*Content in this blog relates to Queensland legislation.

What is ‘claim farming’?

In 2019 legislation was introduced to eliminate ‘claim farming’ in Queensland in relation to motor vehicle accident claims. Claim farming is the process where individuals or call centres, whether located abroad or in Australia call residents and ask if they, or any family members have been involved in an accident. Such accident could relate to a motor vehicle accident, or other incident such as a workplace accident. These callers then encourage the call recipient to make a personal injury claim.  These calls were described by the receivers as harassing with the promise of quick and simple compensation in their pockets. The contact details of these individuals who had agreed to make a claim were then sold to legal practitioners or other providers to action the matter.

Research showed that some 1.5 million Queenslanders had been targeted by claim farmers, with some individuals receiving multiple calls per week.

The calls which lead to claims being commenced were seeing the cost of insurance sky rocket. Action needed to be taken to cease this practice from continuing, this is where the changes to the Motor Accident Insurance and Other Legislation Amendment Act (‘MAIA’) were introduced.

The changes to the MAIA introduced in December 2019 declared that this unpleasant activity be prohibited. These changes targeted those who had been randomly calling members of the public and coercing them into making a claim following a motor vehicle accident. The legislation changes made it an offence for anyone to accept payment for the details of these people who were persuaded into commencing a claim. This introduction made it illegal in Queensland for practitioners and the like to accept and pay a fee to a claims farming caller for a personal injury claim referral.

Queensland was the first jurisdiction in Australia to introduce this process to stamp out this unruly practice. It has since been successful in its introduction with the Motor Accident Insurance Commission commencing prosecution proceedings against numerous separate parties for various alleged claim farming offences. Prosecutions for 324 claim farming charges have been commenced, with each charge involving contravention of section 74 of the MAIA, which refers to the giving or receiving of financial incentives for receipt of motor vehicle accident referrals.

As a result of this effective legislation change to the MAIA these phone calls were then seen being made by claim farmers again to members of the public, however asking if they had been involved in other types of personal injury incidents, such as workers’ compensation claims or public liability claims. Again people were being coerced into making these claims. These claim farmers at this stage were pretending to be insurance companies, or other government agencies to pressure these vulnerable people to make claims. Further legislation needed to be introduced to ensure that these calls were ceased completely.

Changes made to current legislation

The introduction of the MAIA saw a substantial drop in the number of people who reported to have been called and harassed by claim farmers, meaning this legislation change was functioning as it should. As this legislation change was proving to be effective new laws were urged to be introduced to cover all other areas of personal injury fields which were seeing people being targeted to make a claim. Areas such as workers’ compensation were now the target for these calls.

The Queensland government decided early this year that there was a need to expand the extent of the anti-claim farming provisions which were only applicable to motor vehicle accidents. June 2022 saw these similar changes introduced to the Personal Injuries Proceedings Act 2002 and the Workers’ Compensation and Rehabilitation Act 2003. These new rules ban all claim farming from occurring in Queensland. The amendments made to these Acts replicate that which has already been put in place by the MAIA and to defy the new laws carries penalty. Essentially, these new laws remove the financial incentives for claim farmers to make these calls and persuade an individual who may have been injured into make a personal injury claim. The changes also make it illegal for practitioners to accept these referral details for a payment.

Essentially, the additions made to these legislations aim to prevent those who are injured from being induced into making a claim, and unlawful for the claim farmers to receive payment for providing the claim referral.

The changes to these Acts now have the requirement that law practice certificates be completed at the commencement of a claim which contain a declaration to be made by the supervising principle of a firm stating that claim farming provisions have not been contravened in respect of that claim. These law practice certificates will also need to be produced by firms upon resolution of a claim declaring that the claim farming process has not been utilised.

Summary

The new laws require legal firms to declare that the claimants they are representing have not been harassed into making a claim by way of being ‘claim farmed’. Supervising principles must also now declare that they have not paid a fee to be referred the claimant’s details. The legislation changes are now ensuring that unnecessary claims are not being commenced and burdening the system.

The legislation changes prevent injured people who are targeted at their most vulnerable time from being harassed and coerced into making a claim by a claim farmer who would then receive payment for that referral. There is no doubt that the introduction of these further legislation changes have been positive in aiming to completely cease the practice of claim farming across Queensland.

If you or anyone you know has been affected through a motor vehicle accident, contact our team today on 13 43 63.