- Legislation introduced to stamp out predatory claims harvesting practices
- Reforms will ban unsolicited cold calling of car crash victims and selling of personal information
- New laws will protect vulnerable members of our community and reduce costs
- Penalties of up to $10,000 will apply for anyone breaking new laws
- Changes will improve timeliness of resolution for genuine claims
The State Government is cracking down on the dodgy practice of insurance claims harvesting for injuries sustained in car crashes.
New legislation has today been introduced to the Western Australian Parliament that will make it an offence to solicit and receive payments for claims referrals.
Anyone caught breaking the new laws will face fines of up to $10,000 – depending on the offence.
Claims harvesting covers a range of practices designed to persuade or entice people involved in car accidents to make injury claims. It often occurs 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.
Victims of this behaviour have reported being harassed by these third-party operators, who are motivated by a financial reward if the person makes a claim. Apart from this misuse of personal information and harassment, the practice costs all Western Australians in the administration of all insurance claims made, and diverts resources from genuinely injured car crash victims in our community.
The Claims Harvesting legislation introduced today will:
- make it an offence to pay or receive consideration for claim referrals;
- make it an offence to personally approach or contact a person to solicit or entice them to make a claim;
- 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;
- oblige claimants and the Insurance Commission to participate in pre-action conferences and exchange offers of settlement before a writ can be issued;
- provide for information sharing with, and an effective means of investigation and enforcement by, relevant agencies – includingthe Legal Practice Board, Consumer Protection, Department of Transport, and the Insurance Commission; and
- introduce an offence for providing false or misleading information to the Insurance Commission.
It is estimated 28 per cent of all claims are the result of claims harvesting, adding to compulsory third party insurance premium fees paid by all WA vehicle owners. These claims are estimated to incur a cost of about $14 for every registered vehicle.
The new legislation will align WA with legislation introduced in other jurisdictions to stamp out this predatory behaviour, and protect vulnerable members of our community from harassment.
As stated by Transport Minister Rita Saffioti:
“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.
“With claims harvesting on the rise in WA, it is vital we act now to stamp out this unethical behaviour.
“Not only does this cause significant stress to the victims involved – it also pushes up the compulsory third party insurance premium fees paid by all Western Australian vehicle owners.
“This new legislation brings WA into line with the other States, and helps maintain affordable and sustainable insurance for Western Australians who need treatment and compensation when injured in a crash caused by another driver.”
