Thursday,
May 22, 2008
Part II
Department of
Veterans Affairs
38 CFR Parts 1, 14, 19 and 20
Accreditation of Agents and Attorneys;
Agent and Attorney Fees; Final Rule
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29852 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
DEPARTMENT OF VETERANS concerned VA’s proposed attorney education (CLE) requirements
AFFAIRS accreditation requirements and the established by VA. Because these are
centralization of attorney accreditation requirements beyond bar membership
38 CFR Parts 1, 14, 19 and 20 and disciplinary proceedings in the we retain the definition of ‘‘attorney’’ as
RIN 2900–AM62 Office of the General Counsel (OGC). proposed.
The comments are discussed below. Four commenters suggested that VA
Accreditation of Agents and Attorneys; Based on the rationale described in this amend the definition of ‘‘claim’’ in
Agent and Attorney Fees document and in the notice of the § 14.627(g). One commenter suggested
proposed rulemaking, VA adopts the that we place the definition in 38 CFR
AGENCY: Department of Veterans Affairs. proposed rule as revised in this part 3.
ACTION: Final rule. document. We agree that clarification is
necessary concerning when a fee is
SUMMARY: The Department of Veterans Section 14.627—Definitions payable for representation, especially in
Affairs (VA) is amending its regulations Noting some confusion in the circumstances where more than one
governing the representation of comments concerning accreditation of representative, agent, or attorney is
claimants for veterans benefits in order individuals and when those individuals involved. A number of commenters
to implement provisions of the Veterans would be considered to be providing requested that we reconcile the
Benefits, Health Care, and Information representation in a proceeding before definition of ‘‘claim’’ in § 14.627(g) with
Technology Act of 2006, and to the Department for purposes of charging case law, including Carpenter v.
reorganize and clarify existing fees, we modified the definitions in 38 Nicholson, 452 F.3d 1379 (Fed. Cir.
regulations. As amended, the CFR 14.627(a) and (n) to clarify that 2006). Because the definition of ‘‘claim’’
regulations establish the procedures and ‘‘accreditation’’ means authority to in § 14.627(g) is identical to the prior
rules necessary for VA to facilitate the assist claimants in the preparation, definition we will retain it as proposed
paid representation of claimants by presentation, and prosecution of claims but will address commenters’ concerns
accredited agents and attorneys after a for VA benefits, and that and reconcile the case law in
Notice of Disagreement has been filed ‘‘representation’’ means the acts § 14.636(c), the section pertaining to the
with respect to a case. The purpose of associated with representing a claimant circumstances under which fees may be
these regulations is to fulfill Congress’ in a proceeding before the Department charged.
direction that agents and attorneys may pursuant to a properly executed and One commenter recommended that
be paid for services rendered after a filed VA Form 21–22 (appointment of the definition of ‘‘service’’ under
Notice of Disagreement is filed with service organization) or VA Form 21– § 14.627(o) include a proof of receipt
respect to a decision by an agency of 22a (appointment of individual). component. We disagree. The
original jurisdiction while ensuring that In § 14.627(d), we amend the commenter makes this suggestion based
claimants for veterans benefits have definition of ‘‘attorney’’ to mean a upon the alleged failure of VA to
responsible, qualified representation. member in good standing of a State bar properly deliver correspondence related
DATES: Effective Date: The final rule is
who has met the requirements to benefit claims. However, requiring
effective June 23, 2008. See prescribed in 38 CFR 14.629(b) for proof of service under part 14 does not
SUPPLEMENTARY INFORMATION for initial
practice before VA. One commenter address the commenter’s concerns about
opined that changing the definition of benefit claims. Under part 14, claimants
compliance dates.
‘‘attorney’’ as proposed in § 14.627(d) and attorneys are required to ‘‘serve’’
Applicability Dates: Some
was unnecessary. Another commenter, documents related to claimants’ or the
amendments in this final rule are for
without taking a position on the General Counsel’s motions for review of
prospective application only. For more
appropriateness of the proposed fee agreements. Such service is not
information concerning the dates of
definition, suggested VA address the related to the manner in which VA
applicability, see the SUPPLEMENTARY
question of whether the Agency Practice mails or proves mailing of documents
INFORMATION section.
Act, 5 U.S.C. 500(b), prohibits VA from related to claims. Furthermore, we
FOR FURTHER INFORMATION CONTACT: regulating attorney practice before the modeled our proposed service rules
Michael G. Daugherty, Staff Attorney, Department. We discuss VA’s authority after the rules of practice and procedure
Office of the General Counsel (022G2), to regulate attorney practice before VA generally followed by litigants,
Department of Veterans Affairs, 810 below under § 14.629. practitioners and courts, such as Rule
Vermont Avenue, NW., Washington, DC We disagree that a change in the 5(b) of the Federal Rules of Civil
20420, (202) 461–7699. (This is not a definition of ‘‘attorney’’ is unnecessary. Procedure and Rule 25(c) of the Federal
toll-free number.) Prior to the enactment of Public Law Rules of Appellate Procedure, both of
SUPPLEMENTARY INFORMATION: In a 109–461, VA accredited attorneys for which provide that service by mail is
document published in the Federal practice before the Department based complete on mailing.
Register on May 7, 2007 (72 FR 25930), solely upon being a member in good
VA proposed to amend its regulations standing of a State bar. However, Public Section 14.629—Requirements for
governing the representation of Law 109–461 amended 38 U.S.C. Accreditation of Representatives,
claimants for veterans benefits, 5904(a) and directed VA to prescribe, in Agents, and Attorneys
accreditation of individuals who may regulations, qualifications and standards In 38 CFR 14.629, we proposed to
provide representation, and limitations of conduct for practice before the continue administering VA’s
on fees charged for representation. The Department. As discussed in greater accreditation program in OGC and to
public comment period ended on June detail below, the final rule does not clarify that the Assistant General
6, 2007. VA received 44 comments from require attorneys to submit to a Counsel has primary responsibility for
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interested individuals and character and fitness evaluation or pass the program. We received numerous
organizations, including agents, a written exam to be accredited. comments regarding the requirements
attorneys, law firms, pro bono groups, Nonetheless, attorneys must apply for for accreditation. Several commenters
and veterans service organizations accreditation, certify their standing suggested that it was a conflict of
(VSO). The comments generally annually, and complete continuing legal interest and a violation of due process
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29853
for OGC to administer the accreditation agency member has an unalterably Department where the accreditation
program because the General Counsel is closed mind on matters critical to the provisions in 38 CFR part 14 are
the Secretary’s legal advisor and disposition of the proceeding’’). applicable. Under its limited
represents the Secretary in benefits In a case in which a corporation accreditation authority, OGC cannot
matters that are appealed to the U.S. regulated by a Federal agency asserted control or otherwise limit attorney
Court of Appeals for Veterans Claims. that an agency decision maker admission to practice before the courts.
These commenters asserted that OGC participating in an investigation of a In our view, continuing administration
might use the accreditation program to regulatory violation had prejudged its of the accreditation program in OGC is
screen out opposing counsel or to claim resulting in a violation of necessary to avoid conflicts that might
retaliate against parties in benefits procedural due process, the U.S. Court arise from involvement of VA officers
litigation. of Appeals for the Federal Circuit held with claim adjudication responsibility
We agree that individuals seeking that the corporation could prevail on its and to ensure that only individuals with
accreditation have the right to a timely claim ‘‘only if it can establish that the the appropriate legal expertise are
decision based solely on the merits of decision maker is not ‘capable of involved in accreditation
their application by an impartial and judging a particular controversy fairly determinations.
unbiased decision maker. However, the on the basis of its own circumstances.’ ’’ We received four comments regarding
argument that VA’s accreditation NEC Corp. v. United States, 151 F.3d the process for appealing an adverse
program, as clarified by the 1361, 1373 (1998) (quoting United initial accreditation decision of the
amendments in 38 CFR 14.629, creates States v. Morgan, 313 U.S. 409, 421 Assistant General Counsel to the
a conflict of interest and violates due (1941)). See also Hortonville Joint Sch. General Counsel. One commenter stated
process is not supported in law or in Dist. No. 1 v. Hortonville Educ. Ass’n, that although a final decision of the
fact. 426 U.S. 482, 493 (1976). ‘‘This standard General Counsel may not be appealable
The VA General Counsel or his is met when the challenger within VA, ‘‘it is clearly appealable
designee may lawfully determine demonstrates, for example, that the under the Administrative Procedure Act
whether an applicant satisfies the decision maker’s mind is ‘irrevocably [(APA)] and the Department should
requirements for accreditation. In 38 closed’ on a disputed issue.’’ NEC Corp., revise proposed § 14.629 to so state.’’
U.S.C. 5904, Congress granted the 151 F.3d at 1373 (other citations We agree. A decision to deny
Secretary of Veterans Affairs the omitted). accreditation under 38 U.S.C. 5904(a) is
authority to accredit agents and The commenters have not alleged any based solely upon a determination of
attorneys for practice before VA. See facts indicating an actual conflict of whether an applicant has satisfied the
also 38 U.S.C. 5901 (‘‘[N]o individual interest in OGC’s administration of the requirements prescribed in regulations
may act as an agent or attorney in the accreditation program. The comments for accreditation. VA did not propose to
preparation, presentation, or also suggest a misunderstanding of VA’s deny judicial review of these decisions,
prosecution of any claim under laws organizational structure and the scope only to clarify that review is in the U.S.
administered by the Secretary unless of VA’s authority under 38 U.S.C. District Court under the Administrative
such individual has been recognized for Chapter 59. Claims for VA benefits are Procedure Act (5 U.S.C. 701–706) rather
such purposes by the Secretary.’’). adjudicated by agencies of original than in the administrative review
Congress has also authorized the jurisdiction within one of the system that Congress designed for
Secretary to delegate authority to act Department’s administrations (Veterans adjudicating veterans benefit claims.
and to render decisions under the laws Benefits Administration, Veterans Although the Court of Appeals for the
administered by VA as he deems Health Administration, or National Federal Circuit held in Bates v.
necessary. See 38 U.S.C. 512. The Cemetery Administration) and those Nicholson, 398 F.3d 1355 (Fed. Cir.
Secretary, then the Administrator of decisions are generally subject to review 2005), that section 5904 is a law that
Veterans Affairs, first delegated the by the Board of Veterans’ Appeals affects the provision of veterans benefits
authority for the accreditation program (Board), which makes the final agency for purposes of the Board’s jurisdiction,
to the General Counsel in 1954 in a new decision on benefit claims. Although the the court did not address the distinction
38 CFR part 14.19 FR 5556, Aug. 31, Board is obligated by law to follow between decisions denying
1954. The United States Supreme Court precedent opinions of the General accreditation under section 5904(a) and
has held that such delegations, Counsel, the Chairman of the Board is decisions cancelling accreditation under
involving the combination of functions appointed by the President and is section 5904(b). Whereas a decision to
in a single decision maker, do not directly responsible to the Secretary, not cancel or suspend accreditation may
violate due process. See Withrow v. the General Counsel. 38 U.S.C. 7101(a), indirectly affect the provision of
Larkin, 421 U.S. 35 (1975). Further, 7104(c). Staff attorneys assist Board benefits because it may result in
general allegations of conflict are not members in rendering decisions on withdrawal of representation and delay
sufficient to rebut the strong benefit claims, but these attorneys are in adjudication, a decision to deny
presumption ‘‘that public officers employees of the Board, not OGC. Also, accreditation has no affect on pending
perform their duties correctly, fairly, in VA’s authority is to regulate agents’ and adjudications. An unsuccessful
good faith, and in accordance with law attorneys’ practice before the agencies of accreditation applicant has had no
and governing regulations.’’ Haley v. original jurisdiction and the Board, not lawful contact with VA’s benefits
Department of the Treasury, 977 F.2d practice before Federal appellate courts. system as a representative, agent, or
553, 558 (Fed. Cir. 1992) (quoting See 38 U.S.C. 5904 (authorizing attorney. Moreover, we do not interpret
Parsons v. United States, 670 F.2d 164, suspension or exclusion from ‘‘practice section 5904(a) as expressing
166 (Ct. Cl. 1982)), cert. denied, 508 before the Department’’). Although OGC congressional intent to extend VA’s
U.S. 950 (1993). See also Assoc. of Nat’l attorneys represent the Department informal and nonadversarial
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Advertisers v. FTC, 627 F.2d 1151, 1170 before the Court of Appeals for Veterans adjudication process to individuals
(D.C. Cir. 1979) (agency decision-maker Claims, they are not involved in the seeking admission to practice before
‘‘should be disqualified [for a conflict of adjudication of claims before VA’s VA. As such, an initial decision to deny
interest] only when there has been a agencies of original jurisdiction or the accreditation to practice before VA
clear and convincing showing that the Board, the two forums in the under 38 CFR 14.629 is separate and
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29854 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
distinct from a decision to suspend or Counsel’s review of a determination to testing as a requirement for attorney
cancel accreditation under 38 CFR deny accreditation to the evidence of accreditation fell into one of four
14.633, which may be appealed to the record before the Assistant General general categories: (1) The proposed rule
Board under Bates. We will amend the Counsel at the time the decision was failed to consider other alternatives to
introduction to § 14.629 to clarify that made. The commenter suggested that testing; (2) testing is contrary to
the General Counsel’s decision denying this requirement would deny the Congressional intent; (3) testing is
accreditation is a final agency action for appellant’s right to due process because contrary to 5 U.S.C. 500, the Agency
purposes of 5 U.S.C. 702. the rationale underlying the decision Practice Act; and (4) a testing
Another commenter recommended may not be apparent until the applicant requirement is redundant because
that VA adopt a procedure for appeal of receives notice of the decision. attorneys have already demonstrated
initial accreditation decisions similar to It is not our intent to prevent competency by passing a bar
that provided in 38 CFR 14.633 for individuals from submitting additional examination.
suspension or cancellation of evidence necessary to satisfy the In drafting the accreditation
accreditation because a denial of accreditation requirements or to limit provisions in the proposed rule, VA was
accreditation would impact a VSO the General Counsel’s review of a required to reconcile the competing
representative’s ability to remain decision denying accreditation to the interests reflected in section 101 of
employed. We disagree and will not initial application for accreditation. Public Law 109–461. In section 5904(c),
make any changes based on this Under the introduction to § 14.629, the Congress directed that veterans were to
comment. Assistant General Counsel will notify be provided the option of retaining paid
A service organization representative the unsuccessful applicant of the representation earlier in the
may not represent claimants before VA decision and provide the applicant an administrative appeals process, after a
without VA accreditation under opportunity to submit additional Notice of Disagreement was filed with
§ 14.629(a); therefore, any employment information for the purpose of respect to a case. However, in section
by a VSO of an individual for purposes correcting any deficiencies or 5904(a), Congress introduced a new
of providing representation before VA omissions. If, after receiving and requirement that VA establish in
must be conditional. Procedural due considering the additional information, regulations qualifications for practice
process requires that an individual the Assistant General Counsel continues before VA to ensure that agents and
receive notice and an opportunity to the denial of accreditation and the attorneys have specialized training or
respond before being deprived of a applicant appeals the decision to the experience where VA had previously
protected property or liberty interest. General Counsel, the record forwarded only required membership in good
Cleveland Bd. of Educ. v. Loudermill, to the General Counsel for review will standing with a State bar as a
470 U.S. 532, 542 (1985). However, an include the additional information requirement for attorney accreditation.
applicant does not have a protected submitted by the applicant in response Sections 5904(a) and (c) require VA to
liberty or property interest sufficient to to the initial denial. Timely decisions develop a program of agent and attorney
warrant notice and opportunity for a on accreditation are important to both accreditation that ensures competent
hearing prior to VA making a decision applicants and the Department; representation while facilitating choice
on an accreditation application. See consequently, this provision is designed of representation.
White v. Office of Pers. Mgmt., 787 F.2d to encourage applicants to provide In section 5904(a)(2), Congress gave
660, 663–64 (D.C. Cir. 1986) (‘‘before the information in a timely manner to VA the choice of prescribing in
right to a hearing attaches, a deprivation facilitate final resolution of the matter regulations a requirement that, as a
greater than the denial of a particular by the General Counsel. condition of accreditation as an agent or
job application must be involved’’). We received many comments attorney, an individual must have either
To the extent the commenter suggests regarding the proposed requirement in a specific level of experience or
that a decision of the General Counsel § 14.629(b) that attorneys achieve a specialized training. In drafting the
to deny accreditation warrants some score of 75 percent or higher on a proposed rule, we considered
procedural due process, the process written examination as a condition of alternative means including practical
provided in the introduction to § 14.629 accreditation. We received eight experience through which applicants for
provides both notice and an opportunity comments in favor of testing, and 27 accreditation could demonstrate either
to respond adequate to the nature of the comments opposed to testing. experience or training and concluded
interest involved. In the event the Among those commenters generally that testing provided balance between
Assistant General Counsel denies an favoring testing, four stated that testing ensuring competence and providing
application for accreditation, the alone was insufficient to ensure choice of representation. After weighing
Assistant General Counsel will notify continued competency to represent all the options and considering the
the applicant of the reasons for veterans before VA and recommended comments, we decided, with respect to
disapproval and provide the applicant that VA require some form of CLE to attorneys, that a law degree, bar
with an opportunity to submit ensure continued competency. Three membership in good standing, and CLE
additional information. If the Assistant commenters, while acknowledging the in veterans benefits law and procedure
General Counsel continues to deny the value of testing as a means to ensure is the best method to fulfill
application, the applicant may appeal competency, expressed concern that congressional intent as expressed in
the decision, in writing, to the General such a requirement would discourage section 101 of Public Law 109–461.
Counsel for a final decision. For the pro bono representation of indigent Although VA has authority under
reasons discussed above, the veterans. Similarly, the two most section 5904(a)(2) to ensure attorney
appropriate forum for review of the prevalent reasons provided for competence through testing, we
General Counsel’s decision denying opposition to testing was that CLE was considered the formal education and
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initial accreditation is the U.S. District necessary to maintain competency and testing already required of licensed
Court under the provisions of the APA. that testing would discourage pro bono attorneys, the potential chilling effect of
One commenter expressed concern representation of indigent claimants. further testing on pro bono
with the provision in the introduction to The majority of the remaining representation of indigent veterans, and
§ 14.629 restricting the General comments expressing opposition to the absence of complaints concerning
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29855
attorney competence in representation of representation. However, in amended As discussed above, 5 U.S.C. 500 is a
before the Department under former section 5904(a), Congress expressly statute of general applicability, enacted
law, and concluded that completion of directed VA to prescribe in regulations in 1965 and binding on nearly all
CLE requirements is a better choice for additional requirements for practice Federal agencies. In 1969, Congress
veterans, their attorneys, and VA. before the Department. In amending amended former 38 U.S.C. 3401, now
Accordingly, we will take a measured section 5904(a), Congress is presumed to section 5901, to incorporate a reference
approach in regulating the practice of have been aware of the Agency Practice to section 500. Public Law 91–21,
attorneys before the Department and Act, and, as a result, section 5904(a) as § 12(a), 83 Stat. 34 (1969). Section 5904
will amend the rule to remove the implemented by VA in § 14.629(b) is applicable only to VA and was
testing requirement and instead require should not be read as being in conflict amended in 2006. See Food and Drug
the completion of State-bar-approved with that act or the intent of Congress. Admin. v. Brown & Williamson Tobacco
CLE credits to maintain accreditation. See 2A Norman J. Singer, Statutes & Corp., 529 U.S. 120, 133 (2000). (‘‘The
We will evaluate this method of Statutory Construction § 45.12 (6th ed. meaning of one statute may be affected
ensuring competent attorney 2000) (In construing legislation, we by other acts, particularly where
representation and may revisit the issue must presume that Congress was aware Congress has spoken subsequently and
of testing at a later date. of existing law and the rules of statutory more specifically to the topic at hand.’’);
After drafting the proposed rule, we construction.). see also Pioneer Hi-Bred Int’l, Inc. v.
learned that several State bar One commenter noted that, in J.E.M. AG Supply, Inc., 200 F.3d 1374,
associations have offered, currently amending 38 U.S.C. chapter 59, 1376–77 (Fed. Cir. 2000) (It is a basic
offer, or will offer CLE courses in Congress did not remove provisions principle of statutory construction that
veterans benefits law and procedure, regarding the Agency Practice Act from ‘‘a general statute must give way to a
some of which are available in formats 38 U.S.C. 5901. Section 5901 provides, specific one.’’). Because provisions
capable of supporting distance learning ‘‘[e]xcept as provided by section 500 of incorporating section 500 were added to
for persons outside the jurisdiction. title 5, no individual may act as an agent section 5901 over 37 years before the
Other organizations offer veterans or attorney in the preparation, last amendment to section 5904(a), and
benefits law and procedure training that presentation, or prosecution of any because Congress expressly directed VA
has been approved for CLE credit by claim under laws administered by the in section 5904(a) to establish attorney
some States. Accordingly, we will Secretary unless such individual has accreditation requirements that exceed
amend § 14.629(b) to provide that an been recognized for such purposes by those in section 500, a reasonable
initial 3 hours of State-bar-approved the Secretary.’’ The commenter went on harmonization of sections 5901 and
CLE in veterans benefits law and to suggest that because Congress did not 5904 is that the reference to section 500
procedure is required for agents and amend section 5901, it did not authorize in section 5901 is for the purpose of
attorneys. Additionally, to maintain VA to exceed the requirements in 5 establishing attorney practice
accreditation, agents and attorneys U.S.C. 500, specifically bar membership requirements for VA to the extent
would be required to periodically in good standing and a written Congress has not specifically provided
complete 3 hours of State-bar-approved declaration of representation. otherwise in chapter 59.
