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Increased claims volumes in October in all portals can be set against mixed longer term trends

Claims Portal's data released yesterday assists us in reviewing latest claims trends in terms of volumes and behaviours while we await publication of the Civil Liability Bill.

Summary

There were real terms increases in volumes of new claims into the RTA and all 3 casualty portals in October, even after the longer working month was taken into account.

Longer term numbers of new RTA claims continue to decline, though this month those longer term trends in the case of PL and EL show rare increases for only the second month in 2017.

Stage 3 usage is stable for RTA at around 30%, but increasing for PL and for EL, while the 4.8% increases in PSLA advised by the 14th edition of the Judicial College Guidelines are likely to start impacting from next month.

New RTA claims in October

Su Graph 1 131117 (1)

In October 62,509 new RTA claims entered the portal, which was a 9.4% increase over the level of 57,206 seen in September. It is the highest level for 7 months, and also the largest monthly increase for 5 months.

We had seen over recent months how the monthly average was close to 60,000. As October's level was broadly as much above that level as September's was below it, we have a situation where that average continues to hold good; indeed the monthly average over the last 6 months now stands close to it at 59,613.

The trend continues of each month in 2017 being the lowest for that particular month since the RTA portal was in its infancy. This is the lowest monthly number of new claims for October since 2010.

The new claims number for October is lower than the corresponding month in the 3 previous years as follows: lower than in 2016 by 6.9%, than in 2015 by 17.0%, and lower than in 2015 by 21.5%.

New RTA claims in October – time weighted

Su Graph 2 131117

There were 22 working days in October which was a 4.8% increase in working time from the 21 in September. But as the actual increase in RTA volumes of 9.4% is a larger figure, indeed around double, we show on the graph above an increase in the number of new CNFs per working day.

While the same graph shows a second consecutive month on month increase in the number of new RTA CNFs per working day, we are still in the position where the last 8 consecutive months have for the first time shown an average new RTA claims intake per working day of fewer than 3,000.

 

New RTA claims over the longer term

Su Graph 3 131117

Looking at longer term trends on a 12 month cumulative analysis, the trend is unremittingly downwards, now for 24 out of the last 26 months as the graph above sets out.

The extent of the fall last month was 0.6% from 735,399 to 730,784, which is less than the monthly average of 1.1% seen for 2017 to date.

The rate of fall seen over a longer period is though increasing. Between October 2015 and October 2016 it was 5.8% while from October 2016 to last month it was 11.3%.

At the end of the period affected by the pre-LASPO peak and its aftermath, the corresponding figure in April 2014 was 771,709. The current level of 730,784 is 5.3% below that historic low.

Comparison with annual CRU data

Su Graph 4 131117

After the first 7 months of 2017/18 we can update an assessment of where the annual total of new RTA CNFs is likely to end up at the end of the financial year before it appears on the preceding graph. Adding October's number to the previous 6 months gives a figure of 409,609 to date.

At this point last year the total stood at 474,720, that is around 16% higher than the current level.

The annual equivalent of this year's current figure based on the position after 7 months would be 702,187. In other words it continues to appear that the 2017/18 result will be around 100,000 lower than the previous year and around 150,000 below the totals for the 2 preceding years.

New casualty claims in October

In all 3 casualty portals there were increased volumes in October when compared to September. Those rises were 8.0% in PL, 8.7% for EL disease and 14.9% for EL. All of those increases were greater than the increased working time factor worth 4.8% so are rises in real terms.

The month on month picture has been consistent between each of the casualty portals for 4 months now, but each month has been inconsistent compared with its predecessor. In other words there were decreases in all 3 casualty portals in July and September, followed by increases in August and now October.

Comparing to the 3 preceding years in each of these 3 portals, last month's figures for PL and EL were in fact higher than the corresponding numbers in all portals, with the exception of last month being higher than September (only) for PL and for EL. The detail follows.

Su Graph 5 131117

New PL claims

There were 5,325 new claims in October, which is an increase of 8.0% from the level seen in September of 4,930. This is the highest level for 7 months and the largest month on month increase for 5 months.

The monthly average over the last 6 months remains close to 5,000. In fact it is now 5,064.

Looking back at the months of October for the 3 preceding years the current level is 2.7% higher than in 2016, but is 14.1% lower than in 2015 and 30.9% less than in 2014.

New EL claims

October saw 4,202 new EL claims, a 14.9% increase over September's level of 3,657. Exactly as with PL, this is the highest level for 7 months and the largest increase for 5 months.

We have throughout this year to date seen less consistency with the average of new EL claims recently though the range had been between 3,500 and 4,100. The average over the last 6 months now stands at 3,901.

Looking back at past Octobers we find that the pattern is similar to PL. The current level is 4.6% above the number seen in EL disease in 2015, but lower than in both 2015 by 7.6% and in 2014 by 18.25%.

New EL disease claims

There were 774 new EL disease claims submitted in October, which was 8.7% higher than in 2016. It is the highest number for 4 months and the highest month on month increase over the same 4 month period.

The average monthly intake over the last 6 months now stands at 776, very close to the current level.

