'Ambulance chasers' only came about because the government wanted to abolish more and more areas where civil legal aid was available. The trade off was that lawyers and insurance companies (as most ambulance chasers are) were allowed to work on no win, no fee agreements (which was previously forbidden). Insurers make money out of these claims because they sell 'After the Event' Insurance to cover the chance of the litigant losing and having to pay the otherside's costs.
No win no fee doesn't encourage pointless litigation - what lawyer (who, lets face it, is a money driven animal - why would you want to spend years at University and then deal with other people's misery without a big pay off? - if you want that become a nurse!) would fight a case, spending the many hours of work it takes to litigate, without an almost near to damnit chance of winning the case and getting the 35% up lift in fees from the otherside that no win no fee creates?
As I said, No Win, No Fee normally means that an insurer is backing the case - Only cases advised by Counsel at 70% (which is a very high ratio) get through the net, so statistically the quantity of personal injury litigation has gone down dramatically since the introduction of NW,NF and the abolition of legal aid for PI claims - its just now its been farmed out to commercial entities you hear about it more.
Its the perception of legal action that drives silly H&S officers (and probably company insurers) not the reality. But in my view, its better to be over cautious with people's health and safety than slap dash.