STATEMENT OF JOSEPH A. VIOLANTE NATIONAL LEGISLATIVE DIRECTOR OF THE DISABLED AMERICAN VETERANS BEFORE THE COMMITTEE ON VETERANS’ AFFAIRS UNITED STATES SENATE JUNE 8, 2006 Mr. Chairman and Members of the Committee:              On behalf of the 1.3 million members of the Disabled American Veterans (DAV), I respectfully provide our comments on the following bills for the record.              S. 2694 would amend existing law to permit attorneys and agents to charge claimants for services rendered in the preparation, presentation, and prosecution of claims. It would authorize the Secretary of Veterans Affairs to collect registration fees, set limitations for fees charged claimants, prescribe standards of conduct, and expand grounds for suspension or exclusion from further practice for attorneys and agents providing such services. It would subject veterans service organization representatives to the same rules for suspension.              With removal of the limitation in current law that authorizes attorneys and agents to charge claimants fees only for services provided after the date on which the Board of Veterans’ Appeals (BVA) first makes a decision in the case, fees could be charged at all stages of the administrative claims process. The Disabled American Veterans opposes this provision.              Veterans should be able to file claims for disability benefits and receive fair decisions from the Department of Veterans Affairs (VA) without the necessity to hire and pay a large portion of their benefits to lawyers. Congress designed the current administrative claims process to be non-adversarial and pro-veteran. Unlike litigation in the courts where the parties must discover and produce their own evidence and affirmatively plead all the legal technicalities on which they base their suit, Congress obligated VA to assist the claimant in obtaining pertinent evidence and placed the duty upon VA to consider all relevant law and avenues of entitlement.              Disability compensation and other benefits for veterans and their families should go to the intended beneficiaries for the purchase of the necessities of life and to meet other needs, not into the pockets of lawyers. That is the very reason the system was designed to work without lawyers and the wisdom behind the law that has for so long prohibited lawyers from charging veterans for filing and prosecuting claims: “There would seem to be no need for the assistance of an attorney in order to initiate the claims process by completing and filing an application. Moreover, even if the initial decision is adverse, the Committee believes that it may be unnecessary for a claimant to incur the substantial expense for attorney representation that may not be involved in appealing the case for the first time to the BVA. The claimant may well prevail, as many claimants currently do, without legal representation when the case is first before BVA.” S. Rep. No. 100–418, at 63-64 (1988). “The Government interest, which has been articulated in congressional debates since the fee limitation was first enacted in 1862 during the Civil War, has been this: that the system for administering benefits should be managed in a sufficiently informal way that there should be no need for the employment of an attorney to obtain benefits to which a claimant was entitled, so that the claimant would receive the entirety of the award without having to divide it with a lawyer.” Walters v. National Ass’n of Radiation Survivors, 473 U.S. 305, 321 (1985). By allowing lawyers to charge veterans for claims assistance, this bill abandons the commitment to a system that delivers benefits to veterans without necessity to pay lawyers.              Under the best of circumstances, mistakes will be made in a mass adjudication system such as VA’s, but claimants can guard against such mistakes through free representation from recognized veterans organizations. Veterans organization representatives also provide free advice, claims filing assistance, and a wide range of other assistance with matters not involving monetary awards. Lawyers will have no reason to assist veterans in matters that are not fee-producing. They will naturally limit their assistance to matters where there is potential for receiving for themselves a portion of the claimants’ monetary benefits. Claimants who obtain the services of lawyers rather than through appointment of a veterans service organization representative may very well find themselves without the availability of free assistance in routine matters that they receive from veterans service organization representatives.              We believe enactment of this bill will have far reaching detrimental effects that will far outweigh the emotional gratification of having the right to choose representation by a lawyer. The Court recognized the probable adverse effects in National Ass’n of Radiation Survivors: There can be little doubt that invalidation of the fee limitation would seriously frustrate the oft-repeated congressional purpose for enacting it. Attorneys would be freely employable by claimants to veterans’ benefits, and the claimant would as a result end up paying part of the award, or its equivalent, to an attorney. But this would not be the only consequence of striking down the fee limitation that would be deleterious to the congressional plan. A necessary concomitant of Congress’ desire that a veteran not need a representative to assist him in making his claim was that the system should be as informal and nonadversarial as possible. . . . The