Portal Data for July 2019 shows declining claims volumes in the shadow of political uncertainty
The Claims Portal data for July 2019 has now been released with a significant drop in RTA numbers, certainly when compared with the prior year. We had delayed publication of our analysis for a couple of reasons; firstly to await the long promised MOJ Response to the MedCo Consultation, and secondly the Portal figures published by Portal Co this month contained an error in including part of August as well.
As a result, our analysis will not match exactly the figures direct from Portal Co for those eagle eyed observers, and given there are some significant variations between the June figures from last month's release, we suggest a note of caution when considering some of the data this month. We are informed the issues will be corrected for the August data.
Firstly a look at what is going on with the reforms at present.
Since our last update, an MIB whiplash reforms seminar was held on 30th July, with both the MIB and MOJ on hand to update both sides of the fence on progress made. Despite the change of Prime Minister, David Parkin of the MOJ gave a clear statement of intent that the governmental shift would not put them off track. It was stated that the MOJ response to the medical evidence consultation would be available 'soon' and the response has now finally been published. MedCo preparations have been continuing based on the most likely outcome of the consultation, which has now come to pass, but it is worrying that something so straightforward when compared with the other whiplash reform measures cannot easily be dragged over the line.
The headline features are:
• The MedCo system will be extended to cover the provision of initial medical reports in relation to all RTA related personal injury claims under £5,000 (i.e. no longer just soft tissue), and the provision of initial medical reports for non-soft tissue personal injury claims will be limited to General Practitioners (GPs) and Accident and Emergency (A&E) consultants only;
• Specific specialist medical experts or additional types of practitioner will not be added to the list of experts available to provide initial medical reports;
• The fixed recoverable costs regime for soft-tissue injury medical reports will be extended so as to apply to all initial RTA related, non-soft tissue injury medical reports used to support claims under £5,000, but not to extend FRCs to cover specialist reports; i.e. the claimant will get a GP or A&E report at £180 initially, and if they recommend a report from a further specialist, that report won't be subject to a fixed fee;
• The MOJ will develop, in conjunction with MedCo, new qualifying criteria on customer care, standard service level agreements and accessible information for claimants to be applied to/used by medical reporting organisations (MROs) and direct medical experts (DMEs) providing services to unrepresented claimants through the MedCo process.
In terms of practicalities, the MIB at the last conference were still confident that they could meet the 6th April 2020 implementation date for the new portal. The key to this is whether 'user testing' is available by October 2019, which was always the stated aim, in order to give stakeholders time to recommend changes to the system and iron out faults. With Parliament due to be shut through much of September and October, it is difficult to see the Statutory Instrument setting the tariff and definition being in place before considerably later in the year, further complicating the work of the CPRC who would no doubt like to know the position before finalising the rules.
The same difficulties remain that we reported on last month in terms of ADR, medical reports and infant claims.
Elsewhere, the charity sector launched a major criticism of rushing the reforms through, asking for a delay of 'at least' a year. No conversations have been had that the Citizens Advice Bureau are aware of between the MOJ/MIB and third sector organisations which may well bear the brunt of the litigant-in-person increase. Advice centres would need training and potentially extra resources.
With confirmation now that Parliament is being prorogued today until 14th October, the risk of a no-deal Brexit and/or a general election is very high and in either eventuality, it is unlikely that the whiplash reforms will be seen as a priority in such circumstances, increasing the chance of delay.
Prorogation in itself would halt all parliamentary business, with bills yet to be given Royal Assent likely to fall away unless specifically carried over to the next session. You will no doubt recall that something similar happened to the Prisons and Courts Bill which was the original vehicle for the whiplash reforms and which was killed off by Teresa May's snap election in 2017. However thankfully it reappeared in the form of the Civil Liability Bill leading to the Civil Liability Act. Hence, the legislation itself seems secure unless there is a change of government or government policy. If a Labour or even Lib-Lab government came in, then implementation of the reforms they opposed could potentially be shelved.
It is perhaps too early to speculate on whether we will go to the polls and what the outcome of a general election might be, but it all points at least to delay. It remains to be seen whether the October testing deadline will be met and then what happens with the wider political situation.
The ABI has in the meantime suggested that the reforms should focus on RTA and leave the small claims limit for EL and PL claims where it is, at least for now. That may ease the political situation around the reforms to some extent as Labour MPs and the trade unions were finding it hard to divorce the RTA situation from vulnerable employees.
