How Do VA Malpractice Settlements Work? Approval, Payment, and Limits Under the FTCA

Last Updated: November 10, 2026

A VA malpractice settlement is not a check from the hospital. It is a compromise of a claim against the United States, and the Federal Tort Claims Act decides who may agree to it, when the Department of Justice must sign off, and where the money comes from. In general, an agency can settle a claim on its own authority only up to the amount the Attorney General has delegated, and any settlement above $25,000 requires the Attorney General's prior written approval unless that authority has been delegated (28 U.S.C. § 2672).

How Does a VA Malpractice Settlement Work Under the FTCA?

The settlement path follows the two stages of an FTCA claim. Before any lawsuit, you present a written claim to the federal agency, usually on a Standard Form 95. The statute allows the agency head or a designee to "consider, ascertain, adjust, determine, compromise, and settle" a claim for money damages caused by the negligence of an agency employee acting within the scope of employment, when a private person would be liable under the law of the place where the act or omission occurred (28 U.S.C. § 2672).

If the claim is not resolved, you can file suit in federal court only after the agency has denied the claim in writing, or after six months have passed without a final disposition, which you may treat as a denial (28 U.S.C. § 2675(a)). Settlement remains possible after suit is filed. The Attorney General or a designee "may arbitrate, compromise, or settle any claim cognizable under section 1346(b)" after an action has commenced (28 U.S.C. § 2677).

Who Has to Approve a VA Malpractice Settlement?

The answer depends on the amount and on the stage of the case.

• Before suit, up to the delegated authority: the agency can settle on its own. The statute says any award, compromise, or settlement "in excess of $25,000 shall be effected only with the prior written approval of the Attorney General or his designee," but also allows the Attorney General to delegate settlement authority to the agency head, up to the authority delegated to United States attorneys (28 U.S.C. § 2672).
• Before suit, above that authority: the settlement needs the Department of Justice's prior written approval.
• After suit is filed: the Attorney General or a designee has the authority to compromise or settle (28 U.S.C. § 2677).

The practical effect is that a settlement figure is not final just because an agency claims examiner is willing to discuss it. Whether the number needs another level of sign-off depends on its size and the delegation in force.

Where Does the Money Come From?

Payment depends on the amount. A settlement of $2,500 or less made administratively is "paid by the head of the Federal agency concerned out of appropriations available to that agency." Larger administrative settlements, and those made by the Attorney General under § 2677, are paid "in a manner similar to judgments and compromises in like causes" (28 U.S.C. § 2672).

Compromise settlements of claims referred to the Attorney General are likewise "settled and paid in a manner similar to judgments" (28 U.S.C. § 2414). Congress has appropriated the necessary amounts to pay final judgments, awards, and compromise settlements payable under §§ 2414, 2672, or 2677, when payment is certified by the Secretary of the Treasury (31 U.S.C. § 1304).

Is a Settlement Final Once It Is Agreed?

Generally, yes. Under § 2672, an award, compromise, or settlement made under that section is "final and conclusive on all officers of the Government, except when procured by means of fraud" (28 U.S.C. § 2672). That finality is also why the terms deserve careful review before you accept.

Two related rules matter:

• The agency's handling of your claim is not evidence. The statute provides that "disposition of any claim by the Attorney General or other head of a federal agency shall not be competent evidence of liability or amount of damages" (28 U.S.C. § 2675(c)). A settlement offer, or a denial, does not prove or disprove your case if it goes to court.
• The amount you claimed matters. A suit generally cannot seek more than the amount presented to the agency, unless the increase rests on newly discovered evidence or intervening facts (28 U.S.C. § 2675(b)). See Can You Raise Your SF-95 Sum Certain After You File?.

What Can Be Included in an FTCA Settlement?

The United States is liable "in the same manner and to the same extent as a private individual under like circumstances, but shall not be liable for interest prior to judgment or for punitive damages" (28 U.S.C. § 2674). Two things follow:

1. Compensatory damages are the measure. Because liability tracks the law of the place of the negligence, the categories of recoverable damages and any state limits can differ by state. See Why the Same VA Medical Error Can Mean Very Different Compensation, Depending on the State.
2. There is no punitive component and no pre-judgment interest. Settlement talks are about compensating the loss, not penalizing the agency.

Are There Limits on Attorney Fees?

Yes. By statute, no attorney may charge more than 25 percent of a judgment or of a settlement made after suit under § 2677, or more than 20 percent of an award, compromise, or settlement made administratively under § 2672. The statute makes exceeding those limits punishable by a fine of up to $2,000 or imprisonment of up to one year, or both (28 U.S.C. § 2678).

Does Settling Affect Your VA Benefits?

That is a separate question with its own rules, and it is covered in VA Malpractice Settlement and VA Disability Benefits. Ask about it before you sign any settlement.

What Should You Do Before Accepting an Offer?

1. Confirm the amount you presented. Check the sum on your Standard Form 95, because it generally caps what you can later seek in court.
2. Ask who has approval authority. Find out whether the offer has been approved by the person with authority to bind the government at that amount.
3. Get the terms in writing. A settlement is "final and conclusive" absent fraud, so read what you are releasing.
4. Check both deadlines first. A tort claim is barred unless presented to the agency within two years after it accrues, or suit is filed within six months of the mailing of a final denial (28 U.S.C. § 2401(b)).
5. Have a federal-claims attorney review the offer before you respond.

Related Articles

• VA Tort Claim Payouts →
• The FTCA Claim Process, Step by Step →
• VA Malpractice Case Timeline →
• Standard Form 95 Explained →
• VA Medical Malpractice and the FTCA → — the complete FTCA overview
• Misdiagnosis and Failure to Diagnose →
• Browse by State → — how state law shapes a claim

Frequently Asked Questions

Who approves a VA malpractice settlement?

Before suit, the agency can settle within the authority delegated to it, and a settlement above $25,000 needs the Attorney General's prior written approval unless that authority has been delegated (28 U.S.C. § 2672). After suit, the Attorney General or a designee may compromise the claim (28 U.S.C. § 2677).

Where does the money for an FTCA settlement come from?

Administrative settlements of $2,500 or less are paid from the agency's appropriations. Larger ones are paid in a manner similar to judgments (28 U.S.C. §§ 2414, 2672), from amounts Congress has appropriated and the Treasury certifies (31 U.S.C. § 1304).

Can I get punitive damages or interest in a VA settlement?

The FTCA provides that the United States is not liable for punitive damages or for interest before judgment (28 U.S.C. § 2674).

Is an FTCA settlement final?

An award, compromise, or settlement under § 2672 is final and conclusive on government officers except when procured by fraud (28 U.S.C. § 2672).

Is there a cap on attorney fees?

Yes. The statute caps fees at 20 percent of administrative settlements and 25 percent of judgments and post-suit settlements (28 U.S.C. § 2678).

The information provided on this website does not, and is not intended to, constitute legal advice. All information, content, and materials available on this site are for general informational purposes only. Readers should contact their attorney to obtain advice concerning any legal matter.

The author, EJ Archuleta, J.D., is a 13-year federal practice lawyer. He is licensed to practice law in the courts of the State of Texas, is a member of the State Bar of Texas, and is admitted to the United States District Court for the Western District of Texas. He has helped hundreds of military service members, veterans, and their families receive compensation for injuries and wrongful death caused by the Department of Veterans Affairs.