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Social Security Disability Attorney’s Fees: The Law

On Behalf of | Jan 18, 2012 | Civil Trial, Legally Speaking

Social Security must approve any fee agreement between a representative and a claimant.  42 U.S.C.A. §406.  At the administrative level, the fees are usually charged on a contingency fee basis or through a fee petition to the Social Security Administration. In order for a contingency fee contract to be approved, it must state that the attorney’s fees are to be no more that 25% of the back due benefits or $6,000.00 whichever is less.  The current cap on attorney’s fees is $6,000.00.  Social Security can adjust the cap for inflation. Fee agreements will not be approved if a claimant appoints more than one representative from the same firm and all of the representatives do not sign the same contract; the claimant has more than one representative from different firms; a representative withdraws before Social Security makes a decision or the Federal Court reverses the Social Security denial and awards benefits. (POMS §GN 03940.001). If a contract cannot be approved, then a representative must submit a fee petition.  In addition to filling out the fee petition form, a representative should attach proof of the amount of time spent in the case. Most case management software allows practitioners to keep up with their time.  It would be a good idea to do this in all cases so when a fee petition is necessary, the time report can be easily generated and attached. If Social Security withholds the attorney’s fees for payment directly to the representative, then there will be a user fee charge of  6.3% of the attorney fee, whichever is less.  (42 U.S.C.A. §406(a); 69 Fed. Reg. 387, Jan. 5, 2004 and Social Security Protection Act of 2004, P.L. 108-203 §301, 118 Stat. 493 (2004)). If an attorney appeals a case to Federal Court after the final administrative denial of benefits by Social Security and the appeal is successful, then the attorney can apply for appellate attorney fees under the Equal Access to Justice Act (EAJA).  The petition for fees under EAJA must allege that the Plaintiff has a net worth of less than two million dollars ($2,000,000.00), the rate and the amount of the fee requested and itemized statement of time spent in the case and that Social Security’s defense of the case was not substantially justified.  Charles Hall, Social Security Disability Practice, §6:81, 2005 ed. p. 260 (citing Duggan, Attorney’s Fees Pursuant to the Equal Access to Justice Act, 25 Soc. Sec. Rep. Serv. 635, 648 (1989) (WESTLAW: SSRS database, ci (25+5 634))). The United States Attorney representing Social Security has sixty (60) days from a judgment to file an appeal. Hodges – Williams v. Barnhart, 221 F.R.D. 595 N.D. Ill., (2004) (citing Fed. R. Civ. P. 4(a)(1)(B)).  If Social Security does not appeal, then Plaintiff’s counsel has thirty (30) days after Social Security’s sixty (60) days has past to submit an EAJA petition. Id.  (citing 28 U.S.C.A. §2412). The Federal Court will review the EAJA petition.  In their review of the petition, the Court will give deference to a contingency fee agreement between the attorney and the client as well as consider the attorney’s experience in Social Security, time spent, and the result.  Gisbrecht v. Barnhart, 535 U.S. 789 (2002).


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