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Latest portal data shows short term volumes remain stable though longer term trends continue to be negative, while issued claims are on the increase

The most recent data from Claims Portal for the month of November, as well as from the Ministry of Justice on the number of issued claims for Q3 of 2017, allow an up to date view to be given of the latest claims trends.

Summary

In terms of volumes of new claims in November, there was a small increase of 0.4% in the number of RTA claims, set alongside limited decreases in the main casualty portals of 1.1% in the case of PL and 0.3% for EL. All 3 main portals, RTA, PL and EL continue to show signs of stabilisation of volumes over the later months of 2017.

Longer term trends still point downwards. RTA volumes continue to decline at an increasing rate, and while PL and EL have returned to declining longer term volumes, the rate of decline in these casualty portals is in fact decreasing.

This evidence points to more disruption in the RTA market than in casualty claims, as would be expected from the likely impacts of the government's proposed reforms in the form of the introduction of a whiplash tariff and the raising of the small claims track limit for all types of injury claim. The Civil Liability Bill continues to be awaited and of course has not yet been published for the expected pre-legislative scrutiny, though the Justice Committee have re-opened their inquiry "Small Claims Limit for Personal Injury" with a closing date for further written submissions of 22 December.

Stage 3 usage continues to increase in PL and EL claims, though seems to have stabilised with RTA claims perhaps because of the issue of delay in obtaining dates for stage 3 hearings.

The number of issued personal injury claims increased significantly in the provisional figures for Q3 of 2017, and there is now an expectation that the annual total for the year may return to 2015 levels after a decline last year.

New RTA claims in November

 

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There were 62,286 new RTA claims entering the portal in November, that's a small increase of 0.4% over the level of 62,063 seen in October. This now is the highest monthly level for 8 months; the last higher month was back in March of this year.

And the recent consistent level of volumes continues. Over that same 8 month period the number of new RTA claims has each month been within 3,000 of 60,000, so within a range of 57,000 to 63,000. The average over the last 6 months now stands at 59,885, unsurprisingly a very similar figure.

But looking back a year or so ago we were noting a degree of consistency around figures in the 65,000 to 70,000 range, so while a degree of uniformity is not novel, we now see it at a level 5,000 to 10,000 lower than a year or so ago.

We also continue to see the trend in operation whereby new claims data for the various months of 2017 is generally the lowest ever for that month: November 2017 is the lowest for that month of the year since the RTA portal opened.

The number of new RTA claims for November 2017 is lower than for the same month in each of the 3 previous years as follows, it is noteworthy that all percentage reductions are in double figures: lower than in 2016 by 10.7%, less than in 2015 by 14.9%, and lower than in 2014 by 12.4%.

New RTA claims in November – time weighted

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There were identical numbers of working days in both October and November – 22. So of course there is no impact on the data from a varying number of days in this month's assessment.

Just as there has been a marginal increase of 0.4% in new RTA claims volumes over the month on the unadjusted data, so there is the same small increase taking account of the number of days worked, so as to result in a barely perceptible increase in the height of the two final bars on the graph above.

New RTA claims over the longer term

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When we look at longer term RTA trends by reference to a rolling 12 month cumulative basis, the trend remains unmistakably downwards. We have seen falls on this measurement in 25 out of the last 27 months.

Last month the drop was 1.0% from 730,076 to 722,611. This means the average monthly fall during 2017 remains 1.1% as it was last month.

The rate of the ongoing decrease has increased from year to year within the last 2 years. Between November 2015 and November 2016 it was 6.5%, while over the last 12 months it has speeded up to a decline of 11.9%.

Until the current low point, the previous historic low had been 771,709 which was reached in April 2014 in the aftermath of the pre-LASPO peak. The current level is 6.4% below April 2014's number.

Comparison with annual CRU data

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We are now two-thirds of the way through the financial year 2017/18 as measured by the DWP in their annual CRU data which will be published next spring. After 8 months of the year we are in an increasingly improved position to calculate the expected outcome for the annual RTA portal data over the same period which can then be assessed alongside the CRU figures at the end of financial year.

The total volume of new RTA claims to date in 2017/18 stands at 471,211. At the same stage last year the comparative level was 544,471, that's 15.5% higher.

At the current rate, the annual 2017/18 total will be 706,817. That's a reduction of 12.8% from the 2016/17 total of 797,067, or around 90,000 less than last year.

New casualty claims in November

As is the case with RTA claims, the volume of new claims to both the PL and EL portals shows a broadly similar level to those seen in the previous month. In PL there was a small decrease of 1.1%, while for EL the limited increase was of 0.3%, when compared to October.

This should though be put in the context of November's levels being in fact close to those higher numbers seen in October when there was an 8.0% increase in PL and a 14.9% rise in EL claims: current levels are close to the increased levels seen on the last analysis.

Another similarity as between RTA, PL and EL is that there continues to be a level of consistency over the last 6-8 months though again at a somewhat lower level than seen previously.

