New “claims harvesting” legislation has today been introduced to the WA Parliament that will make it an offence to solicit and receive payments for insurance claims referrals for injuries sustained in car crashes.

Around 28% of claims are estimated to be the result of harvesting, adding around $14 to compulsory third-party insurance premium fees on every registered vehicle. 

"We're calling time on this dodgy practice. We are putting in place legislation to protect all Western Australians from the privacy breaches, harassment and false hope pitched by these claims harvesters,” Transport Minister Rita Saffioti said.

Claims harvesters persuade or entice people involved in car accidents to make injury claims, often through cold-calls to find out if members of the community have been in an accident, and then enticing them to make a claim. 

Targeted calls also occur after the personal information of people involved in a car accident has been traded to another party. 

The Insurance Commission of WA welcomed the legislation, which it says is designed to deter unscrupulous individuals from soliciting referrals and stop a minority of law firms that solicit and pay for the claim referrals.

"Western Australians are being scammed into giving away their personal details to unknown parties in Australia or internationally, and harassed or enticed into retaining certain lawyers to make injury claims.

“Often people are cold-called to find out if they have been in an accident, and in some cases, the caller will pretend they are from the Insurance Commission of WA,” it says.

The legislation will make it an offence to pay or receive funds for claim referrals, or to approach or contact a person to solicit or entice them to make a claim, and will also introduce an offence for providing false or misleading information to the Insurance Commission. 

Penalties of up to $10,000 will apply for anyone breaking the new laws.

The legislation will also oblige lawyers representing motor injury insurance claimants to certify via statutory declaration that they are not aware of referral fees being paid or solicitation taking place, and oblige claimants and the Insurance Commission to exchange offers of settlement before a writ can be issued.

Enforcement methods will be beefed up at relevant agencies, including the Insurance Commission, the Legal Practice Board, Consumer Protection and Department of Transport.

Insurance Commission CEO Rod Whithear says making it illegal to solicit community members to make motor vehicle injury claims should help stop predatory behaviour.

“We hear stories of people being taken advantage of when they are vulnerable by parties involved in claims harvesting activity. Claimants have advised us that their representatives have taken half or more of the funds awarded as compensation for the injuries inflicted on them,” he said.

“We hope that the claims harvesting legislation being introduced by the WA Government will help reduce incidents of claimants losing compensation payments to their representatives.”

The new legislation brings WA into line with other states. Queensland banned the practice in 2019, and last year also banned such “farming” of personal injury claims.