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Latest portal data shows monthly new claims volume increases set against longer term high but reducing volumes in a disrupted market

13 February 2017

The release of the monthly MI from Claims Portal allows an updated insight into claimant operations and their methodologies, as well as the chance to make an updated comparison of new claims volumes with CRU statistics.

Summary

It is entirely unsurprising after the substantially decreased volumes of new claims into all of the portals in December, that there are increases for the month of January. However, the new data shows that we start 2017 in each portal with the first intake of new claims at levels below the monthly averages for 2016 in a disrupted market. It remains to be seen if this trend will continue as we await the government's response to the whiplash/SCT consultation.

Longer term trends remain negative in RTA and generally within the casualty portals, though new claims volumes remain high. We look ahead to a projected RTA portal total of new claims for 2016/17 of around 840,000 once there is release of the data for February and March 2017, and expect to see a total not significantly below pre-LASPO levels.

New RTA claims in January

Feb Portal 1

In January, 65,873 new claims were made to the RTA portal, which was an increase of 14.8% from December. But we should remember that volumes in December were at their lowest level for 3 years, and a substantial increase in January was therefore always likely.

If instead we compare the number of new RTA claims in January 2017 with the levels for the month of January in previous years, we see that January 2017 saw the lowest total for the month since January 2011, and was also 6.4% below the level in January 2016.

If we compare the increase between the months of December and January with what has been seen in past years, the 14.8% this time is more than the 12.5% increase seen 12 months ago, but is rather less than the increases of 21% and 31% seen if we go back 2 more years.

January has also started the year of 2017 off on a lower footing than the calendar year of 2016, where the monthly average was 68,004, so we are currently 3.1% below that with one month gone.

The Department for Transport data for vehicle miles travelled and for the number of RTAs causing injury have each been updated with a further quarter's data and are shown as lines on the graph above. The new quarter's data is in both cases showing an upward movement, and in that case it is clear that there is no correlation at present with the reducing trends in the portal data which we are seeing.

New RTA claims over a cumulative 12 month average

Feb Portal 2

The cumulative graph shows another monthly fall: we have seen falls now for 15 of the last 17 months. This time the extent of the fall is 0.56%, similar to the 0.58% seen last month, more than the 0.34% the previous month, but less than the 0.78% and 0.85% seen prior to that.

The overall decline in new RTA CNFs when measured this way is 7.9% since the peak seen 17 months ago in August 2015.

As the graph above shows, the rate of decline over the last 17 months at an average of 4,096 per month is slower than the rate of increase over the prior 16 months of successive monthly increases seen between April 2014 and August 2015 when the level increased at an average of 6,816 per month.

Put another way, the current decreasing trend over the last 17 months since August 2015 is happening at a rate which is only 60% of the rate of the increasing trend over the 16 months between April 2014 and August 2015.

New RTA claims shown annually

The next 2 graphs present annual data over financial years:

Firstly, the CRU data recording the number of RTA injury claims notified to the CRU over the period since 2000/01 on an annual basis is shown on the next graph, with 2 blue bars showing averages over specified 5 year periods.

Feb Portal 3

Data over the same period from Claims Portal showing the number of RTA injury claims submitted to the portal is set out on the next graph, again with a blue bar showing the latest 5 year average. It should be noted that this graph is more up to date than the CRU graph as it includes data for 2016/17 – we have taken the 10 month figure through to the end of January and have allowed for 2 further months based on an average new claims number for the financial year to date. 

Feb Portal 4

The RTA portal was gaining maturity in both 2010/11 and in 2011/12 and did not reach its full intake level until 2012/13.  

In the pre-LASPO period up to April 2013 we saw peaks of new RTA claims being achieved both in the CRU records and into the portal: 866,829 into the portal in 2012/13 (in 20111/12 it had not reached maturity), while CRU records show there were 828,489 in 2011/12 and 818,334 in 2012/13.

Since then, volumes have remained high, in both cases within about 60,000 or 7.5% of the pre-LASPO peak, though predictably they have not reached that peak which was only achieved by claimant operation behaviours designed to avoid the impacts of the reforms.

The expected level of new claims into the RTA portal in 2016/17 will be within 3.9% of what would then be an average of new claims into the portal over the last 5 years.

 

New casualty claims in January

Feb Portal 5

In the case of the casualty portals, we had seen exceptionally low levels of new claims in December. It is unsurprising therefore that January has seen increases, though they are moderate in extent and the actual level seen in January is in each case lower than the monthly average for 2016.

New PL claims

In January there were 5,189 new PL claims, an increase of 32.3% over December, which in turn was the lowest intake for 3 years. But January 2017 is the lowest January since the casualty portals opened.

And the new figure of 5,189 is 2.3% below the PL monthly average for 2016 of 5,311.

New EL claims

There were 4,032 new EL claims last month, an increase of 26.4% from December, which was also the lowest monthly level for almost 3 years. The new number was almost identical to the intake of new EL claims in January 2016.

