Posted on 12/3/2011 8:15 AM

You may be familiar with the Equal Access to Justice Act.  It is specifically designed to help small businesses.  Actually, its more descriptive name would be the Almost Equal Access to Justice Act.  Here is why.

The Act says the "prevailing party" may recover its fees and expense in an action against the United States unless the position of the United States was substantially justified or special circumstances make an award unjust.  The applicant must be elgible for an award based on its net worth ($2M for individuals and $7M for companies).  The applicant is the prevailing party if it succeeds on any significant issue in litigation which achieves some of the benefit it sought in bringing the action in the first place.  Once the applicant crosses that threshold, the amount of recovery may be reduced depending on the degree of success.

Fees and expenses under the Act may be denied totally if the position of the United States was "substantially justified".  The tribunal deciding the application must make a judgment call whether the government's position throughout the dispute had a reasonable basis in both law and fact.  The determination is made on a case by case basis.  Thus, since the decision is based on subjective judgment, it really is another test of what is seen by the eyes of the beholder.

Finally, under the Act, a $125 per hour cap applies to attorneys' fees unless the applicant can show an increase in the cost of living or a special factor, such as where the limited availability of qualified attorneys for the proceeding involved justifies a higher fee.  Good luck with that one.  Special factors are very rarely applied and one tribunal recently applied the cost of living formulas to arrive at a whopping $155 per hour.  (The $125 rate was set in 1996).  How many experienced lawyers charge $155 per hour?

The Act needs to be amended to remove the "substantially justified" takeaway and the hourly rate needs to be increased.  Pure and simple.  Either that or it should be renamed, perhaps, the Almost Equal Access to Justice Act.


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