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Latest Portal Company data shows trends which are not easy to ignore

19 February 2015

Yesterday’s newly released data from the Portal Company seems to confirm the view that the reductions in the number of new claims which we had seen to all 4 of the portals over the last 2 months were merely temporary, and capable of being explained by short-lived factors such as the need for “seasonal adjustments” over the Christmas period.

Significant increases

In general, the number of new claims entering the RTA, EL, PL and EL disease portals are the highest seen over the last 3 months. The rates of increase in the new claims data for January when compared to December show the following increases, each of which looks significant:

  • RTA 22%

  • EL 22.5%

  • PL 19.5%

  • ELD 39%

A starting point when considering whether there is a need to make adjustments is often seen as the number of working days per month. While there were 20 in November, and we could say (depending on the actual Christmas holidays taken) 18 in December, last month there were 21. This aspect is worth taking account of, but it requires only a limited adjustment to do so, and it cannot by itself explain the size of the increases across all of the portals. So we need to look further for an explanation.

Latest data

First, let’s look at the increases.

RTA new claims:

SU 190215 1

Casualty new claims:

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New RTA CNFs

Last month saw 78,300 new CNFs lodged to the RTA portal. There have only ever been 5 higher monthly figures. Of those 5 higher months, all are explicable by temporary phenomena. 4 were attributable to the immediate pre-LASPO period, while the fifth was October 2014 and was identified by the Portal Company as being a month affected by double counting as claims were resubmitted due to changes in law firm ownership and naming, then mainly due to the creation of IME Law.

We looked pre-LASPO at a monthly average of new claims at around 67,500. Last month’s figure of 78,300 was above the pre-LASPO level by as much as 16%. While it has to be accepted that the £10-25k claims which have of course been added to the process since the pre-LASPO average was calculated need to be taken account of in the comparison, they are unlikely to be worth more than a couple of per cent, so the net increase is say 14% when last month’s figure is compared to pre-LASPO.

New process

Any affect from the incoming process changes?

Is it possible that the incoming changes on increased independence of the medical process are affecting the increase? In our view, yes it is, though we are seeing any temporary effect relatively early. It will only be for new CNFs lodged to the RTA portal on or after 6 April that it will be necessary for the medical report to be obtained from a medical expert selected via the new MedCo Portal when dealing with, as they are now called, “soft tissue injury claims”.

We do expect to see another peak of claims being filed with the Portal Company in the months of February and March, as well as in the first few days of April. 5 April is Easter Sunday. Perhaps we should also expect “Easter is cancelled” to be the standard message in some claimant law firm offices as that time of year approaches.

We will need to move past Easter to see if the 78,300 which we have seen this month does in fact have an element in its number of another bulge caused by yet further claimant measures being taken to step around incoming process changes which those businesses see as detrimentally affecting current processes.

DfT data

The latest quarterly data, for Q3 of 2014, has been released since the last monthly set of Portal Company data was released, and has been included on the RTA new claims graph above. Broadly, this shows when compared to the same quarter 12 months before an increase in vehicle miles travelled of 2%, and an increase in road casualties of 5%. We superimpose those trends over the months where the Portal Company data is likely to be affected by them, and it therefore follows that the increase in the number of RTA claims seen this month may at least in part be affected by the increases shown in the DfT data.

Casualty claims increase

New casualty claims increasing in number

The position here as far as the number of new claims is concerned has similarity not only with the RTA position, but between the casualty portals themselves.

At 6,342 and 4,594 respectively, the number of new claims into the PL and EL portals show a monthly increase after 2 successive falls, and in both cases the January figure is the 4th highest ever.

In the case of EL disease, the number of new claims at 1,841 is the highest ever, and comes on the back of 3 monthly falls.

The monthly increases seen this month when compared to last are set out above at the start of this message and are 19.5%, 22.5% and as much as 39% respectively.

As can be seen on the casualty new claims graph, this month’s data reintroduces some normalisation into the new claims numbers. The extent of the increases seen this month should not be expected in future months, but instead we expect to see new claims numbers returning towards the monthly averages seen previously.

Retention rates

The usual stable picture is seen for RTA claims. For all 3 casualty portals there is an interesting increase in retention rates seen this month. The drops in retention rates seen over recent months in all the casualty portals have been arrested.

