Jan 10, 2019

Form Fee Agreement

     While we knew it was coming, it still surprised me to see that Social Security had released a form fee agreement last month that attorneys representing Social Security claimants can use. This is not mandatory. Attorneys and others representing Social Security claimants can always draft their own forms. I guess I was expecting some announcement.
     Here's the key language from the form:
If SSA favorably decides my claim(s) and the decision results in past-due (retroactive) benefits, I agree to pay my representative(s) a fee that does not exceed the lesser of 25 percent of my past-due benefits or the maximum dollar amount allowed under the Social Security Act Section 206(a)(2), or such higher amount set by the Commissioner of Social Security based on the date Social Security Administration (SSA) authorizes my representative’s fee. 
Choose One:
I agree to pay the maximum fee as stated in the preceding paragraph. ($6000 as of 2018).
I agree to pay less than the maximum $________________ or  _____________%.
Read and acknowledge the following: I understand that I, my eligible spouse, any affected auxiliary beneficiary, my representative or the decision maker have the right to protest the fee authorized under this fee agreement, in writing, within 15 days from the authorization.
I understand that my representative may still request a fee even if my case does not result in past-due benefits, or the decision is not favorable. If the fee agreement cannot be approved because there are no past-due benefits or for other reasons, my representative may file a fee petition to request that SSA authorize a fee. I also understand that if there are no past-due benefits withheld, if not enough past-due benefits are withheld, or if my representative is not eligible for direct payment by SSA, I will be responsible to pay the authorized fee to my representative(s) directly. SSA does not authorize out-of-pocket costs and expenses for which I am responsible to pay directly to my representative.
Two-Tiered Fee Agreement
If SSA favorably decides my claim(s) above the ________________ administrative level, this fee agreement is void and my representative(s) may seek a higher fee by filing a fee petition. SSA must authorize this fee.
Escrow/Trust Accounts or Third-party Payments
With my consent my representative(s) has/have or will establish an escrow/trust account in the amount of $__________ 
My representative will receive a fee from another party (e.g., state, county, private entity) for $__________  and I will have no financial responsibility to pay any fee, unless SSA authorizes the total fee
     Note that this is written in fluent bureaucratese. Perhaps, because it is a Social Security form our clients will just accept it without giving us trouble but imagine the typical 10th grade dropout understanding it. Well, if you work at Social Security maybe you can't imagine that and maybe that's why this form is written in such stilted language.  The form is also flatly inaccurate because it indicates that only the Social Security Administration can authorize a fee in a two-tiered fee agreement situation. No, a federal court can also authorize a fee.

10 comments:

Anonymous said...

This reminds of the form the U.S. Courts issued that they encourage both pro se and attorneys to use when filing a complaint in Federal Court. It is both confusing and has the potential to limit arguments that could have been made later on.

Anonymous said...

The SSA has never really understood that the fee agreement is a contract between the Rep and Client.

This can be seen where they reject the automatic approval of the fee in an Order that says they "Do not Approve the Fee Agreement"

There is nothing wrong with the fee agreement. It simply does not meet the standard for automatic approval thus requiring the filing of a fee petition. The agreement itself is perfectly valid as a contract generally and as an agreement that permit payment of the attorney fee from amounts withheld after the fee petition is approved.

Their draft agreement dealing with "two tier" agreements shows this best when they say that is some way "this fee agreement is void". Again, no. It is simply structured in a way that requires a fee petition and is otherwise perfectly acceptable.

Anonymous said...

Good start, but tier part is inadequate. There is nothing you can fit in little space given to indicate when second tier kicks in. Also, what rep wants his fee agreement to state that attorney may petition for a fee even if case is lost? No rep in his right mind will try to collect a fee from a client that lost and that language can make them very nervous. Form is a unusable for most part.

Anonymous said...

My first reaction to people who complain about a form and "bureaucratese" is "show me your revised version and demonstrate your point." Otherwise, it's just griping.

Anonymous said...

Don't like the form, don't use it. Also, I've reviewed literally hundreds of different forms. I've yet to see one that is user-friendly to the extent that it would be easy to understand for a 10th-grader. If you have one that you claim to be such, please share it with the world.

Anonymous said...

The form is awful. For example, it does not address the fact that there are two types of fees in Social Security cases, administrative and court, and I find it confusing for a lot of other reasons. It is written as an agreement that the claimant is offering the representative rather then the other way around. I don't expect a claimant is ever going to come to me and tell me these are the terms that I want to use for you to represent me. Offer and acceptance and important concepts in contract law and who is making the offer is extremely important.

The idea of a suggested fee agreement is not necessarily bad but this one is written all wrong from so many standpoints that I would never use it.

I do not expect that any fee agreement is going to be clear to someone with a 10th grade education but I do expect it to say enough that that person can, if he reads is or someone reads it to him, understand more than this agreement provides. Moreover, a lot of what should be in the agreement (eg fees vs. costs) is really in the introduction and the way the form has been drafted it would be easy to claim that the introduction is NOT part of the agreement.

Anonymous said...

@4:25

Your examples in no way show that SSA fails to understand that fee agreements are contracts between the representative and his/her client. When SSA says it does not approve the fee agreement, it is simply finding that the agreement doesn't meet the requisite regulatory requirements to permit direct payment of fees from withheld benefits. SSA does not have the authority to decide whether a fee agreement is a valid/enforceable contract (an issue governed largely by state law). Nor does it purport to possess or exercise such authority.

Additionally, in a two-tiered agreement, language declaring the first tier void is necessary to prevent the contract from being ambiguous and incoherent. If an appeal doesn't void the first part, then the language in the first their would cap the fees recoverable under the contract at $6,000 regardless of how much work the representative does at the AC or federal court level.

SSA does plenty of things worth griping about. But yours don't seem like legitimate gripes to me.

Anonymous said...

9:15 is my hero!

Anonymous said...

What if your're content with the $6,000 on remand in a federal court action? After all, you have the 25% 406(b) less the EAJA and just want to use the fee agreement process to collect the $6,000. Does this avoid waiting a year for the fee petition award? Yes, I know with Culbertson, you might petition for the full 25% but, let's say you think that's excessive as it relates to your disabled client and just want to avoid the whole fee petition process.

Anonymous said...

"What if your're content with the $6,000 on remand in a federal court action? After all, you have the 25% 406(b) less the EAJA and just want to use the fee agreement process to collect the $6,000. Does this avoid waiting a year for the fee petition award? Yes, I know with Culbertson, you might petition for the full 25% but, let's say you think that's excessive as it relates to your disabled client and just want to avoid the whole fee petition process."

This idea is was not workable because it would often result in total awards that are less than 25% (let alone 50%) combining the administrative fee petition and 406(b).

The 25% 406(b) fee is a *maximum* fee for work performed federal court.

It's common (for me, at least) to have the requested 25% fee cut by an amount that is more than $6,000.00 by the federal court judge when benefits are awarded by the federal court judge. This means that you have to submit a fee petition to the Appeals Council requesting an amount in your fee petition *over* $6,000.00 to reach 25% (total) of back benefits (since you refund the EAJA fee).