What does 2 months of Portal data show us about on-going claims trends?
8 September 2014
Friday afternoon saw the release by the Portal Company of two months’ worth of claims data, for the months of both July and August. It’s unusual for this to happen, but the delay in releasing the July figures presumably due to the effect of the holiday season last month, has been responded to with what is effectively an early release of those for August.
Volumes of new claims into the portal
As usual, we need to look first at the RTA position so as to inform ourselves not only as to the trends in relation to motor claims, but to the claims environment generally. In July, there were 74,000 new claims, and in August there were 66,500, as can be seen on this graph. The yellow bars continue to show the post reform period and can be compared with the blue bars representing the pre-reform months, with the red bars covering the time of reform itself.
Dealing first with interpretation of the new CNFs numbers themselves, while there is clearly a difference between 74,000 and 66,500, there are as expected some pointers towards a continued upward movement having taken place. 74,000 was the highest number of new CNFs in a single month since April 2013, when there was specific reason to lodge CNFs that month in 2013 before the reductions in Stage 1 and 2 costs took effect. And of course it is well above the pre-reform average of 67,500.
What though do we make of the reduced number of new claims in August, down to 66,500, and at a level below the pre-reform average? In our view, the figure of 66,500 for August is less significant in the overall scheme of things than the high of 74,000 for July. One reason for this is that the August figure will have been affected by both holiday absences, as well as the reduced number for working days for those claimant handlers not on holiday. Due to the way that weekends fell in August, as well as the bank holiday, there were only 20 working days that month as opposed to 23 in July. If you do the maths and add weighting for a notional extra 3 working days on top of the August figure of 66,500, then in fact that figure is increased above the July number.
And anyway, August is usually a quieter month. Over the last two years at least it has been a month of lower new claims numbers than the preceding Julys.
Incoming changes affecting portal numbers
One reason for another peak in the number of new RTA CNFs over the months we are looking at now, as well as during the month of September, will be the potential effect of the first stage of the latest MoJ reforms on whiplash, which will apply to new CNFs lodged on or after 1 October. Some claimant lawyers at least, and especially those who will see the changes coming in as at that date as a threat to the way they operate, will be submitting higher volumes before 1 October.
Those process changes will see the move towards restrictions on obtaining more than one medical report the cost of which will now be fixed in all cases; the provision that the writer of it should be independent from past and future care of the claimant; and the opportunity for the defendant to submit its version of the accident to the medical expert when it wishes to do so.
Latest Department for Transport data
The graph above shows the latest data from the DfT in relation to vehicle miles and accident numbers, a quarter in arrears to allow the effect of changes to feed through to numbers of new CNFs. Since we looked at that data last, we have one extra quarter for vehicle miles and two quarters of accident numbers. The number of miles travelled has dropped off somewhat over the last quarter, though is still near to its peak. The number of accidents has also fallen, and continues to be at around the same level as two years ago. The explanation for the difference between these two sets of data is that the casually rate per vehicle mile has fallen by 2% over 12 months.
The bottom line has to be that we expect that in September another above average number of new CNFs because of the in-coming whiplash process changes. The stabilising DfT accident data now available might suggest a longer term levelling off in claims numbers beyond that.
Other RTA trends
We have commented before on the increasing number of RTA cases moving to stage 3. The number of court packs in July was remarkable – 3,044, the highest ever by a considerable margin. Though the August figure was lower at 2,562, that number is the second highest on record. The number of new court packs has doubled in a year. There can be no doubt that claimants and their lawyers are much keener in searching not only for any extra damages, but also for the additional costs, of taking claims to stage 3.
At the same time, it follows that it is unsurprising that levels of PSLA offers in RTA claims continue to edge up, to £2,567 in July and to £2,571 in August.
There is now 13 months’ data for each, and gradually the data is becoming more statistically significant. The number of new CNFs to each of the 3 portals continues to rise. July was the highest month yet for all portals, and in each case August showed a drop off, for no doubt the same reason as for RTA. The peaks of monthly new claims are now: PL – 7,332, EL – 4,696, and for EL disease – 1,744. Over the first 12 months, the numbers of new CNFs were: PL – 54,000, EL – 33,000 and EL disease – 12,000. Settlement numbers over 12 months are though much closer as between PL at 1,871 and EL at 1,856. EL disease is much lower at 300.
As to PSLA, the casualty numbers continue to out strip RTA (£2,571), and have now reached peaks of £3,106 for EL and £3,309 for PL. EL disease reached a peak of £4,877.
No change for RTA claims, sticking firmly to the 50% level. But some difference is now emerging as between EL and PL. PL is like RTA stabilising at the 50% mark, but retention rates for EL are falling and only 1 in 3 EL claims is now being concluded in the portal.
Because of the lower number of EL disease claims the data is more volatile, but retention rates have continued to drop. Apart from July’s blip, the figure remains under 10%, and is now well under that level. This does not point to a successfully operating EL disease portal and it continues to give rise to concern that the current processes are unsuitable for that type of claim and continue to require reform.
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.