The number of new injury claims in the year to 31 March 2019 made in Great Britain as notified to the CRU is set out in the table below.
Overall numbers rose 1.0% as a 5 year decreasing trend came to an end. We may have moved over the last two years to a new picture of stable numbers at around 860,000 claims a year. The upwards trend was as a result of increases in EL and RTA in particular.
RTA numbers rose 1.6% and over the last two years we may be seeing here too a new level of around 650,000. Portal data was stable too with a small decrease of 0.4%, so the picture for RTA is consistent.
PL new claims fell 10.7%; the level is similar now to 2016/17. Portal data showed a drop of 2.8% so both point downwards though with some difference in extent.
The number of new EL claims including EL disease claims rose as much as 29.2%, to a similar level to 2015/16. Portal data on the other hand showed reductions. It is difficult to reconcile the two sets of data though if the true position is somewhere in the middle then a small increase in EL numbers would not be surprising in terms of the nature of the incoming reforms.
As to the response to the FoI request and the type of RTA injury involved in claims, the data shows the importance of the change in definition for affected claims from "the neck and upper torso" to "the neck, back or shoulder". However even on that basis we see an increase over the last 5 years of claims fully outside the definition from 9.7% to a current 15.5%.
What the CRU data does not however tell us is the extent of the rise in secondary site injuries where a non-whiplash injury is claimed in addition so as to try to achieve the result of both tariff and non-tariff damages. This is an important area where in advance of implementation of the reforms further avoidance behaviour can be anticipated and should be responded to.
Total numbers of new claims
The overall number of injury claims reported to CRU over the 12 months to 31 March rose 1.0% from 853,615 to 862,356. This brings to an end a prior trend of decreasing volumes which had been seen over the last 5 years from 2012/13 to 2017/18.
12 months ago we saw a large fall of 12.8% on this matrix, so we are some distance from that situation this year. Instead the data from the last two years suggests that we may have arrived at a new normal level of overall number of injury claims at around 860,000.
The average number of new claims over the last 5 years, now over the period from 2014/19, currently stands at 934,894.
The primary reason for this year's increase was the higher number of EL and RTA claims.
Number of RTA claims
The number of new CRU registered RTA claims rose 1.6% from 650,019 to 660,608. Last year we had seen a substantial fall of 16.7% which is not repeated this time.
As with the overall claims number we may have reached a new normal level of RTA claims at around 650,000, a significant number, though 100,000 lower than in the earlier years of the current decade.
The average over the last 5 years from 2014/19 now stands at 724,724.
Knowledge of the incoming reforms due in April 2020 from the Civil Liability Act and associated Small Claims Track limit changes affecting RTA and whiplash claims in particular can be expected to have driven the decrease in numbers that we saw when we looked at the data 12 months ago.
The stable number this time round suggests that the claimant market has for now come to terms with those changes in terms of its response. It seems clear that at present most of the affected categories of RTA claim are still being brought; the limited proportion of those which are not can be presumed to have been unmeritorious.
Comparison with RTA portal data
We did of course already have the portal data for 2018/19 from which we saw a reduction over the same period of 0.4% or 2,596. In other words both the data from the CRU and from the portal show the same picture which is of essentially stable numbers when 2018/19 is compared to 2017/18.
The portal MI had shown a 12.0% fall when 2017/18 was compared to 2016/17, so again as with the CRU data there is a changed position as we have moved from a double digit percentage fall to the current stable situation.
Difference between portal and CRU data – RTA claims
A geographical distinction should be appreciated, as the CRU data is for the whole of Great Britain including of course Scotland but excluding Northern Ireland, while the portal process and therefore the data from Claims Portal is confined to England and Wales. This may have been a factor justifying a higher CRU number, but in fact as with previous years as shown on the table below the difference is the other way round.
There is no specific confirmed reason to account for the difference: neither the DWP nor Claims Portal seek to reconcile their data with the other source. Potential factors include double counting of portal claims including where CNFs submitted by more than one firm of lawyers or are double counted, or the possibility of overlooking the requirement to report claims to the CRU.
In reality we may not need to find the true reason(s), but can instead use the two sets of data as alternative sources of evidence of particular trends, noting both sets for new RTA claims are now pointing towards stable numbers of claims at a new albeit reduced level.
Number of PL claims
The CRU data showed a 10.7% decrease in the number of PL claims over the year, down from 96,067 to 85,742.
This decade had generally seen a reducing number of PL claims on a year-by-year basis until the 12.4% increase seen 12 months ago. That would seem to have been a temporary phenomenon as in 2018/19 the number of new PL claims returned to around the same level as in 2016/17.
Comparing 2018/19 with 2017/18 in terms of portal data we saw a 2.8% reduction from 58,221 to 56,576. So both sets of data point to a downward trend, but rather greater on the CRU numbers than those recorded in the portal.
Perhaps surprisingly in terms of a year-on-year comparison, it seems from the data that PL claims where numbers are reducing currently tend to be seen as less attractive to claimant operators than RTA claims which remain stable, despite the CLA/SCT changes impacting less in the PL context than with RTA claims.
Unlike the picture with RTA, in the case of both casualty sets of data the number of CRU claims is greater than those registered to the portal. Perhaps the wider geographical remit of the CRU data is relevant? In any event the position shown by the data recording the difference from year to year between the two sets of data is reasonably consistent.
