One of the most common “bones of contention” in the costs of disrepair claims is the cost of expert surveyor’s reports. As a rule of thumb, a landlord would expect to pay between £750 to £1,000 for the cost of the Claimant’s expert undertaking a survey. This is, of course, subject to the landlord having had the opportunity to inspect the property at the outset of the claim (or prior to a claim having been made) in accordance with the Pre-Action Protocol for Housing Conditions Claims (England).
The costs of surveyors’ reports are becoming increasingly expensive due to an agency having been appointed to instruct the expert. The fee applied by the agency can be as much as four to five times the cost of the surveyor’s report.
This issue has previously been considered by the Courts in the context of medical agency reports. In Stringer v Copley [2002] (unreported) His Honour Judge Cook in the Kingston upon Thames County Court was:
“…satisfied that there is no principle which precludes the fees of a medical agency being recoverable between the parties, provided it is demonstrated that their charges do not exceed the reasonable and proportionate costs of the work if it had been done by the solicitors.”
As indicated above, our experience is that the costs of the agency are not reasonable and proportionate. In Stringer, HHJ Cook used an analogy that if the doctor’s fees were only £75 and the agency charges £300, the total of £375 would undoubtedly be unreasonable and disproportionate. He therefore went on to say that “…it is important that their invoices (or ‘fee notes’) should distinguish between the medical fee and their own charges, the latter being sufficiently particularised to enable the costs officer to be satisfied that they do not exceed the reasonable and proportionate cost of the solicitor doing the work.”
More recently the issue has been considered by the High Court in Northampton General Hospital NHS Trust –v- Luke Hoskin (administrator of the estate of Pippa Hoskin deceased) [2023] (unreported). In this particular case, HHJ Bird ordered that invoices for expert reports rendered by an agency should contain a breakdown to enable the paying party to establish the amount charged by the expert and the fee applied by the agency.
Paragraph 3 of HHJ Bird’s judgment details that:
“…An invoice for each sum, issued by Premex Services Limited, and addressed to the Claimant’s solicitor was served with the bill. Premex is a medical reporting organisation. It is instructed by solicitors to provide medical reports. It maintains a panel of medical experts to whom it offers quick payment terms and other services. In exchange for those favourable payment terms and services, the experts provide reports at a lower cost than they would charge if directly instructed by solicitors.”
The Defendant requested a breakdown of the fee note as to how much of the fee related to the medical report and how much related to the agency. The Claimant’s solicitor declined to do so, maintaining that the overall invoice amount was reasonable and proportionate.
The Defendant therefore made a specific application for the breakdown which was declined by the Judge on first instance. On appeal, HHJ Bird considered Practice Direction 47 of the Civil Procedure Rules together with case law on the issue.
(9) On commencing detailed assessment proceedings, the receiving party must serve on the paying party and all the other relevant persons the following documents …
(c) copies of the fee notes of counsel and of any expert in respect of fees claimed in the bill;
(d) written evidence as to any other disbursement which is claimed, and which exceeds £500….
(18) In my judgment the language of PD 47 is very clear and admits of no doubt. Paragraph 5.2 applies if the receiving party is asking the paying party to pay for the cost of an expert. If that is the case, then the receiving party is required to provide a copy of the expert’s fee note(s). The effect is that the precise cost charged by the expert (recorded in the fee note) is known.
In his determination HHJ Bird noted (at paragraph 19) that if a breakdown is provided the paying party can make a decision about the fee by taking into account factors such as the “going rate” for a similar report. Without such a fee note neither the paying party or Court are able to make a rational, evidence-based decision on whether the fee should be accepted. This stifles both negotiations and the assessment process.
HHJ Bird went on to refer (at paragraph 21) that “the points made by His Honour Judge Cook in Stringer apply with equal force today as they did in 2002”.
(22) I am satisfied that it is clear that PD 47 imposes a duty on the receiving party to provide the fee note of any expert instructed and, where such costs are claimed details of the costs of any MRO. Premex is not an expert. Its invoice cannot be described in any sensible way as a fee note and is in any event not the fee note of the expert.
HHJ Bird took a robust approach and not only ordered that the breakdown must be provided, but also that each of the expert reports be assessed at zero due to the non-compliance with Practice Direction 47.
In contrast, approximately a month prior to the decision in Hoskin, District Judge Jenkinson in the County Court (Anthony Sephton -v- Anchor Hanover Group [2023) (unreported)) refused an application for non-party disclosure by the Defendant against the non-party Target Medical Solutions Limited. The District Judge referred to a previous decision on the issue in Beardmore v Lancashire County Council [2019] where the Court had considered the matter in the context of CPR 31.17(3), and whether the disclosure sought is likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings. The Judge took the view that the breakdown was irrelevant when assessing whether the recoverable disbursement was reasonable and proportionate rather than by consideration of how that charge was apportioned between practitioner and agency.
When approached on the issue in the context of fixed costs claims, the Civil Procedure Rules Committee (“CPRC”) has previously indicated that this is an issue for the Courts rather than the CPRC.
Permission to appeal has now been sought in Hoskin which, if granted, will provide parties with a binding decision on this issue. We shall report further on this in the future as it is likely to be a strongly fought argument on both sides, not least given the far-reaching consequences it may have on a variety of claims with the impending extension of the fixed costs regime. As surveyor’s reports will be a recoverable disbursement, the issue will affect social housing landlords whether or not the fixed costs regime is extended to including housing disrepair claims.
How can Birketts help?
Birketts has an in-house costs team to assist our clients in challenging tenant’s costs. Our expert lawyers can advise on where the costs can be challenged, appropriate settlement parameters and negotiations. If required, we can also assist with the preparation of Points of Dispute/Replies and detailed assessment hearings.
If you have any queries regarding the content of this article or wish to discuss any issue regarding costs, please contact Sarah Burwood, Melanie Bonté or Naomi Chan-Jackson to see how Birketts can help you.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at July 2023.