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Mixed monthly picture as to new claims volumes in September continues to be set against longer term negative trends

Claims Portal’s September data is now available and allows for a review of both monthly and longer term trends, at a time when the Ministry of Justice are consulting on a review of the rules and procedures surrounding not only gastric illness claims but lower value claims generally, with a view to discouraging unmeritorious claims.

 

Summary

September’s data shows a reduced volume of claims into not only the RTA portal but also all 3 casualty portals, though when allowance is made for a shorter working month in September, RTA and EL disease in fact show a net monthly increase.

The longer term trends remain negative in all 4 portals. Clearly the claimant market is significantly disrupted in anticipation of reform though there is no immediate sign of publication of the Civil Liability Bill which may not be the highest priority for a distracted government at present. Presumably that disruption has affected the number of farmed claims being presented in particular.

The data on PSLA levels has shown a clear inflationary impact over the last 2 years of the 13th edition of the Judicial College Guidelines, while the general 4.8% increases which found their way into the recently published 14th edition are likely to be felt in the weeks ahead.

New RTA claims in September

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In September there were 57,598 new claims to the RTA portal, that’s a decrease of 2.7% from the number seen in August. It’s the lowest number in the last 5 months.

We had seen over each of the 4 preceding months numbers for new RTA claims close to 60,000: over that period each month had been within 1,400 of that level. This month we have dropped 1,000 beneath that number.

We have already seen a trend established whereby monthly volumes in 2017 have generally been the lowest for that particular month since the first year that the portal was open. That trend continues this month. At 57,598, the only lower new claims level for September was 56,933 which was seen in 2010 when the portal was in its 5th month of service.

The new RTA claims number in September is lower than the same month in the preceding years by significant amounts: lower than in September 2016 by 13.0%, less than in September 2015 by 21.2% and lower than in September 2014 by 21.9%.

New RTA claims in September – time weighted

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 Even taking into account the Bank Holiday in August, there was still one extra working day in August when compared to September, equivalent to a reduction in working time of 4.5% in September. As this is a larger percentage than the actual month on month fall of 2.7%, we show an increase in the number of new CNFs per working day on the graph above when September is compared to August.

We have now seen 7 consecutive months where the number of new CNFs per working day has fallen below 3,000. While there was not the same consistency 4 years ago, this lower level of daily CNFs was last seen in the aftermath of the LASPO-induced peak in late 2013.

New RTA claims over the longer term

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As the graph above shows, the trend measuring claims over the longer term by reference to an assessment looking back over the preceding 12 months continues to be negative. Last month was the 23rd monthly fall out of the last 25 months.

The extent of the fall from the previous month was 1.2%, from 744,660 to 736,060. This is consistent with an average monthly fall this calendar year to date of 1.1%.

As has been seen before the rate of decrease is increasing. Between September 2015 and September 2016 the decrease was 5.4%, while between September 2016 and last month the rate of falling back was more than double at 11.5%.

Around 12 months after the introduction of LASPO in fact in mid 2014 the number on this measurement fell to 771,709 which had represented the low point on the graph above. The current level at 736,060 is 4.6% below that mid 2014 level. The number looks likely to continue to fall further. 

Comparison with annual CRU data

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We can again look ahead to where the annual total of new RTA claims is likely to stand at the end of March 2018, the same year used by the CRU in their analysis.

The average monthly total of new RTA claims into the portal in 2017/18 to date now stands at 57,957, while after the same number of months during 2016/17 it had stood at 67,933, some 10,000 higher.

At the same rate the annual figure for the current fiscal year will reach 695,480, which continues to be around 100,000 lower than the total reached at the end of 2016/17 of 797,067.

2017/18 would also be the lowest year to date with the exception of the RTA portal’s inaugural year of 2010/11 when the data was collected over 11 rather than 12 months and the actual number was 575,873. Rounding up for the 12th month increases that 2010/11 number to 628,225, that is within 70,000 of the projected total for 2017/18.

