Impacts from MoJ's plans for whiplash and Small Claims Track reform may be leading to separate trends in RTA and casualty as seen through latest portal data
Against the background of the Ministry of Justice updating their planned implementation date to April 2019 for the reforms affecting the handling of whiplash and other minor injury claims, and while we await both the publication of the Civil Liability Bill as well as the report from the House of Commons' Justice Committee following their inquiry into the Small Claims Track reforms, we now look at the latest released data from Claims Portal to identify current market trends.
On a month by month basis, there were substantial increases of volumes of new claims into all portals in January, ranging from 32% in RTA, 44% in PL, 52% in EL disease to 55% in EL. However, while the reason for this is not solely the additional working days available in January, it must be understood that these increases are calculated from historically low levels in December.
Compared to average monthly intakes of new claims during 2017, the numbers of new claims into the RTA, PL and EL portals in January were at higher levels than those we saw last year. Whether that will continue into the remainder of 2018 remains to be seen and will inevitably be affected by developments during the year as we move towards the planned reforms taking place in April 2019 as anticipated.
Over the longer term, there have been well established trends of reduced volumes into all portals for at least the last 2 years, which coincides with the announcement of the planned reforms. This month there are in fact few signs of those trends towards reducing volumes over the longer term continuing as the reduction in RTA numbers is only nominal, while there are small increases in longer term PL and EL volumes.
As we have seen before, the disrupted market which has led to these changes continues to be more pronounced in the case of RTA claims than with PL and EL. This variance between motor and casualty claims is expected to continue as it is reported that the MoJ's intention is to exclude PL and EL claims from implementation of the reforms initially.
As well as allowing the reforms to concentrate in RTA where the volumes are greater, the government's decision will potentially have the effect of claimant operations putting short term efforts into casualty claims which in turn may see the early signs of new and separate trends developing further, with a distinction being drawn between RTA on the one hand and casualty on the other.
New RTA claims in January
As a reminder, we saw last month record low volumes of new RTA claims into the portal in December: the lowest monthly level for 7 years, albeit set against the fact that for every year that this portal has been opened the month of December has seen the lowest volume of new claims over the calendar year.
In January, the RTA new case intake rose as much as 32.3% over December's level, from 49,061 to 64,908. This is the highest monthly volume level for nearly a year, in fact since March 2017.
As 2018 gets underway, we can begin a comparison with the average calendar year data for 2017. That year saw a total number of new claims of 714,251, an average of 59,521 per month. At 64,908, we start 2018 at a level 9.1% higher.
But on the other hand, in comparison with previous Januarys, this is the lowest level for that month of the year since the portal opened, albeit only marginally less than in January 2017.
At 64,908 new claims, the January 2018 level was 0.3% less than in January 2017, 7.8% less than in January 2016, and 16.1% lower than in January 2015.
Significant percentage increases as between December and January are common, but at 32.3%, this month's has only been exceeded once, between December 2012 and January 2013. Those increases have been:
- 2017/18: 32.3%
- 2016/17: 13.9%
- 2015/16: 12.5%
- 2014/15: 21.1%
- 2013/14: 31.1%
- 2012/13: 35.1%
- 2011/12: 26.8%
- 2010/11: 28.2%
New RTA claims in January – time weighted
There were 22 working days in January, the same as in November, but 3 more than in December. Put another way, January's working month was 15.8% longer than December's.
As the month on month increase in volumes in January when compared to December was greater than the increase in working time, it follows that the graph above shows an increase over the month. The current level of new RTA CNFs per working day is now the highest for 8 months.
On the other hand, despite that increase, the pattern of fewer than 3,000 new claims per working day continues. It was in February 2017 almost 12 months ago that the number last exceeded 3,000.
New RTA claims over the longer term
The new claims data on the longer term 12 month cumulative basis form of measurement is as above. The height of the column on the far right is of almost the same height as the previous month. In fact, there was a small further decrease of 0.03% last month, from 713,411 to 713,222.
We have seen falls now over 27 of the last 29 months when we look at the data this way. This month, there are just enough new claims falling within range to see another month on month decrease.
The average monthly fall on this measurement was 1.1% during 2017. We will have to wait to see whether a new alternative trend of at least smaller reductions becomes established during 2018, but the first month's data suggests that that is possible.
