Medical Agencies, again.
Another day, another decision in CXR -v- Dome Holdings, following after Parsons -v- Stevens, relating to medical agency fees. The latter found that absent an agency breakdown so we all know what they are charging and how, then the assessment will be harsher than if one was provided. The former made the common sense finding that the underlying expert fee note should be enough to resolve the break down issue.
Leaving aside the question that flows from this sentence appertaining to assessment methodology, let us take a meander through the crux of the issue – medical agency breakdowns.
What is going on? A solicitor instructs an agency, who instructs an expert to prepare a report. Said report attracts a fee, agency applies an uplift to this fee for services rendered, solicitor gains a report.
What is the problem? Well, the uplift is the problem because no one knows how it is calculated and the agencies are, mostly, unwilling to explain it. Whilst some judges are content to form a view on a fee as put before them, others agree with paying party firms that clarity is required. For want of a breakdown, the fees can potentially be slashed or even disallowed entirely, whether reasonable or not.
What breakdown can the agency provide? There appears to be an assumption that the agency can just break down their fees by time and there is no reason not to do this. However, it is not that simple. The agency fee, often folded into a %, reflects a series of imponderables that straddle a vast swathe of work in much the same way as block rated ATE premiums, so any kind of breakdown is probably, at best, a loose collection of reasons sitting behind the %. These may include obvious work such as admin, conflict checking, arranging appointments, paying fees, and salaries; but also, more esoteric elements such as insurance, interest, overheads, adverse funds, delayed payment allowances and, of course, profit. Is there a relationship between the agency work and the expertise of the relevant expert, or is it one size fits all? Can any fee be broken down case by case when it may reflect data that is agency or even industry-wide?
Is this smoke and mirrors and, in fact, all the Court needs to know is how much is the agency charging on top of the underpinning fee? Well, we can at least find that out without the agency, just obtain the expert fee directly.
Then, how does the Court know whether that agency fee is reasonable or not? What are the nationwide parameters for a “reasonable” agency fee? If the % can be cracked apart, what elements of this are commercially sensitive, and what are not? How much will it cost to look into this? Will it turn on the specific case particulars and the questions of proportionality and reasonableness etc., or does this lead us down, yet again, the street of block rated premiums and judicial knowledge, or lack thereof.
What if a breakdown is provided? What doors are suddenly kicked open? What about actual expert time, do we need to investigate how much time they spend writing, in the appointment, checking, thinking, and so on? Do we demand that they provide expense of time calculations to support their rates? Where next? Do we begin breaking apart court fees into their constituent elements to determine what part of the court fee is not recoverable because it turns out it goes towards paying court admin?
So, if the fees are at risk and a breakdown impossible to obtain, why use an agency? The most obvious reason is that litigation is expensive. Agencies can offer preferential payment terms, absorb expert fees upfront, and arguably benefit from economies of scale. They may well also have access to a selection of experienced experts rather than a solicitor having to approach a selection who do not or cannot act. In theory, an agency makes expert instruction more efficient, consistent and more economical, which in an era of ever-increasing costs pressure on Claimant firms, is probably very attractive. In short, a medical agency helps facilitate access to justice (and in clinical negligence particularly, perhaps one must always have an eye on the bargaining power of the NHS in the context of CPR 1.1(2)(a) and (c)(iv)).
So, what should you, the solicitor who uses an agency, do to mitigate your exposure to another Judge deciding that absent a breakdown the fee is at risk of significant sanction?
Firstly, ask for a breakdown so you can prove you have done. Do not assume you should not because you assume the agency will decline.
Secondly, as Senior Costs Judge Gordon-Saker said in CXR, make sure you have a copy of the underpinning expert fee. The cost is your clients, not the agencies, so you are arguably entitled to this, and you can then, if required, wave it before a Judge. At the very least this should preserve that underlying fee in principle.
Thirdly, check your terms with the agency. What do these say about their fees, adverse costs, breakdowns and responsibilities?
Fourthly, in the context of these disputes becoming more prevalent, you may be wise to keep your own client informed of the additional agency expense and the risk of shortfall against recovered costs.
Lastly, as a bonus tip, if you are preparing a Precedent H, and you are considering your expert fees, do not forget to allow an uplift for the agency. How much should we allow, you may ask? Well, now that’s the question…
PIC are able to liaise with your agency to obtain underlying fees and/or assist them in providing enough information to the Court to offset the above issues and preserve as much of the fee as possible.
Lee Dixon, Senior Costs Consultant
24.05.2024