Woollard v Fowler – Medical Agency Fees

Judgment has just been handed down in an important case, Woollard v Fowler [2005] EWHC 90051 (Costs), concerning the recoverability of the charges made by medical agencies in costs covered by the predictable costs regime of CPR 45. This was a decision of the Senior Costs Judge, Master Hurst, sitting as a Recorder.

Medical reports and records had been obtained by the claimant’s solicitors through a medical agency, Mobile Doctors Ltd, in a road traffic accident where the costs were covered by CPR 45. The costs claimed included fees paid to the medical agency which included both the amounts paid to the actual expert, GP surgery and hospital but also further charges for the work performed by the agency in obtaining these items. For example, the fee for the medical report was £435 of which only £275 went to the surgeon, with the balance going to the agency.

The defendant argued, successfully at first instance, that the fixed profit costs allowed for under Part 45 were to include all work of a fee earner nature. The rules did not contain any provision to enable an element of profit costs work to be subsumed within a disbursement and awarded in lieu of profit costs. Therefore the additional costs of medical agency were disallowed.

That decision was not followed by Master Hurst who concluded that the wording of the rules that specified that the recoverable disbursements included “the cost of obtaining - (i) medical records; (ii) a medical report” was not accidental and was because the rule drafter was well aware of the common practice of the use of medical agencies. The charges raised by medical agencies had previously always been treated as disbursements and CPR 45 did not alter the position. He therefore held that the medical agents’ charges were recoverable.

Worryingly for defendants, he also held that “the test on all assessments is one of reasonableness and proportionality but there seems to be no reason why an agency should not be used to obtain an engineer’s report if, in all the circumstances, it was reasonable and proportionate to do so”. This seems to be an open invitation to solicitors to seek to delegate further items of work to agents. This will inevitably lead to more and more elaborate schemes where certain claimant solicitors will seek to do less and less work to obtain their fixed fees whilst simultaneously obtaining various kick-backs from the agents they instruct to perform the delegated work.