The Justice Secretary will today promise an end to the "no win, no fee" deals that encourage unscrupulous lawyers to take spurious cases to court.
Kenneth Clarke will set out plans to force them to accept a 25 per cent proportion of the damages they win for their clients, rather than huge success fees.
Critics of "no win, no fee" arrangements said they deter defendants – often faced with cases for minor accidents – from fighting back against frivolous accusations.
Mr Clarke will also raise the maximum damages which can be awarded in small-claims courts from £5,000 to £15,000. He hopes the move will encourage more people to settle their claims through mediation – and without the involvement of expensive lawyers.