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Latest trends on claims notifications

The Portal Company have now released the latest statistics showing numbers of new claims notifications in RTA, EL, PL and EL disease. There are points of interest in relation to trends in each claims type. The latest stats are for the month of September as of course they are always released a month in arrears.

RTA claims

The number of new CNFs for September was 62,500, a rise of 5,000 from the August figure of 57,500. July’s figure of 72,500 had been unusually high as has always been the case on the eve of a process reform, in July of course claimant lawyers wanted to lodge CNFs to avoid fixed recoverable costs outside the portal in case those claims dropped out. August’s figure had, again as usual, been low as a hangover after July’s peak, and we were waiting for the new figures to see how quickly the number of new claims would increase back up to 70,000 per month, last year’s monthly average. Well, we now have our answer – with a 5,000 increase up to 62,500 we are back on the path towards 70,000. It remains our view that we will be back to the 70,000 level by the end of this year or early next. We also continue to think that RTA claims number will go above 70,000 per month once the £10-25k claims start hitting the portal in any number. So, in summary on motor, there is confirmation that we look to be on for claims numbers being back to former levels within a couple of months.

EL/PL/EL disease claims

On all three of these claims types that were new to the portal as at 31 July, we now have a second month of statistics, those for September. On EL and PL accident claims, the number of notifications has in both cases risen similarly from the first month, by 400-500%. On EL accident, there were 910 new claims, as compared to 200 in August. On PL, there were 1808 new claims as compared to 375 in August. Each is a significant increase as the new processes are now up and running and these numbers will now continue to rise on a significant upward trend as the switch to the portal for these claims becomes embedded.

The number of these types of claim dropping out of the portal process remains high however. Of the 1110 claims which have entered the EL accident portal in the first two months, 693 remain in the system, and of the 2183 claims entering the PL portal, 1360 remain inside. As to those claims leaving the process, the largest category remains use of the “exit process function”, the main reason for which remains in our view the unfamiliarity with the new processes on the part of users of those systems.

As to EL disease, the rise in the number of new CNFs is slower, with 312 entering in September compared to 143 in August, roughly a 200% increase. 303 of those claims remain in the portal. We expect these numbers in the EL disease portal to increase at a slower pace due to the fact that the submission of new EL disease claims was artificially accelerated by the submission of letters of claim before 31 July to avoid the portal process and FRCs within the portal. The same potential did not of course exist for EL and PL accident claims where the question of whether or not the portal is to be used depends solely on the accident date.

The first EL and PL accident settlements of portal claims have been reached. 3 EL accident claims have settled at an average general damages figure of £1,867, and 4 PL claims have settled at an average figure of £1,300. By way of comparison, this year’s average RTA figure over vastly more claims is £2,230. It is early days to draw any conclusions for the settlement levels for EL and PL. The current average settlement figures are clearly based on a very small sample and are probably in turn smaller claims, and we expect these figures to rise, and at least in the case of EL claims to exceed the RTA figure in the months ahead.

Market developments

The fact that there is evidence here of RTA notifications starting to return to volumes they were at prior to the reforms coming into force continues to suggest that the claimant market is continuing to attract new claims in volumes. Trends that have been seen in place previously continue to happen, at a steady if not breakneck speed.

The new big players are getting bigger. Slater and Gordon have this week announced to their home stock exchange in Australia that talks to acquire Pannones are on-going, as well as with a number of other firms. Their deal with Pannone is expected to be done within weeks. In the meantime, they have announced their intention to acquire the specialist asbestos practice, John Pickering. In the meantime Quindell have claimed that they are now involved in some way or other in 20-25% of injury claims that insurers are handling, and aim to become a £1bn business next year.

What of the smaller players on the claimant side? A survey by insolvency practitioners Bennett Jones says that many smaller firms are sitting on their existing pre 1 April caseloads and are expecting to make the fees from them last another year or two, rather than selling them on. They are not though spending the incoming cash on getting in new claims, and are reluctant it seems to face the new realities. Bennett Jones equate these firms to people who deny climate change, and suggest that they face a catastrophe if they do not establish exit plans. The options are certainly there for claimant firms departing the injury market. A new option is Pi Gateway, a consortium set up by four Manchester firms who will buy firms out, claiming that as lawyers themselves they can empathise with the issues faced by solicitors in those firms, and in an expression more commonly used elsewhere, say they offer “a quick and clean exit with dignity”. No mention by them of prices paid, but elsewhere there is word of departing firms being offered 40p in the pound for their work in progress.

Contact

For further information please contact Simon Denyer, Partner, at simon.denyer@dwf.co.uk or call +44 161 604 1551 

By Simon Denyer

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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