Statutes Amendment (Claim Farming) Bill

Second Reading

The Hon. S.E. CLOSE (Port Adelaide—Deputy Premier, Minister for Climate, Environment and Water, Minister for Industry, Innovation and Science, Minister for Workforce and Population Strategy) (16:19): I move:

That this bill be now read a second time.

I am pleased to introduce the Statutes Amendment (Claim Farming) Bill 2024. The bill will prohibit claim farming in relation to personal injury claims. Claim farming is a process of collecting and selling the personal information of a person who has suffered an injury. The information is often collected in inappropriate or exploitative ways, such as cold-calling or unsolicited approaches. High-pressure sales tactics are used and deceptive promises of quick and easy compensation might be made. The injured person's details are then referred to a law firm or claims manager provider who pays for the referral and makes a profit providing services to the injured person.

Whilst all persons with an injury are vulnerable to some degree, claim farmers often target people with vulnerabilities additional to the injury, including prisoners or residents of remote Aboriginal communities. Most alarming are reports from multiple sources that claim farmers are targeting victims of child sexual abuse in the wake of reforms to establish the National Redress Scheme and to remove time limits for personal injury claims in relation to child abuse. This bill will outlaw such practices entirely.

Claim farming is inappropriate and exploitative. Cold approaches by claim farmers to an injured person disrespects their autonomy and wellbeing, and they may not be ready to speak about the events leading to their injury. The sale of claims by claim farmers to legal firms disrespects the best interests of the injured persons and may be motivated by which firm will pay the highest fee rather than which firm is the most appropriate to represent the injured person in all of the circumstances.

This bill is intended to proactively prevent widespread claim farming practices within South Australia. While it does occur, it is thankfully relatively infrequent. However, we do not want South Australia to become a destination of choice for claim farmers, particularly as other jurisdictions begin to take action against it when they have the opportunity to stop it at the start. The bill will create two new offences in the Summary Offences Act 1953 to prohibit claim farming practices in relation to personal injury claims.

A personal injury claim is a claim for compensation for physical or mental harm or death. Therefore, the ban will cover claim farming practices against the relatives of a deceased person who may have a wrongful death claim. The first offence will cover the actual sale of claim referrals. It will be an offence to give or receive, or to allow another person to give or receive, a benefit in exchange for a claim referral. A benefit includes money, goods or services. However, it does not include gifts exceeding a prescribed value. This will ensure that a gift or favour to thank someone for referring a client, such as taking a professional contact out for lunch, will not be considered illegal claim farming.

There will also be some limited exceptions for claims referred from one law firm to another as part of the sale of the law firm or because the referring firm has a conflict of interest or insufficient expertise in the subject matter. In these circumstances, paid referrals will be permitted, although legal practitioners will still be required to disclose the payment to their client under the South Australian Legal Practitioners Conduct Rules.

The second offence will cover one of the main tactics used to collect the personal information of injured persons by outlawing unsolicited approaches towards potential claimants. It will be an offence to personally approach or contact a person to induce them to make a personal injury claim or to cause or allow someone else to make such a contact. Contact is prohibited regardless of whether the person contacted would actually be entitled to make a claim. For example, it would prohibit the practice of claim farming businesses cold-calling large numbers of persons to ask if they or someone they know has recently been in a motor vehicle accident.

There are several circumstances in which the unsolicited approach offence will not apply. It will of course be legal to contact someone at that person's request. If an injured person is interested in making a claim and requests contact, for example by placing an inquiry with a law firm or claim management service, they can of course be contacted to talk about the potential claim.

Additionally, altruistic approaches where the person making the approach does not expect or intend to receive, and does not receive, a benefit as a result of the approach are permitted. It will certainly not be unlawful to approach an injured friend or family member and encourage them to consider seeking compensation where the intent of the approach is not the ultimate profit from the referral of the claim.

