Kerry Underwood

VAT, MEDICAL AGENCIES, SEARCH FEES AND TRAVEL: A COURT OF APPEAL DECISION

with 2 comments


The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

British Airways Plc v Prosser [2019] EWCA Civ 547

the Court of Appeal held that, where a medical agency is instructed in relation to the obtaining of medical records and/or reports, VAT may be charged on the total cost, and not just on the agency’s administration fee.

This was on the basis that the agency was performing a service which allowed the solicitor to perform its service to the client, rather than the agency simply acting as a post-box.

The Court of Appeal said that in low value claims, where the amount of any VAT is not substantial, payment of VAT on the full amount was a cost that was “reasonably and proportionally incurred” and  “reasonable and proportionate in amount” so as to satisfy the requirements of CPR 44.3, regardless of whether the agency was obliged to charge VAT or not.

The Court of Appeal said that the position may sometimes be different and if “the VAT element were substantial, VAT should not in fact been imposed and the receiving party or his lawyers ought to have been aware that there was real doubt as to the VAT position, a Costs Judge might well conclude that the receiving party should not recover VAT.”

The decision also reviews the case law on related matters, such as VAT on travel expenses incurred by solicitors, and VAT on searches in conveyancing matters.

I am grateful to Steven Turner, the barrister who successfully represented John Prosser in this matter, for information concerning this case.

Please also see my related blog –

FIXED COSTS CASES: MEDICAL AGENCY FEES RECOVERABLE AS DISBURSEMENTS

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Written by kerryunderwood

April 23, 2019 at 8:45 am

Posted in Uncategorized

2 Responses

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  1. Excellent Judgement and one I shall be using in my future negotiations. Thanks for this information as always Kerry, very helpful!

    Richard Ferguson

    May 3, 2019 at 4:40 pm

  2. Pleasure 🙂

    kerryunderwood

    May 3, 2019 at 4:48 pm


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