Claims volumes of all types are up across the board in July while longer term trends point to stabilising volumes
The data from Claims Portal for July allows a further sighting of likely future claims numbers on the eve of the Civil Liability Bill proceeding to Second Reading in the House of Commons.
In July there were increasing numbers of new claims into the RTA, PL and EL portals, with the RTA increase being as much as 11.3%. The casualty increases were more modest at 6.3% in the case of EL and 3.6% for PL.
Longer term trends in the case of RTA, PL and EL measured on a 12 month cumulative basis were all pointing towards increasing volumes taking into account this month's data. This is the first time in some 3 years that this has been the case.
Particular interest may be in where current levels of RTA claims entering the portal may end up at the end of the year. Whether looked at in terms of the calendar year 2018, or the accounting year 2018/19 running until the end of next March, the current data suggests only a slight decrease in the region of 1.5% when compared to 12 months previously, much smaller than the 12.0% decrease seen at the end of 2017/18.
It could reasonably be said that current indications are of moving towards a new stable level of RTA portal claims at around 700,000 per year.
This month's data also shows an increased use of stage 3 in RTA claims by 15% to the highest level yet. This is the first month where one-third of RTA claims have needed to progress to stage 3 before settlement on quantum can take place.
New RTA claims in July
During the month of July there were 61,040 new claims into the RTA portal, which represents an increase of as much as 11.3% from the 54,830 seen in June. July was the 2nd highest month of the calendar year 2018 to date.
July is another exceptional month (we last saw one back in May of this year) when the current trend of a particular month's total representing the lowest volume of new claims for that month of the year since the portal was new, is not followed. This July’s number is in fact 4.4% higher than the corresponding month of July in 2017. It is though 7.1% lower than July 2016 and 24.3% less than July 2015.
Adding July’s number to the total of new claims for the calendar year of 2018 to date increases the current monthly average to 58,625. This is now only 1.5% below the average for the calendar year of 2017 which was 59,521.
But if we compare the monthly average for the year to date with the same 7 months in 2017 then the gap is greater. The current 2018 average is 3.4% below the average for the same 7 months of 2017 reflecting the decreasing trend as to the number of new claims seen in the later months of last year.
New RTA Claims in July - time weighted
There were 22 working days in July, an increase of 1 day or 4.8% of working time over the 21 seen in June. The increased length of the final bar on the graph above reflects the fact that the rise in the number of new claims at 11.3% outstrips the additional time available to claimant operations to submit new claims into the portal.
The current level equates to 2,775 new RTA claims per day on average. This is the 17th consecutive month that the daily level has been below 3,000.
As demonstrated on the graph above the first 5 months of 2018 produced higher monthly claims intakes than the 2nd half of 2017. June’s average ended that trend, but July has seen a return to it.
New RTA claims over the longer term
Going to the usual rolling 12 month cumulative basis in order to better see longer term trends, this month saw an increase of 0.4% from 695,880 in June to 698,428 this time around. That represents only the 5th increase over the last 31 months. It almost but not completely undoes the effect of a 0.5% fall the previous month.
The average monthly decrease for 2018 to date is now 0.3%, the level at which it had stood in May after rising to 0.4% after last month’s data was taken into account. This represents a changed picture from the average monthly fall of 1.1% seen over the calendar year of 2017. The current rate of decline during 2018 to date is only around a quarter of what it was last year.
Looking back further in time the rate of decline has also slowed: from 10.1% between July 2016 and July 2017, to 7.3% over the last 12 months.
Comparison with annual CRU and portal data
With the inclusion of the data for July, we are 4 months into the accounting year used by the DWP for recording the CRU data. It is worth again seeing where the current data available so far for the year up to the end of March 2019 might be heading.
If RTA portal claims continue at the current rate, then the annual total for 2018/19 would reach 690,342. That would be a figure only 1.4% lower than the total of 700,008 reached in 2017/18, and on that basis, if confirmed; RTA portal levels could at that point in time reasonably be described as having been stable over the last 2 financial years.
It would be a rather different picture from the 12.0% drop seen between 2016/17 and 2017/18 and would suggest that stability might be being achieved at a slightly decreased level from that which was seen over the period up to 2016/17.
In 2017/18 there were 650,019 new RTA claims reported to the CRU. The currently projected number of RTA portal claims for the year 2018/19 is 6.2% higher.
Data from Access to Justice's campaign
A2J were publicising this month data emerging from a Freedom of Information request which they made of the DWP in relation to CRU claims data which they claimed showed that "the so-called whiplash epidemic is disappearing".
