By: 3 April 2017
Small EL and PL personal injury claim values have risen by up to 12% since 2015

Insurance pay-outs for small employers’ and public liability (EL/PL) personal injury claims have increased significantly in the past two years, climbing to an average value of nearly £4,000 by the end of 2016, according to Weightmans.

The firm has carried out a detailed analysis of data gathered between January 2015 and December 2016 by the Claims Portal and has found that EL/PL claim values rose by an average of 10% and 12% per cent respectively during the period.

The latest figures are in line with the upward trend for personal injury claims values seen in recent years, albeit markedly less than the 27% increase of 2014-5.

Despite the rise in pay-out values, an overall reduction in the volume of personal injury claims passing through the portal suggests that Government efforts to tackle claims-farming are starting to bear fruit, said Weightmans.

The number of EL claims fell by almost 8%, to fewer than 50,000 between January 2015 and December 2016, while PL volumes dropped by more than 12% to 64,000.

The increases in EL/PL values far outstrips the rise in the average value of road traffic accident (RTA) personal injury claims. This rose by only 3.4% over the same period, suggesting that the days of double digit increases – 35% from 2011-4 – are over.

In a report on the claims figures, Weightmans said that while the increase in the average value of small RTA injury claims in the two year period was at a considerably slower rate than seen in previous years, it still represented a “damages creep” above the rate of inflation, bolstering the argument for the introduction of reforms such as the increasing tariff limit for whiplash claims.

Bavita Rai, an insurance partner at Weightmans, said: “The continuing, high increases we are seeing in the pay-outs awarded for injury claims is a cause for concern, indicating that an over-inflationary pressure on claims values remains an issue for insurers and their customers.”

However, she added that the overall decrease in claims volumes was encouraging.

“[It] points to both the Portal having its intended impact on claims-farming and the effect of improved health & safety practices across UK workplaces,” she said.

The full report can be downloaded here.