Govt won’t appeal Dodds decision
The Government will not appeal an earthquake insurance court decision that set a ‘‘powerful precedent’’ for a class action that may involve thousands of other Christchurch homeowners and cost taxpayers more than $400 million.
In August 2019, the High Court found Government insurance company Southern Response had engaged in misleading and deceptive conduct that misrepresented Karl and Alison Dodds’ insurance entitlements.
The insurer had produced two differing detailed repair/rebuild assessments, or DRAs, which outlined the costs of rebuilding or repairing their home, and only shown them one which did not include some costs.
The Government appealed to the Court of Appeal, saying it needed legal clarity because of the thousands of other cases in a similar position. The Court of Appeal sided with the Dodds in September. The Government could have appealed further to the Supreme Court, but announced on yesterday that it would not.
Grant Cameron, the lawyer representing a separate class action disputing the same DRA issue, said the Dodds’ case provided ‘‘a powerful precedent’’.
The action could involve about 3000 members, with the potential to cost the Crown hundreds of millions of dollars.
Karl Dodds said he hoped the Government would set up an inquiry into Southern Response’s behaviour.
The process had been tough on the couple, he said. Alison Dodds suffered from a medical condition caused by stress and the court action had not been helpful.
He said they might pop the top off a bottle of bubbly to celebrate.
Greater Christchurch Regeneration Minister Megan Woods had called the couple this morning to apologise on behalf of the Government, he said.
Their lawyer, Peter Woods, echoed the hope the Government would set up an inquiry into the way Southern Response was set up and how it settled claims.
It was possible a similar situation could happen again in the future and there were lessons that could be learned, he said.
Earthquake Commission Minister Grant Robertson said officials were working through what the decision would mean for other Southern Response policyholders.
Southern Response would pay the damages awarded by the courts to the Dodds shortly, he said, and would meet its legal costs for the appeal. Damages are about $170,000.
Southern Response general manager Casey Hurren said the company accepted the Court of Appeal’s findings.
‘‘While we regret that Mr and Mrs Dodds have been in the middle of this, we are pleased that this court decision has provided us with some of the principles on which we will be able to base our response to other affected policyholders.’’
The Dodds’ Warren and Mahoney-designed Huntsbury home was deemed uneconomic to repair after it was damaged in the February 2011 earthquake.
In December 2013, they chose to settle their claim for $894,937, including the EQC component, based on the DRA they were presented, and bought elsewhere.
The Dodds later learned of the second ‘‘office’’ copy of the DRA included undisclosed expenses such as demolition and professional fees, which would have bought the total up to $1.87m.
Southern Response was created by the Government to settle quake claims when insurer AMI failed in 2011.