The widespread public perception that a compensation culture pervades UK society is a big problem that deters people from volunteering, Justin Davis Smith, NCVO's volunteering chief, told Parliament last week.

Giving evidence last week at the committee stage debate for the Social Action, Responsibility and Heroism Bill (the Sarah Bill), Davis Smith said that 38 per cent of young people are put off volunteering because of fears of being sued.

But the myth is greater than the reality, he said. 

“We are not in the grip of a compensation culture, but nevertheless people perceive there to be one. I think that perception, that myth, that fear is just as big a deterrent as if there were the reality of a compensation culture.”

The Sarah Bill, sponsored by Justice Secretary Chris Grayling, is intended to send a message to the courts that “sometimes accidents will happen”. But some Labour MPs and charity lawyers have questioned its necessity, claiming that it is a solution looking for a problem.

NCVO, however, has lent its support to the bill. Davis Smith told MPs on Thursday that it will be less about changing the law and more about sending a message to Parliament.

“My understanding is that the bill is not about substantively changing the law; it is more about giving a message from Parliament to the courts about the importance of volunteering in our society and the importance of social action.

"If the 2006 Compensation Act has not been as successful as we wanted it to be… perhaps the reason is the lack of dissemination and working with and through voluntary organisations to try and get those messages out to the coalface.”

Davis Smith said that NCVO members were asked whether they felt they were able to handle the risk associated with litigation issues that might be brought against their volunteers.

Of the 500 members who replied, 16 per cent responded that they did not feel very confident in managing that risk. A further 27 per cent said that they felt “only a little bit confident”.

The smaller the organisation, the greater the concern, said Davis Smith: “There is a risk-management concern among some of our members, but the interesting thing was that, the smaller the organisation is, the more the level of concern goes up. That is not surprising because some of the large, household-name charities have their own in-house legal teams or access to legal services.

“It is often the small community groups, which are sometimes run entirely by volunteers, that are doing some of the most challenging, potentially risky but certainly most worthwhile activity in our communities, and they are perhaps most challenged by some of the issues that have been raised.

“We have a second concern that, in addition to the possible negative effect that some of this myth might have on individual action, we hear evidence from some of our members—anecdotal evidence, perhaps—that organisations are tempted to close down and stop some of the most valuable and risky activities because they themselves fear that they will be sued should something go wrong."