Australian firm to fund homeowners' class action against Southern Response
Monday, 6 May 2019
Homeowners taking Government insurer Southern Response to court have the backing of an Australian funder.
Lawyer Grant Cameron has signed a contract with Claims Funding Australia to provide litigation funding for his class action against Southern Response.
The lawsuit claims Southern Response underpaid homeowners on insurance settlements by providing abridged detailed repair/rebuild analysis reports (DRAs). The reports, omitting costs such as demolition, extra design work and contingencies, were used in place of more detailed reports available, the lawsuit alleges.
The claim seeks the payout difference between the two levels of report, plus damages, interest and other costs. It is also seeking a declaration from Southern Response that it breached the Fair Trading Act.
**READ MORE:
* Potentially costly class action against Southern Response given go-ahead
* Government-owned Southern Response facing multimillion-dollar legal action
* Out-of-court settlement possible for Southern Response class action
* Home owners aghast at fee for Southern Response class action**
Litigation funding, widely used overseas where class actions are common, is where a third-party funds a lawsuit and and takes a percentage of any claimants' winnings. There is no charge to claimants if the case does not succeed.
Claims Funding Australia is an arm of Maurice Blackburn Lawyers, an Australian law firm specialising in class actions and social justice cases.
A spokesman for Maurice Blackburn Lawyers said it was too soon to know how many claimants would sign up for the action.
Fees would range from 17.5 per cent to 27.5 per cent of settlement sums, depending on how drawn-out the case became, he said. Any fees claimants owed to Grant Cameron Lawyers would be on top of those amounts.
In announcing the deal, Cameron said it meant that 'the best class action minds in the Southern Hemisphere have looked closely at this matter and they've decided to support it'.
He said they could 'now see this through to completion, no matter how long it might take'.
The lawsuit was given the go-ahead by the High Court late last year.
Southern Response was formed by the Government to settle the claims of policy holders of the failed insurer AMI after the Canterbury earthquakes. The company will not comment on the lawsuit while it is before the courts.
Southern Response policyholders who settled their claims before October 2014 are eligible to join Cameron's class action.
Cameron believes there could be about 3000 policyholders affected and about $300m involved.
He did not respond to a call seeking details on what fee his firm would charge claimants for a successful outcome, on top Claims Funding Australia's fee.
An earlier representative case Cameron launched on behalf of homeowners in 2015 and 2016 was funded by Sydney-based Litigation Lending Services Ltd. That company took took 15 per cent of claimants' settlements and another 5 per cent went to Cameron's law firm, amounts Cameron described at the time as low for litigation funding.
Meanwhile, a case already before the High Court is expected to set a precedent on the matter of abridged reports.
That case, taken by Huntsbury hill homeowners agains Southern Response, was heard in the High Court in March with a judgment expected soon.