A government-commissioned study has proposed a reform in legislation to disrupt “claims farming” activity that has been putting pressure in Queensland's compulsory-third party (CTP) insurance scheme.
The study into claims farming in Queensland's CTP insurance scheme, worth $1.4 billion in insurance premiums, was conducted by barrister Richard Douglas by request of the Motor Accident Insurance Commission (MAIC) last year.
In the report, Douglas said it would be futile to pursue international claim farmers who try to collect information from Queensland crash victims, and recommended instead to reform legislation to quell the interaction between lawyers and such claim farmers, The Courier-Mail reported.
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“Claims farming … is likely to promote the making of unnecessary or fraudulent claims,” Douglas wrote. “Now, or in the medium term, legislative measures to stamp it out ought to be seriously considered.”
In the report obtained by The Courier-Mail via Right to Information laws, Douglas wrote that while some claims farming was illegal, it may not be the case for lawyers who directly contact crash victims in Queensland.
“The legislative measures … ought be focused on amplifying the disincentive for legal practitioners to engage in claims farming,” he said.
“Pursuit of international claim farmers is a futile exercise.”
Douglas said that not only is it difficult to pursue anyone legally outside the state under Queensland laws, there is also the “inability to readily garner evidence sufficient to found any prosecution.”
The law already prohibits people responding to accidents, such as tow truck drivers, from urging accident victims to make a legal claim; while law firms are generally banned from paying fees to get people to make claims, the report said.
Douglas pointed out, however, that so far, no one had been prosecuted under the anti-touting laws due to the complexity of the law.
“Any experienced lawyer would struggle in construing the maze of provisions. Prosecution, most probably, would be protracted and unpredictable in outcome,” he said.
To stamp out claims farming, Douglas proposed having legal practitioners sign a pledge declaring they had not paid a fee for victims' contact details, and prohibiting lawyers from doing any claims farming themselves, among other measures. He also pushed for the application of the state's costs rule to non-Queensland practitioners to stop the possibility of interstate lawyers from teaming up with claims farmers, the report said.
Douglas did not say in the report where claims farmers are getting their information on crash victims, although he mentioned that social media was one possible source. He also noted that some submissions claimed “without evidence that police, hospital, and CTP staff may be a paid source of contacts.”
A letter from MAIC last year suggested that insurers themselves were the source of the leaks. “A number of recent calls to the MAIC enquiry line suggest that perhaps accident information is being obtained from the records of comprehensive motor insurers.” These claims were passed on to insurers which MAIC said it was “not aware whether this information has led to any action or outcomes.”
The Courier-Mail said it spoke to six insurers, including Suncorp and Budget Direct, none of which had struck problems with leaks of internal information.
“Our analysis from customer feedback is that most claims farmers are simply cold calling with no information, hoping to randomly find someone that has had a recent motor accident,” a Suncorp spokesman told the publication.
“When the claims farmer does know the customer has been in an accident the details are generally wrong, which indicates that the source is unlikely to be insurance records.”
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