Speed Medical Examination Services Ltd v Secretary of State for Justice
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cranston |
| Judgment Date | 11 December 2015 |
| Neutral Citation | [2015] EWHC 3585 (Admin) |
| Docket Number | Case No: CO/1590/2015 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 11 December 2015 |
[2015] EWHC 3585 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Cranston
Case No: CO/1590/2015
Richard Gordon QC and Gerard Rothschild (instructed by Group General Counsel, Speed Medical Examination Services Ltd.) for the Claimant
James Eadie QC and Anneli Howard (instructed by the Government Legal Department) for the Defendant
Hearing dates: 27/10/2015 and 28/10/2015
Introduction
In this judicial review the claimant challenges the legality of part of the Government's reforms to the process for handling soft tissue whiplash claims. The reforms include a requirement for personal injury solicitors to identify and instruct independent, accredited medical experts for the provision of initial medical reports via an online portal, which is administered by MedCo Registration Solutions ("MedCo"). The claimant contends that the MedCo system is both irrational and also unlawful as being incompatible with national and European competition law.
The claimant, Speed Medical, is a medical reporting organisation ("MRO"). MROs arrange for medical reports to be prepared for litigation. A legal adviser provides the MRO with details of a client and the type of expert required. The MRO will liaise both with the client to ascertain availability and to obtain authority to access medical records, and also with a suitable medical expert from its panel to arrange a convenient appointment to examine the client. The MRO checks the report produced by the expert for factual accuracy and compliance with the Civil Procedure Rules. There is a trade association for MROs, the Association of Medical Reporting Organisations ("AMRO"), of which the claimant is a member.
The claimant was founded in 1998. By early 2015 it was employing approximately 215 staff and its panel of experts numbered some 15,000 persons. Over the four years before the decision challenged in this judicial review, it had an average annual turnover of some £40 million. In the period January to March 2015, the claimant was providing an average of 9,500 reports per month and appears to have had significantly more than 20 percent of the market. The claimant's evidence is that the introduction of the MedCo system has caused a decline in its business.
The defendant is the Secretary of State for Justice ("the Secretary of State"), whose department is the Ministry of Justice, which is responsible for civil justice and for the adoption of the MedCo system.
The first interested party is MedCo, a company limited by guarantee registered under the Companies Act 2006. It is self-funding through the fees it charges. The members of MedCo are the major representative bodies in this area — AMRO, the Association of Personal Injury Lawyers, the Motor Accident Solicitors' Society, the Forum of Insurance Lawyers, the Law Society, the Association of British Insurers, the Motor Insurers' Bureau, the British Medical Association and the Chartered Society of Physiotherapy. There is only one class of member and the rights and obligations of members are not transferable. Every member has one vote. Under MedCo's Articles of Association the Secretary of State has observer status on MedCo's Board and all its committees. The person chairing the board must be independent and the first Chair was proposed by the Secretary of State before being appointed by the MedCo Board. A meeting of the MedCo Board on 3 June 2015 received legal advice as to whether MedCo's powers are sufficient for the purposes of bringing into effect the various policy decisions taken by the Ministry of Justice.
Considerable expert evidence from economists was available for this claim, three reports from Alix Partners (Matthew Hughes and Matthew Hunt/Rameet Sangha) for the claimant, and three reports from Dr Majumdar of RBB Economics for the Secretary of State. Both sides accepted that this evidence was of only incidental assistance in deciding the issues in the judicial review. Accordingly, I have been relieved of the burden of evaluating it.
There is no need to canvass the lengthy procedural history of this judicial review. Essentially Leggatt J refused permission to apply for judicial review but subsequently, when the application was renewed, another judge ordered a 'rolled-up' hearing to consider both permission and, if permission were to be granted, the judicial review itself.
The whiplash reform programme
Since 2012 the Secretary of State has been working on a "Whiplash Reform Programme". That derives from a concern with the increase in whiplash claims while the number of reported road traffic accidents has been declining. Further, there are some figures which show that the number of whiplash claims in Britain is disproportionate to those made in other European countries. There has been a related concern with the impact of this on motor vehicle insurance premiums.
In June 2012, a Ministry of Justice paper identified the problem statistically and set out the options: to do nothing, to introduce independent medical panels to assess whiplash injuries; and to increase the small claims fast track limit to deal with such cases at lower cost and more expeditiously. That paper noted the role of MROs in the commissioning of expert medical reports. It also noted that the difficulty inherent in diagnosing a whiplash claim created problems for insurers in contesting it. It added:
"1.21 There is anecdotal evidence that some existing arrangements for selecting and commissioning medical practitioners and experts, and for paying for their assessments, could generate financial incentives which could be associated with the existence of exaggerated or unmeritorious claims. Furthermore existing clinical governance arrangements suggest that there is scope to improve current levels of feedback and clinical audit and peer review in relation to medical assessment."
Later the paper stated:
"2.19 It is possible that the financial incentives facing the medical practitioner or expert in relation to their medical assessment may be affected by who commissions and (initially) pays for the assessment, including in relation to whether and how repeat business relationships might develop, and in relation to how particular individual medical practitioners and experts might be selected. The impacts identified in this [paper] are contingent upon the funding model and commissioning and selection arrangements supporting an outcome whereby fewer exaggerated and unmeritorious claims are made.
2.20 Whichever variant is chosen the reforms would amount to establishing increased gatekeeping compared to now in relation to who might provide a medical assessment in future, and enhanced standards and quality assurance in relation to the content of medical assessments."
That paper led to the December 2012 Ministry of Justice Consultation on Reducing the Number and Costs of Whiplash Claims. The Ministerial foreword described Britain as the whiplash capital of the world, stated the figures and referred to the Prime Minister's recognition of the pressing need to tackle the rising cost of insurance premiums. It quoted the insurance industry's estimate that the cost of whiplash claims to the average policy-holder was £90 per year. The Consultation document itself detailed the figures and stated that the Government was identifying options to reduce the number and total cost to the public of fraudulent or exaggerated whiplash claims. It explained the difficulties of diagnosing whiplash injuries. The area was complex and there was a range of options to tackle the problem. In terms of obtaining better medical evidence, the consultation document stated:
"39. A further concern is that GPs, who frequently build strong relationships with patients and their families over many years, may find it difficult to decline to certify an alleged whiplash injury, even if there may be doubts about the diagnosis. Similarly, doctors who regularly receive work from legal service providers or insurers may be keen to retain a relationship with them.
40. The Government is consequently consulting on whether a system of independent medical panels, which would assess claims for whiplash injury and give objective, impartial advice to the court, should be established. The Government believes that independence would help address the concerns described above about the current arrangements for the diagnosis of whiplash injuries.
41. If this proposal were taken forward, there are various options around delivery. Broadly, the two key models for such a system are:
i. an accreditation scheme. The Government would establish the standards for accrediting providers of medical assessment services and would appoint an organisation by competitive tender to run an accreditation scheme. Individual doctors, groups of doctors or Medical Reporting Organisations could apply for accreditation… and
ii. a national call-off contract. The Government would work with interested parties… to develop the criteria for a national framework contract… Medical organisations would be invited to bid to be placed on the list of approved suppliers under the contract, possibly on a geographical basis. An independent board, with representatives from the court service, claimants' organisations and insurance companies, might be created…"
In July 2013 the House of Commons Transport Select Committee reported on its inquiry into whiplash and the costs of motor insurance. It accepted that...
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