The CBI has welcomed a study into the impact of the compensation culture announced today (Thursday) by the Better Regulation Task Force, saying this is long overdue.
The study will look at whether the threat of litigation is an effective way of encouraging good practice or actually has a detrimental effect on private and public sector organisations.
CBI Director-General, Digby Jones, said: "This is a welcome investigation and long overdue. Certainly the threat of legal action can focus companies' attention on their obligations and people should be able to safeguard their rights but business needs protecting from abuses.
"A growing have-a-go mentality means too many claimants are launching dubious cases in the hope of a pay-out. This creates a huge burden for companies who often find it cheaper to settle out of court even when right is on their side. This is fuelling huge rises in business insurance costs. Over 40 per cent of all insurance payouts go on legal costs, this is unacceptable.
"There is a fine line between access to justice and system abuse. I hope this study adds to pressure for action to ensure that only genuine cases go forward."