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Southern Response Concealment

Class Action - New Zealand

Media Release - 12 February 2020

 

Southern Response Concealment Class Action

 

Southern Response obstructs disclosure of how much it has concealed from policyholders

 

12 February 2020

 

Background

 

The Southern Response Concealment Class Action has about 3000 participants and is pursuing recovery of several hundred million dollars from the Crown.    The case commenced after Southern Response, a government entity, misled and deceived its customers when proposing insurance claim settlement terms.

 

The company deliberately withheld from its customers the true cost of rebuilding their earthquake damaged homes.    It did this by sending the customer an abridged version of its repair/rebuild estimate which left out significant cost items including:  contingencies, project management costs and design fees.    In many cases the concealed costs amounted to six figure sums.   

 

Some customers found out about the extra costs after they made Privacy Act requests and obtained copies of their Southern Response file.  Those files revealed the full repair/rebuild estimates withheld from policyholders.

 

In July 2015 the Supreme Court held Southern Response’s behaviour to be unlawful and so all policyholders expected the company to correct its gross error.  Instead, the company decided to correctly settle only those settlements that occurred after 1 October 2014 and to ignore the 3000 policyholders it now knew to have been incorrectly settled prior to that date.   

 

In August 2019, Southern Response the High Court found the company guilty of misleading and deceptive conduct and ordered it to pay Mr and Mrs Dodds more than $200,000 in damages.   

 

Despite these court decisions, in September Minister Grant Robertson claimed that, the government still needed “clarity” and Southern Response lodged appeals.    

 

Grant Cameron, Solicitor for the class action, confirmed today that contrary to years of agreed practice, Southern Response is now refusing to provide electronic copies of class action members’ documents.  

 

“For many years, policyholders’ Privacy Act requests have been generally complied with and there has been no issue about the delivery of the relevant documents.   However, with a change in senior management, Southern Response now says it is unable to provide the documents because it would, “impair the efficient administration of Southern Response””.

 

“We are gravely concerned at this development and my clients interpret this as a blatantly obstructive manoeuvre, presumably designed to further delay full and fair disclosure of how much Southern Response has concealed from its policyholders.   It’s absurd that a government agency that knew of these obligations, would now claim that it has no resources with which to properly comply.”

 

Brendan Ross, the class action representative said, “the position is outrageous as not only has the company concealed vital information, and withheld payment of our entitlements, but it now proposes that our lawyers must go around and sort through their files to find the truth.    That is to force the costs of finding its own information, onto class members and this just adds insult to injury”

 

“We are all very concerned about what guidance the government must be giving to Southern Response because it seems inconceivable that as the owner of Southern Response, it is not in control of the situation”.

 

Inquiries to:  Grant Cameron, 0274 323 066, or [email protected] 

Litigation update:  Supreme Court sets appeal date

17 January 2020 | Supreme Court

On 16 September 2019, in a landmark decision, the Court of Appeal ruled that Mr and Mrs Ross may bring a class action against Southern Response on an opt-out basis on behalf of all policyholders who have allegedly suffered loss due to Southern Response’s misleading and deceptive conduct.

In October, Southern Response applied to the Supreme Court for permission to bring an appeal.  The Supreme Court has now given Southern Response permission to appeal, and has set a date of 23 and 24 March 2020 to hear the appeal.  Click here to download the Supreme Court judgment granting leave to appeal.

In the hearing, Southern Response will try to overturn the Court of Appeal’s decision allowing the opt-out class action to proceed against Southern Response.  The class action legal team will argue that the Court of Appeal’s judgment should stand.

Because of the upcoming Supreme Court hearing, the parties have agreed to stay (i.e. to put on hold) the application for a common fund order in the High Court, which had been scheduled for a hearing on 16 and 17 March 2020.  The stay will be lifted after the Supreme Court appeal is decided.  Click here to download the High Court’s minute.

In other news, Southern Response is also appealing the decision in Dodds v Southern Response, in which the High Court found that Southern Response had engaged in misleading and deceptive conduct and misrepresentation.  That appeal will be heard in the Court of Appeal in May 2020.  The High Court’s findings in the Dodds case are similar or identical to the allegations Mr and Mrs Ross are making in the class action.

Media Updates

Thousands of homeowners will now be automatically included in class action against Southern Response

16 September 2019  Jordan Oppert

Thousands of Canterbury homeowners will be automatically included in a Class Action lawsuit against insurer Southern Response, the Court of Appeal has ruled today. 

Click here for the One News article

Source:   One News


 

Lawyers welcome class action in Southern Response test case 

16 September 2019  Lisa Owen

A court decision that means thousands of home owners battling Southern Response will automatically be clumped together in a class action is being applauded by lawyers taking the test case.

Click here for the RNZ Checkpoint article

Source:  RNZ Checkpoint


 

Landmark ruling allows NZ's first 'opt out' class action lawsuit against Southern Response 

16 September 2019  Michael Hayward

The courts have made it easier for people to join a group lawsuit which could cost the Government hundreds of millions of dollars.

Click here for the Stuff article

Source:   Stuff


 

Court of Appeal rules on Southern Response appeal 

16 September 2019  RNZ

In what is being hailed as a landmark ruling, the Court of Appeal has decided a class action against Southern Response can proceed on an opt out basis.

