Local authorities paid out more than £100m in personal injury compensation over the past 12 months, council risk managers have calculated.
Association of Local Authority Risk Managers (Alarm) chief executive Sheila Boyce said most of the claims related to accidents on poorly maintained roads or ill health caused by sub-standard housing.
She said councils were wasting time and money investigating a "growing number of spurious and weak claims".
Boyce said: "Our members are recording increasing levels of claims.
"To some degree they are a result of a lack of funding.
"But, largely, claimants are inspired by no win-no fee advertising and by the media's preoccupation with blame and claim issues."
She said payouts were diverting money from services such as housing, education and highways.