Senior Costs Judge Directs Breakdown Of Premex Fees

CXR v Dome Holdings Limited involved a dispute over the recoverability of medical agency fees as disbursements in a legal costs claim. The claimant, CXR, had engaged a medical reporting agency, Premex, to obtain expert medical reports. The defendant, Dome Holdings Limited, raised a supplementary point of dispute challenging the claimant’s failure to provide a breakdown of the fees charged by the medical expert and the agency.

Chronology of Relevant Events

• The claimant, CXR, engaged Premex, a medical reporting agency, to obtain expert medical reports.
• The claimant served a bill of costs claiming fees for the medical reports as disbursements.
• The defendant, Dome Holdings Limited, served supplementary points of dispute, challenging the claimant’s failure to provide a breakdown of the expert’s fees and the agency’s fees.
• The matter came before Senior Costs Judge Gordon-Saker in the Senior Courts Costs Office for determination.

Issue to be Decided

The key issue to be decided by the court was whether the claimant was required to provide a breakdown of the fees charged by the medical expert and the medical reporting agency separately when claiming these fees as disbursements in the bill of costs.

Parties’ Positions and Arguments

The Defendant’s Position: The defendant argued that paragraph 5.2 of Practice Direction 47 requires the receiving party (the claimant) to serve “copies of the fee notes of … any expert in respect of fees claimed in the bill” and “written evidence as to any other disbursement which is claimed and which exceeds £500“. The defendant relied on the judgment of His Honour Judge Bird, who concluded that this provision required the receiving party to serve fee notes showing the specific costs charged by the expert and a breakdown between those costs and the agency’s fees.

The defendant also cited the decision of His Honour Judge Cooke [sic] in Stringer v Copley (2002), where the judge held that, while there is no principle precluding the recoverability of medical agency fees, “it is important that their invoices or fee notes should distinguish between the medical fee and their own charges, the latter being sufficiently particularised to enable the costs officer to be satisfied that they do not exceed the reasonable and proportionate cost of the solicitors doing the work.“

The Claimant’s Position: The claimant, represented by Ms Allen, relied on two County Court decisions:

1. Beardmore v Lancashire County Council (2019), where His Honour Judge Wood KC concluded that agency fees were recoverable in principle under the fixed costs regime applicable to cases that had exited the RTA and EL/PL pre-action protocols.
2. Sephton v Anchor Hanover Group (2023), where District Judge Jenkinson held that, because the fee was recoverable to the extent that it is reasonable and proportionate, the court did not need to know the apportionment between the provider and the agency.

Ms Allen argued that the court’s task is simply to allow a reasonable and proportionate figure for the entire disbursement, including both the expert’s fee and the agency fee for obtaining the report.

Judge’s Decision

Senior Costs Judge Gordon Saker found that the Practice Direction requires the receiving party to serve copies of the expert’s fee notes, and in the absence of a breakdown of the expert’s fees and the agency’s fees, it is impossible to determine whether those fees exceed the reasonable and proportionate cost of the solicitor doing the same work, as suggested by His Honour Judge Cooke [sic] in Stringer v Copley:

“…on the one hand there are decisions which would suggest that a receiving party in a detailed assessment should provide details of the expert’s fees and the agency’s fees separately and there are decisions, on the other hand ,which would suggest that, certainly in the case of fixed recoverable costs, it is not necessary to do so; and Ms Allen pins her colours to the mast of the latter decisions on the basis that the court’s task is simply to allow a reasonable and proportionate figure for the whole disbursement: that is, the expert’s fee and the agency fee in obtaining the report. [7]

“To that jurisprudence I would add only one comment before deciding which one I will follow and that is, in relation to the invoices in this case, there is no indication in any of them as to what hourly rate has been charged in respect of obtaining the report or as to the amount of time spent and, it seems to me, that that information is or would be of great assistance to the court in deciding whether the fees are reasonable and proportionate. Absent that information, all the court would have to go on is where (inaudible) the product of the work done, which may be a medical report, it may be a letter or it may be an attendance note where, for example, the expert has attended, or a conference or telephone call. [8]

“It seems to me, therefore, there are good reasons why, although not required by the Practice Direction, experts’ fee notes should set out the work that was done with sufficient clarity, including the amount of time spent, to enable the court to form a view as to the reasonableness of the fee. [9]

“That aside, in my view, the comments of the late His Honour Judge Cooke [sic] and the reasoning of His Honour Judge Bird are the more compelling. First, the Practice Direction requires the fee notes of the expert and, second, in the absence of a breakdown of the fees of the expert and the agency, it is impossible to do the exercise which His Honour Judge Cooke suggested in Stringer: of deciding whether those fees are more or less than the solicitor would have charged for doing the same work.” [10]

He concluded that, subject to submissions, the claimant would be required to provide a breakdown of the fee notes issued by Premex to show the separate fees of the expert and the agency:

“Accordingly, subject to submissions, I would require the claimant to provide a breakdown of the fee notes issued by Premex so as to show the separate fees of the expert and the agency. It is unfortunate that that is arising in the course of, albeit on the first day, a detailed assessment, but there we are. An application could have been made in advance of the hearing.” [11]