Defence lawyers say the imposition of a new cap on medical agency commission is a major change in how personal injury claims are handled.
Horwich Farrelly, which represented some of the defendants in JXX v Archibald, described the outcome as a ‘major victory’ for the wider insurance market.
In the case, Senior Costs Judge Rowley said that medical reporting agencies did not need to provide a breakdown of costs but should be subject to a cap on their charges, limited to 25% of the underlying expert fee.
Horwich Farrelly said there had been concerns around escalating medical agency fees for more than a decade.‘The JXX decision marks an important turning point in the long‑standing debate around medical agency fees,' partner Paul McCarthy said. 'For too long, paying parties have faced escalating charges with little meaningful oversight.
‘The senior costs judge’s clear position that reasonable fees should not exceed a 25% uplift brings much‑needed structure and fairness to the process,’ McCarthy added.
The firm expressed its hope that the decision would encourage medical agencies to adopt a ‘more open and cooperative approach’ by voluntarily providing copies of underlying expert fee notes.
The ruling – as acknowledged by Rowley himself – is likely to be appealed by at least one party. Slater and Gordon, one of the firms representing claimants in the joined-up hearing, said yesterday it is ‘considering the judgment in further detail’ with clients and the other parties involved in the case.
Meanwhile, costs lawyers are conflicted about whether the claimant sector can be satisfied with the judgment.
Nick McDonnell, director and costs lawyer with Kain Knight, highlighted that the court rejected the long-standing Stringer v Copley approach, which required medical reporting fees to be justified by comparison with hypothetical solicitors’ work. ‘For now, and subject to any appeals, this decision is a resounding win for MROs and brings clarity to a long contested area of costs law,’ he added.
Sean Linley, director of costs consultants Carter Burnett, said that while the decision in JXX was not binding, it is arguably the most significant judgment to date on MRO fees and breakdowns.
He said: ‘It establishes – unless and until appealed – that MRO fees are not solicitor costs, but equally that without evidence (or where evidence is limited) any assessment of MRO fees should be undertaken with caution. The 25% benchmark offered by the SCCO will likely begin to bite in between‑the‑parties assessments and negotiations going forwards.
‘Some practitioners may wish to discuss the implications of this case with their MRO providers, specifically around terms.’
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