Homeowners in tears at tribunal
It’s been six months since Canterbury’s tribunal for quake insurance disputes opened for business. Liz McDonald talks to its chairman about what they have seen so far.
Homeowners turning up alone at the Canterbury Earthquake Insurance Tribunal facing insurers armed with senior lawyers including Queen’s Counsel (QC).
Frustrated claimants in tears as they describe the stress of a long insurance battle.
These are among the scenes the tribunal has witnessed since being launched by Government in June.
About 90 homeowners have so far applied to put their claims before the tribunal, tasked with helping homeowners bogged down in disputes. Some have been transferred from the High Court.
During that time 10 homeowners have managed to settle their claims without a tribunal ruling having to be made. Some cases have been withdrawn. One decision has been made, but still requires a point of law to be decided by the High Court before the claim can be settled.
One case has gone through the hearing process, the first yet concluded for the tribunal, with a decision expected in January.
A handful of cases were rejected as not meeting the tribunal’s criteria. The rest are working their way through the tribunal process.
The tribunal is intended as a cost-free and quicker option for homeowners and insurers mired in disputed quake claims, including those already in the court system.
It is headed by Chris Somerville, a retired District Court judge who sits full-time while two lawyers handle cases part-time. Somerville says the process takes longer than many homeowners expect.
‘‘Some people have unrealistic expectations about what the tribunal can do – they think we can read the reports and make a decision, but we have to hear from experts on both sides and then make a decision,’’ he says.
‘‘It probably takes longer than they think, but it’s still quicker than going to court.’’
The service is free for claimants who can bring a supporter or advocate with them, but any legal or other professional representation must be paid for unless owners qualify for legal aid, which very few have so far.
Somerville says trying to redress the balance for homeowners without legal representation has been one of their big challenges, when the insurers have top lawyers at their service.
Some claimants already have large bills for lawyers and other experts from being in the court system.
‘‘The owners themselves are often financially exhausted and are coming without a representative. Some insurers have arrived with a QC,’’ he says.
‘‘It makes it hard for the tribunal because it’s easier when both the parties have representatives to question witnesses.
‘‘If they don’t have a representative the tribunal gets more involved in asking questions than would be acceptable in the court process. Facts must be properly tested. The challenge is to be able to deal with that person and address the issues and still be impartial and fair.’’
To try help homeowners, the tribunal has now arranged for extra support from the Greater Christchurch Claims Resolution Service (GCCRS), which provides its own mediation and advice as well as a voluntary service where an independent decision-maker makes a binding decision.
Previously the GCCRS has provided some claimants going to the tribunal with a supporter, but sending advocates would be a new service.
Somerville says the cases settled so far have been the more straightforward ones. ‘‘After a few days of evidence, you get a feeling for where it is going and parties have a better understanding. People get a reality check and people shift their position – this has happened on both sides.’’
Cases involving Earthquake Commission claims appear to be the quickest to solve as they involve smaller amounts, he says.
Other cases are likely to take a lot longer, including some managed repair cases involving multiple issues and sums of more than $1 million. One of the homes is still in need in fixing after three rounds of repairs. ‘‘Some of these cases are massive. We had a number of highly complex cases referred to us by the High Court that could take six months.
‘‘Our disputes are quite entrenched but they also involve difficult issues on which homeowners and insurers are taking opposing views.’’
The tribunal brings in experts such as structural and geotechnical engineers, builders and valuers to give guidance, ask questions and interact with witnesses.
Rather than sitting for adjacent days, the hearings stop and start as information is gathered and considered, a process Somerville says is quicker in the long run.
The tribunal can take legal questions to the High Court as cases progress, and there are High Court days set aside for such matters.
One example is the issue of managed repairs – who pays to remedy a botched repair if the repairer is out of business, or in liquidation? The High Court will consider this question for the tribunal in February, and its judgment could unblock multiple disputed claims and lead to settlements.
‘‘We have no idea how many more of these cases are out there when claims haven’t yet been made,’’ Somerville says.
Another common issue is what benchmark to use for setting floor levels, especially where the quakes shifted land levels or where homes have an increased flooding risk.
The tribunal does not award costs except in exceptional cases, however claims for costs can be referred to the courts.
While the tribunal is a public process, to date none of the outcomes have been made public as they have been settled by agreement without a judgment needed. Any judgments made will be posted on the tribunal’s Justice Ministry website.
Somerville says as well as the complexity of some of the claims, what has struck him most has been witnessing the effects on homeowners of a long insurance battle.
‘‘Everybody is frustrated. I’ve had quite a few people, especially men, in tears.
‘‘One man was calmly describing the damage to his home and the effects of everything on his family, but he broke down and cried when I asked him about the judicial process.’’
Somerville says he has been ‘‘surprised how nice everybody is’’ despite their experiences.
‘‘They are just ordinary people who have had to deal with so much, and with so much stress.’’
In 2020 the tribunal will receive a boost with more appointees to hear claims. With applications from claimants now coming in at a faster rate, the tribunal has interviewed lawyers for up to five extra positions starting in March or April.
‘‘Everybody is frustrated. I’ve had quite a few people, especially men, in tears.’’ Chris Somerville Canterbury Earthquake Insurance Tribunal