In April 2026, the letters began to come in. Simple envelopes from the Department of Veterans Affairs ended up in mailboxes all over the nation, frequently for veterans who hadn’t heard anything significant from the organization in years or even decades. For many of them, the notice was the first clue that something had gone wrong in the past and that a federal court was now attempting to correct it.
Freund v. Collins, a class action lawsuit certified by the U.S. Court of Appeals for Veterans Claims in March 2026, is the case at the heart of it all. It is anticipated that a fairness hearing will take place in June or July of this year. It’s something more basic than a new benefit or a change in policy. It turns out that because of mistakes in its own recordkeeping system, the VA had been covertly rejecting veterans’ disability claims for decades without informing anyone.
The Veterans Appeals Control and Locator System, or VACOLS, is the system in question. It was put into place in 1990 and used automated monthly sweeps to monitor disability appeals. The system closed a veteran’s case if the database did not contain a timely Substantive Appeal. not hearing. No letter of warning. The veteran thought the appeal was still going through the line, but it just froze in place.
The VA was consistently slow to enter incoming documents into its own system, which is where it becomes challenging to defend. Logging paperwork took an average of 43 days. Veterans who followed the correct procedures and filed on time still had their appeals denied because the VA had not yet recorded their submissions. Over one in six of these automated closures were incorrect, according to the VA’s own Inspector General. Nearly 70% of the impacted cases had been incorrectly closed when federal courts reviewed a sample of them during litigation.
It’s difficult to accept that number. For those veterans, the VA’s silence was a closed door that no one informed them of, not a bureaucratic hold-up.
If the proposed settlement is accepted at the fairness hearing, the VA will have to audit 28,258 appeal files that were identified as possibly having a timely Substantive Appeal. Individualized notices would be sent to an additional 64,599 veterans whose files contain potentially eligible documents. If an appeal is found to have been incorrectly closed, it will be reactivated rather than restarted. As if the incorrect closure had never occurred, the VA would have to continue where it left off.
It is important to keep a close eye on the one-year window. Veterans whose appeals were not included in the initial audit would typically have 365 days following final court approval to bring up the matter directly with the VA under the proposed terms. Given that some of these files date back more than thirty years, that isn’t a long time. Now is the time for veterans or their families to start looking through old documents if they recall a claim that seemed to disappear.
The Freund fairness hearing has a subtle significance that transcends the formalities of the law. Veterans did not fail the system in this instance. After failing them, the system moved on. The court is currently considering whether that failure can be significantly rectified, i.e., whether tens of thousands of individuals who complied with all regulations can receive a fair assessment of what they were entitled to.
How smoothly the VA will carry out the reactivation process after the court grants final approval is still unknown. Large-scale audits of legacy databases and outdated paper files are rarely spotless. However, these veterans have never seen a more structured framework than the one being implemented. The Freund settlement might be many people’s only real opportunity.
