Act's use of the word "disability" connotes more than physical impairment, thereby requiring evaluation of ability to work. Second, he asserts that by allowing compensation for unscheduled injuries, see 21 V.S.A. §§ 644(b), 648(20), the Act sanctions consideration of factors other than physical injury. Third, he argues that the purpose of the statute is to compensate for lost wages, which requires consideration of capacity for work. Thus, he concludes that the Commissioner erred in failing to consider the claimant's ability to work, and in relying solely on physical impairment in setting compensation.

The claimant's arguments do not persuade us to reject our precedent. Earning capacity is significant to the Workmen's Compensation Act, but it performs a far different function than envisioned by the claimant.

The claimant correctly assigns protection against wage loss as one of the Act's purposes. The Act, however, also seeks to establish an expedient, efficient remedy for injured workers. Simplifying the elements of recovery is the Act's mechanism for achieving efficiency. To be entitled to benefits, a claimant need only establish that he suffered "a personal injury by accident arising out of and in the course of his employment by an employer subject to (the Act)." 21 V.SA. §618. . . . Because resolution of these issues on a case by case basis would impede the process, thereby delaying awards to needy beneficiaries, the legislature has chosen a "scheduled benefits" system. The rate of compensation for listed injuries has been conclusively determined in the Act. See 21 V.Š.A. §§ 644, 648. The system still protects against wage loss, but it fulfills this aim by awarding permanent disability benefits on the basis of physical impairment as a means to insure against wage loss. Professor Larson explains how a scheduled benefits system, such as Vermont's, insures against wage loss:

(Exclusion of individual wage loss evidence) is not, however, to be interpreted as an erratic deviation from the underlying principle of compensation law-that benefits relate to loss of earning capacity and not to physical injury as such. The basic theory remains the same; the only difference is that the effect on earning capacity is a conclusively presumed one, instead of a specifically proved one based on the individual's actual wage-loss experience. A. Larson, Workmen's Compensation Laws 58.11, at 10-173 to 174 (1981) (footnotes omitted).

The yardstick is general, not particular. Bishop v. Town of Barre, 140 Vt. 564, 442 A.2d 50 (1982) (citations omitted).

Obviously, VA could not use a wage-loss system for compensating veterans to whom it awards compensation upon military discharge, and not following civilian employment in many instances. Workers' compensation programs use schedules that are based on medical judgments as to impairment in earning capacity, and VA's rating schedule is not based on an outdated concept. Suggestions that it is are based on misconceptions.

In an adjudication system as large as VA's, simplicity is essential. The more complex schedule that factors in occupational variants or individual circumstances have proven counterproductive:

For reasons similar to those dictating the use of schedules, experience indicates the desirability of keeping them as simple as possible. The admirable urge to build into the schedule a maximum amount of individual equity has at different times caused some States and the veterans' program to adopt multifactor schedules which vary awards for similar injuries in accordance with the disabled person's occupation, age, or other factors.

The trend has been sharply away from schedules of that type. Today only California, among workmen's compensation jurisdictions, maintains such a schedule, and the Veterans' Administration abandoned it some years ago. Yet proposals keep recurring for the reintroduction of occupational variation in disability rating schedules. The logic of the argument for such variations is attractive. The experiencethat of California has been described in detail in this paper-does not, however, support the logic.

A persuasive case for occupational or other variations must succeed in explaining away not only the California experience but also the unsuccessful attempt of the Veterans' Administration to adopt the principle.

The President's Commission on Veterans' Pensions (Bradley Commission), Compensation for Service-Connected Disabilities: A General Analysis of Veterans' and Military Disability Benefits, Mortality Rates, Disability Standards in Federal Programs, Workmen's Compensation, and Rehabilitation, Staff Report Number VIII, Part A, H.R. Comm. Print No. 84-281, at 243 (1956) [hereinafter Bradley Commission Report No. VIII].