CLE in veterans benefits law and Congress did not remove the reference One commenter stated that the
procedure. VA will review available to 5 U.S.C. 500 in section 5901; proposed testing requirement for
training as necessary to ensure however, to give effect to the attorney accreditation was inconsistent
sufficiency. Agents and attorneys commenter’s suggestion would be to with the requirement in section
applying for accreditation must satisfy ignore Congress’ amendment to section 5904(a)(2) that VA prescribe in
the initial CLE requirement during the 5904(a) requiring VA to establish as a regulations qualifications and standards
first year of accreditation and must condition of accreditation a specific of conduct consistent with the
satisfy the follow-on CLE requirement level of experience or specialized American Bar Association’s Model
every 2 years thereafter. Upon training, either of which goes beyond Rules of Professional Conduct (Model
completion of the initial and follow-on section 500’s requirements for attorney Rules). The commenter noted that the
CLE requirements, agents and attorneys practice before Federal agencies. The comment to Model Rule 1.1 states, ‘‘a
must certify in writing to OGC that they commenter incorrectly reads section lawyer need not necessarily have
have completed qualifying CLE, such 5901 in isolation from section 5904 and special training or prior experience to
certification to include the date and does not account for an applicable rule handle legal problems of a type with
time of the CLE and identification of the of construction. The provisions of which the lawyer is unfamiliar.’’
CLE provider. VA intends that agents chapter 59 must be read as a whole to Although we have decided to remove
and attorneys will include information give effect to amended section 5904. See testing as a requirement for attorney
concerning their compliance with the Splane v. West, 216 F.3d 1058, 1068 accreditation, we do not agree that VA’s
CLE requirements in the annual (Fed. Cir. 2000) (‘‘We must construe a authority to prescribe qualifications
certification required by § 14.629(b)(4). statute, if at all possible, to give effect standards for agents and attorneys is
Even though we will not require and meaning to all its terms.’’) (citing limited by the comment to Model Rule
testing for accreditation of attorneys Lowe v. Securities & Exch. Comm’n, 472 1.1.
under § 14.629(b), the question remains U.S. 181, 207–08 n.53 (1985)); see also The comment fails to distinguish
whether any additional requirements for Gonzales v. Oregon, 546 U.S. 243, 273 between the general provision in section
attorney accreditation, such as the CLE (2006) (statutes ‘‘should not be read as 5904(a)(2) and subsequent specific
requirement, are contrary to the Agency a series of unrelated and isolated provisions modifying the general
Practice Act, 5 U.S.C. 500, as some provisions’’) (citation omitted); Davis v. provision. In section 5904(a)(2),
commenters asserted. Until Congress Michigan Dept. of Treasury, 489 U.S. Congress directed VA to prescribe in
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enacted Public Law 109–461, VA’s 803, 809 (1989) (‘‘It is a fundamental regulations qualifications for
attorney accreditation requirements canon of statutory construction that the accreditation consistent with the Model
were limited to those prescribed in the words of a statute must be read in their Rules. In section 5904(a)(2)(B), Congress
Agency Practice Act, bar membership in context and with a view to their place further directed VA to establish as a
good standing and a written declaration in the overall statutory scheme.’’). condition of accreditation, a
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29856 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
requirement that an individual must and require that they possess liability applications have omitted mention of
have ‘‘such level of experience or insurance as a condition of circumstances that required further
specialized training as the Secretary accreditation. VA’s representation inquiry before we had enough
shall specify.’’ Section 5904(a)(2)(B), as regulations, like those of Social information necessary to make a
a specific provision, must be given Security, are limited by the authorizing decision regarding accreditation.
effect as against the general provision statutes unique to each agency. As Agents, unlike representatives, work
provided in section 5902(a)(2). Thus, to discussed earlier, the statute governing without the oversight and monitoring
the extent testing, or CLE, or any or any VA’s accreditation of agents and required of recognized organizations
other accreditation requirement related attorneys requires a specific level of under § 14.628(d)(1). Additionally,
to level of experience or specialized experience or specialized training in without such an expanded inquiry, OGC
training may be inconsistent with the addition to membership in good simply cannot verify that an agent is
comment to Model Rule 1.1, it is standing in a State bar, as qualification who he or she claims to be.
consistent with the specific provision in requirements for accreditation. The pilot One commenter requested that we
section 5904(a)(2)(B). program to which the commenter refers clarify whether § 14.629(b)(4) permits
Several commenters stated that testing is authorized by a specific statutory self-certification of the State bars,
of attorneys would be unnecessary and directive to the Commissioner of Social courts, and agencies before which an
redundant because attorneys, as a Security enacted in section 303 of attorney is authorized to practice. The
condition of licensing, have already Public Law 108–203. Clearly, if commenter also asked us to clarify
established a minimum level of Congress had wanted VA to adopt a whether certification is an annual
competency by completing formal legal pilot program similar to that used by the requirement.
training and passing a State bar Social Security Administration, it could Pursuant to 38 U.S.C. 5904(a)(3), VA
examination. One commenter have enacted similar authorizing must prescribe regulations requiring
questioned why VA would require the legislation. Because VA’s authority to that ‘‘each agent or attorney * * *
same testing for attorneys as is required regulate representation is limited to that provide annually * * * information
for agents who have not completed provided in chapter 59, we will make no about any court, bar, or Federal or State
similar legal education or passed a changes to the final rule based on the agency * * * to which such agent or
State-bar administered examination. To comment. attorney is admitted to practice or
the extent the comments are limited to We received two comments stating otherwise authorized to appear * * *
the proposed testing requirement, VA that it is not necessary to evaluate the and a certification by such agent or
agrees that it is appropriate at this time character of attorneys who are members attorney’’ that they are in good standing.
to limit the regulation of attorney in good standing of a State bar because We interpret the phrase ‘‘by such agent
practice before the Department to they have already met the State’s or attorney’’ to mean that self-
membership in good standing with a character and fitness requirements. VA certification is appropriate. Requiring
State bar and subsequent completion of agrees that a State bar’s comprehensive certified statements from every bar,
CLE requirements. character and fitness determination, court, or agency to which an agent or
Although Congress did not which is a prerequisite to licensure, is attorney is admitted might be onerous,
distinguish between agents and generally sufficient for practice before and some agencies and courts might not
attorneys in amending chapter 59 and VA. To fairly recognize the routinely provide such certification. We
directing VA to establish standards of comprehensive nature of a State bar believe self-certification is sufficient,
conduct and qualifications as conditions character and fitness evaluation, VA provided that the certification advises
for accreditation, formal legal education will generally accept an attorney’s VA of any change in status. VA may
and State bar membership requirements certification of membership in good verify such information as necessary,
for attorneys clearly distinguish them standing with a State bar under and false certification of good standing
from agents. As discussed above, § 14.629(c)(1)(B) as satisfactory proof of would be grounds for initiating
Congress intended that the legislation fitness to practice. Absent information disciplinary proceedings under 38 CFR
would increase standards for all to the contrary, VA will presume an 14.633. Concerning the requirements for
individuals who provide paid attorney’s continued fitness to practice periodic recertification, the plain
representation before VA. Consequently, upon the receipt of a completed VA language of section 5904(a)(3) is clear
to ensure that claimants receive the Form 21a and self-certification of that Congress intended to require
same level of competence regardless of membership in good standing in those annual re-certification. We will amend
whether they are represented by an jurisdictions in which he or she is § 14.629(b)(4) to clarify these
agent or an attorney, VA will continue licensed under § 14.629(b). Accordingly, certification requirements. Finally, we
to test agents as a condition of initial we will amend the final rule to reflect amended the regulation to clarify that
accreditation to verify their competence these changes. an agent or attorney must notify VA
to represent claimants and will require Additionally, in regard to character within 30 days of any change in status
both agents and attorneys to complete and fitness, VA finds it necessary to in any jurisdiction in which he or she
veterans benefits law and procedure differentiate between agents and is admitted to practice. This is necessary
CLE as a condition of maintaining attorneys. Because agents have not because 38 U.S.C. 5904(a)(4) prohibits
accreditation. We will amend the final completed a background investigation VA from recognizing an agent or
rule to incorporate these changes. comparable in scope to a State bar attorney who has been suspended or
One commenter remarked that VA character and fitness evaluation, VA disbarred and VA may not otherwise
should consider a system for will conduct an expanded inquiry become aware of the suspension or
accreditation similar to that used by the consisting of additional personal history disbarment until many months after the
Social Security Administration in its questions on the VA Form 21a to fact.
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pilot program. The commenter provide a more complete basis for the One commenter expressed concern
suggested that VA should accept bar Department’s determination of good that § 14.629(b)(5), which provides that
membership in good standing as character and reputation. VA’s VA will not accredit an agent or
sufficient for attorney accreditation and experience with agent applications attorney ‘‘if the individual has been
should test non-attorney representatives supports this decision, as several suspended by any court, bar, or Federal
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or State agency in which the individual requirement as it applies to agents. Prior specifically identifying, by name, any
was previously admitted and not § 14.629(b)(viii) required individuals to legal intern, law student, or paralegal
subsequently reinstated,’’ is overbroad submit relevant information concerning assisting in their claim. Thus,
in that lack of reinstatement in one physical limitations as part of the § 14.629(c)(3) merely applies current
jurisdiction following suspension and application process for claims agents. rules for practice before the Board to
reinstatement in another jurisdiction VA uses this information to determine practice before VA’s agencies of original
may simply reflect an attorney’s whether appropriate accommodations jurisdiction. For the foregoing reason,
decision not to practice in a given are necessary for administering the we also decline to exempt any legal
jurisdiction. The commenter accreditation exam to individuals with intern, law student, or paralegal, who is
recommended that VA should accredit disabilities who seek accreditation as a separately accredited by VA, from this
individuals as long as they are licensed claims agent. requirement.
to practice in one state. We proposed to revise § 14.629(c)(3) We also disagree that requiring a
The plain language of section to clarify the nature of consent required claimant to specifically identify a legal
5904(a)(4) prohibits VA from by the claimant to permit a legal intern, intern, law student, or paralegal
recognizing an individual as an agent or law student, or paralegal to assist an assisting an accredited attorney violates
attorney if such individual has been attorney in representing the claimant. the Due Process Clause of the Fifth
suspended or disbarred by any court, Several commenters expressed concern Amendment, and in particular its equal
bar, or Federal or State agency to which that requiring a claimant to provide protection component. The comment is
the individual was previously admitted written consent specifically identifying based upon the commenter’s mistaken
to practice and has not been the names of the legal interns, law belief that VSO support personnel may
subsequently reinstated. The statute students, or paralegals assisting in the assist in the representation of a claimant
contemplates a situation in which an case would be overly burdensome. One without the claimant’s consent and are
attorney has not been reinstated after commenter objected to the provision thus similarly situated but treated
suspension or disbarment because he or claiming it violated equal protection differently. Under § 14.629(c)(3), legal
she has been deemed ineligible for because the requirement does not apply interns, law students, and certified
reinstatement by the admitting to a VSO’s support staff. A final paralegals may assist in the preparation,
authority. The situation described by commenter recommended that we presentation, and prosecution of a claim
the commenter presents a slightly exempt accredited legal interns, law under the direct supervision of an
different situation in that suspension in students, and paralegals from this attorney of record, provided that the
one jurisdiction may be purely requirement. attorney obtains the claimant’s consent
derivative of the action taken by another We disagree that requiring a claimant on a VA Form 21–22a. These
jurisdiction. The suspended attorney to specifically identify any legal intern, individuals are deemed qualified to
has subsequently demonstrated fitness law student, or paralegal assisting in the represent claimants under an attorney’s
to practice in one jurisdiction and has claim is overly burdensome. The supervision as a result of their
been reinstated in that jurisdiction, and purpose of this requirement is to ensure specialized legal training. VSO support
the attorney voluntarily chooses not to that a claimant affirmatively personnel, unlike legal interns, law
seek reinstatement in the other acknowledges that a specific individual students, and paralegals assisting
jurisdiction. We do not interpret section will be working in a representative accredited attorneys, are not authorized
5904(a)(4) as precluding accreditation in capacity on his or her claim and will to assist in preparing, presenting, and
these derivative suspension or have access to the claimant’s private prosecuting claims. Accordingly, the
disbarment situations. Accordingly, we information. Section 14.629(c)(3) commenter’s equal protection concern,
will amend the rule to distinguish authorizes legal interns, law students, or that we require claimants’ consent for
between an independent suspension or paralegals to assist in the preparation, legal interns, law students, or paralegals
disbarment proceeding and a derivative presentation, or prosecution of a claim assisting accredited attorneys in
disbarment proceeding for purposes of under a duly appointed attorney. This providing representation but do not
VA accreditation. In a situation where authority allows legal interns, law require claimants’ consent for VSO
an attorney is suspended or disbarred in students, and paralegals, under the administrative personnel assisting
jurisdiction B solely based upon direct supervision of an attorney, to accredited VSO representatives, is
suspension or disbarment in jurisdiction directly engage claimants, review files, unfounded.
A and the attorney is reinstated in and appear on a claimant’s behalf at any One commenter opposed to testing
jurisdiction A, the General Counsel may hearing. Current law, 38 U.S.C. 5701(a), stated that the quality of the
accredit such individual based on an makes files, records, reports, and other examination would be dependent on the
evaluation of the particular facts and papers related to a claim confidential competency of VA Regional Counsel
circumstances of the situation. and privileged except when disclosure administering the examination and
However, in situations where an is authorized. Section 5701(b)(1) would introduce inconsistency in
attorney is suspended or disbarred in authorizes disclosure to a ‘‘duly accreditation. Another commenter
jurisdictions A and B, and neither authorized agent or representative of a expressed concern about the format of
action is derivative of the other, claimant.’’ Given that legal interns, law the examination, the manner in which
reinstatement in both jurisdictions is a students, and paralegals are authorized it would be developed, and the manner
prerequisite to VA accreditation. to represent a claimant in a limited in which it would be graded. Although
One commenter objected to VA asking capacity when supervised by an we have amended the rule to remove the
an agent or attorney seeking accredited attorney, we believe it is testing requirement for attorneys, we
accreditation for information relevant to appropriate to require the claimant to will address these comments to the
whether the applicant has any physical identify by name any legal intern, law extent that they can be construed as
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limitation that would interfere with the student, or paralegal authorized to relating to the testing of agents.
completion of the written accreditation represent the claimant. The role of Regional Counsel is
exam without further explanation of the We note that Rule 606 of the Board’s limited to administering the
purpose and relevancy of this Rules of Practice, 38 CFR 20.606, examination to prospective agents. To
information. This is not a new requires written consent by a claimant ensure nationwide access to the
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29858 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
examination, it will be offered at the authorize any individual to represent an was presented. We understand that
Regional Counsel of jurisdiction upon unlimited number of claimants. These slight delay may result because of
receipt of a complete application at the commenters seemed to interpret processing and forwarding. This section
VA Central Office. To ensure § 14.630 as a pro bono attorney in no way prohibits a claimant from also
uniformity, the Regional Counsel will representation provision. Two forwarding a copy of the form to the VA
administer the examination according to commenters recommended that we facility that is handling the claim. A
OGC’s standard procedures. To ensure amend § 14.630 to authorize any final situation may arise where a
objectivity, the examination will be unaccredited individual to represent an claimant moves from the jurisdiction of
offered in a multiple-choice format and unlimited number of individuals so long one regional office to the jurisdiction of
be graded by OGC personnel at VA’s as a fee is not charged. We will not another regional office. In that instance,
Central Office. make any changes to the rule based on the claim and case file will be
The sole purpose of VA’s these comments. transferred to the new regional office of
accreditation examination is to VA has long interpreted 38 U.S.C. jurisdiction, and the claimant should
objectively determine whether an agent 5903, the statutory authority for treat the new regional office as the
has the qualifications necessary to § 14.630, as a provision under which ‘‘agency of original jurisdiction where
provide competent representation before ‘‘any individual’’ may represent a the claim is presented.’’
the Department. To that end, VA’s claimant on a one-time-only basis on a
accreditation examination has been ‘‘particular claim’’ for benefits. The Section 14.631—Powers of Attorney;
developed to fairly assess the minimum individual must generally seek Disclosure of Claimant Information
level of competence required for accreditation under 38 U.S.C. 5902 We received five comments regarding
practice before the Department. (service organization representatives) or proposed § 14.631. One commenter
Examination questions have been 5904 (agents and attorneys) to provide expressed concern that under
centrally developed by OGC’s subject representation for a claimant on any § 14.629(b), claimants currently
matter experts before incorporating other claim. VA does not have authority represented by attorneys would have
them into the examination. under section 5903 to permit their representation revoked on the
We received one comment regarding individuals to represent an unlimited effective date of the new regulations
the term ‘‘agency of original number of claimants without VA unless and until a VA Form 21–22a is
jurisdiction’’ as it is used in § 14.629. accreditation as the commenters completed by the claimant. The
The introduction to § 14.629 provides suggest. See 38 U.S.C. 5901 (‘‘no commenter, while recognizing VA had
that upon a determination that an individual may act as an agent or good reasons to have a standardized
individual meets the requirements for attorney in the preparation, consent form, stated that requiring the
accreditation in paragraph (a) or (b) of presentation, or prosecution of any form to allow representation is a
this section, VA will provide claim * * * unless such individual has different matter because the claimants
notification of accreditation authorizing been recognized for such purposes by have a contract, on file with VA,
the preparation, presentation, and the Secretary’’) and 5903 (authorizing indicating appointment of an attorney as
prosecution of claims before ‘‘an agency VA to permit representation on a their representative. The commenter
of original jurisdiction and the Board of ‘‘particular claim’’ only). We addressed recommended that we amend the rule to
Veterans’ Appeals.’’ One commenter, a the issue of attorney representation of eliminate the requirement that a VA
VSO, expressed concern that language claimants on a pro bono basis above Form 21–22a be submitted as a
in the introduction to § 14.629 was not regarding § 14.629. requirement for representation,
sufficiently broad to authorize practice Section 14.630(a) requires a person particularly for claimants represented
before the Veterans Benefits authorized to provide representation on by attorneys as of the effective date of
Administration’s Appeals Management one claim to file a VA Form 21–22a the rule. We will not make any changes
Center and Resource Centers where ‘‘with the agency of original jurisdiction to the rule based on this comment.
claims may be forwarded for where the claim is presented.’’ One Section 14.631(a) requires that
disposition. The commenter commenter requested that we clarify the claimants use a standard form, VA Form
misunderstands VA’s intent. filing requirement because the case may 21–22a, to appoint individuals
In drafting the introduction to be pending at a Resource Center, the providing representation on a particular
§ 14.629, VA’s intent was to clarify that Appeals Management Center, or the claim under § 14.630, representatives,
representation of claimants, and the Board when the claimant seeks agents, and attorneys, and to authorize
rules governing such representation, representation. The commenter the disclosure of claimant information.
were not limited to claims before the recommended that the form be filed We have authority under the
Board. VA’s current policy is that with the VA facility in possession of the amendments to 38 U.S.C. Chapter 59 in
authorization to provide representation claim. Public Law 109–461 to regulate agent
on a claim decided by an agency of We decline to change § 14.630(a) to and attorney practice before the
original jurisdiction includes the require a claimant to file a Department, and we interpret this
inherent authority to provide representation form with the VA facility authority as permitting us to exceed the
representation before other VA facilities in possession of the claim. When a limitations in 5 U.S.C. 500 by, among
to which the claim may be forwarded claimant files a claim with their local other things, requiring the use of a
for disposition, including, but not VA regional office they presumably standard form to indicate appointment.
limited to the Appeals Management know where they filed the claim and See 38 U.S.C. 5904(a)(2) (‘‘[t]he
Center and Resource Centers. We will may have established contacts with VA Secretary shall prescribe in regulations
amend the final rule for greater personnel. We recognize that there will * * * qualifications and standards of
clarification. be instances in which the claim has conduct for individuals recognized
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been temporarily moved to another VA under this section’’). We also interpret
Section 14.630—Authorization for a facility. However, it will be easier for current law as requiring a claimant’s
Particular Claim the claimant if he or she files the written authorization before VA can
A number of commenters representation form with the agency of release information protected by the
recommended revising § 14.630 to original jurisdiction where the claim Privacy Act, and 38 U.S.C. 5701 and
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7332, and we have determined that VA conduct or other law.’ ’’ We note that affect their physical or mental health.