Law firms may also approach their existing or former clients unsolicited to talk about a personal injury claim, as they have a pre-existing relationship with that person. However, the lawyer must reasonably believe that the client would not object to the contact. Law firms may also approach persons at the request of a community legal centre or industrial organisation, or other organisation of a kind prescribed by the regulations, and may also approach persons that they believe may be eligible to participate in a class action for which the law firm is responsible.

As well as creating these new criminal offences, the bill also amends the Legal Practitioners Act to provide that the conduct covered by the offences is capable of constituting unsatisfactory professional conduct or professional misconduct when engaged in by legal practitioners.

If a lawyer pays for a claim referral, or if they make an unsolicited approach to a person to try to convince them to make a claim, this can be reported to the Legal Profession Conduct Commissioner. The commissioner can investigate the alleged misconduct and this could lead to disciplinary action against the legal practitioner, including reprimand, fine, restriction or suspension on entitlement to practise law.

For the purpose of disciplinary proceedings under the Legal Practitioners Act, allegations of claim farming made against legal practitioners need only be proved to the civil standard of proof on the balance of probabilities. The same exceptions will apply as are available in relation to the new criminal offences. Disciplinary action may be commenced against lawyers regardless of whether criminal charges for claim farming are laid against the claim farmer or the legal practitioner.

The bill creates additional financial consequences for lawyers who engage in claim farming. If an associate of a law practice is convicted of a claim farming offence, the law practice is not entitled to any fees in relation to the farmed claim. They may not collect any outstanding fees and must repay any fees already received. I commend the bill to members and seek leave to insert the explanation of clauses into Hansard without my reading it.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Legal Practitioners Act 1981

3—Amendment of section 70—Conduct capable of constituting unsatisfactory professional conduct or professional misconduct

This clause amends section 70 of the principal Act to provide that a contravention of the claim farming offences proposed to be inserted into the Summary Offences Act 1953 by this measure is conduct capable of constituting unsatisfactory professional conduct or professional misconduct. The clause also provides that, for the purposes of determining whether a legal practitioner has engaged in unsatisfactory professional conduct or professional misconduct, the question of whether a person has contravened the Act, the regulations, or a claim farming offence is to be determined on the balance of probabilities.

4—Amendment of Schedule 4—Investigatory powers

This clause amends clause 5 of Schedule 4 of the principal Act to extend the protection against self incrimination in the Act to the proposed claim farming offences. It also amends clause 19 of that Schedule to allow information relating to an investigation into the conduct of a legal practitioner which relates to an offence against the proposed claim farming offences to be shared with a body prescribed by the regulations.

Part 3—Amendment of Summary Offences Act 1953

5—Insertion of Part 8A

This clause inserts a new Part into the principal Act.

Part 8A—Personal injury claim farming

42—Interpretation

Proposed section 42 provides definitions for terms used in proposed Part 8A.

42A—Giving or receiving a benefit in exchange for claim referral

Proposed section 42A creates an offence of giving or receiving a benefit, or allowing another person to give or receive a benefit, in exchange for the referral of a personal injury claimant. The section creates exceptions for situations where the referral occurs as part of the sale of a legal practice, or occurs because the referring practice has a conflict of interest or insufficient experience or expertise in the matter.

42B—Approaching or contacting person to solicit or induce a claim

Proposed section 42B creates an offence of making an unsolicited approach or contact to a person to solicit or induce them to make a personal injury claim. Exceptions are provided where the approach or contact is at the request of the contacted person, if the person making the approach or contact does not expect to receive a benefit, if the person making the approach or contact has previously provided legal services for the person approached or contacted, and in relation to community legal centers, industrial organisations and class actions.

42C—Imputation of state of mind of officer etc

Proposed section 42C provides that the conduct or state of mind of an officer, employee or agent of a person acting within the scope of their authority will be imputed to that person.

