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Double portal data release continues to show decreasing volumes of new claims but higher damages levels

8 November 2016

The latest release of their MI is another of those rare occasions when we are being treated to double rations by Claims Portal; we have the release of data not only for September but also for the recently concluded month of October.

Summary

Analysis of longer term trends continue to show reducing volumes into the RTA and all casualty portals.

The MI also continues to show increasing use of stage 3 and corresponding rising levels of PSLA settlement values, but the latest data shows a significant leap in RTA quantum which has now risen 10.5% since last year’s Judicial College Guidelines were published.

New RTA claims in September and October

The general pattern at this time of year is to have seen a fall in new claims volumes in August, followed by month-on-month rises in both September and in October. We had already seen in our last analysis that this year was proving unusual as instead of a fall in the month of August, we had in fact seen volumes increase that month.

The corollary of that has been seen with the new RTA data. The increased volumes in August have led to a fall between that month and September, though the usual trend returns with an increase between September and October.

In September, there were 66,516 new claims submitted, a fall of 3.2% after August. In October, there were 68,169 new claims, an increase of 2.5% over September.

Abc1

The two new months of data are below the 2015/16 average of 71,491 by 7.0% and 4.6% respectively, and are also below the average over the first six months of 2016 of 70,186 by 5.2% and 2.9%.

The monthly number of new RTA claims into the portal has now not hit 70,000 since April. Measured over the last six months since then, the average monthly new claims figure now stands at 67,443, that is 5.7% below the corresponding average (71,491) for 2015/16.

New RTA claims 12 months cumulative

Abc2

The two bars on the right of this graph show an ongoing decreasing trend when the data is looked at on this basis. Specifically, over the last two months the falls have been from 839,421 to 832, 510 in September, and then down to 825,393 in October. Those decreases were 0.78% and then 0.85%.

Since the peak of 880,466 in August 2015, there have now been decreases in 12 of the last 14 months. The current level of 825,393 is 6.3% below that peak.

On the other hand, this form of measurement of new claims volumes reached its lowest level in April 2014 at 771,711 as the LASPO reforms seemed to have had their maximum effect. That is before the claimant market’s response to the new regime started having a measureable effect. The current level of new claims measured over the preceding 12 months now stands at 7.0% above that level.

We are therefore currently in the position on a 12 month cumulative assessment where volumes remain closer to the August 2015 peak than to the April 2014 low point. However, our expectation is that unless the next portal data released for November shows an unexpected result, we will at that point see a further fall on this measurement to a position where the level is then closer to the low of April 2014 rather than to the high of August 2015. Additionally, that trend is perhaps likely to continue to develop further unless further external influences have effect.

New casualty claims in September and October

We had also seen untypical increases in volumes in these 3 portals in August as with the RTA portal. Despite that, in both the PL and the EP portals there were further increased levels in September, followed by falls in October. While in EL disease the rise in August was followed by falls in both subsequent months.

Abc3

New PL claims

As to the detail, in PL the number of new claims rose 4.8% in September to 5,750, but then fell 7.6% to 5,313 in October.

When compared to the 2015/16 average of 5,857, September was down 1.8% while October was down 9.8%. While if the comparison is to the first six months of 2016 at 5,524, then September was higher by 4.1% while October was lower by 3.8%.

The average over the last six months for PL now stands at 5,434, lower than both average figures used as a comparison in the previous paragraph.

New EL claims

Turning to EL claims, the number of new claims rose 1.1% in September to 4,423, but then fell 6.9% to 4,116 in October.

When compared to the 2015/16 average of 4,375, September was up 1.1% while October was down 5.9%. While if the comparison is to the first six months of 2016 at 4,247, then September was higher by 4.1% while October was lower by 3.1%.

The average over the last six months for EL now stands at 4,216, also lower than both average figures used as a comparison in the previous paragraph.

New EL disease claims

In the case of EL disease, after the 8.7% increase seen in August, there were falls of 4.0% to 853 in September and of 1.8% to 838 in October.

Comparing to the 2015/16 average of 1,665 these were falls of no less than 48.8% and 49.7%, while if the benchmark is the average over the first six months of 2016 then the decreases were 22.0% and 23.4%. The average for the last six months has fallen to 877.

