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June portal data: a slight return?

With apologies for the slight delay due to holidays (socially-distant and quarantine compliant of course!) we take a look at the latest Portal data. As the government further eases the lock-down restrictions; encouraging people back to pubs, shops and offices, and as photos appear on the front pages of our newspapers of packed beaches, has increased transport usage led to more claims being submitted to the MOJ Portal? The answer is yes, but not by much.

This is the third set of monthly figures since the lockdown to be fully impacted. At this stage in June, pubs, hairdressers and restaurants had not opened so the impact of those changes will not be seen until the July data is available.

Transport useage

June's figures from the government's official statistics appear to show a flattening line in increased transport usage but figures are still pretty much what they would be for the time of year for commercial vehicles:


And in July even car usage has increased slightly to around 80% with some spikes higher at weekends to around 90% of ordinary use. It will be interesting to see what happens if the government is successful in encouraging the working population back to the office in order to support economic recovery.

The government shifted from the Stay at Home message to Stay Alert on 10 May and began to ease the lockdown restrictions. The downward spikes in all travel including commercial in April and May during some weekends correlate with Easter and May bank holidays. Since the end of May we have seen a return of the pre lockdown pattern of an increase in miles travelled for cars during the weekend. This pattern was reversed prior to June which indicates that travel by car was mainly for commuting purposes during the "hard" lockdown period.

This month, the Society of Motor Manufacturers and Traders (SMMT), reported that in July, new UK car registrations went up for the first time this year suggesting an increased appetite for getting back behind the wheel.

On 2 August, car usage actually hit 100% of pre-accident levels for the first time (admittedly on a Sunday). But for reasons we have discussed previously, particularly around congestion levels, learner drivers and the restrictions on pubs/nightclubs, the number of new claims is still some way off that level.

Whilst there has been some drop in cycling levels we can see from the graph below that in July weekend cycling remains at least 175% of pre-lockdown levels. Weekend cycling is vulnerable to seasonal variations and when we move into the autumn we would expect to see a fall, if you pardon the pun.

On 27 July the government launched a policy paper outlining their plans to encourage cycling and walking for health in England. The plans centre around four themes: better streets for cycling and people; cycling and walking at the heart of decision-making; empowering and encouraging local authorities to enable people to cycle; and protecting them when they do. After a government study revealed that two thirds of adults expressed fears about the dangers of riding on the roads, the Transport minister, Chris Heaton-Harris, said that the plans for cycling and walking announced by the prime minister last month were designed to address that.

As part of the scheme the general public is being provided with £50.00 vouchers to encourage them to have old bikes repaired and brought back to a roadworthy condition. The Highway Code will also be reviewed with a view to further protecting cyclists and other vulnerable road users.  In addition, the government has stressed within the paper that proper infrastructure changes are needed and that "paint only" cycling routes will not be supported.

As we can see, this is a concerted push towards a long term increase in cycling for leisure and commuting, particularly last mile journeys.  E-bike usage is also being encouraged with a commitment to launch a national e-bike support programme which could include loans, subsidies, or other financial incentives, for e-bikes, adapted e-bikes and other e-vehicles. In our last update we discussed the implications of the e-scooter trials which were launched earlier this month.

It seems inevitable that in the future we will see an increase in the miles travelled by vulnerable road users compared to pre-lockdown levels. The high incidence of serious injury and fatality in accidents involving vulnerable road users is well known. It would appear that the government intends to take steps to mitigate against these risks. Insurers will be asking themselves whether these measures will be effective and if the speed of their implementation will match the pace of the increase in cycling levels.

As a further indicator of the easing of lock-down restrictions, the DVLA has issued guidance for the resumption of driver and rider training and testing. There are different provisions for different types of vehicles, and for England, Scotland and Wales. It must be stated however that this is a gradual restart, and where car driving tests are resuming, they are currently only for those people who had a test cancelled during lockdown. This backlog will have reduced numbers of new drivers on the roads and perhaps will also have led to a small minority driving for longer without passing their test on a provisional licence. We know that new drivers are involved in proportionately more accidents and the lack of new drivers may be artificially suppressing the number of claims at the moment.

Courts

To deal with the backlog of cases, on 19 July the Lord Chancellor announced the locations of ten 'Nightingale Courts', to begin hearing cases "from next week", with work ongoing to identify more sites.  The courts will hear "civil family and tribunals work as well as non-custodial crime cases". In a small survey of 50 firms carried out by serious injury rehabilitation provider Medicess, the results which were reported by Litigation Futures suggested that, "law firms and insurers indicated that they expect a dip in workload over the next six months as a result of Covid-19 but expect the market to have recovered by the end of 2021".

