The Law Commission is calling for eased restrictions on compensation claims for psychiatric illness suffered by the relatives of victims of avoidable accidents.
A consultation paper, issued last week, is seeking views on how easy it is for the bereaved to seek damages for conditions like traumatic stress disorder.
The move follows a case in which relatives of football fans killed in the Hillsborough disaster sued South Yorkshire Police over "nervous shock" suffered.
A House of Lords ruling said that a plaintiff must be able to prove a close tie of love and affection to the victim, that they were close to the accident's scene and that they witnessed it.
But the commission wants the second and third conditions lifted. Professor Andrew Burrows, a commission member, says: "The issue of when there should be liability for 'nervous shock' has long perplexed judges. While we believe it is important to retain special limits on liability for psychiatric illness, our provisional view is that some of the existing limits are arbitrary and unjust, and should be removed."
The document will also examine whether there should be liability for illness caused by journalists who negligently spread false news, employers who overburden their staff and those who destroy property. Another issue to be considered is whether professional rescuers such as the police should be precluded from claiming for psychiatric illness if they suffer from negligence at work.
Michael Napier, president of the Association of Personal Injury Lawyers, says: "There is hope for these victims in the Law Commission's paper."