regular introduction of lawyers into the proceedings would be quite unlikely to further this goal. Describing the prospective impact of lawyers in probation revocation proceedings, we said in Gagnon v. Scarpelli, 411 U.S. 778, 787-788, 93 S.Ct. 1756, 1762, 36 L.E.d.2d 656 (1973): “The introduction of counsel into a revocation proceeding will alter significantly the nature of the proceeding. If counsel is provided for the probationer or parolee, the State in turn will normally provide its own counsel; lawyers, by training and disposition, are advocates and bound by professional duty to present all available evidence and arguments in support of their clients’ positions and to contest with vigor all adverse evidence and views. The role of the hearing body itself . . . may become more akin to that of a judge at a trial, and less attuned to the rehabilitative needs of the individual. . . . Certainly, the decisionmaking process will be prolonged, and the financial cost to the State--for appointed counsel, . . . a longer record, and the possibility of judicial review—will not be insubstantial.” We similarly noted in Wolff v. McDonnell, 418 U.S. 539, 570, 94 S.Ct. 2963, 2981, 41 L.Ed.2d 935 (1974), that the use of counsel in prison disciplinary proceedings would “inevitably give the proceedings a more adversary cast. . . .” Knowledgeable and thoughtful observers have made the same point in other language: “To be sure, counsel can often perform useful functions even in welfare cases or other instances of mass justice; they may bring out facts ignored by or unknown to the authorities, or help to work out satisfactory compromises. But this is only one side of the coin. Under our adversary system the role of counsel is not to make sure the truth is ascertained but to advance his client's cause by any ethical means. Within the limits of professional propriety, causing delay and sowing confusion not only are his right but may be his duty. The appearance of counsel for the citizen is likely to lead the government to provide one—or at least to cause the government's representative to act like one. The result may be to turn what might have been a short conference leading to an amicable result into a protracted controversy. . . . . “These problems concerning counsel and confrontation inevitably bring up the question whether we would not do better to abandon the adversary system in certain areas of mass justice. . . . While such an experiment would be a sharp break with our tradition of adversary process, that tradition, which has come under serious general challenge from a thoughtful and distinguished judge, was not formulated for a situation in which many thousands of hearings must be provided each month.” Friendly, “Some Kind of Hearing,” 123 U.Pa.L.Rev. 1267, 1287-1290 (1975). Thus, even apart from the frustration of Congress’ principal goal of wanting the veteran to get the entirety of the award, the destruction of the fee limitation would bid fair to complicate a proceeding which Congress wished to keep as simple as possible. It is scarcely open to doubt that if claimants were permitted to retain compensated attorneys the day might come when it could be said that an attorney might indeed be necessary to present a claim properly in a system rendered more adversary and more complex by the very presence of lawyer representation. It is only a small step beyond that to the situation in which the claimant who has a factually simple and obviously deserving claim may nonetheless feel impelled to retain an attorney simply because so many other claimants retain attorneys. And this additional complexity will undoubtedly engender greater administrative costs, with the end result being that less Government money reaches its intended beneficiaries. 473 U.S. at 323-26.              It is understandable why some attorneys advocate changing the system. Perhaps veterans who advocate it do so under the belief that they would generally receive better representation by attorneys. Data on the subject simply do not support that belief. Attorneys presumably choose only the cases they believe more meritorious, where most veterans service organizations essentially represent any claimant and do not refuse representation in cases merely because of a lower likelihood of favorable outcome. Nonetheless, historically and currently, attorneys still have no greater success rate in BVA appeals, for example, than veterans service organization representatives. In 2005, the average BVA allowance rate among veterans service organizations was 21.7 percent. The allowance rate for attorneys was 21.1 percent. Average allowance rates among the veterans service organizations are again higher than allowance rates for attorneys thus far in 2006. With a 21.3 percent allowance rate as of the end of April 2006, attorneys are below the overall average BVA allowance rate for all appeals—including those with no representation—of 21.6 percent.              Beyond our opposition to removal of restrictions on attorneys’ fees, we have other concerns about provisions of S. 2694. Section 2(b) of the bill would amend section 5904(b) of title 38, United States Code, by adding more grounds for suspending or excluding attorneys and agents from further practice. These additional grounds are: (1) failure of the attorney or agent “to conduct himself or herself with due regard for the non-adversarial nature of any proceeding before the Department,” (2) submittal of “frivolous claims, issues, or arguments,” and (8) failure “to comply with any other condition specified by the Secretary in regulations prescribed by the Secretary for purposes of this subsection.” Section 2(a)(2) of the bill provides that veterans organization representatives may be suspended on the grounds in section 5904(b) applicable to suspension and exclusion from further practice in the case of attorneys and agents.              