Lawyers' organisations have welcomed the High Court judgment that the Personal Injuries Assessment Board (PIAB) cannot refuse to deal directly with lawyers.
The employers' organisation, IBEC, however, described the decision as regressive and urged the PIAB to appeal it.
The PIAB said the decision affects only those claimants who choose, at their own cost, to engage a solicitor.
"Many accident victims are successfully dealing directly with PIAB and the first awards are due within the promised nine month time frame without recourse to litigation and litigation costs," said Ms Patricia Byron, its chief executive.
She said the PIAB aims to reduce the high cost of legal and other expert fees that have been associated historically with processing personal injury compensation claims, and have contributed to high levels of insurance premiums.
The Irish Insurance Federation said it was "business as usual" between it and the PIAB, which it fully supported. The judgment in no way alters the fact that legal costs are not recoverable from the PIAB, according to a spokeswoman. The question of dealing with a claimant's solicitor was a procedural issue for the PIAB, she said.
The Minister for Enterprise and Employment, Mr Martin, who inherited the insurance issue from the architect of the PIAB, the Tánaiste, Ms Harney, said he was studying the judgment. He said he "remains committed to the PIAB objectives of reducing the cost of delivery of compensation to victims of accidents and to reducing the time taken to process claims.
However, the Law Society hailed the judgment for maintaining "fairness between the strong and the weak". It quoted the judgment saying: "The lawyer/client relationship exists in the common good to guarantee equality of arms."
"The judgment shows that PIAB cannot be trusted to act fairly towards accident victims," said its director, Mr Ken Murphy. "Legal representation is necessary to guarantee the rights of victims of accidents against the interests of big business and the insurance industry that PIAB was designed to protect. The judgment exposes the imbalance and anti-claimant bias of PIAB."
The chairman of the Bar Council, Mr Hugh Mohan SC, said the judgment exposed two major flaws of the legislation,which the Bar Council had brought to the attention of the Government while it was being debated. These were the lack of equality of arms between an accident victim and an insurance company with abundant legal resources, and the interference with the lawyer-client relationship.
Mr Phil Hogan, Fine Gael spokesman for enterprise, trade and employment, called on the Government to review the legislation because of the judgment.
Mr Brendan Howlin, of the Labour Party, welcomed the judgment, describing it as "inevitable". He said he had attempted, unsuccessfully, to insert an amendment requiring the PIAB to deal with a claimant's solicitor when asked to do so.
In a significant development, a major craft-workers' union, the Technical, Engineering and Electrical Union, has broken ranks with the ICTU and called for an urgent review of the PIAB as it affects industrial accidents.
"Today's High Court judgment by Mr Justice McMenamin has confirmed the union's view that the system is inherently flawed, especially as it affects employees taking claims for industrial injuries," said Mr Eamon Devoy, the union's acting general secretary.
"We are very aware of the problems involved for workers taking claims," he said.