Australia's legal profession has reacted to allegations against Salter Gordon that it engaged in controversial practice of paying for injury referrals.
Slater and Gordon has denied accusations by Australian broadcaster ABC of engaging in the controversial practice of ‘claim farming’ with several companies. Claim farming is a practice whereby a law firm pays an agency or an individual a fee for having referred an injured person to the firm as a client. Under Australian Solicitors Conduct rules, paying for client referrals is permitted so long as it is disclosed to the client in question and does not create a conflict of interest for the lawyer. ABC has alleged Slater and Gordon has been paying a telephone marketing firm called PreLegal $1,290 for each new client it recruits for workplace injury and traffic accident compensation claims across Victoria, South Australia and Tasmania.
Documents claim the arrangement with PreLegal generated 214 new clients for Slater and Gordon between March and June last year, 'and was expected to result in more than $3 million worth of fees' for the firm. The report also claimed that Slater and Gordon had a referral arrangement with Medibank Private, a car rental company Compass Claims, and a “referral partnership pilot” with Australia’s largest online doctor appointment booking service, HealthEngine, via a third party arrangement with Bannister Law.
Australia’s Lawyers Weekly reports the allegations have been met with a fiery response from local lawyers, with many lawyers condemning the practice. Slater and Gordon denied it was engaged in the controversial practice, saying that it ‘has acted and continues to act in accordance with all its legal and ethical obligations regarding its marketing activities.’ Australian Lawyers Alliance (ALA) president Laura Neil said, ‘we have always been vocal in our opposition to this practice and have supported proposed measures to ensure that lawyers do not benefit when a client has been procured by claims harvesting.’