Vero wins earthquake court case – 13 years later

Vero wins earthquake court case – 13 years later | Insurance Business New Zealand

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Vero wins earthquake court case – 13 years later

Court delays are causing insurers “a lot of frustration and cost,” says expert

Vero Insurance New Zealand recently won a court case described by one global legal firm as “a line in the sand on the obligation to prove what is the appropriate repair strategy for natural disaster damage.” The disputed insurance claim concerned two Christchurch commercial buildings damaged 13 years ago by the Canterbury earthquakes.

Vero, owned by Suncorp Group, has a significant market presence in New Zealand as a provider of insurance coverages via brokers.

The Court of Appeal upheld an earlier decision by the High Court and dismissed the appeal by the owners of Moorhouse Commercial Park (Moorhouse). Moorhouse unsuccessfully argued that Vero breached its contract under Moorhouse’s insurance policy including failing to accept the extent of the earthquake damage.

Moorhouse also argued that Vero’s “epoxy repair” methodology would not repair the buildings to the policy standard.

Court capacity issues

The case – 13 years in the making – also underscores how drawn out disputes over earthquake-related repair issues can be when they become a court battle.

However, insurance disputes of all kinds can take a long time making their way through New Zealand’s court system.

Ben Sanders (pictured immediately below), partner at another global law firm, Kennedys, told Insurance Business that the capacity of the courts is an ongoing issue.

“A week-long, or longer, trial in the Auckland High Court, is now Q3 2026 or later,” said Wellington-based Sanders. “This means that claims take a long time to get resolved and this causes a lot of frustration and cost for the parties involved.”

More mediation

One, arguably positive, result is that less cases are going to court.

“This has allowed mediation to take a more important role in claims and the majority of claims -outside of regulatory prosecutions – are being resolved by way of a negotiated settlement,” he said.

Sanders said dispute resolution cases that involve insurers could concern almost any entity from “the full spectrum” of different businesses and governments across the country.

“The range is very broad,” he said. “Almost all civil cases in Court and regulatory complaint processes could have an insurer involved.”

Sanders said this can include general liability claims resulting from damage to property, claims against professionals like lawyers or accountants and regulatory prosecution in areas like health and safety and resource management.

“As well as disputes arising in the areas of employment, cyber, construction and health care,” said Sanders.

Dispute systems: NZ vs Aus

Sander’s colleague and partner in the firm’s Auckland office, Kim Burkhart (pictured immediately below), said a number of these cases can play out in a similar fashion to cases in other jurisdictions.

“There are a lot of similarities and in some areas, such as cyber – the Kennedys APAC offices work together to offer a regional service,” said Burkhart.

However, there are some key differences, she said, in the dispute resolution system in New Zealand compared to Australia.

“One difference is that the class action space in New Zealand is still in its infancy so there are not frequent large scale class actions like there are in Australia,” said Burkhart.

However, this dispute area is starting to grow.

“Another difference is our accident compensation scheme that provides no-fault cover to everyone in New Zealand and eliminates litigation for personal injury,” said Burkhart.

When insurance claims become court battles

The Denton’s report on the Vero court case said it “settled the law” on a “greatest hits” of earthquake-related issues including confirming the use of epoxy injection to repair concrete cracking and whether an inaccessible but damaged wall requires cosmetic finishing.

Reports suggest there are still many 100s of unsettled Canterbury earthquake insurance claims, some are likely involved in ongoing court battles. Others could still go to court.

The Canterbury Earthquake Sequence (CES) was New Zealand’s most costly natural catastrophe. The event resulted in 650,000 insurance claims and a total insured cost of more than $31 billion.

How do you see this insurance dispute involving Vero? Please tell us below

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