Claim farming involves approaching people and pressuring them into making a claim for compensation. It is an offence for legal practitioners to engage in claim farming in Queensland.
The Commission receives enquiries and information about alleged offending under the Personal Injury and Proceedings Act 2002 (PIPA), including claim farming.
For every personal injury claim, the lawyer must complete the LPC form to say the claim has not been claim farmed.
LPCs are required at various stages of the claim process, including:
It is an offence to give a false or misleading LPC.
The LPC must be signed by the supervising principal, be verified by a statutory declaration and state that:
If the supervising principal believes section 71 or 71B of the PIPA does not apply due the subsection (3), the LPC form must outline the reasons for this belief.
Learn more about the requirements for your LPC form at this flowchart.
If you are selling all or part of your law practice’s business, you must complete a LPC for each of the claim matters you are selling.
You need to provide the certificate to the new law practice and a copy to the claimant, pursuant to section 8F of PIPA.
If you are a purchasing all or part of a law practice, you must receive an LPC as identified above.
If you do not receive an LPC for the claim, you must complete a notice that states you have not received the certificate and provide it to the regulator as soon as practicable.
Some claims may fall under two or more claim schemes and involve multiple respondents.
These hybrid claims may occur where, for example, an employee suffers an injury at a work site due to faulty equipment. Their claim may fall under both the PIPA and Workers’ Compensation and Rehabilitation Act 2003 (WCRA).
An LPC must be submitted under each scheme. However, hybrid claims can be submitted using a form that applies to personal injury, workers compensation claims and car accidents.
There are 3 regulators that investigate claim farming offences, depending on the type of claim:
Each relevant regulator is responsible for investigating breaches of the claim farming provisions that fall within their jurisdiction. However, a coordinated approach will be taken to hybrid claims.
The Commissioner may investigate the conduct of an external entity where they suspect the entity has contravened the claim farming provisions.
A special investigator can be appointed to investigate potential claim farming offences, where the regulators reasonably suspect an entity may have contravened the offence provisions under their respective Acts.
The regulators will conduct investigations where discrepancies are identified in relation to LPCs, and where complaints, intelligence or other information received indicates that a matter has been claim farmed.
These provisions prohibiting claim farming and failure to provide an LPC at the required stages both carry a maximum penalty of 300 penalty units.
Breaches of these provisions may result in prosecution.
The regulators will consider the available evidence to determine the appropriate regulatory response. Action taken will be impartial and proportionate to the seriousness of any breaches identified.
Breaches of the LPC requirements or claim farming provisions may also be considered unsatisfactory professional conduct or professional misconduct. The Commission may investigate this.
If you’re acting for an insurer in a personal injury case and you reasonably suspect claim farming or a contravention of an LPC provision, you must report it.
For claims under the PIPA or regarding a lawyer’s conduct, make an enquiry to the Commission.
For workers’ compensation claims, make a complaint to the Workers’ Compensation Regulator.
For compulsory third party (CTP) motor accident claims, make a complaint to the Motor Accident Insurance Commission.
Note that each scheme has different requirements for LPCs and reporting non-compliance.
For claims under the PIPA or regarding a lawyer’s conduct
For workers’ compensation claims
For CTP motor accident claims
Section 71G of PIPA requires a supervising principal (where they reasonably believe a person is contravening an LPC requirement) to give the Commissioner the information the principal has in relation to the contravention.
This must be done within 14 days of forming the belief, or a longer period agreed by the Commissioner.
A supervising principal’s failure to comply may constitute unsatisfactory professional conduct or professional misconduct.
Section 71G (4) states that an insurer may give the Commissioner the information they have in relation to a contravention, where the insurer reasonably believes a person is contravening a law practice certificate requirement or sections 71 or 71B.
An LPC is not required for existing medical negligence claims where the section 9A notice was given prior to commencement.
An LPC is only required for these claims upon settlement or judgement.
This is consistent with the requirements for other personal injury claims where the notice of claim under section 9 of the PIPA was given prior to commencement of the LPC requirements.
An LPC won’t be required under sections 8C or 9C of the PIPA in claims where a law practice has already been retained prior to commencement of the claim farming provisions, as these provisions apply at the time the law practice is retained.
Likely, the next point an LPC is required for claims on foot will be at settlement or judgment, unless there is a sale of business.
Section 88 of PIPA and section 747 of WCRA apply where a law practice was retained by a claimant prior to commencement and the claim has not been settled, decided by a court or otherwise concluded on commencement.
An LPC must state the matters in sections 8B(2), (3) and (4) of PIPA (and section 325F (2), (3) and (4) of WCRA) only in relation to conduct after the commencement.
Section 8F of PIPA and section 325M of WCRA apply to referring a client to a new practice after commencement, even if the agreement for the sale was entered into prior to commencement.
An LPC will also be required for sale of business if the referral of the client occurs after commencement.
