Special tribunal to resolve claims
The Government is being criticised for not consulting on setting up a special insurance tribunal to resolve outstanding Earthquake Commission (EQC) and insurance claims.
At budget time, the Government announced $6.5 million in operating funds and $1.5m capital to establish an independent tribunal to resolve disputes arising from the Canterbury earthquakes of 2010 and 2011.
The Earthquake Tribunal bill was introduced to Parliament yesterday and could pass its first reading within the next month.
But the Government has come under fire for not consulting with Cantabrians or the insurance council and excluding ‘‘on sold’’ properties.
Insurance Council of New Zealand chief executive Tim Grafton has said he was concerned the Ministry of Justice did not bother to consult anyone except Treasury even though we have been pressing for consultation since last November.
‘‘Best practise has been ignored by the minister and his ministry.’’
He had concerns with the way the tribunal was proposed to be run.
‘‘It will not allow insurers to bring cases, only policy-holders. This is unfair as it only deals with one half of the problem.’’
National’s Earthquake Commission spokesman Stuart Smith said it was concerning that only Treasury had been informed and believed the people involved should have been asked to share their insight.
He said he was underwhelmed by the bill and questioned if it would really work and if it would be any faster than the courts, which it was duplicating. ‘‘If people think this will be a silver bullet, they will definitely be disappointed.’’
He expected the resources needed to make it work would already be tied up in other earthquake-related legal processes.
The bill had left out the ‘‘hardest part’’ that was related to on sold properties, he said.
Earthquake insurance claimants advocate Ali Jones said the bill excluded owners of the ‘‘on sold’’ properties from being able to access the proposed process. The issue was complex and was not going away and possibly thousands of ‘‘on sold’’ owners needed some clarity.
‘‘The financial costs related to being found liable for the ‘‘on sold’’ properties will run into the hundreds of millions possibly more and I am sure that slowing down the progress of getting a case before the courts to decide that liability, is very likely a tactic the insurers will be using.’’
Greater Christchurch Regeneration Minister Megan Woods said the bill would make a real difference for the people of Canterbury and the select committee process was the right and proper process for everybody to have their say.
The delay to resolve residential insurance claims had made a significant impact and more options were needed to make progress and help them reach an outcome.
‘‘The tribunal will have flexibility to tailor its approach to the needs of each case, and has various options available for resolving claims without a formal hearing, including referral to an independent, funded mediation service.
It would be proactive, managing cases through the process and setting timeframes that must be followed so claims progress, she said.
Justice minister Andrew Little said the bill delivered on preelection promises and established a tribunal which would enable homeowners to resolve longstanding residential insurance claims including with Southern Response or the Earthquake Commission. ‘‘The tribunal will have the ability to award costs or general damages.
‘‘It will also be able to appoint independent expert advisers to help the tribunal to understand the technical aspects of a claim.’’