New casualty claims in September

Compared to the preceding month of August, all 3 casualty portals showed a monthly fall in September, ranging from between 4.0% with EL disease at the lower end and 7.4% with EL at the top end. In the case of both EL and PL, which saw a decrease of 5.1%, the falls were greater than the effect of the loss of 1 working day which as we have seen with RTA was equivalent to a reduction in the working month of 4.5%.

Looking at the data last month we saw that with the August figures there were increasing volumes across all 3 casualty portals. With the September data we return to the month on month decreases which we saw with the figures for July.

When we look back to the preceding 3 years and as we saw with RTA, across the piece with the casualty portals, claims numbers are lower than in each of the preceding 3 years by significant amounts.

Su 181017 Table 5 Copy

New PL claims

There were 4,957 new claims in September, a fall of 5.1% from the level of 5,222 which we saw in August. Over the last 5 months there has been a fairly consistent number of new PL claims, in each of those months they have been within 200 or so of 5,000.

Looking back over the preceding 3 years to the month of September to compare the level seen in 2017, we are currently at a level 13.1% below September 20126, 20.2% lower than September 2015, and 32.0% below September 2014.

New EL claims

3,682 new claims entered the EL portal in September, a decrease of 7.4% from the level seen in August. There is less consistency currently with EL claims than there is for PL: over the last 5 months the range for EL claims has been between 3,500 and 4,100, a variance of 600.

The number for September 2017 was 16.4% below that seen in the same month in 2016, 20.5% lower than in September 2015, and 19.9% less than in September 2014.

New EL disease claims

There were 722 new EL disease claims in September, a drop of 4.0% from the 752 which entered in August. Over the last 3 months, monthly totals have been within a range of only 30.

The current monthly total is 14.8% below that seen in September 2016, 61.3% below September 2015 and 55.1% less than in September 2014.

New casualty claims over the longer term

As the graph below demonstrates, longer term trends continue to point generally downwards in all 3 casualty portals.

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PL claims

Over the 12 months up to the end of September, there were 59,454 new PL claims, which is a fall of 1.2% from the position seen at the end of August. The average monthly fall to date during 2017 now stands at 0.8%, so the drop last month was greater than average.

There have now been monthly decreases on this form of assessment over 26 of the last 27 months, which was when the current trajectory began.

The rate of decline has slowed: as between September 2015 and September 2016 it was 12.3%, while over the 12 months up to September 2017 it was 10.2%.

EL claims

Over the 12 months up to the end of September, there were 46,738 new EL claims, a decrease of 1.5% from the position we saw at the end of August. The average monthly decrease over 2017 to date now stands at 0.7%, so again last month’s drop was greater than average – double in fact.

There have been decreases in 17 of the last 21 months, which was when the current decreasing trend started.

The annual rate of decline has been similar over the last 2 years: between September 2015 and September 2016 it was 7.7% while over the last 12 months to September 2017 it has been 7.8%.

EL disease claims

There were 9,535 new EL disease claims over the 12 months up to the end of September, representing a 1.3% decrease from the position seen a month earlier. The average monthly decrease over 2017 to date is now 1.5%.

This is the 21st consecutive monthly fall from when the current decreasing trend began.

The annual decreases have been large but the rate has fallen: from 38.0% between September 2015 and 12 months later, to 32.0% from September 2016 to date.

Retention rates

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In September retention rates increased for RTA and for EL disease, but fell back for both PL and for EL.

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Over a longer 12 month cumulative period, the trend for RTA is very marginally downward though still just above 50%, while for all 3 casualty portals it remains upward. PL has now reached 20% and EL disease 10%, while EL is over 25%.

For both these retention rate graphs claims proceeding to stage 3 are included within the definition of retained claims.

RTA claims – stage 3 usage and PSLA levels

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Stage 3

In September 6,197 RTA claims proceeded through to stage 3. That is the lowest level in the last 5 months, and a 3.6% reduction from August’s level.

