UK Personal Injury Litigation 2016; The turbulent course of market-changing reform continues

Powered by

All the vital news, analysis, and commentary curated by our industry experts.

$4495

The personal injury sector continues its turbulent course of market-changing reform, with legislative, legal, and regulatory forces at work. While the market was just beginning to settle post-Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), the game-changing reforms announced by the government in November 2015 have once again whipped up a storm of uncertainty.

Scope

• Sharp declines were finally seen in employers’ liability and public liability claims recorded in 2015–16, reflecting the start of a decline in noise-induced hearing loss claims, and, for public liability, a return to pre-LASPO levels.

• While a more stable picture in claims recorded will be welcomed by the insurance industry, the LASPO spike is still taking its toll on profitability. Settled claims remain significantly above pre-LASPO levels.

• Reforms could have a potentially cataclysmic impact on the claimant sector. They will crystallize the trends of consolidation and revenue diversification already in evidence.

• The result is likely to be a small number of larger claimant representatives guiding consumers through the small claims track, and providing additional services such as rehabilitation.

Reasons to Buy

Review your strategy against both the existing and new challenges regarding the personal injury claims market, as well as mooted solutions.

Benchmark against the market's experience of personal injury claims frequency and costs.

Slater & Gordon
Parabis
AA
LV=
Admiral
Direct Line Group
Allianz
RSA

Table of Contents

EXECUTIVE SUMMARY

The turbulent course of market-changing reform continues

A post-LASPO landscape is emerging, three years after implementation

Proposed government reforms would have a game-changing impact

Claimant representatives are facing further radical structural change

The next 12 months will be pivotal

THE PERSONAL INJURY CLAIMS MARKET

The personal injury sector has had a turbulent 15 months

The post-LASPO landscape is emerging

Claims numbers are falling following a surge in the build-up to LASPO

Claims numbers have yet to drop significantly below pre-LASPO levels

LASPO created a shift in personal injury claims that has yet to fully play out

The focus of claimant representatives away from motor led to sharp increases in EL and clinical negligence claims

Return to growth for motor claims in 2015-16, while EL and PL claims fall

LASPO has had a mixed impact on the market

The banning of referral fees is felt to have had little impact

Civil justice reforms have reduced costs

The impact of cost reduction on the ability of claimant representatives to take forward EL and PL claims is unclear

Proposed government reforms would have a game-changing impact on the sector

Proposals would increase the small claims track limit and remove general damages for minor soft tissue injuries

Key questions and uncertainty remain about the coverage of incoming reform

Political issues and the contentious nature of the reforms add to the uncertainty

Stark differences of opinion exist, although reforms are likely to be watered down

The reforms will reportedly save motor insurers an estimated £1bn a year

Announced reforms could have a wide-ranging impact

The reforms may have unintended consequences

Restructure of market participants: CMCs are likely to capture a greater share of the market

Claims inflation could be an unintended consequence of the reforms

Access to justice could fall to contentious levels

The market may see a spike in claims numbers following any reforms

Changes may push increased claims in other areas

Raising the small claims track limit: "old wine in new bottles" vs. market-changing impact

Removing general damages: the real game-changer

The CMC sector is facing further radical structural change

There was a sharp decline in CMCs post-LASPO

Before the end of 2015 the market was showing signs of stabilizing

Uncertainties surrounding the Autumn Budget reforms and future regulation have thrown the sector back into turmoil

The future for CMCs: contraction, diversification, and more regulation

Consolidation and diversification will increase

Revenue diversification will be key to survival

CMCs need to prepare for transfer of regulation to the FCA

Current regulatory priorities could have a more immediate impact on the sector

Tackling nuisance calls and unsolicited marketing would have a huge impact on the number of leads

Monitoring referral fee ban compliance will be complemented with the SRA's review

Tackling unauthorized activity, which may increase due to regulatory changes

Personal injury solicitors must prepare for tighter costs and a shifting landscape

