Insurance Medical Reporting Ltd & Anor v Your Lawyers Ltd

Factual and Procedural Background

The claimants are medical reporting organisations supplying medico-legal services, including medical reports and ancillary services, to law firms. The defendant is a medium-sized law firm specialising in personal injury and related claims, with a high volume of active cases. Their commercial relationship dates back to 2008, governed by an agreement dated 22 August 2011 ("the Agreement") between the first claimant and the defendant, consisting of a Credit Agreement and Terms & Conditions of Supply ("the supply terms").

The Agreement sets out payment terms whereby the defendant agrees to pay invoices within 30 days of costs being received from claimants, with payment contingent on case settlements ("pay when paid"). The supply terms impose obligations on the defendant to cooperate and provide information reasonably required by the claimants in relation to the services provided.

Since 2008, the claimants invoiced the defendant over £5 million, with approximately £2.5 million outstanding. Attempts by the claimants to reconcile outstanding invoices and obtain information from the defendant were met with limited engagement, leading to a breakdown in the commercial relationship in November 2015.

Subsequent correspondence involved requests for detailed reconciliations and information about case statuses, which the defendant contested as unreasonable and disproportionate. The claimants issued proceedings in September 2017 seeking an account of outstanding fees and supporting documentation pursuant to the information clause of the supply terms.

The defendant's Defence denies entitlement to the information sought under the contract and accepts only a limited implied term requiring reasonable and proportionate disclosure of case status and sums received. The defendant contends that full reconciliation requests are onerous and disproportionate.

The claimants applied for summary judgment on 16 May 2018, seeking a determination of their entitlement to the information and an order compelling the defendant to provide it.

Legal Issues Presented

1. Construction of clause 4.1.2 of the supply terms ("the information clause"): whether it requires provision of any information reasonably required by the claimants, including information on outstanding invoices, or is limited to information related to the services provided.
2. If the clause extends to information on outstanding invoices, the nature and extent of the claimants' entitlement.
3. Whether the defendant is in breach of the information clause.
4. If so, what the defendant must do to perform its obligations under the information clause.
5. If the information clause does not extend to such information, the nature and extent of the defendant's obligations under the implied term.
6. Whether the defendant is in breach of the implied term.
7. If so, what the defendant must do to perform its obligations under the implied term.

Arguments of the Parties

Claimants' Arguments

• The information clause is unlimited in scope and includes information regarding outstanding invoices.
• The credit agreement and supply terms together form one integrated contract governing the parties' relationship.
• Clause 4.1.2 differs from other clauses by not limiting the customer's obligation to cooperate only in matters relating to the services.
• The defendant has admitted an implied term entitling the claimants to an account in the form sought.
• The defendant's "Open Offer" to provide information is an admission that the information is reasonably required.
• The claimants have sought to reduce the burden on the defendant by limiting the categories of information requested.

Defendant's Arguments

• The information clause should be construed as limited to information relating only to the "Services" provided under the contract.
• The Agreement consists of two separate contracts: the supply terms and the credit agreement, which are freestanding and distinct.
• The credit agreement imposes contingent payment obligations, while the supply terms govern provision of services only.
• The defendant accepts an implied term to provide reasonable and proportionate information about case status and sums received but denies entitlement to full reconciliation.
• The claimants' requests for full reconciliation are onerous, disproportionate, and would require extensive manual review.
• The defendant has provided information where reasonable and proportionate requests were made and has continued to engage despite termination of the contractual relationship.
• The "Open Offer" was made for commercial reasons and does not admit that the information is reasonably required under the contract.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by examining the nature of the contractual relationship, noting that the Agreement creates a debtor-creditor relationship subject to "pay when paid" terms, and does not impose a general duty to account absent express or implied contractual obligations.

Regarding the information clause, the court found that it imposes a qualified obligation on the defendant to use reasonable endeavours to provide information reasonably required by the claimants, not an absolute duty. This precludes the claimants' entitlement to demand a full account as a matter of right, as their entitlement is limited to information reasonably required and subject to reasonableness of the defendant's endeavours.

The court highlighted that establishing breach of the clause requires proof that the defendant failed to use reasonable endeavours to provide reasonably required information, and that what constitutes reasonable endeavours is fact-sensitive and unsuitable for summary determination.

The court also considered the construction of the information clause but concluded that the point was not suitable for summary judgment due to insufficient evidence of the factual matrix and the defendant's real prospect of success on construction.

On the implied term, the court noted it similarly does not confer an entitlement to a full account but requires reasonable and proportionate provision of information necessary to determine whether fees have fallen due. The extent and timescale of such disclosure involve factual issues inappropriate for summary resolution.

The defendant's offer to provide information on a rolling basis was not an admission that the information was reasonably required under the contract but rather a commercial gesture.

Ultimately, the court found that the claimants had not shown that the defendant had no real prospect of defending the claim and that the issues raised, including the reasonableness and proportionality of information requests, required factual inquiry unsuitable for summary judgment.

Holding and Implications

The court DENIED the claimants' application for summary judgment.

The direct effect is that the claim will proceed to a fuller hearing where factual issues concerning the construction of the contract, the reasonableness of the information requests, and the defendant's compliance with its contractual obligations will be determined. No new precedent was established, and the decision emphasizes the importance of factual context in assessing obligations to provide information and the limits of summary judgment in such disputes.