Dispute over medical agency transparency rumbles on

The thorny issue of medical reporting costs in personal injury and clinical negligence claims has resurfaced, following the judgement in JXX v Archibald, and it now seems we’ll have to wait until the end of the year before we get any more clarity on the subject.

The decision follows a succession of cases over the last couple of years that have provided only limited clarification around the question but failed to resolve it.

In January, Costs Judge Rowley left the claimants in this case with a choice as to how the agency’s bills could be assessed and invited either party to appeal, making it clear that more guidance was needed. But it now looks like the case won’t be back in court until November.

At the heart of the dispute lies the question of transparency about the fees charged by medical reporting agencies.

Defendants have demanded nothing less than a detailed breakdown of an agency’s bill, which can often run to 6 figures in complex cases.

For their part, medico-legal agencies claim confidentiality. A full breakdown of all the costs in their bill could reveal the fees paid to individual experts, the charges that the agency makes for its services and, ultimately, its margin, all of which could be commercially sensitive and potentially damaging to their relationship with suppliers.

This can leave claimant law firms stuck in an awkward position between the two, liable for the agency’s bill but unable to provide the detailed breakdown of costs the court may require to allow recovery from the defendant.

There is no question that most law firms need to outsource the work of gathering medical reports, as much to keep the substantial costs off their balance sheets as to delegate the work to specialists with the skills, processes and personnel to book experts, make client appointments, collate reports and ensure that the work is satisfactorily carried out.

Herein lies the challenge that generates much of the conflict between defendants and claimants in such cases. Expertise is costly, but so is money.

The more complex a case, the more numerous and expensive the experts required to evidence it, and more complex cases inevitably take longer to settle, so all those costs have to be carried by somebody in the supply chain, often for many years.

The principle that such agency costs are recoverable is well-established, provided they do not exceed the reasonable costs the firm would charge for doing the work itself. But defendants don’t seem willing to take the firm or its agency’s word for it.

Some defendant firms are lobbying the government to push through reform as part of its review of fixed recoverable costs and would like to see some common types of experts’ fees fixed or capped and claimants compelled to provide a full breakdown to the defendants.

Meanwhile, the House of Commons Public Accounts Committee has, this month, called upon the government to develop a plan to reduce costs in clinical negligence claims, within six months.

It seems clear that some compromise will be needed to provide defendant firms with reassurance that medical reporting costs are being effectively controlled, without undermining the vital role that medico-legal agencies now play or affecting the quality of expert evidence that clinical negligence victims have available to them.

Whatever the answer to this particular question may be, it seems unlikely that we’ll see it before the year is out.