The Fourth Circuit rules today, August 15, that in making a fee award in a Social Security case, a court may take into consideration the time spent by a claimant’s counsel at the administrative stage.  This is despite the general prohibition on the award by a court for fees at the administrative stage.

In Mudd v. Barnhart, the claimaint had lost at the adminstrative stage, but won in the district court.  In considering claimant’s attorney’s fee application, the district court considered all of the time spent by the lawyer, at all stages of the case, before making an award of the statutory maximum of 25% of the back award.  The Social Security Commissioner did not appeal the award of benefits, but argued that the district court exceeded its authority when it gave a full recovery to the lawyer.  (The fee is paid out of the total award, not in addition to it, so the money was actually coming out of the claimaint’s pocket.)

On appeal, the Fourth Circuit affirms the award of fees, holding that the district court was within its discretion to consider the previous work in order to give it “a better understanding of  factors relevant to its reasonableness inquiry, such as the overall complexity of the case, the lawyering skills necessary to handle it effectively, the risks involved, and the significance of the result achieved in the district court.”  As long as the award itself is only for work done in the district court, the “windfall” to the lawyer (a whopping $736 an hour) is permissible.