MOJ Whiplash reforms are compatible with Articles 102 and 106 TFEU

11 Dec 2015

The Administrative Court has rejected a judicial review challenge to the Government’s recent whiplash reforms, which on 6 April 2015 introduced a mandatory requirement for personal injury solicitors to instruct medical experts via the MedCo internet portal.

A leading medical reporting organisation (MRO), Speed Medical Examinations Limited, sought to challenge the operation of the Portal on the basis that it had affected its volume of business and restricted competition in the market for medical expert reports contrary to  EU and national competition law. Mr Justice Cranston held that MedCo could not be abusing its position in the upstream market for the provision of access to medical experts by distorting competition in the downstream market for the supply of medical reports in circumstances where it was not active or had no commercial interests downstream market and/or derived no direct or indirect economic advantage from distorting competition. As a regulator, acting in the public interest, implementing a policy of the Secretary of State for Justice, it was performing a public function and could not be resorting to methods different from those governing normal competition. Further, in implementing government policy, MedCo was complying with a legal requirement under Schedule 3 of the 1998 Act which sheltered it from all liability. Lastly, Cranston J held that even in there were some effect on competition downstream, the MedCo scheme formed part of the wider whiplash reforms programme and was objectively justified on the basis that it removed conflicts of interests from the selection process and ensured the independence of medical experts and MROs providing evidence for whiplash claims. At the same time, it was proportionate and did not go beyond what was necessary as it ensured that all MROs had an opportunity to be presented in the search results and preserved choice for users. Competition between large and small MROs was maintained and there were no barriers to entry that would make the market overly rigid or prevent future evolution of the market.  The Portal was less draconian that other alternatives discussed in the consultations.  A rationality challenge was also dismissed.

This judgment is important for the assessment of conduct that straddles two related markets under Art 102 TFEU as well as the characterisation of public service entities under competition law.

Anneli Howard, led by James Eadie QC, acted as junior counsel for the Secretary of State for Justice.

A copy of the judgment can be found here.