42D—Additional consequences for law practice

Proposed section 42D provides that if an associate of a law practice is convicted of a claim farming offence the law practice is not entitled to recover any fees or costs in relation to the provision of the services to which the offence related.

42E—Extraterritorial application of Part

Proposed section 42E provides for the extraterritorial application of proposed Part 8A.

Mr TEAGUE (Heysen—Deputy Leader of the Opposition) (16:26): I indicate I am the lead speaker and indicate that the opposition is not opposed to the bill just at the outset.

Also at the outset on this significant day in the house, I do want to acknowledge the service of the Deputy Premier to the state of South Australia. The fact that this is a serious moment for personal and professional and public service of the Deputy Premier, I want to acknowledge that.

Notwithstanding that significance, the Deputy Premier has fronted up here late on a sitting Thursday to read the government's speech on this bill. I hope, in due course, she might be amenable to responding to some questions in the course of the committee process which might follow this second reading debate.

Can I also say relatively close to the outset, I might be not the only one to just take a certain amount of umbrage at the title of the bill. I have the good fortune to be on my feet just presently, and without reflecting on the presence of members in the chamber, the member for Finniss is one of many members, particularly on this side, who has a proud nation-leading history and legacy of commitment to farming in this country and that is something very different to what is being described in this bill. There may be people who will take more particular umbrage, and so I raise in all seriousness that, while it is a term that sort of kicks around, it could not be further from the farming that is recognised as stitched into the carpet of this place, which is, of course, industry and activity that is right at the heart of the state of South Australia.

The kind of activity that is the subject of this bill is a wholly undesirable activity that has been on its way, happening, as I understand it, particularly interstate and particularly in the Eastern States. Unlike as often is occurring here in the parliament where we are legislating to deal with a problem that has caused a response, this is a set of circumstances in which there has been certain undesirable activity going on elsewhere and the purpose of this bill is to head that off at the pass so that it actually does not end up happening in South Australia.

I say all of that also—and this might flag some level of curiosity at the committee stage—in the context of a debate in which we are here on 18 September 2025. I have been fortunate to have received a briefing now some months ago, and that is very much the characterisation that we have all been working on, going back to then. The second reading debate was completed in another place about six months ago, and that followed it having been introduced and addressed for the first time by the government more or less exactly a year ago.

If I go back even further, the Law Society's engagement with this issue tells the story of the society's, the profession's, engagement with government on this matter going back a year and a half earlier than that, at least. I might just take the chance while we are working through a chronology to refer to the Law Society's letter to the Attorney by its then-president Alex Lazarevich dated 21 March 2024, by which Mr Lazarevich referred to the Law Society having raised the matter at least in this way, and I quote from paragraph 6:

In April 2023, the Society provided its views to you—

that is, to the Attorney—

in relation to the prevalence of claims farming in South Australia and the possible value of legislative reform in addressing it. As you will be aware, the Society noted its understanding that whilst claims farming practices may presently occur in South Australia, it had limited knowledge as to the extent—

and there is emphasis in italicisation of that word 'extent'—

to which they occur. Accordingly, a qualified view of support was put that the Society would be open to potentially supporting a legislative approach if there was evidence that such practices are currently occurring on a sufficiently wide basis.

All of that is to identify that the awareness of the notion of this—and I note with some regret there that the Law Society has also adopted this rather unfortunate vernacular of 'claims farming'—is that there is an appreciation of its prevalence going back to at least early 2023, and no doubt it goes back a bit further than that. Yet at that stage, still, the Law Society was saying, 'It might be happening in South Australia. We don't know about the extent of it'—a sort of qualified bringing to attention of an issue that is around the place.

To the best of my knowledge—and I think I can bring this to the house as we stand now—the bill has been live, as it were, formally for about a year-and-a-half, and it has presumably been in the works for a year or so before that. I am not, in my second reading contribution just now, bringing to the house any particular greater awareness of the prevalence in South Australia having accelerated in that time, and that is good news.

