Claim is defined expansively to include a potential claim (section 3(1)). That means the prohibitions apply before any claim has formally been made, when a person is injured and could bring a claim but has not yet done so. The Act does not require that the claim be viable. Section 5(6) confirms that the offence applies regardless of whether the potential claimant is entitled to make a claim or has decided to make or has made a claim.

Consideration is defined simply as “a fee or other benefit”. It is not limited to money. It would include shares, discounts, services, goods, or any form of payment in kind. The breadth of “other benefit” captures indirect benefits such as free advertising or cross-referrals.

Contact is defined in section 5(7) to include personally approaching or contacting in person, by mail, telephone, email or another form of electronic communication, individually or as a member of a class. The class inclusion is important: it covers mass marketing that targets a defined group (for example, all people who purchased a defective product) and not just one-on-one approaches.

Solicit is defined to include induce (section 5(7)), which would capture encouraging or persuading, not just outright asking.

Law practice and associate and legal services take their meanings from the Legal Profession Uniform Law (NSW). A reference to a law practice includes a reference to an associate of the practice (section 3(2)). That means the prohibition on arranging for third parties to contact potential claimants catches a law practice that uses an intermediary.

Potential claimant is defined in section 5(1) as “another person” who is contacted. The term is not further limited, so it means any person who could conceivably have a personal injury claim, regardless of whether they have sought legal advice.

Referral for the purposes of section 6 includes a referral arising from services provided to a claimant and the disclosure of a claimant’s personal details (section 6(6)). So simply handing over a person’s name and contact details is a referral if done for consideration.

The Act creates a structure of exceptions (section 5(4) and section 6(4)) which place an evidential burden on the accused. That means the prosecution does not have to prove the absence of an exception; the defendant must raise evidence that the conduct falls within an exception. For example, a law practice that contacts an existing client it has previously provided legal services to must prove it had a reasonable belief the client would not object. If the contact is made via a community legal service or industrial organisation, the law practice must have received a request from a representative and confirmation that the representative reasonably believed the potential claimant would not object.

The exceptions also cover notices under the Civil Procedure Act 2005, section 175 for representative proceedings (class actions), and advertising, marketing or promotion of a law practice to the public (section 7). The advertising exception is broad: a person does not commit an offence by advertising, marketing or promoting a law practice to the public, or by providing or receiving consideration relating to such advertising. This means that genuine advertising (e.g., television commercials, billboards, online ads) is safe, even if the advertiser pays a media company. But the exception only covers advertising to the public, not targeted distribution to injured persons.

The Act primarily affects three groups.

First, it affects intermediaries and referral agents who operate in the personal injury market. This includes entities that solicit accident victims at the scene, such as tow-truck drivers, insurance claims managers, health practitioners (physiotherapists, chiropractors), and “claims management” companies that generate leads for law practices in exchange for a fee. It also affects online lead generation businesses that collect personal injury claim enquiries and sell them to law firms. For these actors, the Act imposes a criminal penalty of up to 500 penalty units (currently $110,000 for an individual, $550,000 for a corporation if the penalty unit value is $220, as it is in 2025) for each prohibited contact or referral payment.

Second, law practices and their associates are affected because they are the ones who typically pay for referrals. Section 6(2) criminalises the payer side: a law practice that pays for a referral faces the same penalty. The Act applies to a law practice’s associates (including directors, partners, employees, and related entities) because section 3(2) includes associates in the definition of law practice for most purposes. This creates risk for law practices that have structured referral arrangements through separate marketing companies. The exceptions in section 6(4) allow law practices to refer a matter to another service provider when acting for the claimant (for example, referring a client to a medical expert) and to purchase another law practice under certain conditions with client consent. But the broad prohibition on paying for referrals will disrupt any arrangement where a third party receives payment for introducing a client.

Third, potential claimants are affected because their rights to receive contact about possible claims are curtailed, though the Act is framed as a protection measure. The Act removes the ability of a person to be solicited by someone who stands to gain financially, but it does not affect the person’s right to bring a claim or to seek out legal representation. The exceptions for class action notices, existing client contact, and community legal service or union referrals provide some channels for outreach.

The Act also has extraterritorial effect, meaning it can reach conduct outside NSW. A marketing company in Queensland that calls a NSW resident with a personal injury claim may be guilty of an offence if it receives consideration. This raises practical enforcement difficulties, but the Act is drafted to maximise its reach.

The Act does not apply to claims under other regimes such as motor accident claims (compulsory third party), workers compensation, or dust diseases, because those are excluded by the Civil Liability Act carve-out. That affects the scope significantly: the Act targets the niche of common law personal injury claims not covered by statutory schemes, which in NSW is a diminishing field due to the dominance of the Motor Accidents Injuries Act 2017 and workers compensation. Still, there are areas such as medical negligence, public liability, and intentional torts (though not all of these are personal injury damages) where the Act will apply.

