More early signs of stabilising levels of new claims as the time for the Civil Liability Bill draws near
The latest data releases from Claims Portal and from the Ministry of Justice allows us to consider latest claims trends as we continue to look forward to publication of the Civil Liability Bill to give effect to the planned whiplash reforms linked into the intended Small Claims Track increases.
We saw in the January portal data released a month ago that there had been substantial increases in volumes of all types of portal claim that month ranging from 32% to 55% when compared to the record low levels seen in December. From those high levels there are in this month's data predictable reductions of claims volumes throughout, but these are modest and can be attributed to February's shorter working month.
As to the new MI, we see In RTA a reduction of new claims of 10.0%, while in the casualty portals the falls were less, ranging from 3.0% in the case of EL disease to 3.5% in PL and 6.4% for EL. The effect of the shorter working month was a reduction in time of 9.1%, accounting for most of the RTA decrease and all of the casualty ones.
As was seen last month, we continue to start 2018 with claims levels higher than seen in the 2017 averages in the main portals. RTA is 3.1% higher; PL is higher by 3.7% and EL by 6.7%. Are these increases likely to continue further into 2018 and if so are they more secure in the case of EL and PL?
As to volumes measured longer term, we saw when looking at the MI last month that while there had been a well-established trend of reducing volumes over the last 2 years or more across all types of claim, there were now few signs of that trend continuing. That newly seen position remains the case this month in the main portals: in fact we may be starting to see the early signs of stabilisation of volumes rather than further reductions.
Specifically as to the longer term data, in the case of RTA, the rate of reduction has got significantly smaller over the last 2 months, while in PL 2 of the last 4 months have shown increases. EL may also be near to a stable level. Again we would ask, if these new trends are indeed emerging, are they likely to be more secure with PL and EL? This would be on the basis that those types of claim are likely to be significantly less affected by the reforms than RTA, both in terms of the extent of the changes and the timing of their introduction.
In terms of the accounting year till the end of March, the latest signs are that annual RTA portal volumes will end up between 700,000 and 710,000, so around 90,000 or 11-12% lower than 2016/17. The impact of the disruption to claimant operations which has taken place in anticipation of the incoming reforms will be clear in statistical terms when the annual CRU data is issued.
New RTA claims in February
There were 58,108 new claims into the RTA portal last month (February), that's a 10.0% decrease from the level of 64,580 which entered in January. January itself had seen the highest level of new claims since March 2017, so a shorter working month in February was always likely to lead to a significant drop.
As we have seen as a trend over recent months, this was the lowest February entry level since the RTA portal opened. February 2018 was lower than February 2017 by 5.4%, less than February 2016 by 19.6% and lower than February 2015 by 21.3%.
A drop as between the months of January and February would be expected in view of the shorter month, and indeed generally though not always is in fact seen. This year's 10.0% compares to a fall of 5.6% last year, a rise of 2.7% in 2016 and a fall of 4.6% in 2015.
The monthly average of new RTA claims after 2 months of 2018 now stands at 61,344. That's a level of 3.1% higher than the average for the calendar year of 2017 which reached 59,521.
New RTA claims in February – time weighted
The shorter working month of February saw 20 working days, a reduction of 9.1% from the 22 which were available in January. It follows that when looking at the 10.0% reduction in volumes as between January and February that most of required explanation is in the length of the working month.
It was a year ago in February 2017 that the number last exceeded 3,000 new RTA CNFs per working day; this is the 12th consecutive month below that level. Last month's level was the highest since March 2017; this month is only marginally less.
Levels during the first 2 months of 2018 have been close to 3,000 per working day, but the last time that barrier was exceeded was in February 2017.
New RTA claims over the longer term
The graph above shows RTA claims on a 12 month cumulative basis. THe trend has been downwards for the last 2.5 years: in fact, there have been falls over 28 of the last 30 months.
Looking at the data in recent 12 month periods, the rate of decrease has increased, from 7.9% over the period between February 2016 and the same month in 2017, and then 11.3% over the last 12 months till February 2018.
But over the most recent 2 months, the rate of decrease has slowed; see the 3 bars on the right of the graph above. Last month the fall was of 0.03%, this month it is of 0.5% from 712,698 to 709,372.
