Over
2500 AMI policy holders with unresolved insurance claims following Christchurch’s earthquakes have until April
2017 to join a class action seeking damages for delays claiming $15,000 per
policy holder for each year of unacceptable delay in finalising claims and an
extra $25,000 each general damages.
AMI’s Christchurch earthquake liabilities
were taken over by Southern Response Earthquake Services set up as a
taxpayer-funded bailout when AMI was
brought to its knees by an over-concentration of earthquake risk in the
Canterbury region. Southern Response
inherited 7600 earthquake insurance claims and half a million dollars from
government. Southern Response has yet to
sign off on one-third of the claims it took over. A vocal group of dissatisfied AMI policy
holders allege Southern Response is dragging the chain: delaying repairs by
having Arrow International alone manage repairs; skimping on repair costs and
not honouring policy terms when negotiating cash payouts for policy holders
intending to self-manage repairs. Rather
than argue individually with Southern Response they obtained High Court
approval, despite Southern Response’s objections, for a representative action
consolidating their common grievances into one court action.
This class action is being funded by private
litigation funder, Litigation Lending Services.
It says it will charge 10-15 per cent of damages recovered; a lesser
commission than its usual 20-30 per cent fee.
Litigation Lending says Southern Response
is drawing out the claims process because it is not in the business of writing
new insurance cover. It has no
reputation to protect as there will be no ongoing business relationship. The strategy is to minimise costs at the
expense of AMI policyholders’ rights, it says.
Southern
Response Claims Group v. Southern Response – High Court (16.12.16)
17.012