The fee paid by insurance firms will fall by €200 from €1,050, bringing it back to the level set in 2004 when the PIAB began operating.

Meanwhile, the fee paid by claimants is to be reduced from €50 to €40 for an online application and to €45 for a postal one.

‘The Injuries Board has estimated that the new rates will cut costs for claimants and insurance firms by about €2 million each year, making claims for victims of workplace, motor and public liability accidents much more affordable for businesses and consumers.

‘The move is in line with the Government’s commitment in the four-year plan for recovery to identify ways to tackle increases in insurance costs and drive improvements in our competitiveness,’ said Minister O’Keeffe.

The Department is now preparing the statutory instrument to give effect to the fee reduction.

The chief executive of the Injuries Board, Patricia Byron, said the agency was able to reduce fees after careful management of resources and the successful outcomes of a number of court challenges.

‘The Injuries Board makes no draw on the Exchequer.

‘Instead, we fund our operations through a fee on those who are responsible for injuries arising from motor, workplace and public liability accidents, as well as a modest charge on claimants.

‘We were pleased to be in a position to recommend to Government that respondent and claimant fees be reduced without impacting on our continuing capacity to deliver an efficient and effective service,’ said Ms Byron.

Since it was set up in April 2004, claimants’ waiting times under the Injuries Board have been cut on average by more than 29 months - from three years under the old courts system to less than seven months now.

‘As well as speeding up claimants’ applications, the enormous saving on legal fees shows the consumer is getting much better value for money and costs to businesses are reduced,’ said Minister O’Keeffe.

Figures from the Central Statistics Office show that motor insurance premiums are 30pc lower than they were eight years ago as a result of the Government’s insurance reform programme which included the establishment of the Injuries Board.

Minister O’Keeffe said he expects insurance firms to pass on the new fee reduction to their customers and further reduce premiums.