Iron Trades reports 54% fall in litigation

Iron Trades reports a massive 54% drop in claims resulting in litigation since the introduction of the Woolf reforms to the legal system.

The figures bear out anecdotal evidence from lawyers, and show that the Woolf reforms have so far delivered their intention to cut down unnecessary litigation.

But the results were marred slightly for Iron Trades, with the discovery that it was failing to acknowledge one in every four letters of claims within 21 days - a Woolf requirement, which, if not met, can lead to financial sanctions.

Iron Trades attributed the problem to policyholders delaying replies to the insurer.

Claims manager Brian Herdman said it was too early to say whether the drop in litigation was a long-term trend.

"We do not know if this is the dawn of a golden era or the calm before the storm," he said.

"Are claims handlers focusing on the resolution of claims or are they busy in the margins of the new rulesNULL Early indications suggest the former but claims handlers love rules and it remains to be seen how long it is before resolution gives way to construction and interpretation."

He added that the fall in litigation fees could be cancelled by the rise in compensation costs.

Iron Trades figures centred on accidental and short-tail employers liability claims, and were compared to the same period of last year.

The figures also revealed that a third of claimants solicitors were failing to provide sufficient information in the letter of claim to enable defendants to begin investigating - this compares to 90% during last year's pilot.

Herdman believes this was because during the pilot claimant solicitors had volunteered, but now they were dealing with everyone.

Iron Trades also failed to reach its near 100% target of communicating its decision on the claim after three months of investigation.

The insurer only managed a 92% success rate.

"We aimed for 99.99% but over-estimated our ability to change attitudes in such a short period of time," said Herdman.