Unravelling this month's Portal Company data
11 April 2014
Usually analysis surrounding the news of release of the monthly data from the Portal Company has to be accompanied by caveats that it’s too early to be identifying clear trends. This time though there’s an additional complexity in looking at the RTA new claims notifications figure - currently the high level figure which is being used to look at trends in new notifications on a cross-class basis. We need to identify and to understand this new complexity before we can make sense of this month’s figures.
New RTA notifications
Before opening this month’s data, the question being asked was whether the number of new claims would break the 70,000 barrier. Well, the obvious answer is that it did at 71,500. However, our analysis is that it only did as a result of a new factor appearing in the data for the first time this month. The new development is that there is a significant number of claims exiting the process as a result of insurers’ processes identifying claims resubmitted by claimant lawyers following a change of their business name as duplicate claims. The background to this is that as part of the on-going changes in claimant operations, some claimant businesses have changed name following new business ownership and as a result have been resubmitting claims in their new names, leading to position where the resubmitted claims are taken by certain insurers’ systems to be duplicates.
We have raised the issue with the Portal Company and as a result are told the issue will be considered at their next Behaviour Committee meeting on 12 May. There are short term solutions available to the Committee such as ensuring that claims that fall out as a result of these aspects are still dealt with in similar ways to those that would have applied in the portal including use of Stage 3, and importantly, ensuring that portal costs will still apply, but longer term the solution may be re- engineering of the portal’s IT processes so that it can cater for this situation.
Tweaking the new RTA claims figures
It may be reasonable to say that up to around 3,000 of the new notifications this month are claims that have been resubmitted in this way. If so, that would reduce this month’s number of new RTA claims to 68,500. On that basis if we look at the picture over the last six months, and allow for the fact that as usual for the time of year there was a trough in December followed by a peak in January, a fairly consistent picture is starting to emerge with an average of 66,750 per month, within a range (disregarding Christmas) of 66,000 to 69,000. If this proves accurate, then this would continue to point to a small drop in volumes.
New casualty volumes
Usage of the casualty portals continues to increase and this will clearly remain the case for a year or so yet as we move further from the start date of 31 July last year. PL is now at 5,857, EL at 3,635 and EL disease at 1,286. While the current portal processes are unsuitable for most disease claims, unless the disease claim falls into an excluded category, then it must of course start off within the portal. So the impact in disease claims will be more on claims falling out and therefore on retention rates, rather than not entering the portal.
Retention rates – RTA, EL, PL and EL disease
The RTA figures in the first graph continue to show retention rates of around 50%, the drop this month is mainly attributable to the new factor regarding duplicate claims and will hopefully be a short term problem.
EL retention rates are shown below – we had been moving to a stable position again at 50%, though this month we are dropping towards 40%, but these are still early days and the rate should recover.
PL retention rates are improving. Conversely to EL, they have risen this month from 40% to 50% seemingly indicating the likely success of these portals alongside the RTA portal. For PL claims, this is the 2nd consecutive fall in numbers leaving at Stage 1 on liability issues. This is the graph.
But for EL disease this graph below shows retention rates of only 20-30%, and where claimant lawyers are also looking to avoid the portal altogether by finding reasons to have claims excluded from the process, this surely demonstrates that changes are needed to that portal for it to be worthwhile.
Other motor trends
This month saw the highest level yet of claims proceeding to a court pack at the start of stage 3, up to 2,011 in number. This is now a 100% increase in claims reaching that stage within the last 12 months. Claimants (or their lawyers) seem much more willing to proceed to that stage. Whether this is to obtain the additional Stage 3 costs which have not been reduced against the substantially reduced stage 1 and 2 costs can only be guesswork.
And general damages offered in RTA cases are still on the rise too, now up to £2,497. Give or take a pound it’s the nineteenth consecutive monthly increase, and the figure has shown a 19% rise over the last 12 months.
Other casualty trends
General damages continue to increase here too. But there is the additional factor with these new types of claim to the portal that the average will rise anyway as we move towards settling more substantial cases. The PL figure is now at £2,752 and the EL level is £2,538, both of which are higher than for RTA which as noted already has increased again to £2,497. The EL disease figure at £5,665 is based on a much smaller profile of claims.
In EL disease we are though now up to 34 settled claims, and we have even gone as far as 3 such cases moving into Stage 3 with the court pack being prepared. In the minority of cases, some insurers will be satisfied that the EL disease portal can be worthwhile.
We hope this assists in analysing this month’s data.
For further information, please contact Simon Denyer, Strategic Legal Development Partner, on 0161 604 1551.
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.