Update – Appeal decision regarding disclosure of breakdowns in medical reporting organisation cases.
Northampton General Hospital NHS Trust v Hoskin [2023] unreported, HHJ Bird, Manchester County Court, is important for anyone instructing medical agencies, or thinking about doing so.
The case had arrived at costs proceedings after the parties settled the substantive proceedings with the Defendant to pay the Claimant’s costs. A dispute arose regarding 2 items in the bill, being medical reports obtained via Premex Services Limited (“Premex”), a medical reporting organisation. One fee being £5,400 plus VAT in respect of a medical report from Mr Irons, a consultant in obstetrics and gynaecology and the other being a fee of £8,775 plus VAT in respect of a medical report from Dr Khan, a consultant cardiologist.
The Defendant asked for a breakdown of the items, i.e. a request for an explanation of how much of the claimed fee related to the individual medical report and how much related to the services provided by Premex. Premex refused to supply this, arguing the invoiced amount was both reasonable and proportionate so that there was no need for a breakdown.
The Defendant applied for an Order the Claimant provide the breakdown and served Points of Dispute requesting details of the sums charged by the experts and Premex. The application was initially heard by Regional Costs Judge Harris, who dismissed the request.
The appeal was heard by His Honour Judge Bird, who ordered that the Claimant produce the breakdown within 14 days or have the disbursements assessed at £nil. He stated:
“I am satisfied that it is clear that PD 47 imposes a duty on the receiving party to provide the fee note of any expert instructed and, where such costs are claimed details of the costs of any MRO. Premex is not an expert. Its invoice cannot be described in any sensible way as a fee note and is in any event not the fee note of the expert.”
This is a County Court appeal decision, so is persuasive rather than binding but it marks the latest decision in a long running battle between medical agencies and Defendants to obtain more detail as to the medical agency element of report fees charged. These are; however, important issues and the parties were represented by Leading Counsel in the appeal.
Whilst it is not binding this is not the first case to hold that there should be disclosure of the breakdown of the fees between the medical agency and expert elements. In Stringer v Copley (unreported), 17 May 2002, Kingston on Thames County Court, where Judge Cooke noted that “….it is important that their invoices (or “fee notes”) should distinguish between the medical fee and their own charges, the latter being sufficiently particularized to enable the costs office to be satisfied they do not exceed the reasonable and proportionate costs of the solicitors doing the work”.
It is not new for the court to want sufficient detail of any fees claimed to consider the reasonableness of the same, here HHJ Bird said: “If the paying party (and potentially the court) is to make a decision about MRO fees it needs to understand what they are.” This reminds us of the comments of Senior Costs Judge Gordon-Saker in Deutsche Bank AG v Sebastian Holdings Inc & Anor [2021] EWHC B4 (Costs) addressing the assessment of expert fees, where he said “there has to be sufficient detail provided to allow the court to carry out the task required by the rules and, in particular, CPR 44.3 and 44.4.”
The decision in Hoskin does not decide what is a reasonable sum for the fees claimed, so it may not affect the sum ultimately payable for the disbursements between the parties. However, the paying party here is hoping that the breakdown will assist them in reducing the fees claimed, no doubt in light of the guidance from Stringer v Copley, to seek to show that the medical agency element exceeds what would have been the reasonable and proportionate charges for the solicitor undertaking the work.
Leaving aside fixed costs for a moment, it is worth remembering that medical agency fees are in principle recoverable (see cases such as Claims Direct Test Cases Tranche 2 Issues [2003] EWHC 9005 (Costs)), so this is an issue of reasonableness. However, there could be a reduction to the fees on assessment that would leave a short fall, which could lead to solicitor/client considerations where the shortfall is to be met by the lay client.
And what of the position of medical reporting organisation’s fees within the disbursement charges in fixed costs? There are decisions at variance as to whether these are recoverable as disbursements or subsumed in the allowances for profit costs, with Powles v Hemmings [2021] 4 WLUK 573 finding the fees were not recoverable and Wilkinson-Mulvaney v UK Insurance Ltd unreported, Cardiff County Court (19 January 2023) finding they were recoverable as part of the expert fee.
It has now also been confirmed that the decision in this case is being appealed and we all await the outcome!
How can PIC help?
PIC regularly deal with issues relating to such arguments and can provide you with expert assistance to navigate all your costs and funding issues.
Caroline Engledow, Costs Lawyer
08.06.2023