Portal Data for August 2019 shows steady volumes with Brexit uncertainty reaching fever pitch
The Claims Portal data for August 2019 has now been released, with some reductions in RTA and EL/PL new claim numbers. Last month we did mention concern over some of the July figures which was justified, and those figures have been adjusted now in this latest release.
Any reduction might in part be continued uncertainty in the market (as well as politically), as well as changes in behaviour having a longer-lasting effect on claims numbers with Claimant representatives switching to more profitable avenues of work. For example Housing Disrepair and Cavity Wall claims are not subject to a portal, there being no PL Disease protocol in comparison to the EL Disease one.
Various update meetings and seminars have been held in September but with little further substantive information resulting. The Sprint workshops continue but work on the online portal would need to be close to completion if user testing is to take place in late October/early November as originally planned. It is likely that any slip with that public user testing will result in the April 2020 deadline not being met. It does not appear that the CPRC have made much headway with the necessary rules and pre-action protocols, which may be because they are themselves awaiting policy decisions on ADR, scope of the tariff and valuation of non-whiplash injuries. We also know that the secondary legislation is still outstanding to introduce the tariff and increase the small claims limit.
The MOJ have recently accepted that there is a risk to the April date and there has been no sign of the public awareness and education campaign that was once promised to educate the public about the ability to bring their own injury claims.
Whilst Parliament has now been recalled following the excitement of the recent Supreme Court case, it doesn't appear to be debating much aside from Brexit and is now about to be prorogued in any event. Whether we exit the EU or not at the end of October, a General Election is likely in the months that follow and this will disrupt affairs further.
Speaking of such matters, an MIB Brexit Update took place a few weeks ago in Westminster. Issues arising were green cards although great progress had been made with that, 94% of UK insurers being signed up to the emergency green card scheme in ports. It was hoped that the provision to actually print on green paper could be removed in years to come!
There were also concerns raised of rising import costs causing knock on effects on the price of parts and delays with parts. CHO's may be rubbing their hands in expectation of extended hire periods caused by external factors.
Repairs are undoubtedly costing more already. According to the Institute and Faculty Of Actuaries, Accidental Damage cost rose by 8.3% per annum from 2015 to 2017 and Third Party damage has averaged a 5.7% increase each year from 2010 onwards. At the same time, theft is on the increase. The ABI noted that in the first three months of this year, the cost of theft payouts rose 22% to £108 million on the same period last year. The rise reflects Home Office figures recording a 50% rise in vehicle thefts over the last five years.
Lastly, there have been press reports of the first new CMC set up offering free use of an automated system to deal with post-reform personal injury claims. Law firms will apparently not be paid for or by clients who use the system but will be able to keep those claims which drop from the process presumably due to value and becoming cost bearing. The company, BMS Funding, says it plans to make money through referral fees on medical reports and credit hire. It is interesting to note that the company has been set up by the founder of Claims Direct.
Civil Justice Statistics
This month we have a "double whammy" of statistics for you with the Civil Justice Statistics being released covering the April – June 2019 period, Quarter 2.
The headline figures to note is a 6% reduction in issued County Court claims to 465,000 in the quarter. Issued PI claims were down even more than this, by 11%, to 28,000 and the year on year reduction is stark as can be some from the graphs below. This is in fact the lowest figure since 2011.
Also on the increase was the amount of time taken to get to trial, an average of 36.6 weeks for a small claim, up 2.7 weeks and 59.1 weeks for multi/fast track, up three weeks. This feels particularly concerning in the context of small claims given the potential increase in small claims post April 2020 with the reforms.
There was an increase in defended claims (up 5%) but a reduction in those going to trial, down by 2%. Overall, the total of 465,000 issued claims was well below the peak of 565,000 for the same period in 2017 but still well above the 328,000 issued in the same period in 2012.
These graphs relate specifically to personal injury:
New RTA Claims in August
August 2019 saw 55,764 new RTA claims submitted, down 9.1% on the adjusted figure for July 2019 and 4.4% on the August 2018 figure of 58,324. But it remains to be seen whether the August figure will be adjusted next month.
With 21 working days in August, two less than July, a drop would have been expected and whilst there is reduction in CNFs per day, when expressed in this way it is far less dramatic. The number of claims per day in August totals 2655 per day as opposed to the adjusted July figure of 2668.
The 12 month cumulative CNF figures show a very slight reduction over the last 18 months as follows:-
Interestingly our own data shows that the market share of the top 25 firms is declining over the last 12 months and being taken by "new kids on the block" – firms that have appeared handling personal injury claims for the first time. The share amounts to approximately 10,000 claims per annum so a not insignificant number.
New Casualty Claims in July
There were 4637 new PL CNF's submitted in August 2019, a not unexpected drop from the previous months adjusted figure of 5060, dropping 8.4%, it was also a drop of 5.2% on the comparative month in 2018. August 2019 was still the second highest month of the year however, since 4654 claims were submitted in January 2019. With cumulative totals falling over a rolling 12 month period for the last few years, a strong final few months might see a trend in the upwards direction:-
There were 3,498 new EL Accident claims submitted to the Portal in August 2019, a significant drop of 13.1% based on the previous month.
EL Disease dropped to 363 new claims, a drop of 16%. As we know however these claims tend to be higher value and complexity which are less suitable for the portal in the first instance.
Given the recent Lyle v Allianz strike out case for stagnation in the portal when the value of the claim was vastly in excess of the portal limit, claimant firms will be reluctant to start claims in the portal when they may encounter difficulty later in the process. Practitioners should note that the Claimant in the case of Cable v LV (which followed the principals of Lyle and struck out a £2million portal incubation case) is seeking permission to appeal so watch this space.
Stage 3 Usage and PSLA
PSLA increased slightly to £2826 from £2,818 the month before so still pretty static. We believe significant movement is unlikely until the new JC Guidelines come into existence. It had been thought that the new guidelines would be delayed so that the confirmed tariff figures might be inserted. However a provisional publication date of 15th November 2019 has been provided so it appears the JCG editorial board will be proceeding without reference to the new tariff.
The number of claims where a Court Proceedings Pack has been prepared dropped back from the significant increase last month to a more predictable 5663 for RTA claims, a slight drop on the same period the previous year.
It is obvious from the Portal figures supplied that a great many EL/PL cases drop out of the portal process compared to the RTA figures. The figures suggest roughly 1 in 10 RTA cases submitted end up with a Stage 3 pack being submitted, compared to 1 in 40 EL cases. This cannot just be because settlement rates within the portal are better for RTA cases, it must indicate cases dropping out for complexity or insurers wishing to drop cases out for further investigation.
Retention rates rose for RTA cases during August and also EL accident and PL. There was a slight drop off for EL disease but nothing significant.
For more information please contact Nigel Teasdale, Partner M+44 (0)7752 709 114 Nigel.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.