Proposed “claims farming’’ laws will stamp out predatory practice
Proposed laws to stamp out so-called "claim farming" would protect Queenslanders from predatory and unscrupulous operators trawling for personal injury claims, according to the state’s peak legal body.
Queensland Law Society President Bill Potts praised the State Government which on Friday (June 14) tabled the Motor Accident Insurance and Other Legislation Amendment Bill 2019—saying it was it was something the Society had campaigned strongly for over the past three years.
Mr Potts said the proposed amendment would go a long way to stopping "claim farming"—which involve individuals or firm call-centres in Australia or abroad contacting members of the public to ask whether they or a family member have been involved in a motor vehicle accident.
"The Queensland Government should be congratulated for the tabling of the Bill and we are delighted it appears they have responded to the Society’s submission—almost a year ago—calling for tough penalties and sanctions to discourage the practice," Mr Potts said.
"The legislation reflects the Society’s opposition to claim farming as well as any practice by solicitors and third parties which breaches the Personal Injuries Proceedings Act 2002 (Qld) or the Australian Solicitors Conduct Rules 2012.
"Claim farming of any kind—be it directly or through a consultancy model—is unethical for solicitors and in some cases it is prohibited by legislation."
The tabled bill says: "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 (MAIC), other government agencies or insurers."
"Claim farmers induce and harass individuals to make a claim under the statutory insurance scheme established by the MAIC Act, often with the promise of quick and easy compensation.
"(They then) sell individuals’ personal information obtained through the contact for a fee to a legal practitioner or other claims management service provider who then handles the claim under the scheme."
Mr Potts said the legislation also sought to level the “playing field’ with interstate practitioners by the proposed extra-territorial application of the "50/50 rule"—which caps the amount a Queensland solicitor can charge under a no-win, no-fee agreement.
"We understand the Bill has now been referred to the Economics and Governance Committee," he said. "And the Society, as always, stands ready and willing to provide any support or guidance on this Bill to eliminate the diabolical practice of claim farming."
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