New NSW Law Bans Claim Farming Practices

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NSW Parliament passes tough new bill to crack down on "claim farming" - the shady practice of pressuring trauma survivors into making compensation claims they don't need.

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Claim farmers use cold calls and high-pressure tactics to harvest personal information, then sell these details to legal firms for fees ranging from $800 to $10,000.

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"No one should be harassed or intimidated into making a civil compensation claim which may not be in their best interests," Attorney General Michael Daley stated firmly.

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Under the Claim Farming Practices Prohibition Bill 2025, anyone caught soliciting, buying, or selling claims faces hefty fines up to $55,000.

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Lawyers involved in claim farming must return all fees collected from farmed claims and are banned from charging for these services.

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The hidden costs of claim farming often get passed to victims through settlement disbursement fees that many don't fully understand.

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The legislation protects various civil claims including serious injury, medical negligence, public liability, and intentional torts such as child abuse and assault.

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Legitimate claimants can still seek compensation by approaching lawyers directly, as the bill targets only predatory practices.

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Fraudsters may also face existing criminal penalties - dishonestly obtaining financial advantage through deception carries up to 10 years imprisonment in NSW.

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The bill, developed through consultation with victim-survivors and industry stakeholders, has passed both houses and now awaits final assent.

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