Response to Government Update on PI Market Reforms
2 March 2021
NAHL Group plc
("NAHL" or the "Group")
Response to Government Update on Personal Injury Market Reforms
Notice of Results
NAHL (AIM: NAH), a leader in the UK consumer legal services market, today provides an update on the Government's timetable for the implementation of reforms to the personal injury sector.
Impact of Ministry of Justice announcement
Last week, the Government re-confirmed its intention to implement reforms relating to the handling of low-value road traffic accident ("RTA") claims and published further implementation details. These reforms were first announced in the November 2015 Autumn Statement. The changes are not retrospective and will only apply to RTA accidents occurring on or after 31 May 2021 (the "Implementation Date"). The reforms introduce fixed tariff damages for RTA whiplash claims and increase the size limit of claims managed through the RTA small claims track from £1,000 to £5,000.
As a result, the potential damage awards and associated costs from claims managed through the RTA small claims track will be lower. This change is therefore expected to reduce some law firms' fees from such RTA cases.
According to the Government's impact assessment, the reforms could affect up to 90% of RTA personal injury claims and the reductions in damage awards and associated claims costs will amount to c. £1.3bn. The reforms therefore represent a fundamental change for the RTA personal injury claims market.
The details of the RTA reforms released last week are in line with the Board's expectations and financial planning assumptions. The Board was also pleased to note that the legislation did not make any changes to the small claims track limit for non-RTA claims, which had previously been anticipated.
The Group has been planning for these changes since 2015. Its focus on the unaffected non-RTA claims, along with the progress it has made with its personal injury business transformation strategy, means it is well positioned for these industry changes and to grow market share.
NAHL's business transformation strategy
Over the last five years, and in advance of the implementation of the Government's reforms, the Group has been executing its business transformation strategy, with the successful launch of National Accident Law ("NAL") in April 2019. This has included transitioning from being a claims management company into a modern, technology-enabled law firm, with a market leading brand that is able to process its own enquiries.
The Group's strategy to generate increased value in a post-reform environment principally comprises three elements:
1. Profitably process RTA claims in NAL, including small claims;
2. Process an increasing volume of non-RTA claims in NAL, generating a higher return; and
3. Leverage investments in operations, people and technology to improve both processing efficiency and customer experience, for all claim types.
Management have made good progress with each element of this strategy. In December 2020, key upgrades to the call centre technology, digital journey and customer triage processes were successfully implemented. Since January 2021, the majority of new RTA claims have been processed in NAL and the necessary changes to enable all RTA claims, including small claims, to be processed in NAL will be completed ahead of the Implementation Date. Commencing in the second half of 2021, it is anticipated that an increased proportion of non-RTA claims will be transferred into NAL.
Notice of results
The Board intends to announce its results for the year ended 31 December 2020 on 25 May 2021.
Tim Aspinall, Chair of NAHL, commented:
"The management team has worked extremely hard over several years to ensure we are ready to embrace these changes. Since the initial Government announcement which proposed the reforms back in November 2015, we have successfully transformed our business by becoming a leading volume processor of personal injury claims. We are pleased to have clarity on the detail and timing of the reforms and the Board is confident that, as we emerge from the pandemic, our business can deliver sustainable growth in a post-reform world."
For further information please contact:
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NAHL Group plc Tim Aspinall (Chair) James Saralis (CFO)
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via FTI Consulting Tel: +44 (0) 20 3727 1000 |
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Peel Hunt LLP (Nomad & Broker) Ed Allsopp Miles Cox Rishi Shah
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Tel: +44 (0) 20 7418 8890 |
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FTI Consulting (Financial PR) Alex Beagley James Styles Sam Macpherson |
Tel: +44 (0) 20 3727 1000 |
Notes to Editors
NAHL Group plc (AIM: NAH) is a leader in the Consumer Legal Services ("CLS") market. The Group provides services and products to individuals and businesses in the CLS market through its two divisions:
· Consumer Legal Services provides outsourced marketing services to law firms through National Accident Helpline and Homeward Legal; and claims processing and conveyancing services to individuals through Your Law, Law Together, National Accident Law and National Conveyancing Partners. In addition, it also provides property searches through Searches UK.
· Critical Care provides a range of specialist services in the catastrophic and serious injury market to both claimants and defendants through Bush & Co.
More information is available at www.nahlgroupplc.co.uk , www.national-accident-helpline.co.uk and www.bushco.co.uk .
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