AGENCY FEES AND MEDICAL REPORTS: JUDGE REFUSES TO ALLOW AGENCY PROFIT ELEMENT OF THE FEE: ANOTHER ROUND IN A CONTINUING BATTLE

I am grateful to Howard Dean of Keoghs, solicitors,  for sending me a copy of the judgment of District Judge Morris in Smith -v- Portsmouth Hospital NHS Foundation Trust, a copy of which is available here.   It is a case where the judge refused to allow anything for the costs of the medical agency involved and confined the recoverable costs to the sums claimed by the experts. A copy of the judgment is available here

Approved Judgment Smith v Portsmouth Hospital NHS Foundation Trust

“Under CPR 44.3(2), any doubt is resolved in favour of the paying party. So I am not going to allow the Speed profit costs element of the Speed invoices. In relation to the expert’s fees themselves, I am satisfied on the balance of probabilities that the breakdown supplied by Speed sets out the expert’s fees. So I will allow the expert’s fees as item number 18, £4,902, and item number 19, £2,688.”

THE CASE

The claimant brought an action for damages for clinical negligence which settled for £25,000.   There was a provisional assessment of the costs.  The judge here was carrying out an oral review hearing of that assessment.

THE ISSUE IN RELATION TO THE COST OF THE MEDICAL REPORTS

As is often the case the review related to the costs of expert reports and, in particular, the breakdown between the medical agency and the sums actually paid to the experts.

“The disbursement vouchers supplied by the claimant with the bill are those of Speed Medical, not those of Mr Jackson, Mr Gibbons nor Mr Thompson.”

THE BREAKDOWN

The judge reviewed the previous case law in relation to this issue in some detail.

“Therefore, as a starting point the claimant should provide the defendant with a clear breakdown of the expert’s fees to enable the paying party and the court to assess (1) the expert’s fees and (2) the medical agency fee element. The medical agency fee element is potentially recoverable as a matter of law, but a breakdown enables the court to assess what is reasonable and proportionate.”

NO SERVICE OF THE FEE NOTES BY THE CLAIMANT

The defendant argued that the fee notes served were those of the agency and not the experts. The claimant had not, therefore, complied with the rules.

“The defendant accepts that the claimant has served copy fee notes of agencies but does not accept that they are copy fee notes of an expert and do not comply with PD5.2(c) to CPR 47.

In the circumstances, the defendant and the court are not in a position to assess the fees properly or at all.”

THE BREAKDOWN PROVIDED

The agency provided a general breakdown of how it reached its fees.  However these were in general terms.

“However, by way of full and frank disclosure, Speed Medical have confirmed that their invoice is broken down as follows:
(1) expert’s fee;
(2) fixed operational fee, costs of the case handled, etc, dealing with the file;
(3) referral commission. This is a commission fee if the law firm insist they want a separate agreement, whereby a commission fee or instruction is paid to the third-party marketing company usually. So the marketing agreement dictates what fee that is, so it varies from each firm/referrer.
(4)A finance fee of 6.5 per cent per cent per annum for three years, we offer the three-year deferred terms)

(5)Waive – the write-off percentage a law firm requests. So with each instruction, it accumulates a fund which they can utilise to partially reduce or fully write off any Speed Medical invoice.
Speed profit costs, expert fee under £1,000, 20% or £225, whichever is higher; expert fee £1,001+ = 20% capped at £600.”

THE DEFENDANT’S RESPONSE

“Matters have moved on since the provisional assessment on 8 July. The claimant has produced breakdowns of the disputed fee notes on 26 September 2024. These are at bundle pages 152 and 153 for items 18 and 19. Ms Holroyd says that the claimant has given the defendants everything that they have asked for, whereas Mr Teasdale suggests that the breakdowns raise more questions than answers. The replies by the claimant to point of dispute number 8 set out the five component parts of the Speed fee. The breakdown provided on 26 September 2024 provides the court with details of the expert’s fee and purports to detail the Speed fee.”

THE JUDGE’S CONCLUSION

“What are my conclusions? The claimant has provided a breakdown of the expert fee element of the Speed invoice which I can read, understand and accept. The breakdown in relation to the Speed profit costs element is unclear to me. The expert’s fee and the Speed profit costs element should be the exact sum of the disbursement voucher. They are not. If in relation to item number 18, the detailed breakdown is for £6,736.28, does that mean that the breakdown provided, which is for the exact amount of the invoice,mean that Speed absorbed the referrer commission, the finance element, the waive fee within their own profit costs? I do not know. That information is not before me. Under CPR 44.3(2), any doubt is resolved in favour of the paying party. So I am not going to allow the Speed profit costs element of the Speed invoices. In relation to the expert’s fees themselves, I am satisfied on the balance of probabilities that the breakdown supplied by Speed sets out the expert’s fees. So I will allow the expert’s fees as item number 18, £4,902, and item number 19, £2,688.

“As per Senior Costs Judge Gordon-Saker in CXR v Dome Holdings Ltd (SCCO, 14/8/23) at paragraph 50 of his judgment, he found that Dr Sander(including examination and review records) must have cost something. Mr Jackson in this case has clearly reported. To assess his fee at nil, as submitted by Mr Teasdale, would be unduly harsh. I have assessed the Speed profit costs element at nil for the reasons set out above. Therefore my award for item number 18 is £4,992 and item number 19, £2,688.”