As we move into the second phase of lockdown with non-essential retail now open for business and the prospect of further easing of restrictions to come, we analyse the Claims Management Portal data for May. This is the second set of monthly figures to be fully impacted by lockdown since the crisis began. For those amongst us who like their statistics, in addition to the Portal analysis we look at the regular MOJ quarterly civil justice data, with the bonus addition of weekly HMCTS data showing the effect of Covid on litigation.
Firstly however, we start by taking a look at the recent available transport data for the UK since lockdown to try and predict future trends.
Use of Transport
We have previously looked to transport figures to provide context to the portal statistics within our regular briefings, but the importance of this analysis has never been greater. Since our May update, road transport has risen again with heavy goods vehicles and light commercial vehicles leading the way. Use of HGVs is now close to 100% of previous levels and LGVs over 80%. Car use had seemed to reach something of a plateau but last weekend went over 70%.
The latest Department for Transport data produced is as at 15 June and it will be interesting to see whether the recovery in car usage continues later in the month as restrictions were further eased from 15 June 2020.
It is also well worthwhile having a look at the figures on cycling for the past few months as they make interesting reading:
unsurprisingly we can see that cycling has increased dramatically since lockdown started, particularly at weekends. That has been reflected in the higher proportions (though not necessarily higher numbers) of pedestrian and cyclist claims being made. As at 15 June, DfT figures show use of National Rail at just 8% of pre-lockdown figures with cycling at 166%. Meanwhile, motor transport combined has recovered slightly to 74%.
Whilst the significant spikes in weekend usage demonstrate a surge in cycling for leisure purposes, as people start to return to work in greater numbers, we suspect a number of those who usually use public transport will switch to bikes to get to work where the travelling distance makes this a plausible option. This means that as more cars do return to the roads, the higher proportion of claims involving cyclists and vulnerable road users will continue. E-scooters should get the green light for trials by the end of the month which could also add to the risk and would increase the range of viable cycle journeys particularly in the London area.
So what can we see ahead for Motor?
In addition to the DfT data, the government has also on occasion used the Apple data on mobility in their daily update slides. This data is based on requests for directions (driving only) so needs to be treated more cautiously but it is interesting to see the trends internationally and particularly in countries where lockdown eased ahead of the UK:
In the US, France and Germany routing requests have not just returned to pre-lockdown levels, they have considerably surpassed them. Now of course there is a great deal of difference between directions requested and actual miles on the roads, but the trends are there, and could this be a sign of things to come, particularly with the reluctance to travel by public transport?
Insofar as the interaction with claims is concerned, again there will not necessarily be a direct correlation between miles travelled and claims. As people return to work, vehicles will return to the road but start times are more likely to be staggered, people will work different days, and rush hours will not be the same as they were. So it seems unlikely claims volumes will return to pre-lockdown levels in the near future at least.
Looking further forward, insurers will be concerned about how accident frequency will be affected in the mid-term, and the likely shift in how vehicles are used. We may see an increase in vehicles on the road as those who currently do not own a vehicle purchase one and take out a new policy. There are signs of increased interest in car buying in the UK, and since China's lockdown ended car sales there have risen for the first time in two years, but this will not necessarily translate into sustained growth. Almost certainly though, there will be a change in how vehicles currently owned will be used. As people continue to work from home, vehicles once used for the commute will be available for other family members to use during the day, or for their own work if previously they used public transport. Similarly, families with more than one vehicle might choose to save costs by just running one car. Whilst there may not be much change therefore in terms of vehicle miles, changes in driving behaviours may well affect the risk profile of vehicles, and insurers' risk may be spread across fewer policies.
An indication of rising frequency may be found in the increase in accidental damage claims reported by many insurers which is likely to be a precursor to increasing BI claims. Even before the recent government announcement that restrictions would be eased further, insurer Admiral was reporting a 39% increase in accidental damage claims in England, stating "Comparing a two-week period during lockdown at the start of May with the following two weeks in the month when restrictions on travel eased, we saw a 39% increase in the number of accidental damage claims from motorists in England".
