Despite the Ministry of Justice’s efforts to control medical reporting agencies, they continue to behave badly...
MedCo is the on-line system created by the Civil Procedure Rules Pre-Action Protocol for Low-Value Personal Injury Claims in Road Traffic Accidents (RTA). Its purpose is to prevent firms of solicitors and medical reporting organisations (MROs) from running cosy money-making collaborations by injecting the random selection of expert witnesses into the high-volume low-value RTA sector. The system went live on 6 April 2015. Medical experts, MROs and those who commission medical reports must register via the MedCo website to be able to provide or commission fixed-price medico-legal reports in RTA claims covered by the pre-action protocol.
So-called ‘national MROs’ have to pay MedCo an annual subscription of £75,000, smaller MROs pay £15,000 and independent experts pay £150 to register. Furthermore, the national MROs will be required to pay a £100,000 bond to demonstrate their ability to meet their experts’ fees.
One reason that parasitical MROs have been so long lived is because many are owned by the solicitors using them, and such ownership is seldom clear. The MoJ is intent on stopping this. When registering, claimant solicitors are obliged to complete a user agreement that includes a ‘statement on direct financial links’. These statements are used to ensure that experts and MROs with a financial link to the claimant solicitor are not returned in the search offer.
Having bent over backwards to accommodate the MROs, and in the process created a complex, costly and easily bypassed approach to taming a market problem the CPR created, the MoJ is now having to deal with the fact that some MROs are already acting to pervert the MedCo system.
In a note date June 2015, the MoJ says:
The Ministry of Justice is of the view that the system of allocation introduced on 6 April will, if given the opportunity to operate as intended, succeed in delivering greater independence whilst maintaining consumer choice, with sufficient flexibility built into the system so as not to prevent MROs from developing their practice and/or moving between tiers.
Concerns have arisen relating to the behaviours exhibited by some MROs which have the potential to undermine both the Government’s policy objectives and public confidence in MedCo. Examples include:
- established high volume MROs registering multiple new smaller MROs; such actions have the potential to put at risk the chances of existing MROs to compete for selection, and also runs contrary to the policy objective of providing users with a range of 7 ‘different’ – i.e. unconnected – MROs to choose from;
- a significant number of Tier 2 MROs are affiliated with a central IT hub, whereby each MRO is a separate corporate entity but shares a number of centralised services and resources as part of a collective entity.
The system was neither designed nor intended to permit this type of behaviour, but the Ministry of Justice is clear that MedCo, through the application of the qualifying criteria, its user agreements and ethics policy, has the requisite tools to address it.
One wonders why the MoJ persists in its efforts to regulate this particular mire when faced with such blatant game-playing.
Jackson LJ understood the solution. His answer – and the correct and simple one in our view – is that the cost of the medical report should be a disbursement, whereas the MRO mark-up should be part of the solicitor’s profit cost and so unrecoverable. One simple rule change would return us to a normal marketplace for expert reports without all the fuss that MedCo brings.