Latest Claims Portal data shows an upturn in claims volumes but the longer term trends continue to point marginally downwards
Late last week Claims Portal Limited released their claims process MI for the month of February. The data on new claims volumes shows in the case of RTA, EL and PL claims the same two trends across all of those portals.
Firstly, on a month-by-month basis there was an increasing number of new claims when the data for February is compared to the preceding month. On the other hand, on the 12 month cumulative form of measurement looking at longer term trends, there are continuing falls in new claims volumes, which is now additionally apparent in EL disease as well.
Analysing the data further allows us to see that these conclusions are not in fact inconsistent with one another, but clearly the factors influencing month on month changes will need to become established in order to impact on the longer term picture.
New RTA claims month-by-month
In February there were 72,750 new claims submitted to the RTA portal, an increase of 2,100 or 3% from the number for January. However, at 72,750, the number of new RTA claims is still 1,250 or 1.7% lower than the average seen over September to November 2015, those months usually being relatively a stable part of the calendar and so able to form the basis of comparison.
Additionally, the rise which we have seen from January to February this year is the first time that there has ever been an increase between those two months since the RTA portal was established. But in considering whether that is significant, we need to have in mind that in 2016, there was one more working day in February than in January – one more extra day for claimant lawyers to submit their clients’ claims into the portal process. We have seen this factor being a relevant one in the past.
In 2015, the position was reversed, and there was one more working day in January than in February. So we should be cautious in seeing the increase between January and February as significant based only on last month’s data where the increase may be explicable by this factor.
New RTA claims 12 months cumulative
Adding February’s data into the equation, we continue to see a marginally decreasing number of claims when this form of measurement is used.
Following the pre-LASPO peak in April 2013, we firstly saw 12 consecutive monthly falls, followed by 17 consecutive monthly increases. Since then, while a new trend was at first not easy to identify, we have now seen 4 out of the last 5 months showing a fall. The latest data can be seen on the extreme right hand side of this second graph.
Over the last 12 months till February 2016, the number of new RTA claims stands at a total of around 869,000, which is 1.6% lower than the pre-LASPO peak level of 883,000.
That drop of 1.6% is highly likely to become a greater fall with the next monthly data release, as March 2016 replaces March 2015 in the 12 month assessment, and where March 2015’s level was unusually high because of action taken by claimant lawyers who wanted to beat the timeline for the implementation of phase 2 of the MedCo reforms which had effect for new CNFs lodged after 5 April 2015.
Latest influencing factors
The position as to new claims numbers is therefore a variable one depending on the form of measurement we choose. In reality, we are again in a period of transition as the claims landscape is affected by impending reforms. The effect of those reforms is likely to be greater and more wide-ranging than seen with LASPO and Jackson.
May looks as though it will be a key month as we look towards a likely claims landscape which the government seems to want to have in place well before the next General Election is due in 2020. The delayed consultations now seem likely to be issued that month both in relation to the Autumn Statement changes, and as to the widening of the fixed costs regime.
Looking at the key Autumn Statement changes which will impact significantly on portal claims, it could be said that there remains extra reason for claimant lawyers to take on new claims now and over the forthcoming months, before those reforms are implemented.
But on the other hand, the substantial additional uncertainty created by the likely effect of the reforms, and the further changes which claimant operations will need to make to survive will for some firms inhibit their ability to take on additional volumes. We will have to wait to see how these factors operate together to produce an effect on future claims volumes in the months ahead.
New casualty claims month by month
Both the EL and PL portals showed increases in the latest data as shown on this third graph, as we saw with the RTA portal. Both EL and PL showed second consecutive monthly increases. Not only that, but similar to the position with the RTA portal, this was against the background of little or no increases between the months of January and February in the past.
In the case of EL claims, there were 4,352 new claims in February, a rise of 7.7% over January. In PL, there were 5,832 new claims in February, an increase of 10.8% over January.
But in both cases, the number of new claims remains lower than seen over the September to November period last year, where the averages were 4,533 for EL and 6,113 for PL.
EL disease is in an entirely different position. In February, there were only 1,236 new cases submitted to that portal. This was a 10.4% drop from January’s level, and the 4th consecutive monthly fall. Indeed, the level of new claims of this type entering the portal is the lowest for 2 years.
New casualty claims 12 months cumulative
This data shows continuing decreasing trends, as with RTA but more pronounced.
In the case of PL, there have now been 8 consecutive monthly falls on this measurement, and with EL claims there have been 5 consecutive monthly decreases. For the first time, there is also a clear EL disease monthly decrease as well.
The same influencing factors highlighted above in relation to RTA claims will be relevant with casualty claims too, though the impact of the proposed Autumn Statement reforms specifically on this type of claim should be less than with RTA.
The graph shows 12 month cumulative figures. RTA and EL accident are showing slightly downward trends, PL seems static, while EL disease has for the first time fallen to below 10%.
In a situation where it seems only a minority of disease claims are entering the EL disease portal, where that number is at its lowest for 2 years, and where the cumulative retention rate is below 10%, the imminent arrival of the report of the Civil Justice Council NIHL Working Group which will look to improve the handling of this type of claim is of particular importance.
Over the last 7 months the numbers of claims which have been known to have settled have been at lower levels than historically. At least last month’s figure showing an increase has reversed the trend after 3 consecutive monthly falls.
Claims Portal’s clean-up exercise
Up until now, Claims Portal has not as far as we are aware had a process for removing claims from their systems which originally entered one of the portals, but are no longer active. The graph below shows that the problem has been a growing one. In relation to RTA claims, there are now nearly 1m claims which have entered the RTA portal, but have not been notified as having been concluded in one way or another.
Starting from the end of this month, a clean-up exercise is to be undertaken lasting the remainder of the year. Claims Portal is looking to identify claims which are not in fact active, yet remain in the portal. They have developed a matrix of periods of time after certain steps have been taken in the process, so that if a claim has not been taken out of the portal but that time has elapsed, the claim will be removed from the portal as part of the clean-up exercise.
Some of the periods of time are as short as 30 or 60 days; others are 1 year or as long as 5 years. View the Claims Portal Data Cleaning Exercise for the detail.
As the RTA portal is less than 6 years old it may take some time for this process to make a difference.
Why the need for a data clean-up?
The problem has probably been caused in the main by poor housekeeping on the part of claimant solicitors. Claims which are not proceeding or have settled outside the formal stage 2 processes have simply been allowed to remain in the portal and give the appearance of being a live claim, though they may not be.
Going forward, Claims Portal advises greater use by claimant lawyers of the exit and settled functions. In fact, it seems to us that while “the missing million claims” will over time be reduced in number, there are likely under current processes to be a significant number of inactive claims remaining in the portal for some time.
Stage 3 usage
Due no doubt to the extra costs advantages from use of stage 3, usage remains increasingly popular. In the case of RTA claims, in February 5,386 claims had a stage 3 pack prepared, the highest ever, and an increase of 8% over the level we saw in January.
Usage of stage 3 in EL and PL also remain comparatively popular, at 37 and 51 matters respectively. In the case of EL disease though, there were only 2 packs prepared, the lowest in 2 years, and another indication of an unsatisfactory process for that type of claim.
In the case of RTA claims, we are still looking for any clear evidence of an impact from the publication of the 13th edition of the Judicial College Guidelines last October. The February data shows a fall of £15 in the average PSLA figure to £2,586, which is consistent with settlement levels seen before October.
In the EL and PL portals there are relatively high PSLA levels though. EL was its highest ever at £3,951 while PL was at the 5th highest level at £3,761. EL disease on the other hand remained at a low level, at £3,742.
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.