38 CFR 14.636 Attorney Fees in VA Disability Cases

Who Can Charge Fees and When

Only VA-accredited attorneys and claims agents can charge fees for representation in VA proceedings. 38 CFR § 14.636^[1] Non-accredited individuals cannot receive fees regardless of the work performed. That baseline matters at intake when firms contract with outside consultants or use unlicensed staff who interact directly with claimants.

The more consequential rule governs timing. No fee can be charged for services provided before the date a claimant receives notice of the agency of original jurisdiction's initial decision on the claim. 38 U.S.C. § 5904(c)(1)^[2] That prohibition is absolute. Work done during initial adjudication, regardless of how much time and effort it consumed, cannot be billed. The clock starts only after the AOJ issues that first decision.

This applies across all proceedings before the AOJ and the Board of Veterans' Appeals, whether or not an appeal has been initiated. 38 CFR § 14.636(a)^[3] Once that initial decision exists, an attorney or agent may charge fees for assisting the claimant in seeking review, including a claim to reopen under 38 CFR 3.156(a) or a claim for an increase in rate of a benefit. 38 CFR § 14.636(c)^[4]

Firms that take cases before the initial decision and then continue representation after it need to track that boundary carefully. The fee agreement may be executed before the initial decision, but fees cannot accrue from services rendered before notice of that decision.

What Counts as a Reasonable Fee

Every fee charged must be reasonable at all times. 38 CFR § 14.636(e)^[5] VA can review fee agreements for reasonableness and can order a refund of fees found excessive.

The regulation creates a presumption that simplifies compliance for most contingency arrangements. A fee agreement is presumed reasonable when two conditions are met: the fee does not exceed 20 percent of past-due benefits, and the attorney or agent provided continuous representation from the date of the agreement through the date of the decision awarding benefits. 38 CFR § 14.636(f)(1)^[6]

Both conditions matter. An agreement at 20 percent is not presumed reasonable if there was a gap in representation. Continuous representation means exactly that. If a firm withdraws and re-enters, the presumption likely does not apply, and VA can scrutinize the fee under the general reasonableness standard.

Fees above 20 percent are not automatically prohibited, but they are subject to full reasonableness review. Agreements calling for higher percentages need to be structured carefully, with documentation of the complexity and time involved, because VA can order a refund if the fee is found unreasonable after the award is made. 88 FR 88534^[7]

How Direct Pay Works

When a fee agreement requests that VA pay the attorney or agent directly from a past-due benefit award, VA withholds the fee amount from the award and transmits it to the representative. This mechanism requires specific procedural steps.

Any fee agreement calling for VA direct payment must be filed with the VBA Regional Office handling the claim. 38 CFR § 14.636^[8] A fee agreement that does not request direct pay goes to VA's Office of General Counsel instead. Filing with the wrong office does not create direct-pay rights. Firms should confirm which office has jurisdiction before submitting.

After VA issues a decision awarding past-due benefits and a direct-pay fee agreement is on file, the AOJ issues a fee notice. That notice contains a determination on fee eligibility. 38 CFR § 14.636(c)(4)^[9] Where a continuous representative provided representation through the date of the decision, the fee defaults to that representative and is presumed reasonable under the 20-percent standard. 88 FR 88534^[7]

If there was a change in representation, the fee allocation becomes more complicated. VA will evaluate which representative is entitled to the fee, and the firm should document the dates of representation clearly.

Calculating Past-Due Benefits

Past-due benefits are defined as a nonrecurring payment resulting from a benefit granted on appeal or awarded based on a readjudicated claim after a denial by an AOJ or the Board. More specifically, they represent the lump sum of recurring cash payments that accrued between the effective date of the award and the date of the grant. 38 CFR § 14.636(h)(3)^[10]

The accrual period runs from the effective date to the date of the grant. For most claims, identifying those two points is straightforward. For service connection claims, the termination date has a specific rule.

When a benefit granted on appeal is service connection for a disability, past-due benefits are calculated using the initial disability rating assigned by the AOJ following the award of service connection. The termination date is the date of that AOJ rating decision, not the date of the appellate decision awarding service connection. 38 CFR § 14.636(h)(3)(i)^[11]

That rule matters in practice. If the BVA awards service connection and the AOJ then assigns a rating, the fee is based on payments that accrued between the effective date and the AOJ's rating decision, at whatever percentage the AOJ assigns. If the claimant later appeals that initial rating, any additional past-due benefits from the rating appeal are calculated separately. Firms should not estimate the fee on service connection claims until the AOJ issues its rating following the award.

Fee Agreement Filing Requirements

Fee agreements must be filed within 30 days of execution. 38 CFR § 14.636(g)^[12] VA can accept a late-filed agreement upon a showing of sufficient cause, but relying on that exception is a compliance risk. The 30-day window runs from the date the agreement is signed, not from any later event in the case.

The filing destination depends on the type of agreement. Direct-pay agreements go to the VBA Regional Office. All others go to OGC. 38 CFR § 14.636^[8] Sending a direct-pay agreement only to OGC, or vice versa, is a common error that can delay or prevent direct payment.

Non-compliance with filing requirements is not just an administrative inconvenience. Violation of or refusal to comply with VA regulations governing practice before VA can be a basis for cancelling VA accreditation. 38 CFR § 14.633(c)(1)^[13] For firms handling volume caseloads, tracking execution dates and filing deadlines across every open case requires a system. Manual tracking creates the risk of missed filings.

CUE Claims and Fee Eligibility After Held v. McDonough

The CAVC's 2023 decision in Held v. McDonough changed fee eligibility for a specific category of claims. Before the decision, 38 CFR 14.636(c)(2)(ii) excluded fees in cases resolved through a finding of clear and unmistakable error. The CAVC held that provision invalid as inconsistent with 38 U.S.C. 5904(c)(1). 38 U.S.C. § 5904(c)(1)^[14]

The practical result: where a later decision finds CUE in a prior decision, attorney fees are available following that CUE decision. The invalidated regulation had blocked fees in those cases. After Held, they are available under the same framework that applies to other post-initial-decision representation.

For firms handling CUE motions, this matters at case intake. A claim that resolves by finding CUE in an earlier decision can now generate a fee from the past-due benefits awarded as a result. The fee agreement should be structured and filed the same way as any other post-initial-decision representation agreement.

Firm Workflow Implications

The regulatory structure of 38 CFR 14.636 creates several operational pressure points.

The pre-decision fee prohibition requires clean intake tracking. If a firm begins work before the AOJ initial decision and then continues after it, the representation timeline needs to document when fee-eligible services began. That line should be visible in the case file, not reconstructed from memory after an award.

The 30-day filing window requires a triggered workflow. When a fee agreement is executed, the filing deadline should be created automatically in whatever system the firm uses. The destination, whether VBA Regional Office or OGC, should be confirmed at the time of filing, not left as an assumption.

The continuous representation condition for the 20-percent presumption means that any change in the representing attorney or agent should be documented immediately. If accreditation lapses or a staff attorney leaves, the firm needs to assess whether continuity of representation has been preserved and whether the presumption still applies.

For service connection claims, fee estimates at the time of agreement execution should be treated as preliminary. The actual past-due benefit calculation depends on the initial rating the AOJ assigns after the award of service connection. That number is not known until after the appellate decision. Building fee projections on assumed ratings creates expectations that the record may not support.

The accreditation dependency is worth stating plainly. Direct payment requires that the representative hold active accreditation at the time VA processes the award. 88 FR 88534^[7] Firms should confirm accreditation status before a large award is processed, not after.

Firms should confirm accreditation status before a large award is processed, not after.