In its quest for the most simple, practical, and equitable rating schedule possible, Congress also apparently chose to base the ratings on average impairment in earning "capacity" rather that average loss of earnings: "Actual earnings are a relatively

concrete quantity. . . . Earning capacity, however, is a more theoretical concept. It obviously does not mean actual earnings, since the legislature deliberately chose a different phrase for the post-injury earnings factor." Joseph W. Little, Thomas A. Eaton & Gary R. Smith, supra 375.

Certainly, it would be unwise to adopt the suggestion by some, as cited by the OIG, that veterans' disabilities should be compensated based on individual impairment in earning capacity:

Despite the fact that no two disabilities are likely to be precisely alike, influencing the future of the disabled persons in exactly the same fashion, a mass compensation program cannot be administered by attempting independent judgment in each case on the particular and special facts which may be involved. A social insurance program cannot be turned into a judicial system.

To achieve administrative efficacy, social insurance relies on the "magic of averages" to arrive at overall equity and social justice. This means inescapably that one individual may get somewhat more and another somewhat less than precise individual justice would indicate. Bradley Commission Report No. VIII, at 242.

Neither would it be fair or practical to base compensation on individual earnings or income. Again, for those veterans awarded compensation upon military discharge, there would be no civilian pre-injury wage for comparison with post-injury wages. Compensation, by definition, is not a needs-based gratuity, and the level of compensation should in no way be based on income, earned or otherwise. A veteran who, despite service-connected paralysis and confinement to a wheelchair, works and earns wages higher than the average wage of non-disabled counterparts should not be denied compensation on that basis. Moreover, some critics who call for a new rating schedule do so in the name of improved consistency, but there would be no consistency if veterans were compensated based on individual earnings or income. In addition, there would be no fairness in paying a veteran who overcomes disability less than another veteran with the same disability who has been unable to overcome it. VA's rating schedule is built on the principle that veterans are to be compensated as uniformly as possible with no penalty for individual ability to overcome disability. The history shows that, though those formulating and updating the rating schedule may have taken some general account or notice of changes in the American workplace, it is fairly clear that, other than the quickly abandoned rating schedule authorized in by the World War Veterans' Act of 1924, the ratings were not founded on any average among the range of mental, physical, educational, and skill requirements of jobs existing in the national marketplace. Disability grading founded on earnings-based estimates of the effects of injuries and diseases would be unfair to veterans because such rating criteria would ignore the diminishment of quality of life and shortened life expectancy from disability. Though loss of earning capacity may be the primary basis of disability ratings, it has been recognized, and it is particularly true in today's society, that disability adversely affects veterans in other ways that cannot and should not be ignored. The Bradley Commission observed that there are other compensable elements of disability that should be recognized, such as loss of physical integrity, loss of physical vitality, pain and suffering, social inadaptability, and shortened life expectancy. Bradley Commission Report No. VIII, at 134-35; ECVARS, at 16. We believe any attempt to base ratings on wage comparisons between disabled veterans and non-disabled persons would present many problems and inequities, which we will not belabor here given the length of the discussion already required to explain our answer to the question presented to us.

The recommendations cited by OIG are based on overly simplistic views, faulty assumptions, and misunderstandings about the principles of the VA rating schedule and ignore issues relating to the equitable and practical bases for those principles. The proponents of radical change themselves have no expertise in formulating disability assessment models. Theirs is a solution in search of a problem.

Though there are areas in which VA could improve its Schedule for Rating Disabilities, it is based on contemporary concepts of disability; it is not outmoded. We know of no better model in other disability programs, and in recent testimony before the Veterans' Disability Benefits Commission, GAO conceded that it knew of no better model. Congress has wisely rejected prior calls to change the basis of VA's rating schedule and should continue to do so.

Question 2. The panelists joining you on our second panel during the hearing suggested that some significant changes in the system should be considered in order to improve its performance. Do you have any response to their suggestions? Answer. Yes, I think the suggestions that I did not have an opportunity to address or to address thoroughly during the hearing merit a response.

