The insurance industry has reacted strongly to a suggestion from the Minister of State for Justice, Mr Willie O'Dea, that the Personal Injuries Assessment Board (PIAB) may not succeed in reducing the cost of insurance claims.
However, representatives of the legal profession have welcomed his contribution to the debate.
Mr O'Dea said yesterday the compensation board would not be able to replace the court system, as the right to go to court was written into the Constitution.
"It will only be available as an alternative," he said in an article in the Sunday Business Post. "Furthermore, if either party doesn't like the decision of the tribunal, they can reject it and go to court.
"The danger, of course, is that most people will continue to go to court rather than to the tribunal, which will be seen as a haven for people who have a 'dodgy' claim or, even worse, as a first port of call to 'test the water' for the real action that will take place later in court (or more likely on the steps of the court)."
Mr O'Dea suggested that legislation be introduced to cap the size of awards, except where a person had a particular skill that was lost as a result of the injury, or in the case of serious injuries.
Speaking to The Irish Times yesterday, he said his view of the board was a personal one and he hoped it would work. But if, when it came into operation next January, it did not have an immediate effect on insurance premiums, then a debate on how else to achieve insurance reform would have to take place.
Mr Martin Long, spokesman for the Irish Insurance Federation, said the industry was fully committed to the PIAB, and full credit should be given to the Tánaiste and Minister for Enterprise and Employment, Ms Harney, for putting insurance reform at the top of her agenda.
"The PIAB is one of 67 recommendations from Dorothea Dowling in the Motor Insurance Advisory Board report," he said.
"The insurance industry is supporting them all. Eleven of the 67 were aimed at the insurance, and we have implemented eight of them, and the remaining three are in train.
"All the cost-saving reforms are in the hands of Government Departments. The IIF is disappointed at the speed of Government reforms in this area. It is not fair to be critical of a system that has not yet started. It should be given a chance."
Mr Long said the cost of motor insurance was coming down, but figures to be released by the IIF later this month would show continuing losses in business insurance, amounting to €50 million.
The Personal Injuries Assessment Board is aimed initially at claims arising out of accidents at work.
Mr Ken Murphy, director general of the Law Society, said he agreed with Mr O'Dea's assessment that the board was unlikely to reduce insurance premiums.
"In our view there has been a fear of questioning PIAB among politicians of all parties. Some have acknowledged to us that if they publicly raised the obvious questions about the board they would attract the devastating wrath of Dorothea Dowling and the business lobby," he said.
"For example, why is the Government afraid to conduct in advance a cost-benefit analysis of PIAB?"
However, he said he did not agree with the proposal to cap awards, which had first been proposed 10 years ago, but was considered in a 1996 Deloitte and Touche report to Government and rejected.
The real question was why business insurance premiums were not coming down, giving that profitability had returned to the insurance industry "with a vengeance".
A spokesman for the Tánaiste, who is still on holiday, said the start-up date of January 1st for the PIAB was on schedule, and it was intended that it would make the whole process of making claims a lot quicker.