Know About New Queensland Laws Banning Claim Farming in Compensation Matters

New Queensland Laws Banning Claim Farming in Compensation Matters

Queensland recently became the first state in Australia to introduce legislation aimed at banning the practice of claim farming by legal firms for personal injury, workers’ compensation, and motor vehicle accident claims.

Claim farming describes a practice whereby a third party – often located in a local or overseas call centre, or using social media channels – pressures a person to engage a certain law firm to make a compensation claim. The third party is then renumerated for their work.

The practice can see people pressured into making claims for the compensation they shouldn’t and artificially inflate the costs of representation because payment of the claim farmer must be factored into the arrangement.

The recent introduction of the Personal Injuries Proceedings and Other Legislation Amendment Act 2022 (the Amendment Act), which amends the Personal Injuries Proceedings Act 2002, the Legal Profession Act 2007 and the Workers’ Compensation and Rehabilitation Act 2003, make claim farming practices now illegal in Queensland. The provisions also replicate and build on those found in the Motor Accident Insurance Act 1994.

The new laws seek to end the practice of claim farmers harassing or inducing potential victims to make claims but don’t affect the ability of a person to make a personal injury claim with their chosen lawyer.

What do the new laws achieve?

The new Queensland laws:

• make it an offence for lawyers and law firms to pay claim farmers for the details of potential claimants, or to receive payment for a claim referral or potential claim referral;
• prohibit claim farmers from cold calling or personally approaching another person to solicit or induce them to make a claim;
• require legal practitioners who represent claimants to certify with a law practice certificate (LPC) that they have not paid a claim farmer for the claim at the beginning and end of the claim process (as is currently required for claims arising from motor vehicle accidents);
• prevents law firms from using inappropriate cost practices.

More on law practice certificates (LPCs)

Under the new laws, lawyers and law firms will need to provide an LPC for personal injury claims and workers’ compensation claims at various stages, from when the firm is first retained, for pre-court claims, at settlement or judgment, as well as when the law practice is sold. The requirements of the LPC are a statement by the supervising principal and each associate of the law practice that a claim farmer has not been paid for the claim, and that they have not approached, solicited or induced the claimant to make a claim.

In most cases the LPC must be provided both to the client and the relevant insurer. It is an offence to not provide an LPC when required, or to sign and give a false or misleading LPC. The amendments also include a requirement for a notice of claim to be accompanied by a certificate signed by the claimant.

Unsure? Speak with our compensation law specialists

If you are making a personal injury, workers’ compensation or motor vehicle accident claim in Queensland and are worried about an approach from a claim farmer, or whether you need to ask for an LPC from a law firm you’ve asked to represent you, contact our compensation professionals at Gajic Lawyers. We can help guide you through the new legislative changes to put your mind at ease and give your claim the best chance of success.

In circumstances where you gave been subjected to claim farming, we cannot and will not act on your behalf.

Upon engaging our practice to act on your behalf, we will require you to sign a statement confirming your instructions as follow:

1. You have been involved in a subject motor vehicle accident and sustained injuries as a result of the motor vehicle accident.
2. You had made inquiries about your rights and entitlements on the web before engaging our firm to act on your behalf.
3. The claim is made based on your own intention once you are satisfied with the process involved.
4. The claim has to be made through your own initiative.
5. You should not have been approached, contacted or induced by us or any third party to make a claim.
6. We cannot promise you that your claim will succeed.

To learn more about compensation claims, contact us at the Brisbane Compensation lawyers team today.