UPDATED: Important changes for PI practitioners

UPDATE: This Bill has received assent (30 June) and the provisions commencing on assent are now in force, including the changes to the 50/50 rule and claim-farming offences. The complete Act is now available.

The Personal Injuries Proceedings and Other Legislation Amendment Bill 2022, which was passed yesterday (22 June), contains a number of significant changes for personal injuries practitioners.1

The Bill is largely directed towards outlawing claim farming in matters subject to the Personal Injuries Proceedings Act 2002 (PIPA) and Workers’ Compensation and Rehabilitation Act 2003 (WCRA), but also contains important changes to the Legal Profession Act 2007 (LPA) as well as a change to the definition of terminal condition within the WCRA.2

The Bill is yet to receive assent, however Queensland Law Society wishes to bring the following changes to the attention of members:

Changes commencing upon assent

1. Changes to the 50/50 rule

The Bill amends sections 346 and 347 of the LPA such that interest and certain amounts (additional amounts) are effectively treated as legal costs rather than disbursements for the purpose of the maximum payment for conduct of a speculative personal injury claim.

New subsection 347(8) of the LPA will define additional amounts:

additional amounts, in relation to a law practice’s conduct of a client’s speculative personal injury claim—

(a) means—

(i) an amount paid or payable to an entity other than the law practice for obtaining instructions or preparing statements in relation to the claim; and

(ii) interest or fees paid or payable by the client for a loan or credit facility obtained on the advice or recommendation of, or facilitated by, the law practice, to fund the payment of disbursements or expenses relating to the claim; and

(iii) interest or fees paid or payable by the client to the law practice for the use of an overdraft facility or other credit facility held by the law practice to fund the payment of disbursements or expenses relating to the claim; and

(iv) other disbursements or expenses prescribed by regulation; but

(b) does not include an amount mentioned in subparagraph (a)(i) paid or payable to a barrister engaged by the law practice for services provided –

(i) after notice of the claim is given under the Motor Accident Insurance Act 1994, section 37; or

(ii) after notice of the claim is given under the Personal Injuries Proceedings Act 2002, section 9 or 9A; or

(iii) after a notice of claim is given for the claim under the Workers’ Compensation and Rehabilitation Act 2003, section 275; or

(iv) before a notice mentioned in subparagraph (ii) or (iii) is given, if an urgent proceeding is started for the claim under—

(A) the Personal Injuries Proceedings Act 2002, chapter 2, part 1, division 5; or

(B) the Workers’ Compensation and Rehabilitation Act 2003, section 276 or chapter 5, part 7, division 1.

The Bill also inserts a new section 71E into PIPA, requiring compliance with the 50:50 rule (as amended) where s347 LPA does not apply to the law practice.

Practitioners acting in speculative personal injury matters are urged to check their costs agreement and have regard to the imminent changes to the 50/50 rule.

2. Outlawing of claim farming

The Bill amends both PIPA and WCRA to introduce offences for giving or receiving consideration for claim referrals or approaching or contacting another person and soliciting or inducing that other person to make a claim. The offences are analogous to those introduced into the Motor Accident Insurance Act 1994 (MAIA) in 2019 and each carry a maximum penalty of 300 penalty units.

The Bill also introduces special investigation powers for the Legal Services Commissioner and Workers’ Compensation Regulator in respect of suspected claim-farming offences.

Changes commencing on 1 July – terminal condition

In response to the decision in Blanch v Workers’ Compensation Regulator [2021] QIRC 408, the Act reinserts a timeframe to the definition of terminal condition in section 39A of the WCRA. The new definition of terminal condition commences on 1 July 2022 and provides that a terminal condition of a worker is a condition certified by a doctor as being a condition that is expected to terminate the worker’s life within five years after the terminal nature of the condition is diagnosed.

While the Bill as introduced provided that the new definition would apply retrospectively, including to applications for compensation that were already on foot, advocacy by QLS and others resulted in amendments to the commencement date of the new definition and transitional provisions. The definition was also amended during consideration in detail to change the timeframe from three to five years.

Changes commencing on a day to be fixed by proclamation

The remainder of the Bill introduces requirements for law practices acting in PIPA and WCRA matters to provide law practice certificates to claimants and respondents/insurers at various stages of claims. Similar to the requirements under MAIA, law practice certificates will contain a declaration by the supervising principle that the claim farming provisions have not been contravened in respect of the claim.

The law practice certificate provisions are to commence on a date to be fixed by proclamation. QLS will be liaising with the relevant agencies regarding the law practice certificate forms and proclamation date.

QLS fully supports the objective of the Bill to outlaw claim farming but has expressed significant concern about the formulation of the law practice certificate provisions. Read the QLS submission to the Legal Affairs and Safety Committee.

QLS will provide further information and education regarding the law practice certificate requirements in due course.

Hayley Stubbings is a Queensland Law Society Senior Policy Solicitor.

See QLS Proctor’s compensation law casenotes – updated weekly

Latest update (28 October 2022): PI claim farming: New law practice certificate and claimant certificate now available

1 See the Bill as introduced, and the amendments introduced during consideration in detail. No consolidated version was available at the time of publication.
2 Note that the Bill also amends the Electoral Act 1992, commencing 1 July 2022. Those changes are not dealt with in this article.

Share this article

Leave a Reply

Your email address will not be published. Required fields are marked *

Search by keyword