The Battle Against Claim Farming: A Landmark Victory

The Battle Against Claim Farming: A Landmark Victory

Published on 1 December 2023
Last updated on 6 October 2023

At Ascent Lawyers, we are steadfastly committed to upholding the integrity of the legal profession and celebrating its victories. Today, we are delighted to report a major win against an insidious scam called ‘claim farming’ in Australia.

Close-up of a fountain pen on a piece of paper with text Claim farming offenders beware: Australia's landmark prosecution breaks new ground!

1. What is Claim Farming?

Claim farming, associated with car crash scamming, involves scammers cold-calling or sending social media messages to people about being in a car crash and making a personal injury claim. These fraudsters use threatening tactics to harvest personal data, which they then sell to personal injury firms. The Motor Accident Insurance Commission (MAIC) introduced legislative reform in December 2019 to ban the farming of Compulsory Third Party (CTP) insurance claims, protecting the personal information and privacy of community members.

2. The Landmark Prosecution

On 7 February 2023, the Brisbane Magistrates Court fined Accident Management Solutions (AMS) a total of $1 million for 94 claim farming offences and $5,000 for contravening an information requirement. This marked the first claim farming-related sentencing in Australia, signaling a strong deterrent to future offenders.

3. Key Takeaways from the Prosecution

Here are some crucial points from this landmark case:

  • Integrity of the Insurance Scheme: This case reinforces the necessity to maintain the integrity of CTP insurance schemes and protect personal information.
  • Financial Consequences: The financial penalties in this case highlight the serious ramifications for claim farming activities.
  • The Role of the Legal Profession: Legal professionals need to be cautious of dubious offers to generate personal injury ‘client leads.’ MAIC warns that claim farmers frequently create new entities promising compliance, requiring heightened vigilance.
  • The Importance of Reporting: If you suspect claim farming, it is imperative to report it to MAIC. They closely monitor and investigate these reports to safeguard the privacy of individuals.

4. Looking Ahead

Despite AMS entering liquidation following the commencement of the prosecution, MAIC elected to continue the prosecution to spread awareness about the unlawfulness of claim farming. Even though the likelihood of the fines being paid is low, the decision of the court carries a significant message: claim farming will not be tolerated.

In June 2022, additional legislative changes were made to further prohibit claim farming in Queensland. The Personal Injuries Proceedings Act 2022 and the Workers’ Compensation and Rehabilitation Act 2003 now mirror the claim farming provisions in the MAI Act.

While this case marks a significant victory, it is only the first step in an ongoing battle. MAIC continues to work tirelessly to deter claim farming and preserve the integrity of Queensland’s CTP insurance scheme.

At Ascent Lawyers, we echo MAIC’s sentiments and fully support this ongoing fight against claim farming, which directly undermines the trust and integrity of the legal system. We encourage all our colleagues in the legal profession to be vigilant and proactive in reporting potential claim farming activities. Together, we can ensure that justice is served and the public trust in our profession is upheld.

Disclaimer: Ascent Lawyers owns all copyright in the text. This article is of a general nature and should not be regarded as legal advice or relied on for assistance in any particular circumstance or emergency situation. To obtain legal advice in relation to your own circumstances, please contact us for consultation.

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