Click here for the RNZ article

Source:   RNZ


 

Ross v Southern Response Earthquake Services Limited [2019] NZCA 431

16 September 2019  | Courts of New Zealand

In a landmark decision this morning, the Court of Appeal has allowed the class action formed by the Rosses to proceed on an opt-out basis.  This means that every eligible policyholder is now automatically part of the class and able to benefit from the representative proceedings.  

The Court of Appeal also recognised that people whose houses were considered repairable were in the same situation as those whose houses were deemed rebuilds, and so they too are now part of the action.

Click here to download the full judgment text

Source:  Courts of New Zealand


 

Full interview: CEO explains why they're appealing court decision that found they acted in misleading and deceptive way 

13 September 2019  John Campbell

The Government's earthquake insurance company Southern Response is appealing a landmark court decision which found it had acted in a misleading and deceptive way. 

Click here for the One News article

Source:   One News

 

Earthquake insurer Southern Response off to Court of Appeal over ruling it's been deceptive, misleading 

12 September 2019  Simon Dallow, Thomas Mead

The Government's earthquake insurance company Southern Response is appealing a landmark court decision which found it had acted in a misleading and deceptive way. 

Click here for the One News article

Source:    One News

 

Government urged to pay out Christchurch earthquake claimants allegedly underpaid by insurer, Southern Response  

9 September 2019  John Campbell

The lawyer acting for a group of up to 3000 Christchurch earthquake claimants who have allegedly been underpaid by Southern Response insurance company, is calling on the Government to act quickly to ensure pay outs are made. 

Click here for the One News article

Source:   One News

   

Christchurch couple misled by Southern Response speak out 

4 September 2019  Lisa Owen

A couple who defeated the government's quake insurer in the High Court say its deceptive actions were nefarious and they want an apology and inquiry. 

Click here for the RNZ Checkpoint article

Source:   RNZ Checkpoint


 

Quake-hit homeowners baffled a Southern Response bosses silent

21 August 2019  Logan Church

Another day, another Southern Response no-show. And Christchurch homeowners are asking where the company's chief executive Anthony Honeybone and its board chairman Alister James are, and why neither are speaking publicly.

Source:   RNZ Checkpoint


 

Why the latest High Court judgment on Southern Response is ‘extremely important’

17 August 2019  Sol Dolor

The Christchurch High Court has found that Southern Response behaved deceptively in a case that a leading litigation lawyer said has far-reaching effects.

Justice David Gendall said in a judgment handed down Friday that the Crown-owned earthquake claims company was disingenuous in the way it presented the entitlements through a document called a Detailed Rebuild Assessment (DRA) for Karl and Alison Dodds’ earthquake-damaged home...
Click here to read full article at NZ Lawyer Magazine

 

Source:  NZ Lawyer Magazine


 

High Court slams Southern Response for “deceptive conduct”

17 August 2019 Roxanne Libatique

The Christchurch High Court has found that controversial earthquake insurer Southern Response behaved deceptively, Stuff.co.nz reports.

The case revolved around Southern Response’s policy of producing two differing detailed repair/rebuild assessments (DRAs) that indicate the costs of repairing or rebuilding a customer’s home.

High Court Justice David Gendall found that Southern Response engaged in misleading and deceptive conduct and misrepresented entitlements during a Christchurch earthquake claim for a damaged home – resulting in customers Karl and Alison Dodds receiving much lower insurance payments than they were entitled to...  Click here to read full article at insurancebusinessmag.com

 

Source:  Insurance Business Mag


 

Dodds v Southern Response Earthquake Services Limited [2019] NZHC 2016

16 August 2019  | Courts of New Zealand

The High Court of New Zealand has upheld a Christchurch couple's claim that their insurer engaged in misleading and deceptive conduct and misrepresented their entitlements in processing their earthquake insurance claim. Southern Response was the insurer that dealt with the couple's claim for damage to their house in the Canterbury earthquake sequence of 2010/2011.

Click here to download the full media release

Click here to download the full judgment text

 

Source:  Courts of New Zealand


 

Southern Response engaged in misleading and deceptive conduct, High Court ofinds

16 August 2019  |  Michael Hayward

A lawsuit against government-owned Southern Response could cost millions in earthquake insurance claims settlements.   Click here to read full article

 

Source:   Stuff.co.nz


 

Government-owned insurance company lambasted by High Court for ‘deceptive conduct’

16 August 2019  |  John Campbell

Southern Response was formed to pay out Christchurch earthquake claims.

 

Source:   1 NEWS


 

Maurice Blackburn bankrolls Southern Response class action

11 May 2019  |  Sol Dolor

Maurice Blackburn Lawyers has backed the class action against New Zealand government-owned Southern Response.

Claims Funding Australia (CFA), the litigation funding arm of Maurice Blackburn, has signed an agreement with lawyer Grant Cameron to provide funding for the class action against the earthquake insurance settlement company.

Last year, Cameron’s firm, GCA Lawyers, filed proceedings and got the go-ahead from the High Court for the class action.

About 3,000 people may have been affected by alleged underpayment of costs of damage as a result of the Canterbury earthquakes, Cameron told Newshub. He said that most among the group, which could be owed as much as $300m, may not even know they did not receive the full payments they were owed.

The funding agreement means that “the best class action minds in the Southern Hemisphere have looked closely at this matter and they’ve decided to support it,” Cameron said.

Policy holders who settled with Southern Response before October 2014 may be qualified to participate in the action, CFA said.

 

Source:  NZ Lawyer Magazine


 

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