Court statistics have a lag back to mid-June rather than being up to date. They show a slight recovery in terms of workload but not particularly swiftly:

In terms of hearings, rather oddly June seems to show a dip from May listings when you would expect more of a return to normality. June and the other summer months may have fewer hearings listed as a matter of course however which may explain matters. The number of adjournments has dipped again, which is good news:

Reforms

With Parliament entering summer recess on 22 July until the 1 September, it seems unlikely that any further substantial progress of secondary legislation will be made in the near future on the whiplash reforms. However, it is understood the MOJ have re-engaged the CPRC to start reviewing the draft rules and protocols in earnest thus giving hope that an April 2021 start date may yet be achieved. But there remains a long way to go…

On the extension of the FRC regime however, speaking at DWF's virtual costs round table on 9 July, Professor Dominic Regan stated that the MOJ remained "mad keen" on a fixed costs regime that would capture most cases between £25,000 and £100,000, and that we were looking at perhaps October 2021 for implementation. The MOJ had also accepted Sir Rupert's recommendation that where there is a good Part 36 offer in a fixed costs case, the recoverable costs will simply be bumped up by 35%, so people will come out of court knowing that both damages and costs are sorted. If that works, Dominic Regan has no doubt that the next step, albeit projecting way into the future, will be to increase jurisdiction to cases worth up to £250,000.  The model wouldn't apply to clinical negligence claims and cases which are deemed too complex for fixed costs – these would be cases lasting at least three days at trial or those requiring at least two experts to give evidence in court. You can read more about what was said on this topic at the round table and current issues in respect of the fixed costs regime here.

Case law

The most significant decision for some time in the portal world came from the Court of Appeal at the end of July in Cable v Liverpool Victoria Insurance Co Ltd dealing with claims incubation where a claim was originally presented via the Low Value Protocol which then was subsequently pleaded at £2.6m. The Court of Appeal gave a scathing judgment of the claimant's solicitors' conduct, but ultimately decided not to strike out the claimant's claim, granting relief from sanctions albeit with a cost penalty. Look out for DWF's full analysis of the case which will be published shortly.

There was also the SCCO decision in Coleman v Townsend in mid-July concerning the recoverability of counsel's abated brief fee, under table 6B section D and the costs of counsel's skeleton argument, after the claimant accepted the defendant's Part 36 offer the day before trial. The defendant's appeal came before Master Haworth.  Given the decision of the Court of Appeal in Aldred v Cham last October (which we reviewed here) the defendant argued that fixed costs were designed to deliver certainty and that the trial advocacy fee was clearly intended to be recoverable inter-partes once the day of trial had actually been reached and that the preparation of the cost  of preparing the skeleton argument, was part of trial preparation and should be disallowed. Master Haworth preferred the defendant's submission stating "It follows that both the claim for preparation of the skeleton argument and an abated brief fee fall within Table B which includes all work "on or after the day of listing, but prior to the date of trial"."  Read more analysis on this case in our article Fixed costs - are you paying too much?

Also of significant interest to portal practitioners is the case of Harris v Browne. In a first instance decision in the Bradford County Court, the District Judge held that a mistake made by the claimant whilst making an offer in the portal was binding. On appeal, the Circuit Judge overturned that decision, using the Overriding Objective "on the unique facts of this case" to obviate the strict aspects of the portal rules.

Permission to appeal to the Court of Appeal was roundly refused, seemingly bringing an end to that particular argument.  The reasoning for refusing appeal centred on the way the Circuit Judge's decision was made, and the application of the Overriding Objective, the Court stating '...that assessment of how the Overriding Objective applied in this case is not capable of successful challenge in this Court'. The knowledge of the insurance company in being aware of the mistake meant the Overriding Objective had to be assessed when coming to a conclusion. This is in stark contrast to the earlier decision in Mahoney v Royal Mail which took place in Truro County Court on 26 May 2020. Here an offer of £550 rather than £5,500 was made in error and the court held the acceptance was binding irrespective of the fact that the accepting party was aware of the mistake.

CRU Data

The annual CRU data was released in July, taking into account figures up to the end of March 2020. Hardly any impact of the lockdown will be felt until next year's figures so these represent 'business as usual'. Reports in the press including Litigation Futures presented a scenario of rapidly dropping claims numbers but on bare inspection this is not the case, with drops against 18/19 figures but not 17/18 for Motor and EL.

In RTA there were 653,052 claims made during 19/20, a drop from the 660,608 the previous year but an increase on 17/18 volumes of 650,019. Over the last three years the number of RTA claims is actually fairly static.

