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Key Points
- NSW will introduce laws to stop “claim farming” that pressures people into lodging false compensation claims.
- The crackdown comes after seven alleged “claim farmers” were accused in February of promoting millions of dollars in false claims
- The laws will ban a person from contacting someone else to solicit them to make a relevant claim, according to the NSW government.
New “claim farming” laws will be introduced in Australia’s most populous state to protect people from being pressured into lodging compensation claims, including about sex abuse.
The NSW government said on Monday the laws would curb the “predatory practice” of pressuring vulnerable people to lodge civil claims on issues such as child abuse, assault or deprivation of liberty.
The crackdown comes after seven alleged “claim farmers” were accused in February of promoting millions of dollars in false claims as part of a syndicate, facilitated through Sydney law firms.
Police allege the syndicate has made claims — many of them potentially false — with an overall value of $1.3 billion.
Attorney General Michael Daley said it was “abhorrent that individuals and organisations are seeking to profit off vulnerable people such as victim-survivors of child sexual abuse”.
“The NSW government is listening to advocates who have called for a ban on this predatory and exploitative practice that worsens the trauma experienced by victim-survivors,” Daley said in a statement.
“We have carefully consulted with the community and are moving to stop the harm inflicted by this egregious behaviour.”
The laws will ban a person from contacting someone else to solicit them to make a relevant claim, according to the NSW government.
They will also prevent a person from buying or selling a claim referral and force lawyers who are convicted to refund legal costs received on farmed claims.
The reforms do not inhibit abuse victims from bringing claims, which can be done by contacting a lawyer directly, the government said.
Australia’s National Redress Scheme, set up in 2018 after the Royal Commission into Institutional Responses to Child Sexual Abuse, enables payments to those subjected to institutional abuse.
More than $1.4 billion has so far been paid out to around 15,000 successful applicants under the scheme, which includes government departments, churches and sporting groups.
If you or someone you know is impacted by sexual assault, call 1800RESPECT on 1800 737 732, text 0458 737 732, or visit . In an emergency, call 000.
