The game is up
Last June, the MoJ indicated that it would carry out a review as to how MedCo was operating. The review, which the MoJ said it would it was always going to carry out, was brought forward due to the gaming of the system by MROs that was witnessed. Having completed their review, the MoJ have today announced that, amongst other changes, they intend to alter the composition of the search offer, so that two Tier 1 and ten Tier 2 MROs will be provided. Nigel Teasdale, MedCo Director and DWF Motor and Fraud Head, looks at the MoJ’s announcement, which hopefully will bring some of the abuses to an end.
Following implementation of MedCo in April last year, it was apparent that some of the MROs who were registered with MedCo were attempting to game the system by a variety of means, all of which had the potential to undermine the government’s policy objectives and confidence in the system. In an attempt to tackle the issues, the government brought forward its review of MedCo and as part of the Framework Review, the MoJ consulted with a wide range of stakeholders, receiving 93 responses to its Call for Evidence.
The changes that are to be made
In order to address the issues that were being seen and having completed its review, the MoJ have now announced that it will take the following steps:
The search criteria will be changed so two tier 1 and ten tier 2 MROs will appear in any search, providing claimants with greater choice
The qualifying criteria are to be tightened to avoid MROs playing the system and overstating their abilities
There will be a new definition of an MRO, which presumably will exclude multiple registrations
The MOJ will give further consideration to MRO regulation
The change to the search offer comes after stakeholders had indicated support for more than one Tier 1 MRO appearing in any search and after analysis of management information. As well as providing greater choice, this change will increase competition between Tier 1 and Tier 2 MROs.
The qualifying criteria for MROs will be changed and a new definition will be given, with a view to stopping the practice of some MROs “splitting” and registering themselves multiple times, so as to increase their chances of appearing in any given search. The detail of this is still awaited at this time but it also seems the MOJ will seek feedback from the industry on any draft.
In support of that change, the MoJ have also announced that they will change the statement of direct financial links, so that connections have to be declared for the past three years (as opposed to the last 12 months) and further guidance will be provided on the payment of commissions and referral fees. The MoJ has also indicated that the declaration will now have to be signed annually and that it will keep the statement of direct financial links under review and change it again if appropriate.
The changes are to be made by the summer of 2016.
For further information please contact Nigel Teasdale, Partner, on +44 (0)1772 554264.
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.