They said that the CRU have informed them in response to their request that whereas there were 355,367 new RTA claims registered in the first 6 months of the calendar year 2017, that number had reduced to 326,699 in the first 6 months of this year, a fall of 8.1%. This is of course not officially published CRU data.
The formally published CRU data is always for the 12 months to the end of March in any year. Earlier this year the DWP reported that the full year data to 31 March showed a fall from 780,324 in 2016/17 to 650,019 in 2017/18, a decline of 16.7% (it will be recalled that the portal data over the same periods showed a smaller decline of 12.0%). It is worth noting that on the A2J data, if accurate, the rate of decline has halved from what it was in the formally published data looking at the 2 financial years in question.
We looked at the portal data for the first 6 months of the year in our last month's review of the June MI from Claims Portal. Over the same period covered by the FoI request, that's the first 6 months of the year, while there were 366,316 new RTA claims into the portal in 2017, there were 349,337 of them entering in 2018. This represents a decline of 4.6%, less than A2J's 8.1%.
Comparing like for like, we have pointed above that in considering the portal data and contrasting 2018/19 to date with 2017/18, currently available data points to a potential annual decrease of just 1.4%, and at that sort of level it would be reasonable to see the data as pointing towards an essentially stable level of claims over what will then have been a 2 year period.
The reductions in volumes of new claims which have taken place over the last 2-3 years can undoubtedly be attributed to market changes in anticipation of the Civil Liability Bill and associated Small Claims Track changes. The portal data may now be suggesting that the new norm is becoming a portal intake of around 700,000 new RTA claims per year – a substantial number.
To the extent that figure is lower than in earlier years it is due to the expectation of the reforms taking place, so that if for some reason they did not then it would be anticipated that volumes would no doubt increase back towards past levels.
New casualty claims in July
There were 4,942 new PL claims in July, that’s a 3.6% increase over the 4,768 received in June. As we saw with RTA claims, this month does not follow the trend we have seen previously of this being the lowest ever number of PL claims for the particular month of the year since the casualty portals opened, as it was 1.6% higher than the level reached in July 2017. It was though 6.1% less than in July 2016 and 27.8% lower than in July 2015.
The monthly average of new PL claims during the calendar year 2018 to date now stands at 4,870, which is still 1.0% less than the 2017 average of 4,917. Comparing the first 7 months of the year with the same period in 2017 when the monthly average was 4,981 shows a decline over the year of 2.2%, but a figure reduced from 2.7% when the same analysis was done at the end of last month.
July saw 4,009 new EL claims, an increase of 6.3% over June’s level of 3,773. As with PL claims, last month’s level beat the comparative figure for July 2017 by as much as 14.0%, though it was 1.2% less than in July 2016 and 20.8% below the July 2015 number.
The EL monthly average of new claims for the calendar year of 2018 to date is now 3,955. That is 2.6% higher than the 2017 average of 3,855, though the current level is 0.3% less than the average for the same first 7 months of last year.
EL disease claims
There were 487 new EL disease claims in July, a reduction of 6.7% from June’s number of 522. Apart from last December, this is the lowest number of new EL disease claims since the casualty portals were 3 months old. It’s lower than in July 2017 by 32.2%, less than July 2016 by 40.8% and under the July 2016 level by 72.7%.
The average monthly number of new EL disease claims in 2018 to date is now 587. That’s a reduction of 22.4% from the 2017 average of 756 and is also 28.6% below the average for the same first 7 months of the year standing at 823.
New casualty claims over the longer term
Looking as we have with RTA claims at 12 month cumulative numbers to better recognise longer term trends, in the case of PL up to and including July there were 58,223 claims, which is an increase of 0.1% over the 58,147 seen at the end of last month.
We have seen reductions now over 31 of the last 37 months, but more recently, over the last 10 months there have been an equal number of months showing increases to those showing falls, 5 apiece. This is a sign of stabilising volumes and that as things now stand the previous pattern of constantly falling new claims numbers is at an end.
The average rate of decrease per month during 2018 to date remains at 0.2%, less than the 2017 average which was 0.7%.
The historical rate of decline longer term has also decreased: from 10.1% between July 2016 and July 2017, to 3.6% over the last 12 months.
Analysing the same data in the case of EL, over the 12 months up to and including July there were 46,362 new claims, an increase of 1.1% over the 45,871 seen at the end of June.
There have been reductions now in 23 of the last 32 months, but over the last 10 months the position has been more stable with 4 monthly increases alongside 6 decreases, in the same way as seen with PL claims.
