EQC settles with on-sold test case under new Government policy
Thursday, 22 August 2019
An agreement has been reached in line with the Government's new 'on-solds' ex gratia payment, saving the Earthquake Commission (EQC) from a trip to the courts.
The case was due to be heard in the High Court in a 15-day trial that would have started on Monday. It was a group action known as JS Gibling and others vs the Earthquake Commission.
A settlement has been reached between Jamie Gibling, the lead claimant in the case,and EQC. It is the first settlement under the Government's policy to make ex gratia payments for repairs to 'on-sold over-cap' homes, a scheme expected to cost taxpayers about $300 million. The payments are being managed by EQC and it is thought there are about 1000 on-sold over-cap homes.
Th action, which had nearly 60 claimants, alleged Crown natural disaster insurer EQC was negligent in meeting its statutory obligations for missed damage or inadequate earthquake repairs to a group of homeowners with on-sold over-cap homes.
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An on-sold over-cap home is one bought since the 2010 and 2011 earthquakes and later found to have missed or poorly repaired damage that was assessed by EQC or repaired through its managed repair programme and will exceed EQC's $115,000 liability cap.
The Gibling case was paid for by a litigation funder and was to be represented by Shine Lawyers.
Earlier in the week, managing director Angela Parlane said the case was about establishing that EQC had a duty of care, as the process offered by the Government was without admission of liability.
On Thursday, Parlane said the case had been settled without the need for a formal judgment.
'We are happy that our clients will receive their full legal entitlement, and often cases like this are settled without admissions of liability.'
She said many of her clients had faced financial ruin due to unrepaired damage on their houses, and it was fantastic an agreement had been reached without a three-week trial.
EQC deputy chief executive Renée Walker said the commission had been working directly with Shine since the Government policy for on-sold over-cap homes was announced last Thursday.
Shine's main concern was that there needed to be a framework for establishing repair costs so the other cases in the group action could be settled, she said.
The process for the settled case was effectively the same as what would be used for those not in the court case, and included the option of independent mediation through the Greater Christchurch Claims Resolution Service.
Walker said there were some legal costs covered in the settlement. Other cases that had incurred legal costs would also be eligible for some compensation from EQC.
EQC, as opposed to central Government, are paying for this settlement as ministerial direction for the ex gratia payments had not come through yet. Walker said the policy meant EQC could negotiate on the same terms.
EQC intended to pay Gibling on Thursday and let the court know it was dropping the case.
The Gibling case was promoted as a a precedent-setting 'test case' that would clarify legal responsibility on the on-solds issue, but the Government found it was not suitable as a test case because it would not clarify the issue for a large enough group of homeowners.
About 100 homeowners have filed cases to the High Court relating to on-solds.