Queensland officially bans 'claim farming'

Claim farming became officially illegal in Queensland, making it the first state in Australia to legislate against such act.

Queensland Attorney-General Justice Shannon Fentiman said on 22 June that claim farming is officially banned in the state through the passage of the Personal Injuries Proceedings and Other Legislation Amendment Bill 2022.

What is “claim farming”?

The Queensland Law Society (QLS) defined “claim farming” as a practice involving third-party agents cold-calling people to coerce them into making personal injury claims – usually due to workplace injuries or car crashes.

Fentiman said new laws would suppress the practice by prohibiting any individual from approaching another person without their consent and “soliciting or inducing” them to make any personal injury claims.

“Claim farmers cold call or approach individuals to coerce them into making a personal injury or workers’ compensation claim and then charge a fee to ‘sell’ their claim to a legal practitioner or other claims management service providers,” she said.

With the new laws in place, it is now considered an offence to pay claim farmers for the details of potential claimants or receive any payment for a claim referral.

A win for the workers

Industrial Relations Minister Grace Grace said the amendments guarantee that workers who unfortunately sustain a work-related terminal condition have access to terminal compensation when they most need it.

“The workers’ compensation regulator also has expanded compliance and enforcement powers to effectively prosecute claim-farming offences, and these are consistent across the schemes, ensuring there are no weak points to be exploited by claim farmers,” Grace said.

Fentiman said the new law would not affect the rights of genuinely injured Queenslanders to access justice. Instead, it hopes to protect workers from potential abuses.

“The new laws will, however, prevent claimants or potential claimants from being incentivised, harassed, and induced into making a claim by a claim farmer who will receive payment for the referral,” she said.

The Attorney-General also said that workers can still initiate legitimate claims under the Personal Injuries Proceedings Act or the Workers’ Compensation and Rehabilitation Act.

“The laws 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,” Fentiman said.

Previous advocacies

The official ban of claim-farming came after years of QLS’ advocacy to outlaw the activity and 2 ½ years after implementing the Motor Accident Insurance and Other Legislation Amendment Act.

The positive changes in the said act, introduced by the Queensland Government in 2019, to stop the increasingly prevalent practice of claim farming for motor vehicle compulsory third party (CTP) claims significantly affected the creation of the new laws banning claim farming, in general.

“Since those CTP claim farming reforms commenced in December 2019, the Motor Accident Insurance Commission has recorded a significant drop in the number of people reporting they are being harassed by claim farmers,” Fentiman said.

However, even when the 2019 reform was successful, Fentiman said that the claim farming industry pivoted, and reports have shown that claim farmers were targeting personal injury claims, including those involving institutionalised child sexual abuse and workers’ compensation claims.

“These new laws address this by prohibiting claim farming and breaking the nexus between claim farmers and legal practices by requiring law practices to certify that claims they are representing have not been farmed,” she said.