The Secretary of Veterans Affairs has promulgated a comprehensive rule governing suspension and termination of accreditation of representatives. We believe additional statutory provisions for suspension of veterans service organization representatives are unnecessary. Moreover, we believe the new grounds that would be added by section 2(b) of the bill are so broad and vague as to be difficult to follow or enforce. For example, it is unclear what would be considered an action without “due regard for the non-adversarial nature of any proceeding before the Department.” In addition, given that VA has a duty to seek supporting evidence for a veteran’s claim, the law does not require that such claim be accompanied by evidence. Attorneys, agents, and representatives will sometimes be unable to determine the factual merits of a claim before it is submitted. Under these circumstances and many others that are unlike those of more traditional proceedings, it will be more difficult to define frivolous claims. We believe these additional rules will unnecessarily complicate the process.              We also have some concern, should the bill be enacted, that it authorizes VA oversight only for contingency fee agreements under which the Secretary is to pay the attorney directly from past-due benefits awarded on the basis of the claim. We believe this leaves open the possibility for abuse.              For these reasons, we believe enactment of these provisions will profoundly change the administrative claims process to the detriment of veterans and other claimants. We believe there is a potential for wide-ranging unintended consequences that will be beneficial for neither claimants nor the Government. Beyond the cost to veterans, added administrative costs for VA are likely to be substantial, without commensurate added advantages or benefits for either.              S. 2562, the Veterans' Compensation Cost-of-Living Adjustment Act of 2006, would increase, effective as of December 1, 2006, the rates of disability compensation for veterans with service-connected disabilities and the rates of dependency and indemnity compensation for survivors of certain service-connected disabled veterans. However, within the cost-of-living adjustment (COLA) measure is a provision that “Each dollar amount increased under paragraph (1), if not a whole dollar amount, shall be rounded to the next lower whole dollar amount.” (The DAV supports the overall intent of this bill.) To maintain the value of veterans’ benefits, they must be adjusted to keep pace with the rise in the cost of living. Rounding down the adjusted rates to the next lower dollar amount, however, will gradually erode the value of benefits over time and thus benefits will not keep pace with the rise in the cost of living. Rounding down veterans’ cost-of-living adjustments unfairly targets veterans for convenient cost savings for the government. Additionally, the DAV supports legislation that would provide for automatic annual adjustments, based on increases in the cost of living, for specially adapted housing and automobile grants to assist eligible disabled veterans and servicemembers. These grants must be adjusted annually if they are to keep pace with the rise in the cost of living and remain meaningful benefits.              Because the issues addressed within the following bills are not specific to its legislative focus, the DAV has no resolutions pertaining to these measures. However, because they would benefit veterans and their family members, the DAV has no objection to their favorable consideration: S. 2659, the Native American Veterans Cemetery Act of 2005, would amend title 38, United States Code, to provide for the eligibility of Indian tribal organizations for grants for the establishment of veterans’ cemeteries on trust lands. S. 2416, the Veterans Employment and Training Act of 2006, would provide flexibility in the programs of education for which accelerated payments of educational assistance under the Montgomery GI Bill (MGIB) may be used. Specifically, it would allow MGIB payments to be used for tuition for education programs that lead to certification or licensure in an occupation, or leads to occupation in an industry that has a critical shortage of employees or is an industry that is experiencing a high growth rate. S.______, draft legislation, would authorize accelerated payments of educational assistance for survivors and dependents of veterans who died or are permanently and totally disabled as a result of a disability arising from active military service. Specifically, it would allow such payments to be used for tuition for education programs that lead to certification or licensure in an occupation in a high technology field, or leads to occupation in an industry that has a critical shortage of employees or is an industry that is experiencing a high growth rate. S. 2121, the Veterans’ Housing Fairness Act of 2005, would provide housing loan benefits for the purchase of residential cooperative apartment units.              We appreciate the Committee’s interest in ensuring the effectiveness of programs for disabled veterans, and we appreciate the opportunity to present DAV’s views.  Printer-Friendly Version