Insurers may be able to close backlogs of old claims as the courts move to automatically adjourn cases that have remained dormant for more than 12 months.

The automatic stay will apply to all civil court proceedings which have not been active since Lord Woolf's civil justice reforms came into effect last April.

Claimants have until April 26 to restart their claims or the courts will intervene and grant an automatic stay or open-ended adjournment. This will allow insurers to subsequently apply to have such cases struck out.

Jonathan Sacher, head of insurance department at City solicitors Paisner & Co, said: "The automatic stay may enable insurers to downgrade reserves that they have maintained in the expectation that some dormant cases might eventually come back to life."

He added that it was unlikely the courts would allow claimants to reactivate proceedings after April 26, without exceptional reasons. However, claims managers suggest the number of cases involved is unlikely to be large and therefore the effect on their reserves may be minimal.

Laurence Besemer, technical claims manager for Allianz Cornhill, said: "Claimants' lawyers have had two years' notice of Lord Woolf's reforms to prepare for these changes. It would therefore be very surprising if there were to be a significant windfall for insurers."

Brian Herdman, manager of claims services at insurer Iron Trades, said: "The effect on insurers' reserves will be difficult to predict. There are a number of other factors which in all probability will have a greater impact on claims costs."

He added that Woolf's reforms have had a positive effect in bringing claims cases to an earlier resolution and this has reduced the burden for insurers.


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