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Court backs recoverability of agency fees in PI claims
Authored by Hector N. Stamboulieh (APIL Fellow) – In-House Counsel ARAG plc:
I noted with interest a recent article by Rachel Rothwell in the Law Society Gazette last month, summarised below by me, showing that the court can still rule in favour of Claimants in the current generally Defendant friendly PI climate.
Ruling in Beardmore v Lancashire CC in Liverpool County Court, Judge Graham Wood QC rejected the Defendant’s attack on the recoverability of agency fees charged for obtaining medical records in employers’ and public liability cases that have exited the portal process and fall under CPR 45.29I.
The dispute arose from a straightforward tripping claim that settled for £3,500 after leaving the portal. The Defendant agreed to pay the relevant fixed legal costs and the direct costs of the GP and hospital notes - £10 and £50 respectively - but disputed that it was obliged to pay the ‘profit costs’ charged by agency Target Medical for obtaining the records. The claimants sought a total of £96 for each report, including VAT.
Judge Wood was not interested in any relationship between the medical agency, in this case Target Medical, and the Claimant’s solicitors. However, he added:
‘I do not believe that this court should be drawn into…..criticism of the use of medical agencies, even those which are closely connected with bulk claims solicitors… ‘I can understand why paying parties should be cynical where such a connection exists, and it appears as though it is merely an additional payment to the receiving party solicitors which would not otherwise be recoverable, and the restrictions are being circumvented. However, if as a matter of policy the rule makers believe that it is appropriate to make the fixed costs regime more restrictive and to exclude agency fee recovery, then a simple rule change can be introduced.’
Judge Wood said the heart of the question before him was whether the fact that rule CPR 45.29I specifically referred to a limit on recovery of agency fees in ‘road traffic accident claims’ therefore meant that such fees could ALSO not be recovered in EL/PL cases. He said, had the rule drafters intended to exclude EL/PL claims, they could have easily worded it that way.
He, therefore, decided to allow recovery of ‘the reasonable and proportionate cost of obtaining the medical records’, which he set at £30 for each of the two sets of records in this case, on top of the direct costs and with VAT to be added.
A logical interpretation and sensible decision on the information provided, in my humble opinion. Although the sum in such cases is only “tens of pounds”, many thousands of cases will be affected by this decision. ARAG plc had generally taken a similar view and their policies often covered reasonable agency fees with regards to medical records when records were charged for prior to May 2018.
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