Lord Falconer has warned that unfounded fears of a "compensation culture" are threatening to undermine important activities such as school trips.

The constitutional affairs secretary said on Wednesday that the government will be forced to regulate accident claim lawyers unless the industry agrees to adopt a voluntary code.

The Cabinet minister argued that the number of payouts has not risen in recent years, but that the proliferation of advertising for "no win, no fee" compensation has increased fears and forced organisations to take unnecessary defensive steps.

The move came in response to a Better Regulation Task Force report earlier this year which concluded that while legitimate claims for injury must be made, a US-style attitude to litigation is beginning to take hold.

Announcing his new tough line at an Insurance Times seminar, Lord Falconer called on legal firms to use responsible media campaigns.

There is also speculation that he will seek to ban "ambulance chasers" from advertising in hospitals and doctors surgeries.

Perception

But he said the biggest problem was the perception that organisations could be held to account for genuine accidents.

"The problem is that lots of organisations like schools, the voluntary sector and local authorities are so worried about claims being brought that they don't do things that everybody would like them to do," the government's legal affairs chief told the BBC.

"They don't do enough school trips. The voluntary sector gets worried about arranging things because they fear they may be sued if somebody gets injured."

"The number of actual accident claims had gone down over the last few years," he added.

"But the numbers of bodies like schools or local authorities or hospitals that are practising defensive activity in order to avoid the possibility of claims has probably gone up."

Consequences

However shadow home secretary David Davis said litigation had increased, with "damaging consequences".

"I welcome the government's announcement to clamp down on companies who encourage frivolous compensation claims," he said.

"The compensation culture has grown substantially in the past seven years, with an estimated cost of over £10 billion per year – £4 billion of which is spent on legal fees.

"The growth of the compensation culture has had a number of damaging consequences, not least the sharp decline in voluntary work, like outdoor activities. We welcome any genuine attempts to reverse this but there is still much more to be done.

"The government should be looking at ways to nurture a culture of responsibility and common sense, rather than pretending the compensation culture will go away by itself."