Group Action Against EQC - Expressions of Interest Sought

Media Release 16 September 2013

Group Action Against EQC - Expressions of Interest Sought

The Christchurch office of national law firm Anthony Harper is gauging the level of public support for a possible group action against EQC.

Lawyer Simon Munro says a meeting yesterday in Christchurch confirmed that a significant number of people are concerned either about the amount of money EQC is offering as a cash settlement or are worried about the work EQC is planning to undertake on their homes.

Munro says the move has come about after a number of professionals raised concerns about the approach that EQC is taking with regards to the standard of reinstatement EQC is undertaking.

“It is quite clear that EQC’s obligations are to repair a home to “as new”, under the Earthquake Commission Act, however in many cases this is not happening,” he says. “The consequences of EQC getting this wrong are significant. Many home owners may see the equity in their homes eroded.”

Simon Munro says the firm is confident they can establish that EQC’s approach is wrong and he hopes the situation can be corrected without going to court.

“If we can change EQC's approach without the need for court action, that is the ideal outcome. If litigation is necessary, our intention would be to seek a declaratory judgment from the Court, confirming the appropriate standard of repair that EQC is obliged to meet. This is not about seeking damages, it’s about making sure things are done correctly and as required by law.”

Munro says a number of issues are continuing to cause concern including where the repair of pre-existing damage is necessary in order to reinstate earthquake damage in accordance with the Building Code or other applicable laws, but is not being allowed for by EQC, and in some cases an inadequate settlement is being forced on homeowners by EQC.

“This includes cases involving replacement of old wiring for example where people are being told EQC will not replace wiring and people are having to make payments to EQC before EQC will start repairs. Other cases involve EQC forcing a cash settlement on homeowners where EQC considers there are potential weather tightness issues. If there is work that must be done in reinstating earthquake damage, that must be undertaken by EQC or included in the value of any cash settlement. The Act is not being correctly applied in these and a number of other situations and that needs to be corrected,” he says.

Those who would like to register their interest, are encouraged to contact Anthony Harper in Christchurch on 379 0920, or please email your details (name, address of the property, and contact details) to reception@ah.co.nz Registration will be on a no-obligation basis.

ENDS

Additional:

What issues do we think are relevant?

Some of the more common issues that we have come across so far include:

o situations where the standard of repair that EQC is aiming for has been stated by representatives of EQC as being “like for like” or “pre-earthquake standard”, rather than the legal standard, which is "as new, modified to comply with applicable laws".

o where the repair of pre-existing damage is necessary in order to reinstate earthquake damage in accordance with the Building Code or other applicable laws, but is not being allowed for by EQC (and in some cases an inadequate settlement is being forced on homeowners by EQC). This may include cases involving:

replacement of old wiring;

foundations partly damaged by earthquake and also suffering pre-existing subsidence damage;

repair of weather tightness (leaky home) issues;

repair of parts of a house which had been constructed or renovated without a necessary building consent; and

repairs necessary to raise the foundations of a house to a sufficient level in order to comply with any new flood hazard area requirements.

o where the repair strategy proposed is unlikely to return the house to an "as new" condition. This may include situations where:

verticality of walls is not being corrected;

no foundation repair is proposed despite earthquake damage to the foundations; and

proposed foundation repairs would not reinstate the foundation to the required standard.

This is not an exhaustive list, just some examples of the issues that we have come across. If you are dealing with EQC in relation to a different issue, we may be able to address that as well.

What are we going to do?

We have already been in touch with many home owners who are very concerned that the EQC process is not going to fix their house properly. The next step will be to send out a questionnaire to all interested home owners to identify:

o the areas where home owners believe EQC is not meeting its legal obligations;

o how many home owners have these problems with EQC; and

o how many home owners might wish us to represent them about these issues.

Once we have got the questionnaires back, we will reply with an update and details of a meeting to discuss these issues.

What should you do?

If you would like to register your interest in joining a group action against EQC, please email your details (name, address of the property, and contact details) to reception@ah.co.nz or call Anthony Harper on 379 0920 (Registration will be on a no-obligation basis).

What are we trying to achieve?

• To establish whether EQC’s approach is wrong.

• If we can change EQC's approach without the need for court action, that is the ideal outcome.

• If litigation is necessary, our intention would be to seek a declaratory judgment from the Court, confirming the appropriate standard of repair that EQC is obliged to meet.

But isn’t EQR (Fletchers) doing the repairs, why not a group action against them?

EQC is the organisation which has the responsibility for repairs under the Earthquake Commission Act. Fletchers has been contracted to carry out the work and is doing so based on instructions from EQC. Gerry Brownlee's office has confirmed in writing what is required under the Act in a general sense but somewhere between the Minister and what is being communicated to EQR contractors the message is not getting through. We need to get that clarified and corrected as soon as possible.

Are you doing this pro bono?

All work to date has been pro bono, that includes the other professionals and experts we have been consulting with. Unfortunately that is not sustainable and there will be costs that must be covered as we progress. That is one of the reasons a group action is being considered as this will also help spread the costs for those involved.

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