The average monthly intake for 2016 was 4,142 so we start off 2017 2.7% below that level.

New EL disease claims

Last month saw 864 new EL disease claims entering the portal, 39.6% more than December, but again as will be recalled that month saw the lowest level for more than 3 years. As with PL, this is the lowest intake of EL disease in any January since the casualty portals opened.

The average number of new EL disease claims was 949 so the first month of 2017 is at a level 9.0% lower.

New casualty claims over a cumulative 12 month average

Feb Portal 6

While we show the data for all 3 casualty portals on the one graph, in truth the trends are rather different as is depicted pictorially. There are still negative trends on new claims volumes, with it being strong in the case of EL disease, moderate with PL and increasingly weakening for EL.

PL claims

On this method of assessment there have now been 19 consecutive monthly falls, though the decrease last month from a 12 month total of 63,894 to 63,841 was marginal.

The decrease over the last 12 months is 11.1%

EL claims

Against a backdrop last month of seeing 11 falls out of the preceding 13 months, we have seen a very small increase in January from 49,766 to 49, 768.

The decrease over the last 12 months has reduced to 7.1%

EL disease claims

We now have a 13th successive monthly fall, and a substantial one, down from 11,390 to 10,881.

Over 12 months the rate of decrease has increased further and now stands at a level as high as 52.0%.

Retention rates

Feb Portal 7

The first graph above shows the data on the assumption that claims moving into stage 3 should be counted as not being retained within the portal process. There have been positive movements on retention in January.

Feb Portal 8

Settled claims

 RTA claims

Feb Portal 9

In December we saw that the number of stage 2 settlements in RTA claims had fallen substantially to the lowest level seen for 6 years at which stage the RTA portal was in its infancy. This month the number of settlements has risen from 14,044 to 15,504, but with the exception of December 2016 this remains at the lowest level for 6 years.

This trend seems to be caused by a combination of two specific factors: lower claims intakes, and a greater willingness to use stage 3 as demonstrated below.

Casualty claims

Feb Portal 10

The number of stage 2 settlements across the 3 casualty portals combined has increased this month from the historic low seen in December.

The same factors which are relevant to the RTA portal will impact on the number of casualty settlements, though in comparative terms the use of stage 3 is not as marked in casualty, again as will be seen below.

RTA stage 3 and settlement levels

Feb Portal 11

Stage 3

We saw that in December the use of stage 3 had reduced in terms of number of claims due mainly to seasonal factors. In January the figure increased to 5,934 claims, with only 5 months during 2016 reaching a higher number.

If we compare the number of RTA claims proceeding to stage 3 in January with the number settling at stage 2, we see that 27.7% of claims settling in the portal proceeded through to stage 3 before concluding.

PSLA levels

The level continues to edge upwards, this month from £2,728 to £2,747. Only the untypical month of last October where the level of £2,851 was reached is higher than the current level.

We now stand 7.0% above the level of £2,567 from November 2015 shortly after the 13thedition of the Judicial College Guidelines was published.

Casualty stage 3 and settlement levels

Feb Portal 12

Stage 3

We saw in last month's analysis how claimant lawyer practices involving an increasing use of stage 3 seemed to be moving more quickly towards what happens in RTA claims, in the case of EL claims as opposed to PL claims. This month, it's PL claims which are doing so more quickly than EL claims.

With PL claims, 85 claims went to stage 3 in January, the highest ever level. Setting these alongside the 577 claims which settled at stage 2, it can be seen that 14.7% of PL claims where only quantum was in issue needed use of stage 3 to conclude.

In the case of EL, 57 cases used stage 3 in January, and when account is taken of the 688 stage 2 settlements, it means that where quantum only was at stake 8.3% of claims went through to stage 3.

As to EL disease, always the exception amongst casualty claims, only 1 claim went through to stage 3. 63 claims settled at stage 2 so in mathematical terms this produces a figure of 1.6% of settled claims progressing through to stage 3.

PSLA levels

The PL average now stands at £3,889, reduced from December, but an increase of 2.1% over November 2015, the same period following publication of the 13th edition of the JCG which we have used as a comparison for RTA claims.

The EL average level increased from December and now stands at £4,104, which is currently above the November 2015 level by 6.6%.

In the case of EL disease, there was also an increase, to £3,946, but the current level is 1.3% lower than that seen in November 2015 as the low volumes of claims within that portal make clear analysis as difficult to achieve as always.

The number of claims still in the portal

Finally, a word on retained portal claims.

RTA claims

Feb Portal 13

Despite the steps taken by Claims Portal by way of clean-up , there remains a steadily increasing number of RTA claims in the process, now well over 1.1 million. As things stand at present, this number is likely to continue to grow.

Casualty claims

Feb Portal 14

Less than a twentieth of the volume of retained RTA claims, and while the number is increasing, the rate of increase is slower.

Contact

For more information please contact Simon Denyer, Partner on +44 (0)161 604 1551 or email simon.denyer@dwf.co.uk

By Simon Denyer

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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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