New hope to hasten EQC settlements

The Government may bring forward funding to hasten legal clarification on ‘‘grey areas’’ holding up Canterbury homeowners’ earthquake claims.

Earthquake Commission (EQC) Minister Megan Woods said yesterday that she had asked Justice Minister Andrew Little to allocate pre-Budget funding so test cases could go to court.

The resulting declaratory judgments would form legal precedents for EQC on issues such as apportionment and liability, Woods said.

‘‘This is about trying to establish liability in particular areas, so every homeowner doesn’t have to meet the expense. The sooner we can clarify things, the better.’’

In a shake-up of EQC aimed at speeding up settlement of outstanding claims, the Government has already formed a new unit for those cases, appointed former Labour cabinet minister Dame Annette King as interim EQC chairwoman, and installed an independent ministerial adviser.

Seven years after the earthquakes a total of 2600 claims are not settled, of which nearly 1300 are to fix botched repairs.

Another 316 claimants have legal action against EQC before the courts.

EQC chief executive Sid Miller said the commission was exploring legal options after receiving legal advice that Fletcher Construction, whom it contracted to project manage home repairs in 2011, could be held liable for re-repair costs.

It had not decided whether to pursue costs from Fletcher, but wanted to assure homeowners that any action would not slow settlements further.

‘‘People will get their entitlement up to our liability under the Act,’’ Miller said. ‘‘We can settle up to the EQC cap. That’s our obligation.’’

He said liability for complex cases, including poorly repaired onsold homes, would be decided after the courts had made declaratory judgments.

‘‘I appreciate how difficult this is for people.’’

Insurance lawyer Andrew Hooker, the managing director of Shine Lawyers, said statements from the minister and EQC were ‘‘just more words’’.

‘‘We’ve been hearing these sorts of words for years. They are not going to get my clients homes fixed,’’ he said.

‘‘If you agree with EQC, they will settle your claim. EQC’s words are meaningless. They say they want to settle claims, but then they fight to the death on every corner.

‘‘They dig in and drag it out for years, and then offer a few crumbs. We see their liability as going way beyond the Act.’’

Hooker said instead of the Government seeking funds to pursue court precedents for EQC to follow, it should ‘‘just fix it’’.

‘‘They own EQC, for goodness sake.’’ A spokeswoman for Fletcher Building said its responsibility under its 2011 agreement with EQC was project management, ‘‘not design, construction or work done by EQC contractors’’. That contract included a clause indemnifying Fletcher against many aspects of the repair programme.

Fletcher ‘‘did not have any direct contractual relationships with contractors or homeowners’’, she said, and believed it had met its obligations under the agreement.

Miller said EQC was part-way through hiring case managers for the new unit, which should be handling all affected claims by the end of the month.

Most claimants in the unit would have their own case manager and a single point of contact, he said. EQC intended for all 2600 claimants to know by the end of June what their ‘‘resolution path’’ would be.

‘‘We want to be able to give people certainty,’’ Miller said.

King’s appointment to chair the EQC board followed the resignation of Sir Maarten Wevers in February. Wevers, who had taken on the role in 2013, admitted that mistakes had been made, customers were not always supported as they should have been, and EQC had taken a long time to reach the final stages of settlements.

‘‘We want to be able to give people certainty.’’

EQC chief executive Sid Miller