Statutes Amendment (Claim Farming) Bill

Committee Stage

In committee.

Clauses 1 and 2 passed.

Clause 3.

The Hon. J.M.A. LENSINK: I move:

Amendment No 1 [Lensink–1]—

Page 2, line 11 [clause 3(1), inserted paragraph (ca)]—Delete 'or 42B'

I will speak to all of my amendments at the same time. In relation to the removal of section 42B, this bill seeks to address the unethical practice of claim farming; however, as currently drafted—and if I go back a couple of steps, a number of our amendments have been informed by the Law Society, so we thank them for that consideration. As the bill was drafted, certain provisions, particularly section 42B, create unnecessary regulatory overreach and introduce unintended consequences for legitimate legal practice. These amendments before us refine the bill to ensure it achieves its intent without imposing excessive burdens on the legal profession.

As I stated, the Law Society of South Australia has raised valid concerns regarding the breadth of section 42B as currently drafted, which seeks to prohibit approaching or contacting individuals to solicit or induce a claim. While the objective of deterring claim farming is commendable, the provision as written is overly broad. The society has pointed out that this section could unfairly impact legal practitioners responding to inquiries or engaging in ethical outreach to potential claimants who may otherwise be unaware of their rights.

The Liberal Party's amendment removes section 42B from the bill in its entirety. This ensures the legislation remains focused on the core issue, which is banning the sale and purchase of claim referrals, without unnecessarily restricting legitimate communications between legal professionals and potential claimants. Furthermore, the amendments remove references to section 42B throughout the bill, so are consequential.

In addition, the Law Society, in their submission to parliamentary members, has questioned the lack of sufficient data to justify the existing 42B. In their view, there is limited evidence that South Australia faces an industry-wide problem requiring such a broad provision. Concerns have been raised by the Legal Profession Conduct Commissioner (LPCC) about investigating non-lawyers under this bill. Our amendments propose to clarify that the LPCC's role should remain focused on regulating legal practitioners rather than expanding into areas beyond its scope, and these amendments still uphold the intent of the bill, which is to prevent exploitation and uphold ethical legal practice, while ensuring that legitimate legal outreach and client engagement are not unintentionally penalised.

The Hon. K.J. MAHER: Speaking to this amendment, I will speak, I think, to all nine amendments the Hon. Michelle Lensink is moving. I think the operative one is amendment No. 7 [Lensink-1] and the remaining eight are consequential on that one amendment. Speaking to these as a lot, I will explain why the government will not be supporting the amendments put forward. The government does agree with some of the things the Law Society has put forward. In fact, they have been reflected in the development of this bill, in consultation with the Law Society, and further amendments that we will come to traverse later on that the government has put forward are directly in relation to issues the Law Society has put forward.

Speaking to this lot of nine amendments, there are two offences proposed in this bill, each covering a different aspect of the claim farming behaviour. Proposed section 42A of the Summary Offences Act would criminalise providing a benefit in exchange for a claim referral. This covers a primary way in which a middle-person claim farmer makes a profit through the collection and sale of details of potential claimants. Proposed section 42B would criminalise the making of unsolicited approaches towards persons or soliciting or inducing them to make a personal injury claim in the expectation of receiving a benefit from that approach. This targets the predatory tactics that are engaged in to solicit business from injured persons.

The amendments put forward by the Liberal opposition would delete the second part of that—that is, section 42B—meaning unsolicited approaches would no longer be criminalised and only the sale of claim referrals would be criminalised. The government does not support the amendments. We believe that both amendments are important to properly stamp out the practice of claim farming.

Receiving unsolicited contact about a personal injury claim has the potential to be invasive and does not respect the autonomy of the injured person. Receiving an unsolicited call, email or letter about a potential claim could in some cases be traumatising, particularly in cases, for example, of the wrongful death of a family member, child sexual abuse or sexual assault or harassment. Further, unsolicited conduct is a key strategy of claim farming operations. Having a specific offence for this conduct will allow early investigation of potential claim farmers if evidence of suspicious, unsolicited claims comes to the attention of authorities, even if there is not yet evidence of those claim referrals being sold.

I am advised that the Queensland laws on claim farming have an offence specifically targeting unsolicited approaches, as does a bill to outlaw claim farming that was recently introduced in the New South Wales parliament.

The section 42B offence in the bill that is the subject of removal from these amendments contains measured exceptions to allow lawyers specifically to approach potential personal injury claimants in appropriate circumstances, including:

if the approach or contact was requested by the potential claimant, or the lawyer reasonably believes that the approach or contact is at the request of the potential claimant;

if the person approached is a current or former client of the lawyer; and

if the lawyer has been asked to contact the person by a community legal centre or an industrial organisation, or in relation to a class action for which the law firm is responsible.

Given these exceptions are already contained in section 42B, we think it is reasonable to not support the amendments put forward.

The Hon. R.A. SIMMS: The Greens are persuaded by the arguments that the government has put forward in relation to these amendments. In light of that, we will not be supporting the Liberal amendments.

Amendment negatived; clause passed.

Clause 4 passed.

Clause 5.

The Hon. K.J. MAHER: I move:

Amendment No 1 [AG–1]—

Page 3, line 17 [inserted section 42, definition of claim]—After 'injury' insert:

, and includes a claim for redress under the National Redress Scheme for Institutional Child Sexual Abuse (Commonwealth Powers) Act 2018

Farming of child sexual abuse claims is of particular concern. Under the bill as introduced, a claim means any claim for compensation or personal injury. This would include claims of physical or psychological injury caused by child sexual abuse, such as common law negligence claims.

It has been brought to the government's attention that there is an argument that there could be some ambiguity as to whether a claim under the National Redress Scheme would be classed as a claim for personal injury for the purpose of this bill. Whilst a redress payment under the scheme can certainly assist to compensate for physical and psychological injuries that may have arisen, proof of injury is not required to access the scheme. This amendment will put it beyond doubt that claims under the National Redress Scheme are covered by the prohibition on claim farming that this bill seeks to address.

The Hon. J.M.A. LENSINK: Just for the ease of the committee, the Liberal Party is supporting all of the amendments in set 1 in the government's name.

Amendment carried.

Amendment No 2 [AG–1]—

Page 3, after line 30 [inserted section 42]—After the definition of community legal centre insert:

industrial organisation means—

(a) an association, society or body formed to represent, protect or further the interests of employers or employees; or

(b) an organisation, or a branch of an organisation, registered under the Fair Work (Registered Organisations) Act 2009 of the Commonwealth;

This amendment makes it clear in clause 5 that, after the definition of community legal centre, 'industrial organisation' is included for the reasons I outlined in talking to the honourable member's amendment.

Amendment carried.

The Hon. K.J. MAHER: I move:

Amendment No 3 [AG–1]—

Page 3, after line 34 [inserted section 42]—After the definition of legal practitioner insert:

legal services has the same meaning as in the Legal Practitioners Act 1981;

This is a clarification to insert after the definition of legal practitioner, to make it clear, that 'legal services has the same meaning as in the Legal Practitioners Act 1981'.

Amendment carried.

The Hon. K.J. MAHER: I move:

Amendment No 4 [AG–1]—

Page 5, line 29 [inserted section 42B(4)(d)(i)]—Delete 'or industrial organisation' and substitute:

, industrial organisation or organisation of a kind prescribed by the regulations

This related to amendment No. 2.

Amendment carried; clause as amended passed.

Titled passed.

Bill reported with amendment.

Third Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector, Special Minister of State) (17:06): I move:

That this bill be now read a third time.

Bill read a third time and passed.