The rate of decrease has increased over recent years, from 6.8% as between January 2016 and January 2017, to 11.9% from January 2017 up to last month.
The current level is 7.6% below the previous low point seen at the conclusion of the post-LASPO peak in April 2014 of 771,709.
Comparison with CRU data
We will see in the spring, perhaps in April, the publication of the CRU new claims and settled claims data for 2017/18, which is for the financial year up to the end of March. The new claims part of that data can in turn be compared with the portal claims intake data over the same period, the graph above showing the portal picture up to the end of 2016/17.
We are now 10 months into 2017/18, and the current level of new RTA claims into the portal stands at present at 584,091. Continuing at the same rate would produce a figure at the end of March of 700,909.
We predicted last month that while December's low number of new claims had reduced the anticipated end of year level to below 700,000, and to a level of 100,000 less than 2016/17, that the position would change again before the end of the financial year and that now indeed seems likely as expected outcomes are now somewhat higher following receipt of the data for January.
The current expectation for 2017/18 is of an annual level which is 12.1% and over 90,000 lower than we saw in 2016/17.
New casualty claims in January
In the case of all 3 casualty portals, and as with the RTA portal, there are significant increases in volumes of new claims to report in January, well beyond the direct effect of more working days in the month.
New PL claims
In January there were 5,224 new PL claims, that's an increase of 44.1% over the level of 3,626 seen in December. This is the highest level since October 2017.
In the calendar year of 2017 there were 59,110 new PL claims into the portal, an average of 4,926 per month. We start 2018 with the month of January at a level 6.0% higher than last year's average.
This is the 5th January that the casualty portals have been in existence. While the January 2018 level is around 1,000 less than January 2015, it is comparable to the 4 other Januarys.
When compared to the last 3 years, the current number is 2.1% higher than in January 2017, 0.3% lower than in January 2016 and 16.3% less than in January 2015.
As we saw was the case with RTA claims, large increases in volumes are the norm as between December and January, with this year's large increase of 44.1% being exceeded once. Those increases have been:
- 2017/18: 44.1%
- 2016/17: 31.5%
- 2015/16: 14.0%
- 2014/15: 18.3%
- 2013/14: 55.8%
New EL claims
There were 4,273 new EL claims in January, which is an increase of as much as 54.9% more than December's level of 2,758. This is the highest month since March 2017.
During the calendar year of 2017, there were 46,320 new EL claims into the portal, a monthly average of 3,860. January 2018 is 10.7% higher than that level.
Looking back to other Januarys, the January 2018 number is higher than 4 of them, though lower than in January 2015.
As to the previous 3 years, the level for last month was 7.0% higher than in January 2017 and 6.0% more than in January 2016, but 5.9% less than in January 2015.
Again, large increases in volumes are the norm as between December and January, with this year's large increase of 54.9% being exceeded once. Those increases have been:
- 2017/18: 54.9%
- 2016/17: 25.7%
- 2015/16: 16.8%
- 2014/15: 21.8%
- 2013/14: 60.4%
New EL disease claims
The EL disease portal had 732 new claims entering last month, which is a 52.2% increase over the level seen in December which stood at 481. As with PL, this was the highest level since October 2017.
In the calendar year 2017 there was a monthly average of new EL disease claims of 765. The latest month's data shows that we start the year of 2018 4.3% lower than that.
Unlike the case with the other casualty portals, EL disease is showing the lowest new claims number for the month of January since it opened. When compared to the 3 preceding years it is 13.2% lower than in January 2017, 46.7% less than in January 2016 and 59.6% lower than in January 2015.
In the case of EL disease claims as well, large increases in volumes are the norm though not universal as between December and January, while this year's large increase of 52.2% has not previously been exceeded. Those changes have been:
- 2017/18: 52.2% increase
- 2016/17: 37.1% increase
- 2015/16: 1.7% decrease
- 2014/15: 38.3% increase
- 2013/14: 47.9% increase
New casualty claims over the longer term
In January, both the PL and EL portals showed increases rather than decreases on this longer term method of measurement. While not unique, this is unusual as the general picture has been of long term decline over the last 2 years or more.
Over 12 months through to January, there were 59,148 new claims, a 0.2% increase over the position the previous month when the figure stood at 59,043.
