Christchurch Earthquake 2011
A successful legal challenge against insurers could open the door for hundreds of settled earthquake claims to be revisited, a Christchurch lawyer says.
Ministry of Justice figures show 53 cases were filed in the High Court last year, with more than half lodged in the past three months.
Former children's television host Olly Ohlson is trying to raise more than $30,000 to challenge the insurance payout being offered for his Brooklands home. The house was deemed repairable, but the land was written off by the Government.
Ohlson felt he should be paid full replacement value if forced to rebuild elsewhere.
Dallington couple Matt and Valerie O'Loughlin have also begun raising funds to fight for their red-zoned home.
Duncan Webb, a partner at Lane Neave, said a successful case could result in some settled claims being reopened.
"If one of these cases is successful and it shows the insurer has settled hundreds of claims for thousands and thousands of dollars less than the entitlement, the real question is what happens to those people who have accepted Cera [Canterbury Earthquake Recovery Authority] offers or insurance payouts that are less than they're actually entitled to," he said.
"There's a good argument they should be revisited."
Property law experts spoken to by The Press had doubts.
Don McBeath, a partner at MDS Law, said most settlement deeds contained a "full and final" provision.
"If a settlement was perhaps contrary to a subsequent legal decision, I would have thought it would be fairly hard to overturn that because normally once you enter into contract, that becomes binding," he said.
Allowing settled claims to be revisited would open a "real can of worms" for insurers.
"I wouldn't have thought it would be an easy task to reopen [claims].
"All of this comes down to a question of interpretation of insurance policies, largely," McBeath said.
Tom Weston, QC, a litigator specialising in insurance disputes, said some cases may be revisited in certain circumstances but would be the "exception rather than the rule".
"If both parties are legally advised and enter into a settlement with their eyes open, then it's hard to see how you could go back," he said.
"You can never rule out the possibility of undoing things, but it would be the exception rather than the rule."
The red-zoning was "knotty issue" and without precedent, Weston said.
An Insurance Council spokesman said it was premature to speculate on the effect on insurers before a ruling had been made.
"They're dealing with these issues on the policy-wording basis and whatever way [the legal challenge] falls, they'll deal with it," he said.
- © Fairfax NZ News
How would you rate your quality of life?Related story: Quake stress creates the 'new vulnerable'