What can a government do when there are too many claims in a CTP scheme? One thing it can do is to shut down promotion of the scheme by marketing businesses, otherwise known as claims farmers. This has just occurred in Queensland with the passing of the Motor Accident Insurance and Other Legislation Amendment Bill 2019.

Prominent Brisbane injury compensation law specialist Mark O’Connor has welcomed the move, saying as far back as 2017 the insurance industry was demanding changes to Queensland’s Compulsory Third Party (CTP) insurance scheme because of a spike in Queensland CTP insurance claims.

What is wrong with spreading the word about peoples’ rights to make a legitimate claim? Surely, this is promoting access to justice? But sometimes access to justice can take on unsavoury forms such as paying for clients. How much of this furore was because Queensland lawyers were disadvantaged in representing clients compared to interstate competitors acting in the Queensland market?

According to Mark O’Connor’s firm Bennett & Philp Lawyers:

Queensland firms cannot by law charge more than 50 per cent of a nett settlement for their total fees which makes it uneconomic to pursue many small claims through the courts, but Mark says interstate law firms were not subject to Queensland’s fees cap and exploited the advantage.

It is understood ‘claims farmers’ – people with suspected access to insurance industry data- in turn, have been selling information about small claims to interstate law firms which then encourage people involved in accidents to bring CTP damages claims blowing out claim numbers.

The Brisbane Times describes claims farming as “cold-call scammers who sell your private information”. The Brisbane Times explains:

They often suggest they act on behalf of a government agency, and harass people into making a compensation claim under Queensland’s compulsory third-party insurance scheme, often with the promise of quick or easy compensation.

Claim farmers then sell that person’s information to lawyers who handle the case.

It is estimated more than one in five Queenslanders have been targeted by the practice, some up to 10 times.

Law firms will now have to declare the supervising principal and each associate had not engaged in claim farming when making a CTP claim.

Deputy Premier Jackie Trad said the state could not afford to let claim farming affect the community and compulsory third-party premiums.

“Highly sophisticated, fraudulent scams continue to evolve and we must ensure we keep our fingers on the pulse so we can respond to emerging issues,” she said.