdraw services as representative in an appeal at
any time prior to certification of the appeal to the Board of Veterans'
Appeals by the agency of original jurisdiction by complying with the
requirements of Sec. 14.631 of this chapter.
* * * * *
Sec. Sec. 20.609 and 20.610 [Removed]
0
22. Remove Sec. Sec. 20.609 and 20.610.
0
23. Amend Sec. 20.800 by adding a sentence at the end of the paragraph
and revising the authority citation to read as follows:
[[Page 29880]]
Sec. 20.800 Rule 800. Submission of additional evidence after
initiation of appeal.
* * * The provisions of this section do not apply in proceedings
before the General Counsel conducted under part 14 of this chapter to
cancel accreditation or to review fee agreements and expenses for
reasonableness.
(Authority: 38 U.S.C. 7105(d)(1); 38 U.S.C. 5902, 5903, 5904)
0
24. Amend Sec. 20.1304 by adding a paragraph (e) and revising the
authority citation at the end of the section to read as follows:
Sec. 20.1304 Rule 1304. Request for change in representation, request
for personal hearing, or submission of additional evidence following
certification of an appeal to the Board of Veterans' Appeals.
* * * * *
(e) Relationship to proceedings before the General Counsel to
cancel accreditation or to review the reasonableness of fees and
expenses. The provisions of paragraphs (a), (b), and (d) of this
section allowing appellants to submit additional evidence do not apply
in proceedings before the General Counsel conducted under part 14 of
this chapter to cancel accreditation or to review fee agreements and
expenses for reasonableness.
(Authority: 38 U.S.C. 7104, 7105, 7105A; 38 U.S.C. 5902, 5903, 5904)
[FR Doc. E8-10779 Filed 5-21-08; 8:45 am]
BILLING CODE 8320-01-P