Consolidation and contraction will result from the need for scale and efficiency

Fixed fees have led to a significant contraction in income

The need for scale and efficiency will segment the market

Slater & Gordon and Parabis provide insight into the issues of cost reduction and the likely future structure of the market

Significant restructuring is anticipated

The future of insurance company ABSs has been called into question

The SRA is likely to take more robust action and be handed greater fining powers

Fixed recoverable costs are likely to expand

The government expects urgent action on the Insurance Fraud Taskforce's recommendations

The Insurance Fraud Taskforce's final report was published in January 2016

The government accepts all the recommendations of the report and expects urgent action

The announcement of planned reforms overshadowed some of the work of the taskforce

Future claims trends: clinical negligence remains an area of concern

Clinical negligence claims have increased substantially since LASPO

Clinical negligence claims are estimated to have cost the NHS £1.4bn

Claims are expected to continue to rise, although the fixed fee regime may deter non-specialists

No other areas have yet risen to become the next NIHL or clinical negligence

PERSONAL INJURY CLAIMS: MOTOR INSURANCE

Motor personal injury claims have increased as the market has adjusted to LASPO

Motor personal injury claims rose for the first time in four years

There are signs the market has adjusted and stabilized

Claims settled still remain significantly above pre-LASPO levels

RTA casualties continue to fall, remaining at odds with claims numbers

Whiplash and fraudulent claims remain thorny issues for motor insurers, continuing to drive claims numbers

Whiplash claims account for up to 70% of motor personal injury claims numbers

Fraud remains a significant problem

Claims inflation has a greater impact on larger claims, but legal changes and reforms will drive increases at the smaller end

Claims inflation is rising at 11% a year for larger claims

Claims inflation for lower-value RTAs is more stable

Factors affecting future claims inflation

MedCo has had a bumpy start and faces a potentially uncertain future

MedCo was set up in April 2015 to improve medico-legal reporting for whiplash claims

The early review of MedCo sought to tackle the issue of MROs gaming the system

MedCo's future will depend on the government's proposed personal injury reforms

Proposed government reforms would affect motor insurance profitability

Any policy shift on general damages or small claims track would have a significant impact

The increase in the small claims track limit could affect 70-80% of motor personal injury claims

Legal costs could be reduced by up to 50%

Reforms could save up to 20% of personal injury claims costs

Savings of £40-50 a year are impossible without the removal of general damages

While reforms may lead to significant cost savings, they cannot be viewed in isolation

Premium rates have already returned to pre-LASPO levels

A surge in claims numbers in the build-up to any reforms could lead to levels higher than the pre-LASPO peak

Claims costs are likely to increase in other areas as a result of the reforms

The next 12 months will be a pivotal time for motor insurers

In the longer-term personal injury will be affected by vehicle technology, telematics, and driverless cars

PERSONAL INJURY CLAIMS: EMPLOYERS' LIABILITY

EL claims are finally decreasing

Disease claims continue to distort the picture, but claims have fallen in both sectors of EL

Although disease claims recorded are falling, NIHL continues to take its toll

Disease claims recorded peaked in 2013-14, driven by NIHL

The NIHL cash cow could be put out to pasture

Asbestosis and mesothelioma cases are largely stable and have not impacted claims numbers

NIHL continues to take its toll; claims settled are still sharply rising and recorded claims remain significantly above pre-LASPO levels

Accident claims are the only area to have fallen below pre-LASPO levels

Accident claims have dropped significantly since 2011-12

Injuries to employees, the underlying driver of EL accident claims, are in long-term decline

The Claims Portal is having limited success, particularly for disease claims, leading to calls for reform

Only 20% of disease claims are estimated to meet portal criteria

4% of disease claims and 12% of accident claims notified have been settled within the portal

Costs for the Diffuse Mesothelioma Payment Scheme will be impacted by claims inflation, not frequency

The scheme is expected to cost 28% more to run in 2015-16

While the value of awards is increasing, applications to the scheme appear to be flattening

