A "class action" or “representative action” is a court proceeding brought on behalf of a group of people who have the same or similar legal rights. One or more people in the group act as the representatives of the whole group. These representatives are called the “plaintiffs”. The people in the group are called “class members”.
Class actions can provide access to justice for people who may not effectively be able to bring their own individual claims, for example because of the time and cost involved. They can make litigation more efficient, fairer and more cost-effective, because the class members may share resources such as lawyers and the cost can be spread across the whole group.
This class action is a claim for damages (i.e. compensation) from Southern Response for allegedly misleading its policyholders about the estimated cost of repairing or rebuilding their houses damaged in the Canterbury Earthquakes.
The claim alleges that because of Southern Response’s misleading behaviour, policyholders ended up settling their insurance claims for much less than they were entitled to.
Mr and Mrs Ross, who are the representative plaintiffs in the class action, have filed the claim against Southern Response for misrepresentation, breach of the Fair Trading Act (misleading and deceptive conduct), and breach of good faith. The claim is filed on Mr and Mrs Ross’ behalf and also on behalf of other policyholders who are in similar circumstances.
The Rosses seek (for themselves and for all class members) compensation for the difference between what Southern Response told policyholders was the estimated cost to repair / rebuild their home, and what the actual estimated cost was.
The class action alleges that Southern Response has acted incorrectly in the following ways.
In a 2015 court decision, the Supreme Court of New Zealand held that policyholders who chose the “Buy another house” option under the insurance policy were entitled to receive additional sums for contingencies and design fees.
After the Supreme Court of New Zealand decision, Southern Response decided that going forward, it would pay those additional sums to all policyholders who settled after 1 October 2014. However, it would not pay anything more to policyholders who settled before 1 October 2014, because it said those claims “were settled in good faith on a full and final basis”.
Relevantly, for those affected ‘pre-1 October 2014 settlement’ policy holders, the Christchurch High Court has more recently considered an individual claim brought by an insured couple against Southern Response, alleging that Southern Response had engaged in misleading and deceptive conduct and had misrepresented the extent of the entitlements available under the policy in the context of a pre-1 October 2014 settlement. In that case Justice Gendall found that, by providing an abridged DRA that led the insureds to think this was the complete rebuild cost, Southern Response had engaged in misleading and deceptive conduct. In delivering judgment his Honour stated that,
"Editing or redacting parts of such an important assessment document, and then suggesting it is the complete and only assessment of total rebuild cost as occurred here, is misleading and deceptive".
This recent High Court of New Zealand decision is encouraging and serves as a persuasive (but not binding) precedent for the Court to have regard to in determining the similar claims being made in this class action against Southern Response.
This class action is brought on behalf of policyholders who settled with Southern Response before 1 October 2014.
Brendan and Colleen Ross have agreed to act as representatives of the class members affected by Southern Response’s actions.
Their home was located in the Christchurch residential Red Zone in and was damaged beyond repair during the Canterbury Earthquakes. Their house was insured by AMI Insurance prior to the earthquakes, and Southern Response took over their insurance claim afterward. The disclosed DRA that Southern Response sent to Mr and Mrs Ross showed an estimated rebuild cost of $362,354.
However, the undisclosed DRA included additional costs bringing the total estimate to $475,727. Southern Response never told Mr and Mrs Ross about the undisclosed DRA and did not send them a copy. Mr and Mrs Ross chose the “Buy another house” option under their policy and settled their claim with Southern Response for $362,354 (less EQC payments and excesses).
Brendan and Colleen Ross are the plaintiffs. They sue in their own capacity and as representatives of the class members.
The defendant is Southern Response Earthquake Services Ltd (Southern Response), a company now wholly owned by the New Zealand government.
To be eligible you must be within ‘the class’ approved by the Court in its Representative Order. Broadly speaking, you are eligible to participate in the class action if you:
The Representative Order is the order made by the Court to establish who is eligible to take part in the class action. On 16 September 2019 the Court of Appeal expanded the representative order made in the High Court, setting out:
The specific wording of the Order is:
This will not affect your ability to become or remain a class member.
If your house was in the Christchurch red zone, the New Zealand Government gave you two options:
If you took the land only option and entered a settlement agreement with Southern Response prior to 1 October 2014, you may be eligible for the class action.
If you took the house and land option, you cannot join the class action. This is because the New Zealand Government took over your insurance claim and so you would not have entered a settlement with Southern Response.
If you are not sure which applies to you, contact GCA Lawyers for assistance.
You do not need any documents to become a class member. If you become a client of GCA Lawyers you can ask us to file a Privacy Act request on your behalf to obtain the necessary documents from your Southern Response file.
