Attorney's Fees

• Author: Thomas E. Bush
• Pages: 367-460

7-1

Chapter 7

Attorney’s Fees

§700 The Fee Agreement Process for Approval of Attorney Fees

§710 Payment of the Fee Under the Fee Agreement Process

§720 The Fee Petition Process

§730 Submitting a Fee Petition and Obtaining a Fee Authorization From SSA

§740 Fee Issues Applicable to Both the Fee Agreement Process and the Fee Petition Process

§750 Attorney Fees in Federal Court

§760 Equal Access to Justice Act (EAJA)

§770 The EAJA Time Limit

§780 EAJA Sample Pleadings

§790 Payment of EAJA Fees

§700 The Fee Agreement Process for Approval of Attorney Fees

§701 Conditions for Fee Agreement Process

§702 The Lesser of 25% of Past-Due Benefits or $6,000

§703 Possible Additional Fee Agreement Provisions

§704 Timely Submission of the Fee Agreement to SSA

§705 Exceptions to the Fee Agreement Process

§706 Approval of Fee Agreement

§707 Administrative Review if the Decision Maker Disapproves the Fee Agreement

§708 Changing the Terms of a Fee Agreement

§709 Law Firms, Paralegals and Multiple Representatives

§709.1 SSA Answers to NOSSCR: Fee Agreements and Multiple Representatives

§709.2 EM-13024 Distributing Fees When All Appointed Representatives Who Are Not Members of the

Same Entity as Those With an Approved Fee Agreement Waive Their Fees

§709.3 When an Associate Leaves the Firm

§710 Payment of the Fee Under the Fee Agreement Process

§711 Notice and Right to Object

§712 Procedure on Administrative Review of the Fee

§713 Objection by the Decision Maker

§714 Objection by the Claimant or Auxiliary

§715 Objection by Attorney

§716 Problems With Partially Favorable Decisions

§716.1 Problems With Subsequent Applications

§717 Avoid Excessive Fees

§718 Erroneous Fee Payments

§719 If You Are Fired or Withdraw

§720 The Fee Petition Process

§721 The Myth of the 25% Limit on Attorney Fees

§722 Summary of Fee Petition Process Rules

§723 Possible Fee Arrangements

§724 Fees May Be Paid in Advance

§725 SSA’s Rules for Evaluating a Fee Request

§725.1 HALLEX I-1-2-57—Evaluating Fee Petitions

§726 SSA’s Rules Are Insufficient to Determine a Fee

§727 Two-Tiered Fee Agreement and the Fee Petition Process

SOCIAL SECURITY DISABILITY PRACTICE 7-2

§730 Submitting a Fee Petition and Obtaining a Fee Authorization From SSA

§731 Keep Good Time Records

§732 How to Submit a Fee Petition

§733 Form: Petition to Obtain Approval of a Fee for Representing a Claimant Before the Social Security

Administration

§734 Where to Send a Fee Petition

§734.1 Form: Fee Petition Transmittal Flag

§735 When to Submit a Fee Petition

§736 Wait for Payment of Auxiliary Benefits

§737 Submit a Written Argument for Approval of Fee

§737.1 Sample Fee Petition Brief

§738 Obtaining Fees in Excess of $10,000

§739 Appealing a Fee Authorization

§740 Fee Issues Applicable to Both the Fee Agreement Process and the Fee Petition Process

§741 How to Calculate Past-Due Benefits

§742 Payment of Attorney Fees in SSI Cases

§743 Calculating a Percentage Fee in an SSI Offset Case

§744 Other Offsets

§745 Obtaining Reimbursement for Expenses

§746 Fee Approval Regulations Do Not Apply in All Circumstances

§747 Coping With SSA’s Failure to Withhold Attorney Fees

§748 The User Fee

§749 How to Return a Check to SSA

§750 Attorney Fees in Federal Court

§751 A 25% Limit on Attorney Fees in Federal Court

§752 To Set a Fee, Federal Courts Look First to the Contingent Fee Contract, Then Test It for Reasonableness

§753 Attorney Fees in SSI Cases Are Regulated

§754 Coping With SSA’s Failure to Withhold and Pay Court-Approved Attorney Fees

§755 Fees for Representation Before Both the Federal Court and SSA

§756 Maximizing Your Fee and Minimizing Bureaucratic Hassle

§757 Sample: Motion for Authorization of Attorney Fees

§758 Form: Federal Court Fee Contract

§760 Equal Access to Justice Act (EAJA)

§761 Legislative History of the EAJA

§762 Prerequisites for Awarding Attorney Fees

§763 Prevailing Party

§764 The Meaning of “Substantially Justified”

§765 Calculation of Attorney Fees and Expenses Paid Under the EAJA

§766 EAJA Fees for Time Spent Representing Claimant on Remand

§767 Time on EAJA Motion and Appeal of EAJA Denial

§768 Applications for Fees Under EAJA and 42 U.S.C. § 406

§769 Attorney’s Duty to Bring EAJA Applications in Appropriate Cases

§770 EAJA Time Limit

§771 Court Reversal With or Without Remand for Rehearing Pursuant to Sentence Four of 42 U.S.C. § 405(g)

§772 Court Reversal With or Without Remanding for Rehearing Based on a U.S. Magistrate Judge Recommendation

§773 Stipulated Reversal With or Without Remanding for Rehearing

§774 Remands Under Sixth Sentence of 42 U.S.C. § 405(g)

