Government-owned entity Southern Response is engaged in a last-ditch effort to avoid an opt-out class action over allegations regarding earthquake insurance settlement claims. Policyholders have asserted that Southern Response withheld information allowing them to underpay when settling claims related to the Canterbury earthquake.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Government-owned entity Southern Response is engaged in a last-ditch effort to avoid an opt-out class action over allegations regarding earthquake insurance settlement claims. Policyholders have asserted that Southern Response withheld information allowing them to underpay when settling claims related to the Canterbury earthquake.
Stuff NZ reports that as many as 3000 policyholders may have been misled by Southern Response, who may not have disclosed costs for rebuilding and repairs. This led to policyholders being unaware of what they were actually entitled to, and therefore accepted settlements while relying on incomplete facts and figures.
Southern Response has appealed an earlier court decision to approve the opt-out.
A litigation funder is involved in the case and will receive an undisclosed share of any award stemming from the class action. This is good news, as Southern Response seems willing to drag the case out for as long as possible. Understandable, since losing this class action could lead to New Zealand Government losses in the millions. In New Zealand, laws regarding funding agreements in opt-in vs opt-out cases are still poorly defined.
Tuesday is expected to be the last day for the Supreme Court hearing.