Form 21–22a is legally sufficient to under State bar rules attorneys will We agree that VA’s withdrawal
authorize release of such information. generally have duties in addition to provisions should not conflict with
This is reflected in VA’s current policy those prescribed by VA and that these other provisions intended to protect
of releasing claimant information to rules typically contain the Model Rule claimants from harmful information.
attorneys only upon receipt of a VA 1.6 provision. Section 14.632(d) Accordingly, we will amend § 14.630 to
Form 21–22a signed by the represented prohibits attorneys, in representing provide that upon withdrawal from
claimant. claimants before VA, from violating the representation, all documents provided
We understand the need to ensure rules of professional conduct of the by VA must be returned to the agency
continuity of representation, and it is jurisdictions in which they are licensed of original jurisdiction or pursuant to
not our intent to revoke representation to practice law. Accordingly, we do not the claimant’s request, provided to the
on the effective date of this rule if we agree that it is necessary to add the organization or individual taking over
do not have a VA Form 21–22a signed model language and will not make any the representation. See Model Rules of
by the agent or attorney on file. Rather, changes to the rule based on the Prof’l Conduct R. 1.16(d) (steps to take
the requirement pertains to claimants’ comment. upon termination of representation).
designation of agents and attorneys One commenter disagreed with the However, we do not agree with the
occurring on or after the effective date requirements in § 14.632(c) to notify the commenter’s suggestion that we expand
of this rule. Accordingly, for all agency of original jurisdiction of the rule to require individuals to
representation before the Department withdrawal from representation and to provide all documents, including those
initiated on or after the effective date of surrender of documents provided by VA obtained from the claimant and other
this regulation, June 23, 2008, VA will in the course of the representation. sources, to the agency of original
not recognize the designation of an Concerning the requirement to notify jurisdiction. We intend that individuals
agent or attorney for purposes of the agency of original jurisdiction in the providing representation will maintain
representation or disclose claimant event of withdrawal from or dispose of these documents according
information to the agent or attorney representation, the commenter stated, to State law.
without a properly executed VA Form among other things, that the provision Two commenters stated that
21–22a on file. As to representation does not account for the fact that the § 14.631(c) and (d) fails to ‘‘address
initiated before the effective date of the claim or appeal could be at a facility VA’s role once a power of attorney has
regulation, because Federal law other than the agency of original been withdrawn or revoked.’’ The
prohibits release of claimant jurisdiction. The commenter’s commenters suggested that the final rule
information without claimants’ written experience also indicates that the should address whether VA intends to
authorization, VA will not disclose such agency of original jurisdiction ‘‘does not provide timely notice to all concerned
information to a claimant’s attorney notify other VA facilities or update the parties in such situations and, if so,
unless the claimant has authorized the necessary databases in a timely describe how VA would provide such
disclosure on a Form 21–22a. manner.’’ The commenter suggested that notice. Commenters further stated that
We also disagree with the suggestion VA amend the final rule to require the without timely notice by VA, claimants
that VA should accept non-standard individual or organization desiring to may be confused as to who represents
authorizations for the release of withdraw from representation to notify them on a particular claim and seek
claimant information and will not make the VA facility in possession of the advice from a party who is no longer
any changes based upon the comment. claim or appeal in addition to the their representative.
VA has previously accepted non- agency of original jurisdiction and the When a power of attorney is
standard authorizations for the release claimant. VA agrees that additional withdrawn or revoked, VA’s role is to
of claimant information from attorneys, notification upon withdrawal from ensure that that communications
but found many of these to be legally representation would be helpful. regarding an affected claim or claims are
insufficient requiring additional review Accordingly, we will amend the final provided only to the appropriate
and communication with attorneys rule to incorporate the suggestion. representative of record. It is the
delaying both the processing of the Concerning the requirement for responsibility of the claimant and the
claim and the release of information to surrender of documents provided by VA organization, individual providing
attorneys. upon withdrawal of representation, the representation on a particular claim
One commenter approved of the commenter expressed support for the under § 14.630, representative, agent, or
requirement in § 14.631(a) that a person requirement in the proposed rule and attorney to ensure that the claimant
providing representation under suggested that it be extended to all fully understands the scope of
§ 14.630, or an accredited documentation belonging to the representation, particularly when an
representative, agent, or attorney must claimant. The commenter also suggested agent or attorney is providing limited
sign the VA Form 21–22a to indicate that VA provide guidelines for representation on a particular claim
acceptance of appointment for purposes situations in which an individual under § 14.631(f)(2). Moreover, a
of representation. The commenter stated providing representation under claimant and his or her organization,
that this provision would help to ensure § 14.630, representative, agent, or individual providing representation on
that claimants contact VSOs in a timely attorney loses contact with a clamant, a particular claim under § 14.630,
manner if they need assistance. and how long the documentation should representative, agent, or attorney are in
We received a comment concerning be maintained for the protection of the a better position than VA to understand
the circumstances under which an claimant and the representative. who represents whom on a given claim.
attorney may terminate representation. Another commenter suggested it might Therefore, VA will not provide
The commenter requested that we add not be appropriate to require that additional notification of withdrawal or
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language similar to that provided in individuals withdrawing from revocation to claimants or
Model Rule 1.6 requiring an attorney to representation return all documents to representatives. Additionally, the rule is
withdraw from representation when the claimant because several provisions not intended to preclude withdrawal
‘‘representation will result in a in 38 CFR part 1 proscribe disclosing from representation until a claimant
‘violation of the rules of professional information to claimants if it would obtains alternative representation. After
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29860 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
an organization, individual providing when necessary, communicate with the advocacy on behalf of a claimant
representation on a particular claim other individuals or organizations contesting an initial VA decision on a
under § 14.630, representative, agent, or representing the claimant before the claim. However, we do not interpret the
attorney complies with § 14.631(c), in Department. In the event that an agent amendments to chapter 59 as expressing
part by providing time for the claimant or attorney withdraws from Congress’s intent to create a new
to obtain alternative representation or representation on a particular claim and adversarial system of adjudication. In
proceed pro se, the organization or the claimant has an existing power of amending section 5904, Congress
individual may withdraw from attorney in favor of a VSO, specified that claimants may pay for the
representation. representation on the particular claim ‘‘services’’ of agents and attorneys with
The commenters also expressed defaults to the VSO, and, as a result, VA respect to proceedings before the
concern about § 14.631(f)(1) and (f)(2), would send future information on the Department after the date on which a
under which agents and attorneys may particular claim to the VSO. It is the Notice of Disagreement is filed in the
limit the scope of their representation to shared obligation of the claimant and case. Congress did not define the scope
a particular claim. They suggested that the organization, representative, agent, of the services provided by agents and
the final rule address VA’s provision of or attorney, to fully communicate attorneys, except to specify that they
timely notice to all individuals that a concerning any modification to the involve, among other things, assisting
new power of attorney is limited to a scope of representation. claimants who challenge a VA decision.
particular claim and that the new power Commenters also expressed concern We interpret these provisions to mean
of attorney does not pertain to the that VA lacked the capacity to that VA’s adjudication system shall be
veteran’s other claims. VA disagrees distinguish between a claimant flexible enough to permit agents and
with the premise that the responsibility represented by an agent or attorney for attorneys to act as advocates for their
for notifying claimants and other all purposes and one represented by an client in contested matters. Accordingly,
interested parties of arrangements to agent or attorney only on one particular we will modify § 14.632(a)(2) to remove
provide limited representation rests claim. Because such inability could the requirement that individuals
with VA and will not make any changes result in miscommunication between providing representation shall conduct
based on the comments. In enacting the VA, the claimant, and the themselves in accordance with the non-
amendments to 38 U.S.C. chapter 59, representative, the commenters adversarial nature of practice before VA.
Congress provided claimants for VA suggested that VA develop such The remaining provisions in § 14.632,
benefits choice in representation. It is capability. VA’s current benefits which are comprehensive in prohibiting
the claimant who designates the source delivery database does not have the disruptive conduct, are sufficient to
and scope of representation on VA Form capability described by the commenter, protect the VA system.
21–22a and enters into fee agreements, but VA has procedures in place to One commenter suggested that we
not VA. Moreover, § 14.631 clearly communicate with organizations and amend § 14.632(c) to proscribe
identifies the effect of withdrawal from individuals providing a claimant with ‘‘knowing’’ violations. The commenter
representation and the effect of a representation on different claims. VA is speculated that VSO representatives are
revocation of a power of attorney, a currently developing a replacement not familiar with the Model Rules and
concept that organizations and database, but it is unknown at this time could unknowingly violate them.
accredited individuals are obligated to whether the capability described will be First, the Model Rules have not been
follow. included in the final version. adopted, nor do they govern practice
Under § 14.631(f)(1), receipt of a new before VA. Section 5904(b) requires VA
power of attorney by VA, without Section 14.632—Standards of Conduct to prescribe regulations concerning
limitation, revokes existing powers of for Persons Providing Representation standards of conduct for practice before
attorney. Generally, there can be only Before the Department VA that are consistent with the Model
one power of attorney. As a result, the We received a number of comments Rules. In other words, Congress directed
organization or individual is appointed opposing the requirement in VA to take them into account when
for representation on any and all claims § 14.632(a)(2) that individuals establishing standards of conduct and
the claimant has before the Department. representing claimants ‘‘conduct qualifications for practice before VA.
Under § 14.631(f)(2), however, an agent themselves in accordance with the non- While 38 U.S.C. 5902 and 5903 subject
or attorney may limit the scope of his adversarial nature of the practice before representatives and individuals to
or her representation to a particular the agency of original jurisdiction and suspension or exclusion from practice
claim by describing the limitation on the Board.’’ One commenter suggested before VA as prescribed by 38 U.S.C.
VA Form 21–22a. Under this section, that attorneys are by nature adversarial 5904(b), neither section adopts the
organizations or individuals with an and that VA incorrectly assumed Model Rules. Rather, in implementing
unlimited power of attorney retain Congress intended them to act in a non- the statute, VA is establishing standards
representation for all claims before VA adversarial way before VA. The same of conduct for all persons representing
with the exception of the particular commenter also suggested that an claimants before VA in § 14.632. These
claim indicated on the VA Form 21–22a. attorney’s ethical obligation to represent standards are based upon the Model
Agents and attorneys advising claimants a client with ‘‘zeal’’ and the proposed Rules and we intend to look to the
concerning limited representation are regulation’s mandate that attorneys commentary to the Model Rules and
obligated to exercise care in ensuring adhere to the non-adversarial procedure relevant administrative and judicial
that claimants understand the precise cannot co-exist. Two commenters opinions on the Model Rules when
scope of the representation to be recommended that agents be permitted interpreting them. Section 14.632(d) is
provided by the agent or attorney, and to represent claimants with ‘‘zeal,’’ clear that attorneys must additionally
that which will be provided by other presumably, in an adversarial manner. comply with the rules of professional
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individuals or organizations, if any. In We agree that Congress did not intend conduct of any jurisdiction in which
such cases, the agent or attorney should to prohibit ‘‘adversarial’’ conduct to the they are admitted to practice to the
inquire whether the claimant has an extent that such conduct meets the extent that those rules do not conflict
existing power of attorney appointing a standard established by VA in 38 CFR with VA’s regulations. Because the
VSO as his or her representative, and, 14.632 and is consistent with ethical Model Rules have not been adopted, the
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commenter’s concern that a non- Therefore, we will remove ‘‘excessive’’ there is no universal definition of
attorney representative may from the regulation text. ‘‘professional’’ and that determining
unknowingly violate them is We disagree, however, that there is what is ‘‘unprofessional’’ for purposes
unfounded. ambiguity in our use of the term of enforcing VA’s standards of conduct
The commenter also expressed ‘‘unreasonable’’ and will not change the would be difficult absent precise
concern that the General Counsel would rule based upon the comment. As an guidance. We agree and will remove
discipline a representative based upon initial matter, 38 CFR 14.636(e) lists engaging in ‘‘unprofessional’’ conduct
an unknowing violation of the Model eight factors that VA considers when as violation of VA’s standards of
Rules and recommended that we amend reviewing a fee agreement for conduct.
§ 14.633(c) to clarify that disciplinary reasonableness. They are the same
action is appropriate only for knowing factors that the Board considered under Section 14.633—Termination of
violations. An individual representing a former law, and we did not intend any Accreditation or Authority To Provide
claimant before VA should be capable of substantive change when we moved Representation Under § 14.630
comprehending what is required of those criteria to 38 CFR Part 14. Second, We received numerous comments
them under the standards of conduct in § 14.636(f) implements the statutory regarding the proposed regulations
§ 14.632 and act accordingly. However, presumption that fees of 20 percent or governing suspension and cancellation
upon further review, we believe that the less are presumed reasonable. The of accreditation under 38 CFR 14.633. In
General Counsel should consider the presumption of reasonableness, general, commenters expressed concern
circumstances surrounding a violation combined with the criteria for reviewing about the role of OGC in suspension and
of those standards and have sufficient fee agreements, provides agents and cancellation proceedings, suspension
discretion to impose the proper remedy. attorneys sufficient notice concerning and cancellation procedures, the types
While we opt not to add a knowledge the reasonableness of fees. of sanctions that could be imposed, and
element § 14.632(c), we will address the A number of commenters also the grounds for suspension and
General Counsel’s discretion in expressed concern about § 14.632(c)(9) cancellation of accreditation.
suspension and cancellation of and requested clarification of the ‘‘acts We received ten comments expressing
accreditation proceedings in § 14.633(c). or behavior prejudicial to the fair and concern about OGC’s role in
One commenter expressed concern orderly conduct of the administrative accreditation matters. Under proposed
that § 14.632(b)(2), which requires proceedings before VA.’’ While § 14.633, the Assistant General Counsel
individuals representing claimants § 14.632(c)(7) concerns an individual’s managing VA’s accreditation program
before VA to ‘‘act with reasonable obligation to provide prompt investigates and presents disciplinary
diligence and promptness in representation to a claimant, matters to a hearing officer and forwards
representing claimants,’’ fails to clearly § 14.632(c)(9) concerns an individual’s the hearing officer’s findings to the
define what constitutes a ‘‘prompt’’ use of dilatory or obstructive tactics General Counsel with a
response. The commenter also sought during representation. Such tactics recommendation for a final decision. A
clarification of ‘‘good cause’’ under might include advising a claimant to commenter questioned whether the
§ 14.632(c)(7) and as it relates to withhold cooperation, filing duplicative Assistant General Counsel should have
§ 14.632(b)(2). The meaning of pleadings, unnecessarily disrupting responsibility for both the prosecutorial
‘‘prompt’’ and ‘‘good cause’’ for hearings, intentionally misleading function and the adjudicative function,
purposes of this provision cannot be adjudicators, or other tactics that cause recommending a final decision, in
defined according to a set of criteria, unnecessary delay. In our view, this disciplinary proceedings. According to
such as particular number of days, given provision is sufficiently clear to put the commenter, the procedure in
the variety of circumstances that may individuals on notice that they cannot § 14.633 ‘‘raises the perception of
arise in claim adjudication. Rather, we employ such tactics when providing unfairness or conflict of interest in
intend only that individuals interacting representation in a proceeding before cancellation proceedings.’’ The
with VA in a representational capacity the Department. Accordingly, we will commenter recommended that we
be ready and quick to act as the not make any changes based upon the amend the rule to provide a more
occasion demands. We expect comments. independent disciplinary counsel to
individuals representing claimants One commenter recommended that investigate and present VA’s case in
before VA will make reasonable efforts we amend § 14.632(c)(10) to clarify that suspension and cancellation
to expedite the administrative process disclosure of a claimant’s information to proceedings. The commenter also
and not use dilatory tactics. When VA paralegals and other support staff is not recommended that the rule explicitly
requests information from a claimant or prohibited and not a violation of VA’s provide that the presiding hearing
his or her representative, reasonable standards of conduct. We disagree and officer ‘‘not directly or indirectly report
efforts should be made to respond to will not make any changes based on the to, or be employed under, the General
VA’s request as soon as practicable as comment. As discussed above regarding Counsel or others designated to decide
this is in the best interest of the § 14.629(c)(3), a claimant must disciplinary matters’’ and ‘‘that the
claimant. This section is intended to put specifically authorize a legal intern, law hearing officer not be a VA employee.’’
all representatives on notice that student, or paralegal to assist an Other commenters also expressed
unreasonable delay will not be attorney in providing representation. concern about the General Counsel’s
tolerated. The change recommended by the broad authority in accreditation matters.
One commenter stated that commenter would conflict with One commenter stated that there was an
§ 14.632(c)(5), which prohibits agents § 14.629(c)(3) and interfere with our inherent conflict with the same entity
and attorneys from entering into fee obligation to protect the confidentiality making accreditation and disbarment
agreements that are ‘‘clearly of claimants’ information. decisions. Another commenter
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unreasonable [or] excessive,’’ is One commenter opposed suggested that OGC, as his ‘‘adversary,’’
ambiguous. We agree in part and § 14.632(c)(11), which prohibits, among would use the authority under § 14.633
disagree in part. First, the term other things, a claimant’s representative to find that he was not competent to
‘‘excessive’’ is redundant because any from engaging in ‘‘unprofessional’’ represent claimants before the
excessive fee will be ‘‘unreasonable.’’ conduct. The commenter suggested that Department. One individual generally
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suggested that concentration of recommendation, will suspend or appearance or perception of a conflict of
accreditation authority in OGC invited revoke the recognition of such attorney interest. Accordingly, we will not make
abuse. To remedy the potential for and/ or agent’’). further changes to the proposed rule
or perception of conflict, one Management of VA’s accreditation based on the comments.
commenter suggested that VA appoint program is a proper function of OGC. We received three comments
an independent body, not under the The office is staffed by attorneys who concerning the Assistant General
supervision of the General Counsel, to have the necessary expertise to Counsel’s notice in disciplinary
conduct initial investigations, hold administer the program and these proceedings under § 14.633. One
hearings, and make accreditation attorneys are not involved in the commenter suggested that we amend the
decisions. Another commenter stated adjudication of claims before VA’s rule to provide notice and opportunity
that the General Counsel, as the agencies of original jurisdiction or the to respond to allegations of misconduct
Secretary’s counsel of record before the Board where accredited individuals or incompetence prior to initiating an
U.S. Court of Appeals for Veterans provide representation. Further, VA inquiry. Another commenter suggested
Claims, would be biased, or at least does not have authority to regulate the that we additionally provide ‘‘remedial
conflicted, in making disciplinary practice of individuals before the Court notice’’ under § 14.633. Such notice
determinations as to whether an of Appeals for Veterans Claims and the would advise the individual of the
attorney’s conduct was unprofessional OGC attorneys that represent VA before infraction and provide an opportunity
or that an attorney’s representation that court are under the supervision of for the individual to correct the
lacked competence; therefore, such a separate Assistant General Counsel offending behavior in lieu of formal
decisions should be decided by an who is not involved in administration of disciplinary proceedings. Finally, a
independent third party, not the the accreditation program. The commenter stated that an individual
commenter’s opposing counsel. commenters did not raise any issue of who requests a disciplinary hearing
actual conflict or bias sufficient to should receive all information about the
It is well-settled that a Federal agency
disturb VA’s long-standing practice of complaint, including its source.
may police the behavior of attorneys We agree that the notice provided to
managing the accreditation program in
and other professionals practicing individuals in disciplinary proceedings
OGC. Nonetheless, we agree that the
before it. See Polydoroff v. Interstate could be expanded to improve the
process for suspending or cancelling
Commerce Comm’n, 773 F.2d 372, 374 process and, consistent with current
accreditation can be improved to
(D.C. Cir. 1985). Moreover, the minimize the appearance of conflict and practice, may reduce the number of
combination of investigative and bias. To that end, we will amend the formal inquiries resulting from
adjudicative functions in a single entity rule to clarify that the hearing officer inadvertent acts or technical violations.