The Act imposes duties not to contact potential claimants for consideration, not to receive or pay consideration for referrals, and not to arrange for third parties to do so. These duties are strict in the sense that there is no requirement for the prosecution to prove that the defendant knew the contact was an offence. The language of section 5 does not include a fault element (such as “knowingly” or “recklessly”), so it is likely a strict liability offence subject to the defences and exceptions in the Act. However, the defendant can raise the exceptions listed in section 5(4) and section 6(4), which would then require the prosecution to disprove them beyond reasonable doubt (or the defendant to meet the evidential burden).

The right to advertise is preserved explicitly by section 7. A person can advertise, market, or promote a law practice to the public, and can provide or receive consideration for that advertising. This means that a law firm can pay for Google Ads, television commercials, or billboards, even if those advertisements generate leads that result in claims. The dividing line between a targeted contact and a public advertisement is critical. An advertisement sent to a general audience is safe, but an email sent to a list of people known to have been injured in a particular incident may be a prohibited contact if the sender expects consideration.

A law practice also has the right to contact its own existing clients. The exception in section 5(4)(b) permits contact where the practice has provided legal services to the potential claimant and reasonably believes the potential claimant will not object. This exception is not limited to personal injury clients; it could cover a client who previously instructed the firm on a conveyancing matter, provided the firm has a reasonable belief the client would not object to being contacted about a personal injury claim.

A law practice also has the right to contact a potential claimant after receiving a request from a representative of a community legal service or industrial organisation (e.g., a union), provided the representative confirms they reasonably believe the potential claimant will not object. This permits unions and community legal centres to refer their members to law practices without falling foul of the prohibition on referrals for consideration, but only if the representative is not receiving consideration for the referral (which would be caught by section 6 anyway).

The Act does not create any private right of action for a potential claimant who is contacted. The only enforcement mechanism is criminal prosecution. A claimant who is solicited has no statutory right to damages, but could potentially sue for breach of statutory duty or rely on the conduct in a civil claim for harassment or privacy. That is not addressed in the Act.

Each offence under sections 5(1), 5(2), 5(3), 6(1), and 6(2) carries a maximum penalty of 500 penalty units. At current values (2025: $220 per unit), that is $110,000 for an individual and $550,000 for a corporation (since corporations can be fined up to five times the maximum for individuals under the common law principle unless the Act provides otherwise; the Crimes (Sentencing Procedure) Act 1999 applies to NSW offences unless varied). The Act does not include a separate corporate multiplier, so the usual interpretation would apply.

Proceedings are to be dealt with summarily before the Local Court (section 9). That means the maximum term of imprisonment is limited to two years for any single offence, but the Act does not provide for imprisonment; the penalty is pecuniary only. It is possible that a court could impose a community correction order or other non-custodial penalty, but the focus is on fines.

A statutory time limit applies for commencement of proceedings: within two years of the date the offence is alleged to have been committed, or within two years of the date on which evidence of the alleged offence first came to the attention of a police officer (section 8). This extension gives police and the NSW legal regulator time to investigate, particularly if the evidence emerges later from complaints or from other investigations. The court attendance notice must specify the date on which evidence came to the attention of the police officer if reliance is placed on that later date. The provision overrides the general time limit in the Criminal Procedure Act 1986.

Enforcement is likely to be handled by the NSW Police or by the Office of the Legal Services Commissioner (who may refer matters). The Act does not create a dedicated enforcement agency. The practical challenge is that prohibited contacts often occur in private, and potential claimants may not realise the conduct is an offence or may not report it. However, the high penalty and the strict liability nature (subject to defences) reduce the burden on the prosecution.

The Act also imposes an evidential burden on the accused in relation to the exceptions. This means the accused must point to evidence that the exception applies; the prosecution does not need to negate each exception in the first instance. This is a significant procedural shift from the usual requirement that the prosecution prove all elements.

The Act sits alongside but does not replace the Legal Profession Uniform Law (NSW). That law already prohibits a law practice from paying commissions or referral fees for the referral of clients (section 174 of the Uniform Law). However, the Uniform Law is a professional regulatory scheme, enforced by the Legal Services Commissioner, with maximum penalties for misconduct that may not include criminal fines. The Claim Farming Practices Prohibition Act creates a criminal offence that overlaps with the Uniform Law prohibition. A person could be charged under both, but the double-jeopardy principle would likely prevent conviction for both if they arise from the same conduct. The Act does not include a provision stating it does not affect the Uniform Law, so both can operate concurrently.

The Act also interacts with the Civil Procedure Act 2005, specifically section 175 (notices for representative proceedings). The Act excludes from the prohibition a notice given under that section, so class action nofification campaigns are permitted. But the exclusion only covers the notice itself; any follow-up contact that involves consideration would still be scrutinised under the Act.