§775 Circuit Court of Appeals Cases

§780 EAJA Sample Pleadings

§781 Sample: EAJA Motion for Award of Attorney Fees (Fourth Sentence Remand)

§782 Sample: Plaintiff’s Affidavit and Assignment of EAJA Fee

§783 Sample: Plaintiff’s Attorney’s Affidavit (Fourth Sentence Remand)

§784 Sample: Memorandum Supporting EAJA Motion

§785 Sample: Motion for Judgment (Sixth Sentence Remand)

§786 Sample: EAJA Motion for Award of Attorney Fees (Sixth Sentence Remand)

§787 Sample: Plaintiff’s Attorney’s Affidavit (Court Reversal Case Also Asking for Approval of 42 U.S.C. § 406(b) Fees)

§788 Sample: Plaintiff’s Attorney’s Affidavit (Sixth Sentence Remand)

§790 Payment of EAJA Fees

§791 Payment by Mandatory Direct Deposit

§792 Dealing With Payment Delays

§792.1 EAJA Fee Payment Contacts

§793 Payment of Costs and Expenses

§794 Form: Attorneys and Legal Organizations ACH Vendor/Miscellaneous Payment Enrollment Form

7-3 ATTORNEY’S FEES §700

§700 The Fee Agreement Process for

Approval of Attorney Fees

Attorney fees in Social Security disability and SSI

cases are regulated. 42 U.S.C. §§ 406(a) and 1383(d)

(2). The Social Security Administration (SSA) must

approve your fee for work done before the agency

unless one of the very limited exceptions to this rule

applies. See §746. If you accept an unauthorized fee,

you could be punished by a fine not exceeding $500.00

or by imprisonment not exceeding one year, or both. 42

U.S.C. § 406(a)(5). You could also lose your right to

practice before the Social Security Administration. 20

C.F.R. §§ 404.1740(c)(2) and 404.1745(b) & (c).

Two Fee Approval Systems

Two alternative systems with entirely different

procedures, rules and time limits govern fee approval.

One system, the fee petition process, described in

§§720-739, is slow, burdensome, generally stingy and

leaves inordinate discretion in the hands of decision

makers. The other system, the fee agreement process,

which provides for streamlined approval and payment

of attorney fees, works better in the majority of cases.

Fee Petition Process Problems

The primary problem with the fee petition system

is the typically long delay before payment. When

the fee petition process is used, it is not unusual for

it to take six months or more from the date of the

favorable decision for a fee petition to be approved

and another three months for payment to be made.

In most hearing offices fee petitions are not handled

expeditiously. Cynics say this is a deliberate effort by

decision makers to discourage use of fee petitions and

encourage use of the fee agreement process, a system

that requires very little decision maker time. Those

more charitable are not surprised that decision makers,

who dislike the fee petition process almost as much

as attorneys do and who have been busy with a large

backlog of claims in recent years, give fee petition

approval low priority.

The fee petition process is not only slow, it is also

stingy. Attorneys seldom feel that they are paid the full

value of their services under a system that steadfastly

refuses to consider the contingent nature of fees and

only rarely rewards outstanding work. For example,

if you win tens of thousands of dollars for your client

because of a brilliant inspiration that took very little

time, you’re likely to be granted a fee commensurate

with the small amount of time spent on the case rather

than a fee commensurate with your brilliant inspiration.

An arbitrary hourly rate cap, a factor not listed for

consideration in the regulations, is silently applied.

Fee Agreement Process

The fee agreement process, designed to address the

limitations of the fee petition system, is faster; and,

although it contains traps for those who do not carefully

follow its complicated rules, it is a vast improvement.

Nevertheless, one cannot expect too much from the fee

agreement process. When the fee agreement process

began, many attorneys thought that at last SSA had

recognized the contingent nature of fees. These attorneys

also thought that by using the fee agreement process,

they could represent almost all claimants without having

to worry about the adequacy of fees in any single case.

They thought that average fees would be adequate. But

attorneys have discovered that it remains necessary

to avoid using the fee agreement process in too many

cases with small or non-existent back benefits because

the good-paying cases may not sufficiently bring up the

overall average.

Fee Agreement Process Problem—Appeals

Beyond ALJ Hearing

Attorneys have found that the fee agreement process

pays smaller fees than the fee petition process in

time-consuming cases such as those involving appeals

beyond the ALJ hearing level. Indeed, the more hours

an attorney spends on a case, the lower the average

hourly fee because under the fee agreement process,

fees are limited to a maximum of $6,000. As we shall

see, however, there is a way to seek higher fees in

cases involving appeals beyond the ALJ hearing level

by using a two-tiered fee agreement. See §703 and the

two-tiered fee agreement in §178.3.1.

Fee Agreement Process Problem—Subsequent

Applications

In a case where a second application is paid while

the first is on appeal to federal court (or in those rare

cases where SSA allows a second application to be filed

while a case is on appeal to the Appeals Council), SSA

will treat the two applications as one case for purposes

of applying the fee agreement cap. The attorney may

spend an average amount of time on the case involving

the second application and receive a $6,000 fee. After

winning on the first application, the one that took years

of work, the attorney will be dismayed to discover

that it is SSA’s position that no additional fee is due

under the fee agreement process. Because the attorney

accepted the fee from the case involving the second

application, SSA says the attorney elected to treat the

entire case as coming under the fee agreement process.

The attorney has already received a maximum fee. See

§716.1. However, if the case went to federal court, the

court can approve an additional fee under 42 U.S.C. §

406(b). See §§750 ff.