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MedCo – the latest developments

Since we last reported there have been a couple of very significant developments in the progress of the wider reform of whiplash claims, the latter having the potential to postpone the process that started in September of last year.   

We now have an answer to the question of how many experts and MROs will feature when a search is made for an expert on MedCo, but we now also have confirmation that the long threatened judicial review of the government’s reforms has materialised. DWF Head of Motor and MedCo director Nigel Teasdale looks at both developments and what they could mean for the reforms.

The “search offer”

How the government would deliver its stated aim of achieving independence of the medical expert has been a key issue from the moment the government announced its intention to introduce medical panels in whiplash cases last year. Could the government successfully legislate for independence? As recently as last August, the MoJ had indicated that it considered experts should be randomly allocated. In coming to its final decision, the MoJ have had to walk a tightrope of ensuring that any solution works in a way that ensured that experts are independent, but not at the expense of restricting any more than necessary access to justice or market competition.

As part of its work, in the last two months of 2014 the MoJ conducted a pre-registration survey of medical reporting organisations (MROs) and last month the MoJ proposed that there should be two tiers of MRO to choose from: larger MROs capable of servicing high volumes of clients, and smaller, regionally based MROs capable of servicing a local market. The MoJ set out its draft qualifying criteria for all MROs and invited views by way of a short survey which concluded on 20 February.

The MoJ has now announced that those looking for an expert from MedCo will receive a “search offer” (as the MoJ are calling it) which should include:

  • One high volume national MRO and six other MROs; or

  • Seven direct medical experts

A search can be made for an MRO, or a direct expert, but not both.

The MoJ’s final decision is some way from the cab rank appointment of medical experts as originally proposed by them last year, but the MoJ describe the decision as a “pragmatic and proportionate” one. It provides a claimant with a greater selection of experts than was available under the original pre-action protocol introduced as part of the Woolf reforms, over 15 years ago. Since the government decision was made, there has been no official announcement from either APIL or MASS to say that they are unhappy with it, so presumably it is one which will be acceptable to the majority of claimants’ solicitors.

Ultimately, it remains to be seen whether configuring the search offer in this way, delivers independence of the expert and produces an environment where experts do not feel beholden to those who commission medical reports.

There has been no clarification yet on the number of medical experts that will be offered for selection by the MRO, should a claimant choose to go down that route. As we understand it, there may be nothing preventing claimants’ solicitors from agreeing a list of pre-agreed experts with an MRO, which experts might then be offered in the event that that particular MRO appears in the search offer. How the interaction between the MRO and the commissioning solicitor is to be monitored is also something that will need careful thought.

Having made this announcement, the MoJ have stated that it is their intention to review the decision once they have 6 months of data from the MedCo portal, with a view to considering changes if appropriate. 

Fees and financials

The larger MROs will be required to pay an annual subscription of £75,000 for MedCo membership, with the fee for smaller MROs being £15,000 and independent experts required to pay £150 to register. In addition, the larger MROs will be required to pay a £100,000 bond to demonstrate their ability to meet experts’ fees and that bond will act as security in the event that ability to meet fees becomes an issue at a later date.

It is not thought that the fee levels will deter MROs from registering with MedCo, although it is clear that the fee for experts to register directly with MedCo is set at an attractive level and may encourage some experts to “go it alone”, rather than sign up to take instructions from an MRO, or indeed perhaps to do both.

The membership fees and the number of experts and MROs registering and paying those fees as a result will be important in feeding into the MedCo budget.

Accreditation, audit and sanctions

Now that the MoJ have announced how the search offer will work, the main focus now shifts onto how the accreditation process will work. We know that all experts wishing to carry out soft tissue injury claims for MedCo must be accredited by January 2016, and a lot of hard work is now being undertaken by the Accreditation Subcommittee of MedCo to develop that process in good time.

It is essential that the accreditation process is robust and effective as it will underpin the random selection of experts. If the system of accreditation is ineffective, then a change in approach to examination and report writing is unlikely.

The key features for a successful accreditation process are likely to be:

  • Experts should receive effective training on the issues that are at large in this area of injury work, preferably including training on the mechanics of how soft tissue injuries are caused in road traffic accidents.

  • There should be an ongoing duty to attend training sessions and demonstrate compliance.