That said, if you think you may be a member of the class action you must keep all documents that you have been given by Southern Response and all communications you have had with that company. The most important documents are the DRA that Southern Response sent you, any accompanying correspondence, and your settlement agreement with Southern Response.
As the case progresses GCA Lawyers will keep registered clients updated about developments through our online client portal. GCA Lawyers clients (who have accepted our Client Agreement) receive email notification when a new update is available.
Of course, should clients of GCA Lawyers have any questions that are not answered by GCA Lawyers updates or FAQs, you can speak to a lawyer about the claim by emailing [email protected] or by ringing GCA Lawyers on 03 365-1347 during business hours.
In this class action, the claim is for the difference between the cost estimate in the disclosed DRA, and the higher estimate in the undisclosed DRA payable under the policy of insurance. Our information suggests the average difference may be about $100,000. However, we cannot advise you about the total size of your claim, or how much of that might be payable, without reviewing the documents from your Southern Response file and speaking to you in person.
In this class action, you will not be able to seek compensation over and above the difference between the estimates in the two DRAs. If you want to pursue such compensation, you need to seek independent legal advice and consider bringing your own separate claim.
There has already been a preliminary hearing in the Christchurch High Court, in November 2018. That hearing concerned Mr and Mrs Ross’ application for leave to bring the claim as representatives of other class members. In December 2018, the Christchurch High Court issued a judgment granting Mr and Mrs Ross leave to bring the claim against Southern Response on behalf of all persons within the class definition.
A copy of the judgment can be found here here.
An appeal was filed regarding some of the details of the Christchurch High Court decision and was heard in August 2019. In a judgment dated 16 September 2019 the Court of Appeal expanded the definition of the class so that everyone who qualifies to take part in the class action is automatically represented by Mr and Mrs Ross, unless they close to opt out of the class action. The Court of Appeal also confirmed that people who settled their insurance claims on the basis of a repair are eligible to take part in the action too alongside those who settled their insurance claim on the basis of a rebuild.
A copy of the judgment can be found here.
Registering means that GCA Lawyers can contact you and inform you about any developments in the class action. To do that, we need your email address and/or phone number so that we can get in touch.
You will need:
The date you settled will usually be recorded on the Settlement and Discharge Agreement which you entered into with Southern Response at the time your claim was resolved.
Because you are registering your interest, the information should be as accurate as possible and completed to the best of your abilities. Use whatever material you have and what you can recall to fill in the information as best you can.
If you choose to become a client of GCA Lawyers we can assist you to obtain this information by making a Privacy Act request on your behalf. Alternatively you may wish to make your own Privacy Act request with Southern Response. If you do so please make sure you keep this information separate from any documents you already hold.
No, it costs nothing to register.
No, registration will not make you a client of GCA Lawyers. It just gives GCA a way to initially inform you more about the class action.
Yes, if you change your mind you can deregister by emailing “I would like to deregister” to [email protected] . If you deregister you will no longer receive emails about the class action.
The insured property is the house that was covered by an AMI insurance policy, damaged in the Cantebury earthquakes and in respect of which your insurance claim was settled.
Any of the trustees can register to be informed about the class action.
You can register an additional property by clicking on the “Add Additional Property” tab in the Insured Property Information stage.
GCA Lawyers are a Christchurch, New Zealand law firm founded in 1986. We specialise in complex litigation and dispute resolution, with a particular focus on class actions.
Over the last 28 years we have successfully brought a large number of group or class actions. These include a 1992 claim on behalf of clients of collapsed Wellington law firm Renshaw Edwards, as they sought to recover funds lost through fraud from the Solicitor Guarantee Scheme operated by the New Zealand Law Society, claims in 1996 against the Crown following the Cave Creek disaster, and claims against the Crown in 2000 relating to historical abuse of patients at Lake Alice Hospital. Each of these claims was successfully settled on behalf of group members.
GCA’s most recent class action was also a claim against Southern Response, brought on behalf of policyholders whose insurance claims Southern Response had refused to settle. That action was settled with the Crown in mid-2018.
For more information about our firm, go to www.gcalawyers.com.
GCA Lawyers have the track record and expertise to bring this class action to a successful conclusion.
The plaintiffs, Mr and Mrs Ross, have engaged GCA Lawyers as their solicitors to bring the class action.
By becoming a client of GCA Lawyers, you too would be engaging the firm that is bringing this action. We will then make sure you are able to participate in the class action and give you advice about your rights, including in relation to any settlement.
If you do not become a client of GCA Lawyers, we will not be able to give you advice about the class action or otherwise assist you with your individual claim.
To participate in the class action it is not mandatory to become a client of GCA Lawyers although you may wish to do so for the reasons set out above.
It doesn’t cost anything upfront to become a client of GCA Lawyers.
