The issues of reasonable fees for medical reports in low-value personal injury litigation, the use of medical agencies to obtain such reports and the details of such an agency’s fees have again raised their ugly heads.
In its initial guise, and crudely stated for present purposes, the ‘old’ challenge was not so much one of reasonableness but one of principle: is an agency’s fee for obtaining a medical report, being work that would otherwise be done by a solicitor (i.e. a profit cost), recoverable as part of, or as a ‘bolt-on’ to, a disbursement (i.e. the expert’s own fee)? After all, profit costs were, and remain in such low-value RTA claims, prescribed (and soon will also be prescribed in EL/PL claims) whereas disbursements are not, such that ‘hiding’ such solicitor work within what is ostensibly a disbursement appeared to be little more than a ruse to circumvent, or rather supplement, fixed recoverable costs. Thankfully, that issue was resolved in the affirmative by Senior Costs Judge Hurst in Woollard -v- Fowler, any further appeal in that case was compromised and thereafter, AMRO was born.
All such issues subsequently and largely fell away. I say ‘largely’ as some issues, even new issues, continued (e.g. costs draftsmen including already paid fees in bills of costs; failures by claimant lawyers and agencies to send fee invoices/requests to the compensator/insurer, resulting in ‘Rate A or B’ arguments etc.). On the whole however, things were generally quiet on this particular front; fees for GP, A&E and orthopaedic medical reports were agreed between a wealth of medical agencies and insurers, such agencies were widely-used and a simple, fair and proportionate system existed.
In the last few years however, there has been a growing trend of claimant-orientated PI law firms setting up their own medical agencies. Invariably, such agencies have shunned AMRO and their fees are higher, often considerably higher, than AMRO fees. Where there is no competition to obtain work, as such agencies’ principal if not sole source of work is spoon-fed to them by their ‘parent’ law firm, then of course their charges will not be, nor indeed need to be, competitive.
And yet, such non-AMRO agencies will often use the very same panel of GPs and consultants as AMRO agencies. Furthermore, it must be remembered that AMRO agencies are more than happy to accept instructions from whoever.
Prima facie therefore, the fees of non-AMRO, non-independent medical agencies appear to do no more than add a further, unjustifiable layer of costs in personal injury claims without any benefit to the end consumer (and a potentially substantial benefit to the consumer’s legal representatives). Accordingly, challenges to such fees have become increasingly commonplace (for some at least; thankfully my own cases invariably involve(d) AMRO signatories).
On 22/05/13, District Judge Woodburn, sitting as Regional Costs Judge at the Liverpool County Court, handed down judgment in Charman -v- John Reilly (Civil Engineering) Ltd, the lead case conjoined with two others involving the same issues, namely:
1. What was a reasonable sum to allow in respect of a medical report obtained via a non-AMRO agency; and
2. Whether the claimant should be compelled to disclose details of the fees claimed so as to distinguish between the expert’s fee and the fee of the agency.
In brief, the claimant sought to recover a medical report fee of £350.00 plus VAT. Had the report been obtained via an AMRO agency, the fee would have been £200.00 plus VAT (if paid within 90 days of the invoice, or £225.00 plus VAT if paid thereafter). The defendant essentially offered the AMRO rate as reasonable and in the absence of a breakdown of the agency’s fee which the claimant failed and/or refused to provide (there was a curious assertion that the claimant could not obtain a breakdown of the agency’s fee – curious in the sense that his solicitors effectively own the agency and no doubt could have obtained a breakdown had they really wanted to).
The claimant’s position may be broadly summarised as follows:
* AMRO fees are merely a factor to be considered;
* He could not obtain a breakdown but a breakdown was in any event “neither necessary nor appropriate“;
* Providing a breakdown to a public hearing “… would make it impossible for that medical agency properly to compete with other medical agencies“; and
* The fee claimed was reasonable.
The defendant’s position may be broadly summarised as follows:
* The decision of HHJ Cook in Stringer -v- Copley remained good authority for the proposition that a breakdown of the agency fees should be disclosed;
* The AMRO rates are evidence of a reasonable and proportionate fee;
* The AMRO agreement might be in jeopardy if agencies not operating under the same were able to recover higher fees (described as incongruous by the District Judge); and
* The fee claimed was not reasonable.
