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A government drive to end the UK's compensation culture has been welcomed by the Federation of Small Businesses (FSB).
In a speech today Lord Charles Falconer, the constitutional affairs secretary, committed the Government to overcoming the problem of frivolous claims from companies offering 'no win no fee' deals.
He warned them to "put their houses in order" before the Government was forced to step in with regulation.
Falconer said there was the perception that there was easy money just waiting to be had and this was causing serious problems
"People become scared of being sued; organisations avoid taking risks and stop perfectly sensible activities," he said. "It creates burdens for those handling claims and critically it also undermines genuine claims."
FSB national chairman Carol Undy said frivolous litigation inspired by a US-style blame culture was costing small businesses as well as other public bodies.
"Business owners feel under pressure to settle out of court even where the case against them is weak and the whole business community is suffering through inflated liability insurance premiums," he said.