However, GCA Lawyers is charging legal costs for bringing the class action. Those costs are being paid upfront by CFA, the litigation funder that is funding the class action. If the class action is unsuccessful, you will not have to pay anything.
If the class action is successful and you receive a share of a payment made by Southern Response under a settlement or a court judgment, then your share of GCA Lawyers’ legal costs and the litigation funder’s commission will be deducted from your share of the payment, under GCA’s Terms of Engagement and CFA’s Funding Agreement. In other words, if you choose to become a client of GCA Lawyers, there are no circumstances in which you will ever have to pay any legal costs/commission out of your own pocket. Any such legal costs/commission payable on a successful outcome are paid only from recovery of damages and costs obtained from Southern Response.
Yes, as CFA is funding all the costs of the action (including all the legal costs) you will need to accept the CFA Funding Agreement before becoming a client of GCA Lawyers.
Yes, Mr and Mrs Ross obtained independent legal advice about GCA Lawyers’ Terms of Engagement, and CFA’s funding terms, from a separate Queens Counsel who has expertise in class actions.
You have the right to seek advice about the Terms of Engagement and the Funding Agreement from lawyers other than GCA before agreeing to these. This is not a requirement however we would encourage you to do so if you have any unresolved questions or concerns.
CFA is a litigation funding company with operations based in Australia. Established in 2009, it offers in-depth knowledge and understanding of the litigation funding industry, and provides practical and cost effective solutions for managing and funding litigation that would otherwise be too expensive for individual claimants.
CFA is wholly owned by Maurice Blackburn, Australia’s leading class action law firm.
Where someone has a legal claim, but either can’t afford to bring the claim, or doesn’t want to take the financial risk, a litigation funder may agree to support the claim. This typically means the funder meets all costs of bringing the claim (including legal fees), and agrees to pay any costs that might be incurred if the claim is unsuccessful (including paying the other side’s legal fees).
This means the litigation funder takes all the financial risk. If the claim is unsuccessful, the claimant will not have to pay anything at all. However, in exchange for taking that risk, the funder is usually entitled to be paid back what it has spent, plus a share of the proceeds of the claim, if the claim is successful.
The principal benefit of litigation funding is that it can provide access to justice for claims that would not otherwise have come before the courts because individual litigants could not afford to do so. By engaging with a litigation funder, the financial risks and burdens of litigation are removed and the claim can then be progressed and determined on its merits before the courts.
First, CFA has an impressive track record of funding successful litigation. Second, as a wholly owned subsidiary of Maurice Blackburn, CFA has the benefit of highly experienced class action litigators. Having agreed to support this class action, CFA has the resources and commitment to help see the case through to a successful conclusion.
No, you will not need to pay anything to join the class action or pay any costs, along the way. All costs of the action (including the legal fees) will be met at first instance by CFA.
Yes, but not out of your own pocket. Under the Funding Agreement, if the action is successful you will have to repay CFA your share of the costs it has paid to support the class action, plus a commission (i.e. a percentage of the monies recovered). However any costs that you are required to pay to CFA will be deducted out of the money Southern Response agrees to pay, or is ordered to pay if the claim is successful. In other words, you will not be required to pay anything other than from the amounts paid by Southern Response. For details, see the Funding Agreement at clause 11.1. In other words, there are no circumstances in which you will have to pay any legal costs/commission out of your own pocket. Any such legal costs/commission payable on a successful outcome are paid only from recovery of damages and costs obtained from Southern Response.
No, you will not have to pay any costs if the class action is unsuccessful. These are covered by CFA.
GCA Lawyers have engaged Philip Skelton QC and Kelly Quinn as Counsel for the plaintiffs. Counsel are the lawyers who argue the case in court. The lawyers (GCA Lawyers and Counsel) are paid fees on an hourly rate basis by CFA.
If the action is successful, in addition to their hourly rates the lawyers will also be paid Deferred Costs and a Success Fee.
Deferred Costs include part of the lawyers’ hourly rates that are not paid each month, but are only paid at the end of the proceeding if the class action is successful. The Deferred Costs may also include payment for some of the work that the lawyers did on the class action before CFA became involved, when the lawyers were working without being paid.
The Success Fee is a variable bonus payment that depends on how much money is recovered from Southern Response, and the number of Class Members that get to share in that recovery. In simple terms, the more Class Members are successful, the larger the Success Fee will be. The Success Fee will be shared between the lawyers as provided in their terms of engagement.
Upon success, CFA will recover the expenditure it has incurred in supporting the action (the Project Costs), plus a percentage of the money recovered from Southern Response. For details, see the Funding Agreement at clause 11.1.
If the Frequently Asked Questions have not addressed your query you can find out more information by ringing 03 365-1347 during business hours or by contacting GCA Lawyers at [email protected].