to regulate the conduct of professionals, will not directly or indirectly report to, Accordingly, we will amend the rule to
as proposed in § 14.633, without more, or be employed under, the General provide that the Assistant General
does not violate due process. In Withrow Counsel or the head of any VA agency Counsel, before deciding whether to
v. Larkin, 421 U.S. 35, 56 (1975), the of original jurisdiction before which the conduct an inquiry under § 14.633, will
Supreme Court held, ‘‘[i]t is also very individual provides representation. inform the individual of the allegations,
typical for the members of To further insulate the General potential violations of law, and the
administrative agencies to receive the Counsel’s adjudication of suspension or source of the complaint, and will
results of investigations, to approve the cancellation decisions from provide the subject with an opportunity
filing of charges or formal complaints investigation, prosecution, and fact to respond. Additionally, we will
instituting enforcement proceedings, finding, we will amend the rule to amend the rule to provide that when
and then to participate in the ensuing remove the procedural requirement in appropriate, including but not limited to
hearings. This mode of procedure does proposed § 14.633(f) that the Assistant situations when the seriousness of the
not violate the Administrative General Counsel provide a violation does not justify an inquiry
Procedure Act, and it does not violate recommendation on a final decision to because no harm results to the claimant
due process of law.’’ The Secretary of the General Counsel after reviewing the or VA, the Assistant General Counsel
Veterans Affairs may lawfully delegate record provided by the hearing officer. will provide an opportunity for the
authority for accreditation matters to Instead, the rule provides that the subject to correct the offending behavior
OGC. 38 U.S.C. 5904 (Secretary’s hearing officer shall submit the entire before deciding whether to conduct an
authority to recognize individuals for hearing transcript, any pertinent records inquiry. This clarification reflects
practice before the Department); 38 or information, and a recommended current practice in that the Assistant
U.S.C. 512 (Secretary’s delegation finding to the Assistant General Counsel General Counsel provided notice and
authority concerning decisions under within 30 days after closing the record. opportunity for remedial actions prior to
laws administered by VA). The General Participation of the Assistant General initiating formal inquiries in some cases
Counsel has made the final decision on Counsel following the investigation and under former law.
matters of accreditation concerning prosecution of any disciplinary matters We received two comments regarding
representatives, agents, and attorneys will be limited to providing the absence of suspension as a sanction
since 1954 without being challenged administrative support to the hearing in proposed § 14.633. One commenter
based upon evidence of actual conflict officer in compiling the record and questioned the omission of suspension
of interest or bias. See 38 CFR 14.629 forwarding it to the General Counsel from proposed § 14.633 because section
(1954) (‘‘[a]ny cause considered with the hearing officer’s 5904(b) expressly provides that VA may
sufficient to reject the application of an recommendation. suspend or exclude individuals from
attorney or agent or to cancel The amendments described above, practice before the Department and
recognition previously granted will be which ensure a neutral hearing officer stated that VA’s failure to include the
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reported through the Chief Attorney to and insulate the General Counsel’s lesser sanction of suspension is an
the General Counsel for final adjudicative decision from the unreasonable interpretation of the
determination’’); 38 CFR 14.637 (1954) investigative and prosecutorial statute. Another commenter disagreed
(‘‘[i]f the charge or charges be sustained, functions of the Assistant General with VA’s use of terms ‘‘cancel’’ and
the General Counsel if he concurs in the Counsel, are sufficient to minimize the ‘‘terminate’’ in § 14.633 when the statute
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29863
provides that ‘‘the Secretary may it treated VSO representatives and claims are not needlessly delayed.’ ’’ Id.
suspend or exclude.’’ The commenter agents and attorneys the same for at 19 (citations omitted).
recommended that VA use the statutory purposes of discipline. In amending VA’s definition of ‘‘frivolous’’ in
terms and specify several kinds of section 5904(b), Congress did not § 14.633(b)(4) is based on Model Rule
discipline with the most severe sanction distinguish between paid and unpaid 3.1. In our view, the regulation is
being exclusion from practice before representation. Further, under the plain sufficiently clear to provide notice of
VA. This commenter also recommended language of 38 U.S.C. 5902(a)(2), VSO prohibited conduct. Additionally, were
that the timing and methods of seeking representatives ‘‘shall be subject to the VA to discipline a representative, agent,
reaccreditation be specified. [disciplinary] provisions of section or attorney for filing a frivolous claim,
We agree that suspension may be 5904(b) of this title on the same basis and such action were appealed to the
appropriate in cases involving as’’ an agent or attorney accredited Board, precedent opinions of the Court
extenuating circumstances or where the under section 5904(a). of Appeals for Veterans Claims and
misconduct is not so severe as to Several commenters expressed Court of Appeals for the Federal Circuit
warrant the harsher penalty of canceling concern with § 14.633(c)(4), which adds would control. In the Senate
accreditation. On October 12, 2007, VA the submission of a frivolous claim, Committee’s report, it quoted Abbs v.
published in the Federal Register (72 issue, or argument as grounds for Principi, 237 F.3d 1342, 1345 (Fed. Cir.
FR 58009) a final rule amending suspension or exclusion from practice 2001), in defining frivolous arguments
§ 14.633 to provide for suspension of before VA. Two commenters stated that or issues as those ‘‘ ‘that are beyond the
accreditation as a lesser sanction for all veterans are entitled to reasonable contemplation of fair-
conduct prohibited by section 5904. The representation and that it is VSO policy minded people.’ ’’ S. Rep. No. 109–297,
amendments provide that the General to present all claims to VA for at 19–20. In Abbs, the court also noted
Counsel may suspend accreditation for processing, even if the claimant does that an action is frivolous when the
a definite period or until the individual not have evidence supporting a grant of individual providing representation
satisfies the conditions established by benefits. These commenters are ‘‘has significantly misrepresented the
the General Counsel for reinstatement. concerned that VSO representatives law or facts, or has abused the judicial
The General Counsel will reinstate might be held responsible for claims process by repeatedly litigating the same
suspended accreditations at the end of and arguments submitted by claimants issue in the same court.’’ Abbs, 237 F.3d
the period of suspension or upon directly to VA without the knowledge of at 1345.
verification that the individual has the representative or VSO. They also
satisfied the conditions for Comment 2 to Model Rule 3.1 is
expressed concern about the definition instructive concerning whether filing a
reinstatement. The General Counsel’s
of ‘‘frivolous’’ in VA’s regulation. Two claim when all the facts are not known
decision to suspend or cancel an
commenters complained that the rule or all the evidence is not fully
individual’s accreditation will be based
does not clearly define ‘‘good faith developed can be regarded as frivolous:
on the facts and circumstances of the
argument’’ and questioned whether an The filing of an action or defense or similar
particular case, with suspension being
argument could shift from being non- action taken for a client is not frivolous
appropriate in cases involving
frivolous to frivolous. The commenters merely because the facts have not first been
extenuating circumstances or less
all noted the tension between the need fully substantiated or because the lawyer
egregious conduct not warranting
to file a claim to gain the earliest expects to develop vital evidence only by
permanent cancellation. discovery. What is required of lawyers,
VA’s use of the terms ‘‘cancel’’ or possible effective date and the need to
determine whether a claim, issue, or however, is that they inform themselves
‘‘terminate,’’ instead of ‘‘exclude,’’ in about the facts of their clients’ cases and the
§ 14.633 is intentional. In section argument is frivolous.
applicable law and determine that they can
5904(b), the terms ‘‘suspend’’ and A veteran’s right to representation make good faith arguments in support of
‘‘exclude’’ refer to the General Counsel’s under 38 U.S.C Chapter 59 does not their clients’ positions. Such action is not
decision to temporarily or permanently include the right to representation for frivolous even though the lawyer believes
prohibit an individual from providing frivolous claims. The plain language of that the client’s position ultimately will not
representation before the Department. section 5904(b)(6), made applicable to prevail. The action is frivolous, however, if
Accreditation is analogous to a license representatives by section 5902(b)(2), the lawyer is unable either to make a good
to practice before VA, which the provides that the Secretary may suspend faith argument on the merits of the action
or exclude agents and attorneys who taken or to support the action taken by a good
General Counsel suspends, cancels or faith argument for an extension, modification
terminates. The General Counsel does present a frivolous claim, issue, or
or reversal of existing law.
not ‘‘exclude’’ an accreditation. argument. In the Committee Report
Two commenters disagreed about the accompanying the predecessor bill to S. Model Rules of Prof’l Conduct R. 3.1
provisions in § 14.633 that subject VSO 3421, S. 2694, the Senate Committee on cmt. (2000) (emphasis added). Like
representatives to suspension or Veterans’ Affairs specifically recognized agents and attorneys, VSO
exclusion from practice before VA on the adverse impact that frivolous claims representatives must inform themselves
the same grounds as apply to agents and filed by service organizations have on about the facts of each case and the
attorneys. The commenters found it VA’s system of adjudication. See S. Rep. applicable law, and before providing
‘‘inherently inequitable’’ that the No. 109–297, at 17 (2006) (‘‘service further representation, determine
proposed regulation did not distinguish organizations must ensure that * * * whether they can make a good faith
between individuals who provide paid frivolous claims are removed so that argument in support of a claim. In this
representation and those who do so valid claims are not needlessly context, VA interprets ‘‘good faith’’ as
without charge. We disagree and will delayed’’). Noting the growth in the ‘‘honesty of purpose’’ and ‘‘freedom of
not change the rule based on these number of claims filed with VA, the intention to defraud.’’ Black’s Law
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comments. Committee resolved that ‘‘requiring all Dictionary 477 (6th ed. 1991). In the
All claimants for VA benefits are veterans’ representatives to advocate event that a good faith argument cannot
entitled to responsible, qualified responsibly, by avoiding frivolous be made, representatives, agents, and
representation, and VA did not propose claims, arguments, or issues, could be of attorneys must withdraw from
any change to § 14.633 to the extent that significant help in ensuring that ‘valid representation or assume the risk of
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29864 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
suspension or exclusion from further unethical practice’’ may be grounds for of specific criteria demonstrating a lack
practice before VA. suspension or exclusion from practice of competence would necessarily be
The commenters also asserted that before VA, is too broad and allows VA incomplete; however, we will amend
certain unspecified State and County to disaccredit representatives for any the final rule to provide that a lack of
veterans agencies are prohibited by unlawful practice, such as speeding. the degree of competence required will
State and local law from refusing to Section 14.633(c)(7) is intended to be based on the factors discussed in the
represent veterans seeking benefits. As a provide the General Counsel with current commentary to Model Rule 1.1.
result, the commenters claim that VA’s authority to cancel accreditation for any Concerning consistency in
regulation would be in conflict with unlawful, unprofessional, and unethical determining whether a representative
State law. Without reviewing the practice adversely affecting an demonstrates a lack of the degree of
specific State and local laws in individual’s fitness for practice before competence required to prepare,
question, it is difficult to respond to this VA. Despite the fact that current present, and prosecute a claim, the
comment. However, to the extent that § 14.633(c)(4) has contained similar investigation of such allegations is
the existence of a State or local law language for many years, VA has never centralized with the Assistant General
requiring an organization to provide used this authority to disaccredit Counsel managing VA’s accreditation
representation conflicts with the individuals for traffic violations or other program under § 14.633. Centralization
prohibition on the filing of frivolous conduct unrelated to fitness to practice will result in uniform application of the
claims under section 5904(b)(6) and 38 before VA. However, for the reasons disciplinary standards in § 14.633.
expressed above, we will strike the term One commenter expressed concern
CFR 14.633(c)(4), we do not agree that
‘‘unprofessional’’ and amend the final about the provision in § 14.633(e)
a change is necessary. Federal law
rule to clarify that that the General requiring VA to initiate an inquiry
generally preempts the application of ‘‘upon receipt of information from any
Counsel’s authority to cancel
State law by virtue of the preemption source.’’ According to the commenter,
accreditation for unlawful and unethical
doctrine. See U.S. Const. art. VI, cl. 2. without specific guidelines as to what
practices is limited to conduct adversely
Despite the fact that Congress did not type of information VA would act upon,
affecting an individual’s fitness for
expressly command that State laws VA will be overwhelmed with
practice before VA.
regarding representation would be Three commenters were concerned allegations of incompetent
superseded by those in 38 U.S.C that in proposed § 14.633(d) providing representation, some of which could be
Chapter 59, Congress’ intent can be that accreditation shall be cancelled unfounded. To better balance the
inferred ‘‘because ‘[the] scheme of when the General Counsel finds that the interests of individuals providing
federal regulation may be so pervasive performance of an individual providing representation before the Department
as to make reasonable the inference that representation under § 14.630, with the interests of the Department in
Congress left no room for the States to representative, agent, or attorney ensuring the competent representation
supplement it.’ ’’ Fidelity Federal demonstrates a lack of the degree of of claimants, we will amend the rule to
Savings & Loan Ass’n v. De la Cuesta, competence necessary to adequately specify that VA will initiate an inquiry
458 U.S. 141, 153 (1982) (quoting Rice prepare, present, and prosecute claims under § 14.633 only upon receipt of
v. Santa Fe Elevator Corp., 331 U.S. 218, for veterans benefits, was too vague and credible, written information, including
230 (1947)). Unless otherwise specified would lead to inconsistent disciplinary e-mail messages, indicating improper
in statute, Congress has left no room for decisions. They suggested that VA conduct or incompetence. As discussed
the States to supplement the law related establish specific and objective criteria earlier, when VA receives information
to the provision of Federal veterans in an effort to better define the concept. concerning misconduct or incompetent
benefits. Federal regulations have the VA agrees that further explanation representation of claimants before the
same preemptive effect as Federal would improve understanding of the Department, the Assistant General
statutes. Id. at 154. Accordingly, we will concept. Counsel will provide notice to the
make no changes to the rule in this area Competent representation individual concerned and an
based on the comments. encompasses many factors, among opportunity to respond before initiating
Two commenters recommended that others, the level of knowledge and skill a formal inquiry. Consistent with
VA discipline an individual for required for a particular case, the degree current practice, we believe that
presenting a frivolous claim, argument of preparation required for a particular requiring written complaints and
or issue only if it was a knowing case, and the analysis of the facts and providing notice to the individual
violation of the law. One commenter issues required in a particular case. See concerned will reduce the potential for
stated that adding a knowledge Model Rules of Prof’l Conduct R. 1.1 unfounded complaints.
requirement would bring the proposed cmt. (2000). A representative, agent, or Two commenters stated that the 30-
rule in line with the standard expressed attorney demonstrates a lack of the day period for an individual to respond
in § 14.633(c)(2) that limits sanctions for degree of competence necessary to to the Assistant General Counsel’s
presenting or prosecuting a fraudulent adequately prepare, present, and notice of intent to suspend or cancel
claim to those made ‘‘knowingly.’’ The prosecute a claim for veterans benefits accreditation is an unreasonably short
other commenter suggested that we when his or her performance indicates period of time to respond to such notice
amend the rule to provide that a service a lack of the knowledge, skill, or and request a hearing. One commenter
officer must have acted intentionally or preparation required for a particular stated that the 30-day period is
recklessly in providing representation case. At a minimum, individuals ‘‘arbitrarily short’’ and ‘‘does not meet
before VA takes disciplinary action. We representing claimants before VA must the standard for meaningful due
agree that a violation of § 14.633(c)(4) be familiar with the facts of the process.’’ The other commenter
should include a requirement that such particular case, applicable law, and the suggested that the final rule address
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violation was made knowingly and will procedures for filing claims and whether time periods are based on
amend the rule to add such language. appeals. Because the facts and calendar or business days and whether
One commenter expressed concern circumstances of a particular case and a response is deemed timely based on
that § 14.633(c)(7), which states that the skills possessed by a representative, the date of mailing or date of receipt. It
‘‘any other unlawful, unprofessional, or agent, or attorney are unique, a checklist was also suggested that a 45-day time
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29865
period would avoid forcing individuals weekend or legal holiday, then the first changes to the final rule based on this
to chose between attending to client business day thereafter shall be comment.
representation and responding to VA. included in the computation. We define One commenter stated that it would
We do not agree that the 30-day period ‘‘legal holiday’’ consistent with Rule 6 be unfair for the Board to use or seek
for responding to the Assistant General of the Federal Rules of Civil Procedure. General Counsel opinions during its
Counsel’s notice is unreasonable and Two commenters disagreed with the review of the General Counsel’s
will not make any changes to the rule General Counsel’s discretion under disciplinary decisions and suggested
based on these comments. § 14.633(f) to hold disciplinary hearings that we amend § 14.633(g) to prohibit
As we discussed above, procedural at a VA Regional Office or at the VA the Board from doing so. We disagree
due process under the U.S. Constitution Central Office. One commenter and will not change the rule based on
is a flexible concept depending upon suggested that the individual who is the this comment.
the demands of the particular situation. subject of the disciplinary proceeding The General Counsel is the
VA is obligated under its accreditation should be allowed to choose where the Department’s chief legal officer and is
authority to ensure the responsible, hearing is held. The other commenter responsible for advising the Secretary
qualified representation of claimants for suggested that the final rule prescribe concerning VA programs and policies.
benefits. In our view, it would be criteria for deciding the location of a 38 U.S.C. 311; 38 CFR 14.500(b). A
unreasonable and prejudicial to hearing. According to this commenter, written legal opinion of the General
claimants to provide accredited requiring a representative, agent, or Counsel involving laws administered by
individuals more time than is attorney to travel to Washington, DC for VA is binding as to all VA employees
reasonably necessary to respond in a hearing would be a hardship and and officials, 38 CFR 14.507(a), to
these disciplinary matters. Accordingly, potentially impair the individual’s include the Board. 38 U.S.C. 7104(c)
we will not provide more than 30 days ability to produce evidence or compel (‘‘[t]he Board shall be bound in its
for responding to the Assistant General the appearance of witnesses. The decisions by the regulations of the
Counsel’s notice of intent to suspend or commenter also noted that VA’s Department, instructions of the
cancel accreditation. The 30-day period regulation providing subpoena authority Secretary, and the precedent opinions of
is appropriate and fair because it strikes to officials in designated positions the chief legal officer of the
a balance between VA’s interests in prescribes a 100-mile radius from the Department’’). The Board is responsible
protecting claimants and the interests of place of a hearing for such authority and for providing one administrative review
individuals responding to a notice of questioned whether VA would extend on appeal after considering all of the
intent to cancel accreditation. We note the 100-mile limit for purposes of this evidence of record and applicable
that § 14.633(e)(1)(i) requires the regulation. See 38 CFR 2.2(b). provisions of law. 38 U.S.C. 7104(a).
Assistant General Counsel to provide We agree that in promulgating Accordingly, in reviewing the General
notice concerning the right to submit regulations designating the location of Counsel’s disciplinary decisions, the
additional evidence during disciplinary hearings under § 14.633 we must Board applies the law to the facts of the
proceedings and to request a hearing. consider the interests of individuals case and is bound by any precedent
Further, under § 14.633(f), individuals defending allegations of misconduct or opinion of the General Counsel that
may present evidence at a hearing and incompetence. Individuals defending interprets that law. VA does not have
may supplement that evidence during allegations of improper conduct or authority to create an exception to
the 10-day period following the hearing. incompetence would indeed suffer costs section 7104(c) as the commenter
In our view, these measures reasonably in traveling to VA’s Central Office and appears to suggest. This does not mean
balance VA’s obligations to claimants may be unable to compel the attendance that the Board is bound by the General
and individuals who are the subject of of witnesses or the production of Counsel’s decision in the matter on
disciplinary proceedings. Finally, evidence outside the 100-mile radius appeal. In fact, § 14.633(g) provides
should the 30-day period be insufficient provided in 38 CFR 2.2(b). The General ‘‘[n]othing in this section shall be
to formulate an answer, Counsel, claimants, and those accused construed to limit the Board’s authority
§ 14.633(e)(2)(iii) provides that the of improper conduct or incompetence to remand a matter to the General
Assistant General Counsel ‘‘may extend have an interest in the consistency of Counsel under 38 CFR 19.9 for any
the time to file an answer or request a the hearing process. To ensure equity action that is essential or a proper
hearing for a reasonable period upon a and consistency in the hearing process, appellate decision or the General
showing of sufficient cause.’’ VA will amend the language of Counsel’s ability to issue a
We agree that we need to clarify the § 14.633(f) to provide that if a hearing is Supplemental Statement of the Case
scope of the 30-day response period in requested, it will held at the VA under 38 CFR 19.31.’’ Additionally, we
§ 14.633(e)(2)(i). Accordingly, we will Regional Office nearest the individual’s note that the Board is required to
amend the rule to provide that an principal place of business. If the provide in its decision a written
individual providing representation individual’s principal place of business statement of the reasons and bases as to
under § 14.630, representative, agent, or is in Washington, DC, the hearing will its findings on the material issues of fact
attorney has 30 calendar days from the be held at the VA Central Office. based on the entire record and without
date on which the Assistant General Another commenter recommended deference to any factual findings of the
Counsel mails notice of intent to that VA add provisions to § 14.633(f) General Counsel. See 38 U.S.C. 7104(d).
suspend or cancel accreditation to file prescribing the authority of the hearing Moreover, any reviewing appellate court
an answer and to request a hearing. In officer. The commenter recommended would not be bound by a General
computing the time period for filing a that the regulation expressly provide the Counsel precedent opinion. Therefore,
response, the date on which the notice hearing officer with authority to change the suggestion that the Board could use
was mailed by the Assistant General the time or place of a hearing and to a General Counsel opinion to unfairly
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Counsel shall be excluded from the 30- deal with the conduct of the hearing. influence its review of a General
day period. A response postmarked We believe that the hearing officer Counsel accreditation decision is
prior to the expiration of the 30-day currently has the inherent authority unfounded.
