More signs of move towards stabilising volumes from August portal data amid a mixed set of figures
As the Civil Liability Bill completed Committee Stage on 11 September and we await the date for its Report Stage, we look to see what an analysis of the Claims Portal data for August adds not only to the debate surrounding the Bill but to an understanding of current claims trends.
The overall impression from the new claims data is of a continuing move away from a picture of reducing volumes of new claims to one of stabilised numbers across RTA, PL and EL.
Over the month, RTA new claims numbers fell by 2.7% and EL by 1.7%, though PL rose by 1.4%. Looking at 2018 to date and comparing volumes with 2017, RTA is currently 1.6% lower and PL is reduced by 1.0%, but EL is 1.0% higher. The extent of both of the reductions as well as that of the increase is small.
Looking at longer term trends measured on a preceding 12 months basis, all 3 portals were slightly reduced this month, RTA by only 0.01%, PL by 0.4% and EL by 0.1%. At those marginal levels of reductions, we could well return next month to marginal increases as recently seen in all 3 of them.
As to RTA data over the publicly important year to 31 March used by the CRU, current portal numbers suggest an intake for 2018/19 of 692,000, which would involve a reduction from the 700,000 seen in 2017/18 of only 1.1% compared to the 12.0% fall seen at last year end.
PSLA levels in RTA claims rose to £2,840, the 3rd highest to date, and are now 2.1% higher than levels seen before the 14th edition of the Judicial College Guidelines was published which recommended increases of 4.8%.
EL disease claims as presented to the portal continue to show a very different picture. The numbers of them entering continue to fall substantially and the number of them moving to settle within the process remains very low.
The latest data on the number of litigated claims shows the lowest number for 4 years and it would be unsurprising if this were linked to stabilisation of new portal claims at a lower level than previously.
New RTA claims in August
The month of August saw 58,858 new RTA claims entering the portal, which is a 2.7% reduction from the 60,476 which did so in July, though it should be recalled that July's level was the 2ndhighest month of 2018 to date.
As with the months of May and July this year, August was another month where the previous trend where a particular month's total represents the lowest number of new claims for that month of the year since the portal was in its infancy, is not followed. In this case, August 2018 exceeds August 2013 by 2.6%.
Looking back over more recent years, August 2018 was very marginally less than August 2017 by just 71 new claims or 0.1%, though was lower than August 2016 by 14.2% and less than August 2015 by 13.3%.
The monthly average number of new claims during the calendar year of 2018 now stands at 58,550, which is 1.6% below the monthly average for the whole of 2017 which was 59,521. At the end of the previous month the gap had been 1.5% so it has marginally widened.
Doing the same comparison over the first 8 months of the years 2017 and 2018, the extent to which 2018 is lower than the prior year has in fact reduced, from 3.4% at the end of July to 3.2% once August's data is added.
New RTA claims in August – time weighted
There were 22 working days in August as there had been in July so the extent of the reduction in volumes is the same as shown on the first graph: 2.7%.
This is equivalent to 2,675 new claims per working day. This is the 18th consecutive month that the level is under 3,000.
New RTA claims over the longer term
A month ago we saw with the inclusion of the July data an increase in volumes when calculated on the longer term 12 month cumulative basis, only the 5th increase over the last 31 months. While the height of the bar representing August on the graph above looks similar to July's, in fact over the month there was a small decrease of 0.01%.
The average monthly fall for 2018 remains at 0.3% after 8 months, but may soon be nudged lower to 0.2%. This remains well below the monthly average for the calendar year of 2017 which was 1.1%.
Longer term the rate of decrease has slowed: from 11.3% between August 2016 to August 2017, to 6.2% over the last 12 months.
Comparison with annual CRU and portal data
Including August's data we are now 5 months into the accounting year used by the DWP for their annual CRU data, and at a stage approaching the mid-point of that time are in an increasingly improved position to see where the portal data over the full year to 31 March 2019 may end up.