As we said last month, we may see an increase in collisions due to drivers not being ready to return to the road after a four month lay-off which could be particularly acute in younger/newly qualified drivers. Vehicles themselves may be in a poor condition having been left unused and/or unmaintained for long periods. It is also true that those that have been driving are now used to driving on much quieter roads – this will not be the case for long.
Insurers and particularly actuaries are fully aware of the inflation around repair costs which will most likely be compounded by Brexit. If, as expected, there is a longer term government-backed move towards cycling/e-scooters as a viable form of everyday transport, as well as a reinvigorated leisure activity, they may also be faced with a significant rise in serious injury claims.
Court and procedural developments and case law
The quarterly civil justice statistics released are from Q1 and so don’t yet reflect the impact of Covid-19. Nonetheless, one can see that the number of personal injury claims issued has reduced again:
Conversely, the average number of weeks from a claim being issued to initial hearing date (NB, therefore does not include those claims that may have been adjourned at the last minute due to lack of judicial time) has continued to rise, particularly for small claims track hearings which are now up to 40 weeks:
We then have a new set of data produced this week by HMCTS comparing the present position with a pre Covid baseline: HMCTS weekly management information during coronavirus - March to May 2020 - GOV.UK
Claims issued: the pre-COVID-19 baseline for civil receipts inc. High Court claims and possession cases was 38,521. This decreased rapidly and the lowest number of receipts was 4,626, during the week ending 10 May, reflecting that this hasn’t been a temporary blip.
Civil orders: Completed civil orders fell to a low of 12,112 during the week ending 12 April. The figure increased slightly during the next two weeks, but stood at 13,327 in the week ending 24 May.
General/interlocutory applications, including the number of general civil applications received and processed, began at 27,652 but fell to a low in the week ending 12 April. The number stood at 19,359 in the week ending 24 May.
Civil hearings and adjournments: The pre-COVID-19 baseline of hearings listed was 14,815. This fell to a low of 8,806 during the week ending 10 May. The number of adjournments due to COVID-19 then increased rapidly to 2,592 the week ending 29 March, and reached a high of 3,922 a week later. From 26 April, the number of adjournments saw a sustained fall, reaching 1,433 in the week ending 24 May.
This reflects our experience that the courts have continued to stabilise in terms of number of hearings taking place remotely and protocols being put in place. In-person hearings have remained relatively rare but plans are now being put in place to re-introduce them over the next few months on limited terms.
The above analysis demonstrates that it is not simply the number of accidents affecting litigation. The immediate impact was felt as a result of court closures and a variety of organisations including claimant representatives moving to remote working. It is likely that numbers will recover significantly over the coming few months.
Manchester Civil Justice Centre has just re-opened. Seven courtrooms there were due to re-open, three dealing with civil matters and four with family. They confirmed that the backlog at 15 May came to 511 small claims hearings and 200 fast track trials with a further 752 fast track trials listed between 15 May and 28 August. Some will of course have settled but this is an indication of the size of the task facing other courts as they gradually re-open. There will be no quick return to 'business as usual'.
Recent case law has shown that judges will not allow the crisis to become an excuse for slow or sloppy case handling and some cases have of course proceeded remotely. It should be noted that the highly influential Professor Richard Susskind, a strong advocate of and advisor to Lord Briggs on the Online Court project, has openly stated that he feels there are no issues with determining credibility on a remote basis. The Civil Justice Council has provided its report, following the rapid consultation on Covid-19 provisions, concluding that, whilst virtual justice was working in part, most lawyers want to return to the physical courtroom. Read the Civil Justice Council report on the impact of COVID-19 on civil court users.
One recurring issue since the lockdown has concerned the extent to which claims can be investigated whilst directors and employees have been furloughed. This is an issue that has particularly affected workplace accident investigations. There has been no official guidance on this issue, and although ACAS have advised that a furloughed employee can participate as a witness in disciplinary proceedings, this isn't completely analogous to the claims investigation scenario. This month, in an application in the Nottingham County Court, reported by the Nottinghamshire Law Society, the Designated Civil Judge His Honour Judge Godsmark QC, declined to vacate a trial on the ground that the defendant's employees were currently furloughed (he vacated the hearing for other reasons). He "ruled that attending a court to give evidence for the employer is not “work” and certainly not work within the meaning of the furlough scheme. Further, being contacted by an employer’s solicitor to arrange attendance at court is not asking a furloughed employee to do any work which makes money or provides services in breach of the scheme. Participating as a witness (for employer or anyone else) in the justice system is not a breach of the terms of the furlough scheme." Although these comments have been cautiously welcomed by practitioners, there remains concern about whether they would have weight in any subsequent HMRC investigations, and whether they even cover the ability of solicitors to interview employees for the purpose of giving a witness statement.
