What do we know about the EQC land class action?

What do we know about the EQC land class action? | Insurance Business New Zealand

Claims

What do we know about the EQC land class action?

Backers the same group behind on-sold case

Claims

By
Terry Gangcuangco

Litigation lawyer Grant Shand is now handling two class actions against Toka Tū Ake EQC after the latest one certified a week ago. Who are eligible as class members, and how is the new lawsuit different from the earlier case?

EQC land class action

Under the EQC land class action, the representative plaintiffs – who were paid $22,000 for increased liquefaction vulnerability (ILV) land damage to their property following the 2010/2011 Canterbury earthquakes, instead of the actual cost to reinstate the land up to the claims cap – will seek to be compensated the full amount.

On behalf of the class, it will be argued that EQC was wrong in employing the so-called diminution of value (DOV) methodology to pay claimants what was described as substantially smaller sums.

Shand’s camp noted that, where DOV was applied, the average land claim values were $21,238 for ILV where the building remained in place and $11,584 for ILV where the building has been or will be removed. According to the claim, the Earthquake Commission Act 1993 does not say that this methodology can be used as the measure of loss for such claims. 

The Grant Shand Barristers & Solicitors principal previously pointed out that the representative plaintiffs, Lucinda McEvedy and Andrew Freer, should have been paid $160,000.

So, who can join this new representative action that is backed by Canterbury Litigation Funding Limited? In Associate Judge Paulsen’s judgment, it was ruled that the class action should proceed without the eligible members having to opt in, provided that they meet the class definition.

EQC on-sold class action

Last year, the EQC on-sold class action was approved by the High Court. Unlike the opt-out land class action, the on-sold lawsuit required eligible claimants to opt in. They had until September 22, 2023, to do this.

Also funded by Canterbury Litigation Funding, the on-sold class action relates to the properties that were on-sold after EQC assessed, repaired, replaced, or made settlement payments on them in the aftermath of the earthquakes.

“Many people who purchased these on-sold houses that were incorrectly or inaccurately assessed and/or badly repaired, relied on EQC’s settlement information that the house was correctly assessed and/or repaired,” the team behind the class action noted when the claim was put forward. “They now find that further repairs are needed to meet the standard of repair required under the EQC Act.

“Generally, where these houses are over the EQC cap, private insurers will only pay indemnity value, leaving homeowners with a shortfall to repair their houses. 

“While the government introduced the $300 million On-Sold Policy (administered by EQC) to meet this shortfall in the repair costs, this requires affected homeowners to complete repairs that are paid to homeowners in tranches with up to the final 10% not paid until the repairs are complete.”

EQC’s response

When contacted by Insurance Business about the land class action, the Crown entity acknowledged receipt of Associate Judge Paulsen’s decision. According to EQC, it is currently considering the outcome and next steps. It also went on to encourage homeowners to contact EQC directly about any EQCover concerns.

Insurers declined to comment.

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