period shall be accepted as having been necessary to conduct an efficient and Another commenter asked whether
timely filed. If the 30th day falls on a orderly hearing. We will make no General Counsel’s disciplinary
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29866 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
decisions may be appealed to the Board consultation. In his letter to the due benefits could be transferred to a
and the Veterans Court and whether Secretary, the former Chairman lawyer for less work than was expected
normal appeal procedures would apply. described two factual situations by the client at the time of the
Under § 14.633(g), the General Counsel’s involving attorneys and requested the agreement. Indeed, experts such as the
decision to suspend or cancel General Counsel’s legal opinion as to American Bar Association, while
accreditation ‘‘is a final adjudicative whether the attorneys violated former concluding that contingent fees are
decision of an agency of original 38 U.S.C. 5904. We do not believe that ethical, have noted such agreements
jurisdiction and may be appealed to the it is appropriate to incorporate the legal must be individually evaluated to
Board of Veterans’ Appeals.’’ conclusions of that letter in this determine whether the final payment is
Notwithstanding provisions for closing regulation. The General Counsel’s appropriate and reasonable.
the record, ‘‘appeals shall be initiated response was based on two detailed, yet One commenter, citing Silverman v.
and processed using the procedures in similar, fact patterns. There may be Brown, 7 Vet. App. 487, 488 (1995) (fee
38 CFR parts 19 and 20.’’ Because the other fact patterns which the General of 50 percent of benefits awarded is
proposed rules address the commenter’s Counsel did not consider that might patently unreasonable), recommended
concerns, we will not change the rule result in a different legal conclusion. that we establish a regulatory
based on the comment. Therefore, we decline to include the presumption that a fee in excess of 331⁄3
legal conclusion reached in the May 24, percent of the past-due benefits awarded
Section 14.636—Payment of Fees for is unreasonable. The commenter went
2004, letter to apply generally in all
Representation by Agents and on to assert that ‘‘VA need only
cases. Further, the law is clear that VA’s
Attorneys in Proceedings Before the determine whether the fee called for is
authority to regulate is limited to
Agency of Original Jurisdiction and more or less than one-third of the past
accreditation for purposes of
Before the Board of Veterans’ Appeals due benefits’’ when reviewing a non-
preparation, presentation, and
One commenter urged us to clarify the prosecution of claims, and to reviewing direct-pay fee agreement for
effect delayed implementation of the the fees that agents and attorneys charge reasonableness. Public Law 109–461
regulations will have on fee agreements for representing claimants in amended 38 U.S.C. 5904 to provide that
entered into on or after June 20, 2007. ‘‘proceedings before the Department.’’ a fee that does not exceed 20 percent of
We agree that clarification is necessary. See 38 U.S.C. 5904(a), (c). We do not the past-due benefits awarded ‘‘shall be
The new regulations apply to fee think that it is necessary to expand the presumed reasonable.’’ Congress also
agreements entered on or after June 23, scope of VA’s regulations to address the authorized VA to ‘‘prescribe in
2008. They do not apply to fee legal services that occur outside a regulations reasonable restrictions on
agreements entered before June 23, proceeding before the Department on a the amount of fees that an agent or
2008. claim for benefits. attorney may charge a claimant’’ for
One commenter expressed concern One commenter, citing the potential representation before the Department. In
that § 14.636(b), which authorizes only for abuse, recommended that we limit practice, agents and attorneys appear to
accredited agents and attorneys to the circumstances in which hourly or agree with the commenter that any fee
charge fees for representation, conflicts flat fees can be charged by agents or in excess of 331⁄3 percent of the past-due
with the standards of conduct in attorneys. We did not propose limiting benefits awarded by VA to a claimant
§ 14.632(c)(5). Section 14.632(c)(5) claimants’ options for contracting with would generally be unreasonable. No fee
prohibits individuals recognized under agents and attorneys for representational agreement filed with the Department
§ 14.630, representatives, agents, and services. In our view, it would be since the June 20, 2007, effective date of
attorneys from entering into prudent to revisit the issue in a later amended section 5904 has called for a
unreasonable or unlawful fee rulemaking if we receive information fee in excess of 30 percent of past-due
agreements. concerning agents’ and attorneys’ abuse benefits. Accordingly, we will clarify in
We disagree that this section needs of hourly or flat-rate fees. Without such § 14.636(f) that fees which exceed 331⁄3
clarification. Section 14.632 establishes information, the current options (fixed percent of any past-due benefits
standards of conduct applicable to all fee, hourly rate, percentage of past-due awarded shall be presumed to be
persons authorized to represent benefits recovered, or a combination unreasonable. We will also clarify that
claimants before VA. Section 14.636(b) thereof) appear to provide claimants, the presumptions prescribed in
implements 38 U.S.C. 5904, which agents, and attorneys flexibility in § 14.636(f) for fees that do not exceed 20
permits agents and attorneys to charge negotiating the appropriate percent of any past-due benefits and
fees for representation under specified compensation structure, and appear to fees that exceed 331⁄3 percent of any
circumstances. Individuals authorized promote choice in representation. past-due benefits may be rebutted by
under 38 U.S.C. 5902 and 5903 are Accordingly, we will not change the clear and convincing evidence relating
prohibited by law from charging fees for rule based on the commenter’s to the factors in § 14.636(e). As
representing claimants. Therefore, any recommendation. evidenced by the presumption for fees
attempt by these individuals to charge, Contingent fee agreements, however, that exceed 331⁄3 percent, and the
solicit, or receive a fee for present a more specific risk of absence of such fees in the current
representation is a violation of the exploitation. Attorneys who litigate market, we are not currently of the mind
standards of conduct prescribed in before the VA have, on average, a better that such fees are justified. Accordingly,
§ 14.632(c)(5). We will not change the sense of the value of a particular only in the rare case where there is clear
rule based upon the comment. veteran’s claim than the veteran does. and convincing evidence relating to the
Three commenters recommended that Contingent fees also provide attorneys factors in § 14.636(e) would such fees be
§ 14.636(c) be amended to reflect the with an incentive to take cases that can justified.
General Counsel’s May 24, 2004, letter be easily resolved at the administrative For fees above 20 percent but below
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to the former Ranking Member of the level. Finally, a veteran may lack 331⁄3 percent, additional scrutiny may
U.S. House of Representatives sufficient bargaining power to negotiate be necessary if VA or the claimant or
Committee on Veterans’ Affairs, which a fair deal on fees. Thus, contingent fees appellant challenges the reasonableness
concluded that 38 U.S.C. 5904 permits give rise to the potential that a of the fee under the procedures in
attorneys to charge fees for pre-filing significant portion of a veteran’s past- § 14.636(i). Under those procedures, the
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29867
burden is on the agent or attorney to U.S.C. 5904(c)(2) expressly provides any time so long as an agency or original
demonstrate that this fee is reasonable that agents and attorneys must file a jurisdiction has rendered a decision on
under the individual circumstances. copy of any fee agreement with VA. a claim and a Notice of Disagreement
Such fees may not always, in every Therefore, VA has no choice but to has been filed with respect to that
circumstance, be reasonable. Rather, VA implement the statutory requirement. decision. Therefore, § 14.636(h)
will apply the factors in § 14.636(e) in Second, with respect to the properly reflects congressional intent
a review that considers all of the constitutionality of the statute, given the and we decline to amend it.
individual circumstances of the requirement to file fee agreements with An agent or attorney may receive fees
representation. VA is current law properly passed by for representing a claimant before VA
Although we agree with the Congress and signed by the President, pursuant to a direct-pay fee agreement
commenter’s suggestion that some we presume its constitutionality. or an agreement specifying payment by
administrative efficiency will result Finally, the commenter merely states the claimant. To the extent that an agent
from prescribing a presumption for fees that requiring fee agreements to be filed or attorney seeks payment from the
which exceed 331⁄3 percent of any past- with OGC is a violation of professional claimant, there is no limitation on the
due benefits, we do not agree that VA ethical standards without further parties’ ability to include fees for
need only determine whether a fee explanation. We do not see how such a representation on ancillary benefit
exceeds the 331⁄3 percent threshold requirement violates ethical standards. claims in the fee agreement. Clearly,
when reviewing non-direct-pay fees for Furthermore, thousands of fee Congress generally intended that
reasonableness. The commenter appears agreements have already been filed with claimants would have choice in
to suggest that we would create an VA, and we are unaware of any attorney representation with respect to all claims
implied presumption of reasonableness having been found to have violated his for benefits when it enacted Public Law
for non-direct-pay fees between 20 or her rules of professional conduct for 109–461. However, under 38 U.S.C.
percent and 331⁄3 percent. However, in having done so. Therefore, we will make 5904(d), VA’s authority to honor direct-
section 5904(c)(3)(A), Congress no change to the rule based on the pay fee agreements is limited to
authorized VA to review any fee comments. payment out of ‘‘past-due’’ benefits.
agreement filed with the Department We did not receive any comments Section 14.636(h)(3), interprets VA’s
under section 5904(c)(2) and to order a with respect to § 14.636(g)(2) but have authority in 38 U.S.C. 5904 to pay fees
reduction in the fee if it is excessive or determined that changes pertaining to out of ‘‘past-due’’ benefit awards as
unreasonable. Therefore, we have the presumption of reasonableness being limited to payment out of
adopted a three-tier system. In accord under § 14.636(e) warrant changes in ‘‘nonrecurring payment resulting from a
with the statute, fees of 20 percent or this section. We still require fee benefit, or benefits, granted on appeal or
less are presumed reasonable, absent agreements to clearly specify whether awarded on the basis of a claim
specific evidence to the contrary. Fees the agent or attorney is to be paid by VA reopened after a denial by an agency of
above 331⁄3 percent are presumptively directly out of an award of past due original jurisdiction or the Board of
unreasonable, absent specific evidence benefits. However, the regulation will be Veterans’ Appeals or the lump sum
to the contrary. We interpret section clarified to provide that any fee payment that represents the total
5904(c)(3)(A) to mean that any fee agreement that fails to clearly specify amount of recurring cash payments that
agreement, regardless of any applicable whether it is a direct-pay fee agreement accrued between the effective date of
presumption, may be reviewed for will be deemed an agreement for which the award, as determined by applicable
reasonableness upon VA’s own motion the agent or attorney is responsible for laws and regulations, and the date of the
or upon the motion of the claimant or collecting fees for representation. grant of the benefit by the agency of
appellant. Accordingly, the We received a number of comments original jurisdiction, the Board of
presumptions in § 14.636(f) must be on § 14.636(h). Two commenters Veterans’ Appeals, or an appellate
construed in the context provided by expressed concern that § 14.636(h)(3) court.’’ Most ancillary benefits are not
§ 14.636(i) regarding motions for review improperly permits paid representation recurring cash payments and, therefore,
of fee agreements. in cases in which a Notice of fall outside the definition of ‘‘past-due’’
We received two comments regarding Disagreement has not been filed. One benefits for purposes of determining the
§ 14.636(g). One commenter objected to commenter recommended that amount to be paid directly to an agent
requiring the filing of fee agreements § 14.636(h)(3) be amended to clarify that or attorney under a direct-pay fee
with OGC suggesting the provision is ancillary benefits are not ‘‘past-due agreement.
unnecessarily intrusive, benefits.’’ Two commenters As discussed with regard to
unconstitutional, and that compliance recommended amending § 14.627(g) above, we must reconcile our
would violate professional ethical § 14.636(h)(3)(iii) and adopting a rules prescribing permissible fees with
standards. The second commenter consistent definition of the terms Federal Circuit case law. To accomplish
suggested we could improve ‘‘case,’’ ‘‘claim,’’ and ‘‘issue.’’ this, we will amend § 14.636(c) to
communication between the claimant We disagree that § 14.636(h)(3) clarify when agents or attorneys may
and the attorney and ensure only improperly permits paid representation charge fees. However, we will not create
reasonable fees are charged by requiring in cases in which a Notice of new universal definitions for ‘‘case’’ and
additional information in fee Disagreement has not been filed. ‘‘claim’’ because the terms may have
agreements; this commenter, however, Congress amended 38 U.S.C. 5904(c)(1) different meanings in contexts other
made no recommendation as to what to permit paid representation after the than agent and attorney fees.
kinds of information VA should require, claimant files a Notice of Disagreement. As an initial matter, we note that the
and we believe that we have prescribed Congress further amended section Veterans Judicial Review Act of 1988
sufficient information to permit us to 5904(c)(1) to remove the requirement (VJRA) removed the long-standing
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determine whether a fee is reasonable. that an agent or attorney be hired within limitation on fees but also, for the first
We disagree that requiring an agent or a year of a final Board decision in a time, restricted claimant’s access to paid
attorney to file fee agreements with OGC case. We interpret this to mean that representation to the point after which
is intrusive, unconstitutional, or violates Congress wanted claimants to have the the first administrative appeal of a claim
ethical standards of conduct. First, 38 option to hire an agent or attorney at is complete. In limiting fees to services
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29868 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
rendered after a first final Board The same rationale applies to claims for initial decisions regarding eligibility for
decision, Congress ensured that VA increase. VA must have the opportunity and the reasonableness of fees are made
would initially decide a matter and, to consider new evidence and, if by VA’s agencies of original jurisdiction.
upon request, review that decision appropriate, award the claimant the full See 38 CFR 14.627(b) (definition of
before the Board without encountering amount of benefits due under law. agency of original jurisdiction). Whether
paid representation. In this context, the Congress has determined that claimants an initial eligibility determination is
Federal Circuit issued its opinions in for VA benefits should have the option made by the agency of original
Stanley v. Principi, 283 F.3d 1350 (Fed. of diverting benefits or other personal jurisdiction that decided the benefit
Cir. 2002), and Carpenter v. Nicholson, funds to agents and attorneys only after claim or claims identified in the Notice
452 F.3d 1379 (Fed. Cir. 2006), both of the claimant has expressed of Disagreement, as will generally occur
which concerned the payment of fees disagreement with an agency of original in the case of a direct-pay fee agreement
after a first final Board decision. jurisdiction decision on a matter. filed with an agency of original
Under the amendments to chapter 59, The rationale for proscribing paid jurisdiction under § 14.636(h)(4), or by
Congress shifted the entry point for paid representation for claims to reopen and the Office of the General Counsel as the
representation to the filing of a Notice for increase in rate of a benefit does not agency of original jurisdiction with
of Disagreement. Thus, paid apply to requests for revision of authority to review fee agreements for
representation is available in the decisions based on clear and reasonableness, will depend on the facts
administrative appeal process, which unmistakable error. When a claimant of each case. Regardless, agency of
includes the Decision Review Officer asserts that the correct facts were not original jurisdiction decisions
process, the process for developing an before an agency of original jurisdiction concerning eligibility for fees under
appeal for certification to the Board, and or the Board at the time of a decision, § 14.636(c) are appealable to the Board.
the Board proceedings. We interpret this or the appropriate law or regulations One commenter objected to
significant change as an expression of extant at the time of the decision were § 14.636(h)(3)(iv), in which we proposed
congressional intent to remove all incorrectly applied by an agency of to clarify VA’s policy of calculating
restrictions on paid representation, original jurisdiction or the Board, he or agents’ and attorneys’ fees based on
provided that an agency of original she seeks to attack the prior decision past-due benefits awarded and reduced
jurisdiction has rendered a decision on based upon alleged error, not to obtain due to certain conditions, such as
a benefits matter and the claimant has a new decision based upon new and incarceration. The Court of Appeals for
filed a Notice of Disagreement with material evidence or other change in the Federal Circuit recently interpreted
respect to that decision. In our view, circumstance. VA had an opportunity to
38 U.S.C. 5904 to mean that payment of
Congress balanced claimants’ choice in initially decide the claim based on the
agents’ and attorneys’ fees from past-due
representation with its interest in same law and evidence, and under our
benefits must be based upon the amount
ensuring that claimants’ benefits are not interpretation of the amendments to
of benefits awarded, not the amount
unnecessarily reduced by payment of chapter 59 there is no reason to
actually paid to the claimant. Snyder v.
agents’ and attorneys’ fees. In balancing preclude paid representation if the
Nicholson, 2007 U.S. App. LEXIS 13302
these competing interests, Congress claimant filed a Notice of Disagreement
(Fed. Cir. 2007). The Snyder decision
concluded that an agency of original with respect to the original, allegedly
was issued after the proposed rule was
jurisdiction should have an opportunity erroneous, decision on or after June 20,
published. In light of the need to further
to consider the merits of a claim on the 2007.
basis of the available evidence of record For the reasons stated above, we will consider the scope of Snyder, we will
and render a decision. Only if a modify § 14.636(c) to clearly state the remove § 14.636(h)(3)(iv).
claimant disagrees with that decision general rule that VA must have an We received numerous comments
would the balance tip in favor of choice opportunity to decide a matter before regarding § 14.636(i), which prescribes
of representation. paid representation is available, and to the procedures for seeking review of fee
We interpret Congress’ designation of clarify application of the rule in claims agreements. Three commenters, citing a
the Notice of Disagreement as the entry to reopen, claims for increase, and conflict of interest, objected to OGC’s
point for paid representation in section requests for revision based upon clear authority to review fee agreements on its
5904(c) to mean that an agency of and unmistakable error. own motion. One commenter requested
original jurisdiction must be allowed to We will also modify § 14.636(c) to that we describe when VA could
initially decide a matter before a clarify that it is generally the agency of unilaterally review fee agreements. Two
claimant seeks paid representation. original jurisdiction that issued the commenters asserted that the
Accordingly, with respect to claims to decision on a claim or claims identified procedures for reviewing fee agreements
reopen based upon new and material in the Notice of Disagreement that will are unfair because they do not provide
evidence or claims for increase in rate decide whether an agent or attorney is for an increase in agents’ and attorneys’
of a benefit being paid based upon a eligible for fees under the criteria in that fees. Two commenters also
change in disability or other section. In Scates v. Principi, 282 F.3d recommended that VA establish a set
circumstances, a claimant must seek an 1362, 1367 (Fed. Cir. 2002), the Court period of time in which VA or a
agency of original jurisdiction decision noted that the line between entitlement claimant could seek review of a fee
on the claim and file a Notice of to and reasonableness of fees under agreement. Finally, two commenters
Disagreement with respect to that former 38 U.S.C. 5904 was not always expressed concern that claimants will
decision before hiring an agent or clear and might require a factual not know what it means to ‘‘serve’’ a
attorney to provide representation determination by an agency of original motion for review and recommended
before the Department. By definition, jurisdiction concerning eligibility for that claimants merely ask for a fee
evidence that is new and material was fees before the Board of Veterans’ review at the agency of original
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not considered in any prior agency of Appeals could consider the issue of jurisdiction. These commenters also
original jurisdiction decision. See 38 reasonableness under its original suggested that VA, not the claimant,
CFR 3.156(a) (‘‘new evidence means jurisdiction. Under current section should have the responsibility of
existing evidence not previously 5904, the Board has only appellate notifying the agent or attorney of the
submitted to agency decisionmakers’’). jurisdiction over fee matters and all claimant’s request for review.
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29869
For the reasons discussed at length seeks a review at an agency of original stated transition plan to implement the
above regarding § 14.629, we disagree jurisdiction, the agency of original proposed changes in VA’s accreditation
that there is a conflict of interest in jurisdiction will forward the request to program. More specifically, the
OGC’s review of fee agreements. With OGC for a decision. Therefore, we do commenters expressed concern that
respect to the commenter’s request that not believe the provisions requiring VA’s implementation of new
we clarify under what circumstances claimants to complete service of accreditation standards, without a
OGC will review fee agreements on its documents are too onerous or confusing transition plan for claimants currently
own motion, we believe § 14.636(e) and or in any way prejudice claimants. represented by agents and attorneys
(f) are sufficiently clear. Section Further, we have defined ‘‘service’’ in before agencies of original jurisdiction
14.636(e) describes in detail the fees § 14.627(o) to clarify the notice and the Board, would potentially deny
that are permitted under current law. requirements applicable to individuals representation to such claimants.
Section 14.636(f) implements the seeking review of fee agreements. We agree that implementation of its
statutory presumption that fees that do We also decline to change the new accreditation rules should not
not exceed 20 percent of past-due procedure for filing motions for review impede or otherwise interfere with
benefits awarded are reasonable. We of fee agreements. Under prior law, ongoing representation before agencies
interpret these provisions to mean that claimants mailed a copy of the motion of original jurisdiction and the Board.
