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End of year Claims Portal data for 2017/18 arrives as MoJ ministers prepare for next week's initial scrutiny of the Civil Liability Bill in the House of Lords

Release of the latest Claims Portal data includes figures for March and so permits an end of year review of new claims volumes as we await both the annual CRU claims numbers and the Second Reading of the Civil Liability Bill in the House of Lords on 24 April. At the same time, the appearance of Justice Minister Lord Keen at the APIL conference yesterday and the publication of his speech allows an overview of current MoJ priorities.

Overview

The Claims Portal data shows new claims levels in March into all portals at lower daily levels than in February when March's longer working month is taken into account, but the first 3 months of 2018 have still seen RTA volumes at higher levels than the second half of 2017.

Longer term trends on new claims were negative this month across all portals. Signs of stabilisation of longer term numbers of new claims seen previously were not apparent in March's data.

The end of year 2017/18 figure for new claims into the RTA portal very marginally begins with a '7' with the actual number standing at 700,008, and it is this number which can be compared to the CRU data when available. This is a decline of 12.2% or 97,059 from last year's portal level and reflects changes in the claims marketplace in anticipation of MoJ led reform and strategies adopted in response to previously burgeoning volumes.In terms of the cost of claims, portal data for RTA claims shows PSLA levels at their highest to date, with an increase of 0.9% over the last 4 months suggesting the early signs of impact from the 14th edition of the Judicial Studies Board Guidelines.

Lord Keen at the APIL conference

The minister with responsibility for the Bill in the Lords, Lord Keen, made an appearance as keynote speaker at the APIL annual conference in Birmingham yesterday, and provided an update on the Bill and MoJ projects generally. His approach was uncompromising in favour of the continued path of reform, even though, as he put it, going to the conference was akin to "sticking his head in the lion's mouth".

As to whiplash reform, he referred to the number of RTA claims being 70% higher than in 2005/06 (of which he said 85% were for whiplash), whereas in bringing the Bill forward recently the Justice Secretary David Gauke had referred only to a 50% increase over a decade. It seemed that Lord Keen was seeking to make a stronger case with the figures. Similar measures to deal with the same issue had already been taken in Italy and Spain, he said.

While confirming that the Bill would proceed with its current definition covering injury to the neck, back and shoulder, he confirmed there would also be regulations "which will further ensure that the group of claims causing most concern is captured".

He said that the government believed that many RTA injury claims were suitable to be heard on the Small Claims Track, but that just increasing the SCT level by a new rule would be unwise, without underpinning the changes by developing a new supporting structure including a new accessible IT system. MedCo and indeed Claims Portal would remain central.

He confirmed that the Bill would also proceed on discount rate reform, in order to deal with the current "systemic over-compensation" which he put at 100-125%. The government expected insurers to pass on the savings from both reforms, they would be held to their word that they would do so, and that the government would monitor the position and "consider further action if necessary".

It is Part 2 of LASPO which introduced the Jackson reforms which required legislation, and Lord Keen said that the expected post-implementation review of that Part would take place this year and that the Civil Justice Council would hold a stakeholder conference as part of it.

Finally, he said that the government supported the principle of extending fixed costs, and were currently at the stage of considering Jackson's most recent report on the subject and specifically the differences between types of litigation, and would then launch a consultation.

New RTA claims in March

The latest MI shows that there were 59,136 new RTA claims entering the portal last month, that's a 2.6% increase over the level seen in February of 57,598. In broad terms the data on the graph above shows that the current level is typical of the monthly level seen during most of 2017, lower than in most of the prior period displayed going back to 2012.

As we have seen with other recent months, this is the lowest level for the calendar month of March since the RTA portal opened. March 2018 was lower than March 2017 by 12.7%, less than in March 2016 by 16.4% and below March 2015 by 27.0%.

We usually expect a month on month increase between February and March due to the later month being longer in terms of number of working days. So that we can make a comparison, the increase of 2.6% this time round in 2018 was smaller than the rises in 2017 and in 2015 of 10.1% and 9.6% respectively, while in 2016 there was in fact a small fall of 2.1%.

After 3 months of 2018 the monthly average new RTA claims intake stands at 60,385, which is 1.5% higher than the average for 2017 which stood at 59,521, though when we looked at the data a month ago we saw that then current lead over last year was double that at 3.1%.

On the other hand, a direct comparison with the first 3 months of 2017 shows that the current monthly average for 2018 at 60,385 is lower than the comparative level for 2017 at 64,736 by 6.7%.

