MedCo directors take the wheel
During the course of this month, the new MedCo directors will take over the controls of the organisation. As well as overseeing the arrival of the first instructions in April, they will have responsibility for drafting the accreditation and registration processes. The MoJ working parties have completed a lot of good work, but there is more hard work ahead. DWF Motor and Fraud head and MedCo director, Nigel Teasdale reveals what’s likely to be in his in-tray and that of his fellow MedCo directors and the work that will need to be done to ensure MedCo’s success.
Why has MedCo been created?
It is worth reminding ourselves that one of the original drivers was to bring down the cost of motor insurance by reducing fraudulent and exaggerated claims.
Over the last year or so, we have all watched on as the concept of independent medical panels in whiplash cases has become a reality. In reaching this point, there has been an unprecedented level of cooperation between the claimant and defendant communities, with both camps having a presence on the working parties (as they do on the MedCo board itself). The formation of MedCo is the jewel in the crown of the reforms and the expectations of the industry upon it are great. If MedCo can deliver on its remit – to deliver high quality, independent medical evidence from experts who have no financial links from those commissioning the report, then the reforms in whiplash claims are likely to be seen as a success.
From 6 April 2015, only registered experts and MROs will be able to provide initial medical reports in claims:
where the significant physical injury is a soft tissue injury and includes claims where there is a minor psychological injury secondary in importance to the physical injury”
From that date onward it will also be mandatory for the initial medical report to be commissioned via MedCo.
What is in the in-tray?
One of the most important points is to make sure that there is a relatively seamless transition as matters pass from the MOJ working party to MedCo. However, one must remember that a new company is being set up and consideration needs to be given to practicalities such as approving Articles of Association, funding and insurance. Once the basics are done, then MedCo will need to hit the ground running.
We should shortly find out how many experts or MROs will be available for selection in any given search. The opportunity for them to register their interest and to give information about the number of reports they will be able to produce closed at the beginning of the month and we await news as to the result of that process, which is expected to reveal the extent of the capacity available. This is in turn likely to be used by the MoJ to reach a final decision as a matter of policy on the extent of the choice of experts available to claimants, and enable greater consideration to be given to the likely level of registration fee.
The number of experts or MROs that are returned in any search has been subject to a great deal of debate. Whilst a balance needs to be struck to ensure that the claimant has choice, it is important that that is not at the expense of independence. Those numbers and the principles underpinning the search are likely to be policy decisions of the MOJ.
As a further stage in the process a registration application form should become available on the site for experts or MROs to complete before the end of this month, which in turn will be required to be completed by those experts and MROs who are able to produce reports in this type of claim after 6 April 2015.
As yet there are no set criteria for how experts will become accredited and significant work on that will be needed. It is essential that the accreditation process is robust. Part of that process will involve experts undertaking a comprehensive training programme, presumably including the mechanism of whiplash injuries. In order to allow experts enough time to complete the accreditation programme once established, it will not be possible for full accreditation to be implemented until 1 January 2016.
Some convincing will be required
The reality is that the vast amount of reports that have been prepared to date in this type of claim have been written at the behest of claimant’s solicitors, often under the auspices of a financial relationship between the claimant’s solicitor and the expert. These relationships led to a perception of bias which convinced the government to take action; they saw that it was essential for experts to both be independent and to be seen to be independent.
Whilst it is unrealistic to expect that suspicions of impartially will suddenly be dispelled come 6 April 2015, the new processes will lead to improvements in the standard of reporting, in my view. A new atmosphere will be created in which experts will feel free to be objective in the way the CPR originally intended. The breaking of financial links between commissioners of reports and experts and the introduction of MedCo will mean that experts should be assured that their workflows will not be dependent upon their opinion and prognosis, and suspicions of bias will gradually be eroded.
As part of their registration/accreditation, it is envisaged that experts will be required to provide Management Information and that MI will be used to ensure that experts are complying with their obligations. The ability to analyse MI and the robust audit processes that will be in place, should lead to insurers having faith in MedCo. By the beginning of 2016 and the arrival of accreditation, one would hope there will be more confidence in the opinions of medical experts commissioned via MedCo.
Hopefully the definition of “soft tissue injury” that has been applied to determine which cases proceed through MedCo will not produce adverse behaviours such as seeking to avoid the process by arguing that the main injury is a psychological one and not a soft tissue injury. I know that Insurers will be keeping a close watch to ensure that is not the case.
There will also be more interest from claims management companies in pedestrians and cyclists who are not subject to the MedCo process.
If there are adverse changes in behaviour one would hope the MOJ will give further consideration to extending MedCo to all low value RTA claims and perhaps even beyond to EL/PL claims.
As part of the wider reforms, it is also worth remembering that a previous claims search will be mandatory on new claims submitted to the portal from 1 June 2015 onwards. This development should assist in the fight against fraudulent injury claims, as will the expected coming into force this spring of what will be section 56 of the Criminal Justice and Courts Act 2015 and the requirement for courts to dismiss claims involving “fundamental dishonesty”.
According to their own impact assessment, the government expects the reforms to deliver nearly £300m in savings to the insurance industry. Whilst I believe that figure to be extremely optimistic, I am convinced that the introduction of MedCo set alongside the additional parts of the reform package will lead to a reduction in fraud and exaggerated claims.
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.