**§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
organizations (including their accredited representatives when acting as
such) and individuals recognized under §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 §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 §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 §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 §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 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 §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, 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 §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.)

\[73 FR 29875, May 22, 2008\]

**Supplement *Highlights* reference**: 83(3)