EQC annual legal costs still rising

The Earthquake Commission’s (EQC) yearly legal spend continues to grow as Canterbury earthquake court cases keep rolling in.

Its chief executive is confident the numbers will drop as the commission changes its approach to settling remaining claims.

The Government’s natural disaster agency spent $8.2 million

($9.5m with GST included) on legal fees in 2017. It spent about $7.5m in

2016 and about $6.15m in 2015. The figures refer to spending across the whole organisation, but EQC does not believe there would be much difference in the figures if costs not related to Canterbury quake-related expenses were separated out.

EQC has 316 claims currently in litigation, of which 257 are with the High Court. There are 58 going through District Court, and one with the Court of Appeal.

Of the 684 cases filed against EQC between 2010 and March 2018, eight have gone to a hearing in the courts. EQC was unable to provide a breakdown of the results before publication, but at least three cases went in EQC’s favour.

The rest were settled out of court, dropped, or are still going through the system. EQC figures show 239 cases were discontinued between 2012 and 2017.

Chief executive Sid Miller said EQC went through a court-dictated process whenever court proceedings were filed.

‘‘We are required to file a Statement of Defence within a permitted timeframe, although not all cases will proceed to a hearing.’’

He said the legal costs to date ‘‘reflect the number of cases we have been party to, as well as declaratory judgments sought, independent legal advice received, and out-of-court agreements with legal input’’.

Anthony Harper Lawyers partner Peter Woods was not surprised only eight cases went before the courts. He said often homeowners were suing both EQC and their insurer, and generally EQC would settle as the claim was likely to go over its liability cap of $100,000 plus GST. ‘‘If you’ve got a claim and you’re saying ‘hey look, my foundations are stuffed and my house is a rebuild’, then you’re well over the cap.’’

Woods said once someone sued EQC, they were in a different process, which he thought meant EQC would put more focus on the claim to try and resolve the legal proceeding. ‘‘The main problem people have is just trying to make some progress with EQC and the insurers, particularly for the remedial claims.’’

Miller said EQC was ‘‘in a very different environment now’’, with a new chair and new opportunity to ‘‘really challenge ourselves on how we can do things differently’’ to make sure customers outstanding claims were resolved fairly and swiftly.

‘‘We have set up a new Canterbury Business Unit that is centred on case management. We have also introduced an Internal Panel responsible for reviewing complex claims and looking for paths to settlement. We are running customer workshops, and looking at all of our communication channels.

‘‘I would like to think that all of these things mean that the number of customers who feel that they need to lodge proceedings against us reduces significantly because we are resolving their claim issues directly.’’

He said EQC’s focus was ‘‘squarely’’ on resolving claims fairly and swiftly, and he believed EQC was ‘‘building the foundations that mean we can do this outside of the legal process’’.

Woods said the changes had to be welcomed, but it was ‘‘incredibly frustrating’’ it had taken more than seven years and a change of government to do it.