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Lawyers slam ‘parasitic practice’ following Slaters claim farming allegations

Allegations that Slater and Gordon has been engaging in claim farming with several companies has been met with a fiery response from local lawyers.

user iconEmma Ryan and Jerome Doraisamy 27 June 2018 Big Law
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Earlier this week the ABC issued “secret internal documents” which claimed that Slater and Gordon has been engaging in claim farming. The report alleged the plaintiff firm has been involved in client referral arrangements with at least four companies - telephone marketing firm PreLegal, private health insurer Medibank Private, car rental Compass Claims and online doctor appointment booking service HealthEngine.

Combined, these arrangements are understood to have generated upwards of 800 personal injury matters for Slater and Gordon over the time-frame from March 2016 and August 2017, consequently yielding the firm significant monetary value in legal fees.

Slater and Gordon denied it was engaged in the controversial practice, saying that it “has acted and continues to act in accordance with all its legal and ethical obligations regarding its marketing activities”. 

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“We are not prepared to disclose or discuss the commercial relationships we have with other parties and provide confidential and commercially sensitive information,” a spokesperson for the firm added.

Since the news broke, several lawyers have offered up their opinion on claim farming and Slater and Gordon's alleged involvement in the practice.

Ron Pearce from Ryan Carlisle Thomas Lawyers’ issued a blog post on his firm’s website in response to the ABC’s report, calling for claim farming to be stamped out with immediate effect.

“This dubious practice fails to respect the privacy and dignity of the injured party. It is an odious intrusion into the private life of a person at a time when they are vulnerable and are susceptible to the persuasion and pressuring techniques of sales people who are not lawyers, are not governed by a professional oath to act in a client’s best interests, and who are only motivated by financial gain,” Mr Pearce said.

“It is a parasitic practice that preys on the vulnerable. The law firms that pay third parties to engage in this practice are themselves predators.

“...The practice not only [compromises] a client’s best interests, it is a blight on the legal profession. It demands a swift legislative response from government.”

Australian Lawyers Alliance (ALA) president Laura Neil also offered up her perspective on the practice, noting that lawyers participating and benefiting from such activities “should be clearly and robustly discouraged”.

“We have always been vocal in our opposition to this practice and have supported proposed measures to ensure that lawyers do not benefit when a client has been procured by claims harvesting," Ms Neil said.

“People knowing their rights and where to go for help is a crucial first step in accessing justice.

“However, cold-calling in an intrusive way that breaches people’s privacy is not a practice that the ALA supports. Nor do we agree with the sale of private information by third party providers such as those providing medical booking services. The information that someone has made a medical appointment should never result in a call from a lawyer.

“Claim-harvesting appears to be on the increase but the vast majority of plaintiff lawyers are highly ethical and are opposed to this practice. In fact, legal organisations have been at the forefront of trying to rule out this practice. We will continue to work with other industry groups to put a stop to this activity.”

Maurice Blackburn lawyer and director of the Australian Lawyers Alliance, Rod Hodgson, told the ABC that he believes Slater and Gordon's recent financial troubles “may have pushed it to start direct marketing”.

“Slater and Gordon has been the subject of much public comment over a number of years, and perhaps desperate times have called in their minds for desperate measures,” he told the publication.

Lawyers Weekly put this comment to a Slater and Gordon spokesperson who responded with the following:

“In relation to the reference to the allegation made by one of our competitors ... a new capital structure, a new management and board, a renewed focus on our core strengths and staff who are absolutely dedicated to achieving the best outcomes for our clients, means Slater and Gordon is in a stronger position than ever before”.

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