Personal injury: CRU claims have more than halved in a decade
Any sustained recovery in the personal injury (PI) market “still seems a long way off” given that total claims numbers continue to fall and fixed fees weaken margins, new research has cautioned.
In UK Personal Injury Market 2024, IRN Legal Reports estimated that the PI market was valued at £4.3bn in 2023, a revenue increase of 3.8% on the previous year.
This will remain sluggish over the next couple of years, it predicted.
“There is now a clear market split into those low-value claims, predominantly RTA [road traffic accident] claims, that are being dealt with via high-volume, low-margin processes dealt with quickly, and higher-value claims where margins are better but cases can be prolonged, often taking years…
“As both of the above trends continue the decrease in the number of legally qualified professionals needed to service the market which is already underway will continue while cashflow difficulties will force more providers focusing on serious injury and clinical negligence claims to exit the market.
“The larger players dealing with high-value claims can probably cope with a wait for final payment that could take years. Some smaller firms are unlikely to be able to take a long-term view if they are under financial pressures.”
IRN suggested that the exodus from the market could have been worse had fixed costs for low-value clinical negligence claims come into force in April as had been originally planned.
There are currently 3,637 firms undertaking PI work, a 4.3% fall since 2021, and 1,317 firms that offer clinical negligence advice, a 5% drop in three years.
The report highlighted too how government reports have reduced the number of PI claims – claims registered at the Compensation Recovery Unit have fallen by more than half in the past decade from over 988,000 in 2014/25 to only 477,420 in 2023/24.
RTA claims accounted for 73% of all claims made in the latest year, but this proportion continues to fall year on year.
The number of PI claims going to court has been falling every year since 2017 but they recorded their largest decrease in 2023 at 25%. There were 61,210 PI court cases started in 2023 compared to 81,481 in 2022.
Among the continuing trends identified in the report were diversification into non-PI consumer claims areas, and the increasing lifecycle of many claims – “given backlogs and delays in claims processing times” – in turn ratcheting up cash flow pressures.
Around a third of the leading PI providers now have in-house integrated services dealing with the PI journey from start to finish, meaning non-legal services such as accident management, rehabilitation, medical reports, treatment etc.
“This integrated model is going to appeal to more providers given that it can reduce costs by bringing more services in-house and provide a better service for clients.”
Among the sessions at PI Futures, on 19 September in Manchester, we will look at the current reform agenda as well as how to make a profit from PI. Click here for early bird tickets.
Leave a Comment