The average monthly change during the year 2018 to date is now a small increase of 0.03%, as opposed to an average monthly fall of 0.6% during 2017, another pointer towards stabilising volumes.
The historical rate of decline is also reduced with EL claims, from 5.9% as between July 2016 and July 2017, to 3.1% over the last 12 months.
EL disease claims
Despite the latest trends towards stabilising numbers seen with PL and EL claims, the position with EL disease claims remains rather different.
As at July the data shows 7,491 EL disease claims over the previous 12 months, that’s a 3.0% fall from the position as at the end of June. This is the 31st consecutive monthly decrease.
Over 2018 so far, the average monthly fall is 2.6%, while the average in 2017 was 1.4%, so again pointing to an increasing rate of decline.
The historical rate of decline was 38.0% as between July 2016 and July 2017, and then 23.4% over the following 12 months.
July showed improved retention rates for RTA, PL and for EL, while that for EL disease deteriorated.
Looking over the preceding 12 months for better identifying trends and comparing the data to last month, retention rates have risen for both EL by 1% to 29%, and for PL by 2% to 23%.
The rates for RTA and EL disease have not changed on this measurement though remain far apart from each other: RTA on 53% and EL disease on 5%.
All retention rate percentages include cases moving to stage 3 as retained within the portal process.
RTA claims – stage 3 usage and PSLA levels
As the final bar on the graph above demonstrates, July saw the highest number of RTA courts packs produced to date at 6,829, as a preliminary step to using stage 3 of the portal process. In fact, the level is 150 above the month which comes closest to that number. This also represents an increase of 15.2% from the level we saw in June of 5,926.
Up until last month, we had in broad terms seen no discernible increase in the use of stage 3 over the last 2 years, whereas there had been a clearly identifiable rise to that point. Whether July’s number is the start of a new trend, or will be shown to have been untypical, remains to be seen and we await more data over the following months.
Last month average RTA PSLA levels were £2,833, representing an increase of £3 or 0.1% on the level seen the previous month. This is now the 3rd highest level to date.
The upwards trend can be attributed to the impact of the 14th edition of the Judicial College Guidelines last autumn which advised increases of around 4.8%. If we see November 2017 as the month when the inflationary impact of the JCG would have begun to have impacted, then we can see we are currently 1.8% above that level so the full effects may be still to be seen in the months ahead.
The horizontal line on the graph above shows not only a slowly increasing trend, but also 3 occasions when the level of settlements seems to have increased suddenly before returning to previous levels. The most recent was in May, and the July data supports that from June in showing that the May level was untypical.
Casualty claims – stage 3 usage and PSLA levels
Last month we saw the highest use to date of stage 3 in the casualty portals, while this month the total number of casualty claims reaching stage 3 has returned the same sort of level as we have been seeing over the last 30 months. Stage 3 usage increased up to the start of that time, but as with RTA claims there has been no real continuation of that trend since then.
In the case of PL claims, 69 reached stage 3 in July, a decrease of 11.5% over June.
With EL claims, 76 were taken to stage 3 in July, a drop of 27.0% from June though that was the highest month to date.
As to EL disease, no claims were taken to stage 3 last month, a fall from the 3 seen the previous month. This is the 4th time that a nil sample has been recorded.
On the smaller samples seen with casualty claims, it is still not easy to identify a specific impact from the 14th edition of the JCG as yet as seen from the lines on the preceding graph, though if it appears out of current marginal indications it will be apparent in the case of PL and EL.
PL PSLA rose 9.5% to £4,340, the 2nd highest level to date.
EL fell 0.9% to £4,340 but that was from June’s level which had been the 2nd highest to date.
EL disease rose 8.8% to £3,875.
Comparative use of stages 2 and 3
The increased number of RTA court packs produced in July leads directly into the graph above, as it shows that last month that for the first time the level was reached where one-third of claims concluding as to quantum were doing so at stage 3 compared to stage 2 where the other two-thirds would settle.
This is the highest proportion yet, though as commented above in relation to use of stage 3 it remains to be seen whether July’s new trend is continued in August. If it does not, then the ratio will fall back from one-third.
In the case of the casualty portals shown on the same graph, they both fell back in terms of the ratio as would be expected from what we know about the reduced use of stage 3 over the month. PL is now on 12% and EL on 10%.
For more information please contact Simon Denyer, Strategic Legal Development Consultant DD 0161 604 1551 Simon.firstname.lastname@example.org
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.