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Supreme Court Hears Case on Disability Attorneys' Fees Cap

Earlier this month, the Supreme Court heard a case that will have a big impact on how many disability attorneys are paid and how retroactive pay is calculated.

The case, Culbertson v. Berryhill, specifically deals with disability insurance cases that are appealed to federal district court.

These are cases that are denied after a hearing by an administrative law judge, and then again after review by the Appeals Council. 

It's common that disability attorneys will charge claimants 25 percent of any backpay they receive, not to exceed $6,000. This cap is imposed by federal law.

Another statute, 42 U.S.C. ยง 406(b), states that upon a successful appeal to federal court "the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment." This cap is not subject to the $6,000 limit.

The issue before the Supreme Court is whether when a claimant wins a disability case in federal court the lawyer should receive 25 percent of all back benefits, or if the lawyer should receive 25 percent of back benefits for his work before the Social Security Administration, and another 25 percent of back benefits for work in federal court.

Both the petitioner and the Social Security Administration agree that there are two separate caps, so the Supreme Court appointed a third attorney to argue on behalf of an aggregate cap on backpay.

SCOTUSblog detailed oral arguments from the hearing, with many of the justices concerned about especially large attorneys' fees.

Often, successful disability cases in federal court are actually paid in whole or in part from The Equal Access to Justice Act, a federal fund that pays attorneys' fees in successful lawsuits against the federal government, so regardless of how the Supreme Court rules, disability applicants who appeal to federal court may not see a significant change in how their backpay is calculated.

The Supreme Court is expected to issue its ruling on the case in spring 2019.

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