Sec. 1.1505  Standards for awards.

    (a) A prevailing party may receive an award for fees and expenses 
incurred in connection either with an adversary adjudication, or with a 
significant and discrete substantive portion of an adversary 
adjudication in which the party has prevailed over the position of the 
Commission.
    (1) The position of the Commission includes, in addition to the 
position taken by the Commission in the adversary adjudication, the 
action or failure to act by the agency upon which the adversary 
adjudication is based.
    (2) An award will be reduced or denied if the Commission's position 
was substantially justified in law and fact, if special circumstances 
make an award unjust, or if the prevailing party unduly or unreasonably 
protracted the adversary adjudication.
    (b) If, in an adversary adjudication arising from a Commission 
action to enforce a party's compliance with a statutory or regulatory 
requirement, the demand of the Commission is substantially in excess of 
the decision in the adversary adjudication and is unreasonable when 
compared with that decision, under the facts and circumstances of the 
case, the party shall be awarded the fees and other expenses related to 
defending against the excessive demand, unless the party has committed a 
willful violation of law or otherwise acted in bad faith, or special 
circumstances make an award unjust. The ``demand'' of the Commission 
means the express demand which led to the adversary adjudication, but it 
does not include a recitation by the Commission of the maximum statutory 
penalty in the administrative complaint, or elsewhere when accompanied 
by an express demand for a lesser amount.
    (c) The burden of proof that an award should not be made is on the 
appropriate Bureau (see Sec. 1.21) whose representative shall be called 
``Bureau counsel'' in this subpart K.
[ 61 FR 39899 , July 31, 1996]