NSW cracks down on predatory ’claim farming’

Known as ‘claim farming’, the conduct usually involves unsolicited contact, where personal information is obtained without consent. The Claim Farming Practices Prohibition Bill 2025 is a response to the unethical tactics employed by individuals and organisations to aggressively push people, often involved in personal injury cases, to pursue compensation claims.

Attorney General Michael Daley says that it’s “abhorrent that individuals and organisations are seeking to profit off vulnerable people such as victim-survivors of child sexual abuse”, and the government is “moving to stop the harm inflicted by this egregious behaviour.”

Potential claimants are approached by phone, email, or in person. Operators frequently resort to high-pressure tactics, including harassment, intimidation, and misleading promises, to coerce individuals into lodging claims. Their business model often relies on charging referral fees to sell these claims to legal practices or other organisations, further exacerbating the problem by the dissemination of false or exaggerated information about legal entitlements. This practice is particularly detrimental to vulnerable individuals, notably child abuse victim-survivors, who are at significant risk of re-traumatisation through these aggressive solicitations.

“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,” says Daley.

Jennifer Ball, President of the Law Society of NSW says, “The Law Society supports the introduction of legislation to ensure that victim-survivors of abuse are protected from the exploitative practices of claim farmers. This is unacceptable conduct, particularly in circumstances where victim-survivors are unaware of the free legal options available to them.”

“We commend the NSW Government for taking into account the concerns expressed in our submission on the Consultation Draft around the criminalisation of legitimate referrals, where the lawyer/person making the referral does not expect to receive payment or other consideration,” says Ball.

The proposed bill prohibit any person from contacting another person to solicit them to make a relevant claim. Furthermore, the legislation will ban the buying or selling of claim referrals, effectively cutting off a key revenue stream for claim farmers. Lawyers convicted of these offences will be prevented from charging legal costs and will be required to refund any costs already received.

The legislation will specifically target personal injury claims governed by the Civil Liability Act 2002, encompassing claims related to serious injury, medical negligence, public and product liability, and intentional torts, including child abuse, assault, and deprivation of liberty. The government says it’s committed to protecting vulnerable citizens from predatory practices and ensuring fair access to justice.

Existing offences, such as fraud, will still apply in addition to the new claim farming laws. Dishonestly obtaining financial advantage by deception currently carries a maximum penalty of 10 years’ imprisonment.

Prohibiting claim farming will not prevent abuse victims from bringing a claim for compensation, which can be done by contacting a lawyer directly.