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The Lord Chancellor's view that Britain is in the midst of a "compensation culture" that needs to be curbed has sparked a furious response from lawyers. Lord Falconer said that the forthcoming Compensation Bill would include measures to regulate unregulated "claims farmers."

A number of legal bodies, including the Law Society, Association of Personal Injury Lawyers, and Bar Council have backed the regulation of claims firms. Solicitors attacked the Chancellor's description of a compensation culture, pointing out that there is a falling in levels of accident claims. They also questioned the benefits of the negligence law provisions.

Unveiling the new measures aimed at reining in "ambulance-chasing" claims groups, he said, "There is a culture of fear of being sued and it is stopping good activities."

"There is somebody saying that you have to wear goggles to play conkers and that does not encourage conker playing. Local authorities don't open public spaces because they fear they might be sued, people don't do school trips because they fear they might be sued or sign up for voluntary organisations, like the Boy Scouts or Girl Guides."

The new Bill addresses the issue of regulating claims firms and limiting hard-sell tactics. It will also highlight existing advice over activities such as school trips. Courts will be instructed to consider the wider value of these activities when considering claims.

Tom Jones, of Thompsons personal injury law firm says: "There is no compensation culture. Personal injury claims are dropping significantly. Judges haven't changed, the law hasn't changed. If people sue and their claim is not legitimate, it will not succeed.



Allan Gore, QC, president of the Association of Personal Injury Lawyers, said the myth of a compensation culture required public education on better risk assessment, not legislation.

Many of the bans mocked in the press are the initiatives of a councillor, official, or school head. The notion that "someone might sue" looms larger than its reality.

An increase in litigation has arisen from the introduction of "no win, no fee" legal work in the late 1990s and the birth of claims management firms. The Citizens' Advice Bureau has reported 130,000 complaints about these services since 2000. Many claimants have found that hidden costs exceed their payouts.

A report by the Better Regulation Task Force found last year that the number of registered accident claims had fallen and that the compensation culture was a "myth" because spurious claims were routinely dismissed by the courts.

Lord Falconer insisted that clarifying the negligence law in statute was necessary to send "a clear signal." He added that the provision was not meant to inhibit valid claims.

He said: "Individuals and organisations that adopt reasonable standards and procedures will not be liable and should not have to face unfounded claims. We're making it clear that the court should take into account the wider social value of activities when considering claims."

The bill was presented on the day the Commons' Constitutional Affairs Committee launched an inquiry into compensation culture to consider the need for new laws and how "no win, no fee" deals were working.