Agency Fees in Costs Assessments

Frequently where a party obtains expert evidence it does so via a third party intermediary rather than instructing the expert directly. Conventionally these intermediaries are often referred to as Medical Reporting Organisations (‘MRO’) and that abbreviation is adopted for convenience,  although the same principles apply to non-medical experts or even non-expert services (e.g. interpreter’s fees) sourced via an intermediary.

This often causes dispute between the (usually Claimant) receiving party and (usually Defendant) paying party in respect of the fees charged by the MRO; the dispute is more acutely felt in fixed costs cases where solicitor’s remuneration is fixed but expert disbursements (and consequently MRO fees) are not.

The broad approach taken by Claimants and MROs is generally to seek to avoid disclosure of any breakdown of the global fee as between MRO and expert; the broad approach taken by Defendants is to seek a breakdown, usually (but not necessarily) with the intention of challenging the MRO element but not the expert element.

A quartet of recent decisions highlights the different approaches open to the courts when faced with such a dispute. Sadly, they do not point the same way, and none are binding.

In Northampton General Hospital NHS Trust v Hoskin (Manchester County Court, HHJ Bird, 22/05/23), not a fixed costs case, the dispute arose when the Defendant requested breakdowns of two MRO fees that had been claimed in the Defendant’s bill of costs in the sums of £5400 + VAT and £8775 + VAT. When this was refused by the Claimant, the Defendant issued an application to compel service of a breakdown. The court held that CPR 47 PD 5.2, which requires a receiving party to serve copies of ‘the fee notes of…any expert’ could not be satisfied by service of the fee note of the MRO, on the ground that the MRO was not the relevant expert. The court ordered the service of a breakdown, and in default ordered that the relevant fees would be assessed at £0.

In Aminu-Adu v Esure (County Court at Central London, HHJ Saggerson, 08/03/24), a fixed costs case, the dispute arose after the Defendant had served a Part 18 request seeking a breakdown of an expert report claimed in the sum of £2916 + VAT. The court concluded that a Part 18 request was a valid means of seeking the information sought, and in the absence of a breakdown “The Claimant must pay the price of a lack of information”. The court ordered the Claimant to provide a breakdown or in default the fee would be assessed at £750 + VAT, “err[ing] on the side of caution.”

In JXX v Archibald (SCCO, Costs Judge Rowley, 17/01/25), not a fixed costs case, various MRO fees totalling £120,946.00 including VAT were in dispute. The Claimant sought disclosure of a breakdown from the MRO which was refused. The court held that in the absence of any evidence as to the reasonableness of the MRO fee, the fees would be assessed by reference to whether the sums would have been reasonable for a direct instruction of the expert – i.e. the MRO involvement would be treated as valueless, however the onus was on the Defendant to challenge the fees by reference to any comparative evidence they sought to deploy. Directions were given, and no final determination was made.

Finally in Santiago v MIB (County Court at Central London, HHJ Dight, 21/02/25), a fixed costs case, the dispute related to an interpreter’s fee obtained via an MRO, in the sum of £770 + VAT. The Defendant’s request for a breakdown was refused, but comparative evidence was before the court and the arithmetical mean fee was £662 + VAT. The fee was assessed at £662 + VAT.

So, four cases and four outcomes:

• A breakdown is required, and fees assessed at £0 in default
• A breakdown is required, and fees assessed cautiously at 25% of the sum sought in default
• A breakdown is not required, but the MRO component will be treated as valueless if not provided. The onus is on the Defendant to provide comparative evidence to challenge the fee.
• A breakdown is not required, and the court will assess the reasonableness of the whole by reference to any available evidence.

Although the decisions can be said to have been increasingly more Claimant friendly in chronological order, that appears to be mere coincidence rather than indicative of a direction of travel.

Higher court guidance will certainly be welcomed. In the meantime, a Claimant who refuses a breakdown, or a Defendant who stands on principle without comparative evidence, are both taking a significant risk.

Please contact Lee Coulthard to discuss any query relating to this article. Lee can be contacted on 01943 601 350.