Abstract
Overview
Introduction
This report contains a wide range of data and analysis, providing insight into the trends affecting personal injury claims. It also examines the implications of a number of significant developments that have occurred in the market in the last twelve months. These include the introduction of a new regulatory body, and far-reaching proposals made by the Department of Constitutional Affairs.
Scope
- The latest personal injury claims data and market research, including information on accident and disease claims
- An understanding of the major claims management intermediaries and their advertising strategies
- Insight into changes in claims management regulation and the proposals made by the Department of Constitutional Affairs
- Forecast scenarios for claims numbers and costs, based on primary research and in-house expertise
Report Highlights
The number of accident claims registered to the Compensation Recovery Unit (CRU) at the Department of Work and Pensions increased in 2006-7, rising by 8.3 per cent. Accident claims make up by far the largest proportion of all personal injury claims, accounting for 96 per cent of claims in 2006-7.
Accident intermediaries National Accident Helpline and Injury Lawyers 4U recorded the first and second highest advertising spends respectively in 2006. National Accident Helpline spent £6.2 million on advertising, overtaking Injury Lawyers 4U which had recorded the highest expenditure in the previous year.
Datamonitor forecasts that the number of personal injury claims will grow by an annual average rate of 2.6 per cent between 2006/7 and 2011/12. By 2011/12 the number of claims will reach 775,958. The increase will largely be driven by further growth in the number of motor personal injury claims, which has seen strong growth in recent years.
Reasons to Purchase
- Access comprehensive analysis of UK personal injury claims statistics
- Gain insight into recent developments in the regulation of the personal injury sector
- Develop an understanding of future claims by viewing Datamonitor' s unique personal injury forecast
Table of Contents
- Overview
- Catalyst
- Summary
- Chapter 1: Executive Summary
- The total number of personal injury claims rose by 5.4 per cent in 2006-7
- The number of accident claims increased by 8.3 per cent in 2006-7
- The number of disease claims fell in 2006-7, declining by 36.4 per cent
- The breakdown of personal injury claims changed significantly in 2005-6
- Employers' liability claims have fallen but motor-related claims have risen
- The number and cost of motor personal injury claims rose in 2006
- The number of motor personal injury cases reported to the CRU increased by 12.8 per cent in 2006/7
- Personal injury claims grew as a proportion of total motor claims in 2005
- The number of employers' liability claims fell to a five-year low in 2006/7
- Workplace accidents and work-related ill-health dropped again in 2005/6
- The number of workplace injuries dropped in 2005/6
- The number of applications for employment tribunals increased
significantly in 2005/6
- Sex and race discrimination applications both rose by over 20 per cent
- National Accident Helpline recorded the highest advertising spend for UK
legal services products in 2006
- Two of the largest claims management companies invested heavily in
advertising
- Several personal injury law firms invested heavily in advertising in order to reach the public directly
- The advertising strategies of top personal injury intermediaries and
firms varied in 2006
- Most personal injury law firms focused on advertising via the radio
- Two of the largest claims management companies invested heavily in
advertising
- Brit was the UK' s largest legal expenses insurance provider in 2006
- Brit controlled £71.6 million in legal expenses GWP in 2006
- The DCA is proposing major changes to the personal injury market
- DCA proposals could lead to a significant decline in the size of the ATE insurance market
- The DCA is considering the termination of referral fees
- The paper concluded that the small claims track limit would remain at £1,000
- The consultation paper considered how the claims process for personal
injury cases could be streamlined to make it more efficient and
cost-effective
- The DCA paper advocates the promotion of early admissions of liability and the removal of duplication of work
- Claims Management Companies became regulated by the Ministry of Justice
in 2007
- The Claims Management Regulation Monitoring and Compliance Unit was set up to regulate the sector in April 2007
- The new regulator will address a number of concerns over firm behavior
- New NHS Injury Costs Recovery Scheme regulations came into effect in
January 2007
- The NHS expects to recover an additional £150 million a year through the new cost recovery scheme
- The number of personal injury accident claims is forecast to rise
between 2005/6 and 2011/12
- The number of personal injury claims is forecast to rise by approximately 3 per cent per annum up to 2012
- Datamonitor forecasts that total personal injury claims costs will
surpass £8 billion by 2011/12
- Increases in all lines, especially employers' liability, will continue to drive claims costs upwards
- The total number of personal injury claims rose by 5.4 per cent in 2006-7