The Civil Liability Act 2002, section 3B(1)(b)-(h) sets out exclusions from the Civil Liability Act itself. By referencing those exclusions in the definition of claims covered, the Act effectively adopts the scope of the Civil Liability Act as a filter. That means the Act does not apply to claims for damages arising from motor accidents (CTP), dust diseases, workers compensation, intentional acts, terrorism, crimes, and certain other specified categories. Those claims are already subject to separate statutory regimes and often have their own referral restrictions. For example, the Motor Accidents Injuries Act 2017 has restrictions on touting. This Act will not add much to those regimes.

The Act may also interact with the Australian Consumer Law (which is a Commonwealth-State co-operative law). Section 7 of this Act exempts advertising, marketing and promotion, which aligns with the general freedom to advertise legal services. However, if an advertisement is misleading (e.g., falsely implying a high success rate), the ACL would still apply.

The extraterritorial application (section 4(b)) means the Act may conflict with similar laws in other States. For instance, Victoria and Queensland have their own anti-claim farming laws. A referral agent in Queensland who contacts a NSW resident could contravene both the NSW Act and whatever Queensland law applies. Double jeopardy protections would apply only if the conduct is the same offence in a legal sense, not if it is a different statutory offence.

The Act does not interact with the Privacy Act 1988 (Cth) explicitly, but the disclosure of a claimant’s personal details as part of a referral may also breach Australian Privacy Principles if done without consent. The Act does not require any further consent process; it simply prohibits the referral for consideration. So a compliant arrangement would still need to comply with privacy laws.

The Act as provided is the version as enacted, being the Claim Farming Practices Prohibition Act 2025 (Act No 19 of 2025). There is no amendment history in the source; it is a new Act with no amendments to date. The Act commences on the date of assent, so it is currently in force. There is also a Schedule 2 which has been repealed by section 30C of the Interpretation Act 1987, but that is standard editorial practice for outdated schedules. The repeal of Schedule 2 does not affect the substantive provisions.

The Act contains a regulation-making power (section 11) and savings and transitional provisions in Schedule 1. The regulations have not been made yet (as at the time of this text). The Minister is required to review the Act after two years and table a report (section 10). That review may lead to amendments.

Because the Act is new, there are no prior iterations to discuss. Future amendments may clarify the scope of the advertising exception, extend or contract the excluded claim types, or adjust penalties.

There is no litigation history for this Act. It was enacted in 2025 and, as of the date of the source text, has not been the subject of any reported court proceedings. Interpretation issues are likely to arise, particularly around what constitutes “consideration” in the context of bundled services, and what “reasonable belief” means for the existing-client exception. The extraterritorial aspect may also be tested, especially if an interstate entity challenges the validity of application under the Commonwealth Constitution’s limitations on state legislative power (interstate trade and commerce, implied freedom of political communication, or the principle that a state cannot control conduct wholly occurring in another state). However, the Act is drafted to rely on the state’s legislative powers, and similar prohibitions in other states have survived constitutional challenge (e.g., the High Court upheld a similar provision in the Motor Accidents Compensation Act 1999 (NSW) in Bayside). But no cases under this specific Act exist yet.

The Act’s review clause in section 10 will likely prompt a report in 2027 that may reveal enforcement patterns or any issues, but that is not litigation.

One gotcha is the breadth of “consideration”. It is not limited to money. A law practice that provides free legal research or marketing support to a third party who makes referrals will be caught if that support is a benefit. The definition of “benefit” is not qualified, so even a promise of future work could be consideration.

The reference in section 6(6) that “referral includes the disclosure of a claimant’s personal details” means that simply handing over a person’s name and phone number to another person for consideration is an offence, even if no claim is ever referred. This catches data brokers who sell lists of potential claimants. It also catches a tow-truck operator who, for an arrangement with a law firm, passes on the names of accident victims. The offence is complete the moment the personal details are disclosed for consideration.

Another gotcha: the exceptions in section 5(4) only apply to law practices, not to intermediaries. A community legal service or union that contacts a potential claimant to refer them to a law practice is not covered by the exception unless the contact is made at the request of the community legal service or union itself. If the union receives a referral fee, both the union (receiving consideration) and the law practice (providing consideration) commit offences under section 6. The Act does not exempt referral fees to unions or community legal centres. So a union that charges a law firm a “membership fee” in exchange for placing the firm on a referral list is at risk.

The Act also has an unintended effect on medical referrals. A physiotherapist who refers a patient to a lawyer and receives a finder’s fee is caught. But a physiotherapist who refers a patient to a specialist and receives a fee for that referral is not caught by this Act because the referral is not for a claim-related service. However, if the physiotherapist knows the specialist will provide an expert medical report for a claim, the referral may be considered “in relation to a claim” (section 6(1)). The phrase “in relation to a claim” is broad and could capture referrals where the service is only tangentially related.