The fact that the bill has taken its time reaching the house, and that here we are, at this time in late 2025, debating the second reading in the house, hopefully tells a story, because the government will have had its finger on the pulse as well, that there has been no emergent fresh crisis of such activity in the state.

Sometimes, where there has been a relatively long passage of time from the issue being addressed by government to it being introduced, debated and making its way through the chambers, there is the opportunity for a story to be told. I think it just might underscore a proposition that in South Australia we are still dealing with legislation that is designed to head off what might be anticipated as something that might come to affect those people who might be on the receiving end of inquiries and other undesirable activity undertaken for profit by people who are looking to take financial advantage of those who are injured and otherwise in circumstances that we have seen elsewhere. I think South Australia has therefore still got a relatively clean bill of health in this regard. If anything, that might lead us in this place to retain the kind of reticence that the Law Society has expressed about the reach of the legislation.

Without referring to the debate in the other place, I note that the reasons for the opposition amendments in the other place came from a position of taking on board the Law Society's concerns. It was an expression of that qualified support that the Law Society had for something to be done about this but also reticence about it going too far, in an anticipatory sense, in this state. Those amendments have not found their way to the house, and all of that speaks for itself.

I will indicate where the Law Society's concerns have reached their high watermark in terms of the proposed new section 42B. That arises out of a concern that new section 42B might present an unnecessarily broad and therefore chilling effect on professionals themselves being able to appropriately approach, engage with and refer those who might have a legitimate claim.

The government has obviously seen fit to include 42B in the bill, and it is still there as it comes to the house. The opposition maintains its reticence about 42B. While I am not moving the same amendments—even more against the wind in this place—I just make clear that the Law Society was particularly thoughtful in its engagement in highlighting that risk that the new section 42B poses, and that ought to be recognised. That is all set out at considerable length also in the Law Society's March 2024 letter to the Attorney that I have already referred to.

To do justice to that concern I will just refer to that briefly as well. The Law Society makes the observation:

The intention of the reform appears to be preventing an entity that is not a law firm, or does not provide legal services, from collecting personal information from a potential injury claimant and selling it onto a third party, such as a law firm.

The difficulty, which extends to section 42A as well, is that it might have further reaching and unintended—or perhaps undesirable, anyway—implications for the profession. I do not want to spell this out at any particular length, but I just make the observation that the Law Society put it this way:

The Society considers this reform would be achieved by proposed section 42A alone (despite concerns raised as to its [potentially broad implications]…and thereby alleviate the need for subsequent proposed section 42B entirely. Proposed section 42B provides for an offence insofar as the alleged claims farming conduct relates to a person approaching or contacting a person to induce or solicit them to make a personal injury claim…

Two themes that arose from consideration of the Society's Accident Compensation and Civil Litigation Committees was the relative ambiguity associated with the concept of claims farming and 'benefit'.

It goes on to note the definition of benefit and the fact that the notion of claims farming is perhaps insufficiently defined as well.

The resultant submission from the Law Society for present purposes—and those who are following the debate can read the balance of that for themselves; I would welcome the prospect of the entirety of what is a fairly long contribution from the Law Society being tabled so that that can be part of the record—boils down to doing away with section 42B altogether. That is the state of affairs in circumstances where the situation so far as conduct in South Australia remains a threat in the future and by reference to conduct that has been observed elsewhere.

We are soon going to see whether or not, by prohibiting certain conduct that might already be part of professional practice, that potential for unintended consequence and overreach might be realised ahead of the problematic conduct of third parties seeking to profit from such referrals. If that happens, I expect that we will hear fairly promptly from the profession and, again, they will not be slow to speak up again if they are going to be impacted by this change.

In the same way that it might be said the government has been steady and taking its time in progressing the legislation in the first place, if on commencement there are concerns about its effect on practice then I hope the government may be ready to be nimble in responding to any acknowledged overreaching impact on the profession.

