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Dismay as Southern Response fights on

NZ Newswire logoNZ Newswire 30/01/2017

Lawyers for quake-affected Canterbury residents are dismayed that Crown-owned insurance company Southern Response is fighting a court ruling allowing them to bring a class action law suit against it for breach of contract.

The High Court allowed the suit to proceed last month after action from 40 individuals who said Southern Response consistently delayed house repairs and underestimated claims from the 2010 and 2011 Canterbury earthquakes.

Grant Cameron, a partner at GCA Lawyers which is representing the policyholders, said the appeal against the decision "was another attempt by the insurer to delay the inevitable".

"We can only speculate that it has chosen to appeal the recent judgment to buy it more time, in the hope it might settle many other claims for undervalue, before the court has had a chance to rule on the fundamental issue," he said.

"We consider it absurd for the insurer to publicly claim that it remain committed to working to settle claims fairly and as quickly as possible, when after six years hundreds remain unsettle."

Southern Response was established when insurance company AMI considered it did not have sufficient reserve funds or reinsurance to cover its liability from the canterbury earthquakes.

The Crown injected $500 million and provided access to further funding, AMI was restructured, and its day-to-day insurance business sold to Australian insurance group IAG. Its liability from the Canterbury earthquakes transferred to Southern Response.

In December it said it had settled 81 per cent of 8000 over-cap house claims and 98 per cent of 21,701 out-of-scope claims from the quakes.

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