Court backs recoverability of agency fees in PI claims
Mollie Anderson, Costs Consultant at PIC reports on the case of Beardmore -v- Lancashire County Council.
The case relates to a ‘slip and trip’ claim which settled for £3,500.00 after exiting the portal. The parties agreed the relevant fixed costs but a dispute arose as to whether or not the Defendant should meet the agency costs of obtaining medical records.
The case concerned the Claimant, Dr Carol Beardmore, who was injured in a tripping accident in March 2016, on a public footpath. The Defendant, Lancashire County Council, was the highway authority. The Claimant’s injuries were relatively minor, and negotiations began initially under the pre-action protocol for public liability claims. Due to liability being unresolved, the matter came out of the protocol process accordingly and proceeded as a potential claim. Following some pre-action disclosure and medical evidence being obtained, the Defendant admitted liability and the claim settled in the sum of £3,500.00. The Claimant was entitled to her costs, which were fixed costs under section IIIA of CPR 45.
The Defendant disputed the disbursements recoverable for obtaining the medical records, as the medical records in this case were obtained by an agency known as Target Medical. Target Medical were also involved in commissioning the medical reports. There was belief that there was a mutual directorship regarding the relationship between Target Medical and the Claimant Solicitors, of which the latter had a financial interest. The costs claimed as disbursements included both hospital and GP notes. It was the Defendant’s contention that the recoverable sum should be limited to direct costs of the medical records only. The direct cost was £50 and £10 respectively with the agency charging £96.00 plus VAT for each set of records.
As a result of the objection by the Defendant to paying an agency fee, Part 8 costs only proceedings were issued. The matter came before District Judge Wright, who disallowed the costs claimed as disbursements for obtaining the medical records. District Judge Wright made an ex tempore decision, which was made on the basis of what it would have been reasonable for the Claimant’s Solicitors to do, and District Judge Wright did not engage in any greater detail with the finer points of the fixed costs rules. However, District Judge Wright noted the disparity between RTA cases and PL cases and exercised a discretion on the basis of what was reasonable and proportionate, that discretion was prescribed by her understanding that there was no provision in the rules for the allowance of an agency fee over and above the direct costs.
When considering this case, it is useful to consider Paragraph 45.29B in relation to the application of fixed costs and disbursements within the RTA Protocol. These paragraphs establish the basis on which fixed costs and disbursements are paid in RTA cases. Paragraph 45.29D applies to EL/PL cases with similar wording. Paragraph 45.29I contained within Part IIIA of CPR 45 was the main concern of the court in this case.
Paragraph 45.29I, when applied to this case, which started in the EL/PL protocol, allows the agency fees to be recoverable within the protocol. Therefore, in conclusion, this disbursement, as part of the recoverable fixed costs, is no different to that which would have been obtained had the claim remained within the protocol.
Upon appeal, the Claimant’s argument was based on the assertion that the District Judge fell into error in concluding that agency fees were not recoverable in PL cases by reference to what was no more than a restriction to the maximum disbursement which could be claimed in RTA cases, over and above the direct costs. For the provision to be interpreted in this way, agency fees would only be recoverable in RTA cases, and by implication the absence of any reference in the rules to the recoverability in PL cases effectively excluded anything other than the direct costs.
The below further factors were considered also:
- The case of Woollard & Another v Fowler
- The use of the expression “cost of obtaining” which was specifically referenced in relation to the disbursements involved with medical records and expert reports arising under both protocols and that these words could not simply be limited to the direct costs of the medical institution.
The Claimant’s appeal was successful. Judge Graham Wood QC held that the absence of reference to a limit on the recovery of agency fees in EL / PL cases did not preclude recovery. He stated that if the rule drafters had intended to exclude recovery then it would have been ‘simple enough’ to do so.
Although the appeal was successful, the agency fees were restricted. The Court allowed the direct costs of the records plus £30.00 agency fees and VAT as reasonable and proportionate. The case is significant as whilst the amounts are individually small the decision will have wide reaching complications for a significant number of cases
If you have any queries arising from this article, then please do not hesitate to contact us whereupon we will be happy to assist you.
Mollie Anderson – Costs Consultant – Partners in Costs