This would suggest that while when looking to last year as a comparator we should bear in mind that levels of new RTA claims tended to start off higher in the early months and then fell back, and the same pattern may ensue this year too.

New RTA claims in March – time weighted

There were 22 working days in March, that's 10.0% more than the 20 days in February. As we have seen, the limited increase of 2.6% over the month amounts to a real terms decrease once this factor is taken into account. This is the second consecutive monthly fall in volumes on a time-weighted basis.

This is the 13th consecutive month where new RTA claims volumes have been below 3,000 per working day. But we can see that March 2018, as with the first 2 months of this calendar year, saw daily levels higher than any of the months of the second half of 2017.

New RTA claims over the longer term

Longer term trends seen through the 12 month cumulative data show a decrease this month from 708,559 to 700,008 or of 1.2%. This is the 29th month on month fall over the last 31 months with the current downwards trend beginning just over two and a half years ago.

The first 2 months of 2018 had shown smaller falls than the previous period, of only 0.03% in January and of 0.5% in February. This month's larger fall brings the total decrease so far over 2018 to 1.8% and the calendar year average to date to 0.6%. In 2017 the monthly average fall was more than double that at 1.1%.

The rate of reduction in the data has increased, from 7.2% between March 2016 and March 2017, to 12.0% over the 12 months to March 2018.

The current number at 700,008 is only very marginally over the key figure of 700,000 and is 9.3% below the previous lowest level of 771,709 seen in April 2014 which marked the decline which followed the LASPO peak the previous year.

Comparison with annual CRU data

With the availability of the March data we can now update the graph above by including a further bar representing the concluded year 2017/18 with the same period up to 31 March being used additionally by the DWP when they shortly publish the annual CRU data for 2017/18.

As we saw with the 12 month cumulative data which this month is effectively is measuring the same period, the RTA portal new claims total for 2017/18 is 700,008. We commented last month when anticipating the total for the 12 months in question that it seemed likely that it would begin with the figure '7'. So it does – but only just.

This annual total represents a decline of 12.2% or 97,059 from 2016/17. The level for 2016/17 saw a fall of 7.0% or 60,365 from 2015/16.

The current average annual total as between 2011 and 2018 now stands at 807,372. This remains a significantly high number though the actual total for 2017/18 is the lowest financial year total since the RTA portal was building up its intake in its first year in 2010/11.

The total for the year 2010/11 of 575,873 was over the 11 months the portal was open so allowing for a 12th month at the same rate would produce a figure of 628,225. The 2017/18 total is therefore 11.4% higher than the inaugural year.

New casualty claims in March

There were deceasing casualty claims intakes last month when compared to February, including an actual decrease for PL as well as real time decreases for EL and EL disease once the additional working days are taken into account.

New PL claims

There were 4,875 new PL claims in March, that's a decrease of 2.2% from the level seen in February despite March being a longer working month.

After 3 months of 2018, the monthly PL average is now 5,103, which is 1.8% higher than the monthly average for 2017 of 4,926. But if we compare the average of the first 3 months of 2018 with the first 3 months of 2017 then we see that at 5,277 for last year compared to 5,103 for this year we are currently 5.0% lower. The same factors seem to be in operation as for RTA claims intakes.

The monthly new claims figure for March was the lowest for any March since the portals opened. It was lower than March 2017 by 16.0%, less than March 2016 by 15.5% and below March 2015 by 28.0%.

New EL claims

March saw 3,969 new EL claims, a small increase of 0.5% over the number made in February. In real terms taking account of the increased working month in March this would amount to a reduction.

Taking into account the first 3 months of 2018, the monthly average is now 4,054, higher than the monthly average for 2017 of 3,860 by 5.0%. But again if we compare the averages for the first 3 months of the calendar years 2017 and 2018, then we are currently 3.8% lower at 4,054 for 2018 compared with 4,214 in 2017. Again, the same pattern as RTA and PL.

March 2018 saw the lowest monthly intake for new claims in that month of the year since March 2014 when the casualty portals were in their first year. March 2018 was lower than March 2017 by 12.7%, less than March 2016 by 11.2% and below March 2015 by 21.9%.

New EL disease claims  

In March there were 696 new EL disease claims entering that portal, an increase of 1.6% over February's level but again a real terms decrease once the longer working month is factored in.