Judge Kenneth B. Kramer presented three recommendations:

⚫ revision of section 5103Ã(d)(2)(B) of title 38, United States Code, to make it clear that VA has an obligation to provide an examination or obtain a medical opin

ion to resolve the question as to whether a current disability is causally linked to a disability or event of service origin;

• stationing of administrative law judges (ALJs) at VA regional benefit offices to make the final decision on a claim for the VA agency of original jurisdiction; and removal of the jurisdiction of the United States Court of Appeals for the Federal Circuit to review decisions of the United States Court of Veterans' Claims.

The DAV has no objection to Judge Kramer's first recommendation. From our experience, any problems with section 5103A(d)(2)(B) are more with VA practice than with the language of the statute itself. We believe VA requires evidence of a link between current disability and military service when such evidence should not be required as matter of law, and we believe VA may well shirk its responsibility to obtain evidence on the point when such evidence is necessary for resolution of the claim. Evidence of a connection between current disability and military service is not required under VA regulations when the veteran now claims service connection for an injury in service that left permanent residuals or claims service connection for a chronic disease contracted or aggravated during service in the Armed Forces. See 38 CFR §3.303(b) (2004). However, where there is a valid question as to whether current residuals of injury are attributable to injury during service or where there is a valid question as to whether current disease is related to disease in service because the disease in service was not shown by the military medical record to be chronic, expert opinion is required to resolve the question. Actually, it was a line of erroneous decisions by the Court that imposed a three-part test for service connection, contrary to §3.303(b), that caused VA to deviate from these simple principles and longstanding rules.

While having ALJs as the last decisionmakers at the VA field office level might mean that the record development and decisions would be better at that level, and thereby avoid some appellate workload and many Board of Veterans' Appeals remands, we suspect that the cost would outweigh the benefit.

Under current law, the Court of Appeals for the Federal Circuit has jurisdiction to review decisions of the Court of Appeals for Veterans' Claims on legal challenges but not on questions of fact. That review has proven beneficial and has resulted in reversal-and affirmance-of decisions of the Court of Appeals for Veterans' Claims on important points of law. In some instances where the Court of Appeals for Veterans' Claims chose, in its decision, to sidestep questions of law raised, the Court of Appeals for the Federal Circuit decided the matter and resolved the question. VA cannot appeal its own decision to the Court of Appeals for Veterans' Claims, but, once that Court makes a decision on a point of law in connection with an appeal brought by a veteran, VA should have some recourse if it believes the legal point to have been wrongly decided. Without Federal Circuit jurisdiction, VA would have no right of appeal and would be left to petition for review by the Supreme Court of the United States where review is granted in only a fraction of the cases in which it is sought. The premise for removing Federal Circuit jurisdiction was that appeals there add to the already protracted process. However, appeals to the Federal Circuit are not responsible for the length of time a case spends in the VA's administrative process, and in the rare case a decision by the Federal Circuit brings the case back within the administrative process, that is at the election of the veteran and is preferable to an absence of recourse beyond the Court of Appeals for Veterans' Claims. The DAV opposes this recommendation.

Mr. Robert Chisholm, representing the National Organization of Veterans Advocates, presented five recommendations:

ess;

imposition of mandatory timeframes for each step in the VA adjudication proc

• elimination of the requirement that the claimant file two documents to obtain appellate review, the "notice of disagreement" and the "substantive appeal";

increase in staff at the regional office level, particularly decision-review officers; replacement of the Board of Veterans' Appeals (BVA) with ALJs, or alternatively, decentralization of BVA by placing the Board members at the regional offices; and

enactment of legislation to permit attorneys to charge veterans for assistance in filing claims and representation at the regional office level

Frustration with delays have prompted recommendations from the veterans' community that Congress impose mandatory time limits upon VA. The recommendation sounds attractive, but its practicality is questionable. The DAV believes the better solution is sufficient resources and the reforms we have recommended to improve quality and timeliness.

