High Court approves class suit against Southern Response over earthquake claims

Friday 16th December 2016

Christchurch's High Court has approved a second attempt by a group of Southern Response Earthquake Services policyholders to bring a representative action against the Crown-owned insurance company for breach of contract.

In February this year, the High Court rejected the initial attempt by 46 individuals, who had similar insurance policies and were in dispute with Southern Response over damage caused to their homes in the Canterbury earthquakes, saying their claims were too varied.

A second attempt to proceed with the class action was launched in October, with 40 individuals saying Southern Response consistently delayed house repairs and underestimated claims. A court-sanctioned opt-in order means other Southern Response policyholders have until April 16 next year to join the class action.

Southern Response was established following the quake on Feb. 22 2011, when insurance company AMI considered it did not have sufficient reserve funds or reinsurance to cover its liability. The Crown injected $500 million and provided access to further funding, AMI was restructured, and its day-to-day insurance business sold to Australian insurance group IAG. Its liability from the Canterbury earthquakes transferred to Southern Response.

In a statement, Grant Cameron, a partner at GCA Lawyers which is representing the policyholders, said the group was looking forward to early progress.

Cameron said Justice David Gendall had been satisfied that the common interest pleaded by the plaintiffs - which is that Southern Response engaged in a deliberate strategy to deceive policyholders and delay claims in order to reduce financial liability - was sufficient for a representative action.

BusinessDesk.co.nz

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