VA is not required to initiate the review and supporting evidence to the agent or To avoid that result, agents and
of a fee that is less than or equal to 20 attorney; this rule merely retains that attorneys providing representation in
percent of past-due benefits awarded, requirement. Furthermore, cases as of the effective date of the final
and that any fee in excess of 20 percent disagreements are often the result of a rule need not meet the new
does not benefit from the presumption communication breakdown between the accreditation requirements, unless the
and is subject to review by OGC on its parties to an agreement. We believe the agent or attorney intends to provide
own motion. notice requirements will help parties representation in cases in which a
We also disagree with the commenters resolve fee disputes without getting VA Notice of Disagreement is filed after the
who suggested that OGC should also actively involved. Finally, it is effective date. An agent or attorney will
review fees to determine whether an appropriate to place some burden on a be deemed to be providing
agent or attorney is entitled to an claimant challenging an agreement he or representation on a claim before an
increase in fees notwithstanding fee she entered into. Requiring a claimant to agency of original jurisdiction or the
agreement terms. First, we note that in serve the agent or attorney concerning Board if VA has evidence that the agent
imposing fee limitations, Congress their contract, as opposed to having VA or attorney complied with the
intended to protect veterans’ benefits do the work, will force the claimant to accreditation and power of attorney
from unscrupulous lawyers. S. Rep. No. assume some of the effort required to requirements in former 38 CFR 14.629
109–297, at 6 (2006). Second, section dispute a fee agreement and to and 14.631 prior to the effective date of
5904(c)(3)(A) clearly expresses determine whether it is worth their time this final rule. Further, agents and
Congress’ intent that only VA or a and effort. In our view, this procedure attorneys providing representation as of
claimant may seek review of a fee is reasonable in light of Congress’ the effective date may continue to do so
agreement and only for the purpose of decision to expand choice of through the final resolution of the claim.
reducing the fee called for in an representation. Agents and attorneys seeking to provide
agreement. Accordingly, VA does not representation in a claim in which the
Section 14.637—Payment of the
have authority to review fees as the Notice of Disagreement was filed after
Expenses of Agents and Attorneys in
commenter suggests, and we will not the effective date of the final rule,
make any changes based on the Proceedings Before the Agency of however, must file an application with
comment. We agree with the Original Jurisdiction and Before the OGC as provided in § 14.629(b) and
commenter’s recommendation that we Board of Veterans’ Appeals receive notice of accreditation before
limit the period during which a fee One commenter objected to providing representation. The delayed
agreement may be reviewed by OGC and § 14.637(c), which establishes the types effective date, prospective application,
have amended § 14.636(i) to prescribe of reimbursable ‘‘expenses’’ that an and phased initial compliance dates for
that VA or a claimant may seek review agent or attorney may charge a claimant, CLE will ensure that agent and attorney
of the fee agreement within 120 days of and essentially disagreed with our representation is uninterrupted during
the final VA decision on the claim. determination that overhead costs are the transition period between the old
We disagree with the commenter who not reasonable expenses. Although we and new accreditation programs.
suggested that claimants will not know proposed to reorganize parts 14 and 20 Accordingly, we will not make further
what it means to ‘‘serve’’ an agent or of VA’s regulations governing changes based on these comments.
attorney with a motion for review of a accreditation and fee matters, we did Several commenters also suggested
fee agreement because they lack access not make any substantive change to that VA limit its authority to review
to regulations. The predecessor former 38 CFR 20.610(c), which we applications for accreditation after a
provision, 38 CFR 20.609(i), required a redesignated as § 14.637. In any event, specified period of time has expired.
party contesting the fee agreement to file we continue to believe that it would be OGC cannot commit to reviewing
the motion for review with the Board unreasonable for agents and attorneys to accreditation applications in a specific
and certify that a copy was mailed to the charge claimants for costs that are not time period and will not establish a
other party. While the procedure for directly incurred as a result of providing deadline following which an
filing a motion for review is changing, representation in the case. Accordingly, application must be approved
the substance of what is required of the we will not make any changes based on notwithstanding that it may be
claimant seeking review is not. We note this comment. incomplete or that the individual does
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that VA regulations are available to the not meet the standards in § 14.629. VA
public through a variety of sources, General Matters; Applicability of could not meet its obligation to ensure
including electronic media. To the Accreditation Provisions responsible, competent representation
extent that a claimant is unaware of the We received five comments without sufficient administrative
fee-agreement-review provisions and expressing concern with the lack of a flexibility. While some applications may
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29870 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
be reviewed and approved very quickly, regulatory flexibility analysis employees, Government property,
others may be delayed due to legitimate requirements of sections 603 and 604. Infants and children, Inventions and
administrative concerns. However, we patents, Parking, Penalties, Privacy,
Executive Order 12866
recognize that representation cannot Reporting and recordkeeping
begin without accreditation and that Executive Order 12866 directs requirements, Seals and insignia,
attorney applications may generally be agencies to assess all costs and benefits Security measures, Wages.
approved upon submission of the of available regulatory alternatives and,
supporting documents identified in when regulation is necessary, to select 38 CFR Part 14
§ 14.629; therefore, we will attempt to regulatory approaches that maximize Administrative practice and
review and respond to complete net benefits (including potential procedure, Claims, Courts, Foreign
applications in less than 30 days. economic, environmental, public health relations, Government employees,
We received one comment regarding and safety, and other advantages; Lawyers, Legal services, Organization
section 101(c)(2) of Public Law 109–461, distributive impacts; and equity). The and functions (Government agencies),
which requires VA to report to Congress Executive Order classifies a ‘‘significant Reporting and recordkeeping
on the effects of allowing agents and regulatory action,’’ requiring review by requirements, Surety bonds, Trusts and
attorneys to charge fees for the Office of Management and Budget trustees, Veterans.
representation after a Notice of (OMB) unless OMB waives such review,
Disagreement has been filed. The as any regulatory action that is likely to 38 CFR Parts 19 and 20
commenter suggested that VA ‘‘begin result in a rule that may: (1) Have an Administrative practice and
gathering data now to provide Congress annual effect on the economy of $100 procedure, Claims, Veterans.
with a proper assessment’’ and ‘‘urged million or more or adversely affect in a Approved: May 9, 2008.
the Secretary to set forth specifically in material way the economy, a sector of
Gordon H. Mansfield,
regulation what data will be used to the economy, productivity, competition,
jobs, the environment, public health or Deputy Secretary of Veterans Affairs.
provide Congress with the assessment.’’
VA agrees that data gathering must safety, or State, local, or tribal I For the reasons set forth in the
begin as soon as possible to provide an governments or communities; (2) create preamble, the Department of Veterans
accurate assessment of the effects of a serious inconsistency or otherwise Affairs amends 38 CFR parts 1, 14, 19
Public Law 109–461 and has already interfere with an action taken or and 20 as follows:
taken affirmative steps to measure the planned by another agency; (3)
impact of the new law. However, the materially alter the budgetary impact of PART 14—LEGAL SERVICES,
development and gathering of such entitlements, grants, user fees, or loan GENERAL COUNSEL, AND
information are internal agency programs or the rights and obligations of MISCELLANEOUS CLAIMS
procedural matters exempt from notice recipients thereof; or (4) raise novel I 1. The authority citation for part 14
and comment. See 5 U.S.C. 553(b)(3)(A). legal or policy issues arising out of legal continues to read as follows:
Accordingly, we will make no changes mandates, the President’s priorities, or
the principles set forth in the Executive Authority: 5 U.S.C. 301; 28 U.S.C. 2671–
based on this comment. 2680; 38 U.S.C. 501(a), 512, 515, 5502, 5902–
Order. VA has examined the economic, 5905; 28 CFR part 14, appendix to part 14,
Paperwork Reduction Act legal, and policy implications of this unless otherwise noted.
This final rule contains provisions rule and has concluded that it is a
that constitute collections of significant regulatory action under I 2. Remove the undesignated center
information under the Paperwork Executive Order 12866. heading ‘‘Expanded Remote Access to
Reduction Act of 1995 (44 U.S.C. 3501– Computerized Veterans Claims Records
Unfunded Mandates by Accredited Representatives’’ that
3521) in 38 CFR 14.629 and 14.631. The
collections are approved under Office of The Unfunded Mandates Reform Act precedes § 14.640 and redesignate
Management and Budget control of 1995 requires, at 2 U.S.C. 1532, that §§ 14.640 through 14.643 as §§ 1.600
number 2900–0605 and 2900–0321. We agencies prepare an assessment of through 1.603, respectively.
display the control numbers under the anticipated costs and benefits before I 3. Revise § 14.626 to read as follows:
applicable regulation text in this final issuing any rule that may result in the
rule. expenditure by State, local, and tribal § 14.626 Purpose.
governments, in the aggregate, or by the The purpose of the regulation of
Regulatory Flexibility Act private sector, of $100 million or more representatives, agents, attorneys, and
The Secretary hereby certifies that (adjusted annually for inflation) in any other individuals is to ensure that
this rule would not have a significant year. This final rule would have no such claimants for Department of Veterans
economic impact on a substantial effect on State, local, and tribal Affairs (VA) benefits have responsible,
number of small entities as they are governments, or on the private sector. qualified representation in the
defined in the Regulatory Flexibility Catalog of Federal Domestic Assistance preparation, presentation, and
Act, 5 U.S.C. 601–612. At a minimum, Numbers and Titles prosecution of claims for veterans’
this rule would affect the 117 attorneys benefits.
who filed fee agreements with the Board There are no Federal Domestic
I 4. Amend § 14.627 by:
under the predecessor law and the 47 Assistance programs associated with I a. Revising the introductory text.
agents currently accredited by VA. this final rule. I b. Revising paragraph (a).
However, it would not have a significant List of Subjects I c. Redesignating paragraphs (b)
economic impact on these individuals through (l) and (m) and (n) as
because it would only impose 38 CFR Part 1 paragraphs (c) through (m) and (p) and
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accreditation and reasonable fee Administrative practice and (q), respectively.
requirements the costs of which would procedure, Archives and records, I d. Adding new paragraphs (b), (n), and
not be significant. Therefore, pursuant Cemeteries, Claims, Courts, Crime, (o).
to 5 U.S.C. 605(b), this amendment is Flags, Freedom of information, I e. Revising newly redesignated
exempt from the initial and final Government contracts, Government paragraphs (d), (e), (g), (l), and (m).
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29871
The revisions and additions read as date and manner by which the provide further notice concerning his or
follows: document was mailed. her final decision. The determination of
* * * * * the Assistant General Counsel regarding
§ 14.627 Definitions. the qualifications of a prospective
I 5. Amend § 14.629 by:
As used in regulations on service organization representative,
I a. Revising the introductory text.
representation of VA claimants: agent, or attorney may be appealed by
I b. In paragraph (a)(1), removing ‘‘the
(a) Accreditation means the authority the applicant to the General Counsel.
Department of Veterans Affairs’’, and
granted by VA to representatives, Appeals must be in writing and filed
adding, in its place, ‘‘VA’’.
agents, and attorneys to assist claimants I c. Revising the paragraph (b) heading. with the Office of the General Counsel
in the preparation, presentation, and I d. Redesignating paragraph (b)(2) as (022D), 810 Vermont Avenue, NW.,
prosecution of claims for VA benefits. (b)(6), and paragraph (b)(1) as new Washington, DC 20420, not later than 30
(b) Agency of original jurisdiction paragraph (b)(2). days from the date on which the
means the VA activity or administration I e. Adding a new paragraph (b)(1). Assistant General Counsel’s decision
that made the initial determination on a I f. Revising newly redesignated was mailed. In deciding the appeal, the
claim or matter or that handles any paragraph (b)(2) introductory text and General Counsel’s decision shall be
subsequent adjudication of a claim or paragraph (b)(2)(i). limited to the evidence of record before
matter in the first instance, and includes I g. Redesignating paragraphs (b)(2)(vii) the Assistant General Counsel. A
the Office of the General Counsel with and (viii) as paragraphs (b)(2)(viii) and decision of the General Counsel is a
respect to proceedings under part 14 of (ix), respectively. final agency action for purposes of
this chapter to suspend or cancel I h. Adding a new paragraph (b)(2)(vii). review under the Administrative
accreditation or to review fee I i. Revising newly redesignated Procedure Act, 5 U.S.C. 701–706.
agreements. paragraph (b)(2)(ix). * * * * *
* * * * * I j. Adding new paragraphs (b)(2)(x), (b) Accreditation of Agents and
(d) Attorney means a member in good (b)(3), (b)(4), and (b)(5). Attorneys. (1) No individual may assist
standing of a State bar who has met the I k. Revising newly redesignated
claimants in the preparation,
standards and qualifications in paragraph (b)(6). presentation, and prosecution of claims
§ 14.629(b). I l. Revising paragraph (c) heading.
for VA benefits as an agent or attorney
(e) Benefit means any payment, I m. Revising paragraphs (c)(1) and
unless he or she has first been
service, commodity, function, or status, (c)(3).
accredited by VA for such purpose.
entitlement to which is determined I n. Revising the note following
(i) For agents, the initial accreditation
under laws administered by VA paragraph (c)(4).
The additions and revisions read as process consists of application to the
pertaining to veterans, dependents, and General Counsel, self-certification of
survivors. follows:
admission information concerning
* * * * * § 14.629 Requirements for accreditation of practice before any other court, bar, or
(g) Claim means application made service organization representatives, State or Federal agency, an affirmative
under title 38 U.S.C., and implementing agents, and attorneys. determination of character and fitness
directives, for entitlement to VA The Assistant General Counsel of by VA, and a written examination.
benefits, reinstatement, continuation, or jurisdiction or his or her designee will (ii) For attorneys, the initial
increase of benefits, or the defense of a conduct an inquiry and make an initial accreditation process consists of
proposed agency adverse action determination regarding any question application to the General Counsel, self-
concerning benefits. relating to the qualifications of a certification of admission information
* * * * * prospective service organization concerning practice before any other
(l) Recognition means certification by representative, agent, or attorney. If the court, bar, or State or Federal agency,
VA of organizations to assist claimants Assistant General Counsel or designee and a determination of character and
in the preparation, presentation, and determines that the prospective service fitness. The General Counsel will
prosecution of claims for VA benefits. organization representative, agent, or presume an attorney’s character and
(m) Representative means a person attorney meets the requirements for fitness to practice before VA based on
who has been recommended by a accreditation in paragraphs (a) or (b) of State bar membership in good standing
recognized organization and accredited this section, notification of accreditation unless the General Counsel receives
by VA. will be issued by the Assistant General credible information to the contrary.
(n) Representation means the acts Counsel or the Assistant General (iii) As a further condition of initial
associated with representing a claimant Counsel’s designee and will constitute accreditation, both agents and attorneys
in a proceeding before VA pursuant to authority to prepare, present, and are required to complete 3 hours of
a properly executed and filed VA Form prosecute claims before an agency of qualifying continuing legal education
21–22, ‘‘Appointment of Veterans original jurisdiction or the Board of (CLE) during the first 12-month period
Service Organization as Claimant’s Veterans’ Appeals. If the Assistant following the date of initial
Representative,’’ or VA Form 21–22a, General Counsel determines that the accreditation by VA. To qualify under
‘‘Appointment of Individual as prospective representative, agent, or this subsection, a CLE course must be
Claimant’s Representative.’’ attorney does not meet the requirements approved for a minimum of 3 hours of
(o) Service means the delivery of a for accreditation, notification will be CLE credit by any State bar association
motion, response, or reply to a person issued by the Assistant General Counsel and, at a minimum, must cover the
or entity to which it is directed. Proof concerning the reasons for disapproval, following topics: representation before
of service consists of a statement by the an opportunity to submit additional VA, claims procedures, basic eligibility
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person who made service certifying the information, and any restrictions on for VA benefits, right to appeal,
date and manner of service, the names further application for accreditation. If disability compensation (38 U.S.C.
of the persons served, and the addresses an applicant submits additional Chapter 11), dependency and indemnity
of the place of delivery. For service by evidence, the Assistant General Counsel compensation (38 U.S.C. Chapter 13),
mail, proof of service shall include the will consider such evidence and and pension (38 U.S.C. Chapter 15).
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29872 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
Upon completion of the initial CLE misappropriation; suspension or state that participation in all aspects of
requirement, agents and attorneys shall disbarment from a court, bar, or Federal the claim by a legal intern, law student,
certify to the Office of the General or State agency on ethical grounds; or or paralegal furnishing written
Counsel in writing that they have resignation from admission to a court, authorization from the attorney of
completed qualifying CLE. Such bar, or Federal or State agency while record is authorized. In addition,
certification shall include the title of the under investigation to avoid sanction. suitable authorization for access to the
CLE, date and time of the CLE, and (4) As a further condition of initial claimant’s records must be provided in
identification of the CLE provider, and accreditation and annually thereafter, order for such an individual to
shall be submitted to VA as part of the each person seeking accreditation as an participate. The supervising attorney
annual certification prescribed by agent or attorney shall submit to VA must be present at any hearing in which
§ 14.629(b)(4). information about any court, bar, or a legal intern, law student, or paralegal
(iv) To maintain accreditation, agents Federal or State agency to which the participates. The written consent must
and attorneys are required to complete agent or attorney is admitted to practice include the name of the veteran, or the
an additional 3 hours of qualifying CLE or otherwise authorized to appear. name of the appellant if other than the
on veterans benefits law and procedure Applicants shall provide identification veteran (e.g., a veteran’s survivor, a
not later than 3 years from the date of numbers and membership information guardian, or a fiduciary appointed to
initial accreditation and every 2 years for each jurisdiction in which the receive VA benefits on an individual’s
thereafter. To qualify under this applicant is admitted and a certification behalf); the applicable VA file number;
subsection, a CLE course must be that the agent or attorney is in good the name of the attorney-at-law; the
approved for a minimum of 3 hours of standing in every jurisdiction in which consent of the appellant for the use of
CLE credit by any State bar association. admitted. After accreditation, agents the services of legal interns, law
Agents and attorneys shall certify and attorneys must notify VA within 30 students, or paralegals and for such
completion of the post-accreditation days of any change in their status in any individuals to have access to applicable
CLE requirement in the same manner as jurisdiction in which they are admitted VA records; and the names of the legal
described in § 14.629(b)(1)(iii). to appear. interns, law students, or paralegals who
(2) An individual desiring (5) VA will not accredit an individual will be assisting in the case. The signed
accreditation as an agent or attorney as an agent or attorney if the individual consent must be submitted to the agency
must establish that he or she is of good has been suspended by any court, bar, of original jurisdiction and maintained
character and reputation, is qualified to or Federal or State agency in which the in the claimant’s file. In the case of
render valuable assistance to claimants, individual was previously admitted and appeals before the Board in Washington,
and is otherwise competent to advise not subsequently reinstated. However, if DC, the signed consent must be
and assist claimants in the preparation, an individual remains suspended in a submitted to: Director, Management and
presentation, and prosecution of their jurisdiction on grounds solely derivative Administration (01E), Board of
claim(s) before the Department. An of suspension or disbarment in another Veterans’ Appeals, 810 Vermont
individual desiring accreditation as an jurisdiction to which he or she has been Avenue, NW., Washington, DC 20420.
agent or attorney must file a completed subsequently reinstated, the General In the case of hearings before a Member
application (VA Form 21a) with the Counsel may evaluate the facts and or Members of the Board at VA field
Office of the General Counsel (022D), grant or reinstate accreditation as facilities, the consent must be presented
810 Vermont Avenue, NW., appropriate. to the presiding Member of the hearing.
Washington, DC 20420, on which the (6) After an affirmative determination * * * * *
applicant submits the following: of character and fitness for practice Note to § 14.629: A legal intern, law
(i) His or her full name and home and before the Department, applicants for student, paralegal, or veterans service
business addresses; accreditation as a claims agent must organization support-staff person, working
* * * * * achieve a score of 75 percent or more on under the supervision of an individual
(vii) Information concerning the a written examination administered by designated under § 14.631(a) as the
applicant’s level of education and VA as a prerequisite to accreditation. No claimant’s representative, attorney, or agent,
may qualify for read-only access to pertinent
academic history; applicant shall be allowed to sit for the
Veterans Benefits Administration automated
* * * * * examination more than twice in any 6- claims records as described in §§ 1.600
(ix) Information relevant to whether month period. through 1.603 in part 1 of this chapter.
the applicant for accreditation as an (c) Representation by Attorneys, Law
agent has any physical limitations that Firms, Law Students and Paralegals. (1) * * * * *
would interfere with the completion of After accreditation by the General I 6. Amend § 14.630 by:
a comprehensive written examination Counsel, an attorney may represent a I a. Revising paragraph (a).
claimant upon submission of a VA Form I b. Revising paragraph (b)(1)
administered under the supervision of a
21–22a, ‘‘Appointment of Attorney or introductory text.
VA Regional Counsel (agents only); and I c. Adding paragraphs (c) and (d)
(x) Certification that the applicant has Agent as Claimant’s Representative.’’
immediately preceding the authority
satisfied the qualifications and * * * * *
citation at the end of the section.
standards required for accreditation as (3) A legal intern, law student, or The revisions and additions read as
prescribed by VA in this section, and paralegal may not be independently follows:
that the applicant will abide by the accredited to represent claimants under
standards of conduct prescribed by VA this paragraph. A legal intern, law § 14.630 Authorization for a particular
in § 14.632 of this part. student, or certified paralegal may assist claim.
