Tuesday, April 9, 2019

The Equal Access to Justice Act - Essential Requirements

The Equal Access to Justice Act (EAJA) was enacted back in 1980 to allow individuals and companies to obtain representation in cases against the Government in the event they are successful. This applies to appeals by contractors to the ASBCA (Armed Services Board of Contract Appeals) and other boards and courts.

To be eligible, individuals must show that their net worth is less than $2 million and businesses must demonstrate that their net worth does not exceed $7 million and employed fewer than 500. That part is simple to demonstrate. Not so with another requirement - the "not substantially justified" requirement. Contractors must demonstrate that the Government's position in the dispute was not substantially justified.

Once that bar is crossed, contractors are limited to "reasonable" costs including attorney fees. However, attorney fees are statutorily limited to $125 per hour. Interestingly, the hourly rates for other "experts" involved in the appeals are not statutorily capped. Such costs only be deemed reasonable and reasonableness is determined, in cases before the ASBCA, by the Judge.

Not only are the costs incurred in prosecuting the appeal reimbursable under EAJA provisions, but also costs incurred in preparing the application for EAJA reimbursements. Again, the preparation costs must be reasonable and commensurate with the amounts requested.

Sometimes the Judge will make the determination as to what is reasonable. Other times, the Judge will request an audit of the claimed costs - particularly where the amounts are significant or where assurance is needed as to the propriety of amounts claimed.

Contractors that prevail in an ASBCA case should consider whether some of the costs of pursuing the case can be recovered under EAJA provisions.

See "The Equal Access to Justice Act (Briefly)" and "Contractor Asks For $706 Thousand EAJA Reimbursement - Receives $412 Thousand" for more background and illustration on how EAJA provisions are applied.

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