The Court of Appeal has rejected an attempt by government-owned insurer Southern Response Earthquake Services to throw out a class action lawsuit from Christchurch homeowners whose claims haven't been settled six years after the earthquakes that damaged their properties.

The group, which started off as 47 claimants in February 2016 but has since dropped to 26, gained approval for legal action against Southern Response from the Christchurch High Court in December last year.

Southern Response was established following the February 2011 quake when failed insurer AMI said it didn’t have enough money to cover its liability, prompting the Crown to inject $500 million and assume control of the unwanted business.

In the court case, heard in July, Southern Response’s lawyer argued the claimants didn’t have a common issue binding them together.

The claimants’ lawyer Francis Cooke QC, however, said the group had been subjected to a strategy by Southern Response designed to minimise its financial exposure after all their homes were damaged by the same earthquake.

The appeal court judges said they were satisfied a representative proceeding wouldn’t deprive Southern Response of any defence to individual claims, nor would it give individual claimants a claim they would not have had otherwise.

“We are concerned with the lack of progress with these proceedings,” the judgment said. “The proceedings are in need of careful case management, to assist the parties with progressing to trial in a prompt and cost-effective manner.”


Brandon Vigon