The Government yesterday approved amendments to broaden the scope of the Perjury and Related Offences Bill, introduced by Senator Pádraig Ó Céidigh following calls from Irish insurers and businesses.

Mr Flanagan said: “Up to now, perjury has been a common law offence that has rarely been prosecuted. We will now have a clearly defined statute dealing with an offence of perjury.

“It will deal with people who want to engage in fraudulent activity in the courts and will also act as a deterrent to those who wish to chance their arm.”

He added that the law, despite having general application, would be of particular assistance in dealing with cases of insurance fraud and “exaggerated claims”.

He said: “It’s a clear message to anyone engaged in court proceedings, giving evidence in court, that they need to be mindful of the need to tell the truth and in the event of a fraudulent claim, an exaggerated claim or evidence then there are strong penalties involved here.”

Stuart Gilhooly, former president of the Law Society, is among lawyers who have said they are unconvinced that the proposed law would help deal with fraudulent claims.

The Government has agreed to proposed an amendment to the bill to broaden its scope to include commissions of investigation and tribunals of inquiry.

It will also propose to harmonise the maximum penalty on indictment with the equivalent maximum penalties for largely similar offences in the Civil Liability and Courts Act 2004.

This stipulates that a person who commits an offence is liable, on summary conviction, to a class B fine or to imprisonment for a term not exceeding 12 months or to both; and, on conviction on indictment, to a fine not exceeding €100,000 or imprisonment for a term not exceeding 10 years or to both.

The report stage of the bill will take place in the Seanad next week before moving to the Dáil.

Mr Flanagan paid tribute to Senator Ó Céidigh for his work on this issue and his constructive engagement with Mr Flanagan’s department in progressing the legislation.