The reality of what happens in court does not match the perception of a compensation culture, according to master of the rolls Lord Dyson.

The senior judge said belief in the compensation culture casts a ‘false shadow’ that is not borne out by judgments that have been passed in courts of England and Wales.

But Dyson (pictured) said too often parties are discouraged from going to court to test claims because of ‘exorbitant’ legal fees and the inherent uncertainty of litigation.

Speaking at the High Sheriff of Oxfordshire’s annual law lecture this week, Dyson said lawyers should do what they can to ‘explode the false perception of compensation culture’.

He added: ‘Our courts are well aware of the dangers of contributing to the idea that all injuries should result in compensatory awards.

‘The law is fault-based. It requires a claimant to establish a duty of care, breach and causation of loss. These are not always straightforward matters and if a claimant fails to establish any one of them, his claim fails.

‘The courts have not in recent years lowered the hurdles that a claimant must surmount.’

Dyson cited four examples of the courts or justice system rejecting claims, including Tomlinson v Congleton Borough Council, where the House of Lords rejected a claim after the claimant broke his neck diving into a flooded quarry, and 36 claims against burger chain McDonalds for personal injuries caused by hot drinks – all of which failed.

The examples showed courts adopting a ‘robust, commonsense approach’ to claims for compensation which is inconsistent with the idea of a compensation culture.

But Dyson conceded that a perception that the law requires compensation for any accident is likely to lead individuals, businesses and government to act differently.

Defendants, he warned, are probably often induced to make ‘commercial settlements’ which have little to do with the eventual outcome of any trial.

To test more cases would require more parties to go to court, and Dyson said the ‘obvious solution’ is to introduce ‘reasonable and proportionate’ fixed legal costs.

‘Our government is taking a long time to grasp this nettle,’ he added. ‘The laws of competition and the market place seem to be helpless in resisting the rising tide of the cost of litigating. Many would-be litigants simply cannot afford to go to court.’