The Queensland Government expressed an intention in July last year to stamp out this “insidious” practice.
To this end, on 14 June 2019, the Motor Accident Insurance and Other Legislation Amendment Bill 2019 (the Bill) was introduced to the Queensland Parliament.
The bill proposes important changes to Queensland’s compulsory third party insurance scheme aimed to stop claim farming and preserve the integrity of Queensland’s otherwise well performing CTP scheme.
The background
The term ‘claim farming’ refers to anonymous persons contacting members of the public, from local or overseas call centres or via email or social media, to ask whether they or a family member have been involved in a motor vehicle accident.
The claim farmers often suggest that they are acting on behalf of the Motor Accident Insurance Commission (MAIC) or other government agencies or insurers to gain the trust of the call recipient before inducing and harassing them to make a claim under the statutory compulsory third party scheme established by the Motor Accident Insurance Act 1994 (MAIA).
The practice has become a growing concern for members of the insurance sector and for MAIC with it estimated that more than 1.5 million Queenslanders have already been targeted by claim farmers.
Motor Accident Insurance and Other Legislation Amendment Bill 2019
The bill will be among the first in the country to ban the practice of claim farming.
It aims to do so through two major reforms:
- Firstly, the bill prohibits the act of cold-calling or personally approaching another person without their consent and soliciting or inducing them to make a CTP claim. The bill imposes significant penalties for those who continue this practice.
- Secondly, the bill will make it an offence, with significant repercussions, for any person to pay claim farmers for the names of potential CTP claimants or to receive payment for a claim referral or potential claim referral.
There will also be an obligation on legal practitioners who represent injured claimants to certify, at various stages throughout the claim process, that neither they nor their associates have paid a claim farmer for the injured person’s claim.
Finally, the bill furnishes MAIC with special investigative and enforcement powers where a claim farming offence is suspected of having been committed and strengthens MAIC’s existing supervisory powers allowing it to establish and revise standards about the management of claims by licensed CTP. This broadening of the supervisory role of MAIC is designed to ensure a consistent and firm industry response towards claim farming activity.
The Future for Claim Farming?
For now, the bill has been referred to Queensland’s Economics and Governance Committee but it is expected the reforms will be in force by the end of the year.
In the meantime, MAIC will continue its campaign to attract car crash scammer reports from the public and raise public awareness of the practice of claims farming.
It will be interesting to see if other CTP schemes across the country take similar action.