(3) Evidence showing lack of good in the preparation, presentation, or (a) Any person may be authorized to
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character and reputation includes, but is prosecution of a claim, under the direct prepare, present, and prosecute one
not limited to, one or more of the supervision of an attorney of record claim. A power of attorney executed on
following: Conviction of a felony, designated under § 14.631(a), if the VA Form 21–22a, ‘‘Appointment of
conviction of a misdemeanor involving claimant’s written consent is furnished Attorney or Agent as Claimant’s
fraud, bribery, deceit, theft, or to VA. Such consent must specifically Representative,’’ and a statement signed
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29873
by the person and the claimant that no representation for a particular claim prior to taking any action to withdraw
compensation will be charged or paid under § 14.630 of this part or an and takes steps necessary to protect the
for the services, shall be filed with the accredited veterans service organization claimant’s interests including, but not
agency of original jurisdiction where the representative, agent, or attorney, the limited to, giving advance notice to the
claim is presented. The power of appointment is invalid, and the person claimant, allowing time for appointment
attorney identifies to VA the claimant’s appointed to provide representation is of alternative representation, and
appointment of representation and under no obligation to do so. The power returning any documents provided by
authorizes VA’s disclosure of of attorney shall meet the following VA in the course of the representation
information to the person representing requirements: to the agency of original jurisdiction or
the claimant. (1) * * * pursuant to the claimant’s instructions,
(b) * * * (iv) An individual providing to the organization or individual
(1) The number of accredited representation on a particular claim substituted as the representative, agent,
representatives, agents, and attorneys under § 14.630 of this part or an or attorney of record. Upon withdrawing
operating in the claimant’s geographic accredited veterans service organization from representation, all property of the
region; representative, agent, or attorney; and claimant must be returned to the
* * * * * * * * * * claimant. If the claimant is unavailable,
(c) Persons providing representation (b) VA may, for any purpose, treat a all documents provided by VA for
under this section must comply with the power of attorney naming as a purposes of representation must be
laws administered by VA and with the claimant’s representative an returned to the VA organization in
regulations governing practice before organization recognized under § 14.628, possession of the claims file. Any other
VA including the rules of conduct in a particular office of such an property of the claimant must be
§ 14.632 of this part. organization, or an individual maintained by the organization or
(d) Persons providing representation representative of such an organization individual according to applicable law.
under this section are subject to as an appointment of the entire * * * * *
suspension and or exclusion from organization as the claimant’s (f)(1) A power of attorney may be
representation of claimants before VA representative, unless the claimant revoked at any time, and an agent or
on the same grounds as apply to specifically indicates in the power of attorney may be discharged at any time.
representatives, agents, and attorneys in attorney a desire to appoint only the Unless a claimant specifically indicates
§ 14.633 of this part. individual representative. Such specific otherwise, the receipt of a new power of
* * * * * indication must be made in the space on attorney executed by the claimant and
I 7. Amend § 14.631 by:
the power-of-attorney form for the organization or individual providing
I a. Revising the section heading. designation of the representative and representation shall constitute a
I b. Revising paragraph (a) introductory must use the word ‘‘only’’ with revocation of an existing power of
text. reference to the individual attorney.
I c. Adding paragraph (a)(1)(iv). representative. (2) If an agent or attorney limits the
I d. In paragraph (a)(2), removing (c) An organization, individual scope of his or her representation
‘‘Department of Veterans Affairs’’ and providing representation on a particular regarding a particular claim by so
adding, in its place, ‘‘VA’’. claim under § 14.630, representative, indicating on VA Form 21–22a, or a
I e. Removing paragraph (b). agent, or attorney named in a power of claimant authorizes a person to provide
I f. Redesignating paragraphs (c) attorney executed pursuant to paragraph representation in a particular claim
through (g) as paragraphs (b) through (f). (a) of this section may withdraw from under § 14.630, such specific authority
I g. Revising newly redesignated representation provided before a VA shall constitute a revocation of an
paragraphs (b) and (c). agency of original jurisdiction if such existing general power of attorney filed
I h. In newly redesignated paragraph withdrawal would not adversely impact under paragraph (a) of this section only
(e)(1), removing ‘‘the Department of the claimant’s interests. This section is as it pertains to, and during the
Veterans Affairs’’ and add, in its place, applicable until an agency of original pendency of, that particular claim.
‘‘VA’’. jurisdiction certifies an appeal to the Following the final determination of
I i. Revising newly redesignated Board of Veterans’ Appeals after which such claim, the general power of
paragraph (f). time 38 CFR 20.608 governs withdrawal attorney shall remain in effect as to any
I j. Adding a parenthetical at the end of from representation before the Board. new or reopened claim.
the section. Withdrawal is also permissible if a * * * * *
The revisions and addition read as claimant persists in a course of action (The Office of Management and Budget has
follows: that the organization or individual approved the information collection
providing representation reasonably requirements in this section under control
§ 14.631 Powers of attorney; disclosure of believes is fraudulent or criminal and is number 2900–0321.)
claimant information. furthered through the representation of I 8. Revise § 14.632 to read as follows:
(a) A power of attorney, executed on the organization or individual; the
either VA Form 21–22, ‘‘Appointment of claimant fails to uphold an obligation to § 14.632 Standards of conduct for persons
Veterans Service Organization as the organization or individual providing providing representation before the
Claimant’s Representative,’’ or VA Form representation regarding the services of Department
21–22a, ‘‘Appointment of Attorney or the organization or individual; or other (a)(1) All persons acting on behalf of
Agent as Claimant’s Representative,’’ is good cause for withdrawal exists. An a claimant shall faithfully execute their
required to represent a claimant before organization or individual providing duties as individuals providing
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VA and to authorize VA’s disclosure of representation withdraws from representation on a particular claim
information to any person or representation by notifying the under § 14.630, representatives, agents,
organization representing a claimant claimant, the VA organization in or attorneys.
before the Department. Without the possession of the claims file, and the (2) All individuals providing
signature of a person providing agency of original jurisdiction in writing representation are required to be
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29874 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
truthful in their dealings with claimants activities prohibited by the rules of taken or to support the position taken by
and VA. professional conduct of any jurisdiction a good faith argument for an extension,
(b) An individual providing in which the attorney is licensed to modification, or reversal of existing law;
representation on a particular claim practice law. (5) Suspension or disbarment by any
under § 14.630, representative, agent, or (Authority: 38 U.S.C. 501(a), 5902, 5904)
court, bar, or Federal or State agency to
attorney shall: which such individual providing
(1) Provide claimants with competent I 9. Amend § 14.633 by: representation under § 14.630,
representation before VA. Competent I a. Revising the section heading. representative, agent, or attorney was
representation requires the knowledge, I b. Revising paragraphs (a), (b), (c) previously admitted to practice, or
skill, thoroughness, and preparation introductory text, and (c)(1). disqualification from participating in or
I c. Redesignating paragraph (c)(4) as
necessary for the representation. This appearing before any court, bar, or
includes understanding the issues of paragraph (c)(7). Federal or State agency and lack of
I d. Revising newly redesignated
fact and law relevant to the claim as subsequent reinstatement;
well as the applicable provisions of title paragraph (c)(7), (6) Charging excessive or
I e. Adding new paragraphs (c)(4), unreasonable fees for representation as
38, United States Code, and title 38,
(c)(5), and (c)(6). determined by VA, the Court of Appeals
Code of Federal Regulations;
I f. Revising paragraphs (d) through (f). for Veterans Claims, or the United States
(2) Act with reasonable diligence and
I g. Revising paragraph (h). Court of Appeals for the Federal Circuit;
promptness in representing claimants.
I h. Adding new paragraph (i). or
This includes responding promptly to
VA requests for information or assisting The revisions and additions read as (7) Any other unlawful or unethical
a claimant in responding promptly to follows: practice adversely affecting an
VA requests for information. § 14.633 Termination of accreditation or individual’s fitness for practice before
(c) An individual providing authority to provide representation under VA.
representation on a particular claim § 14.630. (d) Accreditation or authority to
under § 14.630, representative, agent, or (a) Accreditation or authority to provide representation on a particular
attorney shall not: provide representation on a particular claim shall be canceled when the
(1) Violate the standards of conduct as claim under § 14.630 may be suspended General Counsel finds that the
described in this section; or canceled at the request of an performance of an individual providing
(2) Circumvent a rule of conduct organization, individual providing representation under § 14.630,
through the actions of another; representation under § 14.630, representative, agent, or attorney before
(3) Engage in conduct involving fraud, representative, agent, or attorney. When VA demonstrates a lack of the degree of
deceit, misrepresentation, or dishonesty; an organization requests suspension or competence necessary to adequately
(4) Violate any of the provisions of cancellation of the accreditation of a prepare, present, and prosecute claims
title 38, United States Code, or title 38, representative due to misconduct or for veteran’s benefits. A determination
Code of Federal Regulations; lack of competence on the part of the that the performance of an individual
(5) Enter into an agreement for, representative or because the providing representation under
charge, solicit, or receive a fee that is representative resigned to avoid § 14.630, representative, agent, or
clearly unreasonable or otherwise suspension or cancellation of attorney before VA demonstrates a lack
prohibited by law or regulation; accreditation for misconduct or lack of of the degree of competence required to
(6) Solicit, receive, or enter into represent claimants before VA will be
competence, the organization shall
agreements for gifts related to based upon consideration of the
inform VA of the reason for the request
representation provided before an following factors:
for suspension or cancellation and the
agency of original jurisdiction has (1) The relative complexity and
facts and circumstances surrounding
issued a decision on a claim or claims specialized nature of the matter;
any incident that led to the request. (2) The individual’s general
and a Notice of Disagreement has been
(b) Accreditation shall be canceled at experience;
filed with respect to that decision;
such time as a determination is made by (3) The individual’s training and
(7) Delay, without good cause, the
the General Counsel that any experience; and
processing of a claim at any stage of the
requirement of § 14.629 is no longer met (4) The preparation and study the
administrative process;
(8) Mislead, threaten, coerce, or by a representative, agent, or attorney. individual is able to give veterans
deceive a claimant regarding benefits or (c) Accreditation or authority to benefits matters and whether it is
other rights under programs provide representation on a particular feasible to refer such matters to, or
administered by VA; claim shall be canceled when the associate or consult with, an individual
(9) Engage in, or counsel or advise a General Counsel finds, by clear and of established competence in the field of
claimant to engage in acts or behavior convincing evidence, one or more of the practice.
prejudicial to the fair and orderly following: (e) As to cancellation of accreditation
conduct of administrative proceedings (1) Violation of or refusal to comply under paragraphs (c) or (d) of this
before VA; with the laws administered by VA or section, upon receipt of credible written
(10) Disclose, without the claimant’s with the regulations governing practice information from any source indicating
authorization, any information provided before VA including the standards of improper conduct, or incompetence, the
by VA for purposes of representation; or conduct in § 14.632; Assistant General Counsel of
(11) Engage in any other unlawful or * * * * * jurisdiction shall inform the subject of
unethical conduct. (4) Knowingly presenting to VA a the allegations about the specific law,
(d) In addition to complying with frivolous claim, issue, or argument. A regulation, or policy alleged to have
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standards of conduct for practice before claim, issue, or argument is frivolous if been violated or the nature of the
VA in paragraphs (a) through (c) of this the individual providing representation alleged incompetence and the source of
section, an attorney shall not, in under § 14.630, representative, agent, or the complaint, and shall provide the
providing representation to a claimant attorney is unable to make a good faith subject with the opportunity to respond.
before VA, engage in behavior or argument on the merits of the position If the matter involves an accredited
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29875
representative of a recognized forward it with a recommendation to the evidence shall not apply. Testimony
organization, the notice shall include General Counsel for a final decision. shall be recorded verbatim. The
contact with the representative’s (iii) The Assistant General Counsel evidentiary record shall be closed 10
organization. When appropriate, may extend the time to file an answer days after the completion of the hearing.
including situations where no harm or request a hearing for a reasonable The hearing officer shall submit the
results to the claimant or VA, the period upon a showing of sufficient entire hearing transcript, any pertinent
Assistant General Counsel will provide cause. records or information, and a
the subject with an opportunity to (iv) For purposes of computing time recommended finding to the Assistant
correct the offending behavior before for responses to notices of intent to General Counsel within 30 days of
deciding whether to proceed with a cancel accreditation, days means closing the record. The Assistant
formal inquiry. If the subject refuses to calendar days. In computing the time for General Counsel shall immediately
comply and the matter remains filing this response, the date on which forward the record and the hearing
unresolved, or the behavior the notice was mailed by the Assistant officer’s recommendation to the General
subsequently results in harm to a General Counsel shall be excluded. A Counsel for a final decision.
claimant or VA, the Assistant General response postmarked prior to the * * * * *
Counsel shall immediately initiate a expiration of the 30th day shall be (h) The decision of the General
formal inquiry into the matter. accepted as timely filed. If the 30th day Counsel is a final adjudicative
(1) If the result of the inquiry does not falls on a weekend or legal holiday, the determination of an agency of original
justify further action, the Assistant first business day thereafter shall be jurisdiction and may be appealed to the
General Counsel will close the inquiry included in the computation. As used in Board of Veterans’ Appeals. The
and maintain the record for 3 years. this section, legal holiday means New effective date for cancellation of
(2) If the result of the inquiry justifies Year’s Day, Birthday of Martin Luther accreditation or authority to provide
further action, the Assistant General King, Jr., Washington’s Birthday, representation on a particular claim
Counsel shall: Memorial Day, Independence Day, shall be the date upon which the
(i) Inform the General Counsel of the Labor Day, Columbus Day, Veterans General Counsel’s final decision is
result of the inquiry and notify the Day, Thanksgiving Day, Christmas Day, rendered. Notwithstanding provisions
individual providing representation and any other day appointed as a in this section for closing the record at
under § 14.630, representative, agent or holiday by the President or the Congress the end of the 30-day period for filing
attorney of an intent to cancel of the United States, or by the State in an answer or 10 days after a hearing,
accreditation or authority to provide which the individual resides. appeals shall be initiated and processed
representation on a particular claim. (f) If a hearing is requested, it will be using the procedures in 38 CFR parts 19
The notice will be sent to individuals held at the VA Regional Office nearest and 20. Nothing in this section shall be
providing representation on a particular the individual’s principal place of construed to limit the Board’s authority
claim by certified or registered mail to business. If the individual’s principal to remand a matter to the General
the individual’s last known address of place of business is Washington, DC, the Counsel under 38 CFR 19.9 for any
record as indicated on the VA Form 21– hearing will be held at the VA Central action that is essential for a proper
22a on file with the agency of original Office or other VA facility in appellate decision or the General
jurisdiction. The notice will be sent to Washington, DC. For hearings Counsel’s ability to issue a
accredited individuals by certified or conducted at either location, the Supplemental Statement of the Case
registered mail to the individual’s last Assistant General Counsel or his or her under 38 CFR 19.31.
known address of record as indicated in designee shall present the evidence. The (i) In cases where the accreditation of
VA’s accreditation records. The notice hearing officer shall not report, directly an agent or attorney is cancelled, the
will state the reason(s) for the or indirectly to, or be employed by the Office of the General Counsel may
cancellation proceeding and advise the General Counsel or the head of the VA notify all agencies, courts, and bars to
individual to file an answer, in oath or agency of original jurisdiction before which the agent or attorney is admitted
affidavit form or the form specified for which the individual provided to practice.
unsworn declarations under penalty of representation. The hearing officer shall
* * * * *
perjury in 28 U.S.C. 1746, within 30 provide notice of the hearing to the
days from the date the notice was individual providing representation I 10. Add § 14.636 to read as follows:
mailed, responding to the stated reasons under § 14.630, representative, agent, or § 14.636. Payment of fees for
for cancellation and explaining why he attorney by certified or registered mail representation by agents and attorneys in
or she should not be suspended or at least 21 days before the date of the proceedings before Agencies of Original
excluded from practice before VA. The hearing. Hearings shall not be scheduled Jurisdiction and before the Board of
notice will also advise the individual of before the completion of the 30-day Veterans’ Appeals.
the right to submit additional evidence period for filing an answer to the notice (a) Applicability of rule. The
and the right to request a hearing on the of intent to cancel accreditation. The provisions of this section apply to the
matter. Requests for hearings must be hearing officer will have authority to services of accredited agents and
made in the answer. If the individual administer oaths. The party requesting attorneys with respect to benefits under
does not file an answer with the Office the hearing will have a right to counsel, laws administered by VA in all
of the General Counsel within 30 days to present evidence, and to cross- proceedings before the agency of
of the date that the Assistant General examine witnesses. Upon request of the original jurisdiction or before the Board
Counsel mailed the notice, the Assistant individual requesting the hearing, an of Veterans’ Appeals regardless of
General Counsel shall close the record appropriate VA official designated in whether an appeal has been initiated.
and forward it with a recommendation § 2.1 of this chapter may issue (b) Who may charge fees for
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to the General Counsel for a final subpoenas to compel the attendance of representation. Only accredited agents
decision. witnesses and the production of and attorneys may receive fees from
(ii) In the event that a hearing is not documents necessary for a fair hearing. claimants or appellants for their services
requested, the Assistant General The hearing shall be conducted in an provided in connection with
Counsel shall close the record and informal manner and court rules of representation. Recognized
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29876 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
organizations (including their an agent or attorney is eligible for fees determining whether fees are reasonable
accredited representatives when acting under this section. The agency of include:
as such) and individuals recognized original jurisdiction’s eligibility (1) The extent and type of services the
under § 14.630 of this part are not determination is a final adjudicative representative performed;
permitted to receive fees. An agent or action and may be appealed to the (2) The complexity of the case;
attorney who may also be an accredited Board. (3) The level of skill and competence
representative of a recognized (d) Exceptions—(1) Chapter 37 loans. required of the representative in giving
organization may not receive such fees With respect to services of agents and the services;
unless he or she has been properly attorneys provided after October 9, (4) The amount of time the
designated as an agent or attorney in 1992, a reasonable fee may be charged representative spent on the case;
accordance with § 14.631 of this part in or paid in connection with any (5) The results the representative
his or her individual capacity as an proceeding in a case arising out of a achieved, including the amount of any
accredited agent or attorney. loan made, guaranteed, or insured under benefits recovered;
(c) Circumstances under which fees chapter 37, United States Code, even (6) The level of review to which the
may be charged. Except as noted in though the conditions set forth in claim was taken and the level of the
paragraph (c)(2) and in paragraph (d) of paragraph (c) of this section are not met. review at which the representative was
this section, agents and attorneys may (2) Payment of fee by disinterested retained;
charge claimants or appellants for third party. (i) An agent or attorney may (7) Rates charged by other
representation provided: after an agency receive a fee or salary from an representatives for similar services; and
of original jurisdiction has issued a (8) Whether, and to what extent, the
organization, governmental entity, or
decision on a claim or claims, including payment of fees is contingent upon the
other disinterested third party for
any claim to reopen under 38 CFR 3.156 results achieved.
representation of a claimant or appellant
or for an increase in rate of a benefit; a (f) Presumptions. Fees which do not
even though the conditions set forth in
Notice of Disagreement has been filed exceed 20 percent of any past-due
paragraph (c) of this section have not
with respect to that decision on or after benefits awarded as defined in
been met. An organization,
June 20, 2007; and the agent or attorney paragraph (h)(3) of this section shall be
governmental entity, or other third party
has complied with the power of attorney presumed to be reasonable. Fees which
is considered disinterested only if the
requirements in § 14.631 and the fee exceed 331⁄3 percent of any past-due
entity or individual does not stand to
agreement requirements in paragraph (g) benefits awarded shall be presumed to
benefit financially from the successful
of this section. be unreasonable. These presumptions
outcome of the claim. In no such case
(1) Agents and attorneys may charge may be rebutted through an examination
may the attorney or agent charge a fee
fees for representation provided with of the factors in paragraph (e) of this
which is contingent, in whole or in part,
respect to a request for revision of a section establishing that there is clear
on whether the matter is resolved in a
decision of an agency of original and convincing evidence that a fee
jurisdiction under 38 U.S.C. 5109A or manner favorable to the claimant or
which does not exceed 20 percent of
the Board of Veterans’ Appeals under 38 appellant.
any past-due benefits awarded is not
U.S.C. 7111 based on clear and (ii) For purposes of this part, a person reasonable or that a fee which exceeds
unmistakable error if a Notice of shall be presumed not to be 331⁄3 percent is reasonable in a specific
Disagreement was filed with respect to disinterested if that person is the circumstance.
the challenged decision on or after June spouse, child, or parent of the claimant (g) Fee agreements. All agreements for
20, 2007, and the agent or attorney has or appellant, or if that person resides the payment of fees for services of
complied with the power of attorney with the claimant or appellant. This agents and attorneys (including
requirements in § 14.631 and the fee presumption may be rebutted by clear agreements involving fees or salary paid
agreement requirements in paragraph (g) and convincing evidence that the person by an organization, governmental entity
of this section. in question has no financial interest in or other disinterested third party) must
(2) In cases in which a Notice of the success of the claim. be in writing and signed by both the
Disagreement was filed on or before (iii) The provisions of paragraph (g) of claimant or appellant and the agent or
June 19, 2007, agents and attorneys may this section (relating to fee agreements) attorney.
charge fees only for services provided shall apply to all payments or (1) To be valid, a fee agreement must
after both of the following conditions agreements to pay involving include the following:
have been met: disinterested third parties. In addition, (i) The name of the veteran,
(i) A final decision was promulgated the agreement shall include or be (ii) The name of the claimant or
by the Board with respect to the issue, accompanied by the following appellant if other than the veteran,
or issues, involved in the appeal; and statement, signed by the attorney or (iii) The name of any disinterested
(ii) The agent or attorney was retained agent: ‘‘I certify that no agreement, oral third-party payer (see paragraph (d)(2)
not later than 1 year following the date or otherwise, exists under which the of this section) and the relationship
that the decision by the Board was claimant or appellant will provide between the third-party payer and the
promulgated. (This condition will be anything of value to the third-party veteran, claimant, or appellant,
considered to have been met with payer in this case in return for payment (iv) The applicable VA file number,
respect to all successor agents or of my fee or salary, including, but not and
attorneys acting in the continuous limited to, reimbursement of any fees (v) The specific terms under which
prosecution of the same matter if a paid.’’ the amount to be paid for the services
predecessor was retained within the (e) Fees permitted. Fees permitted for of the attorney or agent will be
required time period.) services of an agent or attorney admitted determined.
