Qld leading the charge against claim farming

03 July 2022 By Jemma Barnard
Jemma Barnard

The passage of legislation in the Sunshine State to introduce explicit claim farming offences relating to workers’ compensation claims should be welcomed by all practitioners who ethically and conscionably advocate for injured clients each day, writes Jemma Barnard.

In June 2022, the Personal Injuries Proceedings and Other Legislation Amendment Bill 2022 passed the Queensland Parliament, prohibiting the unscrupulous practice of claim farming across personal injury claims. 

In a media statement, Attorney-General and Minister for Justice Shannon Fentiman said that the legislation would “remove the financial incentive for claim farmers to harass Queenslanders and ensure the justice system is not burdened by the cost of unnecessary personal injury and workers’ compensation claims”.

The practice of claim farming itself has long been an infuriating phenomenon amongst conscionable and ethical practitioners practising in personal injury law.

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Broadly speaking, claim farming is a practice whereby a claim farmer approaches an unsuspecting individual (often via phone, email or social media) and generates a high-pressure situation within which the individual is pressured to lodge a personal injury claim. Claim farmers deploy numerous deceptive tactics and often entice the individual with guarantees of speedy lump-sum compensation or payment of medical bills. Ultimately, once the individual takes the bait, the claim farmer sells all of the personal information shared to a law firm or a claims handler to enable them to progress that claim.

Over the years, there have been attempts by the legislature to curtail claim farming. In 2019, the Labor government introduced the Motor Accident Insurance and Other Legislation Amendment Act 2019, which was aimed at stamping out claim farming in compulsory third party (CTP) claims arising out of motor vehicle accidents.

Prior to that reform, research collected by Queensland’s Motor Accident Insurance Commission revealed that over 1.5 million Queenslanders had been targeted by claim farmers — with some people receiving five to 10 calls a week and even two or three times a day.

Only very recently, and in an Australian first, the Motor Accident Insurance Commission has commenced prosecution proceedings against a Queensland-based legal practitioner, three Australian corporations and an individual for various alleged claim-farming offences and contraventions of the legislation introduced in 2019.

Claim farming is particularly lucrative, however, and so in response to the reform in 2019, the crooks simply diversified their invidious business model! As a consequence, we are now seeing claim farming alive and well across different types of personal injury claims, including workers’ compensation claims, institutional abuse claims, and total and permanent disability claims.

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The new legislation passed by the Parliament in June 2022 introduces provisions that:

  1. Prohibit cold calling or personally approaching another person without their consent and soliciting or inducing them to make a claim;
  2. Make it an offence for any person to pay claim farmers for the details of potential claimants or to receive payment for a claim referral or potential  claim referral;
  3. Impose obligations on legal practitioners who represent injured claimants to certify during the claims process that neither they nor their associates have paid a claim farmer for the claim;
  4. Require law practices to refund, or not recover, fees and disbursements paid in connection with a claim that has been claim farmed;
  5. Provide the Legal Services Commission with additional powers to oversee and enforce the new claim farming provisions; and
  6. Expand the Workers’ Compensation Regulator’s enforcement and investigation powers so it can effectively prosecute claim farming. 

Overall, the practice of claim farming is extraordinarily harmful: it is expensive as it bumps up the cost of insurance, it is predatory as it often targets those who are sick, grieving, and vulnerable within our community, and it is unjust as it consistently denies claimants of rightful outcomes and quality legal advice. 

The passing of this legislation is particularly interesting given that Queensland will be the first jurisdiction in Australia to introduce explicit claim-farming offences relating to workers’ compensation claims. I’m sure it is welcomed by all practitioners who ethically and conscionably advocate for injured clients each day.

We can only hope that the executives granted the powers of investigation and enforcing the new claim farming provisions quickly take the “bull by the horns”, so that this unscrupulous practice is stamped out for good.

Jemma Barnard is an associate at Travis Schultz & Partners.

Qld leading the charge against claim farming
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