The bodyshop services division of the Retail Motor Industry Federation claims the Audatex computer system does not allow for the extra cost of pearlescent paint to be included in repair estimates.
As a result, it says insurers can refuse to pay any extra costs not identified by the system in providing the paint finish in repairs.
Bob Hood, director of the RMI division, claimed bodyshops could be unable to claim £55 million in repair costs as a result of the problem.
But Audatex has hit back, claiming the system allows the extra cost to be weighted elsewhere.
Last week, the two sides met in a bid to diffuse the row.
Hood said: 'We have had discussions about the issue and the best way it can be resolved.'