We have no objection to changing the process to alleviate the need for both a notice of disagreement and a substantive appeal. However, we believe Mr. Chisholm's recommendation is from the perspective of an attorney and does not consider the

situation in which a claimant is unrepresented. A notice of disagreement, like a notice of appeal, simply initiates the appellate process. VA then provides the appellant with a statement of the case to explain the reasons for its decision. With a complete understanding of the bases for the decision, the appellant then files a substantive appeal to set forth his or her specific arguments as to where VA erred. Occasionally, VA discovers its error when it receives the notice of disagreement alleviating the need for a statement of the case and a substantive appeal. Where a claimant is represented, elimination of one step in the process would perhaps be without adverse

consequences.

The DAV agrees that VA needs more adjudicators. We also agree that, on the whole, the decision review officer program has proven successful.

The DAV opposes Mr. Chisholm's recommendation to replace BVA with ALJs, like those of the Social Security Administration, who would be stationed at VA regional offices, or, in the alternative, to decentralize BVA and station its members in regional offices. From the standpoint of an attorney whose practice is not in Washington, D.C., it would be more convenient to have the appellate authority located at the regional office, but it would not be beneficial for veterans or VA. The resolution adopted by DAV's members explain the essential reasons we oppose decentralization:

RESOLUTION No. 182.-OPPOSE REGIONAL DISPERSION OF THE BOARD
OF VETERANS' APPEALS

WHEREAS, veterans and other claimants for veterans' benefits may appeal erroneous decisions of the various and geographically dispersed benefit offices and medical facilities of the Department of Veterans Affairs (VA); and

WHEREAS, inaccuracy and lack of uniformity are pervasive among the claims decisions of the many VA field offices; and

WHEREAS, one board, the Board of Veterans' Appeals situated adjacent to VA's central office and policymaking center in Washington, D.C., hears all appeals; and WHEREAS, appellants, Board members, and taxpayers derive numerous benefits from an appellate board housed in one centralized location, some of the more obvious of which are:

• availability of the collective expertise of the entire board;

• professional interaction and association among Board members and staff;

• shared and uniform training;

• common and shared goals and responsibilities;

• economies of scale from pooled resources and the most efficient workload distribution, with the flexibility and capacity to readjust the workload as necessary between members and support staff;

• a positive environment and employee incentives for developing creative solutions and innovations to meet and overcome the challenges inherent in a system of mass adjudication of claims;

⚫ more efficient and effective centralized case management and storage;

• more effective centralized board administration and hands-on employee oversight; and

WHEREAS, Congress created the Board of Veterans' Appeals after repeated failed experiments with various configurations of regional appellate panels that were plagued by persistent inefficiencies and problems and were proven impractical and poorly suited to properly dispose of veterans' appeals; and

WHEREAS, indications are that consideration is being given within certain quarters of VA to dismember the board and scatter its decisionmakers among the VA field offices or among various regions of the Nation; and

WHEREAS, such regional reorganization of the Board would be extremely unwise, wholly unwarranted, and not in the best interests of veterans or taxpayers; NOW THEREFORE BE IT RESOLVED, that the Disabled American Veterans in National Convention, assembled in Reno, Nevada, July 31-August 3, 2004, categorically opposes any decentralization of the Board of Veterans' Appeals.

We also see no benefit in replacing Board members with ALJs who would be stationed in regional offices. ALJs perform adjudications under the more formal procedures of the Administrative Procedure Act. Social Security ALJs are not located in the same offices as the initial decisionmakers, and we believe locating appellate personnel with the adjudicators whose decisions they will review could be detrimental. The DAV opposes Mr. Chisholm's recommendation to amend the law to permit attorneys to charge claimants for claims assistance and representation at the regional office level. As you know, current law does not bar attorney representation in the initial administrative proceedings before VA, but it does prohibit an attorney from charging for that representation. On behalf of the National Organization of Vet

erans' Advocates, Mr. Chisholm seeks amendment of section 5904 of title 38, United States Code, to remove the prohibition against charging veterans for claims counseling, assistance in filing benefit applications, and representation in benefit claims at the regional office level.