Over the first 3 months of 2018 the monthly average is now 700, which is 8.5% less than the monthly average for the calendar year 2017 which stood at 765. The current average is also less than the average for the first 3 months of 2017; in fact 20.4% lower, with the numbers standing at 700 for 2018 compared to 880 for 2017.

New casualty claims over the longer term

Across all 3 casualty portals we return to a pattern of falling volumes on this longer term method of assessment, though the rate of decrease is currently smaller than last year in the case of PL and EL.

PL claims

Over the 12 months up to and including March, the total for new PL claims now stands at 58,221, which is a drop over the month of 1.6% from the level of 59,150 seen in February.

After 2 consecutive monthly rises earlier this year, we return to the previous pattern of monthly falls. This data now shows decreases in 29 of the last 33 months.

The average monthly rate of decline in 2018 is currently 0.5% (last month the corresponding figure showed an increasing trend), whereas in the year of 2017 it was an average fall of 0.7%.

The rate of the decreasing trend has slowed, from 10.5% between March 2016 and March 2017, to 7.5% between March 2017 and last month.

EL claims

There were 45,785 new EL claims over the 12 months up to and including March, which is a fall of 1.2% from 46,362 which was the position a month previously. Over the last 28 months we have seen 21 monthly decreases.

The average monthly rate of decline was 0.6% in the calendar year 2017 and is now 0.4% after 3 months.

Longer term the rate of decline has increased, so that the EL position has reversed from last month. Between March 2016 and March 2017 it was 5.5%, while as between March 2017 and last month it grew to 7.7%.

EL disease claims

With EL disease, there were 8,605 new claims over the 12 months till March, which is a decrease of 2.8% from the position seen in February. This is the 27th consecutive monthly fall.

The average monthly rate of decline during 2018 to date is 2.0%, greater than the average for the calendar year 2017 which stood at 1.4%.

The longer term rate of decline has though slowed, from 48.3% between March 2016 and March 2017, to 16.7% from March 2017 up till now.

Retention rates

There were deteriorating retention rates for EL and EL disease in March, while those for RTA and for PL remained stable.

Over the longer term and including stage 3 claims within the definition of retained claims, there are marginal improvements this month for RTA, PL and EL disease, while EL remains static.

Currently the level of retained claims stands at 52% for RTA, 28% in the case of EL, while PL is at 21% and EL disease is showing 8%.

RTA claims – stage 3 usage and PSLA levels

Stage 3

In March 6,066 RTA claims had court packs prepared ready to proceed to stage 3. That's an increase of 2.2% over the level seen in February, but a smaller increase than the extra working time available in which to prepare them.

As the bars on the preceding graph show, over the last 18 months there is no clear sign of continuance of the previous trend of increasing use of stage 3, especially in the case of motor claims.

PSLA quantum levels

Average levels rose last month by 0.6% to £2,808, the highest ever level for RTA claims, and the third time that the £2,800 level has been breached.

The current level is now 0.9% higher than November 2017 when it can be thought that the increases seen in the 14th edition of the Judicial Studies Board Guidelines were likely to start to be felt. The standard increases at the time from the 14th edition were 4.8%, so the current increasing trend now visible is likely to continue.

Casualty claims – stage 3 usage and PSLA levels



Stage 3

As to PL, the number of court packs increased by 32.8% to 81, the 5th highest month to date.

With EL, it rose 1.2% to 80, the 6th highest so far.

In the case of EL disease, the number of packs fell by 1 to 4.

PSLA quantum levels

It is difficult so far to identify any effect from the 14th edition of the JCG so far across the casualty portals, though average quantum is currently very similar between the portals.

With PL, the average fell 1.8% over the month to £4,142, while in the case of EL it fell 1.4% to £4,152. Neither shows increases when compared to last November.

With EL disease, average levels rose 2.9% to £4,167. While this figure is 6.8% higher than the level seen last November, the sample is small as always in the disease portal and there are too many variables to draw useful conclusions.

Comparative use of stages 2 and 3

Our graph shows this month an increased proportion of PL claims moving to stage 3 before concluding as would be expected with a 32.8% increased level of use of stage 3 in the month, but that level falling back for RTA and EL.

Current proportionate use of stage 3 as the method of concluding quantum as opposed to stage 2 use only is 30% in the case of RTA, 13% with PL and 12% for EL. Previously observed trends highlighting extra use of stage 3 are more difficult to identify currently and this may be connected in part with the delay in obtaining stage 3 hearing dates making that part of the process less attractive to follow.

Contact

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

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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