Over the first 5 months of 2018/19 there have been 288,189 new RTA portal claims, and if the remaining months follow the same pattern then the final number would be 691,656. That's within 10,000 of and only 1.2% below the 2017/18 total of 700,008.
After a reduction of 12.0% between 2016/17 and 2017/18 as shown on the graph above, it looks as though that in April 2019 we will see that when 2018/19 is compared with 2017/18, the result will be very similar, at around 700,000.
In 2017/18 there were 650,019 new RTA claims reported to the CRU. Our currently anticipated portal RTA total for 2018/19 is 6.4% higher.
On behalf of the government, claims numbers were referred to by justice minister Rory Stewart at Committee Stage of the Civil Liability Bill, who specifically referred to the number of whiplash claims increasing by 40% since 2005, at the same time as the number of vehicle accidents has fallen by 30% and cars had become much safer. While he invited opposition members of the Public Bill Committee to explain the increase, none was heard.
It is in fact worth noting that Mr Stewart was being conservative as if we compare the anticipated portal RTA numbers for 2017/18 and 2018/19 on the one hand pointing to a level of around 700,000, with on the other the CRU average of RTA claims over the 5 years between 2000/01 and 2004/05 which did not exceed 400,000, then current volumes are 75% higher than in the early noughties.
New casualty claims in August
August saw 4,944 new PL claims, an increase of 1.4% over July's level of 4,875. This is the highest monthly level in 6 months.
It is though still the lowest level for the month of August since the casualty portals opened. It is 4.7% lower than August 2017, 9.7% less than in August 2016 and 17.4% below August 2015.
The monthly average of new PL claims in the calendar year of 2018 to date now stands at 4,867. This remains 1.0% below the average for 2017 which was 4,917.
Comparing the first 8 months of 2018 with the same period in 2017 when the average was 5,006 indicates that the current level is 2.8% lower.
As to EL, there were 3,901 new claims last month, a reduction of 1.7% from the 3,969 seen in July.
The level is the lowest for that month of the year since the portal was new. It was 1.6% less than in August 2017, 10.7% lower than in August 2016 and 9.5% below August 2015.
The monthly average number of new EL claims in 2018 to date is now reduced to 3,941, which is 1.0% above the 2017 average of 3,855.
And comparing the first 8 months of 2018 with the same period in 2017 when the average was 3,943 indicates that the current level is only a minimal 0.05% lower.
EL disease claims
In the case of EL disease, there were 431 new claims in August, a reduction of 10.2% from the incoming number in July. This is the lowest single month intake since the casualty portals were 2 months old.
The current level is 42.5% fewer than in August 2017, 51.5% lower than in August 2016 and 73.6% below August 2015.
The monthly average of new EL disease claims during 2018 to date is now 512, which is 32.3% less than the 2017 average of 756. Comparing the first 8 months of 2018 with an average for the same period in 2017 of 814 indicates a fall this year to date of 37.1%.
New casualty claims over the longer term
Looking at the 12 month cumulative data to see longer term trends shows this month a decreasing trend, albeit with a slower rate of decline from that seen earlier.
This month the number fell from 58,119 to 57,876, a reduction of 0.4%. This means that there have been reductions on this measurement in 32 of the last 38 months, though the last 11 months have now shown a steadier pattern with 5 rises and 6 falls.
The average monthly rate of decrease this year so far remains at 0.2%, rather less than the corresponding average for 2017 of 0.7%.
More historic data also shows a reducing rate of decline, from 9.8% as between August 2016 to August 2017 to 3.7% over the last 12 months.
Moving to EL, there was a reduction of 0.1% in the data over the month, from 46,303 to 46,240, so smaller in extent than with PL. 24 of the last 33 months have seen a reduction, though of the last 11 months 4 have shown an increase.
Over 2018 to date the numbers on this measurement have hardly changed: the average monthly decrease is of only 0.004%, compared to an average decline of 0.6% per month during 2017.
The more historic data also shows a reducing rate of decline, from 6.8% between August 2016 and August 2017 to 2.5% over the last 12 months.
