NSW lawyers labelled scammers for cold-calling abuse victims in “claim farming”

Unscrupulous law firms are cold-calling child sexual abuse survivors to pressure them into lodging compensation cases in an escalation of what is known as “claim farming”.

Unscrupulous law firms are cold-calling victims to pressure them into lodging compensation cases in an escalation of what is known as “claim farming”, a federal inquiry has been told.

Some survivor advocacy groups have got in on what has been described in some cases as a “scam” by getting secret kickbacks from law firms for signing up victims, with one child sexual abuse survivor horrified to be hit with a $9,680 bill just for making a statement to one of these groups, according to a scathing submission to the inquiry.

In other examples, The Daily Telegraph has been told of around 30 inmates at Cooma jail signed up in one batch claiming they were abused as children and people being bombarded by daily calls until they lodge claims through certain law firms.

Thousands of people are said to have been targeted since the practice swept across NSW and other states after it was banned in Queensland last year with the NSW Law Society and the NSW Bar Association both alerted to it.

NSW Supreme Court in Sydney. Law firms are under fire for a new ‘scam’ sweeping the state.

In the wake of the child sex abuse royal commission, the predatory lawyers and advocacy groups have expanded from workers compensation, CTP and car crash claims to target vulnerable abuse victims.

The claim farmers were labelled “scammers” in Queensland where the Legal Services Commissioner said the costs they charge are often substantial and end up being passed on to clients. Some of the claims are false but those that do have a basis are tainted in the way they are prepared, legal experts said.

The practice has been highlighted as part of an inquiry by the Joint Standing Committee on Implementation of the National Redress Scheme. The scheme was set up to compensate victims of child sex abuse in institutions and the committee conducts regular inquiries into how it is working.

Child protection advocacy group Bravehearts has “raised our concerns about unscrupulous law firms and so-called survivor advocacy groups” in its submission to the inquiry.

The Daily Telegraph has been told of around 30 inmates at Cooma jail signed up in one batch claiming they were abused as children.

“(We) remain concerned about the exploitative behaviour of some personal injury law firms and survivor advocacy groups,” it states.

“They target clients through social media including Facebook survivor groups. Feedback from clients who have been approached by survivor advocacy groups is that they are often subjected to daily calls.. are not told there are free services (such as the National Redress Scheme) available.”

Bravehearts said it had seen outrageous costs agreements of up to 60 per cent of any settlement that had not been explained to clients who were never advised to seek independent legal advice and did not understand their information had been passed on to a law firm and they were signing binding financial agreements.

Earlier this year, Accident Management Solutions, which has since gone into liquidation, was fined $1 million by Brisbane Magistrates Court in the first claim farming-related offending in the country. It involved 94 claim-farming offences against the state’s Motor Accident Insurance Commission.

NSW Law Society president Cassandra Banks said on Sunday they were monitoring the implementation of the Queensland legislation.

“Solicitors in NSW must not provide legal services on a claim for damages, or defend a claim, unless they reasonably believe the claim has reasonable prospects of success,” Ms Banks said.

“They must certify the claim has reasonable prospects of success if they commence proceedings. If they commence proceedings without reasonable prospects this may constitute unsatisfactory professional conduct or professional misconduct.”

Bravehearts has called on the federal government to put a warning about claim farming on the website of the national redress scheme.

Luke Murphy, president of the lawyers’ peak body, the Law Council of Australia, said it did not condone unethical obligations like claim farming but any response to it had to measured to it did not “compromise the public’s ability to pursue legitimate claims for compensation.”