A Peek behind the curtain of agency costs.
The ongoing battle between Solicitors and Medical Agencies continues. Despite numerous requests for the details of the Agency uplift, some companies are still not willing to disclose this information. Could this be due to the possibility that some agencies add an uplift of almost 40%? Or is it maybe because the uplift fees include unrecoverable elements. The case of Smith -v- Portsmouth Hospital NHS Foundation Trust may pave the way for reasonable and realistic uplifts being applied to expert fees.
The case was in relation to clinical negligence which settled in the sum of £25,000.00. The Claimant instructed and obtained a breach of duty report from a gynaecologist (£6,736.28), a condition and prognosis report from a gynaecologist (£3,869.06), a report from a psychiatrist (£3,130.67), and a report from a pain expert (£5,370.67). A total of £19,106.68 was incurred in commissioning the 4 expert reports however, the invoices were raised by Speed Medical rather than the individual experts.
The Defendant claimed that the Claimant was in breach of PD 47 paragraph 5.2 (c) on the basis that the invoices served with the Bill of Costs were Speed Medical’s invoices and not the experts’ fees and that it was unclear how much of the fees were for the experts and how much was for the medical agency.
At the assessment hearing DJ Morris agreed with the Defendant and advised that ‘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.’
The Defendant offered £3,000 plus VAT for each of the medical reports as being reasonable, in line with the Judgement HD v Northern Devon Healthcare NHS Trust [2023] EWHC 2118 (SCCO).
Speed Medical provided a breakdown of their fees as follows:
‘(1) expert’s fee; (2) fixed operational fee, costs of the case handled, etc, dealing with the file; (3) referral commission. (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.’
The Judge concluded that 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…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’.
This case highlights the ongoing issue of transparency in agency fees and the impact on the Solicitors and the Clients.
It is not only in the Claimant’s interest but also in the interest of the medical agencies to provide a clear and concise breakdown of their fees failing which, they risk their fees being disallowed completely.
How can PIC assist?
With expertise in costs law, PIC can help law firms respond effectively to objections from medical agencies in relation to providing a breakdown of their fees. PIC can also assist in reviewing any breakdowns provided by medical agencies to ensure the fees claimed are reasonable and potentially recoverable prior to any breakdown being disclosed to the Defendant and being open to scrutiny.
Amber Adam, Costs Consultant
27.03.2025