Speed Medical Examination Services Ltd v Secretary of State for Justice

A public body’s policy is not irrational merely because it produces adverse effects or may be imperfect. Where policy is developed through consultation, stakeholder input, review and audit, the court will not substitute its view of the better or more efficient design unless the choice is outside the range of rational responses.

Competition law may apply to a regulatory scheme, but a body implementing government policy is not abusing dominance merely because it controls access to a downstream market in which it is neither active nor economically interested. Conduct required by the legal framework may also fall within statutory and Treaty protections. A restriction may in any event be objectively justified where it pursues independence in medical reporting and represents a proportionate policy choice.

The claimant, a medical reporting organisation, sought judicial review of the Secretary of State’s decision establishing the MedCo search offer for whiplash medical reports. The system presented users with either one Tier 1 and six Tier 2 medical reporting organisations, or seven individual medical experts, selected through the MedCo portal.

The claimant alleged that the design was irrational and infringed the Chapter II prohibition in the Competition Act 1998 and Articles 102 and 106 of the TFEU. Permission and the substantive claim were considered at a rolled-up hearing. The central issues were whether the policy was irrational, whether MedCo occupied and abused a dominant position, and whether any restriction was objectively justified.

1. Claim dismissed. Permission was granted because the competition challenge was arguable, but judicial review was refused on the merits.
2. The rationality challenge failed. The MedCo scheme resulted from an iterative public-policy process addressing concerns about exaggerated or unmeritorious whiplash claims and conflicts of interest in medical reporting. It followed formal consultation, extensive stakeholder meetings and input from representative bodies, including the MRO trade association. The court was not required to accept that the policy was ideal, most efficient or free from undesirable effects. Adverse effects on the claimant’s business did not make it irrational.
3. The offer ratio and qualifying criteria had to be viewed as part of the scheme as a whole. The policy sought to balance independence in reporting, user choice, the continuation of established businesses, market entry and movement between tiers. Review and audit were built into the decision. Errors in forecasting the number of MROs, including the creation of affiliates, did not establish incurable irrationality.
4. The domestic and EU competition provisions were materially equivalent. MedCo operated in an upstream market for access to medical experts, while MROs and experts operated in the downstream market for medical reports. MedCo was not an MRO, did not provide reports and had no direct or indirect economic interest in the downstream market. The cases concerning vertically integrated dominant commercial operators therefore did not establish abuse on these facts.
5. The scheme was also regulatory in character. The MedCo portal was mandated through the civil-procedure framework and MedCo acted to implement the Secretary of State’s policy. Its conduct was connected with a legal requirement of the kind recognised by Schedule 3 to the Competition Act 1998 and the Court of Justice’s case law on conduct required by national law.
6. Even assuming that the scheme restricted competition, the restriction was objectively justified. The offer ratio emerged from industry consultation and available market information. It addressed conflicts of interest while preserving meaningful choice and opportunities for competition, including entry into Tier 2 and progression to Tier 1. The policy involved a discretionary judgment which was not disproportionately intrusive.
7. The litigation was arguably premature because review and audit might alter the number and mix of MROs. That did not affect the conclusion that the substantive challenge failed.

The judgment records no prior merits decision. Leggatt J initially refused permission, but permission was later renewed and a rolled-up hearing was ordered. This court granted permission on the arguable competition ground but refused judicial review.