LIABILITIES held by South Australia's WorkCover scheme could again blow out beyond $1 billion.

Legal expert John Walsh, a managing partner at commercial firm Donaldson Walsh Lawyers, said a Supreme Court challenge by lawyers Lieschke & Weatherill to the power of WorkCover's controversial medical panels could, if successful, escalate the unfunded liabilities.

A successful challenge to whether medical panels' findings are binding on the Workers Compensation Tribunal could allow workers who are put off benefits by panels to mount challenges in the tribunal - this could see more people retain their payments and also see a large legal bill as WorkCover pays costs even if such challenges are defeated.

Industrial Relations Minister Patrick Conlon - who inherited the portfolio after the shock resignation of Bernard Finnigan - is now considering the findings from a review of controversial changes to WorkCover in 2008, which watered down protections for injured workers.

The review by leading former bureaucrat Bill Cossey followed an earlier independent report by PricewaterhouseCoopers actuary John Walsh, which was highly critical of the overall operations.

As Mr Conlon considers the Cossey report before tabling it in Parliament by June 30:

CURRENT unfunded liabilities sit at $865 million.

SENIOR executives including chief financial officer Ian Rhodes were recently made redundant, a move that has confounded observers.

EMPLOYER levies remain the highest in the nation while return to work rates are the poorest.

A SUPREME Court decision on the power of the medical panels is due shortly.

WORKCOVER's head contract, now with claims management provider Employers Mutual Ltd (EML), is being offered for tender, a process likely to take 12 months.

Mr Walsh said recent upheavals at WorkCover meant employers and workers alike faced continued uncertainty with the "troublesome WorkCover scheme".

"With the unfunded liability sitting at $865 million it is difficult to accept that the position of chief financial officer of this embattled organisation is redundant," said Mr Walsh, who also published the same views in a recent industry newsletter.

"All staff at WorkCover will now be wondering just how safe their own positions are and it will be a difficult task to keep morale up in the current environment."

Mr Walsh noted that one of the key findings in the PwC report was that workers' claims were overserviced despite "little evidence of improved return-to-work performance".

"It should be a source of great embarrassment to WorkCover that the report is so damning of vocational rehabilitation and its effectiveness when vocational rehabilitation underpins the effectiveness of the scheme as a whole," he said.

"Patrick Conlon will have a difficult challenge in deflecting criticism from the role that government has played in the continued deterioration in the performance of the scheme."

SA Unions made a detailed submission to the Cossey review in favour of restoring protections for injured workers but secretary Janet Giles said she had little faith Mr Conlon would overhaul the system.

"Mr Conlon was a key architect in the unfair system we have today when he joined Mike Rann and Kevin Foley in pushing through these unfair laws in 2008 against massive opposition from unions," she said. "It is ironic that the guy who was fundamental in the creation of the current system is now the recipient of the report on its effect."

A spokesman for Mr Conlon said the minister was considering the report.

WorkCover chairman Philip Bentley said WorkCover had a new strategic direction to provide the best outcomes for injured workers and employers.