The Constitutional Affairs Committee has said it is to investigate whether there is a growing compensation culture in Britain, and whether new laws are necessary or existing laws on negligence already provide sufficient protection.
The Committee announced it will examine the way lawyers' fees are arranged, in particular Conditional Fee Arrangements and ‘uplifts': the extra fees awarded to lawyers in ‘no-win no-fee' cases, which have been a particular issue in libel cases.
It also wants to discover whether the new legislation can address the apparent ‘risk averse' culture, particularly in public bodies, stemming from fear of litigation.
The new Compensation Bill, which the government will launch today, proposes changes to address what is seen as the growing problem with the compensation culture and the way claims managers handle claims.
The NHS Redress Bill would allow people making smaller claims against the NHS to seek compensation without having to go through the long and costly process of litigation.
Rt Hon Alan Beith MP, chairman of the Committee, said: "[There needs] to be more clarity about whether [a compensation culture] really exists, and if so, whether its adverse results are really best dealt with by a new law as the government proposes."