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Friday, 28 March 2025
The NSW Government has passed legislation banning the practice of ‘claim farming’ where vulnerable people are pressured to lodge civil compensation claims.
The Claim Farming Practices Prohibition Bill 2025 which passed parliament last night prohibits a person from contacting someone to solicit a claim and buying or selling claims.
Claim farmers often target child abuse victim-survivors through cold calling and use unethical, high-pressure tactics to solicit a claim. This person’s details are then sold to a legal practice or another claim farmer.
Claim farmers may obtain a person’s information without their consent and make promises about legal entitlements that are untrue or not in the claimant’s best interests.
Under the new laws, anyone who solicits, buys or sells a claim faces a fine of up to $55,000. Lawyers will also be prohibited from charging or retaining fees associated with a claimed farm.
The bill covers claims arising under the Civil Liability Act 2002 including serious injury, medical negligence, and public and product liability as well as intentional torts.
Intentional torts include acts such as child abuse, assault and deprivation of liberty.
Existing offences such as fraud will still apply in addition to the claim farming prohibition for fraudulent claims.
The existing offence of dishonestly obtaining financial advantage by deception currently carries a maximum penalty of 10 years’ imprisonment.
The ban on claim farming does not prevent abuse victims from bringing a claim for compensation by contacting a lawyer directly.
It also does not prevent someone from giving advice or assistance to another person to encourage them or to assist them in making a claim.
Attorney General Michael Daley said:
“The NSW Government has legislated to put a stop to the insidious practice of claim farming that exploits the trauma of vulnerable people.
“The predatory practices can worsen the trauma and distress experienced by victim-survivors.
“No one should be harassed or intimidated into making a civil compensation claim which may not be in their best interests.
“This ban has been developed in close consultation with the community including victim-survivors and their advocates.”
28 Mar 2025