Is MedCo heading to court?
A few recent developments around MedCo may point to an up-coming showdown
MedCo is the organisation created by the Ministry of Justice to try to bring some much-needed clarity to the low-value road traffic accident personal injury sector. But there have been some interesting developments at MedCo which have got us thinking.
First, in March 2016 we had the MoJ’s response to its review of the operation of MedCo. It stated that ‘the MoJ believes that practices such as registering multiple “shell” MROs on the system must stop. Therefore, measures will be implemented through changes to the qualifying criteria to address these’. As of the start of September 2016, we are still waiting for the ‘necessary changes’ to be made.
Next, we had MedCo’s annual accounts published. At first blush these seemed innocuous enough, but according to some analysts they show that the not-for-profit organisation appears to be sitting on a seven-figure stack of cash!
Finally, we have seen an email from Premex Services Ltd, a national MRO, in which it says it is adding an extra 20 – yes 20 – ‘shell’ companies to the MedCo system, the very type of registration the MoJ has said it wants to stop.
Now we may be adding 2 + 2 and getting 5, but perhaps we are seeing here the drawing of battle lines that will end in a court action that will soak up any cash surplus held by MedCo. Have the national MROs, which on most measures count as ‘big business’, concluded that they need to call the MoJ’s bluff and face down its attempts to control them by turning to the courts?
Still, the MoJ will always have the upper hand in this tussle. If it ever wants to seriously tackle the parasitism of civil litigation by MROs, all it has to do is make a quick change to the Civil Procedure Rules to say the cost of the medical report should be a disbursement and any MRO mark-up should be part of the solicitor’s profit cost and thus unrecoverable. One simple rule change would return us to a normal marketplace for expert reports without all the fuss that MedCo brings.