The Act’s time limit for prosecution (section 8) has a trap: the two-year clock can restart when evidence comes to the attention of any police officer, not necessarily the investigating officer. That creates uncertainty for defendants. If a police officer hears of an offence years later, proceedings can still begin within two years of that date, even if the offence itself is old. The court attendance notice must specify the date, but the prosecution can simply choose an earlier police officer’s note.

Although section 7 exempts advertising, it only exempts advertising to “the public”. A targeted online ad that is served only to people who have searched for “personal injury lawyer” could be argued to be not to the public but to a specific group of interested individuals. The distinction is uncertain.

The sale-of-practice exception in section 6(4)(b) is narrow: it applies only to sale of all or part of a law practice, the referral must be disclosed to the claimant, the consideration must not exceed unbilled legal costs, the claimant must be advised the referral may be refused, and the claimant must approve. Many real-world sales of law practices involve the purchasing practice paying for goodwill and client files. If the payment exceeds unbilled costs, the exception is not available, and the parties must rely on the general referral exception (which only applies when acting for the claimant, which is not the case in a practice sale where the claimant is not yet a client of the purchasing practice). This could make it difficult to sell a personal injury practice without breaching the Act.

Compliance requires three fundamental steps: re-assess any referral arrangements, review marketing practices, and train staff.

First, any person or entity that receives money or a benefit for referring a personal injury claim or potential claim must stop doing so. Existing written agreements entered into before commencement that involve a completed referral before commencement are protected only if the referral was completed before commencement (Schedule 1, Part 2, clause 2(2)). If the referral was not completed before commencement, the agreement does not protect against the prohibition. Therefore, any ongoing contract should be terminated or restructured so that no consideration flows after commencement for future referrals.

Second, law practices must ensure they are not paying for client introductions. This includes lead generation fees to online platforms, fixed fees per referral paid to hospitals, GPs, or community organisations, and any percentage-based fee to an agent. The only safe payments for introductions are: (a) paying for advertising to the public (section 7), which must not be targeted to injured individuals; (b) paying for the purchase of another law practice, but only if the purchase price is limited to unbilled costs and the claimants are notified and consent; or (c) referring a client to another service provider while acting for the client, which is not payment for a referral but provision of legal services. Law practices should also avoid any arrangement where a third party receives a benefit for merely introducing a client, even if that benefit is framed as a “marketing fee” or “administrative fee”. The guidance should be: if the payment is for a specific client referral rather than for general marketing, it is likely prohibited.

Third, compliance with the contact prohibition requires that no one contact a potential claimant for the purpose of soliciting a claim or referring that person to a lawyer if the contactor stands to receive consideration. This applies to employees, associates, and agents of a law practice. For example, a law firm must not hire telemarketers to cold-call accident victims and be paid per appointment booked. The exceptions allow contact if the firm has provided legal services to the person before and reasonably believes they will not object, or if the contact is prompted by a community legal service or union after that organisation has obtained consent. Law firms should maintain records of prior service relationships and any consent from community organisations.

Practically, the best way to generate new personal injury clients without breaching the Act is to rely on general advertising (television, radio, billboards, social media ads targeting broad demographics) and on referrals from existing clients who are not paid for referrals. Referrals from other professionals, such as accountants or financial planners, are safe only if those professionals do not receive consideration for the referral. If an accountant refers a client to a lawyer and later receives a referral fee, both the accountant and the lawyer offend.

Law practices should also audit any third-party arrangements such as with “claims management” companies. If the company is collecting personal details and selling them to the firm, that is likely an offence under section 6(2) (paying for a referral) and section 5(3) (arranging for a third party to contact). The only safe way to use a claims management company is if the company is acting as an advertising agent and the fee is for advertising to the public, not for individual referrals.

Internal training should cover the definition of “consideration” (including non-monetary benefits) and the fact that the offence applies even if the contacted person is not entitled to make a claim. Staff should also understand the evidential burden on the accused for the exceptions; if a prosecution arises, the law practice must be able to prove the exception applies, for example by documenting a prior legal services relationship.

Finally, because the Act has extraterritorial operation, Victoria-based or Queensland-based firms that target NSW residents need to comply or risk prosecution if they have sufficient connection to NSW. The safest approach is to treat any contact with a person who is a resident of NSW and who may have a personal injury claim as subject to the Act, regardless of where the contactor is located.

The Minister’s review after two years may clarify grey areas or lead to regulations. Organisations should monitor any regulations that may prescribe additional corresponding laws for class action notices or add exceptions. Until then, the Act should be interpreted broadly given the high penalty and the strict liability nature of the offences.