Many solicitors are understood to be deducting a percentage of awards made to clients injured in road traffic accidents, the report from the Motor Insurance Advisory Board said.
The report makes it clear that this practice amounts to professional misconduct and said the Law Society would do a service for consumers if it insisted this fact be displayed in all advertisements by its members.
It said lawyers deducting a percentage of damages "leads to a requirement for a higher level of compensation".
The report also criticised the fact that claimants' solicitors were entitled to an interest rate of 8 per cent per annum on their unpresented bills from the date of a court judgment against a defendant.
"This interest rate is far in excess of readily available rates of investment returns. There is clearly scope for solicitors to abuse the situation by deliberately delaying the submission of bills for several months," it said.
It continued: "There are indications that the higher involvement of solicitors and barristers in Ireland causes greater delays in finalising motor claims than experienced in England. On average, settlement periods for motor claims are over three times longer in Ireland".