**Litigation (other than under the Federal Tort Claims Act);
Indemnification**

**§14.514 Suits by or against United States or Department of Veterans
Affairs officials; indemnification of Department of Veterans Affairs
employees.**

\(a\) *Suits against United States or Department of Veterans Affairs
officials.* When a suit involving any activities of the Department of
Veterans Affairs is filed against the United States or the Secretary or
a suit is filed against any employee of the Department of Veterans
Affairs in which is involved any official action of the employee, not
covered by the provisions of §§14.600 through 14.617, a copy of the
petition will be forwarded to the General Counsel who will take
necessary action to obtain the pertinent facts, cooperate with or
receive the cooperation of the Department of Justice and, where
indicated, advise the Regional Counsel of any further action required.

\(b\) *Counsel and representation of employees.* The Department of
Justice may afford counsel and representation to Government employees
who are sued individually as a result of the performance of their
official duties. A civil action commenced in a State court against an
employee, as the result of an action under color of his or her office,
may be removed to the applicable Federal District Court. If a suit is
filed against an employee as the result of the performance of his or her
official duties, where the provisions of either 28 U.S.C. 2679 or 38
U.S.C. 7316 are not applicable (see §14.610), and the employee desires
to be represented by the U.S. Attorney, the Regional Counsel will obtain
a written request to this effect from the employee and will also obtain
an affidavit of the facility Director describing the incident in
sufficient detail to enable a determination to be made as to whether the
employee was in the scope of his or her employment at the time. These
statements, together with a copy of the petition and two copies of a
summary of pertinent facts, will be sent to the General Counsel, who
will transmit copies thereof to the Department of Justice for
appropriate action.

\(c\) *Indemnification.*

\(1\) The Department of Veterans Affairs may indemnify a Department of
Veterans Affairs employee, who is personally named as a defendant in any
civil suit in state or Federal court or an arbitration proceeding or
other proceeding seeking damages against the employee personally where
either 28 U.S.C. 2679 or 38 U.S C. 7316 is not applicable, for any
verdict, judgment, or other monetary award which is rendered against
such employee; provided that: the alleged conduct giving rise to the
verdict, judgment, or award was taken within the scope of his or her
employment and that such indemnification is in the interest of the
Department of Veterans Affairs, as determined by the Secretary or his
designee.

\(2\) The Department of Veterans Affairs may settle or compromise a
personal damage claim against a Department of Veterans Affairs employee,
in cases where the provisions of either 28 U.S.C. 2679 or 38 U.S.C. 7316
are not applicable, by the payment of available funds, at any time;
provided that: the alleged conduct giving rise to the personal damage
claim was taken within the employee's scope of employment and that such
settlement or compromise is in the interest of the Department of
Veterans Affairs, as determined by the Secretary or his designee.

\(3\) Absent exceptional circumstances as determined by the Secretary or
his designee, the Agency will not entertain a request either to agree to
indemnify or to settle a personal damage claim before entry of an
adverse verdict, judgment, or award.

\(4\) A Department of Veterans Affairs employee may request
indemnification to satisfy a verdict, judgment, or award entered against
that employee. The employee shall submit a written request, with
appropriate documentation including copies of the verdict, judgment,
award, or settlement proposal, in a timely manner to the Department of
Veterans Affairs General Counsel, who shall make a recommended
disposition of the request. Where the Department of Veterans Affairs
determines it appropriate, the Agency shall seek the view of the
Department of Justice. The General Counsel shall forward the employee
request for indemnification, and the accompanying documentation, with
the General Counsel's recommendation to the Secretary for decision.

\(5\) Any payment under this section either to indemnify a Department of
Veterans Affairs employee or to settle or compromise a personal damage
claim shall be contingent upon the availability of appropriated funds of
the Department of Veterans Affairs.

\(d\) *Attorney-client privilege.* Attorneys employed by the Department
of Veterans Affairs who participate in any process utilized for the
purpose of determining whether the Agency should request the Department
of Justice to provide representation to a Department employee sued,
subpoenaed or charged in his individual capacity, or whether attorneys
employed by the Department of Veterans Affairs should provide assistance
in the representation of such a Department employee, undertake a full
and traditional attorney-client relationship with the employee with
respect to application of the attorney-client privilege. If
representation is authorized, Department of Veterans Affairs attorneys
who assist in the representation of an employee also undertake a full
and traditional attorney-client relationship with the employee with
respect to the attorney-client privilege. Any adverse information
communicated by the client-employee to an attorney during the course of
such attorney-client relationship shall not be disclosed to anyone,
either inside or outside the Department of Veterans Affairs, other than
attorneys responsible for representation of the employee, unless such
disclosure is authorized by the employee.

\(e\) *Suits by the United States.* In any instance wherein direct
submission to a U.S. Attorney for institution of civil action has been
authorized by the Department of Justice, the Regional Counsel will
furnish the U.S. Attorney a complete report of the facts and applicable
law, documentary evidence, names and addresses of witnesses and, in
cases wherein Department of Veterans Affairs action has been taken, a
copy of any pertinent decision rendered. The Regional Counsel will
forward two copies of such report and of any proposed pleading to the
General Counsel, and will render any practicable assistance requested by
the U.S. Attorney.

\[42 FR 41411, Aug. 17, 1977, as amended at 54 FR 5614, Feb. 6, 1989; 61
FR 7216, Feb. 27, 1996\]