- Table of Contents
- Table of figures
- Table of tables
- Chapter 2: Market Context
- Introduction
- The total number of personal injury claims rose by 5.4 per cent in 2006-7
- The number of accident claims increased by 8.3 per cent in 2006-7
- The number of disease claims fell in 2006-7, declining by 36.4 per cent
- The breakdown of personal injury claims changed significantly in 2005-6
- Employers' liability claims have fallen but motor-related claims have risen
- Accident claims account for the majority of claims by insurance category
- The number and cost of motor personal injury claims rose in 2006
- The number of motor personal injury cases reported to the CRU increased by 12.8 per cent in 2006/7
- Bodily injury claims are the most expensive motor claims to settle
- The average cost of a motor personal injury claim fell by 20 per cent in 2006
- The number of bodily injury claims notified has risen by an average of
15.5 per cent each year since 2002
- Personal injury claims costs rose to approximately 38.2 per cent of motor GWP in 2006
- Personal injury claims grew as a proportion of total motor claims in 2005
- The number of road traffic accidents and casualties declined in 2006
- The number of road traffic accidents has fallen steadily since 1997 as a result of greater road safety
- Despite the fact that the total number of licensed vehicles continues to rise, the number of road traffic accidents is falling
- Road accident casualties fell in 2006
- Injuries fell for many of the major categories of road user in 2005
- The number of employers' liability claims fell to a five-year low in 2006/7
- The cost of employers' liability claims declined by 9.4 per cent in 2005
- The British Coal scheme has cost £3.4 billion so far, although the
majority of payments are for minor amounts
- The British Coal scheme is expected to cost £7.5 billion when all claims have been settled
- The majority of compensation offers to claimants for respiratory disease are below £5,000
- Workplace accidents and work-related ill-health dropped again in 2005/6
- The number of workplace injuries dropped in 2005/6
- The number of workplace injuries, as reportable under RIDDOR, excluding acts of violence, decreased by 4.3 per cent in 2005/6
- Overall workplace injuries dropped in 2005/6 to an estimated 350,000
- Workplace fatalities increased in 2005/6 mainly due to more fatalities among the public
- Total work-related ill-health dropped in 2005
- The number of applications for employment tribunals increased
significantly in 2005/6
- Sex and race discrimination applications both rose by over 20 per cent
- Employers' liability claims are both costly and lengthy to settle
- Employers' liability claims have a long latency period
- Claims costs can accumulate to almost equal the premium income received
- The average cost of an employers' liability claim increases with time
- Chapter 3: ATE and BTE insurance markets
- Introduction
- ATE insurance covers the claimant against legal costs and is sold via a
variety of parties
- ATE insurance covers the claimant in the event that they lose their case and are required to pay the costs of the other side
- Accident intermediaries and solicitors sell ATE policies to claimants
- Allianz, Brit, DAS and Royal & SunAlliance are the major providers of ATE insurance
- ATE insurance policies are usually sold through intermediaries
- The Claims Direct brand is being rebuilt by Russell Jones and Walker
- National Accident Helpline recorded the highest advertising spend for UK
legal services products in 2006
- Advertising plays a major role in promoting services offered by accident intermediaries and personal injury lawyers
- Two of the largest claims management companies invested heavily in
advertising
- Several personal injury law firms invested heavily in advertising in order to reach the public directly
- The advertising strategies of top personal injury intermediaries and
firms varied in 2006
- Most personal injury law firms focused on advertising via the radio
- Advertising strategies are affected by the level of expenditure
- Profiles of accident intermediary and personal injury law firms
- Injury Lawyers 4U
- Injury Lawyers 4U was formed in 2002 as the failings of TAG and Claims Direct were becoming apparent
- IL4U uses a panel of around 70 firms of solicitors
- There is neither a designated insurer or funding partner
- InjuryLawyers4U is a major television advertiser
- National Accident Helpline
- National Accident Helpline was established in 1993
- There were around 100 member firms of solicitors on NAH' s panel in 2006-7
- NAH recommends deferred payment ATE policies
- The company generates its caseload largely via television advertising
- Shoosmiths
- Accident Line
- The Accident Line brand was formed in the early 1990s by the Law Society
- There are 250 member firms on AL' s panel
- AL generates business via directory advertising and relationships with advice agencies
- Claims Direct
- Claims Direct operates a small panel of solicitors
- Its caseload is generated via a mix of advertising media
- Between 400-450 cases were accepted per month during 2006-7
- Personal Injury Helpline
- Accident Advice Helpline
- Accident Advice Helpline was set up in 2000
- Its funding partner pulled out of the market in 2004 and the company went into administration as a result