In 2017, the average rate of decrease was 1.1% per month; in 2018 to date it is 0.25% per month.
The current level is now 8.2% below the previous low point of 771,709 seen in the dip after the LASPO peak in April 2014.
Comparison with annual CRU data
We expect to see in April the release by the DWP of its statistics showing new claims numbers notified to the CRU over the accounting year up to 31st March. It will be worth comparing that outcome with the number of cases entering the portal as we have done in previous years.
With February's portal data included, we are now only 1 month short of the full 12 months of 2017/18. The number of RTA portal claims now stands at 641,681.
If the 12th month produces a level which is the same as an average of the 11 months recorded to date, then the annual total would be 700,015. If March reached say 66,000 new claims, then the outcome would be around 708,000.
It would seem likely that the month 12 figure will leave the portal total somewhere in the 700,000-710,000 range. The first digit does seem likely to be a '7'. With the 2016/17 portal level being 797,067, it is likely that 2017/18 will end up around 90,000 or 11-12% lower.
New casualty claims in February
There were reductions in volumes into all 3 casualty portals in February when compared to the preceding month, but in all cases of a degree smaller than the effect of the shorter working month, so effectively it could be argued this amounts to net increases.
Both PL and EL start 2018 after 2 months of data with monthly average volumes higher than for the calendar year 2017.
New PL claims
There were 5,200 new PL portal claims in February, that's a decrease of 3.5% from January's level of 5,200. The shorter working month reduced working time by 10.0% which more than accounts for the drop.
To date in 2018 after 2 months the monthly average stands at 5,110, that's 3.7% higher than the monthly average for 2017 of 4,926.
This is the fifth February that the casualty portals have been open. Last month's new claims level was higher than in 2 of those previous years, lower than in 2 others.
February 2018 saw a level of new PL claims higher than in the same month of 2017 by 2.3%, but less than in 2016 by 13.0% and lower than in 2015 by 20.9%.
With the shorter working month in February, we should expect there to usually be a decrease in volumes as between January and February but that is not always so. This year's decrease of 3.5% can be contrasted with a fall of 4.1% in 2017, but rises of 10.1% in 2016 and of 1.7% in 2015.
New EL claims
February saw 3,981 new claims into the EL portal, a decrease of 6.4% over the level seen in January of 4,254. That's again less than the effects of the shorter working month.
In 2017 the average monthly intake into this portal was 3,860. After 2 months the 2018 average to date is 4,118, that's 6.7% higher.
Compared to the 4 preceding Februarys, February 2018 is higher than 1, but lower than 3.
February 2018 was lower than the same month in each of the 3 preceding years, by 3.0% than in 2017, 7.7% less than in 2016 and lower by 16.5% than in 2015.
Despite the shorter working month, over the last 3 years there have in fact been increases as between January and February. This month's drop of 6.4% compares with a rise of 2.8% in 2017, of 7.1% in 2016 and of 5.0% in 2015.
EL disease claims
There were 700 new EL disease claims entering the portal in February, that's a decrease of 3.0% over January's number of 722. Once more, this is less than the effect of the shorter working month.
The average monthly intake in 2018 now stands at 711, that's 7.1% less than 2017's average of 765.
February 2018's level is lower than all 4 preceding Februarys. It's less than in 2017 by 18.1%, by 42.7% than in 2016, and by as much as 70.4% than in 2015.
As to the comparative position between the months of January and February, this year's drop of 3.0% compares with an increase of 1.4% in 2017, a drop of 11.0% in 2016 and a rise of 30.6% in 2015.
New casualty claims over the longer term
For both PL and EL, the data after the second month of 2018 continues to show for the calendar year to date an average monthly increase of 0.2% on this longer term measurement which consists of a rolling 12 month analysis. There was an actual increase in the PL figures assessed by reference to the data this month.
With the February data, the 12 month total stands at 59,221, that's a 0.2% increase over the level of 59,110 seen the previous month.
This is the second consecutive monthly increase, each of 0.2%. Over the last 32 months there have now been 4 monthly increases including the last 2 months, as well as 28 decreases.
The average monthly decline in 2017 was 0.7%. In 2018 the average to date is an increase of 0.2%.
