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MedCo will soon open its doors for business

Just over a year ago, the government announced its intention to put in place a number of reforms in whiplash cases, that would help tackle fraud and ensure the independence of the medical expert. A few months ago, we learned that MedCo was to be created to oversee the process of allocating experts and the accreditation and governance of experts that sought to join MedCo. There was also to be a mandatory previous claims search for all new claims.

Yesterday, the MoJ responded to its consultation on the second phase of its proposed reforms and provided some further information about the formation of MedCo Registration Solutions (to give it what we now know is its full name) and provided some explanation as to how the process for requisitioning expert evidence through MedCo will take place. DWF Partner and Head of Motor and Fraud, Nigel Teasdale looks at the government’s announcement in what has been another busy week in the world of whiplash claims. These developments are in fact of potential relevance to all types of injury claims. Where it is logical to see the same approach could also assist in small EL and PL claims, it may be the case again that what happens in motor today can soon be extended. 

What we now know

MedCo Registration Solutions will open for business early next year and it will have an essential role to play in ensuring that medical evidence in whiplash claims is fair and independent. For some time now, the working parties set up by the government at the beginning of this year have been designing a structure for MedCo and a system for commissioning medical evidence that all parts of the industry can agree upon. It will be MedCo’s responsibility to ensure that the new system for commissioning medical evidence works properly and addresses those issues that led to the reforms in the first place and its own creation.

The MoJ has announced that by 4 January 2015, experts and MROs will need to have expressed an interest to MedCo and then between January and April 2015 registration will take place. From 6 April 2015 only registered experts and MROs will be able to provide initial medical reports. This early April start date appears on MedCo’s new website www.medco.org.uk and may well be when the government expects this part of the reforms to go live, just a month before the General Election. While in a speech yesterday to the ABI Motor Conference the Secretary of State Chris Grayling referred to a start date of 1 April 2015, the later date of 6 April which is the following Monday seems the more likely one. From then onwards it will be mandatory for the initial medical report to be commissioned via MedCo. Once live, the MedCo IT system will provide users with a randomly selected list of medical experts or MROs, depending upon which option the user selects as between expert or MRO. The MRO search will also offer users both national and local provider options. Importantly, the experts or MROs offered will exclude those with whom the solicitor approaching MedCo has a direct financial link.

The government have made it clear that the system will not operate in a way that ensures an equal share of instructions to all experts and MROs, so there will remain scope for experts and MROs to distinguish their offerings and secure more instructions as a result. But all experts who are registered with MedCo will appear in the results of some searches so that they have the chance of being instructed.

The MedCo website is now live, and a survey asks basic questions only of an expert or MRO looking to register, around the number of reports written in the last 12 months, and the number expected to be able to be handled in the next year. In the case of the MRO, the questions are around the number of experts registered with them, and the number of reports written by them over the last year. Experts are asked to say which of the permitted specialisms they fall into and the number of MROs they are registered with. There are no questions at this stage around qualifications and competency. MedCo as well as the MoJ at present only to want to see that there will be enough expert capacity from April onwards and understand the number of experts and MROs in each area.

What is still uncertain?

The exact number of experts or MROs that will appear on each list is still something that is being considered and our understanding is that the MoJ will decide upon what they expect to be a limited choice of experts in the new year, once the initial expert registration process has been completed which will enable them to better assess capacity in the market. It is anticipated that the number of options that might finally be offered will be sufficient to provide claimants with choice, whilst still ensuring that the expert is independent. It will be interesting to see how the circle is squared. For the reforms to be a success, it will be essential that this part of the process is approached in an appropriate way.

One of the key stated aims of these reforms is to break the links between the commissioner of the report and the expert and the government have again stated that organisations with direct financial links to medical experts or MROs will not be able to commission reports from those experts or MROs. Presumably, existing financial relationships will be disclosed to MedCo by the MRO or expert which is being registered so that they are then excluded from searches by the linked claimant law firms. Again, we can expect more information on the precise way it is proposed that this will be done shortly but it will be critical that all that is possible is done to ensure that any link is broken, not matter how distant.

As we have previously stated, it will also be essential that the accreditation process is fit for purpose and, whilst the precise detail around accreditation is absent from the government’s announcement, the government have said that it will be objective and transparent. The period of time between an expert or MRO being registered with MedCo and the point at which they must complete the accreditation process is yet to be resolved, it seems. Our view is that this period must be as short as is possible for the system to gain credibility, although balancing that with the need for robust accreditation.

Hopefully there will be a further announcement about these outstanding issues shortly.

In its response to its own consultation, the MoJ confirmed that it would press on with the idea of a mandatory previous claims search for whiplash claims and now says that claimants who do not comply after a second opportunity to do so will face costs sanctions. 

More from the government and other potential ideas for future reforms

Announcing the second phase of these reforms at the ABI Motor Conference yesterday, the Secretary of State for Justice, Chris Grayling also announced the formation of a fraud task force led by the Law Commissioner, David Hertzell. His remit is to consider insurance claims fraud in general across all types of claim (and not just whiplash), including the practices of all involved in the claims process, and whether the current legal framework should be strengthened. He is tasked to consult and to come up with some interim findings by next March. While it is easy to wonder about the depth of the exercise that Mr Hertzell will be able to carry out within what will only be a couple of months, this is an exercise that may continue after the General Election depending on the result. As far as whiplash is concerned, it is hoped that MedCo will also play its part in driving down fraud in this area, together with the other wider fraud initiatives, such as the fundamental dishonesty clause to the Criminal Justice and Courts Bill which is now concluding its final parliamentary stages, and which will of course apply to all types of injury claims.

As to pre-med offers, Mr Grayling indicated yesterday that whilst there may be unusual cases in the future where an offer prior to a medical report is appropriate, he would very much expect Insurers to wait for a MedCo accredited report before making an offer.

Going further than his prepared speech to the Conference, it was also reported that Mr Grayling suggested that his party might in the future if re-elected look at introducing minimum speeds, below which whiplash could not be claimed. Presumably any future attraction to this type of reform which will attract significant opposition will need to see whether the current reforms work first.

Also speaking at the ABI Motor Conference, Permanent Private Secretary to the Attorney General and Conservative MP, Heather Wheeler stated that post May 2015 her party might be prepared to set in train CMA II, in order to try to make some more substantial progress on credit hire, a topic also mentioned by Mr Grayling yesterday, although his suggestion was that the industry itself now needs to tackle the problem

What will happen next?

There is still further detail that the MoJ will need to provide but it has stated that the rules and practice directions that will give effect to the next phase of these reforms will be put to the Civil Procedure Rule Committee, with a view to the rules coming into force in early 2015. Again, we see 6 April 2015 as the likely date.

In the coming months, the nine directors of the “not for profit” MedCo (drawn equally from the insurance, medical and claimant sectors) will be confirmed and will select a permanent chair of its board, but until then the company will be chaired by a former civil servant. The process of ensuring medical evidence becomes more robust will then begin in earnest.

It will be interesting to see how the MoJ’s announcement will be received by the industry and we will continue to keep you informed of all developments, but please feel free to contact Nigel Teasdale on 01772 554264, or at nigel.teasdale@dwf.co.uk 

By Nigel Teasdale

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.