The position is no doubt more extreme with EL disease than with the other casualty portals as in addition to the same factors applying albeit in a more obvious way, there remains the potential for pursuing these claims outside the EL portal such as by the inclusion of more than one defendant.

 

New casualty claims 12 months cumulative

Abc4

The longer term trends of falling volumes as seen on this analysis remain across all three casualty portals, though the rate of decrease varies. In order, the rate of decrease is greatest with EL disease, then with PL, and finally EL.

In PL, there have now been 16 consecutive monthly falls, with the current level of 65,358 new claims over the preceding 12 months being 15.5% below the peak of 77,384 in April 2015.

With EL, there have been monthly decreases in 9 of the last 11 months, with the current level of 50,269 being 8.4% below the September 2015 peak at 54,879.

In the case of EL disease, we now have 10 consecutive monthly falls, so that the current level of 12,963 is no less than 43.9% below the highest level of 23,113 seen last December. That steep rate of decrease can be seen in the green bars on the right of the graph above.

Retention rates

We continue to assess retention rates in the graphs below by comparing the number of claims successfully concluded at stage 2 with those entering the process at the outset.

On a 12 month cumulative basis showing longer term trends the position is as follows:

Abc5

While if looked at month-by-month, the data looks like this:

Abc6

There are increased retentions this month for RTA though that has also been seen previously, and for EL disease over the last two months.

On the longer term view, RTA remains with a retention rate of between 40-50%, EL and PL are either side of 20%, while EL disease has only a minimal retention rate.

RTA settled claims and RTA claims still in the portal

The number of settled RTA claims as shown on the following graph. Clearly the number is heavily influenced by the reducing volumes entering the portal. But the number of stage 2 settlements reached in October at 16,012 was the lowest since the portal was in its infancy.

Abc7

While the number of RTA claims which have entered the portal but are not identifiable as having left it continue to rise at a steady rate despite Claims Portal’s data cleansing exercise which was reported as having begun on 23 May.

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RTA stage 3s and PSLA levels

With RTA claims, widespread use of stage 3 continues, though not quite at the peak seen in August. Stage 3 settlement packs were prepared in 6,189 cases in September and in 6,026 in October. These are the second and fourth highest ever.

The popularity of stage 3 can be seen from the fact that of the settlements reached within a combination of stages 2 and 3 in the last two months, 27% were at stage 3. Slightly lower than the 28% seen in August but we expect this generally upward trend to continue.

Abc9

But it is in relation to PSLA settlements that the line on the graph above shows a significant new trend. While there was an existing upward trend seen since the 13th edition of the Judicial College Guidelines was published late last year, the rate of increase has started to greatly increase.

In September the average stood at £2,704, while in October it was £2,851. These are the two highest levels reached to date.

When compared to the immediate post 13th edition average of £2,580 (November 2015 to February 2016) the current level is higher than by no less than 10.5%. This may well increase further due to the 20% increase in the valuation of certain minor injuries which the JCG came forward with at that time.

Casualty stage 3s and PSLA levels

Abc10

High use of stage 3 is not confined to RTA but extends into PL and EL as well. Highest ever levels of stage 3 packs were reached in September at 77 in PL and at 64 in EL. The justification for high stage 3 usages will be the same as for RTA though in terms of percentages the proportion of settled claims going as far as stage 3 is lower than for RTA.

EL disease remains a different proposition with only 3 and 2 stage 3 packs prepared in September and October respectively.

PSLA levels remain high in PL and EL, though they do not show the same significant increases as RTA over the last two months, and both (PL - £3,909 and £3,818; EL - £4,288 and £3,818) remain slightly below the peak levels reached in August at £4,050 for PL and £4,324 for EL.

EL disease PSLA levels were £3,320 and £3,697 in September and October.

In the future, PL and EL PSLA figures are likely to continue to rise further as we have seen is the case with this set of data for RTA, though perhaps the extent of the increases will not be as great, as the highest JCG increases impact less directly on PL and EL types of injuries.

Contact

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

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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