Looking back over periods of 12 months the rate of decline has slowed, from 11.8% between February 2016 and 12 months later, to 5.8% between February 2017 and last month.
In relation to EL, the February data shows a cumulative 12 month total of 46,411, that's a 0.3% decrease from the level of 46,533 seen in January. January had seen a monthly increase of 0.6%.
Over the last 27 months there have now been 20 monthly falls, as well as 7 monthly increases.
In 2017 there were average monthly falls of 0.6% over the year. We start 2018 with average monthly increases of 0.2%.
The rate of decline when looked at over periods of 12 months has marginally slowed for EL too, from 6.8% between February 2016 and February 2017, to 6.3% over the following 12 months up to February 2018.
EL disease claims
On the same measurement, there were 8,872 claims over the 12 months up to February, a 1.7% drop from the level of 9,027 which we saw a month before. This is the 26th consecutive monthly fall.
The monthly average decline during 2017 was 1.4%; we start 2018 with a similar average of 1.5%.
The rate of decline over 12 month periods has slowed here too: from 51.3% over the 12 months from February 2016 to 15.4% over the most recent 12 months.
In February there were increased retention performances in the 3 casualty portals, but a decline in retention achieved in the RTA portal.
Over the longer term, as assessed at the end of February and compared to the data at the end of the preceding month, the RTA and the PL rates have each increased by 1% to 52% (RTA) and 21% (PL).
The EL retention rate remains unchanged at 28% and the EL disease rate fell 1% to 8%.
All retention rates include cases progressing to stage 3 as retained within the portal process.
RTA claims – stage 3 usage and PSLA levels
5,933 RTA claims had court packs prepared in February, preliminary to being able to use stage 3. That's 6.7% fewer than the 6,362 cases seen in January, but of course the effect of the shorter working month was worth 9.1%, so it could be said that this is a real terms increase.
Looking at the bars on the graph above, there are few if any signs over the last 18 months of what were previously trends towards increasing use of stage 3.
PSLA quantum levels
The average level fell last month from £2,802 to £2,791, a fall of 0.4%. But this is still the 5th highest level to date.
If the 14th edition of the Judicial Studies Board Guidelines started having an impact around November 2017, the current PSLA level is 0.3% higher.
Casualty claims – stage 3 usage and PSLA levels
In the case of PL, this fell 18.7% over the month to 75 cases.
With EL, it reduced 8.1% to 79.
As to EL disease, there were 5 court packs prepared, the same as the previous month.
PSLA quantum levels
For PL, this rose 2.7% to £4,219, the 6th highest month to date.
As to EL, this decreased over the month by the same 2.7%, to £4,213, the 7th highest month so far.
In the case of EL disease, it reduced 4.4% to £4,048.
The effects of the 14th edition of the JCG remain to be felt in the case of casualty claims.
Comparative use of stages 2 and 3
Use of stage 3 when compared to stage 2 increased marginally this month in the case of RTA and EL, though fell back for PL claims.
RTA currently stands at 31% and so representing slightly fewer than 1 in 3 claims, EL is at 13% and PL at 10%. The current signs are towards increased use of stage 3 stabilising at around current levels.
Litigated injury claims
The Ministry of Justice data as to issued claims is now available for Q4 of 2017 and is included in the graph above.
Peak years for issued claims were 2012 and 2013, when the total for each year approached 147,000. Since then annual numbers have been:
- 2014 – 131,441
- 2015 – 142,724
- 2016 – 133,882
- 2017 – 142,197
Enhanced court feed involving increases in court fees of up to 660% but affecting all claims worth over £10,000 to some extent were implemented in March 2015. It is unclear whether that change did impact negatively on issued claims in 2015 or indeed 2016, but if it did, the data for the concluded calendar year of 2017 suggests that the impact has passed as numbers are now within 3% of the 2012/13 peak.
When court fees were introduced for Employment Tribunal cases, the effect was substantial in terms of volume reduction and was easily apparent. The position with increased levels of fees for injury cases is very different: essentially there has been no measurable impact which is now apparent.
It must follow that claimant operations have established processes whereby the burden of the additional fees can be met, and that a strategy for them being able to take cases into litigation when they consider it appropriate is capable of continuing.
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.