The Current State of The Personal Injury Claims Market
There are over 1,300 firms offering personal injury claims management services and as of February 2008, there were 1,385 firms offering personal injury claims management services. Spending on marketing personal injury legal services declined by 15.8% in 2007 (more work, less need to market and advertise!) Personal injury claims firms generate around £300m in annual revenue .
National Accident Helpline, Injury Lawyers 4U and BGR Bloomer were the leading advertisers in 2007 DAS was the largest underwriter of legal expenses insurance in 2007, with an increase of 13.4% in premium income. Most insurers experienced an increase in legal expenses insurance premium income in 2007.
The Ministry of Justice is to implement a new claims process for RTA claims (in 2010) up to £10,000 and raise the fast track limit to £25,000 . They will also implement several major changes to the personal injury claims process. The Claims Management Regulation Monitoring and Compliance Unit was set up to regulate the sector in April 2007.
The Legal Services Act 2007 will encourage competition for personal injury business
NHS clinical negligence compensation cases
A complete picture of the NHS’s annual expenditure on clinical negligence compensation in England is available from 1996. This reveals a general upwards trend up to and including the year 2004-2005. In 1974-75 this was an estimated £1m then the early 90’s cost was reported to be around £52m. Claims for clinical negligence closed by the NHSLA in 2004-2005, defense and claimant costs were equal to, respectively, 13.76% and 19.81% of damages .
Personal Injury overall picture
The number of personal injury claims is forecast to rise with the number of personal injury accident claims expected to total 752,909 in 2013, and total personal injury costs are estimated to grow by 4.7% per year in the forecast period. Total personal injury claims came to £6.7 billion in 2008 , and are forecast to rise to a total of £8.5 billion in 2012 and £8.8 billion by 2013.
Future of Personal Injury Claims
The number of personal injury claims is forecast to rise with the number of personal injury accident claims expected to total 752,909 in 2013, and total personal injury costs are estimated to grow by 4.7% per year in the forecast period. Total personal injury claims came to £6.7 billion in 2008 , and are forecast to rise to a total of £8.5 billion in 2012 and £8.8 billion by 2013.
Market conditions will remain mixed going forward, and it is unlikely that claims inflation will abate in the foreseeable future
Continued improvements to road and workplace safety will benefit insurers with lower exposure to liabilities, yet people are becoming more litigious, meaning more accidents will result in a personal injury claim being filed.
Accident claims account for the majority of personal injury claims. The number of personal injury accident claims rose by nearly 5% in 2007-08 and over three quarters of all personal injury claims are motor related.
Motor cases
The DfT estimates that there are 800,000 RTA casualties each year. Motor personal injury claims are the most common type of personal injury claim, and claims costs were estimated to be around £4.5 billion in 2007.
Motor personal injury cases have consistently increased since 2004, rising by 6.4% in 2007-08 and then by over 10% more during 2008-09. There has been a dramatic rise in the number of motor bodily injury claims.
Falling accident rates do not affect rising claim numbers! The number of motor personal injury claims increased significantly in 2006, then grew in 2007-08 despite continued reductions in the number of road traffic accidents (number of road traffic accidents and number of casualties both fell in 2007, yet number of claims increased). Bodily injury claims are the most expensive type of motor claims to settle, and the number of bodily injury claims notified has risen by an average of 15.5% each year since 2002.
Nature of Claims
There were 625,000 new claims registered in 2008-09, which represents a 13% year-on-year rise. Motor claims are the most successful, compared with other categories of personal injury.
On average in 2008-09, 90% of all motor personal injury claims were upheld in favor of the claimant, a fairly stable rate over the last four years. The average cost of a motor personal injury claim vary from year to year. Research suggests legal costs account for around 40-50% of total compensation
Sources: “UK Personal Injury Litigation 2009” – Datamonitor Report Published on December 2009
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