Future issues for EL

The Mesothelioma (Amendment) Bill could place a further levy on EL insurers

Psychological and chronic back pain claims are yet to have any real impact

Wherever government reform lines are drawn, a seismic impact will be felt in EL

APPENDIX

Abbreviations and acronyms

Definitions

Claims Portal

DBAs

LASPO

MedCo

Bibliography

Further reading

About Verdict Financial

Disclaimer

Table

Table 1: Number of personal injury claims recorded and settled, by type, 2010-16

Table 2: Number and turnover of authorized personal injury CMCs, 2010-15

Table 3: Number of motor personal injury claims recorded and settled, 2010-16

Table 4: RTA casualties and motor traffic in Great Britain, 2005-14

Table 5: ABI average quarterly motor insurance premium, Q1 2012-Q1 2016

Table 6: Number of EL claims recorded, split by accident and disease, 2010-16

Table 7: Number of EL claims recorded and settled, 2010-16

Table 8: Number of EL claims recorded and settled, split by accident and disease, 2012-16

Table 9: Employer-reported fatal and non-fatal injuries to employees, 2010-15

Figures

Figure 1: Important events in the personal injury market since 2015

Figure 2: Claims settled remain significantly above pre-LASPO levels

Figure 3: Motor claims maintain the lion's share of total cases

Figure 4: LASPO created a surge in non-motor claims

Figure 5: The potential impact of government reforms

Figure 6: While the number of personal injury CMCs has continued to fall, turnover increased in 2014-15

Figure 7: Current and future state of the CMC sector

Figure 8: Current priorities of the CMR

Figure 9: Clinical negligence claims have increased substantially since LASPO

Figure 10: A more stable LASPO landscape is emerging in motor personal injury, although claims settled remain significantly above pre-LASPO levels

Figure 11: Motor personal injury claims remain at odds with trends in RTA casualty data

Figure 12: Reforms would affect a significant proportion of motor claims

Figure 13: Claims costing up to £13,000 add £47 to the cost of an average policy

Figure 14: Premium rates have returned to levels seen pre-LASPO implementation

Figure 15: The rise and fall of disease claims recorded has dominated the EL sector

Figure 16: While EL disease claims recorded fell in 2015-16, claims settled continue to rise sharply

Figure 17: EL accident claims are significantly below pre-LASPO levels

Figure 18: Injuries to employees are in long-term decline

Frequently asked questions

UK Personal Injury Litigation 2016; The turbulent course of market-changing reform continues standard reports
Currency USD
$4,495

Can be used by individual purchaser only

$13,485

Can be shared globally by unlimited users within the purchasing corporation e.g. all employees of a single company


Undecided about purchasing this report?

Enquire Before Buying

Get in touch to find out about multi-purchase discounts

reportstore@globaldata.com
Tel +44 20 7947 2745

Every customer’s requirement is unique. With over 220,000 construction projects tracked, we can create a tailored dataset for you based on the types of projects you are looking for. Please get in touch with your specific requirements and we can send you a quote.

See what our customers are saying
testimonial-image
testimonial-image
testimonial-image
testimonial-image
testimonial-image
testimonial-image
testimonial-image

“The GlobalData platform is our go-to tool for intelligence services. GlobalData provides an easy way to access comprehensive intelligence data around multiple sectors, which essentially makes it a one-for-all intelligence platform, for tendering and approaching customers.

GlobalData is very customer orientated, with a high degree of personalised services, which benefits everyday use. The highly detailed project intelligence and forecast reports can be utilised across multiple departments and workflow scopes, from operational to strategic level, and often support strategic decisions. GlobalData Analytics and visualisation solutions has contributed positively when preparing management presentations and strategic papers.”

Business Intelligence & Marketing Manager, SAL Heavy Lift

“COVID-19 has caused significant interference to our business and the COVID-19 intelligence from GlobalData has helped us reach better decisions around strategy. These two highlights have helped enormously to understand the projections into the future concerning our business units, we also utilise the project database to source new projects for Liebherr-Werk to use as an additional source to pitch for new business.”

