What next for the whiplash reforms?
The last 12 months have been a busy time for personal injury lawyers, but it is clear from the Justice Secretary’s recent announcement that reform in this area is still very much at the top of the government’s agenda and that it is fully committed to ensuring the implementation of medical panels this year. The first tranche of rules drafted by the working party were released at the beginning of last month, which was followed by a brief period of consultation which ended on 28 May. DWF were one of those to respond to the consultation. It is now for the MoJ to place the proposed rules before the Civil Procedure Rule Committee, which we understand it will do in July.
Whilst there have been a number of concerns expressed about the scope of the panels, the correct experts to be used, and the level of the fee, one area that once seemed uncontroversial now appears to be in danger of unravelling – how can the independence of the expert be secured?
The battle for independence
It became clear from a rather rambunctious open forum hosted by the MoJ at the beginning of May that some sections of the claimant solicitor community were unconvinced that any reform was needed, and saw the proposed changes as a threat to their business models. Given the nature of the MoJ’s proposals, perhaps we should not see that as a surprise as the proposed reforms could change the MRO market place, in a situation where MROs have become a significant revenue stream for many ABSs. It’s also worth recalling that the MoJ have already demonstrated that they are not afraid to extend reforms made in one type of claim (often motor where of course volumes are highest), into other areas of claims work, and by doing so ensuring that the reform then applies across the spectrum of injury claims handling.
It is the draft wording of the new Pre-Action Protocol that seems to have caused consternation amongst some claimant lawyers. The MoJ has independence at the heart of the changes proposed and say that they are “committed to ensuring that there should not be a financial link between the party commissioning the medical report and any intermediary organisation through which the report is provided”.
To that end, the cross-industry Working Party proposed that the Pre-Action Protocol be amended so that where any report is “obtained via an intermediary such as a medical reporting organisation, the report is obtained via an intermediary in which neither the claimant nor the defendant has any direct or indirect financial interest”. That is tantamount to a restraint of trade, some claimant lawyers argue.
It is though important to note that the proposal from the MoJ was not for an outright ban on the use of MROs, rather it provides for lawyers only to be able to commission a specified proportion of medical reports via any given intermediary, or alternatively requires them to do so on a rota basis from a variety of intermediaries. Of itself, this would not spell the end of MROs, but would mean that claimant firms that are part of an ABS would not be permitted to instruct an MRO that is linked to the same ABS, or indeed linked financially to the claimant firm in some other way.
Nevertheless, within a few days of Lord Faulks of the MoJ publishing his letter setting out the current proposals and the draft rules to accompany them, a small group of claimant lawyers from the North West were calling for support for a formal legal challenge to the proposed reform. Those firms named as involved are Express Solicitors, who own Ontime Group and Jefferies Solicitors of Altrincham who own Lawyers Medical Agency Ltd.
As of 13 June, the MoJ have not received word that a judicial review will actually materialise, although any challenge would probably only become actionable once a decision has finally been taken and we understand that would not be until October. If a JR challenge does materialise, it would not be the first time that the MoJ have had to face such action. When the Ministry revised fixed fees in Portal claims last year they were the subject of an unsuccessful JR by both MASS and APIL, although it appears that this current battle will not have the support of either of those organisations. Let us not forget that a member of each of those organisations sit on the working party taking the reforms forwards.
Judicial review challenge
Any challenge to a decision made by a government department must be made promptly and be pursued on one of two grounds:
that the decision was ultra vires (outside the power of the department making the decision); or
the grounds upon which the decision was taken were unreasonable.
A decision on the reforms seems to be properly within the powers available to the Secretary of State, so we would have thought that any challenge that might emerge would have to be on the grounds of unreasonableness.
Any argument that the MoJ’s decision would be unreasonable seems to be predicated upon two arguments: firstly that as licensed ABSs their activities are already regulated and so further regulation is not required and is unreasonable; and secondly, that there is no evidence at present before the MoJ that experts are not already independent, governed as they are by their own regulatory bodies and the provisions of Part 35 of the CPR.
It seems to us that these views are in fact only held by a minority interest group from the claimant lobby, with a vested interest due to their ownership of an MRO with heavy reliance on their own internal referrals
The consensus amongst the claims industry is that there is a need for reform in this area. According to the government’s own analysis of consultation responses to the Transport Select Committee’s report, 58% of all respondents supported the government’s proposals for independent medical panels, including 69% of medical stakeholders that responded.
Evidence of the need to secure the independence of the expert is further provided by the GMC’s recent decision to sanction one General Practitioner for his approach to writing medico-legal reports after he provided an “obviously dishonest” medical report for a family member without carrying out an examination.
Anecdotal evidence is widespread including a number of reported judgments showing failures of objectivity in report writing by experts and highlighting the failures of the current regime. In McINTYRE & ANOR v THE HOME OFFICE (2014), Mostyn J observed of the expert’s description of the Claimants’ injuries that “..the identical replication of language in each report casts considerable doubt on the professional objectivity..” of the expert who reported in that case.
As there is much at stake, we would not rule out a formal JR challenge being made, but in the first instance it would be for any party wishing to mount a challenge to demonstrate that they have exhausted all other avenues of redress (such as by responding to the MoJ’s consultation for example). If a satisfactory resolution is not found by direct engagement, then an application for judicial review may be brought. The JR process is fraught with uncertainty and judicial review statistics for 2007 to 2011 published by the MoJ last year suggest that only 15% of JR applications are granted.
Whilst we suspect that the MoJ will be sensitive to any formal challenge to their proposals and conscious that any challenge could affect their proposed timetable, one would expect them to hold firm, especially as it seems that the reforms have majority support. We would expect either that this JR will not in fact be pursued, or if it is, we would not expect it to succeed. From the very start of the process of reform we have highlighted that true independence of the medical expert, and breaking down the financial links between the experts and those that instruct them, are vital to the success of these reforms in reducing fraudulent and/or exaggerated whiplash claims.
The next area where we expect to see progress shortly is in relation to the accreditation, sanction and audit process and it will be very interesting to see what proposals the working party will have on that.
If you have any views or would like a copy of DWF consultation response, then please contact me. We will continue to monitor and update you on the reform process directly and also via our dedicated insurance law knowledge website In Touch
For further information please contact Nigel Teasdale, Partner, on 01772 55 4264.
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.