The High Court has rejected an application for summary judgment by a medical reporting agency seeking to reclaim almost £1.6m in fees from a law firm.
Master Clark said the information clause in an agreement between Insurance Medical Reporting (IMR) and Chesterfield-based Your Lawyers Limited did not create an “obligation to account” on the part of the law firm, as it claimed.
IMR was bought in April 2011 by Capita Medical, the second claimant and part of the Capita Group.
In November 2015, Capita Medical wrote to Your Lawyers to say its outstanding invoices amounted to around £2.5m. In early 2016, Capita Medical was sold to Premier Medical.
The claimants asked Your Lawyers to provide information on the outcome of each case so that the outstanding invoices could be reconciled, but complained to the court about the firm’s lack of engagement with the issue.
At the time the claim was issued last September, there were 1,783 invoices outstanding, but by the trial in June, it had fallen to 1,310 worth £1.58m.
In Insurance Medical Reporting & Anor v Your Lawyers  EWHC 1632 , Master Clark said the law firm accepted that the agreement included a limited implied term that it would “within a reasonable time” comply with reasonable requests for information.
However, it argued that the proposed reconciliation would take between 450 and 600 hours to complete (based on 15 to 20 minutes per case for 1,783 cases), and was disproportionate.
Master Clark said the agreement created a relationship of debtor and creditor between Your Lawyers and IMR, with invoices being paid when cases settled or ‘pay when paid’ provisions.
He said the information clause in the contract did not create an “obligation to account” because it was qualified in two ways, limiting the law firm’s obligations to using “reasonable endeavours” to provide information which the claimants could “reasonably require”.
The master said it was not enough for the claimants to plead the agreement and seek an account. They had to prove that they had required Your Lawyers to supply the information, that it was reasonably required and that the law firms had not used reasonable endeavours.
Master Clark said this was enough to determine the claimants’ application in favour of the defendant.
On the other issues, in case he was wrong, he held that when determining the extent of the obligations imposed by a reasonable endeavours clause, it was necessary “to consider the resources and financial circumstances” of the performing party.
“That involves a factual investigation which is unsuitable for a summary process.”
Likewise, the expression “such information as the supplier might reasonably require” was impossible to determine on a summary basis.
Master Clark came to a similar conclusion on the issue of construction of the information clause.
“In particular, I am not satisfied that all the evidence necessary for the proper determination of the question is before me.
“There is no evidence of any detail as to the factual matrix in which the supply terms were entered into, including the context in which the word ‘information’ was used by the parties.”
Master Clark said that just as the information clause did not give rise to an entitlement to an account, nor did any implied term.
He said he was not satisfied that Your Lawyers had no prospect of showing that it had responded to reasonable proportionate requests. The application for summary judgment was refused.