Market Analyst & Management, Liebherr-Werk

Your daily news has saved me a lot of time and keeps me up-to-date with what is happening in the market, I like that you almost always have a link to the source origin. We also use your market data in our Strategic Business Process to support our business decisions. By having everything in one place on the Intelligence Center it has saved me a lot of time versus looking on different sources, the alert function also helps with this.

Head of Key Accounts, Saab AB

Having used several other market research companies, I find that GlobalData manages to provide that ‘difficult-to-get’ market data that others can’t, as well as very diverse and complete consumer surveys.

Marketing Intelligence Manager, Portugal Foods

Our experience with GlobalData has been very good, from the platform itself to the people. I find that the analysts and the account team have a high level of customer focus and responsiveness and therefore I can always rely on. The platform is more holistic than other providers. It is convenient and almost like a one stop shop. The pricing suite is highly competitive and value for our organisation.

I like reports that inform new segments such as the analysis on generation Z, millennials, the impact of COVID 19 to our banking customers and their new channel habits. Secondly the specialist insight on affluent sector significantly increases our understanding about this group of customers. The combination of those give us depth and breadth of the evolving market.

I’m in the business of answering and helping people make decisions so with the intelligence center I can do that, effectively and efficiently. I can share quickly key insights that answer and satisfy our country stakeholders by giving them many quality studies and primary research about competitive landscape beyond the outlook of our bank. It helps me be seen as an advisory partner and that makes a big difference. A big benefit of our subscription is that no one holds the whole data and because it allows so many people, so many different parts of our organisation have access, it enables all teams to have the same level of knowledge and decision support.

Head of Customer Insight and Research, Standard Chartered

“I know that I can always rely on Globaldata’s work when I’m searching for the right consumer and market insights. I use Globaldata insights to understand the changing market & consumer landscape and help create better taste & wellbeing solutions for our customers in food, beverage and healthcare industries.

Globaldata has the right data and the reports are of very high quality compared to your competitors. Globaldata not only has overall market sizes & consumer insights on food & beverages but also provides insights at the ingredient & flavour level. That is key for B2B companies like Givaudan. This way we understand our customers’ business and also gain insight to our unique industry”

Head of Consumer Sensory Insights, Givaudan

GlobalData provides a great range of information and reports on various sectors that is highly relevant, timely, easy to access and utilise.  The reports and data dashboards help engagement with clients; they provide valuable industry and market insights that can enrich client conversations and can help in the shaping of value propositions. Moreover, using GlobalData products has helped increase my knowledge of the finance sector, the players within it, and the general threats and opportunities.

I find the consumer surveys that are carried out to be extremely beneficial and not something I have seen anywhere else. They provided an insightful view of why and which consumers take (or don’t) particular financial products. This can help shape conversations with clients to ensure they make the right strategic decisions for their business.

One of the challenges I have found is that data in the payments space is often piecemeal. With GD all of the data I need is in one place, but it also comes with additional market reports that provide useful extra context and information. Having the ability to set-up alerts on relevant movements in the industry, be it competitors or customers, and have them emailed directly to me, ensures I get early sight of industry activity and don’t have to search for news.

Senior Account Manager, TSYS
Financial Services
New
France Life Insurance Market Size and Trends by Line of…
$3,999 | June 2024
Financial Services
New
Wealth Management Trends and Themes in 2024
$5,250 | May 2024
Financial Services
New
Peru Insurance Industry - Key Trends and Opportunities to 2028
$1,450 | May 2024
Go even deeper with GlobalData Intelligence Center

Every Company Report we produce is powered by the GlobalData Intelligence Center.

Subscribing to our intelligence platform means you can monitor developments at UK Personal Injury Litigation 2016; The turbulent course of market-changing reform continues in real time.

  • Access a live UK Personal Injury Litigation 2016; The turbulent course of market-changing reform continues dashboard for 12 months, with up-to-the-minute insights.
  • Fuel your decision making with real-time deal coverage and media activity.
  • Turn insights on financials, deals, products and pipelines into powerful agents of commercial advantage.