District Judge Woodburn held inter alia that:
* When parties embark upon any form of litigation, they submit themselves impliedly and expressly to the Overriding Objective of the Civil Procedure Rules and the duty to assist the Court;
* That duty to assist the Court remains in circumstances where certain items of work are delegated by a party’s legal representative (in this case, to the medical agency);
* That duty includes assisting the Court when it is deciding the reasonableness and proportionality of any item of costs;
* The decision in Stringer remains good law;
* His attempts to assess the reasonableness of the fee claimed had been frustrated by the claimant’s failure / purported inability to provide a breakdown of the fee;
* The defendant, not being a party to any agreement as to fees between the claimant, his solicitors and the agency, was entitled to ask reasonable questions about how the fee was calculated;
* There are no good reasons to impose AMRO rates on parties not signatories thereto;
* Equally, it is not appropriate to measure the reasonableness of the fee by reference to other composite fees charged by non-AMRO agencies;
* It was reasonable to use a medical agency;
* A reasonable charge for the agency element of the fee is £50.00 (plus VAT if appropriate);
* A reasonable fee to be paid by the agency to the expert is £150.00 (plus VAT if appropriate);
* There is no reasonable basis for a claimant to not provide a breakdown of fees to a defendant; and
* “Solicitors must first disclose their client’s obligations under the Civil Procedure Rules to medical agencies before confirming any agreement for services with that agency. This may obviate any embarrassment if, later, that agency refuses to disclose information on how it’s charges are compiled. ”
A perfectly sensible decision in my view. That is not to say that fees identical to AMRO fees are all that should ever be allowed as between the parties; the fee allowed in Charman is all but irrelevant when compared to the salutary reminder of a receiving party’s burden within detailed assessment proceedings.
Discussion of the decision in Charman subsequently emerged via the simply excellent Litigation Futures website and a feature entitled “Medical report uncertainty after court allows fee above MROA level“. Therein reference is made to a decision of a Deputy District Judge sitting at the Macclesfield County Court, Kavanagh -v- Powell, in which a non-AMRO agency fee claimed at £300.00 plus VAT was allowed in full.
It is said, or certainly implied, that in Kavanagh it was simply argued by the defendant that the fee claimed was unreasonable as it exceeded the AMRO rate. In response, it was apparently argued on behalf of the claimant that:
* AMRO rates are irrelevant;
* Mere reference to AMRO rates did not render the fee claimed unreasonable;
* The paying party did not object to the instruction of a non-AMRO agency;
* The paying party produced no evidence of lower fees charged by other non-AMRO agencies;
* The British Medical Association recommended fee for a written report without an examination, based upon 30 minutes work, is £124.50;
* The instant case involved a consultation and examination such that it was reasonable to double that BMA-recommended fee; and
* The remaining, in approximate terms, £50.00 was reasonable for the agency’s work.
The feature goes on to quote the claimant’s advocate in Kavanagh as saying:
“It is far too a simplistic approach to infer [AMRO] rates on their own demonstrate a reasonable fee for non-particapting medical agencies, an approach which is flawed in law. For a paying party to be successful they must demonstrate that the fee is unreasonable by producing evidence of comparable agency charges who are similarly not a signatory. In Kavanagh, the claimant demonstrated the fee was reasonable by reference to BMA rates without providing a breakdown.”
The first sentence of that quote is beyond debate. However, the second sentence is troubling insofar as it purports to reverse the burden of proof in detailed assessment proceedings on the standard basis (i.e. it is for a receiving party to satisfy the Court that an item of costs is reasonable and proportionate and not for a paying party to establish that it is not). As for the final sentence, it must surely be wrong for a judge to accept a recommended fee as being reasonable in circumstances where that fee has seemingly and arbitrarily been doubled and moreover, tells the Court nothing whatsoever about the fee actually paid by the agency to the expert. Indeed, for all the learned Deputy District Judge knew (without for a moment questioning the veracity of the submission, made without the benefit of a breakdown of the fee) the expert might have have agreed a more modest fee in return for a guaranteed minimum number of instructions over time. That said, the judge could only make his decision based on the arguments advanced on behalf of the parties.
All in all, I should think that Charman will be followed by costs judges far more readily than the decision (and reasoning) in Kavanagh; but the uncertainty referred to by Litigation Futures certainly remains.
Perhaps, with the advent of fixed costs across the fast track being nigh which may well exacerbate the problem, someone or other will fund a fight ‘upstairs’ and the profession will have the certainty it needs. Until then, quite how this issue will pan out in the new world of provisional assessments, if details of non-AMRO agency fees continue to be withheld, is anyone’s guess…