Looking back over the 3 preceding years there is a consistent picture of reductions. We are now 5.0% below the same month in 2016, but the data also shows significant drops elsewhere, that is 59.2% less than in 2015 and 51.3% below the 2014 position.

New casualty claims over the longer term

Set against the longer term trends, October has been an exceptional month as the following graph demonstrates where both PL and EL have shown month on month increases, in both cases the first since March 2017.

In the cases of all 3 casualty portals the rate of decrease has slowed when the last 12 months is compared to the prior 12 months.

Su Graph 6 131117

PL claims

Over the 12 months up to October there were 59,535 new PL claims, an increase over the position seen in the previous month of 0.2%. For 2017 to date the average monthly drop is 0.7%.

This is the first monthly increase since March, so that there have now been falls in 26 of the last 28 months.

The rate of decline has slowed in this portal as in the other 2 casualty portals, from 11.9% between October 2015 and October 2016, to 8.6% over the last 12 months.

EL claims

Over the 12 months up to October, there were 46,883 new EL claims, an increase over the position in the previous month of 0.4%. This results in an average monthly fall for 2017 to date of 0.6%.

Again, this is the first monthly increase since March, and in total there have now been falls in 17 of the last 22 months.

The rate of annual decline has slowed with EL too: from 7.6% between October 2015 and October 2016, to 6.5% over the last 12 months.

EL disease claims

There were 9,477 new EL disease claims into that portal over the 12 months up to October. That's a decrease of 0.4% over the position a month ago. The average monthly fall in 2017 is now 1.4%.

This is the 22nd consecutive monthly fall.

While the figures representing the extent of the decreases are larger, the rate of decline has fallen from 43.6% as between October 2015 and October 2016, to 26.7% over the last 12 months.

Retention rates

Su Graph 7 131117

Last month saw a stable retention rate for RTA claims, and an improving rate in the case of all 3 casualty portals.

Su Graph 8 131117 (2)

The longer term 12 month cumulative rate remains stable for RTA at marginally over 50%, while the rates for all the casualty portals continue to improve. The EL rate has reached 20% while the EL disease rate is back at 10%.

Cases proceeding to stage 3 are included within the definition of claims retained in the process

RTA claims – stage 3 usage and PSLA levels

Su Graph 9 131117

Stage 3

In October, 6,130 claims proceeded to stage 3, which was a 1.1% fall on the month. In fact this is the lowest number for 6 months. It is 1.7% above the level seen 12 months ago. The graph above shows no clear increasing trend during 2017.

PSLA quantum levels

PSLA levels rose 0.2% to £2,781, the 6th highest monthly level to date.

However compared to October 2016, 12 months ago, the current PSLA level is in fact lower, by 2.5%. In turn over the preceding 12 months from October 2015 to October 2016 the level increased by 6.0%.

The current level is 8.3% above November 2015 when the 13th edition of the Judicial College Guidelines started to impact incorporating an average 3.4% increases, albeit with higher percentages for certain minor injuries. It may be that the effect of the 14th edition with its average 4.8% increases will start to be felt from next month.

Casualty claims – stage 3 usage and PSLA levels

Su Graph 10 131117

Stage 3

With PL claims, there were 84 court packs in October, a monthly increase of 29.2%, and the 2ndhighest ever.

As to EL, there were 81 courts packs, a 14.7% fall on the month, but September's level was the highest to date. October remained the 3rd highest ever.

In contrast, there were zero court packs in EL disease, only the 2nd time this result has been reached, the last time being in April.

PSLA quantum levels

In the case of PL, average PSLA rose 1.8% to £4,089, the 6th highest level to date.

Over the last 12 months the level has risen 7.1%, while over the preceding 12 months it increased 10.5%. Since the 13th edition of the JCG impacted in November 2015 it has risen 7.4%.

With EL, PSLA fell 1.0% to £4,118, though again the 6th highest level to date.

Over the last 12 months levels have risen 7.9%, while over the preceding 12 months they rose 5.2%. Since November 2015 and the 13th edition of the JCG they have risen 7.0%.

With EL disease PSLA fell 2.7% to £3,960, though still the 4th highest in the last 2 years.

Over the last 12 months EL disease PSLA has risen 9.2%, while over the previous 12 months it fell 10.2%. Since November 2015 and the 13th edition PSLA EL disease levels have fallen 0.9%.

Comparative use of stages 2 and 3

Su Graph 11 131117

This month RTA use of stage 3 fell below 30% though more data is needed before any new trend can be sensibly identified: it may be a one-off.

The ratio for PL and EL continues to lie between 10-15% though the trend is slowly increasing.

Claims still in the portal

RTA claims

Su Graph 12 131117

There is no identifiable effect from Claims Portal's cleansing exercise impacting to reduce the number of retained claims. The number has now reached 1.2 million.

Casualty claims

Su Graph 13 131117

Volumes of retained casualty claims are much smaller as would be expected from the smaller volumes of claims entering those portals and the fact that their origins are more recent, though the number is about to reach 60,000.

The problem caused by the existence of these claims especially the significant number of RTA claims continues to require a suitable solution to be considered.

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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