Since our last update, we have had a cabinet re-shuffle and now have a new Justice Secretary in the shape of Dominic Raab. Mr Raab is no stranger to the Ministry of Justice, and whilst we would normally expect a change in Lord Chancellor to lead to a temporary pause in the MOJ's business as the new Minister gets his feet under the desk, there isn’t a great deal in the immediate pipeline anyway. However, the expansion of fixed costs and publication of Part 2 of the whiplash consultation on credit hire and rehabilitation can be expected next year at least.
In the short term, the MOJ said, "It remains our intention to publish data relating to the first quarter of operation of the Official Injury Claim service soon. However, given the recent change in Ministerial responsibilities, publication of data has had to be delayed by a few weeks and will likely now take place in October." So we await the full picture to enable us to revisit RTA claims frequency.
HMCTS quarterly Civil Justice statistics have been released covering the period April to June 2021.
Looking at the overall picture, County Court claims were down 15% when compared with the same period in 2019. Personal Injury claims were down 23% to 21,000. 13,000 claims went to trial between April and June 2021, down 14% on 2019 levels.
The reduction in PI claims to June 2021 issued can be seen here:
HMCTS said this about the overall picture:
"Looking ahead, as Covid-19 restrictions now come to an end, claim volumes are likely to return to historic trend levels but we expect timeliness measures to remain impacted. As timeliness measures are taken from the initial claim date, data for the next few quarters is likely to include cases issued before or during the early stages of the pandemic. Measures implemented following the pandemic, such as the opening of Covid secure courtrooms and the increase in hearings by remote means, will have benefited later cases and as such should show in timeliness measures towards the end of 2021."
Despite claim levels being down, the average time taken for small claims and multi/fast track claims to go to trial is now 49.2 weeks and 71.1 weeks respectively – this being 12.6 weeks and 12 weeks up on the 2019 picture. These measures were also 7.5 weeks and 9.7 weeks longer for the same quarter in 2020. The annual picture is seen here:
The data is a little more detailed for fast and multi track claims, although they are lumped together, which is perhaps less helpful. We can however see that the time from allocation to track is fairly consistent, but the time from allocation to trial is pushing out the overall time from issue to trial:
Effect of Covid on Litigation and Claims Lifecycles
The court statistics only really tell half the story. One of the most commonly asked questions is what has been the effect of Covid on claims lifecycles and are we over that now?
Well anecdotally, problems remain with medical appointments, particularly in the large loss arena as well as for care. Similarly, in the lower value multi-track cases, medical reports are significantly delayed.
In the last 18 months, even receiving the Directions Questionnaire has been notably delayed. Once that is submitted, more months pass before a CCMC is listed, perhaps adding six months onto the case compared to pre-Covid. CCMCs are being listed more regularly now but there is still a backlog.
Adjournments of lower value trials is still a major issue, with it affecting the majority of cases. There's an expectation that cases won't be tried until the second or third time round. A recent example was a liability trial listed for a Friday, adjourned on the Wednesday. It was originally adjourned in April 2020 but is now to be re-listed in 2022. Recollections of events back in 2017 are unlikely to improve…
Does the data back up the anecdotal position? We analysed data to compare pre-Covid, the Covid period, and the last three months to see if there have been any improvements in a number of areas, and the data did indeed support what people are seeing on the ground
For example, the time from CNF to first medical increased by 41%:
We also can see an increase in the time from Part 8 issue to hearing in MOJ claims:
And in multi track claims a similar pattern:
So we think it's fair to say that there has been an increase in claims lifecycles due to Covid, and certainly in the litigation area there is no obvious sign of improvement yet.
OIC news and developments
It is still too soon to say whether the introduction of the Official Injury Claims portal has achieved any of its objectives. Insurers are certainly seeing a short term drop in frequency, but that was inevitable as new business models were created, and claimant solicitors have had to cope with "teething problems", meaning significant delays in some solicitors starting to use the new Portal, and even now nearly four months after launch there is hardly a medical report to be seen. Those that have come in have generally been from unrepresented claimants. So we can't yet answer the question of whether there will be a drop in claims severity due to the tariff or if the explosion in additional injuries will balance out the tariff and any savings in general damages.
The OIC advisory working party meeting which as due to take place on 30 September has also fallen victim to the change in Minister, and looks likely to take place in October instead. As we have indicated above, we should also receive some management information relating to OIC claims during October to try and analyse the broader picture of claims frequency across the market.
Of immediate concern is the hike in the guideline hourly rates (GHR), which has this month been approved by the Master of the Rolls and which will come into effect on 1 October. Although directed primarily at the summary assessment of costs, the revised GHR will inevitably be used by all judges as a starting point when considering costs budgeting and detailed assessment.
This will cost defendants who find themselves as the paying party, as arguably the increase in most GHR are well in excess of the true level of inflation in legal costs since the last review in 2010. It is to be hoped that the next review, promised in about two years, will actually take place and will adopt a less contentious methodology. Certainly, by then we should have a much clearer picture of post-Covid working practices and how they impact on solicitors’ overheads.
Looking ahead, probably well into next year and possibly October 2022, we will see the extension of fixed recoverable costs (FRC). This extension will cover all forms of fast track claims (i.e. those valued at up to £25,000 but excluding small claims track cases) and a new category of intermediate claims (cases of limited complexity with a value of between £25,001 and £100,000), albeit without the need for a new track as originally recommended by Sir Rupert.
Defendants will welcome the certainty that fixed costs bring: the maximum exposure to a claimant’s costs is known from the outset. However, FRC present their own challenges. First, the pressure is on defendants to try to bring a claim to a conclusion while it is still in one phase of the costs matrix and before it moves into the next one. The timing of Part 36 offers is critical.
Secondly, costs are dependent on a combination of the value of the claim and its complexity. There will be battles ahead where defendants argue that claimants are exaggerating one or both of these factors to locate their claims inappropriately in the costs matrix. This will apply equally to claimants who try to escape the FRC regime altogether by alleging that their cases are not within the intermediate category.
Transport data is now available up to 20 September, so well after the end of the summer holidays and for many the first return to an office-working scenario. Private car usage remains as it was through most of August. It's a pretty consistent picture with LGV and HGV use at around 110% of pre covid levels and private car usage around 90-95%:
Looking at weekdays and commuting, the period 6 to 17 September showed no marked increase on National Rail or Tube/Bus in the capital despite media stories of busy platforms although the trend continues to be very slowly upwards as can be seen on the graph. At present, with the picture on returning to offices uncertain, there is either a lack of need to or a reluctance to return to public transport:
Footfall and Economic Data – ONS
Retail footfall is still not back to pre-pandemic levels, with figures to 4 September 2021 at 84% of the same week in 2019.
For retail parks, the figures are stronger at 97% of 2019 levels; high streets are around the 80% mark. The government will be hoping the push to return to the office will, in turn, increase footfall on the high street. The reality may be that Covid has accelerated the demise of the high street for shopping on a longer term basis.
Not surprisingly, new CNFs in the RTA arena continue to fall as the impact of the OIC continues. 11,388 new claims were presented in August 2021, a new low in numbers but hardly unexpected. We will need to combine this with the OIC figures to see whether overall claims volumes are up, down or static. Given some of the problems claimant firms have had submitting claims to the OIC, it will take many months for the full picture to be known.