The age old argument as to the recoverability of Agency Fees for the provision of medical reports has taken another twist in a tale which seems to develop at a glacial pace without ever being fully resolved. I refer to the case of Powles v Hemmings (2021), a first instance decision in the St Helen’s County Court of Deputy District Judge Akers, the judgment of which is available here. He determined that the Agency Fees incurred in procuring a medical report from a Medical Reporting Agency fell within the scope of the Profit Costs element of the Fixed Recoverable Costs (“FRC”) under CPR 45.29C.
It had been thought the issue was settled further to Beardmore v Lancashire County Council (2019) when it was concluded that agency fees were recoverable however, relying on the later decision of the Court of Appeal in Aldred v Cham  EWCA Civ 1780, DDJ Akers was persuaded that the work of the agency should fall within the Profit Costs element of the fixed costs. This was a test as to the breadth and scope of the fees a Solicitor recovers in a FRC case and what it was designated to cover. Whilst there was no evidence or submissions as to the intended scope of the fees, the analysis of the work undertaken by the agency persuaded DDJ Akers that this was work intended to be covered by the fees paid to the solicitors and, essentially, to recover them as a disbursement would result in an element of double recovery.
I am of no doubt this case will be persuasive, even as a first instance decision. The case of Beardmore was considered and the decision rejected on the strength of the analysis in Aldred which followed it. Therefore, there is little scope for a district judge to follow the Beardmore case and allow the agency fee.
This is a worrying decision for Claimants who work on thin margins in the realms of the FRC cases and this will only make the economics even tougher. Additionally, Defendants will now be keen to challenge the extent of the agency fee on applicable cases, adding to the administrative costs of settling these matters. No doubt practitioners in this area will need to reconsider their use of agencies. It is a decision which the Personal Injury sector as a whole would do well to challenge in my view, as this maybe the straw that brakes the camel’s back in respect to the viability of FRC cases.
My thanks to Gordon Exall (Barrister) and Simon Fisher of DWF for the provision of the judgment.
Tags: Agency Fees, Fixed Costs, Fixed Costs Regime, FRC, Hemmings, Medical Reports, Powels v Hemmings, Powles