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Legal update: claim farming

On 26 November 2019, the Queensland Parliament passed the Motor Accident Insurance and Other Legislation Amendment Bill 2019 which was designed to protect Queenslanders’ personal, private information and stamping out unsolicited scam calls. The Bill came into force on 5 December 2019.

‘Claim farming’, as it is known in the legal industry, involves anonymous persons contacting members of the public, from local or overseas call-centres or via email or social media, to ask whether they or a family member have been involved in a motor vehicle accident. Claim farmers rely on different tactics to create an impression of credibility, such as suggesting they are acting on behalf of the Motor Accident Insurance Commission (Commission), other government agencies or insurers.

Claim farmers induce and harass individuals to make a claim under the statutory insurance scheme (scheme) established by the Motor Accident Insurance Act 1994 (Act), often with the promise of quick and easy compensation, and may even offer to coordinate medical treatment.

Claim farmers then sell individuals’ personal information obtained through the contact for a fee (either directly or through an intermediary) to a legal practitioner or other claims management service provider who then handles the claim under the scheme.

Research collected by the Motor Accident Insurance Commission, which regulates compulsory third-party insurance (CTP) in Queensland, revealed that over 1.5 million Queenslanders have been targeted by claim farmers.

To stop this practice, the Act has been amended to make a number of changes to remove the financial incentive for persons to engage in claim farming while at the same time ban claim farmers from approaching or contacting members of the public to solicit or induce them to make a claim under the scheme.

For Lawyers, the new offences will prohibit a person giving or receiving (or agreeing or allowing or causing another person to give or receive) consideration for the referral of a claimant or potential claimant. Consideration will mean a fee or other benefit but does not include a gift, other than money, or hospitality if the gift or hospitality has a value of $200 or less. The definition excludes money to prevent cash payments of up to $200 for a claim referral.

A Lawyer must also disclose the payment of the amount to the claimant in a costs agreement.

If there is a breach, law practices may need to refund, or may not be entitled to recover, fees and disbursements paid in connection with a claim.

If you are contacted by one of these scammers or need assistance with a motor vehicle accident, contact one of our injury lawyers on 1300 285 888.


Date Published - April 21, 2022

The Content and links referenced in this article were valid at the date of publishing.



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