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EAJA Fees and VA Claims: the Equal Access to Justice Act Offset Rule Agents Must Know

Most VA fee rules are about money that comes out of the veteran's pocket. EAJA is the exception. The Equal Access to Justice Act lets a veteran who prevails against the government at the Court of Appeals for Veterans Claims recover attorney fees from the government itself. But when the same representative also collects a fee from the veteran's past-due benefits for the same work, federal law forces a choice: keep the larger fee, and refund the smaller one to the veteran. This page explains the statute, the offset rule, and what it means for agents, attorneys, and the veterans they serve.

What EAJA is

Congress passed the Equal Access to Justice Act to level the playing field between private parties and the federal government. The idea is simple: when the government takes a position in litigation that is not substantially justified, and the private party prevails, the government should pay the winner's attorney fees. The operative provision is 28 U.S.C. 2412(d). A court may award fees and expenses to a prevailing party in a civil action brought by or against the United States, unless the court finds the position of the United States was substantially justified or special circumstances make an award unjust.

The statute caps fees at 125 dollars per hour, with an exception allowing a higher rate when the court finds that cost-of-living increases or special factors justify it. In practice, cost-of-living adjustments push the effective rate well above the base figure, which is why EAJA awards in veterans cases often run into the thousands of dollars.

When EAJA reaches a VA claim

EAJA does not apply inside the VA agency process. It enters the picture only when a case reaches the United States Court of Appeals for Veterans Claims, the Article I court that reviews Board of Veterans Appeals decisions. Congress extended EAJA to the Court through section 506 of the Federal Courts Administration Act of 1992, which placed the Court of Appeals for Veterans Claims within the EAJA definition of a court.

So the sequence that produces an EAJA fee looks like this: a veteran appeals a Board denial to the Court, the veteran's representative prevails, the government's position is found not substantially justified, and the Court awards fees against the United States. The award compensates the veteran for the cost of litigating, which is why the law treats it as the veteran's money even though it is calculated from the representative's hours.

Because the two payments come from different pockets, a representative can end up holding both for the same underlying work. That is where the offset rule bites.

The offset rule: VAOPGCPREC 12-97

The controlling guidance is VA General Counsel precedent opinion VAOPGCPREC 12-97, which is binding on the Board of Veterans Appeals. It holds that section 506(c) of the Federal Courts Administration Act of 1992 provides that where the claimant's representative receives fees for the same work under both 38 U.S.C. 5904 and 28 U.S.C. 2412, the representative must refund the amount of the smaller fee to the claimant. The representative keeps only the larger of the two fees recovered.

Three consequences flow from that opinion that the exam tests:

• The Board cannot enforce the refund. The General Counsel concluded the Board has no authority to order the refund or to offset the EAJA amount against past-due benefits itself. The obligation sits entirely on the representative.
• Failing to refund is serious. The opinion states that failure to refund the smaller fee to the claimant is a violation of professional conduct and a direct violation of federal law, citing 38 U.S.C. 5905. This is not a bookkeeping preference; it is a federal obligation.
• Fee agreements should address it. Many well-drafted fee agreements state that the past-due-benefits fee will be reduced by any EAJA award, or that the representative will refund the smaller award. An agreement that ignores the EAJA possibility is incomplete.

What agents need to know in practice

Claims agents rarely appear before the Court of Appeals for Veterans Claims themselves; Court practice is attorney territory, with its own bar admission. But agents absolutely need the EAJA framework, for three reasons.

First, the exam tests it. EAJA questions are classic exam material because they combine a statute (28 U.S.C. 2412), a court (the CAVC), a standard (prevailing party, not substantially justified), and a rule with a direction (refund the smaller). That is four testable facts in one topic.

Second, agents coordinate with attorneys. When a case is heading to the Court, the agent who understands the EAJA offset can explain to the veteran why the fee agreement contains an EAJA clause, and can make sure the file documents which fees were recovered from which source. Clean records are what keep a fee defensible if OGC ever reviews it.

Third, veterans ask. A veteran who won at the Court and sees two fee payments on the ledger will ask where the money went. The agent who can explain, in plain language, that the government paid one award, the past-due benefits paid the other, and the smaller one came back to the veteran, is the agent who keeps the client's trust.

How the exam tests EAJA

EAJA questions usually arrive as short scenarios. The fact pattern gives you a representative who won at the Court, an EAJA award amount, and a past-due-benefits fee amount, then asks who keeps what. The answer is always the same shape: keep the larger, refund the smaller, and the refund goes to the veteran. A second common question asks who pays the EAJA award. The answer is the United States, not the veteran and not VA's benefits budget in the sense of the veteran's own award. A third asks which body of law governs: 28 U.S.C. 2412 for the award itself, and VAOPGCPREC 12-97 (through the Federal Courts Administration Act) for the offset against 5904 fees.

One more distinction worth locking in: the reasonableness review in 38 CFR 14.636 applies to fees charged under 5904. EAJA awards are a court determination under a different statute. Do not mix the two standards on the exam.

Sources

• 28 U.S.C. 2412, costs and fees, including the EAJA provision at subsection (d). Full text: Cornell LII, 28 U.S.C. 2412.
• VA General Counsel precedent opinion VAOPGCPREC 12-97, on the relationship between 5904 fees and EAJA awards. Full text: VA OGC, Prc12-97 (PDF).
• 38 CFR 14.636, standards for fee reasonableness review. Full text: eCFR 14.636.
• U.S. Court of Appeals for Veterans Claims: uscourts.cavc.gov, the court where EAJA awards in veterans cases are made.

This page is for general information only, not legal advice. It is an independent study resource, not affiliated with or endorsed by the U.S. Department of Veterans Affairs.