With those words, I again indicate that the opposition has made its position on this clear in the other place and is supporting the passage of the legislation. As a whole, I am hopeful that this will be of some assistance to those who otherwise might be at risk of the sorts of invasions of privacy and inappropriate profiteering by third parties for inappropriate reasons. I hope that there is an avoidance of that becoming any kind of established practice in South Australia and that we keep a close eye on those possible unintended consequences that might unduly affect the profession.

Ms HUTCHESSON (Waite) (16:48): I rise in support of the Statutes Amendment (Claim Farming) Bill 2024. It is not just a technical bill to adjust statutes, it is a statement about what we stand for as a community, that we will not allow the suffering of injured people to be turned into someone else's business opportunity. When someone is hurt on the road, at work or in any circumstance, they are already vulnerable. They may be facing uncertainty about their recovery, their job and their future. The last thing they need is to be treated as a commodity, with their personal details bought and sold behind their back, yet that is exactly what claim farming is.

For me, this is not in abstract. My own son is currently recovering from a workplace accident. He is doing well and I am proud of his resilience, but I can tell you, if one of these claim farming businesses came near him at this vulnerable time, they would not like to come up against his mother. I say that not just as his mother but as someone who has worked as an industrial advocate. In that role, I saw firsthand the importance of protecting workers when accidents happen. Injured workers deserve proper support, not to be hunted down and exploited. That is why I am passionate about this legislation.

Businesses involved in claim farming can gather potential claimant information in several ways: running ads that target people with certain injuries, for example, promoting hearing checks to those who may have work-related hearing loss; cold-calling individuals to ask if they have suffered an injury, either by dialling random numbers or using contacts from related industries, like a mechanic passing on details of a car accident; collecting data online, such as through booking platforms where patients with work-related injuries provide their details when arranging medical appointments; and approaching people directly within specific communities.

If it is not happening now, it is not happening ever. This needs to stop, and this bill takes strong, necessary action against this kind of behaviour. It makes claim farming a criminal offence under the Summary Offences Act 1953, punishable by fines of up to $50,000. It bans unsolicited personal contact designed to induce people into making personal injury claims, and it bans the buying and selling of claimants' personal details.

For lawyers, the standards are even clearer: under the Legal Practitioners Act 1981, claim farming will amount to professional misconduct. That means the Legal Profession Conduct Commissioner will be able to use their existing investigation powers to investigate as well as require investigated legal practitioners to produce documents or written information. To preserve the privilege against self-incrimination, the purposes for which these documents can be used are limited. The LPCC can also search premises with the consent of the occupier or under a warrant issued by a magistrate.

At the same time, the bill recognises the need for balance. It does not interfere with legitimate practice. Law firms can still refer clients between them for genuine reasons, contact their own existing and former clients and run class actions where outreach is required. Approaches made at a person's request are not prohibited, and advertising legal services remains lawful. This is a carefully targeted bill that clamps down on exploitation without punishing legitimate work.

The bill has also been improved by amendments in the Legislative Council. Amendment No. 1 ensures claims under the National Redress Scheme are captured—that is vital. Survivors of child sexual abuse must be protected from claim farming just as much as anyone else, and perhaps even more so given the trauma they have already endured.

Amendment No. 2 defines 'industrial organisation' in line with the Fair Work Act 1994, ensuring clarity and consistency. This is an amendment I particularly welcome. Having worked as an industrial advocate, I know just how important industrial organisations are in standing up for workers. They are trusted, they are accountable, and they act in the best interests of their members. By drawing this clear distinction between legitimate industrial organisations and exploitative claim farmers, this bill reinforces the right kind of advocacy, the advocacy that protects, not preys upon, injured people.

Amendment No. 3 defines 'legal services' consistently with the Legal Practitioners Act 1981, closing potential loopholes and making the law watertight to ensure consistency between the two acts. Amendment No. 4 allows referrals to law firms at the request of other not-for-profit organisations, such as the Returned and Services League. This is sensible because organisations like the RSL and others in our community are trusted voices who act in the best interests of the people they serve.

