Medical Agency ordered to provide breakdown of expert fees
Posted on 25th May 2023 at 14:32
By Sean Linley, Costs Draftsman
In the case of Northampton General Hospital NHS Trust v Luke Hoskin (Administrator of the Estate of Pippa Hoskin deceased) (County Court at Manchester, on Appeal) (22 May 2023) the court considered the reasonableness of medical expert fees where a medical agency had been used to source the report. The court ordered that the medical agency provide a breakdown of its fees or in the alternative the expert fees would be assessed as nil. We are grateful to Gordon Exall for sharing the judgment via his blog.
Background
Challenges around the recoverability (and extent of recoverability) of medical agency fees have been a long-standing battleground. Paying parties will routinely request breakdowns of agency fees and receiving parties/agencies will gallantly refuse.
In Hoskin the Claimant had sought a obstetrics report fee of £5,400.00 plus VAT and cardiologist report fee of £8,775.00 plus VAT, both obtained via the medical agency Premex.
The Defendant in the costs proceedings requested a breakdown of how much of the fee related to the individual reports and how much related to the services provided by Premex. Premex supplied a reply declining to provide the requested breakdown.
The Defendant sought an order, by way of an application, that the Claimant provide the breakdown that had previously been refused. Initially, the Defendant’s application was refused, however, it was subsequently appealed.
The Key Principles
The court was invited to consider whether a receiving party was required to provide a breakdown in its bill between the cost of an expert report and the costs of a medical agency approached to provide the report, or whether it was permissible for a receiving party to submit a bill which simply includes the fee charged.
In considering the answer the court had regard to the CPR. It noted that under PD 47 the receiving party must serve “copies of the fee notes of counsel and any expert in respect of fees claimed in the bill”. It further noted that PD 47 had provision for a bill of costs to include “attendances on and communications with … agents and work done by them …”.
It was also noted that CPR 35 allowed a court to limit the amount of a party’s expert’s fees and expenses that may be recovered.
The court considered the judgment in Stringer v Copley (2002) and cited the following passages from HHJ Cook (as he then was):
“[HHJ Cook is] satisfied that there is no principle which precludes the fees of a medical agency being recoverable between the parties, provided it is demonstrated that their charges do not exceed the reasonable and proportionate costs of the work if it had been done by the solicitors.” (emphasis added)
And further:
“although the District Judge allowed the charge of Medplan in full, neither he, nor I, nor the paying party know how much of the sum of £375 was the doctor's fee and how much were the charges of Medplan. To demonstrate the point by taking an extreme, if the doctor's fee were only £75 and Medplan's charges £300, the total of £375 would undoubtedly be unreasonable and disproportionate. It does therefore seem to me important that, whilst there is much to commend the use of medical agencies, it is important that their invoices (or 'fee notes') should distinguish between the medical fee and their own charges, the latter being sufficiently particularised to enable the cost officer to be satisfied they do not exceed the reasonable and proportionate cost of the Solicitors doing the work.” (emphasis added)
The Parties’ Positions
The Claimant’s position was that there was no requirement for a breakdown of the agency fee and that if there was a requirement it would be clear in the PD. They also further contended that the agency fee note provided ought to be sufficient.
The Defendant averred that in order to conduct a detailed assessment the Judge would need to be able to distinguish between the expert fee and the agency fee. They also relied upon PD47 averring that the agency were not an expert and so could not be regarded as an expert fee note.
The Decision
HHJ Bird was very clear in his determination. He held that:
“If the paying party (and potentially the court) is to make a decision about MRO fees it needs to understand what they are.”
He determined that that the points made in Stringer still apply, namely that without a breakdown a Judge risked permitting a disproportionate and unreasonable sum.
HHJ Bird continued:
“22. I am satisfied that it is clear that PD 47 imposes a duty on the receiving party to provide the fee note of any expert instructed and, where such costs are claimed details of the costs of any MRO. Premex is not an expert. Its invoice cannot be described in any sensible way as a fee note and is in any event not the fee note of the expert.
23. Once this conclusion is reached, in my view it follows that the appeal must be allowed. The Deputy District Judge was in my view wrong to refuse the order sought. If the paying party is entitled to receive the breakdown (as I have found), as a general rule it is entitled to an order vindicating that right. The court should manage its proceedings in a way that facilitates the just disposal of any matter it has to decide. Here, making the order would have facilitated that aim by ensuring that the court had before it all relevant and necessary information needed to conduct the detailed assessment. It was not suggested that it would be difficult, let alone disproportionate to provide the breakdown so that no reason to depart from the general rule was advanced. By refusing the order, the Deputy Judge left the Judge who would conduct the detailed assessment without the information they needed.”
The court made an order that the Claimant provide a breakdown between the agency’s costs and the experts’ costs within 14 days and in addition to provide copies of the experts’ fee notes. The court further ordered that there had been a failure to comply with PD 47 and that in default of compliance with the order the expert fees be assessed at zero.
What are the implications of this decision?
Although HHJ Bird’s judgment is very clear in its findings, it remains a county court judgment and as such is persuasive as opposed to binding. On this basis expect arguments around agency fees and requirements as to breakdowns to continue unabated.
What this decision highlights is the approach taken by paying parties to continue to push for the breakdown information and it is entirely reasonable to expect that it will only be a matter of time before the issue is before the higher courts. Once it reaches that stage then we are in the territory of a binding judgment that could see the approach to agency fees shift significantly.
If Hoskin was found to be good law then it would be incumbent on receiving parties (in order to comply with PD 47) to provide an agency breakdown and the separate expert fees when serving the Bill of Costs. This will require a collaborative approach with agencies who will be forced to be more transparent about their markups. It will also bring agencies closer into the costs litigation and there could well be some conversations in future between solicitor practices and agencies as to who is left to cover any potential shortfall. It could potentially lead to commercial decisions around whether an agency is used at all and if so whether such an instruction should be clearly communicated to the client, as it could feasibly be the client who has to pick up the tab.
All this said, it’s important to be clear that no one contests the recoverability of the agency uplift, rather it is a question of what is a reasonable and proportionate sum? In Hoskin a breakdown does not equate to a reduced or irrecoverable agency element, if the court determines that the sums are justified. Hoskin could, however, pave the way for a binding judgment in future which could bring agency fees into sharp focus.
The other questions abound will be how such a breakdown should be presented, ought it be time claimed in the bill or would simply confirming the breakdown suffice? No doubt if Hoskin is supported by higher courts in future then we will get more guidance on the correct approach.
There is a sidebar into fixed costs cases where agency fee recoverability acts differently. This is another battleground and we have previously written on this issue. In effect it comes down to whether or not the time spent by the agency is already covered by the fixed costs sum. If it is then it cannot be recovered at all. We have conflicting county court judgments on the issue and when we raised the issue with the Civil Procedure Rules Committee they commented that it is something they will have to look at in the future.
In short the judgment isn’t likely to alter the arguments though it may embolden receiving parties to make similar applications and it is from here that it is eminently foreseeable that a binding judgment may appear in the not too distant future. What is clear is that if Hoskin is affirmed then it will have far reaching consequences for everyone.
Should you have any queries arising from this article or upon costs generally then please do not hesitate to get in touch with our friendly team either via phone 01482 534567 or e-mail info@carterburnett.co.uk
Tagged as: Agency Fees
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