USDAW commented as follows: "We have consistently argued that an injured worker faces particular difficulties in pursuing a claim for injuries sustained in the course of their employment which are at least as great as those faced by vulnerable road users, children and protected parties whom the government has already chosen to exempt from the proposed changes. We therefore welcome the statement from the Association of British Insurers that employers’ liability claims and public liability claims should not be caught up by the increase in the small claims limit. We have always maintained that employers’ liability claims have never formed part of the real objective of this legislation and they, like vulnerable road users and litigants under a disability, should be specifically excluded from the proposed reforms."
MOJ Portal - case law roundup
There are two, recently reported and helpful cases at opposite ends of the spectrum worthy of mention this month; one very much a large loss case that started in the portal, the other a specific issue with amendments of offers from Stage 2 to the CPP.
In the matter of Barry Cable v LV=, the strike out of a Part 8 claim was upheld on appeal by HHJ Wood in Liverpool. The accident took place in September 2014 with a CNF being issued the same month. The initial GP report was vague with reference to dizziness and referral to a neurologist recommended. Thereafter LV chased the claimant's solicitors on numerous occasions with no reply. In September 2016, the claimant's solicitors advised that they had a neurology report and that the claim should exit the portal process due to the value exceeding £25,000.
Despite this, the claimant eventually issued Part 8 proceedings under PD 8B and sought a year's stay during which very little happened, serving the neurology report days before expiry of the stay. The claimant's solicitor applied to transfer the matter to Part 7, and the defendant cross applied to strike out for abuse of process, the claimant's solicitor having served a £2.2 million schedule of loss by this point. HHJ Wood upheld the decision and the claim remained struck out.
Undoubtedly, what helped here were the actions of LV in tracking the claim in having potential at an early stage and backing this up with correspondence. At the very least, these are cost markers for later conduct; and at best, they could assist with striking out a large action that should never have been within the portal in the first place.
Also in the press recently, was the case of Matloob v EUI Ltd. Here it was ruled that failure in a portal case to include the same damages figure in the stage 3 court proceedings pack (CPP) as the stage 2 settlement pack makes the offer void. As is all too often the case, when completing Part B of the CPP the solicitor amended the claimant's offer to show a different position in respect of physiotherapy treatment. EUI objected on the basis that the Part B form should only contain offers from the stage 2 settlement pack. In the original stage 3 hearing the judge awarded the claimant damages and an enhanced uplift for beating their own Part B offer. On appeal, this was overturned as the amended figure was deemed an invalid protocol offer. This joins a body of case law which demonstrates how strictly the Portal rules should be interpreted as a self-contained code.
New RTA Claims in July
According to the data, July 2019 saw 52,995 new RTA claims, a decrease of only 0.3% on the June 2019 figure, but a very significant drop of 11.9% on the July 2018 total of 60,135.
With 23 working days in July, one would have expected an increase on June's figures, however the number of new claims presented per day in fact averaged out at 2,304 claims per day, a significant drop from June's 2,726 claims per day. The graph below illustrates on a 12 month rolling basis the long term trend.
New Casualty Claims in July
There were 4,787 PL claims submitted in July 2019, a very significant increase of 1,561 (48.4%) on the previous month, and the highest month since March. However, the June figure (3,226) is substantially different to the June figure reported by Portal Co last month (4,052) and we do have some nervousness given there has been such a change in the figures that normally only change by a small amount. We have queried the position but would suggest in the meantime that the figures are treated with caution.
There were 3,692 new EL claims into the Portal in July 2019, a significant increase of 28.7% based on the previous month, however there has been similar movement in the June 2019 figures from one reporting period to the next and our concerns are the same as for PL. Again, we urge caution in reviewing the figures this month and it might be better to consider the long term trends below.
Stage 3 Usage and PSLA
PSLA dropped slightly to £2,818 from £2,830 the month before reflecting a fairly static picture. The average over the last 12 months is £2,840 compared to an average of £2,837 for the preceding 12 months.
The number of claims where a Court Proceedings Pack has been prepared has on the other hand increased considerably in July from 5,605 to 6,697. When that increased number is placed against the slightly declining volumes, there has been a significant monthly increase in the percentage of claims that proceed to stage 3 as demonstrated below.
The graph below shows that there are greater fluctuations in both Court Packs and average PSLA, due mainly to the much smaller volumes that make the numbers less predictable. The PSLA figure is £4,417 for EL and £4,553 for PL claims.
Retention rates fell for RTA cases during July but rose for EL/PL and EL disease.
The longer term trends of retention remain stable.
We should be in a position next month to review the quarterly civil justice statistics alongside the Portal data and maybe by then we will know whether the country is heading to the Polls. In the current political climate, anything could happen...
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.