Another way of viewing this is that for both PL and EL, the current level of new claims is lower than for the same month in each of the 3 previous years.  This can be contrasted with the position last month when in October 2017 the monthly total was higher for PL and EL than in October 2016, albeit lower than in the 2 previous years.

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New PL claims

There were 5,231 new claims in November, a monthly fall from last month of 1.1%. The number of new claims in October had been the highest for 7 months, in fact in November the level was the 2nd highest over that same period.

The consistency can be shown from the fact that the level over each of the last 7 months has been within 300 of 5,000. The average over the last 6 months stands unsurprisingly close to that at 5,083.

The number for November 2017 is lower than for the same month over each of the 3 preceding years: lower than in 2016 by 1.2%, less than the level in 2015 by 11.1%, and lower than in 2014 by 16.8%.

New EL claims

November saw 4,188 new EL claims registered, a rise of 0.3% over the 4,177 which there had been in October. Last month's number was the highest for 8 months in the same way that October's level had been the highest for 7 months.

On the consistency factor, we had seen new EL claims levels within a wider range of 3,500 to 4,000 over the previous 7 months. This month's number is only marginally above that range. The average over the last 6 months is now 3,913.

The current level of EL claims for the month of November is lower than in each of the preceding 3 years, but by a smaller margin than PL claims. It's lower than in 2016 by 2.4%, it's 4.9% lower than in 2015, and 3.7% less than in 2014.

New EL disease claims

There were 708 new claims into the EL disease portal last month, that's a reduction of 7.6% from the 766 which there had been in October.

The same level of consistency is elusive in this portal. The current level is the lowest for 7 months. The average over the last 6 months is now 759.

As with the other casualty portals the EL disease new claims data for November is lower than in each of the 3 preceding years: lower than in 2016 by 17.8%, but lower than in 2015 and 2014 by the much larger figures of 56.4% and 53.4% respectively.

New casualty claims over the longer term

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We saw a month ago that October had been an exceptional month as on our 12 month cumulative measurement there were the first increases since March in both the PL and EL portals. Looking at November's data, we return to a picture of month on month falls, though the extent of the falls are half the size of the increases seen the previous month, with the result that the current level remains higher than when we looked at the data in September (though lower than the position on review of October's figures a month ago).

In the case of all 3 casualty portals the rate of decrease last month is below the average monthly figure for 2017, in the case of PL and EL significantly so.

PL claims

Over the 12 months to November there were 59,409 new PL claims, a decrease over last month's level of 59,473 or by 0.1%. The average monthly fall for 2017 now stands at 0.7%.

The rate of decline has slowed: between November 2015 and November 2016 it was 12.2% while over the last 12 months it was 8.0%.

 EL claims

There were 46,747 new EL claims over the 12 months to November, a monthly decrease of 0.2% from last month's figure of 46,849. The average monthly fall for 2017 is now 0.6%.

Again, the rate of decline has slowed. Over the 12 months from November 2015 it was 7.9% while over the last 12 months it was 6.6%.

EL disease claims

The number of new EL disease claims over the previous 12 months was 9,313 in November, a monthly fall of 1.6% from October's level of 9,466. That means the average monthly decrease this year is now 1.4%.

The rate of decrease assessed annually over the last 2 years has again slowed, though from a higher threshold. Over the 12 months from November 2015 it was 47.2%, while over the following 12 months it had reduced to 23.5%.

Retention rates

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This month showed an improving retention picture in the RTA portal but a decreasing one in all 3 casualty portals.

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The longer term trends continue to be stable in the case of RTA at around 50%, and increasing in the case of both EL (approaching 30%) and PL (around 20%). The EL disease trend has turned negative at below 10%.

Both of the retention rate graphs above assume cases proceeding to stage 3 are retained in the process. If the later graph was re-done treating stage 3 claims as excluded, then this would have been the position:

Graph 123 Copy Copy Copy

It is noteworthy that the RTA, EL and PL retention levels are predictably lower looking at the data this way, with the greatest difference seen in the case of RTA with its more significant use of stage 3 (as highlighted below), which on this analysis reduces the RTA retention rate from 50% to 40%.

RTA claims – stage 3 usage and PSLA levels

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Stage 3

In November, 6,447 claims went through to stage 3, that's a 5.2% increase over October's reduced level, and the 4th highest to date, so it would appear there has been a return to the practice of making frequent use of stage 3 and the additional costs available when doing so.

But in fact over the last year or so it has been more difficult to continue to identify the previous trend of ongoing increasing use of stage 3. While the costs advantages remain, the increasing length of the wait for stage 3 hearing dates has a counter effect of worsening cash flow and seemingly the attractiveness of that additional part of the process.

PSLA quantum levels

The average PSLA levels in November rose by the minimal level of £1 over the comparative figure from the previous month. November replaces October as the 6th highest month to date. The effects of the average 4.8% increases in PSLA levels advised in the 14th edition of the Judicial College Guidelines are still to be felt.