In the context of continuing higher usage of stage 3, we should see the slight reduction as untypical. In fact the level for September was barely higher than for the same month a year ago when it was 6,189.

PSLA quantum levels

In September the average PSLA settlement for RTA reached £2,776, the 5th highest level to date but in fact a 0.2% reduction on the month.

Over the last 12 months PSLA levels have risen 2.7% while they rose 5.5% in the preceding 12 months.

Since the effects of the 13th edition of the Judicial College Guidelines started to be felt in November 2015, PSLA levels have risen to their current level 8.1% above where they then stood. The 13th edition advised a standard increase in settlements of 3.4% as well as increases of as much as 20% for certain primary whiplash-type injuries.

It may be around November this year that the effects of the 14th edition begin to be seen in the figures if last year’s precedent is followed. The standard increase proposed in that edition is 4.8% so we expect PSLA to be subject to upward pressure in the weeks ahead.

Casualty claims – stage 3 usage and PSLA levels

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Stage 3

In the case of PL there were 65 court packs prepared in September, a reduction of 9.7% in the month, and the lowest number for 5 months.

But in the case of EL, there were 95 court packs, the highest ever level.

With EL disease the data is of course based on a much smaller sample, and in fact 2 court packs were prepared, and as there were 3 the previous month, that is a reduction of 33.3%.

PSLA quantum levels

In the case of PL, the average PSLA level reached £4,017. This was a 2.2% reduction over the month and in fact was the lowest level for 7 months.

Over the last 12 months PL PSLA levels rose 2.8%, while over the previous 12 months they increased by 5.6%. Since November 2015 and the 13th edition of the JCG the increase has been 5.5%.

As to EL, the PSLA level in September was £4,156, a monthly increase of 4.0%, and the 5th highest ever.

Looking back 12 months, EL PSLA levels have in fact decreased 3.1%, while over the preceding 12 months they had risen 16.8%. Since the 13th edition of the JCG and November 2015 the increase is 7.9%.

With EL disease, PSLA levels were on average £4,071 in September, a 17.8% increase over the month and the 2nd highest for 2 years.

Over the last 12 months EL disease PSLA levels have risen 22.6%, while they fell 15.2% the previous 12 months. We are used to considerable variations in the data with this portal and its limited usage. Since the effects of the 13th edition of the JCG were felt in November 2015, the increase in EL disease PSLA has been 1.9%.

Comparative use of stages 2 and 3

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In the case of RTA, the 30% barrier has again been reached, so that the increased proportionate use of stage 3 continues. At this rate the position where 1 in 3 RTA claims make use of stage 3 before concluding will be reached imminently.

The same trend remains in evidence for PL and for EL though progress in pursuit of it is more variable. Currently usage levels for both PL and for EL sit between 10-15%.

Breakdown of ways in which claims conclude

It is worth a look at how claims to the 4 portals currently conclude.

One common aspect shared by the 4 graphs below is the reducing number of claims across the periods spanned by the analysis. This is unsurprising in view of the longer term trends discussed above.

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In the case of RTA claims, the reduced numbers exiting at stage 1 are apparent, as is the greater use of stage 3 and the corresponding reduction in settlement at stage 2.

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As to PL, presumably because of the greater difficulty in identifying insurers, the proportionately greater numbers exiting at stage 1 remains the most significant factor in the ways in which these claims conclude even now. 

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Exits at stage 1 are still significant for EL, though in the case of both EL and PL the relatively small proportions of the bars coloured blue and orange show in comparison to RTA the lower settlement rates in the main casualty portals, taking into account both the claims which conclude at stage 2 and those proceeding to stage 3. 

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The opportunity of using the Employers’ Liability Tracing Office is presumably a factor in the proportionately lower number of stage 1 exits, though the few claims which in fact settle are also apparent.

Regards

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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