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Kennedys warns MoJ over MedCo ‘gaming’

MedCo needs to be kept simple with a mirrored auditing procedure, says defendant lawyers

14 September 2015

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MedCo must be transparent, uncomplicated, and eliminate incentives which encourage those acting for claimants to 'game' the process, defendant firm Kennedys has argued.

The international firm said the government needs to ensure there is robust auditing of medical reporting organisations (MROs). Kennedys also want information on which firms are instructing which experts.

The Ministry of Justice (MoJ) has brought forward its planned six-month review of the portal system of commissioning medical reports. In a written statement to parliament, Justice Minister Lord Faulks admitted the ministry had planned on reviewing MedCo in October.

'However, since the portal went live on 6 April 2015, issues relating to a number of new business practices within this sector have emerged which have the potential to undermine the government's policy objectives and public confidence in the MedCo portal,' said Faulks in July.

Niall Edwards, partner and head of Kennedys' motor practice, said: 'By taking action now, the MoJ has shown its intention to ensure MedCo is fit for purpose, and that there is scope to minimise the risk of unhealthy activity.'

In its response to the Ministry of Justice's (MoJ) call for evidence on the operation of MedCo, Kennedys, which acts for several insurance companies, said: 'Unfortunately, it may always be difficult to prevent a minority of organisations or individuals from developing unhealthy practices around what they see as an opportunity to exploit a situation and generate revenue.'

Kennedys claim that this has been proven time and again in the context of whiplash claims: 'The low-value, high-volume nature of these claims has attracted bad behaviours - hence the ongoing need for robust and flexible regulation and policing.'

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

'Until we have proper audit procedures in place and good management information, the danger is that unhealthy behaviours will go unaddressed,' said Edwards. 'It is vital to consider MedCo's operation against a background of an ongoing desire by claimant firms to maximise the reward for agencies linked to the claims process.'

Providing an example of the challenges faced by defendants, Edwards continued: 'There is a growing tendency to plead psychological damage in the claim notification form with an indication that agents will be appointed to assess and provide treatment in the absence of a seven-day response.

'In practice, treatment is often underway - effectively ambushing the defendant and denying an opportunity to respond in a meaningful or fair way and, at the same time, generating an additional level of costs.'

Edwards concluded: '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.'

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