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A Queensland law firm under investigation for alleged claim farming has failed to knock down the state’s sweeping investigative powers.
The Queensland Court of Appeal has dismissed Rapid Legal Solutions and director John Francis Windridge’s challenge to Queensland’s claim-farming investigative regime, finding its key investigative powers could remain in force even if other provisions were read down or severed.
Claim farming refers to the practice of firms and legal practitioners paying a third party, described as the claim-farmer, for information about potential claimants. This information is gathered from vulnerable people via unsolicited, high-pressure and manipulative means.
In March 2023, the Motor Accident Insurance Commission (MAIC) questioned Rapid Legal on changes to its volume and type of claims. In October 2024, it raised concerns that the firm may have had referral arrangements or a business development model in place.
At the centre of Rapid Legal’s Court of Appeal proceedings was part 5B of the Motor Accident Insurance Act 1994 (Qld), which empowers investigators to compel firms and associated individuals to produce documents, require people to answer questions under oath, and compel them to provide information even if it might incriminate them.
Section 87ZI removes the ability to refuse compliance on grounds including self-incrimination and legal professional privilege.
Section 87ZQ ordinarily provides individuals with protection against the use of compelled, self-incriminating information and evidence derived from it, but that protection does not extend to proceedings for specified offences, including claim-farming offences.
Rapid Legal and Windridge argued part 5B was incompatible with the Australian Constitution, contending the regime could lead to “show or sham trials because a prosecution can be proved by admissions compulsorily extracted from a person’s mouth”.
In dismissing the appeal, the Court of Appeal bench applied the prudential approach, which sets out that a court should not determine a constitutional challenge “if it is not necessary to do so to resolve the justiciable controversy before the court”.
The court noted that the only compulsory notice issued so far was for Rapid Legal, a corporation that could not claim the privilege against self-incrimination. Further, neither appellant was charged with an offence.
The court then considered whether the provisions giving rise to the constitutional concerns could be read down or severed under the Acts Interpretation Act 1954 (Qld), allowing the remainder of part 5B to continue operating.
Rapid Legal and Windridge accepted that if the provisions could properly be read down or severed in some way from the balance of part 5B, “they would fail on their application for a declaration as to the invalidity of part 5B of the Act and on their appeal”. However, they argued the provisions could neither be read down nor severed.
The bench identified two provisions that could be particularly problematic: 87ZM, which would allow an investigator’s report to be admitted as evidence of the facts stated in it; and 87ZQ(3)(b), which creates an exception to the community that would otherwise prevent compelled information from being used in proceedings.
It was submitted that removal of these provisions would fundamentally change the legislative scheme, but the court disagreed. While doing so could make the investigation and prosecution of claim-farming offences more difficult, it did not change the underlying objective, it found.
“Doing so may make the means of achieving the objective purpose of part 5B less effective, but the objective of investigating and prosecuting claim farming remains the same,” the bench said.
“In those circumstances, as mentioned, it was conceded by senior counsel for the appellants that its claim for relief and appeal fail.”
