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Bill to stamp out the ‘insidious practice’ of claim farming in motor accident claims

Bill to stamp out the ‘insidious practice’ of claim farming in motor accident claims

On 14 June 2019, the Queensland Parliament introduced the Motor Accident Insurance and Other Legislation Amended Bill 2019 (Qld) (Bill) to address the practice of ‘claim farming’ in claims for personal injuries relating to motor vehicle accidents. 

What is ‘claim farming’?

The term ‘claim farming’ is not defined in the Bill

In the first reading speech of the Bill, Deputy Premier Jacqui Trad described the practice of claim farming as follows:

Claim farming involves anonymous persons cold calling members of the public about whether they have been involved in a motor vehicle accident.  They falsely identify themselves as calling on behalf of an insurer, the [compulsory third party] CTP Regulator – the Motor Accident Insurance Commission – or another government agency, allegedly with the sole purpose of helping the individual make a CTP claim. 

They use high pressured tactics and deceptive behaviour to elicit the individual’s personal information and agreement to submit a claim, often with the lure of quick and easy compensation.  This information is then sold, for a fee, to a lawyer or claims management service provider to handle the claim.

The practice of claim farming is widely condemned by lawyers working in personal injuries, as well as insurers across all types of personal injury claims.  For members of the public, the practice signals a breach of privacy through what is assumed to be, unlawful disclosure of their personal information.

Since February 2019, over 500 complaints have been submitted to the Motor Accident Insurance Commission (the Commission) about claim farming.

The Bill

The Bill aims to address the practice of claim farming through two major reforms:

  • a prohibition on the act of cold calling or personally approaching another person without their consent and soliciting or inducing them to make a CTP claim; and
  • making it an offence, for anyone to pay claim farmers for the names of potential CTP Claimants or to receive payment for a claim referral or potential claim referral.

The Amendments

The Bill proposes a number of amendments to the Motor Accident Insurance Act 1994 (Qld) (MAIA).  These include the following:

  1. The requirement of a law practice to complete a Law Practice Certificate (Certificate) (in a form approved by the Commission and verified by statutory declaration) and provide the Certificate to a Claimant prior to the commencement of a claim, after the start of a claim or prior to finalisation of a claim.
  2. The Certificate must state:
    • that the supervising principal and each associate of the law practice have not:
      • given, agreed to give, or allowed or caused someone else to give consideration to another person for a claim referral or potential claim referral for the claim in contravention of section 74(1); or
      • received, agreed to receive, or allowed or caused someone else to receive consideration from another person for a claim referral or potential claim referral for the claim in contravention of section 74(2); or
      • if section 74 does not apply to the supervising principal or an associate to the law practice – the circumstances mentioned in section 74(3) why it does not apply.
      • the supervising principal and each associate of the law practice have not personally approached or contacted the Claimant or solicited or induced the Claimant to make the claim in contravention of section 75; or
      • if section 75 does not apply to the supervising principal or an associate of the law practice – the circumstances mentioned in section 75(3) why it does not apply.
  3. A prohibition against a person (a payer) giving, agreeing to give or allowing or causing someone else to give consideration to another person (a payee) for a claim referral or potential claim referral. 
  4. A prohibition against a person (a payee) receiving, agreeing to receive or allowing or causing someone else to receive consideration from another person (also a payer).
  5. A prohibition against a person personally approaching or contacting another person and soliciting that person, the authorisation of the Commission to make application to the Court for an injunction restraining a person who the Commission reasonably believes has engaged, is engaging or is proposing to engage in conduct, whether in Queensland or elsewhere, that contravened, or is contravening the prohibitions referred to above.

Other changes

In addition, the Bill also sets out to:

