The MTA states the new process has created a backlog of work, and prompted the car insurer to send cars interstate to complete repairs.

In July this year, MTA chief executive James McCall said a result of this system is that 20 percent of businesses in the industry would go under, while the others would have to reduce staff because of the need to cut costs.

Negotiations between the NRMA Insurance parent company, the Insurance Australia Group (IAG) and the MTA have so far had little success. Legal proceedings are expected to begin at the end of this week.