Taken together, these measures mean that claim farming will no longer be tolerated in South Australia. Police will be able to investigate, the LPCC will be able to act against practitioners and the law will have the clarity and balance it needs to protect injured people while preserving legitimate support. For me, this comes back to a simple principle of fairness. Injured people—workers, survivors, families—deserve to know that the system is there to help them, not to cash in on their hardship. This bill draws a line. It says to claim farmers, 'You are not welcome here, your behaviour is not welcome here.' I commend the bill to the house.

The Hon. S.E. CLOSE (Port Adelaide—Deputy Premier, Minister for Climate, Environment and Water, Minister for Industry, Innovation and Science, Minister for Workforce and Population Strategy) (16:53): I would like to thank both members who have spoken on the Statutes Amendment (Claim Farming) Bill 2024 in support of this important reform that aims to protect victims of personal injury in South Australia. As we have heard throughout contributions on this bill, claim farming is a practice that targets victims of personal injury, often those injured in a motor vehicle accident or survivors of childhood sexual abuse, and is motivated by profit. The unsolicited contacting, garnering of personal and often highly emotional private information, then selling and buying those personal details is all part of the claim farming process, and this bill seeks to stop it at all stages.

Among the most distressing instances of claim farming that have been shared with the government by groups such as Knowmore, the national provider of legal assistance through the redress scheme for institutional child sexual abuse, are cases where victims of child sexual abuse who are incarcerated at the time of the unsolicited approach are approached while in prison and, some of the time, have never even spoken about the traumatic abuse suffered as a child, let alone want to share those horrific memories with a total stranger out for a quick buck.

Claim farming is inappropriate and exploitative. Tactics of retrieving this personal information from an already vulnerable person often take a harassing tone, with many claim farmers willing to do whatever it takes to get a potential claimant's information. These methods of persuasion can turn to deceptive promises of quick and easy compensation being made, failing to advise the victim about the free legal service on offer through the redress scheme provided by Knowmore Legal Service.

This bill strikes an appropriate balance between victim protection and allowing legitimate legal services and victim advocacy to continue. While creating offences for both the buying and selling of potential claimant details and for unsolicited contact in pursuit of benefit, the bill provides for the lawful giving of gifts not exceeding a certain value given as a professional courtesy, generally advertising of services, and of course it remains lawful to contact someone at that person's request.

Altruistic approaches, such as from family and friends without the contact being made in the expectation of receiving a personal benefit, will also remain lawful, as well as law firms being able to approach persons at the request of a community legal centre, industrial organisation or for a class action.

Cold approaches by claim farmers to potentially highly vulnerable injured persons displays a total lack of respect for their autonomy and mental health. The sale of personal details to lawyers is plainly not in the best interests of the injured persons, and any person engaging in this type of conduct will soon be committing an offence. An equally important aspect of this bill is the disciplinary powers that it will confer on the Legal Profession Conduct Commissioner for any lawyer who pays for a claim referral or makes an unsolicited approach to a person to solicit a claim.

It is the hope that these professional disciplinary powers will act as a deterrent for all legal practitioners before they engage in any claim farming and, in turn, the claim farmers collecting the claimant details will be run out of business, stamping out this process in its entirety in South Australia. With Queensland and New South Wales now both having outlawed claim farming, it is time that South Australia followed suit to ensure that claim farmers are not attracted here in pursuit of vulnerable victims of personal injury.

I would once again like to thank members who have contributed to this bill and the stakeholders who first raised the phenomenon with the government. In particular, thanks to Knowmore Legal Service, namely Jackie Mead and her team, who will continue to be fierce advocates for victims of child sexual abuse as they navigate through the redress scheme. With that, I commend the bill to the house.

Bill read a second time.