EQC budgets $5m for court cases in 2015/16

More than 430 cases have been filed onto the High Court's earthquake list since September 2010.
DAVID WHITE/FAIRFAX NZ

More than 430 cases have been filed onto the High Court's earthquake list since September 2010.

The Earthquake Commission (EQC) has budgeted $5 million in the next year to fight frustrated Canterbury homeowners in court.

Meanwhile, the latest figures from the High Court showed more than 430 cases had now been filed on the court's earthquake list at the end of September 2015.

EQC and IAG Insurance were each named as defendants in 14 new court cases this year, followed by Government-owned insurer Southern Response with 10 new cases filed against it. 

An earthquake claims specialist Dean Lester said homeowners would prefer to settle their claims out of the courtroom but believed EQC was not willing to have a "good faith, meaningful discussion with its customers".

He said an EQC customer interaction review from 2014 recommended EQC find ways to agree on solutions with homeowners, which Lester said EQC had publicly pledged to implement.

The report, by LSI Consulting, identified a "significant number of key gaps and issues" with the way EQC handled its customers. 

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"EQC is not operating in the way that review directed," Lester said. 

"Their mediation process is a sham, you have to be invited to do it by EQC."

He said many homeowners had found posting about EQC on social media generated them attention, Lester said.

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"Those channels are closely monitored by EQC. . . it's disgraceful that [social media] gets more attention than legitimate requests."

Lester said he had worked with more than 200 homeowners this year. Ending up in court was not what most homeowners wanted, he said. 

"EQC seems quite comfortable going to court. . . but it's an expensive and challenging task and it's costing the taxpayer too."

Labour's Canterbury spokeswoman Megan Woods asked the Minister Responsible for EQC Gerry Brownlee how much funding EQC had set aside for litigation arising from the Canterbury Home Repair Programme in the next year.

Brownlee responded, saying based on previous years' costs, $5m was budgeted for the 2015-16 financial year.

Information provided to Woods showed EQC had spent $8.5m dealing with complaints from homeowners since 2012. Brownlee said the budget for complaints and mediation for 2015-16 could not be "readily identified".

Woods said it was concerning so much money was being spent on legal costs, rather than on fixing people's homes.

"EQC seems more than prepared to go to court and that shows the disregard that ordinary people are being treated with."

An EQC spokesman said the organisation considered its mediation record a success, with an 86 per cent satisfaction response from customers. 

He said more than 90 per cent of customers who went through mediation would settle with EQC.

"It is by far a more cost effective action to take than litigation and is an independent service."

The $5m set aside was an estimate and not based on any forecast litigation, the spokesman said. 

 - Stuff

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