Speed Medical Examination Services Limited v Secretary of State for Justice

The claimant challenged the Ministry of Justice decision of 2 March 2015 implementing the MedCo portal and its ‘‘offer ratio’’ (one Tier 1 MRO to six Tier 2 MROs) for the sourcing of initial whiplash medical reports. The claimant advanced two principal grounds: (i) irrationality of the Decision as defeating its stated purpose (including particular design flaws in the random allocation and tiering system); and (ii) incompatibility with national and EU competition law, including alleged abuse of dominance contrary to section 18 of the Competition Act 1998 and Article 102 TFEU.

The court held that the rationality challenge failed. The Decision was the product of extensive consultation, iterative policy-making and built-in review and audit; it was not irrational for the Secretary of State to adopt the 1:6 offer ratio and the qualifying criteria for Tier 1 and Tier 2 MROs. The court further concluded that MedCo, acting as the mandated IT gateway under the Civil Procedure Rules and implementing a legal requirement, was distinguishable from a commercial undertaking abusing a dominant position.

However, the competition law challenge was considered arguable: the judge accepted that questions remained about whether the scheme might give rise to restrictions of competition and whether any such effects were objectively justified. For that reason permission to pursue the competition law arguments was granted, but judicial review of the Decision was refused.

Background and parties: The claimant, Speed Medical (a medical reporting organisation), operated nationwide and asserted significant turnover and market share in arranging medico-legal reports for whiplash claims. The defendant was the Secretary of State for Justice, responsible for the Whiplash Reform Programme which required initial reports to be sourced via an independent IT hub (MedCo). MedCo was an industry-established company charged with administering searches for accredited experts or MROs; the Civil Procedure Rules were amended to assume the MedCo Portal as the route for initial reports.

Nature of the application: This was a first instance judicial review challenging the Secretary of State’s Decision of 2 March 2015 (the Decision) setting the MedCo ‘‘offer’’ for MRO searches as either one high-volume national MRO and six other MROs or seven individual experts, together with accompanying qualifying criteria for Tier 1 and Tier 2 classification. The claimant sought relief on grounds of irrationality and incompatibility with UK and EU competition law (abuse of dominance under the Competition Act 1998 and Article 102 TFEU).

Issues framed: The court identified and addressed (i) whether the Decision was irrational or otherwise Wednesbury-unreasonable in design or effect; (ii) whether MedCo or the decision would amount to an undertaking in a dominant position abusing that position in breach of the Chapter II prohibition and Article 102; and (iii) whether any restriction of competition had an objective justification or was necessary and proportionate.

Court’s reasoning: On rationality the judge emphasised the iterative policy process: consultation papers, a Core Group of stakeholders, industry inputs (including AMRO), market surveys and built-in review and audit mechanisms. The Decision sought to strike a balance between promoting independence of medical reporting and preserving market opportunities for established providers. That process and the policy choices involved fell within the broad margin of discretion accorded to ministers; the claimant’s business losses did not render the policy irrational. On competition law the judge accepted principles from leading EU and domestic authorities about dominance and abuse but distinguished the present case on the basis that MedCo acted as the legally mandated gateway under the Civil Procedure Rules and implemented government policy. Nonetheless, given the potential for distortion of downstream competition and unresolved questions of necessity and proportionality, the competition challenge was arguable and permission to pursue those arguments was granted. The court ultimately refused substantive judicial review relief.

Procedural note: Leggatt J had earlier refused permission; permission was later granted to pursue competition arguments at the rolled-up hearing but the substantive claim was dismissed.

This is a first-instance decision. The claim for judicial review is refused. The court rejected the claimant’s irrationality challenge because the Decision was the product of consultation, iterative policy-making and built-in review and audit and fell within the Secretary of State’s margin of judgment. Although MedCo’s role was criticised, the court treated MedCo as implementing a legal requirement under the Civil Procedure Rules and distinguished it from an undertaking abusing a dominant position. Nonetheless the competition law challenge (under the Competition Act 1998 and Article 102 TFEU) was held to be arguable and permission to advance those arguments was granted, but that did not lead to substantive relief in judicial review.