Greedy interstate law firms exploiting Queensland legal rules are finally being shut out after the Queensland Government moved to ban the practice of claims farming.
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.
Injured motorists faced reduced benefits if the changes went ahead, and Queensland lawyers at the time laid the blame for the claims spike squarely at the door of Interstate law firms convincing motorists involved in minor bingles to chase payouts through the courts.
Mark O’Connor, an Accredited Specialist in personal injury law and a Director with Bennett & Philp Lawyers, says NSW law firms, in particular, were profiting as they are not bound by caps on the sums Queensland lawyers can charge for fees to pursue smaller claims.
The Queensland Government has now tabled legislation to ban claims farming in the state and level the playing field with fee caps for interstate lawyers too.
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.
“Queensland lawyers have been unfairly copping the flak over this,” Mark says.
He says insurers swayed the Queensland government in the early 2000s to change compensation laws and there was regular pressure from them to water down the state’s Compulsory Third Party provisions.
“A spike in claims around the 2017 period was solely driven by law firms outside Queensland working with claims farmers selling them files that would not be viable to pursue for local firms, but interstate firms can charge what they like, even if the claimant ends up with peanuts,” he says.
“Queensland lawyers are sick of interstate lawyers with claim farmers’ relationships pirating on our system, especially as Queensland lawyers are blamed for the problems,” he says.
Mark says injury payouts in Queensland are conservative and he rejects any suggestion the current system is generous.
“It’s actually quite the opposite. People get significantly less now than they did 20 years ago,” he says.
A ban on claims farming would reduce pressure on the state’s CTP system Mark says and should be welcomed.
Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).