SU 190215 3

We may ultimately reach the position where there will be stabilisation of these rates, in the case of EL at about 40% and PL at something near to 30%. The fly in the ointment will remain EL disease – with a retention rate of only 20% can that low level of claims successfully concluding in that portal really be seen as support for the current process, or instead does it support the need for reform towards a new process which is more specific to the issues raised in disease claims?

Court packs

The drive towards taking claims to stage 3 continues. There are trends worth noting for both RTA and for EL accident in particular.

SU 190215 4

Stage 3

RTA claims at stage 3

As you can see from the bars on this graph, the number of cases moving to stage 3 in the RTA portal rose 7% to 3,446 after 2 months of stability in the numbers. The level of increase of RTA claims moving to stage 3 over the last 12 months is as high as 84%. We know that this tendency has existed in RTA claims now for over 2 years, as in fact the rate of increase was 98% over the first of those 2 years. Though the second year’s increase is slightly more modest at 84% when compared to 98%, it remains a worry.

EL accident claims at stage 3

In the case of EL accident, there were 118 cases moving to stage 3 last month. The previous month there had been 96. Over the entire existence of that portal up until then there had only been 86 cases moving to stage 3. So there has been a big increase in proportionate terms in EL accident cases moving to stage 3 over the last 2 months.

PL is now lagging behind EL. While there have been more than an extra 50% of claims entering the PL portal as compared to the EL portal, only 225 PL claims have moved to stage 3, as compared to 300 EL accident claims.

Our suspicion is that this comparison as between PL and EL accident is likely to be a statistical quirk. We see no reason why the 2 types of claim will be treated any differently for this purpose, when it comes to deciding for the claimant whether the case should move to stage 3.

Stage 3 becoming a usual stage for claims?

But what we do expect to see is that in casualty claims as with RTA claims, there will be a drive towards stage 3 being used regularly, if not almost becoming the norm, largely because of the attraction of the additional fixed costs available there. It should not be surprising if the business models of claimant operations develop still further to this increasingly becoming standard behaviour, and to claimant handlers being driven to take cases to stage 3 at every opportunity.

The ratio of settlements at stage 2 to claims being taken to stage 3 currently looks like this and in the light of what is reported above, the result showing the high likelihood of RTA claims as well now as EL accident claims reaching stage 3 should not be seen as surprising.

SU 190215 5

PSLA increases

There are increases across the board. RTA is up to £2,594 with an increase of 7.5% over the last 12 months. Still significant, though not as large as the increase figure of 17.5% over the previous 12 months. The court packs graph shows the slowing rate of a still significant rate of increase.

PL is up to £3,312, the 2nd highest ever. EL accident is up to £3,379, its highest ever and a 3rd successive monthly rise. EL disease is up to £4,384, a 2nd successive monthly rise.

These increased PSLA figures tend to follow from the greater use of stage 3.

The market

The market, Slater + Gordon and Quindell

We no longer call them Slater & Gordon, but Slater + Gordon, the ampersand having being replaced by a plus sign. More advertising from them is now under the slogan “Your case is our cause”.  They continue their due diligence on the potential for acquiring the operating assets of Quindell as part of their exclusive talks. They have also announced an intention to acquire Walker Smith Way as well as Leo Abse & Cohen.

Elsewhere, there is talk from claimant lawyers of the move away from pre-LASPO cases taking longer than expected, and of the run-off of those claims lasting longer than predicted, and of a temporary buffer against the full force of the reforms still lasting. A recent conference organised by First4Lawyers, a claimant marketing collective, warned though of “carnage” hitting the sector later this year as we moved nearer to the full force of the reforms being felt.

The future

It remains to be seen how far the sector will have finally moved towards the required redefinition in the case of the claimant operations which still need it, by the time that these sorts of effects will finally be felt in all cases, in order that we can see to what extent any failures in the sector, whether from large claimant operations or from smaller ones, will impact on new claims numbers in the short term. Any such effect is indeed likely to be temporary only where the underlying trends as to new claims number tend to show both confidence in the sector, as well as the data pointing towards increasing maturity of processes designed to maximise the remaining opportunities presented.

Contact

For more information please contact Simon Denyer on +44 (0)161 604 1551 or at simon.denyer@dwf.co.uk.

Previous Portal Data analysis

Latest motor and casualty trends from yesterday's portal data - January 2015

What are the conclusions from today's portal data? - December 2014

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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