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Committee's Report

The committee tabled its report, No. 29, 56th Parliament - Motor Accident Insurance and Other Legislation Amendment Bill 2019 on 9 August 2019. The Bill was passed with amendment on 26 November 2019.

About the Bill

On 14 June 2019, the Hon Jackie Trad MP, Deputy Premier, Treasurer and Minister for Aboriginal and Torres Strait Islander Partnerships, introduced the Motor Accident Insurance and Other Legislation Amendment Bill 2019 (Bill) into the Legislative Assembly. The Bill was referred to the Economics and Governance Committee for detailed consideration and report by 9 August 2019.

The explanatory notes stated that the objective of the Bill was to stop the practice of insurance ‘claim farming’. This involved anonymous persons contacting members of the public from overseas call centres or via email or social media, to ask whether they or a family member had been involved in a motor vehicle accident. These ‘claim farmers’ often suggested they were acting on behalf of the Motor Accident Insurance Commission (MAIC) or other government agencies or insurers, or engaged other tactics to create an impression of credibility.

Claim farmers induced or harassed individuals to make a claim under the statutory insurance scheme established by the Motor Accident Insurance Act 1994 (Act), often with the promise of quick and easy compensation, and may have even offered to coordinate medical treatment. Claim farmers then sold an individual’s personal information obtained through this contact for a fee to a legal practitioner or other claims management service provider, who then handled claims under the scheme. The Bill proposed to prevent claim farming by:

• creating two new offences prohibiting claim farming
• requiring a supervising principal of the law practice acting for a claimant to complete a law practice certificate affirming that the supervising principal and each associate of the practice have not engaged in claim farming and, if the claim is a speculative personal injury claim, confirming that the costs agreement for the claim is in compliance with statutory rules regarding the maximum amount the practice can recover in legal costs for a speculative personal injury claim (the ‘50/50 rule’)
• strengthening the enforcement and special investigation powers of the MAIC
• expanding the MAIC’s functions to include the investigation and prosecution of claim farming, and
• expanding the objects of the Act to encourage licensed insurers to act in a way that supports the integrity of, and promotes public confidence in, the statutory insurance scheme.

Timeline