Britain's compensation culture is placing an increasing burden on businesses, says a new report from the CBI

The bosses organisation says that business insurance premiums soared by almost 50 per cent last year and is now calling for urgent reform of the sector.

New moves to restrain the "have-a-go" mentality of compensation claims are needed, the report argues.

Forum Response: Association of British Insurers

A spokesman for the ABI told ePolitix.com: "The CBI is expressing concerns which we have already fed into the Department for Work and Pensions.

"Employers Liability Insurance is unsustainable. Forty per cent of claims costs are currently being taken up by legal fees.

"We are not against people receiving compensation but we need to look at how this is going to be funded. People shouldn't assume that insurers have bottomless pockets.

"More importantly, we also need to look at how to fund the problem of occupational diseases."

Forum Response: Institute of Directors

A spokesman for the IoD told ePolitix.com: "Of course there is a case for individuals taking legal action against organisations that have been negligent.

"However, the abandonment of individual responsibility and the tendency to sue someone or some organisations for compensation, regardless of the merits of the case is proving very damaging to business."