Earthquake Commission's arrogance and discrimination 'creeping back in'

Wednesday, 2 September 2020

Grant Robertson and Megan Woods outline the Government's response to the report on EQC. First published in August 2020.

The Earthquake Commission (EQC) has been labelled arrogant and discriminatory, despite top-level promises of a changed organisation.

This week the Government this week said it had accepted all 70 recommendations from Dame Silvia Cartwright’s inquiry into the insurer, and would bring in new laws to change laws governing the insurer next year.

Cartwright’s report, released in April, was scathing of EQC and labelled it arrogant, incompetent and dysfunctional.

EQC chairwoman Mary-Jane Daly said on Monday EQC was now a completely different organisation and was better set up to help all New Zealanders. It has 1500 earthquake claims on its books, including many from repairs that were botched the first time around.

EQC was the subject of a damning report following the Canterbury earthquakes.

* EQC inquiry into handling of Christchurch earthquake claims wraps up

* Cracks hidden in the concrete foundations of 'thousands' of Christchurch homes

* Public submissions on EQC's performance critical of 'difficult' agency

Mel Bourke, who was previously a member of EQC’s Customer Reference Group and runs EQC Fix, a group formed to monitor EQC and help claimants, said key reforms were still lacking.

”We’ve seen EQC revert back to the behaviour and culture as it was in 2012. We’ve had an apology – but what good is it if they still repeat the same behaviour?

Dame Silvia Cartwright headed the EQC inquiry, which announced its findings in April.

”The arrogance has crept back. There’s a lack of standards and how do you make EQC accountable when they get it wrong?”

Are you still settling a claim with EQC? Email reporters@press.co.nz

Bourke said the Government should open the earthquake tribunal to all claimants, require EQC to fund independent engineering reports, sign the organisation up to New Zealand’s fair insurance code, and form an independent customer group.

She said the Government’s plans did not help those already stuck with unresolved claims. Many claimants, especially in east Christchurch and other poorer parts of the city, were stuck with incorrect reports they could not afford to challenge, she said.

“It’s discriminatory because what if you can’t pay the $15,000 to $18,000 for engineering report and the legals to prove them wrong?

“We’re back to that place where they [EQC] can just say no, that’s the arrogance.”

Insurance lawyer John Goddard agreed those without money or access to advocacy were strongly disadvantaged by the process.

This had been made worse by EQC going back to taking a harder line on legal issues, he said.

“It’s gone back to doing the things that triggered the [Cartwright] inquiry. I do think the Government wants to improve things, but EQC is moving in the other direction.”

EQC needed to do more to reimburse claimants’ costs, and should have to abide by the fair insurance code and insurers’ duty of good faith, both of which it was exempt from, Goddard said.

“The problem at the moment is there is no way of saying what the minimum standards are. How long should it take to resolve a claim – two years, five years, or even 10 years? We need independent oversight of EQC repairs.”

Goddard said one of his clients just had an EQC claims manager turn down a claim for a property he had never seen. His client was then told the manager would close the claim unless an engineering report was provided within a month, he said.

Bourke said the Government needed to solve the problems properly, or there would be similar outcomes in future natural disasters.

“How will they ever cope with an event in Auckland or Wellington, if they can’t sort out Christchurch?”