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MoJ bids to break “unhealthy relationships” in PI market

MoJ: committed to minimising the impact on the market [1]

MoJ: committed to minimising the impact on the market

The Ministry of Justice (MoJ) is looking at widening the definition of ‘direct financial links’ that have to be declared by users of MedCo to break the “unhealthy relationships between organisations operating in the personal injury sector”, it has emerged.

The details of the call for evidence announced yesterday [2] revealed that the MoJ is also willing to consider changing the make-up of the seven medical reporting organisations (MROs) offered to users – it is currently facing a judicial review challenge because only one large, tier 1 MRO appears in each ‘offer’, which it is argued is anti-competitive.

In his foreword to the call for evidence [3], civil justice minister Lord Faulks said: “The government is aware that the personal injury sector is fast moving and contains many innovative organisations and individuals.

“It has, however, become apparent that a number of new business practices have developed in this sector with the potential to undermine both the government policy objectives and public confidence in MedCo.”

The call for evidence said that the declaration of direct financial links aims to meet the goverment’s objectives of “enhancing independence in medical reporting through the breaking of unhealthy relationships between organisations operating in the personal injury sector”.

It explained: “The declaration currently covers direct financial links between those commissioning medical reports and those carrying them out. It does not currently cover financial links with other types of organisation such as MRO to MRO or other types such as ownership by close family members.” It asked whether the declaration should be extended.

MROs are asked to provide comparative data on the volume of reports they were handling before and after the introduction of MedCo as the MoJ looks at the offer made to users.

“The overall aim of the decision on the offer was to balance – as far as was practical – the potential impacts on the market with achieving the government’s overall policy objective of enhancing the independence of medical reporting in support of whiplash claims.”

But it said the fact that high-volume MROs have registered multiple new smaller MROs “have the potential to put at risk the chances of existing MROs competing for selection and also runs contrary to the policy objective of providing users with a range of seven different – i.e. unconnected – MROs to choose from”.

Further, “a significant number of small MROs – where each MRO is a separate corporate entity – are sharing a number of centralised services and resources as part of a collective entity”.

The MoJ said: “The system was neither designed nor intended to permit these types of behaviours or business models. The government is fully supportive of MedCo, and is clear that it has – through the application of the qualifying criteria, its user agreements and ethics policy – the requisite tools to address the current issues arising.

“Additional actions arising from the analysis of the responses to this review may also be undertaken by MoJ to strengthen the framework within which MedCo operates.”

The review will also consider the qualifying criteria for MROs, including the definition and scope of the ‘national coverage’ required to become a tier 1 provider, on the basis that “the government is committed to minimising – where possible – the impact on the market from the whiplash reform programme whilst also seeking to deliver the key public policy objectives”.

The call for evidence also seeks any other views on reform. Interested parties have until 4 September to respond.