- Drafting of a Bill to amend the Motor Vehicle (Third Party Insurance) Act 1943 and the Insurance Commission of Western Australia Act 1986
- Reform will include provisions and new offences for claim referrals and the provision of personal information
- New laws to safeguard people from predatory behaviour
The McGowan Government is set to introduce legislation into the State Parliament to stamp out claims harvesting practices in motor vehicle injury insurance claims in Western Australia.
The new legislation will bring WA in line with Queensland, New South Wales and the Australian Capital Territory, which have introduced legislative reform to combat the insidious practice of claims harvesting of motor injury insurance claims.
Despite a reduction in injuries resulting from car crashes in WA, the volume of claims made continues to increase.
Claims harvesting activity often involves cold calling a person that may have been involved in a car crash, pressuring them to make an insurance claim, and promising a large insurance pay-out. The crash victim's personal information is then sold to predatory law firms for a 'referral fee'.
There are other practices and techniques that involve the trading of Western Australians' personal details to obtain 'referral fees'. These fees will be outlawed under the planned legislation.
These harvested claims have resulted in more being paid out in legal fees than is paid as compensation to injured people. It is suspected that around 30 per cent of present day claims made in WA for Compulsory Third Party (CTP) motor insurance are the result of claims harvesting activity, up from around nine per cent in 2017-18.
This rise in the number of claims means that $15 of every CTP insurance premium paid by WA drivers is used to cover the cost of harvested claims. That money would be better spent on medical treatment for genuinely injured people.
Claims harvesting harms the legitimate and important work done by genuine compensation lawyers in WA, as well as diverting resources from other injured people.
Comments attributed to Premier Mark McGowan:
"Claims harvesting or farming is predatory behaviour which involves practices designed to entice people to make personal injury insurance claims.
"This will not be tolerated and my Government is moving to stamp it out.
"People who have been injured in a car crash are vulnerable and the use of high-pressure sales tactics to extract information from injured people, and then sell that private information to law firms or other parties is abhorrent."
Minister's office - 6552 5000