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(3) Except as noted in paragraph (i) of to practice before VA must be (2) Fee agreements must also clearly
this section and § 14.637(d), the agency reasonable. They may be based on a specify if VA is to pay the agent or
of original jurisdiction that issued the fixed fee, hourly rate, a percentage of attorney directly out of past due
decision identified in a Notice of benefits recovered, or a combination of benefits. A direct-pay fee agreement is a
Disagreement shall determine whether such bases. Factors considered in fee agreement between the claimant or
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29877
appellant and an agent or attorney payment to a claimant or an appellant. action taken on issues concerning which
providing for payment of fees out of For example, no cash payment will be the criteria in paragraph (c) of this
past-due benefits awarded directly to an made to military retirees unless there is section have been met.
agent or attorney. A fee agreement that a corresponding waiver of retirement (4) In addition to filing a copy of the
does not clearly specify that VA is to pay. (See 38 U.S.C. 5304(a) and 38 CFR fee agreement with the Office of the
pay the agent or attorney out of past-due 3.750) General Counsel as required by
benefits or that specifies a fee greater (2) For purposes of this paragraph (h), paragraph (g) of this section, the agent
than 20 percent of past-due benefits a claim will be considered to have been or attorney must notify the agency of
awarded by VA shall be considered to resolved in a manner favorable to the original jurisdiction within 30 days of
be an agreement in which the agent or claimant or appellant if all or any part the date of execution of the agreement
attorney is responsible for collecting any of the relief sought is granted. of the existence of an agreement
fees for representation from the claimant (3) For purposes of this paragraph (h), providing for the direct payment of fees
without assistance from VA. ‘‘past-due benefits’’ means a out of any benefits subsequently
(3) A copy of the agreement must be nonrecurring payment resulting from a determined to be past due and provide
filed with the Office of the General benefit, or benefits, granted on appeal or that agency with a copy of the fee
Counsel within 30 days of its execution awarded on the basis of a claim agreement.
by mailing the copy to the following reopened after a denial by a VA agency (i) Motion for review of fee agreement.
address: Office of the General Counsel of original jurisdiction or the Board of Before the expiration of 120 days from
(022D), 810 Vermont Avenue, NW., Veterans’ Appeals or the lump sum the date of the final VA action, the
Washington, DC 20420. Only fee payment that represents the total Office of the General Counsel may
agreements and documents related to amount of recurring cash payments that review a fee agreement between a
review of fees under paragraph (i) of this accrued between the effective date of claimant or appellant and an agent or
section and expenses under § 14.637 the award, as determined by applicable attorney upon its own motion or upon
may be filed with the Office of the laws and regulations, and the date of the the motion of the claimant or appellant.
General Counsel. All documents relating grant of the benefit by the agency of The Office of the General Counsel may
the adjudication of a claim for VA original jurisdiction, the Board of order a reduction in the fee called for in
benefits, including any correspondence, Veterans’ Appeals, or an appellate court. the agreement if it finds by a
evidence, or argument, must be filed (i) When the benefit granted on preponderance of the evidence, or by
with the agency of original jurisdiction, appeal, or as the result of the reopened clear and convincing evidence in the
Board of Veterans’ Appeals, or other VA claim, is service connection for a case of a fee presumed reasonable under
office as appropriate. disability, the ‘‘past-due benefits’’ will paragraph (f) of this section, that the fee
(h) Payment of fees by Department of be based on the initial disability rating is unreasonable. The Office of the
Veterans Affairs directly to an agent or assigned by the agency of original General Counsel may approve a fee
attorney from past-due benefits. (1) jurisdiction following the award of presumed unreasonable under
Subject to the requirements of the other service connection. The sum will equal paragraph (f) of this section if it finds by
paragraphs of this section, including the payments accruing from the clear and convincing evidence that the
paragraphs (c) and (e), the claimant or effective date of the award to the date fee is reasonable. The Office of the
appellant and an agent or attorney may of the initial disability rating decision. General Counsel’s review of the
enter into a fee agreement providing that If an increased evaluation is agreement under this paragraph will
payment for the services of the agent or subsequently granted as the result of an address the issues of eligibility under
attorney will be made directly to the appeal of the disability evaluation paragraph (c) of this section and
agent or attorney by VA out of any past- initially assigned by the agency of reasonableness under paragraph (e) of
due benefits awarded in any proceeding original jurisdiction, and if the agent or this section. The Office of the General
before VA or the United States Court of attorney represents the claimant or Counsel will limit its review and
Appeals for Veterans Claims. VA will appellant in that phase of the claim, the decision under this paragraph to the
charge and collect an assessment out of agent or attorney will be paid a issue of reasonableness if another
the fees paid directly to agents or supplemental payment based upon the agency of original jurisdiction has
attorneys from past-due benefits increase granted on appeal, to the extent reviewed the agreement and made an
awarded. The amount of such that the increased amount of disability eligibility determination under
assessment shall be equal to five percent is found to have existed between the paragraph (c) of this section. Motions for
of the amount of the fee required to be initial effective date of the award review of fee agreements must be in
paid to the agent or attorney, but in no following the grant of service writing and must include the name of
event shall the assessment exceed $100. connection and the date of the rating the veteran, the name of the claimant or
Such an agreement will be honored by action implementing the appellate appellant if other than the veteran, and
VA only if the following conditions are decision granting the increase. the applicable VA file number. Such
met: (ii) Unless otherwise provided in the motions must set forth the reason, or
(i) The total fee payable (excluding fee agreement between the claimant or reasons, why the fee called for in the
expenses) does not exceed 20 percent of appellant and the agent or attorney, the agreement is unreasonable and must be
the total amount of the past-due benefits agent’s or attorney’s fees will be accompanied by all evidence the
awarded, determined on the basis of the total moving party desires to submit.
(ii) The amount of the fee is amount of the past-due benefits even (1) A claimant’s or appellant’s motion
contingent on whether or not the claim though a portion of those benefits may for review of a fee agreement must be
is resolved in a manner favorable to the have been apportioned to the claimant’s served on the agent or attorney and
claimant or appellant, and or appellant’s dependents. must be filed at the following address:
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(iii) The award of past-due benefits (iii) If an award is made as the result Office of the General Counsel (022D),
results in a cash payment to a claimant of favorable action with respect to 810 Vermont Avenue, NW.,
or an appellant from which the fee may several issues, the past-due benefits will Washington, DC 20420. The agent or
be deducted. (An award of past-due be calculated only on the basis of that attorney may file a response to the
benefits will not always result in a cash portion of the award which results from motion, with any relevant evidence,
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29878 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
with the Office of the General Counsel Board’s authority to remand a matter to if the expenses are reasonable. The
not later than 30 days from the date on the General Counsel under 38 CFR 19.9 Office of the General Counsel may
which the claimant or appellant served for any action that is essential for a review the expenses charged by an agent
the motion on the agent or attorney. proper appellate decision or the General or attorney upon its own motion or the
Such responses must be served on the Counsel’s ability to issue a motion of the claimant or appellant and
claimant or appellant. The claimant or Supplemental Statement of the Case may order a reduction in the expenses
appellant then has 15 days from the date under 38 CFR 19.31. charged if it finds that they are
on which the agent or attorney served a (Authority: 38 U.S.C. 5902, 5904, 5905) excessive or unreasonable. The Office of
response to file a reply with the Office the General Counsel’s review of
(The Office of Management and Budget has
of the General Counsel. Such replies approved the information collection expenses under this paragraph will
must be served on the agent or attorney. requirements in this section under control address the issues of eligibility under
(2) The Assistant General Counsel number 2900–0085.) § 14.636(c) and reasonableness. The
shall initiate the Office of the General Office of the General Counsel will limit
Counsel’s review of a fee agreement on I 11. Add § 14.637 to read as follows: its review and decision under this
its own motion by serving the motion on paragraph to the issue of reasonableness
§ 14.637. Payment of the expenses of
the agent or attorney and the claimant agents and attorneys in proceedings before if another agency of original jurisdiction
or appellant. The agent or attorney may Agencies of Original Jurisdiction and has reviewed the fee agreement between
file a response to the motion, with any before the Board of Veterans’ Appeals. the claimant and the agent or attorney
relevant evidence, with the Office of the and determined that the agent or
(a) Applicability of rule. The
General Counsel (022D), 810 Vermont attorney is eligible for reimbursement of
provisions of this section apply to the
Avenue, NW., Washington, DC 20420, expenses. Motions for review of
services of accredited agents and
not later than 30 days from the date on expenses must be in writing and must
attorneys with respect to benefits under
which the Office of the General Counsel include the name of the veteran, the
laws administered by VA in all
served the motion on the agent or name of the claimant or appellant if
proceedings before the agency of
attorney. Such responses must be served other than the veteran, and the
original jurisdiction or before the Board
on the claimant or appellant. applicable VA file number. Such
(3) The Office of the General Counsel of Veterans’ Appeals regardless of
motions must specifically identify
shall close the record in proceedings to whether an appeal has been initiated.
which expenses charged are
review fee agreements 15 days after the (b) General. Any agent or attorney
unreasonable; must set forth the reason,
date on which the agent or attorney may be reimbursed for expenses
or reasons, why such expenses are
served a response on the claimant or incurred on behalf of a veteran or a
excessive or unreasonable and must be
appellant, or 30 days after the claimant, veteran’s dependents or survivors in the
accompanied by all evidence the
appellant, or the Office of the General prosecution of a claim for benefits
claimant or appellant desires to submit.
Counsel served the motion on the agent pending before VA. Whether such an
Factors considered in determining
or attorney if there is no response. The agent or attorney will be reimbursed for
whether expenses are excessive or
Assistant General Counsel may, for a expenses and the method of such unreasonable include the complexity of
reasonable period upon a showing of reimbursement is a matter to be the case, the potential extent of benefits
sufficient cause, extend the time for an determined by the agent or attorney and recoverable, and whether travel
agent or attorney to serve an answer or the claimant or appellant in the fee expenses are in keeping with expenses
for a claimant or appellant to serve a agreement filed with the Office of the normally incurred by other
reply. The Assistant General Counsel General Counsel under § 14.636 of this representatives.
shall forward the record and a part. Expenses are not payable directly (1) A claimant’s or appellant’s motion
recommendation to the General Counsel to the agent or attorney by VA out of for review of expenses must be served
for a final decision. Unless either party benefits determined to be due to a on the agent or attorney and must be
files a Notice of Disagreement with the claimant or appellant. filed at the following address: Office of
Office of the General Counsel, the agent (c) Nature of expenses subject to the General Counsel (022D), 810
or attorney must refund any excess reimbursement. ‘‘Expenses’’ include Vermont Avenue, NW., Washington, DC
payment to the claimant or appellant nonrecurring expenses incurred directly 20420. The agent or attorney may file a
not later than the expiration of the time in the prosecution of a claim for benefits response to the motion, with any
within which the General Counsel’s on behalf of a claimant or appellant. accompanying evidence, with the Office
decision may be appealed to the Board Examples of such expenses include of the General Counsel not later than 30
of Veterans’ Appeals. expenses for travel specifically to attend days from the date on which the
(j) In addition to whatever other a hearing with respect to a particular claimant or appellant served the motion
penalties may be prescribed by law or claim, the cost of copies of medical on the agent or attorney. Such responses
regulation, failure to comply with the records or other documents obtained must be served on the claimant or
requirements of this section may result from an outside source, and the cost of appellant. The claimant or appellant
in proceedings under § 14.633 of this obtaining the services of an expert then has 15 days from the date on which
chapter to terminate the agent’s or witness or an expert opinion. the agent or attorney served a response
attorney’s accreditation to practice ‘‘Expenses’’ do not include normal to file a reply with the Office of the
before VA. overhead costs of the agent or attorney General Counsel. Such replies must be
(k) Notwithstanding provisions in this such as office rent, utilities, the cost of served on the agent or attorney.
section for closing the record at the end obtaining or operating office equipment (2) The Assistant General Counsel
of the 30-day period for serving a or a legal library, salaries of the shall initiate the Office of the General
response or 15 days after the date on representative and his or her support Counsel’s review of expenses on its own
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which the agent or attorney served a staff, and the cost of office supplies. motion by serving the motion on the
response, appeals shall be initiated and (d) Expense charges permitted; agent or attorney and the claimant or
processed using the procedures in 38 motion for review of expenses. appellant. The agent or attorney may file
CFR Parts 19 and 20. Nothing in this Reimbursement for the expenses of an a response to the motion, with any
section shall be construed to limit the agent or attorney may be obtained only accompanying evidence, with the Office
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Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations 29879
of the General Counsel (022D), 810 I a. Adding an undesignated center revising the authority citation to read as
Vermont Avenue, NW., Washington, DC heading before the section heading . follows:
20420, not later than 30 days from the I b. In paragraph (a) introductory text,
date on which the Office of the General removing ‘‘14.640 through 14.643’’ and § 19.36 Notification of certification of
Counsel served the motion on the agent adding, in its place, ‘‘1.600 through appeal and transfer of appellate record.
or attorney. Such responses must be 1.603’’. * * * Provisions in this section for
served on the claimant or appellant. I c. In paragraph (b)(1), removing submitting additional evidence and
(3) The Office of the General Counsel ‘‘14.640 through 14.643’’ and adding, in references to § 20.1304 do not apply in
shall close the record in proceedings to its place, ‘‘1.600 through 1.603’’. proceedings before the General Counsel
review expenses 15 days after the date I d. In paragraph (b)(4), removing
conducted under part 14 of this chapter
on which the agent or attorney served a ‘‘14.640 through 14.643’’ and adding, in to suspend or cancel accreditation or to
response on the claimant or appellant, its place, ‘‘1.600 through 1.603’’.
review fee agreements and expenses for
or 30 days after the claimant, appellant, I e. In paragraph (d) introductory text,
removing ‘‘14.640 through 14.643’’ and reasonableness.
or the Office of the General Counsel
served the motion on the agent or adding, in its place, ‘‘1.600 through (Authority: 38 U.S.C. 7105; 38 U.S.C. 5902,
attorney if there is no response. The 1.603’’. 5903, 5904)
Assistant General Counsel may, for a The addition reads as follows:
reasonable period upon a showing of I 19. Amend § 19.37 by adding a
Expanded Remote Access to paragraph (c) and revising the authority
sufficient cause, extend the time for an Computerized Veterans Claims Records
agent or attorney to serve an answer or citation at the end of the section to read
by Accredited Representatives
for a claimant or appellant to serve a as follows:
reply. Unless either party files a Notice § 1.600 Purpose.
§ 19.37 Consideration of additional
of Disagreement with the General * * * * * evidence received by the agency of original
Counsel’s decision, the attorney or agent jurisdiction after an appeal has been
must refund any excess payment to the § 1.602 [Amended]
initiated.
claimant or appellant not later than the I 14. Amend newly redesignated
* * * * *
expiration of the time within which the § 1.602 by:
General Counsel’s decision may be I a. In paragraph (b), removing ‘‘14.643’’ (c) The provisions of this section do
appealed to the Board of Veterans’ and adding, in its place, ‘‘1.603’’. not apply in proceedings before the
Appeals. I b. In paragraph (c)(3), removing General Counsel conducted under part
(e) In addition to whatever other ‘‘14.640 through 14.643’’ and adding, in 14 of this chapter to cancel accreditation
penalties may be prescribed by law or its place, ‘‘1.600 through 1.603’’. or to review fee agreements and
regulation, failure to comply with the expenses for reasonableness.
§ 1.603 [Amended]
requirements of this section may result (Authority: 38 U.S.C. 7105(d)(1), 5902, 5903,
in proceedings under § 14.633 of this I 15. Amend newly redesignated 5904)
part to terminate the agent’s or § 1.603 by:
attorney’s accreditation to practice I a. In paragraph (b)(1), removing
PART 20—BOARD OF VETERANS’
before VA. ‘‘14.640 through 14.643’’ and adding, in APPEALS: RULES OF PRACTICE
(f) Notwithstanding provisions in this its place, ‘‘1.600 through 1.603’’.
section for closing the record at the end I b. In paragraph (c), removing ‘‘14.643’’
I 20. The authority citation for part 20
of the 30-day period for serving a and adding, in its place, ‘‘1.603’’.
continues to read as follows:
response or 15 days after the date on
PART 19—BOARD OF VETERANS’ Authority: 38 U.S.C. 501(a) and as noted in
which the agent or attorney served a
APPEALS: APPEALS REGULATIONS specific sections.
response, appeals shall be initiated and
processed using the procedures in 38 I 16. The authority citation for part 19
CFR parts 19 and 20. Nothing in this I 21. Amend § 20.608 by revising
continues to read as follows: paragraph (a) to read as follows:
section shall be construed to limit the
Authority: 38 U.S.C. 501(a) unless
Board’s authority to remand a matter to § 20.608 Rule 608. Withdrawal of services
otherwise noted.
the General Counsel under 38 CFR 19.9 by a representative.
for any action that is essential for a I 17. Amend § 19.31 by adding a
proper appellate decision or the General paragraph (d) and revising the authority (a) Withdrawal of services prior to
Counsel’s ability to issue a citation at the end of the section to read certification of an appeal. A
Supplemental Statement of the Case as follows. representative may withdraw services as
under 38 CFR 19.31. representative in an appeal at any time
§ 19.31 Supplemental statement of the prior to certification of the appeal to the
(Authority: 38 U.S.C. 5904) case. Board of Veterans’ Appeals by the
(The Office of Management and Budget has * * * * * agency of original jurisdiction by
approved the information collection (d) Exception. Paragraph (b)(1) of this complying with the requirements of
requirements in this section under control
section does not apply in proceedings § 14.631 of this chapter.
number 2900–0085.)
before the General Counsel conducted * * * * *
PART 1—GENERAL PROVISIONS under part 14 of this chapter to cancel
accreditation or to review fee §§ 20.609 and 20.610 [Removed]
I 12. The authority citation for part 1 agreements and expenses for
continues to read as follows: reasonableness. I 22. Remove §§ 20.609 and 20.610.
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Authority: 38 U.S.C. 501(a), and as noted (Authority: 38 U.S.C. 7105(d); 38 U.S.C.
I 23. Amend § 20.800 by adding a
in specific sections. 5902, 5903, 5904)
sentence at the end of the paragraph and
I 13. Amend newly redesignated I 18. Amend § 19.36 by adding a revising the authority citation to read as
§ 1.600 by: sentence at the end of the paragraph and follows:
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29880 Federal Register / Vol. 73, No. 100 / Thursday, May 22, 2008 / Rules and Regulations
§ 20.800 Rule 800. Submission of citation at the end of the section to read and (d) of this section allowing
additional evidence after initiation of as follows: appellants to submit additional
appeal.
evidence do not apply in proceedings
* * * The provisions of this section § 20.1304 Rule 1304. Request for change
in representation, request for personal before the General Counsel conducted
do not apply in proceedings before the under part 14 of this chapter to cancel
General Counsel conducted under part hearing, or submission of additional
evidence following certification of an appeal accreditation or to review fee
14 of this chapter to cancel accreditation to the Board of Veterans’ Appeals. agreements and expenses for
or to review fee agreements and
* * * * * reasonableness.
expenses for reasonableness.
(e) Relationship to proceedings before (Authority: 38 U.S.C. 7104, 7105, 7105A; 38
(Authority: 38 U.S.C. 7105(d)(1); 38 U.S.C. the General Counsel to cancel
5902, 5903, 5904) U.S.C. 5902, 5903, 5904)
accreditation or to review the
I 24. Amend § 20.1304 by adding a reasonableness of fees and expenses. [FR Doc. E8–10779 Filed 5–21–08; 8:45 am]
paragraph (e) and revising the authority The provisions of paragraphs (a), (b), BILLING CODE 8320–01–P
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