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The Supreme Court has made an “enormously significant” decision on the earthquake repairs that could cost the government many millions of dollars.
The court has ruled that a class action lawsuit by Canterbury policyholders against the insurance company Southern Response can go ahead on an “opt-out” basis.
The government-owned earthquake insurance settlement company had challenged an earlier decision by the Court of Appeals that homeowners would not have to “opt-in” to be part of the lawsuit.
The lawsuit claims that Southern Response did not disclose the total repair and rebuild costs in the settlement negotiations, so the owners were not aware of the rights they might have received.
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* Landmark ruling allows first NZ ‘opt-out’ class action lawsuit against Southern Response
The press
Brendan and Colleen Ross are representing a new class action lawsuit against Southern Response after their home was damaged by the earthquakes.
An estimated 3,000 Canterbury policyholders may have settled earthquake claims based on incomplete information. Some are affected by sums of at least $ 100,000.
The class action lawsuit is on behalf of homeowners Brendan and Colleen Ross, v. Southern Response, and the latest ruling means that all policyholders affected by the problem will be included unless they choose not to be part of the case.
The unanimous Supreme Court ruling was published on Tuesday after being heard in Wellington in June.
Maarten Holl / Things
Wellington High Court, where the appeal was heard earlier this year.
The ruling said that an opt-out approach, while unusual in New Zealand, met the goals of representative (collective) action. These objectives are to improve access to justice, make efficient use of judicial resources and allow a fair, fast and economic process, according to the ruling.
The Supreme Court also said it could allow a flexible approach to the law, which had to be interpreted to meet modern requirements.
He noted Southern Response’s concern that plaintiffs unaware of the case could be forced by the outcome, but said there would be adequate notice for people to opt out.
The court said that an “opt-out” approach was appropriate, and nothing Southern Response said had satisfied that the approach would harm property owners.
GCA Lawyers attorney Grant Cameron, who is taking the action on behalf of the plaintiffs, called the decision “enormously significant.”
“It means that when large corporations or government agencies deceive or mistreat large groups of people, claims can be made on behalf of all those affected, even if it is difficult to identify all those people,” he said.
STACY SQUIRES./Stuff
Grant Cameron, a partner at GCA Lawyers, will represent the owners.
“It confirms that there is a legal avenue for ordinary people to access justice and hold powerful corporations to account.”
The decision is likely to have a huge effect on consumer protection and environmental claims, “and other claims related to various types of widespread damages.”
Southern Response was formed after the earthquakes to resolve the claims of financially distressed AMI Insurance homeowners.