EL disease claims
In the case of EL disease we see our 32nd consecutive monthly fall, this month of 4.3% from 7,479 to 7,160.
The rate of decline continues to speed up. In 2017 it was on average 1.4% per month but the corresponding figure for 2018 to date is 2.7%.
While the rate of decline over the period between August 2016 and August 2017 is greater than over the last months at 35.8% compared to 25.8%, the gap is narrowing. That gap is now 10.0% whereas it had been 14.6% when the same data was reviewed last month.
The RTA retention rate was stable last month at 53%, as was the EL disease rate at the opposite end of the spectrum at only 3%.
The rates for EL and PL each fell by 1%, with EL now on 28% and PL on 22%.
All retention rate data designates cases proceeding to stage 3 as retained claims.
RTA claims – stage 3 usage and PSLA levels
In August there were 5,999 court packs produced as a preliminary measure to use of stage 3. This constitutes a fall of 12.2% from the record level of 6,829 seen in July.
We saw a month ago how July's number was 150 higher than the closest month as seen on the graph above. We asked whether the data for July was untypical or was the start of a new trend: a move back to the increasing use of stage 3 seen over the period until late 2016. The latest data suggests that the answer is more likely to be the former - that the data in July was untypical.
The average PSLA figure in August was £2,840, an increase of £7 or 0.2% over July. This is the 3rd highest level to date.
The increase is now 2.1% over the level seen last November when the effects of 14th edition of the Judicial College Guidelines began to be felt, their recommendation being for average increases of 4.8%. This would suggest an expected continued inflationary impact in the months ahead.
Casualty claims – stage 3 usage and PSLA levels
Taken together, use of stage 3 in the casualty portals was the 3rd highest to date in August.
PL rose 10.1% to 76.
EL increased 18.4% to 90, also the 3rd highest to date for that specific portal.
The exception was EL disease which increased only from 0 to 1.
In the case of PL average PSLA damages increased 0.9% over the month to £4,379, the highest to date. The current level is 2.0% over where it stood last November when the 14th edition of the JCG began to be felt.
As to EL, the average fell 2.6% to £4,207, with no discernible increase as yet from the JCG 14thedition.
The average figure in the case of EL disease rose 3.3% to £4,001, this being 2.5% higher than when the 14th edition impacted.
Comparative use of stages 2 and 3
In the case of RTA we saw in the July data a specific increase in the use of stage 3 over the month sufficient to reach the position where for the first time one-third of settled claims needed to use stage 3 before concluding. We asked at the time whether this increased level would be continued in August; the answer seems to be that it will not. RTA use of stage 3 is now down to 31%.
Comparative use of stage 3 increased for both PL and for EL, both now standing at 13%.
We wait to see whether for those claims types future use of stage 3 will stabilise at current levels after earlier periods of increasing use, or will rise further.
Litigated injury claims
Earlier this month the data for litigated injury claims was released by the MoJ as shown on the graph above. Q2 of 2018 reported the lowest number of litigated PI claims for 4 years.
The graph demonstrates that the peak for these claims occurred in 2012/13 when both years' numbers were approaching 147,000. This period of course included the pre-LASPO peak.
Since then, the picture has been a mixed one with both 2014 and 2016 reaching totals within the 131,000-134,000 range, while 2015 and 2017 reached higher figures, within the 142,000-143,000 bracket.
It was of course in March 2015 that enhanced court fees were introduced, and this may have had a marginal effect in depressing numbers in 2016, just as 2014 may have been reduced by a post-LASPO effect. 2017 had returned numbers to 2015 levels.
Halfway through 2018 the number of litigated injury claims to date stands at a provisional figure of 65,194. If this type of level is seen during the remainder of the year then the annual figure could be in the region of 130,000, closer to the lower years seen in 2014 and 2016.
In as much as claims volumes as seen through the portal data may be stabilising at lower levels than earlier peaks, it would not be surprising if a similar pattern was observed when it came to that type of claim entering litigation.
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.