A leading specialist on the "compensation culture" says local education authorities prefer to settle school bullying claims rather than go to court in case they lose and set a legal precedent, a conference on child safety heard last week.
Yet delegates also heard very few schools were successfully sued.
Dan Lloyd, an English barrister and civil liberties expert, told the conference in Glasgow: "We are now getting cases of young adults of 20 or 30 suing a school for bullying. That is a diversion of resources."
Mr Lloyd called on education authorities to "stand up and go to court and argue". At present, he said, as soon as someone sues, the case is handed over to the insurer.
A delegate from a Scottish education authority said there were also concerns north of the border over the effect of bad publicity in such cases. "It is cheaper and better to reduce bad publicity and settle as soon as possible," she said.
The Government was introducing a Compensation Bill to try to cap the liability the health service faced and to regulate those practitioners not covered by the Law Society, Mr Lloyd said.
But, he told the conference organised by Generation Youth Issues, such legislation was unlikely to reverse the trend of the past 20 years regarding the compensation culture.
Mr Lloyd explained that American law now treated actions and responsibility as separate things, and that this principle was entering the legal system in Britain.
Although there had been a decline in the number of compensation cases coming before courts in Britain, the important point was not about the numbers of cases in court. "What has happened is the growth in quasi-legal apparatus which includes spurious claims," he said.
This was leading to a fear of litigation affecting professional behaviour in the public sector.
Although the vast amount of claims were made against the NHS, where doctors now practised defensive medicine, pound;200million was paid out to parents in England and Wales in claims against education authorities in the last financial year. "That is a massive diversion of resources away from what schools do best," Mr Lloyd said.
In the same session on litigation and limitation, Sarah Thomson, a lecturer in education studies at Keele university, said some schools described playtime as a "nightmare" because of worries around playground injuries and the fear of being sued by parents.
She said the catalyst to creating the compensation culture had been a decision in 1984 by the Law Society to allow lawyers to recruit clients through TV advertising.
"Where there's blame there's a claim" had been the slogan of those advertising personal injury claims services, which had caught the public imagination. She added that teachers' attitudes had been affected by a poll in 2001 by Mori which showed that 57 per cent of parents said that, if their child suffered personal injury which was seen as the fault of the school, they would take legal action.
In her research, Ms Thomson came across fears about allergic reactions to sticking-plasters which could prompt legal action. One teacher told her:
"We are not even allowed to put a plaster on a child. Wet paper towels are the answer to everything now: the child either gets a wet paper towel or goes to hospital on a 999 call." Ms Thomson said her research showed there were very few cases where schools had been sued successfully, but nevertheless a policy prevailed of "if in doubt, ban it."
The conference heard of reported bans on the game British bulldog, skipping ropes and conkers.
Kate Abley, a former teacher turned children's campaigner, said there was now a "litigation management industry that is really quite shocking".
Councils had risk management strategies without the risk, she added.
Ms Abley traced the risk management culture to major child abuse scandals - the Jasmine Beckford case in 1984 in Brent, and the Kimberley Carlile case in Greenwich in 1986. These were followed by the furore in 1987 in Cleveland over sexual abuse allegations by two paediatricians.
The Children's Act had resulted and that legislation should have put children rather than adults at the centre of its concerns, she said.