Attwood Marshall Lawyers Compensation Law Senior Associate Tina Davis looks at NSW’s new laws to stamp out the predatory and exploitative practice of claim farming and why choosing a reputable law firm for your compensation claim is more important than ever.
The practice of “claim farming” has been happening for many years, but the New South Wales Government has finally followed Queensland’s lead and is cracking down on the aggressive and unethical tactics.
Claim farming involves individuals approaching victims of accidents or victims of child abuse and encouraging them into making compensation claims. They then profit by selling these leads to participating law firms. Such actions exploit individuals during their most vulnerable moments and flood the system with frivolous claims, hindering the process for genuinely deserving claimants.
Until now, Queensland has been the only Australian State with legislation making claim farming illegal for compensation claims, including work injuries, motor vehicle accidents and public liability claims.
NSW had previously viewed the claim farming practices as unethical, with the State Insurance Regulatory Authority encouraging anyone contacted by a claim farmer to report any incidents. However, this wasn’t enough to stop the claim farming.
Now, the NSW Government has passed a Bill to stamp out the claim farming practice, introducing offences against those who cold-call or approach vulnerable people about making a claim and who buy or sell their personal information for profit.
The new law changes in New South Wales
The Claim Farming Practices Prohibition Bill 2025 passed Parliament on 27 March 2025 and received Royal Assent on 9 April 2025. Claim farming is now banned under the Claim Farming Practices Prohibition Act 2025.
It will now become an offence for individuals to contact potential claimants to convince them to launch civil proceedings for personal injury damages. It will also be illegal to buy or sell a relevant claim referral. Any lawyers convicted of accepting a claim through a claim farmer cannot charge legal costs related to the claim and must refund any fees already received.
The legislation covers personal injury claims as defined in section 11 of the Civil Liability Act 2002, which includes claims for serious injury, medical negligence, public liability, child abuse and assault.
This is a welcome development and one that Attwood Marshall Lawyers strongly supports.
We abhor the practice of claim farming and have long advocated for reforms that protect vulnerable claimants and uphold the integrity of the legal system.
What does claim farming look like?
Claim farmers may present themselves as “claims management services,” approaching victims by phone, email or social media – unsolicited and often using high-pressure and misleading tactics. After persuading an individual to make a compensation claim, they then charge referral fees to sell the claim to a law practice or another claim farming organisation.
Those calling for a ban on claim farming emphasised the traumatic impacts it can have on victims, who are often convinced to pursue claims based on misleading promises about their entitlements, which would not be in their best interests. These individuals, particularly victims of child abuse are then potentially exposed to unnecessarily telling their stories multiple times, potentially re-traumatising them each time.
The practice is also a significant concern as it encourages claims with little to no merit. It undermines compensation schemes and makes it more difficult for those with valid, legitimate claims – individuals relying on that compensation to access the treatment they need to recover and the financial support that is vital during an extremely difficult time.
The state of play in Queensland
The recent moves in New South Wales follow steps made in Queensland to also stamp out the practice.
Since 1 July 2022, it has been an offence in Queensland for lawyers and law firms to engage in claim farming for compensation claims, including work injury, motor vehicle accident and public liability claims. Before this date, it was only an offence for law firms to engage in claim farming for CTP motor vehicle accident claims.
Legal practitioners are now also required to confirm (by way of a “Law Practice Certificate”) that they have not paid a claim farmer for the individual’s claim. This certificate must be completed at different stages of the claim.
The laws have already seen its first landmark decision in February 2023 relating to Claim Farming when a Queensland Magistrate sentenced Accident Management Solutions (AMS) with fines totalling $1,005,000 for 94 counts of receiving consideration for claim referrals or potential claim referrals.
Key takeaways
Recognising the signs of claim farming is crucial in thwarting exploitation.
While cost considerations are important, they should not overshadow the quest for quality legal representation. In complex legal matters, the cheapest option often proves inadequate, jeopardising the chances of securing your desired results. Choosing an experienced practitioner ensures comprehensive guidance and advocacy, maximising the likelihood of a successful resolution.
The fight against claim farming demands collective action – from stringent regulations to individual vigilance. In addition to legislative change, empowering individuals with the knowledge and resources to make informed decisions can also help, fortify the legal landscape against exploitation and uphold the principles of justice and equity.
Remember, caution is key. Trustworthy legal assistance requires transparency and a proven track record of community service.
Aside from finding a lawyer located conveniently close to you and ensuring they have the knowledge and skills to help you, it is also important to find a lawyer with whom you can connect with and communicate effectively.
It is also essential to find a lawyer with an established practice and who has been around for many years. An established law firm that has stood the test of time, which should give you some confidence that your lawyer will continue to be there when you need them most, now, and in the future.
When solving complex legal matters, it should not always be about the “cheapest” option but finding the right lawyer with the right expertise to solve your problem and get you the best possible outcome.
In many legal cases, you only get one chance to obtain your desired outcome. If you are unhappy with what you achieved the first time around, in most cases you won’t get a chance to try again.
Attwood Marshall Lawyers – Proudly serving the community for over 75 years
Attwood Marshall Lawyers is one of Australia’s most trusted and experienced law firms, serving the community since 1946.
Our compensation lawyers understand the importance of giving specialist advice, and we are immensely proud of our longstanding reputation for helping people and changing their lives for the better.
Our lawyers genuinely live the firm’s intent; to help people, and they are trained to listen and connect with their clients so that they can find out exactly what they want to achieve and work together to formulate the best plan to resolve the matter and help the individual move on with their life.
To discuss our compensation law services, please contact Department Manager Tyra Hall on direct line 07 5506 8261, email thall@attwoodmarshall.com.au and free call 1800 621 071.
