Annual CRU data confirms entrenched claims culture but continuation of last government's reform programme looks likely
A month later than usual the DWP have published their usual annual claims data for the 12 month period up until 31 March. We can now examine it both alongside the data for previous years, and against similar data from Claims Portal seeking to identify current trends.
The new CRU data of the number of new claims is as follows:
The newly available CRU data shows a stable yet high number of both total claims volumes as well as RTA volumes. The same conclusions of high and relatively stable claims numbers reached from studying portal data in relation to RTA claims is confirmed.
The CRU data however shows falling numbers of new casualty claims both for EL and PL, and again support a similar conclusion reached from portal data for the same types of claim.
The Conservative Party manifesto makes clear its continued intention if re-elected to pursue whiplash reform as was proposed in Part 5 of the Prisons and Courts Bill, but the latest claims data suggests that this is yet to encourage greater interest on the part of claimant operations in EL and PL claims, despite them being less significantly affected by the proposed reforms.
Total volumes of new claims
The number of new injury claims logged with the CRU in 2016/17 fell marginally when compared to 2015/16, by 0.3% from 981,324 to 978,816. But it is reasonable where the drop is so small to see the level as stable.
While this is the 4th consecutive yearly fall, it is rather less in degree than previous years when we had seen falls of 1.7%, 1.8% and 3.0%.
It is fair to say that as measured by DWP data, the total number of injury claims is remarkably stable at around 1 million per year. The yearly average over the 7 years spanned by the analysis now stands at 1,007,449 while the average over the last 5 years is 1,004,722 and the range spanned by the annual totals remains only 70,000 or 7% of the total.
We saw 3 annual increases between 2010/11 through to 2012/13, since when we have had 4 annual decreases, even though this time round the fall is nominal only.
Volumes of new RTA claims
The number of new RTA claims submitted to the CRU rose 1.2% from 770,791 in 2015/16 to 780,324 this time in 2016/17.
This is the 2nd annual increase following a rise also of exactly the same 1.2% 12 months ago. That in turn came after 2 previous annual decreases of 1.4% and 5.6%.
The average number of new CRU RTA claims over the last 7 years now stands at 789,094. The 2016/17 total was within 2.5% of that level. Over the last 5 years the average stands at 780,834, almost identical to the number seen in 2016/17.
As far as new claims volumes are concerned, the DWP continue to publish only the global totals referred to above, leaving other data to be ascertained through Freedom of Information requests.
We have seen already from the MoJ's submission to the House of Commons Justice Committee how they recognise that the number of CRU notified claims for whiplash-related injury remains stable at around 90% of RTA injury claims made. When the data emerges to complete the right hand column on the graph below for 2016/17 it will be interesting to contrast it with the number of new registered claims which we now know stands at 780,324. The current trend at 90% appears well-established.
It is also possible to update the longer term graph showing figures back to 2000/01. The rise between 2005 and 2010 remains obvious. It was over that 5 year period that the number of new RTA claims doubled. There were essentially stable volumes leading up to 2005, and there have been essentially stable volumes since 2010. The point of difference is that the levels of those stable levels are markedly different, the later one being twice as high as the earlier one. It is no doubt this factor of a doubling of volumes in 5 years which underpins the rationale for reform.
Comparison with RTA portal data
The portal data released a month ago allowed us to complete the analysis for the 2016/17 year as shown in the graph above.
As to new RTA injury claims over the last 5 years, the annual average according to the portal is 832,844, and from the CRU data it is 780,834.
There continues to be a broad correlation between the 2 sets of data even though the yearly averages are around 50,000 apart. Both point to a picture of a high and relatively stable volume of this type of claim, the consequences of which are now well recognised.
The yearly difference between the 2 sets of data has fluctuated, but since the RTA portal matured it has varied from as much as 95,000 to as little as 15,000. This year's difference is well towards the lower end of that scale at less than 17,000.
It may be that it is cases which settle on the basis of a pre-med offer and so are reported to the CRU but which do not need to enter the portal which are part of the explanation. If so, a lower usage rate of that form of settlement over the last 12 months may be at least part of the explanation for the small difference between the 2 sets of figures this year.
Volumes of new PL and EL claims
A similar pattern can be seen with the data for each type of claim. Both showed a reduction in the total of new claims for the 3rd consecutive year, and saw numbers at the lowest level since data has been collected in this format. Both have shown proportionately larger reductions over the last 2 years.
