In the latest skirmish involving medical agency fees, the Senior Costs Judge has stated that reasonable medical agency fees should not exceed 25% of the underlying expert fee. With percentage mark-ups reaching the eye watering 143% this represents a significant win for HF, our clients, EUI and Esure, and the wider insurance market.

Concern has existed regarding medical agency fees for over a decade and paying parties have struggled to gain any traction before the courts with arguments for transparency and control. A combination of LASPO and escalating inflation following Covid-19 led to rapid increases in the costs of medical evidence with single reports regularly running into 5 figures. That increase led to renewed focus from paying parties and scrutiny from the courts.

The tide has turned with HHJ Bird’s decision in Northampton General Hospital NHS Trust v Hoskin when an unless order was made requiring disclosure of the underlying expert fee notes, the entirety of the fees would be disallowed.

HF’s approach successfully resulted in disallowance of agency fees and the payment of non-party costs from medical agencies who stood in the way of transparency.

The Senior Costs Judge highlighted that a determinative judgment in this area would be welcome and indicated that he expects to grant permission for appeal. An appeal by one or more parties seems reasonably likely given the circumstances.

In the meantime, hopefully the medical agency market will adopt a more transparent approach, providing copies of the underlying expert fee notes on a voluntary basis (as required by CPR PD 47 para 5.2(c)).

Given the shortfall between fees the medical agencies have/will charge and the gap imposed by this decision, some difficult conversations are likely to be needed between medical agencies and the solicitors who instruct them.

Does this decision narrow the gap between the agencies and compensators to allow for productive industry discussions on a solution?

To discuss how this decision impacts your business, action you should take now or how as an industry we can find a solution that works for all parties moving forward, please contact Paul McCarthy (paul.mccarthy@h-f.co.uk) or Mark Walmsley (mark.walmsley@h-f.co.uk).

Background

The present proceedings

The first judgment in JXX was handed down in January 2025. On that occasion the Senior Costs Judge put the Claimant to his election to provide copies of the underlying fee notes and a breakdown of the agency element of the fee or face the fees being assessed on the basis that he waived the agency element.  The Claimant elected to provide full disclosure as ordered. Directions were given for exchange of evidence and the matter listed for a four-day hearing.

In the meantime, the Claimant in the HLA proceedings applied for that case to be case managed and heard alongside JXX and voluntarily elected to comply with an order akin to that made in JXX.

The medical agencies involved, Premex Services Limited and Medical and Professional Services Limited, were added to the proceedings as parties in their own right.

The claimants and medical agencies served a total of 27 witness statements from a wide variety of individuals. The majority of the evidence focused on the importance of agencies to the personal injury and clinical negligence claims.

The Defendants’ case

The Defendants’ case remains simple. Medical agencies provide a support function to solicitors obtaining medical evidence and they should be able to secure it more cost effectively than solicitors. In accordance with Stringer v Copley (2002), medical agency fees should demonstrably not exceed the cost that would have been incurred had the solicitor undertaken the work themselves (the ‘Stringer cap’). It follows that to ensure the Stringer cap had not been exceeded a breakdown of the work done by the agency is required.

The Claimants’/ medical agencies’ case

The argument for the claimants was that the court should simply look at the totality of the fees claimed for each piece of expert evidence and determine whether in a global sense that fee is reasonable. If so, it should be allowed as claimed, if not it should be reduced.

The judgment

Following four days of argument and the cross-examination of half a dozen witnesses, the Senior Costs Judge made a series of key findings:

  • The claimants failed to prove that medical evidence is cheaper when obtained through an agency.
  • Medical agency fees are a disbursement, not an outsourced profit cost.
  • There should be no ‘Stringer cap’.
  • Deferment of payment and a waive facility are not irrecoverable funding costs.
  • There is no realistic scope for deconstruction of the medical agency fee.
  • There is no competitive market for medical agency fees which would control fees and as a result one fee cannot be compared with another to determine reasonableness.
  • Medical agency fees even in the bracket of 30-53% are unreasonable.
  • The reasonable uplift as against paying parties should be 25%.
  • Any fees above the maximum uplift are a matter for the claimants, their solicitors and the medical agencies.
  • The medical agencies are encouraged to state the percentage mark up on their invoice.
Medical Agency Fees