The government has condemned the registration of multiple shell companies on MedCo after it emerged that some of the large medical reporting organisations (MROs) have recently increased the number they have.
In recent weeks, tier 1 providers Premex, Doctors Chambers, Speed Medical and Premier Medical have each registered 20 more tier 2 shell companies on top of the ones they already have.
The aim is to increase their chances of appearing on the random selection of MROs provided to users.
A letter to customers from Premex, seen by Litigation Futures, confirmed that each of the new tier 2 companies – that go by names like Premex Services (28) Limited, etc – offered the same terms as the customer’s current contract with the tier 1 company.
Premex, Doctors Chambers and Speed Medical each now have 30 shell companies, and Premier Medical 35.
In March, the Ministry of Justice (MoJ) said it would change the MRO qualifying criteria to stop shell companies. Asked about the latest spate of new ones, an MoJ spokesman said: “MedCo is an integral part of the government’s efforts to tackle dishonest whiplash claims.
“Registering multiple shell companies is totally unacceptable, and we will be implementing new qualifying criteria to tackle this behaviour. Announcements on these changes will follow in due course.”
In a statement, MedCo said it could not take action until this happened: “As currently worded, MedCo does not consider that the qualifying criteria, set by government in early 2015, allow it to refuse applications for multiple tier 2 MRO registrations. Legal advice taken by the MedCo Board in an attempt to address this issue confirmed the position.
“On 16 July 2015 the MoJ issued a call for evidence as part of a review of the qualifying criteria and other matters. Following this it announced on 29 March 2016 that it would put in place new qualifying criteria and a new definition of an MRO to prevent this practice and facilitate the removal of all ‘multiple registered’ tier 2 MROs from the system.
“When the MoJ publishes the revised qualifying criteria, which will address the problem of multiple registrations, the MedCo Board will take steps to apply the new policy. Organisations that clearly do not meet the new definition of an MRO and fulfil the new qualifying criteria will be suspended from the system and made non-operational.
“A full audit programme will follow to ensure all remaining MROs comply with the new criteria. In these circumstances, and in accordance with the terms of the agreements signed by those companies, registration fees will not be refunded.
“MedCo has repeatedly made the MRO community aware of this impending action and continues to warn MROs applying to make multiple registrations.”
Litigation Futures has approached the four MROs for comment.