The current level shows an increase of 2.3% over the previous 12 months in comparison with November 2016, whereas that level in turn had shown a larger 6.0% increase over the previous 12 months looking back to November 2015.

The current level is 8.4% higher than 2 years ago, when the effects of the 13th edition of the JCG began to be felt. The impact of the 14th edition should be felt imminently.

Casualty claims – stage 3 usage and PSLA levels

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Stage 3

Stage 3 usage continues to be high in the PL and EL portals mirroring the effect previously seen with RTA claims. The combined height of the bars on the graph above shows that between the 3 casualty portals, November was the highest month to date for the number of casualty court packs.

With PL, there were 89 court packs in November, the highest number to date, and a 6.0% increase in the month. The 3 highest monthly numbers have been seen within the last 5 months.

The EL pattern is similar. There were 81 court packs last month, the same number as the previous month, and the joint 3rd highest to date.

The exception is EL disease where there was an increase from 0 in October to 3 in November, but the use of stage 3 in this portal remains habitually low.

PSLA quantum levels

The highest levels of PSLA to date have been seen in November in both the PL and EL portals as shown by the lines on the previous graph. The 14th edition of the JCG may be already having an effect in these portals, including of course their average 4.8% increases.

In the case of PL, the level reached was £4,294, a 5.1% rise. It's the highest to date by £4.

Over the last 12 months going back to November 2016 we have seen PSLA in PL claims increase by 6.3%, whereas over the preceding 12 months it rose 6.0%. The overall increase over the 2 years since the 13th edition is 12.7%.

With EL, the PSLA average reached £4,378 in November, a 6.3% increase on the month, and the highest to date by £65.

The increase over 12 months since November 2016 has been 7.1%, whereas going back another 12 months it had been 6.2%. The overall increase over 2 years since the effects of the 13th edition have impacted has been 13.7%.

EL disease is again the exception. The monthly figure for November was £3,900; a 1.5% fall on the month to a level which can be seen from the yellow line on the graph above is a not untypical level to that found over the last 2 years, despite month on month variations largely due to small sample size.

Over the last 12 months EL disease PSLA levels rose 10.5%, whereas over the previous 12 months going back to November 2015 they had fallen 11.7%. Since the 13th edition had impact in November 2015, current EL disease PSLA levels are in fact 2.4% lower.

Comparative use of stages 2 and 3

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The same trends observed previously continue, namely in general terms an increasing use of stage 3 in comparison to stage 2, influenced no doubt at least in part by the additional costs recovery available.

In the case of RTA, the data shows that the use of stage 3 over the last 9 months has remained fairly stable at around 30% of settlements. That trend towards stability may have replaced another trend of increasing use of stage 3 that was apparent over the previous 4 years, perhaps by reason of the factor relating to delayed stage 3 hearings highlighted above.

PL and EL still seem to be on an increasing trend of proportionately higher use of stage 3, though at more modest levels than RTA at between 10-15%.

Litigated personal injury claims

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The Ministry of Justice have just released their court data for Q3 of 2017 including the number of personal injury claims reaching the stage of issuing proceedings. It is worth noting that in that quarter, the level reached 38,072 as a provisional figure, which is the highest level since Q1 of 2013.

On an annual basis the volumes of litigated claims can be listed as follows:

  • 2012 – 146,644
  • 2013 – 146,867
  • 2014 – 131,441
  • 2015 – 142,724
  • 2016 – 133,882
  • 2017 – 142,850 (annualised figure based on Q1-Q3 data)

We await the release of the Q4 2017 data in March 2018. If in line with that for the first 3 quarters of the year it will show an annual level of issued claims similar to that seen in 2015, and not far short of the figures reached in 2012 and 2013.

It  was in March 2015 that enhanced court fees were introduced so that where the claim was valued at over £10,000, the issue fee became 5% of the value up to a maximum fee of £10,000 which was payable on a claim worth £200,000. The cases within a value band of £50,000 to £200,000 saw the largest increases, up to 660% in fact.

If the lower number of issued claims in 2016 (down 6.3% from 2015) was in part a reflection of these additional fees, then the current signs are that in 2017 that effect has been mitigated, in that claimant operations have put in place arrangements whereby the fee burden can be overcome. Insurers cannot it seems currently expect claimants and their lawyers to be reluctant to start court proceedings specifically because of the need to pay the issue fee.

It is quite clear that the position with fees for civil claims is very different from that with the introduction of fees to start proceedings in the Employment Tribunal which in July were held by the Supreme Court in the Unison case to be unlawful, having led to a reduction in the number of ET claims of 66-70%. Against the back drop of apparently no reduction in the number of litigated injury claims it surely follows that any similar challenge to enhanced court fees for personal injury or other civil claims would not get past first base.

Regards

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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