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June's portal data shows increasing volumes despite the latest MoJ reforms

20 July 2015

The latest MI from the Portal Company for the month of June which was published late on Friday afternoon shows that last month there were increasing volumes of new claims into each of the RTA, EL, PL and EL disease portals.

In the case of the RTA portal, the data shows for the first time a Government measure designed to have an effect on reducing claims volumes through excluding unmeritorious claims, namely the introduction of the obligation on whiplash claimants to carry out an askCUEPI search before submitting a CNF, seemingly having no effect on volumes.

We also see this month a return to the previous pattern towards increasing use of the stage 3 processes in the case of RTA and EL.

Volumes in RTA

In June there were over 71,000 new RTA CNFs submitted. That is a rise of 3.5% from last month’s figure. It is the first rise after 2 consecutive months of falls.

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But it is easier to identify trends if we look to the rolling 12 month cumulative data. On this basis we can see that we now have the 14th consecutive monthly increase:

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The period which we identify as being affected by the LASPO reforms, between October 2012 and October 2013, shows a rising number of new RTA claims into the portal up to April 2013, and then a corresponding fall. The explanation for that position has always been clear, as in the earlier part of that time the claimant market operated so as to harvest new claims within a timescale which meant that they could be conducted on the more generous pre-LASPO regime, with a corresponding drop-off in activity in the later part of the period while the cases were assimilated.

But in the post-LASPO period the 14th consecutive monthly increase is striking, as is the fact that the cumulative 12 month figure reached last month of 873,000 is now almost as high as the previous peak reached at the height of the LASPO reforms in April 2013 of 883,000. 

The Claims Management Regulation Unit

The CMRU of the MoJ earlier this month published its annual report for 2014/15, and it is interesting to compare its findings with the new claims volumes data.

In 2012/13, the turnover of CMCs was £354m, a period which included the pre-LASPO period, so that the figure itself may have been artificially increased by the peak in pre-LASPO activity. In 2013/14 that turnover of CMCs fell 33% to £238m, but in the newly published data it rose 30% up to £310m.

The CMRU noted in its conclusion that stabilisation in the CMC market seemed to have been achieved “after adjusting to the effects of the major civil justice reforms introduced in 2013.” Indeed the current level of CMC activity is no doubt one of the reasons why we are seeing an ongoing increase in the number of new RTA claims nearly 2 years after the end of the LASPO-affected data.

Volumes in casualty

After 2 months of falling volumes across the 3 casualty portals, this month shows increases as follows:

  • EL up 12.2%

  • PL up 18.4%

  • EL disease up 7.9%

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For EL and PL, most of the extent of the falls over the last 2 months have been regained this month. In reality, all 3 portals continue to mature, and of course only a proportion of EL disease claims enter the portal anyway because of the wide categories of excluded claims including in particular cases where there is more than one defendant apparently being proceeded against.

Retention rates

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The 12 month cumulative data shows RTA at near to 50%, EL close to 30% and PL at around 20%. The EL disease figure based of course on still limited data has increased to 30%, the same as for EL accident, but this of course is on a limited sample and ones which are single defendant only.

While the cumulative retention graph masks individual specific months of data, in June the RTA retention rate fell 6%. A recent increasing trend has been the use of the exit function by claimants’ solicitors on the grounds of what they argue is complexity, often on claims including credit hire. Sometimes they will exit claims without giving details of the allegedly complex issue.

We will see whether this trend becomes statistically significant in terms of data, but insurers will continue to be alive to potential abuses of this type, whether in relation to credit hire, or other categories of special damages which are controversial.

Court packs and stage 3

The only data maintained by the Portal Company is of the number of court packs prepared, rather than of actual Part 8 proceedings being started at stage 3 of the process. The trend towards the increasing use of court packs in RTA claims had been seen to be significant over the last 2 years, with the number doubling between spring 2013 and spring 2014, and then doubling again between spring 2014 and the same time in 2015. Then the trend was reversed in the data for April and May with falls of 1% and 3%.

In June, the court packs data shows a return to the former pattern with an increase of as much as 28% in RTA. The number of RTA court packs prepared in June was 23% higher than the next highest month ever. Perhaps the data for April and May was merely a blip, and that the attraction of stage 3 costs remains as strong as ever to claimants or to their lawyers?

The same significant increase in court packs was there in EL too, where the number was 43, up 72%, and also at a level where it was 72% higher than the next highest month.

In PL and EL disease the number of court packs remained stable.

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General damages

A key difference was seen between the RTA and casualty data this month. In the case of RTA, the average settled PSLA figure was £2,566, essentially static over the last 14 months as the graph above shows, as we head towards the publication of the next Judicial Studies Board Guidelines later this year for what will presumably be the next impetus.

In the case of the casualty portals, there were increases as follows:

  • EL up 2.5% to £3,545

  • PL up 5.4% to £3,633

  • EL disease up 18.7% to £4,746

In the case of EL and PL these are the highest ever figures, while in the case of EL disease the data has been more volatile but has now returned to where it stood 12 months ago.

Contact

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

By Simon Denyer

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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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