Breakdown of Medical Agencies’ Invoices
Ena Aminu-Edu v Esure Insurance Company Ltd
This County Court (non-binding) Judgment by HHJ Saggerson (Circuit Judge at the County Court at Central London) is an interesting read for Injury Solicitors who obtain medical reports through a medical agency.
Essentially, this was dispute about a medical agency’s invoice for a medical report following the conclusion of a lower value fixed costs personal injury claim. The medical agency’s invoice for the medical report was £2430.00 plus VAT and the Defendant (Paying Party) would not accept that amount as reasonable and proportionate because the medical agency refused to provide a breakdown of their invoice.
There are now several decisions by the Courts relating to this point and the saga is definitely not over. As at today’s date (30th April 2024) firstly, in principle, medical agencies’ charges are recoverable provided that their charges do not exceed the reasonable and proportionate costs for that work if it had been done by the Solicitors (see Stringer v Copley 2002) and, secondly, there is currently no binding case authority or rule that requires the Receiving Party to provide a breakdown of the medical agency’s charges in such circumstances (albeit the standard basis of assessment says that any doubt about an item of costs will be resolved in the paying party’s favour).
In this matter of Ena Aminu-Edu v Esure Insurance Company Ltd the medical agency refused to provide a breakdown of their invoice. HHJ Saggerson, via a perfectly cogent and sensible judgment, explained that transparency is an integral part of the costs assessment process and, in the absence of any breakdown by the medical agency, he reduced the agency’s fee for the medical report from £2430.00 plus VAT to £750.00 plus VAT.
So why do Solicitors use medical agencies? And why don’t medical agencies want to provide a breakdown of their invoices?
Probably the main reason why Claimant Injury Solicitors use medical agencies for medical experts’ reports is because most medical agencies are willing to defer payment of their fees for the medical reports until the conclusion of the claim, albeit in return for a fee for those credit terms – and that is the main issue the Defendant insurance companies are seeking to open up with the appropriate case.
Interest on costs is payable from the date of the final Order, currently at 8% (see incipitur rule – Hunt v R M Douglas Roofing Ltd 1990). That interest is intended to compensate the Receiving Party for financing the whole litigation and no other interest is payable except where exceptional circumstances can be shown. Therefore, that element of the medical agencies’ charges for deferring payment of their invoices for medical reports, which can be as high as 40%, are not recoverable as an additional item of interest beyond the interest payable by the Paying Party under the incipitur rule. And that is why the medical agencies are so very reluctant to provide any breakdown of their invoices. (If the medical agencies had simply carried out work to obtain the medical expert’s report, doing work the Solicitors would traditionally have done but at lessor expense, then, of course, presumably, they would have no issue with providing a breakdown of their invoice).
So, my advice to my Claimant Injury Solicitor friends and professional clients, is to be cautious regarding the use of medical agencies. I appreciate that financing multi-track injury claims is difficult, but the Defendants aren’t going to let this issue go and if binding case authority goes in the Defendants’ favour you, or your clients, may be lumbered with paying the credit element of medical agencies’ charges that are not recoverable from the Defendants but for which you/ your clients are still contractually liable to pay.
If you wish to discuss the issue further, please get in touch.
Ian Moxon, Costs Lawyer
16.05.2024