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Last year, the Queensland Government announced a plan to crack down on “claim farmers”—telemarketer-like syndicates that have been increasingly making unsolicited contact with members of the public and harassing them to pursue compensation claims against compulsory third party (CTP) insurance policies.

Significant legislative changes are now being proposed by way of the Motor Accident Insurance and Other Legislation Amendment Bill 2019 (Qld), with Queensland being the first Australian jurisdiction seeking to make claim farming an offence, as well as introducing a range of other measures aimed at stamping out this ‘insidious practice’, as it was so described by Queensland Treasurer Jackie Trad[1].


Claim farming involves unsolicited contact by anonymous persons, often purporting to be calling on behalf of insurers or the Motor Accident Insurance Commission QLD (MAIC) to create an impression of legitimacy, who seek to pressure members of the public into pursuing a claim for personal injuries under the statutory insurance scheme for motor vehicle accidents. Claim farmers then on-sell an individual’s personal information for a fee to legal professionals or other claims management providers that bring the claim on the individual’s behalf.

Claim farming has been a mounting concern in recent times, particularly in Queensland, with approximately 37% of Queenslanders surveyed reporting they had been contacted by a claim farmer in 2018[2].

In addition to often being of a harassing nature, the practice has also raised considerable concerns regarding the privacy of individuals’ personal information. Additionally, there is the propensity for the practice to induce or promote the making of fraudulent claims, which in turn jeopardises the affordability and stability of CTP insurance schemes.

Proposed legislative changes

Notably, Queensland is seeking to be the first jurisdiction to prohibit claim farming by making it an offence.

The Bill proposes two new offences:

  • the first offence (under the new s 74 of the Motor Accident Insurance Act (MAI Act)) removes the financial incentive for persons engaging in the practice of claim farming by prohibiting the giving or receiving of any cash consideration (or any gift above $200) for the referral of a claimant or a potential claimant, and
  • the second office (under the new s 75 of the MAI Act) bans the practice of claim farming itself by prohibiting claim farmers from approaching or contacting members of the public to solicit or induce them to make a claim under the CTP scheme.

The Bill also seeks to impose the following additional measures, inter alia, to assist in the prevention of claim farming and maintain the overall viability of the scheme:

  • legal practitioners retained to act on behalf of a claimant in a CTP claim will be required to complete a Law Practice Certificate which confirms compliance with the ‘50/50 rule’ (proposed new s 79 of the MAI Act or s 347 of the Legal Profession Act 2007).
  • the MAIC’s enforcement and special investigation powers will be strengthened by virtue of a new Part 5B of the MAI Act, allowing the MAIC to appoint an investigator to investigate the relevant affairs of a law practice or lawyer acting for a claimant, or an associate of a law practice or lawyer acting for a claimant (currently, this power extends only to an insurer). Additionally, the new Part 5B will partially abrogate legal professional privilege in relation to such investigations
  • the MAIC’s functions and the objects of the MAI Act will be expanded with the introduction of new functions to regulate the Queensland CTP insurance scheme generally and perform other functions given to the MAIC under the MAI Act. This aspect will involve a strengthening of the MAIC’s supervisory powers by allowing it to establish and revise standards about the proper management of claims with which licensed insurers must comply. The MAIC will publish these standards on its website, and
  • the Bill also seeks to implement a number of amendments to the Motor Accident Insurance Regulation, requiring claimants to give extra information in their Notice of Claim and insurers to comply with the Claim Management Standards as a condition of their licence.

The Queensland Law Society has wholly endorsed the Bill, which was heard in Parliament on 14 June 2019. It is presently being reviewed by the Queensland State Economics and Governance Committee.



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