An unpublished report in the hands of the Tánaiste since early summer casts doubt on her preferred solution to the problem of high insurance costs.
Last month Ms Harney announced the establishment of a Personal Injuries Assessment Board (PIAB) on an interim basis, pending establishing it on a statutory basis.
However, according to the Implementation Group for the PIAB, it could add another and more expensive layer to the compensation system. The warning comes in the draft report of the Implementation Group, which has been seen by The Irish Times.
The group was set up in April 2001 under the chairmanship of Mr Frank Cunneen, and was made up of representatives of Government departments. It held discussions with trade unions, employers' organisations and the insurance sector. According to the draft report, representatives of the Law Society and the Bar Council "unfortunately, felt unable to meet" the group.
It is understood that its draft report was completed in June this year and was then sent to the Tanaiste and Minister for Enterprise and Employment. A spokeswoman for Ms Harney said she had received it and was awaiting an opportunity to bring it to Cabinet.
It would then be published, she said.
The draft report contains a cost benefit analysis of the proposed PIAB, which estimates that it will cost €2 million to set up and €8-€9 million annually to run.
This might be offset by savings, especially over a period of years as the new body took root. However, these were difficult to estimate, especially in the light of the dearth of market-wide statistics, according to the report.
Using estimates provided by the insurers, the Implementation Group estimated that approximately €36 million annually could be saved in employer liability insurance costs.
However, this figure is based on an estimate of €130 million in legal costs in employer liability insurance. This is almost three times more than the amount published in the report of the Motor Insurance Advisory Board earlier this year. Based on 60 per cent returns of raw data from the insurers, the MIAB calculated that legal costs of employers' liability insurance for 2000 was £22.77 million. The full amount would be about €44 million if there were 100 per cent returns.
The draft report echoes the concerns of economic consultant, Dr Peter Bacon, who drew up a report on behalf of the Bar Council, that the PIAB could become another layer in the system.
"Since the assessments of the PIAB would not be mandatory, for good constitutional reasons, it was possible that, over time, either claimants or respondents would increasingly resort to the courts," according to the Implementation Group. "In this way, the PIAB would become another layer in the system. There is no guarantee that this will not happen."
It also warned of possible additional indirect costs. "The group noted the danger that the introduction of PIAB could itself alter patterns of litigation in ways that are now unforeseen, and that may give rise to greater costs than those saved by the establishment of the PIAB.
"In addition, the PIAB, by being more accessible to people, may cause an increase in the number of claims," it warned."The PIAB may also increase costs by encouraging claims for minor injuries."