In the case of PL, volumes reduced from 92,709 in 2015/16 to 85,504 in 2016/17, or by 7.8%.
12 months ago the fall was 7.4%, in the previous years it had been a fall 3.5% and a rise of 0.6%.
Since a peak of 104,863 reached in 2011/12 the level has fallen 18.5%
As to EL, the fall was more pronounced, at 15.2%, down from 86,495 to 73,355.
A year ago the fall was 16.3%, and in previous years it had seen a fall of 1.8% and an increase of 15.6%.
Since a peak of 105,291 achieved in 2013/14 the current level is 30.3% lower.
Comparison with casualty portal data
A comparison is more difficult than with RTA claims for a number of reasons. One is that the casualty portals are more recent in origin than the RTA portal: essentially only 3 years of data is available.
The available PL portal data shows the following new claims numbers:
2016/17 – PL 62,987
2015/16 – PL 70,262
2014/15 – PL 76,996
So it can be seen that the PL portal decreases in volumes over the last 2 years of 10.4% and 8.7% are very similar to the CRU PL decreases of 7.8% and 7.4%.
Another differentiating factor to take into account in the case of EL is that the DWP count EL claims together whether they are accident or disease. The portal separates the 2.
In addition the criteria under which EL disease claims are often excluded from the 2 processes are different: in the case of the portal there are a number of specific exclusions such as there being more than one defendant so that those claims are often progressed outside of it. In the case of NIHL claims with less than a 50dB hearing loss there is no obligation to report to the CRU.
With those factors in mind, the number of new EL and EL disease portal cases into the portal has been:
2016/17 – EL accident 49,604; EL disease 10,345; total 59,949
2015/16 – EL accident 52,493; EL disease 19,972; total 72,465
2014/15 – EL accident 52,120; EL disease 19,998; total 72,118
These EL portal figures produce a reduction over the last 12 months of 17.3% which is close to the CRU fall of 15.2%, but in the year before that the portal data showed a small rise of 0.5% while the CRU figures pointed to a rise of 16.3%.
It is clear from both sets of data from the CRU and from the portal that there have been downward trends for new casualty claims as between 2015/16 and 2016/17 even though RTA claims have remained stable.
There are clearly factors in operation to mean that while both sets of data point to a consistent conclusion for PL namely in favour of reducing volumes, it is more difficult to make a full connection between the 2 sets of data for EL, though the similar picture of reducing volumes in EL as between 2015/16 and 2016/17 seems clear enough.
This suggests that any move away from RTA claims handling towards casualty claims handling in the light of the government's intentions to introduce reform into the handling of claims for minor whiplash as well as raising the injury small claims track limit are yet to be felt.
Volumes of new clinical negligence claims
These were very remarkably stable. There was only 1 single claim fewer notified to the CRU in 2016/17 as compared to the previous year: 17,894 compared to 17,895.
Previous years have shown falls of 2.0% and 1.3% and a rise of 15.6%. Pending the Department of Health's response to the recent fixed costs consultation which will presumably come at some point once a new parliament is elected, the lack of a fixed costs regime is of relevance to the continuing relatively high number of this type of claim.
Number of settlements
RTA settlements rose 3.1% over the year to 755,366. A mirroring of the increasing volumes of new claims will be a factor.
PL settlements fell 8.1% to 92,042, again reflecting a lower volume of new PL claims.
EL finalised matters as notified to the CRU jumped 34.8% to 133,934 to the highest level since 2010. No key factors are identified by CRU but this may in part be due to insurers reporting the conclusion of claims including disease claims which peaked between 2011 and 2015 many of which involved no compensation being paid.
The CRU recovered benefits of £126 million in 2016/17. That is marginally higher than the previous year but the trend is slowly downwards. Over the period spanned by the data presented in its current form, the level of recovery was at its highest in 2010/11 at £140 million.
As usual, the greatest proportion of the recovered benefits arises in EL claims, where nearly £69 million was repaid, 54.8% of the total.
In RTA claims, £30 million was recovered representing 23.8% of the global amount. In PL, £7.6 million was repaid, representing 6.0% of the total, exceeded by clinical negligence where £18 million was recovered or 14.4% of the total.
Alongside this annual CRU review, we will continue to review trends when the next data is issued by Claims Portal.
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.