Whiplash reform developments
This issue was raised in Parliament last week with the responses to a number of questions tabled by Labour MP, Andy Slaughter providing some insight into the current position.
Alex Chalk, answering a question about the Government's decision not to establish an ADR mechanism stated that when the MoJ resumed work on the whiplash portal it would include consideration of incentives and controls for all users of the online claim service where it is appropriate to do so, but that the government did not feel that the current practice of motor insurers accepting liability in the majority of whiplash claims would change after implementation. "However, claimants will have the option to go to court to establish liability where this is necessary".
In answer to a question about the second part of the government's response to the Whiplash consultation from 2016, Chalk answered that, whilst the government were aware of the "continued interest" in the issues raised in Part 2 of the consultation paper, the response to that consultation will be considered after the April 2021 implementation.
In respect of the secondary legislation in relation to the increase in the small claims limit for RTA; and the Government's proposed tariff for minor injury claims Chalk answered that the government will make further announcements, including on the Parliamentary timetable "in due course".
Portal data for May 2020
New RTA claims
This was again the lowest figure ever recorded for the second month in a row with 23,081 new CNFs entering the portal. When taken against business days however, May was slightly better than April with 1,215 claims per day compared to 1,190 in April.
The vehicle miles travelled has now been updated (you will recall there is a lag in the reporting of this data) and the reduction there is unsurprisingly severe bearing in mind the commentary above.
The cumulative number of CNFs per annum is now close to 600,000 and while June might be expected to be slightly higher than April, that cumulative figure will continue to decline. Coronavirus has done in a couple of months what 10 years of whiplash reform failed to achieve:
New Casualty Claims
EL Accidents showed the lowest level of CNFs ever, down to 1,616 as most workplaces remained closed during May. This was down from 2,172 the previous month and a 56% drop when taken against May of the previous year.
PL figures showed 2,237 new claims, again the lowest on record and a 48% drop on the same time the previous year with people staying at home as per government guidance. Footfall in shops virtually ceased in the last quarter, so it will be interesting to observe the impact of the relaxation of the lockdown and the reopening of non-essential retail over the next few months and whether social distancing make for a generally safer environment.
As always, we remember that disease claims submitted to the portal are only the non-asbestos single defendant cases, and therefore not a particularly accurate reflection of notifications, which anecdotally appear to have remained reasonably stable during the lockdown.
Again, the cumulative graphs are showing the reduction on a 12 month basis following the last 2 months of significantly declining volumes:
PSLA and Court Packs
Where claimant handlers may be remaining busy is filing Court Proceeding Packs, they have remained pretty static when compared to the declining volume of new claims:
In RTA claims there were 4,641 CPPs compared to 4,689 the previous month. It is below the 12-month average of 5,343 but not significantly. One would expect to see a decline as the reduction in new claims flows through to the available number of claims to settle.
Indeed, this is reflected in the number of claims ostensibly remaining in the Portal as, for the first time, more claims have settled than are coming in over recent months:
PSLA in RTA rose again this time by 1.8% to £2,903 which was something of a surprise as there had been reports of more claims settling as both claimants and claimant representatives were keen to receive cash in the current environment. It seems to be a reflection of some older claims settling with increased value/complexity compared to the lack of recent new claims with shorter prognosis periods.
Similar patterns were shown in EL and PL claims but on much reduced volumes as always. There were just 54 EL accident court packs and 72 PL court packs.
The average PSLA figure for EL was the highest ever at £4,694, although not by much. PL was £4,486, reasonably static.
In the current environment the usual graphs on retention rates are distorted by the reduction in new claims due to how they are calculated:
And so we look forward to seeing what June data will bring and whether there will be a greater indication of the future pattern of claims…