By Alice Ireland, Lawyer and Luke Geary, Partner

In early 2025, a major fraud scandal surrounding ‘claim farming’ came to light in New South Wales, exposing a widespread and predatory compensation scheme targeting vulnerable individuals particularly survivors of historical child sexual abuse. Police, acting through Strike Force Veritas, arrested seven people in February 2025, accusing them of orchestrating a very lucrative fraudulent claims operation. Allegedly, they pressured individuals, such as former inmates (approx. one third of inmates at the Cooma correctional centre had submitted claims), young offenders, and public-school students, to submit false abuse claims against the NSW Department of Communities and Justice and Department of Education, as part of a syndicate coordinating with various law firms for financial gain.[1]

Among the arrests was Fotis Frank Antonios, charged with 21 offences including inciting false claims and deception. He allegedly used a prestigious law firm to submit a fraudulent historical sexual abuse compensation claim exceeding $650,000, with legal fees totalling around $415,000 and a settlement paid to Antonios of $244,303.29. He also submitted fraudulent applications through the National Redress Scheme seeking financial compensation up to $150,000.[2] Australia’s National Redress Scheme was originally set up in 2018 after the Royal Commission into Institutional Responses to Child Sexual Abuse, to enable payments to those subjected to institutional abuse, without those individuals needing to proceed through the courts.

In response, the NSW Government introduced the Claim Farming Practices Prohibition Bill 2025 (NSW) in March 2025. The legislation aims to outlaw key tactics used by claim farmers – including unsolicited contact, contacting another person to encourage them to make a relevant claim with the expectation of receiving a fee, buying or selling referral rights, and obtaining personal details without consent.[3] Lawyers found to have breached the new law will be barred from charging fees or retaining costs associated with such claims, and may be required to refund any amounts already received.[4]

The bill passed both houses of parliament by late March and was officially assented to on 9 April 2025, becoming the Claim Farming Practices Prohibition Act 2025 (NSW). Under the Act, offenders face penalties including fines up to $55,000. The ban covers claims under the Civil Liability Act 2002 (NSW) encompassing serious injury, medical negligence, public and product liability, as well as intentional torts such as child abuse and assault.[5]

The legislation reflects a strong governmental response to protect vulnerable claimants from coercive exploitation and to restore integrity to the compensation system.

[1] ‘Seven arrested over alleged sexual abuse ‘claim farming’ scheme that police say netted more than $1bn’ The Guardian 13 February 2025 < https://www.theguardian.com/australia-news/2025/feb/13/seven-arrested-over-alleged-sexual-abuse-claim-farming-scheme-that-police-say-netted-more-than-1bn-ntwnfb?utm_source=chatgpt.com>.

[2] ‘Alleged claim farm kingpin used law firm to get fraudulent $650,000 sexual abuse payout, police allege’, The Guardian 25 March 2025 < https://www.theguardian.com/australia-news/2025/mar/25/alleged-sexual-abuse-claim-farm-kingpin-used-law-firm-to-get-fraudulent-650000-government-payout-police-allege-ntwnfb?utm_source=chatgpt.com>.

[3] NSW, Parliamentary Debate, Legislative Council, 27 March 2025, The Hon. Daniel Mookhey, Treasurer.

[4] ‘NSW Government to crack down on practice of ‘claim farming’’, NSW Government Ministerial Releases 18 March 2025 <https://dcj.nsw.gov.au/news-and-media/media-releases/2025/nsw-government-to-crack-down-on-practice-of–claim-farming-.html?utm_source=chatgpt.com>.

[5] NSW, Parliamentary Debate, Legislative Council, 27 March 2025, The Hon. Daniel Mookhey, Treasurer.