In a surprising development today, the Senior Costs Judge introduced a new cap on the mark-up that medical reporting agencies (MRAs) can apply to expert fees. The cap, set at 25%, significantly affects the way these agencies charge and could have a lasting impact on how costs are assessed in future cases.
In the case of JXX v Archibald, Senior Costs Judge Rowley ruled that medical reporting agencies are not required to provide a detailed breakdown of their fees, similar to what solicitors must offer in their bills of costs. This decision stems from the distinction made between MRO fees being categorized as disbursements, rather than outsourced solicitor work.
However, Judge Rowley went on to limit the mark-up medical agencies can apply to expert fees, imposing a strict 25% cap. In the case at hand, the court found that medical agency Premex had charged uplift percentages of 35% and 45%, while Medical and Professional Services Limited (MAPS) ranged from 20% to 104% in mark-ups.
Judge Rowley emphasized that the fees charged by MRAs are largely influenced by long-standing commercial relationships with solicitors, rather than specific factors pertaining to each individual case. While these relationships are legitimate, he argued that they shouldn't justify inflated percentages for the sake of commercial interests.
Concerns for Medical Agencies
This ruling is likely to cause significant concern among medical agencies that have relied on higher mark-ups as part of their business models. With the cap now set at 25%, agencies may need to reassess their pricing structures, which could lead to financial difficulties for some, particularly those that provide services on deferred payment terms.
Wayne Brannan, Commercial Director at Premex, expressed his concerns about the ruling, noting that while it provides clarification on the treatment of MRO fees as disbursements, the 25% cap could pose challenges for medical agencies in maintaining profitability while ensuring claimants have access to the medical evidence they need. Brannan suggested that the ruling could ultimately lead to claimants being unable to access medical reports unless they can pay upfront, potentially impacting the fairness of the claims process.
Impact on Claimants' Compensation
If a 25% markup is insufficient for medical agencies to perform their services as well as granting lengthy credit terms, then part of their overall fee will need to be paid by clients out of damages.
Appeal Likely
With the possibility of an appeal on the horizon, as acknowledged by Judge Rowley, the future of this ruling remains uncertain. The potential for further litigation on this issue suggests that both medical agencies and solicitors may need to stay informed as the legal landscape evolves.
As the legal profession continues to digest the judgment, the core issue remains: how will this cap affect the availability and affordability of medical evidence for claimants in the long term? Medical agencies will likely need to adapt, while claimant lawyers and defendants will also have to reassess their strategies moving forward.
The Importance of ATE Insurance
In light of this decision, After-the-Event (ATE) insurance continues to play a critical role in ensuring that claimants have access to the legal resources and medical evidence needed to pursue personal injury claims. ATE insurance helps protect claimants from the financial risks associated with litigation, especially when they may be unable to afford upfront costs for medical reports or other essential services.
As this ruling creates more uncertainty for medical agencies and claimants alike, ATE insurance will remain an essential tool to maintain fair access to justice and to ensure that claimants are not unfairly disadvantaged in seeking compensation.
Looking to set up an ATE Insurance policy for your client? Contact us today.