There have now been 28 months of decreases interspersed by 3 months of increases over the last 31. In other words last month was the 3rd over that period to show an increase.
The average monthly decrease during 2017 was 0.7%. We begin 2018 with an increase of 0.2%.
The rate of overall decrease has slowed: as between January 2016 and January 2017 it was 11.3% while between January 2017 and January 2018 it was 7.2%.
There were 46,557 new claims over the previous 12 months measured till the end of January. This was a 0.6% increase over the level the previous month which stood at 46,277.
Over the last 26 months which has generally seen a picture of decreases there have been 19 monthly falls among which we have seen 7 months which showed increases, of which last month is the most recent example.
2017 saw average monthly falls of 0.6%. The first month of 2018 has showed an increase of the same amount.
The rate of decline has slowed for EL too. Between January 2016 and 12 months later it was 7.2% while from January 2017 till last month it was 6.4%.
EL disease claims
There were 9,040 new EL disease claims over the 12 months till the end of last month, a fall of 1.2% from the level of 9,151 seen the month before.
This is the 25th consecutive monthly decrease.
The 2017 average monthly fall was 1.4%. We start 2018 with a fall marginally smaller.
The rate of decline has slowed for EL disease too. As between January 2016 and the same month in 2017 it was 52.1% while between January 2017 and last month it was 16.7%.
Looked at on a month by month basis, retention rates improved significantly last month, after falls in December. The RTA rate approached 60% over the course of the month.
Longer term rates showed RTA at 51%, EL at 28%, PL at 20% and EL disease at 9%.
All retention rate data is presented on the basis that cases proceeding to stage 3 are counted as retained within the process.
RTA claims – stage 3 usage and PSLA levels
6,362 claims were recorded as having court packs prepared in January, as part of the stage 3 processes, that's a 23.1% increase from the low level seen in December.
While the 7th highest month to date, a look at the bars on the graph above will show how after a pattern of increases, levels of stage 3 use for RTA claims show few signs of increasing trends over the last 18 months. The current often lengthy wait for stage 3 hearings may well be part of the picture as cash flow factors impacting on claimant operations will come into play.
PSLA quantum levels
Levels rose £2 or 0.07% to £2,802 last month to a figure which is the 3rd highest to date, as shown on the line on the preceding graph.
On the basis that the effects of the 14th edition of the Judicial College Guidelines may be being felt from November onwards, this represents a 0.7% rise to date over that period.
Casualty claims – stage 3 usage and PSLA levels
In the case of PL, stage 3 use rose 2.7% from 73 to 75, the 8th highest month to date.
With EL, the level rose 22.9% from 70 to 86, the 3rd highest to date.
As to EL disease, the number rose 25.0% from 4 to 5, a level last exceeded in June 2016 though the sample remains small.
PSLA quantum levels
In the case of PL, PSLA levels fell 3.4% to £4,110, the 8th highest month to date.
With EL, levels rose 0.2% from a high December base to be the 2nd highest to date.
For EL disease, the figure increased by 6.2% to £4,234, the highest level since June 2015.
In the case of all 3 casualty portals, on smaller samples and more diverse injuries, the specific impact of the latest JCG is more difficult to identify.
Comparative use of stages 2 and 3
There was proportionately decreasing use of stage 3 this month in the case of RTA, PL and EL. Nevertheless, the level remains at over 30% in the case of RTA.
PL and EL are following RTA's increasing trend, though in less stark terms. Both are currently between 10-15%, and so less than half the RTA level.
Other Claims Portal announcement – claims source
Alongside the report yesterday that the government had accepted the insurance industry's offer to fund a new IT gateway to allow self-represented claimants to access the portal, Claims Portal themselves also announced yesterday that they are planning Release 6 in order to update their systems and processes in Q4 of this year in advance of the intended whiplash reforms.
One of the aspects they say will be covered in this Release will be to include the obligation to state the referral source of the claim. They say that this is field recommended by the Insurance Fraud Taskforce and will enable the sharing of that information with the Insurance Fraud Bureau.
While indeed the recommendation to give the source was an IFT recommendation, it appears that matters have proceeded and that policy decisions have now been made regarding its implementation and timing.
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.