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High Court: medical reporting organisations “closely involved” in design of MedCo

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Cranston J: MedCo system “may be not be ideal” but not irrational

A High Court judge has described how the Association of Medical Reporting Associations (AMRO) was “closely involved” in the design of MedCo, the portal for expert evidence in whiplash cases.

Mr Justice Cranston was ruling on the judicial review brought by Speed Medical, a member of AMRO, which challenged MedCo’s offer to solicitors of only one ‘tier 1’ MRO out of seven .

As reported earlier this month, Cranston J rejected the challenge [2] earlier this month, having granted Speed Medical permission to appeal on the grounds that there was an “arguable” case on competition law.

In his ruling, released after our initial story, the judge said that “as with any exercise in public policy-making”, the outcome of the decision of the Ministry of Justice (MoJ) on the operation of MedCo “may not be ideal”.

Cranston J went on: “The problem may not have been precisely identified and, even if it has been, the solution chosen may not be the most effective or efficient to address it, or the one with fewest undesirable side effects.

“But given what has been the process of policy formulation, it cannot be said to be irrational. Nor does the fact that the policy has adversely affected the claimant’s business, if this be the case.

“The policy does not bar the claimant and other tier 1 MROs from developing their business. Unless the competition law challenge is successful, the policy cannot be flawed on this ground.”

Ruling in R (on the application of Speed Medical) v Secretary of State for Justice [2015] EWHC 3585 (Admin) [3], Cranston J said that in 2013 a “consensus emerged” on how to improve the system for medico-legal reporting in whiplash cases.

He said that in July, lawyers’ associations, insurers and AMRO “proposed the establishment of a centrally-managed accreditation scheme and the creation of an independent body called MedCo, with cross-industry representation, which could take steps to ensure the independence of MROs.”

The judge said that, once the government adopted the idea of a random allocation of MROs and doctors, Dr Simon Margolis, chairman of AMRO, “became closely involved in designing how random allocation would be implemented, in particular the number of what became tier 1 and tier 2 MROs to be presented for a choice to be made”.

Cranston J said this was evidenced in particular from documents dating from October 2014 and in the discussion at the last meeting of the core group of stakeholders in February 2015 before the MoJ made its decision.

He said MedCo’s offer ratio was “less draconian” than alternatives advanced in the MoJ’s 2012 consultation paper, including panels of independent medical experts and a national call-off contract under which MROs would have to bid to be placed on a list of approved suppliers.

On Speed Medical’s competition law challenge, Cranston J said those engaged in policy development were “conscious of the competition law implications” of the system, but overall the two-tier offer ratio was considered to be the “most appropriate measure to mitigate conflicts of interest” and preserve choice for users.

“Competition between individual doctors and between large and small MROs was possible, as solicitors were presented with choices of those with whom they had no prior relationship.

“Under the decision it was relatively easy for new MROs to enter tier 2, and with time they might qualify for tier 1. There were no barriers to shelter tier 1 MROs from competition and if not up to the mark they might move down to tier 2. In short, the market was not overly rigid and evolution in the future was possible.”

The judge said Dr Margolis “raised concerns about the destructive impact on businesses of random allocation” without featuring at least one tier 1 MRO, but the offer ratio addressed that concern.

“In this regard I accept the secretary of state’s submission that solicitors’ clients had a wider avenue of choice, certainly in theory, than pre-MedCo, if a law firm routinely referred the majority of their whiplash cases to a single MRO.”

Cranston J said he had “some sympathy” with the justice secretary’s position that Speed Medical’s litigation was “at the least premature”.

He concluded: “As I have said, the rationality challenge does not get off the ground. However, the competition law challenge is arguable and its importance is such that a grant of permission is justified, although for the reasons I have given judicial review itself is refused.”

Announcing earlier this month that it would appeal against the ruling, Graham Pulford, managing director of Speed Medical, said the way MedCo currently operated was “unfair and anti-competitive, and it removes the imperative to innovate from the market, all of which is detrimental to the consumer”.