Set alongside accreditation, there will need to be a strong audit and sanction function to back up the quality of the new system. Again, an Audit and Sanction Subcommittee has been set up by MedCo and key features will be:

  • An MI reporting process that is capable of identifying any MRO or expert who is not complying with the user agreement.

  • An effective auditing process.

  • Tough sanctions against those who fail to observe the user agreement, or flout the rules.

  • A compliance committee capable of policing the system which has real teeth.

This is likely to be a long difficult task to complete, but the MedCo Directors are more than aware of what a system looks like when it is not functioning properly and the lessons of the past will hopefully help in creating an effective system for the future.

A spanner in the works?

Last month the MoJ received a letter before action from a group of MRO owning ABSs who see the introduction of MedCo as a threat to their very existence. The letter before action has been followed up by a claim form issued in the High Court against the MoJ, ironically just before court fees were increased on 9 March. The raising of a judicial review (JR) should not be seen as a surprise as the reforms could change the MRO market place, in a situation where MROs have become a significant revenue stream for ABSs.

The JR has been brought by a small number of northern solicitors firms and their MROs, with one of the firms itself acting in the litigation on behalf of the group. It was an issue that was first raised in June last year and something that we had been tracking ever since. All concerned in the reform process have a vested interest in a positive outcome.

Any challenge to a government decision must be made on one of two grounds:

  • That the decision was ultra vires (outside the power of the government minister making the decision); or

  • The grounds upon which the decision was taken were unreasonable

It is on the second ground that a challenge is being made here. The claimant law firms and MROs suggest that the introduction of the random expert search imposes restrictions on the use of experts in whiplash claims. It is worth bearing in mind that the claim was intimated before the MoJ’s announcement on the search offer.

It is argued that, in arriving at its decision, the MoJ failed to properly consult before deciding to act and that the MoJ pre-judged the issue and concluded that a change was needed. The decision that the MoJ has reached prevents a claimant from consulting with their solicitor over their choice of expert, the claimants argue.

To suggest as the claimants do that the rules that were in place were adequate and protected against any impropriety, fails to recognise the evidence that was taken by the Transport Select Committee in 2013 and the responses to the government’s consultation at that time, when 58% of responders agreed with the government’s proposals for independent medical experts. The need to act was also highlighted by the comments made by Mr Justice Mostyn in McIntyre & Anor v The Home Office (2014), when he observed of the expert’s description of the claimants’ injuries that “…the identical replication of language in each report casts considerable doubt on the professional objectivity” of the expert who reported in that case.  Also last year, the GMC had to sanction a medical expert for completing a medical report, without even seeing the claimant (the claimant also being known to the expert). It seems that the existing rules championed by those now seeking JR failed in these cases and no doubt also in others and catastrophically so.

We await the MoJ’s response to this challenge. It is likely that they will have known from the outset that a JR was a possibility and will have no doubt taken advice on this phase of the reforms before making their announcement. In the event that the JR is defended as it clearly will be, it will be interesting to see whether the MoJ’s announcement on the search offer leads to the claimants reconsidering their position.

It is important to recognise that what the MoJ have proposed does not prevent an ABS from operating its MROs. Indeed, with six smaller MROs appearing in any search, it could be argued that the MROs involved in this JR have as good a chance to grow market share as they may ever have had and as we pointed out earlier, claimants now have more choice in selecting an expert than they have had in recent times.

If the JR is pursued, then there is a danger that it may impact upon the 6 April commencement date for random selection of experts. If the JR remains unresolved by late May, then it is possible that the Secretary of State for Justice may be of a different political hue to the current incumbent and may not have the same view of the reforms. Both of these points may have been in the minds of the claimants when they launched their claim. On the other hand though, the JR may have no effect on the April start date (the new reforms apply to CNFs lodged after that date) which may be able to continue into effect regardless.

One MoJ fact that the group pursuing the JR might have regard to is that from 2007 to 2011 only 15% of JR applications were successful. They will also know that MASS and APIL’s challenge to the MoJ’s decision to reduce fees in the portal in 2013 was unsuccessful, and brushed aside almost contemptuously. Both of those bodies have played a part in shaping the current reforms and have a presence on the MedCo board and are not part of the challenge

We shall of course continue to monitor developments closely and keep you informed.

Contact

For more information please contact Nigel Teasdale, Partner on +44 (0)1772 554264 or email nigel.teasdale@dwf.co.uk

By Nigel Teasdale

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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