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Supreme Court Considering Cap on Legal Fees for Social Security Disability Representation

On November 7, 2018, the U.S. Supreme Court heard arguments in Culbertson v. Berryhill, to determine if there should be a cap or limit to the amount of legal fees awarded to lawyers for representing clients before the Social Security Administration (SSA).

Majority of disability claims are denied

For the period between 2006 and 2015, SSA approved 34 percent of applications for SSDI benefits. 62 percent of all applications were denied. Of the pool of applicants issued denials, 2 percent of them were overturned at the reconsideration level and 9 percent were overturned at the hearing level.

 

Application denials can be appealed at the administration level with a request for a reconsideration or hearing within the SSA’s adjudication process system. If an applicant’s SSDI petition remains denied after reconsideration and a hearing, the applicant under some circumstances can appeal the decision in the federal court system – topping off at the U.S. Supreme Court as is the case in the Culbertson v. Berryhill matter.

Denial of SSDI claims cases take years to resolve. In the meantime, the applicant receives no benefits from SSA. An applicant’s chance of success improves significantly if they are represented by an attorney.

What is SSDI?

Social Security Disability Insurance (SSDI) is a Social Security program that pays monthly cash benefits to disabled individuals. To be eligible for SSDI, an applicant must become disabled before they reach retirement age and be unable to work because of their disability. Determining whether a person is disabled, for purposes of receiving SSDI benefits, is the primary question or issue, when a new SSDI claim is considered by SSA. Individuals who are unable to prove their disability fits within the definition of disability as established by the Social Security Act and its Regulations, are denied SSDI benefits. These denials form the legal basis of appealing, or asking tribunal or court, to review the SSA’s decision.  

Payment of legal fees

The Social Security Act imposes a 25 percent cap or limit on attorneys’ fees in SSDI cases. The various federal district court circuits are split on how to apply this limit. In some jurisdictions, like the 9th Circuit in California, the federal courts have interpreted the provision to mean that the cap only applies to cases argued before the court. Other jurisdictions, like Florida in the 11th Circuit, interpret the provision to mean that the attorneys’ fee limit is an aggregate and apply the cap on all work performed on a case, including any administrative proceedings before the court proceeding.    

There is no indication when the Supreme Court will issue their decision in the Culbertson case. Making a pronouncement about what the Court may decide is pure speculation. Both sides have support for the interpretation used. An award of SSDI benefits is an uphill battle. Limiting the recoverable attorneys’ fees disincentives lawyers from representing clients in SSDI hearings and places people at a legal disadvantage to fight for their benefits.

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