In EL, there were 79,027 claims in 19/20 a fairly significant drop from 89,461 submitted the prior year but again much higher than the 17/18 figure of 69,230. It is worth noting that the 18/19 figure was seen as an inexplicable anomaly at that time.

Clinical negligence claims fell to 15,845 and PL to 72,587. The overall number of claims in all categories fell to 829,252, the lowest figure recorded in recent times. 

Portal Data for June 2020

New RTA Claims

As we expected with transport numbers rising, June did see a recovery albeit perhaps not as strong as might have been expected. There were 31,196 CNFs submitted in the RTA Portal in June 2020, an increase of 8,168 on the May 2020 figures or 35.5%. Taken in context however, this was still the third lowest figure on record since portal stats began and 41.9% down on the prior year figure for June.

The weighted CNF graph also demonstrates the slight recovery:

There was also a further dip in the cumulative totals despite June's increase with the rolling 12 month figure dropping below 600,000 for the first time ever:

The following graph shows a projection of the expected levels of RTA CNFs by quarter based on seasonal influences and taking into account the slight downward trend over the last couple of years in CNF numbers. We can see that the projected volume of CNFs for Q2 2020 was 147,511 compared with the actual figure of 78,852, a fall of 46.5%.  As we move into Q3 with car usage averaging at over 80% of normal and climbing and commercial miles driven nearing normal levels, we should have a clearer picture of the lag between the increase in miles driven and the number of CNF's received.

There are several factors that could mean that new CNFs may not increase incrementally with the level of miles travelled, and we will continue to monitor projected CNF levels against those received.

•  Congestion levels

News of a study from York University suggests air remains clearer as congestion is down and that air pollution has not increased in tandem with the number of vehicles on the road.

The study concludes that the increase in home working and staggering of rush hour has reduced congestion and therefore suppressed pollution levels. The reduction in congestion and the staggering of rush hour is likely to lead to fewer accidents.  Indeed, research by Admiral Insurance published in 2018 found that as many as 43% of their claims took place in rush hour.

The current uncertainty around foreign travel may also lead to increased UK miles driven during the July and August period.  This might result in increased congestion on motorways and in tourist towns.  The largest factor around congestion is likely to come in September with the return of the school run.

•  Vehicle occupancy
Some social distancing remains, and this may continue to have an effect on the vehicle occupancy levels and therefore the number of individual CNFs submitted.

•  Claimant activity
The pandemic has caused significant disruption to claimant operations with many organisations furloughing staff. This may well lead to a delay in new personal injury claims being converted and/or submitted to the portal.  The question for insurers is whether this leads to an overall drop in CNFs or if they will be faced with a spike in new personal injury CNFs when claimant operations stabilise.

New Casualty Claims

New EL accident CNFs showed another small recovery in June, with 1,976 CNFs being submitted; a rise of 19.8% on the previous month but 42.6% down weighed against the same month in 2019. Despite many workplaces re-opening there is still a strong desire from many to work from home which may see slower recoveries in numbers here.

PL also showed a similar upturn with 2,713 CNFs landing, an 18.8% increase but inevitably a 35% drop on the same point the previous year. Whilst shops are now re-open in most cases, the switch to online shopping and the requirement to wear masks in all shops and with consumers fearing a recession may mean that the current levels are the "new normal".

PSLA and Court Packs

We reported last month that Court Proceedings Pack numbers had not been as badly affected as new claims and that still appears to remain the case. In fact, the numbers are pretty close to where they should be:

 

RTA
Court packs totalled 5,114 in June 2020, up 10.2% on the prior month and only around 8% down on the same point the previous year. This perhaps represents the return of some furloughed staff to claimant firms with their first task to be to generate quick revenue.

The slight recovery of new claims has stemmed the drop in the number of claims that remain in the portal:

PSLA was pretty much static, with a drop of 0.2% to £2,896 average.

EL/PL

Although based on low figures, there was a reasonable increase in activity in terms of Court Packs in EL, with the figure rising to 72, a 33% increase in the previous month and static against the previous year. PL however showed a drop off with 56 Court Packs only, a drop of 22% against the previous month and 29% against the same point the previous year. It may be that there is no theme to take from these figures given the low volumes compared to RTA in any event.

Retention

Retention graphs have been skewed of late by the drop in new claims figures – here the graph is starting to return to its normal shape due to the slight recovery in June:

And so to next month to see what news of whiplash reform, miles travelled and Portal claims. If you are able to get away during the month of August I wish you a very happy holiday…

Contact

For more information please contact Nigel Teasdale, Partner, Head of Motor & Fraud, M +44 7752 709114, Nigel.Teasdale@dwf.law 

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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