Queensland bans personal injury 'claim farming'

Queensland parliament today passed new laws forbidding so-called “farming” of personal injury claims after a rise in the targeting of cases such as institutional child abuse and workers’ compensation.

The new laws prohibit anyone soliciting or inducing another person to make a claim, as well as payments to claim farmers for the details of potential claimants, or receipt of payment for a claim referral.

The change is aimed at preventing potential claimants from being “incentivised, harassed and induced” into seeking compensation by a claim farmer who will receive payment for the referral.

Attorney-General Shannon Fentiman says the Personal Injuries Proceedings and Other Legislation Amendment Bill 2022 will stamp out this “insidious practice” of claim farmers cold calling or otherwise approaching individuals to coerce them into claims to attract a fee.

In 2019, Queensland banned claim farming for motor vehicle compulsory third party claims after the Motor Accident Insurance Commission found more than 1.5 million Queenslanders had been targeted by claim farmers with calls to solicit information, with some people receiving 10 calls a week or more.

A maximum penalty of $40,000 for an individual and $200,000 for a corporation was introduced, and since then there has been a “significant drop in the number of people reporting they are being harassed by claim farmers,” says Ms Fentiman, who is also the minister for Justice, Women and Prevention of Domestic and Family Violence.

The new laws “break the nexus between claim farmers and legal practices” by requiring law firms to certify the claims they are representing have not been farmed, she said, and “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”.

Industrial Relations Minister Grace Grace says the Workers’ Compensation Regulator also has expanded compliance and enforcement powers to prosecute claim farming offences.

insuranceNEWS.com.au has previously reported on a surge in historical abuse claims, egged on by advertising from no-win no-pay lawyers on radio and in prisons, leaving providers of foster and residential home care pleading that state governments step in and offer a backstop after private insurers exited the niche market.