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Latest insights into claimant behaviours from Portal data

The usual MI from the Portal Company for February which emerged late yesterday afternoon continues to demonstrate the same trend we saw last month of high volumes of new claims being submitted to the portals. In the case of the RTA portal there is a small reduction from January’s high level, but the casualty portals all show increases. While the extent of those casualty increases is less than for January, they still seem to be significant.

This month’s increases/decrease in percentage terms are as follows, with last month’s increases in brackets:

  • RTA -4% (+22%)

  • EL +5.5% (+22.5%)

  • PL +2.5% (+19.5%)

  • ELD +32% (+39%)

In February there were 20 working days as compared to the 21 in January, a reduction of 5%. Looking at the RTA figure in that light, it could be said there is no real decrease.

And in the case of the casualty portals, in fewer working days more CNFs have been lodged.

The trends as to claims volumes seem to us to continue to point in an upwards direction, though the influencing factors do vary to some extent when we look at each claims type separately.

RTA new claims

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In February there were 74,800 new claims to this portal, which as we have seen is a 4% drop from January. Every February has always had a lower number of new claims than the preceding January. This is probably due to the fact that January’s number will be high as it will contain some “catching up” from the seasonally affected month of December, as well of course the fact that February will be a shorter working month.

But this month’s data is not only the highest February number on record since the RTA portal opened, but also shows the smallest percentage drop from January’s figure seen to date as well.

Medical experts

Phase 2 of independence of medical experts

We can by now be sure that this factor will be having an effect. Subject to the process being blown off course by any judicial review, phase 2 will be implemented for new CNFs submitted to the portal in any soft tissue injury claim on or after 6 April. The detail of the changes as they now stand can be seen here from Nigel Teasdale, our Head of Motor, and MedCo director, where he considers   MedCo - the latest developments 

As we have seen so often in the past, in the face of impending change, claimant lawyers will take advantage of current processes as much as possible by bringing forward to before the key date the lodging of claims to the portal, following which a “shadow effect” with lower volumes will be seen for the next couple of months.

Inevitably that will happen again, so we expect March’s data to show higher volumes of claims again, and to an extent April will be affected too. This temporary effect makes it more difficult to look at longer term trends so we will have to park that part of the analysis for the next few months. 

EL and PL

EL accident and PL new claims

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The increase in the case of EL accident is from 4,559 new claims in January to 4,814 this month. For PL the rise is from 6,299 to 6,455. The new EL number is the second highest month seen to date; in the case of PL it is the fourth highest.

For both these 2 portals, the month with the highest volume of new claims was October 2014. Steadily, the numbers are heading back towards that level, and these 2 portals are showing similar trends to one another as far as new volumes are concerned as can be seen from the graph above.

EL disease new claims

In January there were 1,825 new claims. This figure increased last month to 2,410, the highest monthly total ever. The number of new claims to this portal has now increased at first 39% and now 32%, over the last 2 months.

Looking at the data another way, over the 5 months between August and December last year the number of new claims to the ELD portal averaged 1,470 per month. The figure we are at now shows an increase of no less than 64% beyond that level.

We know that unfortunately the practices of some claimant lawyers can involve them identifying a potential additional defendant in a disease claim specifically so as to avoid the use of the portal, and where that happens, that significant volume of claims will not be captured in the portal data. We can safely assume that the increasing number of ELD portal claims is not due to a greater proportion of claimants deciding to bring claims solely against one employer.

Reasons for more ELD claims

Instead, the likely reason for the increase in the number of ELD claims is simply the increased level of interest on the part of claimant lawyers in this type of claim, leading to more activity in generating those claims. We may simply now be at the stage where the knock on effects of that have reached portal numbers as claimant lawyers recognise that to take those claims forward, if there is only one defendant, the first step has to be the CNF.

That said, the generally low retention rates for this type of claim within the portal show the key driver working here, as it will ultimately remain the case that more claims into the ELD portal will mean more claims dropping out, in turn onto hourly rate costs.

Portal retention rates

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Our cumulative graph partially hides the upturn in the retention rates in all 3 casualty portals this month, caused in turn by increasing volumes of claims into the portal, as well as generally fewer claims dropping out at stage 1. We will need to monitor these trends to see if they become significant over the months ahead.

Use of stage 3

Last month, 3,618 RTA claims proceeded to stage 3, the highest number yet, and a 5% increase from last month. The number of this type of claim going to stage 3 in February 2015 was double the number than did so in February the previous year, which in turn was double the number from February 2013. The trend is clear that much increased use of stage 3 is here to stay. See the bars on the graph below.

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For claimant lawyers the additional costs of proceeding to stage 3 will be valuable. Whereas the fixed costs in a £1-10k motor claim for stages 1 and 2 are £500, the stage 3 costs are an additional £250, and if an oral hearing if requested then this is doubled to £500 including the advocacy fee. So stage 3 gives the claimant solicitor the chance of doubling his/her income if the claimant wins in recovering more than the defendant’s portal offer. Many claimant solicitors think this is sensible business planning, the data makes clear.

While court fees for issuing proceedings have of course recently been substantially increased for claims worth over £10k, that increase will not affect the level of fee payable to use the stage 3 process which remains unchanged at £280, and so that factor will not operate as a brake on this behaviour.

In the PL portal, the number of cases reaching stage 3 rose to 43, again the highest number ever, but this will mainly be due to that portal gaining maturity, and the number will continue to rise.

The EL position is more complex. Over the previous 2 months of December and January, the Portal Company reported exceptionally high numbers of EL claims reaching stage 3 which we thought looked like a statistical quirk. In fact, the Portal Company has now confirmed those 2 figures were not accurate and has issued corrected data. The new figures are December – 10, January – 22, February – 20. Again, these figures will increase as that portal matures.

The ELD portal data continues to be volatile due in part to the low number of claims in it, and the number of new stage 3 cases fell to 5, the lowest level for 7 months.

PSLA levels

Stabilisation is the rule, and there is increasing evidence for that. In the RTA portal the average is now £2,572, almost exactly the same figure as 6 months ago. See the flattening red line on the graph above. The reason for so many more claims reaching stage 3 does not necessarily seem to be linked to higher damages therefore, and the pursuit of the additional stage 3 costs seems rather more likely.

The casualty PSLA figures are also stabilising, in EL the figure is now £3,301, in PL it’s £3,340 (and is by a small distance the highest ever), and in ELD the figure has reached £4,611.

It will be interesting to see the next Judicial College Guidelines which are due in the autumn and whether this is the next inflationary factor we should expect.

Contact

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

Previous Portal Data analysis

Latest Portal Company data shows trends which are not easy to ignore - February 2015

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

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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