  1. Amend to the Motor Accident Insurance Regulation 2018 (Qld) and the prescribed Notice of Claim form, by requiring a Claimant to provide additional information in their Notice of Claim including:
    • the Claimant’s Medicare number;
    • whether the Claimant requires an interpreter and, if so, the language of the interpreter;
    • a diagram showing, to the best of the Claimant’s knowledge, where the driver of each occupant of a vehicle was sitting in the vehicle at the time of the accident;
    • telephone numbers and email addresses of the owner and driver of each vehicle, involved in the accident;
    • telephone numbers and email addresses of the witnesses to the accident;
    • whether a claim has been made under a comprehensive insurance policy or a third party property damage policy and if so, the insurer for the policy, the policy number and any claim number relevant to the accident;
    • more detailed information in the medical Certificate which accompanies the Notice of Claim, including the date the Claimant was first examined by a doctor and their Health Practitioner Regulation National Law unique identifier;
    • the date the Claimant first consulted a lawyer about the possibility of making a claim;
    • the date the Claimant first retained a law practice to act for the Claimant in relation to the claim.
  2. Extend the 50/50 rule cap on legal costs in speculative personal injury claims to interstate law practices.
  3. Provide the Commission with additional powers.  The addition of a new Part 5B proposes to give special investigation powers to the Commission and most notably includes a section prohibiting an investigated person, or an associated person, from answering a question put to them by an investigator which:
    • might incriminate them; or
    • require them to disclose privileged client communication.


A penalty in excess of $39,000 per offence may apply for:

  • contraventions of the claim farming provisions;
  • a failure by a law practice to provide a Certificate; or
  • the provision of a Certificate by a law practice which is false or misleading. 

Additionally, a law practice who contravenes the claim farming prohibitions will not be entitled to recover any fees or costs, including disbursements, that relate to the provision of services for the claim and will be required to repay any amount received that relates to the services to the person from whom it was received.

Exceptions to claim farming

Under the Bill, ‘claim farming’ is not defined. However, ‘consideration’ is defined to mean a fee or other benefit.  Consideration does not include a gift, other than money or hospitality, if the gift or hospitality has a value of $200 or less. 

A ‘claim referral’ does not include the advertisement or promotion of a service or person that results in a claim using the service or person if the advertisement or promotion is made to the public or a group of persons.  For example, an advertisement of services provided by a law practice on the website or in the newsletter of a sporting association or charity, would not contravene the legislation.


The first reading speech suggests that the Bill is aimed at eliminating the unsolicited contact with members of the public by persons or organisations, who attempt to induce individuals to make CTP claims and sell their personal information.

Concern has been expressed among members of the profession that the prohibitions contained in the Bill may have unintended consequences for law practices with relationships with community organisations such as unions, sports clubs and community legal centres. However, by contrast, such organisations do not usually make unsolicited contact with individuals to induce them to make a claim.

If a law practice is paying any entity, or person, a monetary amount for a singular claim referral or potential claim referral (or multiple referrals), that law practice should review its arrangements, as against the Bill.  However, law practices that do not engage in such practices, should not be concerned.

While the potential penalties are high, the Bill only targets claim referrals in CTP claims and therefore, leaves open the potential for claim farmers to target individuals with other types of personal injury claims.

The amendments to Notice of Claim forms will allow CTP insurers to gather more information, at the start of a claim, than ever before.  This data will better identify potential referral relationships between particular health care providers and law practices.  Health care providers who refer prospective Claimants to a law practice may, or may not, contravene section 67 of the Personal Injuries Proceedings Act 2002 (Qld).  Under the MAIA in its current form, the Commission may impose licence conditions which require CTP insurers to provide that data so as to allow investigations into referral relationships between doctors and lawyers.

To report a claim farming incident relating to a motor vehicle accident, contact the Commission through this link.

Kate DenningBill to stamp out the ‘insidious practice’ of claim farming in motor accident claims
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Making a Mandatory Final Offer in Queensland

Making a Mandatory Final Offer in Queensland

Compulsory Conference PIPA – Compulsory Conference Queensland – Compulsory Conference WorkCover Qld – Compulsory Conference Personal Injury

by Kate Denning Google+


In Queensland, parties to a personal injury claim are required to make a ‘mandatory final offer‘ or ‘written final offer‘ (MFO). An MFO is made at the end of an unsuccessful pre-court Compulsory Conference in claims regulated by the:

Here are just some of the irregularities that can arise with MFOs in Queensland claims:

No Mandatory Final Offer

Cost consequences flow from an MFO. Any cost orders ultimately made will depend on: the amount of the offers compared with any judgment; the legislation regulating the claim; offers made during the litigation (except in WCRA claims); and, in limited circumstances, case building that occurs once the matter is litigated. To avoid the potential for adverse cost consequences, a party may agree to participate in settlement negotiations on an informal basis only, so that they are not required to exchange MFOs (or provide a Certificate of Readiness). In multi-party disputes, this strategy may be appropriate for a PIPA Respondent that has been joined to a claim late in the piece. Otherwise, a refusal by one party to have a level playing field with the others for no valid reason, is likely to impact settlement negotiations.

