March 31, 2016

MedCo - Further restriction for MedCo members

In a statement published just before the Easter break, the MoJ has announced a series of measures aimed at strengthening the panel of independent experts who will be able to diagnose whiplash claims. The announcement was made in response to last year's review of the MedCo scheme.

Since its commencement in April 2015, the scheme has been plagued by problems, particularly in respect of accreditation, training and a fair amount of criticism in relation to the choice of medical reporting organisation (MRO). In fact, in its official response the MoJ has identified a number of practices which have 'the potential to undermine both the Government's policy objectives and public confidence in the system.'

The MoJ has released a document setting out the outcomes of the MedCo review and which spells out a number of conclusions in response to the issues raised:

  • Firstly, the revised offer for MROs upon completion of a search on MedCo will be two tier one MROs and ten tier two MROs. This change follows criticism and a judicial review (although unsuccessful) pertaining to the fact that the previous choice of seven MROs including only one tier one provider was irrational and anticompetitive. The offer for Direct Medical Experts remains at seven.
  • Changes to MRO qualifying criteria will be made, partly to prevent the practice of registering multiple 'shell' MROs:
  1. There will be new criteria to define an MRO. This will establish their core roles and functions, with a wider application of minimum service standards.
  2. The 250 experts that are required for an MRO to possess the tier one status must be 'active MedCo-accredited' and qualified to prepare initial whiplash reports. Previously, MROs simply had to have contractual arrangements with 250 experts, with no requirement that they should be practising.
  3. Tier one MROs will also be obligated to have a two-year trading history and a minimum of five distinct clients, with no single client providing more than 40% of its work.
  • In relation to the declaration of financial links between law firms and MROs, the latter must show they have had no financial links with law firms in the last three years (previously one year).
  • Further guidance will be provided in respect of the payment of commission or referral fees and resolving the issue of any employee links.

Despite respondents of the review calling for formal regulation of MROs, the Government has highlighted that this is a 'complex area, and the MoJ will consider whether further action is required.'

It is anticipated that these changes will come into force towards the end of this summer. It is hoped that these reforms will serve to better regulate the regime and prevent abusive practices which undermine the aims of the system, by removing ambiguity in the rules and creating transparency in the scheme to practitioners, defendants and claimants alike.