In a case decided in 1989, an attorney who represented disability claimants challenged the Secretary of Health and Human Services regulation of attorney fees. He asserted that the regulations, in fixing attorney fees for disability attorneys, did not take into account the factors of prevailing market rates, delay in payment, and the risk assumed in contingency fees. He also argued that the regulations violated equal protection because they fixed fees for attorneys receiving payment from private third party insurers while exempting attorney fee payments from non-profit organizations and government agencies.

The 5th Circuit Court of Appeals upheld the Secretary’s regulations. It noted that the seven factors for determining attorney fees set out in the regulations was reasonable. Their purpose was to provide attorneys with fair compensation for the work they have done, while at the same time protecting the claimants from whose benefits the fees are paid.

The Secretary was not required to include the factors propounded by the plaintiff, even though those factors were set out in other regulations. The regulations were not arbitrary or capricious and, therefore, were upheld.

In making this ruling, the Court noted the great deference that is due an agency’s interpretation of its own implementing laws and regulations. The Court further noted that the Social Security Act is one is the most complicated statutes ever enacted by Congress. The Court’s have often afforded wide latitude to the agency in implementing the Byzantine statutory scheme.

At the time of the posting of this blog, attorney fees for representing disability claimants at an administrative hearing are set at one-fourth of any back pay that is awarded, subject to a cap of $6,000. This amount has changed from time to time as inflation has increased. If the case goes beyond a hearing, the attorney fees may go up to one-fourth of the back pay, with the cap removed. There are also EAJA fees that may be awarded to a prevailing claimant’s attorney in a federal court case. But these fees do not come out of the claimant’s benefits.

See Weisbrod v. Sullivan, 875 F.2d 526 (5th Cir. 1989).

See also Social Security Ruling (SSR) 90-3c.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.