-- Let us handle the financial burden of pursuing your claim

The government will begin to crack down on no-win-no-fee claims management firms and personal injury lawyers who take advantage of Britain's compensation arrangements and deter school trips and volunteers who fear litigation.

There is expected to be a huge and loud backlash from those law firms affected. The general consensus is that they will not go out without a battle as the new compensation plan regulations may result in many firms closing up shop.

Defending the bill, Constitutional Affairs Mininster Bridget Prentice countered that there are too many frivolous claims being filed, often the result of bad advice at the hands of solicitors.

Most affected are those who normally would volunteer to help with various programs who are not opting not to because of the threat of litigation having a "real and damaging effect on people's behaviour", she said.

The goal of the bill, which is being debated by MPs and protested by claims management companies, is to cease the wave of spurious claims that raise false hopes and to protect citizens from receiving incompetent advice.

It also enables courts to give special consideration to what the bill terms "desirable activities" and it puts into place several regulatory measures aiming at bringing this industry into ethical and legal control.

"There are some very reputable claims management companies but consumers are too often exploited by the firms that provide bad service and encourage frivolous claims," Ms Prentice told the Commons. "Too many of them are cowboys abusing the system for too long and we are going to stamp it out. It really is scandalous that people think they are going forward on a no-win, no-fee situation and discovering because they have signed up to insurance they are paying really very high amounts of money."

One suggested action was to mandate a two-year imprisonment for personnel in companies who offer unauthorised claims management services. This led market analysis company Datamonitor to predict that such action would result in three-quarters of all no-win-no-fee accident claims firms to go out of business.

The bill will also allow motoring groups and supermarkets to offer cheap legal services, adding extra competition to the market.

Ms Prentice said direct regulation could cost up to £1m a year, but added: "In terms of making sure the consumer gets a fair deal I don't think that's a high cost on anyone."

The government was handed a defeat in March when the House of Lords backed a bid to allow apologies and offers of treatment or redress to be made with out admitting liability.

Conservatives hoped that such actions would serve to calm the environment in compensation cases and they also felt that such an action would not necessarily amount to an admission of negligence or breach of statutory duty.

That amendment was adopted and will not be challenged in the Commons. Ms Prentice said once the legislation becomes law, probably by October, the government would consider contacting voluntary organisations, schools and the public to inform them of their rights.

"I think it is a good thing for governments from time to time to let the public know what the law is and how it applies to them."

Minister Prentice announced that the Department for Constitutional Affairs would initially act as regulator for the claims management industry.