Number of EL claims
We see with the CRU data an increase over the year of as much as 29.2% from 69,230 to 89,461. The pre-existing trend which lasted the previous 4 years of decreasing numbers has reversed. The increase returns the number of new EL claims to broadly where it was in 2015/16.
The CRU publish only one set of EL claims numbers, including both accident and disease, while of course the portal deals with those two types of claim differently and publishes separate MI. The table above adds the two sets of portal data together in order to make a comparison with the CRU figures. A true comparison may though be elusive as in relation to EL disease claims multi-defendant cases are pursued outside the portal, while insurers have differing practices as to whether to report minor hearing loss claims under 50dB to the CRU.
This year on portal data EL accident claims fell 1.1% while EL disease decreased 36.7% and the overall total of both types of EL claim fell by 6.7%.
It is difficult to fully reconcile the 29.2% increase in numbers with the CRU to the average 6.7% decrease on the portal though some relevant factors are mentioned above. This gap accounts for the largest annual difference between the two sets of data as shown over recent years on the table above.
On the basis that casualty claims are less affected by the incoming reforms than RTA claims, there is reason to expect the new casualty claims numbers to be more robust. EL claims in particular may be seen by claimant operations as being founded on safer ground and therefore less risky in terms of prospects for settlement than PL claims. The true position with EL claims may in fact be a small increase as lying somewhere between the nominal 1.1% fall (portal: EL accident) and the 29.2% increase on the CRU data.
Data from the Freedom of Information Act request
This relates to RTA claims only.
We recently repeated our request last made two years ago for the DWP to supply a breakdown of the injury sites involved in RTA claims reported to the CRU so that we could identify developing trends. It was an appropriate time for this further assessment as the data is now available to analyse at the same time as we are looking at the end of year figures.
It will of course be remembered that when the reform which was finally enacted through Part 1 of the Civil Liability Act began its parliamentary passage as Part 5 of the Prisons and Courts Bill, the affected claims falling within the definition of 'whiplash injury' were defined as being limited to "the neck and upper torso". It was in response to concerns about the large volumes of claims that would have been outside that definition that when the Civil Liability Bill was introduced that a wider definition was used referring to "the neck, back or shoulder" and it is this which has followed through into the CLA itself.
We knew from the earlier FoI request that the DWP collects CRU claims data for RTA claims by reference to 8 injury sites. They together with the relevant volumes are set out in the tables below. Those for 2014/15 through to 2016/17 were available previously while the tables for 2017/18 and 2018/19 are new:
The data can be set out in the following graph:
The significance of the data – the former definition of whiplash
It is clear that the widened definition of whiplash injury as used in the CLA was needed.
Of the 8 injury categories, 'other' and 'back only' can be seen to have fallen outside the former definition. Over the last 2 years these categories of injury would have equated to around 23% of claims each year:
2017/18: other 15.0% + back only 7.6% = 22.6%
2018/19: other 15.5% + back only 7.2% = 22.7%
If we then look at categories partly outside the former definition we are identifying the 3 which include 'back', namely 'neck and back', 'whiplash and back' and 'whiplash, neck and back'. Over the last 2 years they would have included these claims:
2017/18: whiplash and back 2.1% + neck and back 20.9% + whiplash neck and back 7.9% = 30.9%
2018/19: whiplash and back 1.8% + neck and back 20.6% + whiplash neck and back 6.9% = 29.3%
The 3 categories that would have fallen within the former definition were 'whiplash only', 'neck only' and 'whiplash and neck'. These 3 categories would have been worth under half of claims in both of the last 2 years; 46.6% in 2017/18 and 48.0% in 2018/19.
Until 2018/19 there had been a 3 year trend of decreasing percentages of claims falling within the former definition. Throughout 2018/19 it has been apparent that a new definition including 'back' injuries was going to be used as defining claims within the reform. Is this the reason why this trend did not continue last year: that there was to be no basis for excluding claims from the new process on the basis of a 'back' injury?
See the table below:
The significance of the data under the current definition
The new definition could be said to have brought within the reform not only cases where 'back only' is recorded but also the 3 categories of injury which were partially outside it on the former definition where 'back' had been identified as one of the injury sites. This leaves only 'other' injuries as falling fully outside the new definition.
The following graph shows a year-on-year increase in 'other' claims over the last 5 years, from 9.7% in 2014/15 through to 15.5% last year. There is every reason to expect that trend to continue. While the rate of increase was smaller last year than in previous years, the rate of change may become steeper.
But this is only part of the story and the DWP/CRU data cannot assist us further in this area. This is because of an apparent increasing tendency to claim a second injury site in addition to the primary site in a situation where the DWP will only collect claims data by reference to the main injury. In other words, alleged secondary injuries beyond whiplash itself affecting for instance the ankle, foot, elbow or wrists will not as matters stand be measured within the DWP published data.
While therefore the 15.5% of claims wholly outside the new process seems clear, in a situation where that percentage may increase further towards 20% by the time the reforms go live, a bigger issue may prove to be the potentially larger but currently unspecified percentage of claims that will be partially outside the tariff due to a secondary injury: at least where that further injury can be substantiated. The need for insurers to see medical support in support of the existence and causation of that additional injury will be heightened.
More important work is needed as the detail of the reforms continue to be addressed to ensure that the policy drivers behind the incoming changes are not subverted by new claimant processes designed to avoid or substantially reduce their effect.
For more information please contact Simon Denyer, Strategic Legal Development Consultant Simon.Denyer@dwf.law