- Its advertising budget was cut significantly in 2006
- Injury Lawyers 4U
- Brit was the UK' s largest legal expenses insurance provider in 2006
- Brit controlled £71.6 million in legal expenses GWP in 2006
- Chapter 4: Regulation and Issues
- Introduction
- The DCA is proposing major changes to the personal injury market
- DCA proposals could lead to a significant decline in the size of the ATE insurance market
- The DCA is considering the termination of referral fees
- The paper concluded that the small claims track limit would remain at £1,000
- The consultation paper considered how the claims process for personal
injury cases could be streamlined to make it more efficient and
cost-effective
- The DCA paper advocates the promotion of early admissions of liability and the removal of duplication of work
- The DCA also wants to reduce the "scope for argument"
- Claims Management Companies became regulated by the Ministry of Justice
in 2007
- The Claims Management Regulation Monitoring and Compliance Unit was set up to regulate the sector in April 2007
- Most companies applying for authorisation were specialist claims management firms
- The majority of companies applying for authorisation have relatively small turnover
- Attempts were made to encourage self-regulation in the sector, however these were unsuccessful
- The new regulator will address a number of concerns over firm behavior
- The DCA' s second major paper reviewed the law on damages
- The DCA is recommending that changes are made to claims for wrongful death and bereavement
- The DCA has rejected calls for statutory provisions in psychiatric illness cases
- The DCA is reconsidering the approach towards collateral damages
- The DCA is seeking views on whether to stop deducting sick pay from loss of earning damages
- The Government is recommending that damages for gratuitous care should no longer be held in trusts for the carer
- The Law on Damages paper also discusses calculations for injury-related accommodation expenses
- New NHS Injury Costs Recovery Scheme regulations came into effect in
January 2007
- The NHS expects to recover an additional £150 million a year through the new cost recovery scheme
- The House of Lords is reviewing whether compensation should be paid for
pleural plaques
- No final decision has yet been made on whether insurers are liable to pay compensation for pleural plaques
- There has been significant growth in the use of alternative dispute
resolution schemes such as InterResolve' s Bodily Injury Claims Scheme
- Independent providers like InterResolve are achieving cost savings by streamlining claims processing
- Avoiding litigation can create more proportional third party costs
- Mediators are capturing business through a growing number of channels
- The sourcing of medical reports and the provision of treatment is also made more efficient
- Chapter 5: The Future Decoded
- Introduction
- The number of personal injury accident claims is forecast to rise
between 2005/6 and 2011/12
- The number of personal injury claims is forecast to rise by approximately 3 per cent per annum up to 2012
- Datamonitor estimates that personal injury claims costs will increase in
2007/8
- Claims costs are forecast to reach £7.5 billion in 2007/8
- Datamonitor forecasts that total personal injury claims costs will
surpass £8 billion by 2011/12
- Increases in all lines, especially employers' liability, will continue to drive claims costs upwards
- The reforms proposed by the DCA in 2007 could impact on claims costs
- APPENDIX
- Supplementary information
- Funding options for personal injury claims
- The impact of the reforms to the Access to Justice Act 1999
- The withdrawal of Legal Aid
- Private funding
- CFAs: the key to the courtroom door?
- Legal expenses insurance
- Definitions
- Research methodology
- BTE and Personal Injury surveys
- Interviews
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Number of personal injury claims made to general insurers, split by accident and disease, 2002-7
- Table 2: Personal injury claims split by insurance category, 2005-7
- Table 3: Number of personal injury claims made to general insurers, split by accident and disease, by insurance category 2006-7
- Table 4: Number of motor personal injury claims, 2001-2 to 2006-7
- Table 5: Average motor claims payout and percentage of claims with a payment by type, 2006
- Table 6: Average cost of a motor personal injury claim, 2002-6
- Table 7: Motor bodily injury claims volume and average amount, 2002-6
- Table 8: Personal injury claims costs as a percentage of motor GWP, 2002-6
- Table 9: Personal injury claims costs as a percentage of total motor claims costs, 2001-5
- Table 10: Total number of road accidents in the UK, 1995-2006
- Table 11: The number of road accidents relative to the number of registered vehicles in the UK, 1995-2006
- Table 12: Road accident casualties in the UK, split by severity of injury, 2002-6
- Table 13: Road casualties by type of injured party, 2005-6
- Table 14: Number of employers' liability personal injury claims split by accident and disease, 2002/3-2006/7
- Table 15: Employers' liability gross incurred claims, 2001-5
- Table 16: Number of claims made to the DTI and total compensation paid for respiratory disease and vibration white finger under the British Coal scheme as of 4th of March 2007
