A government consultation into the new MedCo procedure for medical reports for whiplash cases has uncovered dissatisfaction among both claimant and insurance lawyers.

The Ministry of Justice made a call for evidence in July amid reports that medical reporting organisations were ‘gaming’ the contracting process by registering multiple entities to ensure market share.

In its submission to the ministry, the Association of Personal Injury Lawyers (APIL) blamed the scheme’s problems on the lack of ‘audit and accreditation’ of firms before the online system went live.

‘Problems are arising because medical reporting organisations (MROs) are being permitted to “self-vouch”, with no checks in place to determine whether they actually comply with the criteria,’ it says. It urges the government to carry out a ‘robust and complete audit’ of MROs registered with MedCo.

The group also claims that MedCo involves a ‘retroactive step’ in the adoption of new technology. Previously, it says, MROs could invest in IT to make the instruction of an expert and obtaining a report easier for the solicitor. Now, however there is little point in larger MROs investing in technology to stand out from the competition as the instructing solicitor has no choice of which MRO they use.

‘As well as skewing the market and halting competition, MedCo as currently set up will stop innovation amongst medical reporting organisations, and will lead to a decline in quality of service.’

In its submission, international firm Kennedys, which acts for several leading motor insurers, calls for more transparency in the scheme to reveal which law firms are instructing which experts. ‘Such measures should help ensure MedCo achieves its goal of breaking the financial links between solicitors and experts/MROs and, as importantly, provide a source of good-quality experts for claimants.’

It says: ‘The low-value, high-volume nature of [whiplash] claims has attracted bad behaviours – hence the ongoing need for robust and flexible regulation and policing.’

The response predicts that the market will continue to adapt to the introduction of additional safeguards, not least because of the adoption of alternative business structures that can be used to cloud the nature of relationships between different organisations in the supply chain.

Niall Edwards, partner and head of Kennedys’ motor practice, said: ‘Until we have proper audit procedures in place and good management information, the danger is that unhealthy behaviours will go unaddressed. ‘Like any system, the more complicated it is, the greater the risk that ways will be found to undermine its objectives and create undesirable effects. MedCo needs to be kept simple and have a mirrored auditing procedure in place.’

The Association of British Insurers has already accused ‘some market participants’ of deliberate attempts to ‘game’ the system through manipulation of the random allocation process and suggested that medical reporting organisations should be barred from registering more than one company.

The survey closed on 4 September. A response is expected later in the autumn.

VIA: http://www.lawgazette.co.uk/practice/consultation-uncovers-medco-concerns/5050975.article