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Slater and Gordon denies claim farming allegations
Slater and Gordon has responded to allegations made by the ABC that it has been engaging in the controversial practice known as claim farming with several companies.
Emma Ryan and Jerome Doraisamy
Claim farming is a practice whereby a law firm pays an agency or an individual a fee for having referred an injured person to the firm as a client. Under Australian Solicitors Conduct rules, paying for client referrals is permitted so long as it is disclosed to the client in question and does not create a conflict of interest for the lawyer.
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In information it claims has been obtained from “secret internal documents”, the ABC has alleged Slater and Gordon has been paying a telephone marketing firm called PreLegal $1,290 for each new client it recruits for workplace injury and traffic accident compensation claims across Victoria, South Australia and Tasmania.
According to the ABC report, the documents show the arrangement with PreLegal generated 214 new clients for Slater and Gordon between March and June last year, “and was expected to result in more than $3 million worth of fees” for the firm.
The report also claimed that Slater and Gordon had a referral arrangement with Medibank Private, which generated in six matters for the firm between October 2016 and August 2017. In a statement, Medibank told the ABC that while it does refer customers to personal injury law firms, it does not receive commission fees for doing so.
Further, the report alleged Slater and Gordon had a referral relationship with a car rental company known as Compass Claims, and that Compass Claim referred 549 customers to Slater and Gordon between March 2016 and August 2017. Each customer that signed on to become a Slater and Gordon client is understood to have generated a $1,100 commission for Compass Claims.
Slater and Gordon is also alleged to have had a “referral partnership pilot” with Australia’s largest online doctor appointment booking service, HealthEngine, via a third party arrangement with Bannister Law last year.
The pilot is said to have enabled Slater and Gordon to obtain the personal details of approximately 200 HealthEngine users per month between March 2017 and August 2017.
Of these, 40 became Slater and Gordon clients, yielding a projected half of a million dollars’ worth of legal fees, according to the report.
The report noted that Slater and Gordon was not paying a fee for these referrals, however, the firm is said to have expected Bannister Law to charge for the referrals in the future.
Lawyers Weekly has approached Bannister Law for comment.
Speaking to Lawyers Weekly about the various claims made by the report, a Slater and Gordon spokesperson said: “As Australia’s leading plaintiff law firm, we remain committed to creating mechanisms for Australians to access justice.
“Our board and management uphold the highest ethical standards in meeting the firm’s legal obligations. We are proactive in ensuring that any marketing we undertake is compliant with applicable laws and confident that it meets the highest ethical standards.”
“Slater and Gordon has acted and continues to act in accordance with all its legal and ethical obligations regarding its marketing activities. We confirm that neither we nor anyone on our behalf is engaged in ‘claims farming’.
“We are not prepared to disclose or discuss the commercial relationships we have with other parties and provide confidential and commercially sensitive information.”