Section 5904(a) provides that the Secretary of Veterans' Affairs may recognize attorneys for the preparation, presentation, and prosecution of claims. However, subsection (c)(1) of that section provides “a fee may not be charged, allowed, or paid for services of agents or attorneys with respect to services provided before the date on which the Board of Veterans' Appeals first makes a final decision in the case.' The change NOVA seeks would not be in the best interests of veterans for several reasons, and would be detrimental to the administrative processes. The principal reason for the DAV's opposition is founded in the public policy underlying the current prohibition against charging veterans for claims assistance. Reviewing the history of pensions provided to veterans, the Supreme Court of the United States observed the enduring principle that this monetary assistance should go solely for the benefit of the veterans for which they were provided:

"Enough appears in these references to the legislation of the Congress under the Constitution to show that throughout the entire period since its adoption it has been the unchallenged practice of the Legislative Department of the Government, with the sanction of every President, including the Father of the Country, to pass laws to prevent the diversion of pension money from inuring solely to the use and benefit of those to whom the pensions are granted." United States v. Hall, 98 U.S. 343, 354 (1879).

"The Government interest, which has been articulated in congressional debates since the fee limitation was first enacted in 1862 during the Civil War, has been this: that the system for administering benefits should be managed in a sufficiently informal way that there should be no need for the employment of an attorney to obtain benefits to which a claimant was entitled, so that the claimant would receive the entirety of the award without having to divide it with a lawyer." Walters v. National Ass'n of Radiation Survivors, 473 U.S. 305, 321 (1985).

Veterans and their dependents should not have to resort to hiring and paying lawyers to obtain veterans' benefits to which they are rightfully entitled. Through a variety of social programs, our Nation unselfishly provides benefits to assist citizens disadvantaged for one reason or another. Veterans' benefits are more than a matter of relief provided out of generosity. Because veterans make special sacrifices, subject themselves to extraordinary risks, and bear unusual burdens for the benefit of the rest of us, and because we owe our very existence as a Nation to our veterans, they earn special rights and special treatment. Veterans, who fought for our country, should never have to fight our Government to get the benefits our grateful citizens have provided as a reward for veterans' sacrifices and service. It is intended that these benefits be provided with a minimum of difficulty for the veteran claiming them. Veterans are therefore accorded a privileged status and are due more personal assistance from VA than claimants receive when seeking benefits from other Government sources. It is important, we believe, to remain mindful that veterans obtain their benefits through an informal, nonadversarial, and benevolent claims process, not a litigation process. The fundamental distinctions between the VA process and litigation reflect a calculated congressional intent and design to permit veterans to receive all the benefits they are due without any necessity to hire and pay lawyers.

The nature and purpose of the distinctions between the VA process and other forums are well known and understood by those who are familiar with veterans' benefits law. Generally, veterans have the burden of proof, but, in the VA context, that only connotes the measure of evidence that will or will not warrant a grant of the benefits sought. It merely means VA cannot award benefits without the existence of evidence to reasonably confirm the veteran is entitled. Its effect is to prevent the burden from being put on VA to disprove entitlement when no affirmative evidence exists to show entitlement. If the burden is not met, it is the veteran that suffers the consequences in that the claim fails.

The difference between the meaning of burden of proof for veterans and what burden of proof connotes in the traditional usage is much more than an insignificant subtlety. In its broadest traditional sense, the term includes (1) the obligation to fill the void by physically producing enough evidence to demonstrate the issue warrants formal consideration and (2) by producing enough evidence to convince the fact finder of the truth of the claim. These two elements of the burden of proof are known respectively as the "burden of production" and the "burden of persuasion." In a judicial proceeding, if the party asserting a claim fails to produce enough evidence to even suggest a valid claim, the matter may be summarily decided against him or her without necessity of full consideration of the merits. If the party's evidence is