On a scale of legal ethics this one’s near “bottom feeder” level. A national law firm is being criticised for using a claims marketing business that offers shopping vouchers in pursuit of injury compensation claims.
Troubled national firm Slater & Gordon, which suffered a huge financial collapse after an international expansion, has been using a claims farming business to attract new compo claims.
The company, PreLegal, uses cold call enticements such as Bunnings gift vouchers to encourage claimants from accidents to share their details and sign up to Slater & Gordon to run a claim for them.
Prominent Brisbane compensation law specialist Mark O’Connor, a Director with Bennett & Philp Lawyers, says Queensland lawyers are furious at the tactic because it throws a pall over the whole profession.
He fears these type of practices could also impact on the integrity of the State’s CTP insurance scheme and undermine it.
In Queensland it is forbidden for law firms to offer any gift incentives to sign up compensation claims.
“A so-called survey from a cold call asking if people have been injured in an accident – workplace, vehicle or public place- and offering shopping vouchers to participate in the survey is just a very questionable tactic that reflects badly on the profession,” he says.
“These are claims farmers and they are gathering data on low level claims that may not be economic to run, but in sufficient numbers could hurt the financial integrity of our insurance scheme,” he says.
Last year Mark called for a crackdown on accident claims by harvesters whose behaviour threatened the viability of Queensland’s envied CTP scheme.
The claims farmers were somehow accessing insurance company data and then selling the prospective claims to interstate lawyers who in turn badgered people involved in minor accidents to pursue compensation claims.
Mark said then Queensland’s envied Compulsory Third Party (CTP) insurance scheme was under pressure from increased claims, which could affect the financial viability of the system.
“Those of us who operate within strict ethical boundaries are urging the State government to strike out this practice and prosecute any lawyers taking part in unprofessional activity. This is a huge ethics issue,” he said at the time.
He echoed fears the practice will lead to a surge in unnecessary and exaggerated claims against the CTP scheme which will drive up the premiums paid on vehicle registration.
“People with minor injuries who did not intend to submit claims are being told there’s money to be had and thus we have CTP claims which otherwise would not be pursued,” he says.
Mark says people are being cold-called by people dangling money or gift vouchers as an incentive to pursue a claim.
“It’s something that has been happening for some years but lately it’s become quite serious. Unless it’s stopped it could destroy the financial viability of our CTP system,”
“In Queensland we have strict rules which cap legal fees on a settlement. Elsewhere those rules don’t apply. The lawyers pushing these deals are in it for their own ends, not the client’s,” Mark says.
Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).