Offers inclusive of costs

Under the PIPA and MAIA, where an offer is at or below the ‘upper offer limit‘, parties are required to make offers which are exclusive of costs. Otherwise, parties are permitted to make MFOs which are inclusive of costs.  These types of MFOs should be made with caution.  Offers which are inclusive of costs have received unfavourable treatment by the courts. The difficulty with these types of offers, is that there’s no way for a court to identify from the MFO the amounts allowed for damages and costs.

Offers fixing an amount for costs

A Respondent may make an offer which fixes an amount for costs. The advantage of doing so is that, if accepted, the Claimant has agreed to an amount for costs and no further negotiations are necessary. However, where an offer fixes costs and that offer is rejected – a question might arise later on about whether the Claimant was justified in rejecting it because the allowance for costs was too low. As with offers which are inclusive of costs, these types of offers should be made with caution.

Offers between Contributor and Respondent

Under the PIPA, parties to a contribution claim are not required to exchange MFOs. However, under the WCRA, both Contributors and Respondents are required to make MFOs. The result of this is that for claims regulated by both the WCRA and PIPA, PIPA Contributors may choose to make no offer towards settlement during pre-court negotiations, as a matter of strategy. It may be in the interests of a PIPA Contributor to take a passive role in the claim and see if the other parties will reach a compromise without any offer from them towards a settlement. However, in a claim where a PIPA Contributor has significant exposure, this approach may simply compel the parties to litigate.

Joint MFOs

For claims regulated by the WCRA, costs only flow from the MFO. So, where a claim is regulated by the WCRA and PIPA, the Respondent and Contributor/s in the WCRA claim will be reluctant to make an MFO of $nil. The result is that at Compulsory Conferences there is more pressure on the WCRA parties, than the PIPA parties, to make an appealing MFO to a Claimant. Conversely, if a WCRA party has made reasonable attempts to resolve a matter during the pre-court stage, then they may be reluctant to co-operate with a PIPA party that is keen to negotiate well into the litigation.

Attaching a Release and Cost clauses

Care should be taken when drafting the MFO. If the MFO refers to a Release and a copy of that Release is not attached to the MFO, that may affect the validity of the offer. For claims under the PIPA and MAIA, where a Release is attached and there is otherwise no obligation upon a Claimant to sign a Release, a question may arise about whether the terms of the Release affected the acceptability of the Respondent’s offer. Consideration should also be given to the wording of any clause about costs in the MFO. Particularly if the MFO refers to costs being payable in anyway other than ‘in accordance with the’ relevant legislation regulating the claim.

Clash of the MFOs

MFOs are ‘exchanged’ and so parties do not usually know what offer/s will be made by their opponent/s. In rare circumstances, two parties may make MFOs to each other which are less favourable than the offers put to them.  For instance, Company X offers to settle a Claimant’s claim for $100,000 but the Claimant offers to settle her claim for just $80,000. Parties may attempt to address this by adding a clause to the MFO to the effect that the document serves as an acceptance of any offer that is less/more than the offer made by their opponent.

Expiring limitation period

A Claimant must commence proceedings within 60 days of a Compulsory Conference and cannot start those proceedings while the MFOs are open. MFOs must stay open for 14 days (10 business days for WCRA claims). There is no discretion under the legislation for that time to be abridged. So, for claims regulated by the PIPA and MAIA, a Compulsory Conference must be held no later than 10 business days prior to the expiration of a limitation period, to allow the MFOs to expire and the Claimant to commence proceedings.

Getting it right

There’s no set formula for getting your MFO ‘right’. However, each piece of legislation has its own nuances. It’s important to be familiar with the legislation that regulates both your claim AND your opponent’s. Adequate preparation before a Compulsory Conference will facilitate negotiations and prevent confusion between parties and their legal representatives when MFOs are exchanged.

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Kate DenningMaking a Mandatory Final Offer in Queensland
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InDefence covers legal and technical issues in a general way. Changes in circumstances or the law may affect the completeness or accuracy of the information published. InDefence is not designed to express opinions on specific cases, to provide legal advice or to establish a relationship of client and lawyer between Denning Insurance Law and the reader, or any third party. No person should act or refrain from acting solely on the basis of this publication. You should seek legal advice particular to your circumstances before taking action on any issue dealt with in this blog.