Fuseworks Media

‘Early christmas present for EQC land claimants’

The door has been opened for what could be one of the largest class actions New Zealand has ever seen.

Late yesterday, the Christchurch High Court authorised a class action against the EQC related to how it handled and paid claims for earthquake land damage in the 2010/2011 Canterbury Earthquakes. The action may also benefit other victims of natural disaster land damage.

Leading insurance lawyer Grant Shand and Andrew Barker KC took a case to the High Court to determine whether their clients, Lucinda McEvedy and Andrew Freer, could represent the thousands of people in a similar situation grossly underpaid by the way EQC settled land claims from the Canterbury earthquakes. “Our clients believed it was wrong for EQC to settle land claims the way it did and continues to do so. It used, for the first time in EQC history, a process that settles land damaged by crust thinning or increased liquefaction vulnerability (ILV) by a diminution of value (DOV) methodology and not what it actually costs to repair the land. The judge has found that there are issues common across thousands of EQC land claims and therefore a class action is appropriate,” says Mr Shand Associate Judge Paulsen also agreed with McEvedy and Freer that the action should proceed on an “opt out basis”, saying “an opt out basis enhances the objectives of access to justice.” This means that everyone who meets the class definition is automatically part of the class action unless they opt out. Mr Shand believes the class action could be one of the biggest this country has ever seen with many thousands of properties having been assessed by EQC as having ILV land damage and settled using DOV. “EQC settled over 99.5 per cent of all ILV claims the same way it settled our clients’ land claim. As this is an opt-out class action, it’s likely the numbers involved will be significant,” he says.

Grant Shand says EQC used this way of settling land claims to minimise its land payments to homeowners, saving it about $1.5B.

“EQC paid McEvedy and Freer just $22,000 for their land damage and had the assessment been undertaken correctly, that figure should have been at least $160,000,” he says. “And of the in excess of 13,000 properties assessed with ILV land damage, only 15 received money based on the actual cost to repair their land,” he says.

The judgment sets out the class definition and the common issue to be determined [see below].

Grant Shand says this is the first step for homeowners who had ILV land damage to be properly compensated by EQC for their loss and homeowners who had an ILV land claim settled using the DOV methodology should check to see if they are part of the class.

Further information will made available at www.eqcland.co.nz as it becomes available.

 

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