Conference Issue 2018


Public opinion to judge claim farming

Claim farming can be legal and ethical, if no code is breached, Rob Anderson QC, a barrister with Level 27 Chambers, Brisbane, told the AILA conference.

However, ethics were "lived not learnt" and the morality of claim farming had to be considered.

The WA Insurance Commission said: "Claims harvesting is the practice of unethically pursuing accident victims to encourage them to lodge a motor injury insurance claim.  Victims can be encouraged to exaggerate or even lodge false claims."

Mr Anderson said claim farming, or ambulance-chasing barretry to "stir up litigation", was not new. Technology "might deliver easier means to do it, but the principle is the same."

Claim farming was a subcategory of data mining, with data collected and on-sold to an interested buyer. Data was a commercially viable product. "We have become the product," he said.

Olivia Solon, news editor of UK website Wired, said: "Ask yourself who is paying for Facebook. Usually the people who pay are the customers. Advertisers are the ones paying. If you don't know who the customer of the product you are using is, you don't know what the product is for. We are not the customers of Facebook, we are the product. Facebook is selling us to advertisers."

The Defence Department was spending $1.3 million on data mined from social media accounts. Mr Anderson cited a 26 September 2018 Courier-Mail article in which Defence said it "took into account many sources of information when planning and conducting operations, including social media. [Twitter-owned data mining firm] Gnip filters and aggregates large amounts of publicly available data to enhance understanding and decision-making, particularly during fast-moving crises when social media can be an important source of information to emergency responders".

"Is the ADF spying on us," he asked.

Claim farming didn't have to be large scale. Mr Anderson cited a US case in which a lawyer had used Facebook to "friend" a plaintiff and obtain information about the extent of his injuries.

Was that different from using private investigators? Mr Anderson said yes, because it enabled access to private information intended only for friends.

He said plaintiff law firm Slater & Gordon had paid a telemarketer to obtain 214 new clients, which represented $3 million in income. S&G said its marketing was compliant and met ethical standards. But public complaints arose from the manner of the collection by third parties.

A start up called Health Engine, which enabled people to made medical appointments, had provided information to S&G but said it was only "by consent" because there was an opt-out option on its website.

While legislation varied from state to state, in Queensland the following applied:

• no advertising by lawyers in hospitals and medical centres
• advertising generally must be dignified, and not harass or seek to unduly influence
• limited promotion of ‘no win – no fee’ services
• tow-truck drivers and first responders prohibited from speaking to victims at accident sites about claims
• referral fees permitted, provided they are disclosed to clients
• claim farming can be conducted legally and ethically.

Mr Anderson said there was a disconnect between legal and ethical issues.

NSW Law Society president Doug Humphreys had said: "We must question whether our professional ethics should permit financial gain where it results from the sale of private information by a third party or at the expense of potential intrusion on a client's privacy, forceful sales tactics, or undue influence. Our relationships with clients are sacrosanct, built on trust and transparency. Clients are often vulnerable and potentially open to oppression, undue influence or disadvantage. Our advice should never be influenced by relationships with third parties."

The Qld Government had asked the Motor Accidents Insurance Commission to stop claim farming and had promised legislation. "We may see some tinkering around the edges, but [the problem is] data mining is easy because it's publicly available information."

"There's little the legislature can do, it's a moral issue. If the court of public opinion says it's wrong, the practical answer may be a loud and public narrative," Mr Anderson said.

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Resolve is the official publication of the Australian Insurance Law Association and
the New Zealand Insurance Law Association.