- Table 17: Profile of offers made by the DTI to claimants for respiratory disease under the British Coal Scheme, up to 4th March 2007
- Table 18: Workplace injuries reportable under RIDDOR, 2001/2-2005/6p
- Table 19: Workplace injuries, reportable under RIDDOR, excluding acts of violence, 2001-6p
- Table 20: Total estimated workplace injuries reportable to the HSE, 2001-6p
- Table 21: Workplace fatalities reported under RIDDOR, 2001/2-5/6p
- Table 22: Workplace fatalities reported under RIDDOR, 2001-5p
- Table 23: Number of applications registered by employment tribunals involving sex, race and disability discriminations cases, 2001-6
- Table 24: Number of employers' liability claims paid by year of origin, 1995-2004
- Table 25: Employers' liability claims costs as a percentage of GEP in year of origin, 1995-2004
- Table 26: Average cost of paid employers' liability claims by year of origin, 1995-2002
- Table 27: Top 20 personal injury advertisers, 2006
- Table 28: Top 20 personal injury advertisers, by medium, 2006
- Table 29: Legal expenses GWP by insurer, 2002-6
- Table 30: Number of companies applying to the Claims Management Regulation Monitoring and Compliance Unit by intention of business
- Table 31: Number of companies applying to the Claims Management Regulation Monitoring and Compliance Unit by principal activity of business
- Table 32: Number of companies applying to the Claims Management Regulation Monitoring and Compliance Unit by company turnover
- Table 33: Forecast number of personal injury accident claims, 2005/6-2011/12f
- Table 34: Personal injury claims costs by line of business, 2005/6-2007/8f
- Table 35: Forecast of total personal injury claims costs, 2005/6-2011/12f
- List of Figures
- Figure 1: The number of disease claims registered with the Compensation Recovery Unit declined in 2006-7, however the number of accident claims rose
- Figure 2: The top 20 advertisers of personal injury services spent 68.7 per cent of their budget on TV in 2006
- Figure 3: The number of disease claims registered with the Compensation Recovery Unit declined in 2006-7, however the number of accident claims rose
- Figure 4: Motor-related claims accounted for the largest proportion of all personal injury cases in 2006/7
- Figure 5: Accident claims made up the majority of personal injury claims across all categories in 2006/7
- Figure 6: The number of motor personal injury claims increased by 12.8 per cent in 2006-7
- Figure 7: Bodily injury claims are the most expensive motor claims to settle, however the percentage of claims that are awarded payouts is low
- Figure 8: The number of motor bodily injury claims rose by 20.6 per cent in 2006
- Figure 9: Personal injury claims costs have steadily increased as a percentage of motor GWP between 2002 and 2006
- Figure 10: Personal injury claims costs accounted for over 50 per cent of total motor claims costs in 2005
- Figure 11: The number of RTAs has fallen every year since 1997
- Figure 12: Although vehicle registrations rose again in 2006, road traffic accidents continued to fall
- Figure 13: Road accident casualties continued to decline in 2006
- Figure 14: Car users are the largest category of injured party in relation to road traffic accidents
- Figure 15: Disease claims in the employers' liability market have fallen dramatically since 2003/4
- Figure 16: Employers' liability gross claims incurred declined for the second consecutive year in 2005
- Figure 17: The vast majority of offers under the British Coal Scheme are below £5,000
- Figure 18: Workplace fatalities went down in 2005/6p, apart from among members of the public and the self-employed
- Figure 19: All disease-related fatalities declined in 2005
- Figure 20: There was an increase in the total number of employment tribunal applications in 2005/6
- Figure 21: Applications for disability discrimination declined again in 2005/6, however sex and race applications rose
- Figure 22: Employers' liability claims have a long latency period
- Figure 23: Employers' liability claims costs can accumulate over time
- Figure 24: Analysis of employers' liability claims costs shows that they increase over time
- Figure 25: National Accident Helpline recorded the highest advertising spend for UK legal services products in 2006
- Figure 26: The top 20 advertisers of personal injury services spent 68.7 per cent of their budget on TV in 2006
- Figure 27: Profile of Injury Lawyers 4U
- Figure 28: Profile of National Accident Helpline
- Figure 29: Profile of Accident Line
- Figure 30: Profile of Claims Direct
- Figure 31: Brit was the largest underwriter of legal expenses insurance in 2006
- Figure 32: The majority of companies that applied for authorization to the Claims Management Regulation Monitoring and Compliance Unit were claims management companies
- Figure 33: The majority of companies applying for authorization have a turnover between £20,000 and £50,000
- Figure 34: The number of personal injury accident claims is forecast to rise between 2005/6 and 2011/12f
- Figure 35: Motor personal injury claims costs outweigh employers' liability and general liability claims costs
- Figure 36: Personal injury claims costs are forecast to rise to £8.8 billion by 2012
- Supplementary information
