The citizens of Canterbury are running out of time, money and feasible means of settling their insurance claims. It is now Five years post-earthquakes and with the Limitations Act looming in the background the time has come for those remaining unresolved insurance claimants to carefully consider their options. My own personal experience has left me in no doubt that what is called ‘representative action/ group action’ is the most cost effective solution to solving systemic insurance issues, which, when tackled on an individual basis are unable to produce adequate precedent  or satisfactory individual results. You may know that ‘class actions’ cannot be brought in New Zealand at present, but group litigation is possible by way of Representative action. The terms are however loosely used interchangeably.
There are already several such actions currently taking place in Christchurch. Earlier on in the process we saw a representative action for the group known as the Quake Outcasts. https://www.tvnz.co.nz/one-news/new-zealand/-quake-outcasts-win-court-battle-6254650. This group had good success all the way to the Supreme Court where it was found that the Government had treated uninsured and vacant section owners unlawfully. Sixty-eight of our ‘outcasts’ were initially offered NO payout post-quake for their uninsured or uninsurable land in the ‘Red Zone.’ The Supreme Court upheld their appeal. The same lawyer who assisted the Quake Outcasts is now running a collective action against Southern Response. This person is Christchurch lawyer Grant Cameron of GCA, who has invited thousands of unsettled policyholders to join together against Southern Response, with the backing of international financiers – Litigation Lending Services (LLS). The Southern Response representative action was filed in the courts recently. This firm has also had success with Cave Creek and Lake Alice psychiatric hospital actions in the past. The litigation is based on a ‘no win – no fee’ basis. If the action is successful, LLS and GCA fees will not exceed 20% of the total claim and, in some circumstances, the amount is likely to be significantly less. There is perhaps chance that Southern Response may recognise that it is in a very vulnerable position and may decide that it is prudent to reach a negotiated resolution with the group prior to any court hearing commencing.
In addition there is also an EQC group action which is likely to be filed at court in the not too distant future. Anthony Harper, the law firm running the action has agreed to take the case on at reduced rates and capped the fee at $2000 per property. Considering the real cost of High Court action, this is a nominal amount enabling ordinary homeowners to challenge EQC and seek a fair outcome to their claim.
There are also others who, recognising the travesty taking place are also interested in pursuing the litigation funding opportunities increasingly presenting themselves in Christchurch. Recently another litigation funder LPF Group director Bruce Sheppard and lawyer Kalev Crossland of Shieff Angland, were in Christchurch measuring interest for other possible representative actions. There are currently at least five litigation funders operating in New Zealand. It is clear that the message of the plight of the Canterbury people has seeped through to those who can genuinely make a difference to large numbers of claimants simultaneously.
Representative actions allow one or more persons to sue on behalf of, or for the benefit of, all persons “with the same interest in the subject matter of a proceeding” either with the consent of the represented parties or with court approval. The courts have permitted plaintiffs to use this mechanism to commence group actions. Using this method, a representative action can avoid a defendant having to face a multitude of claims based on the same subject matter and provide the plaintiffs with cost effective justice. Courts have tended to take a wide and flexible approach when deciding whether parties have the “same interest” in a proceeding and have allowed representative actions in a range of circumstances. The wording of the representative action is critical, because a cause of action requires actual reliance to be shown by each plaintiff. If this has not been possible then the courts have not been so willing to allow representative actions. For this reason, legal practitioners with experience and sound background in these matters are a crucial requirement. It is important that the group of claimants involved have the “same interest” in the proceeding. And though each individual’s claim will be different it is required that an individual who is to ‘represent the group’ give evidence on behalf of the other parties’ specifics.
Class actions have flourished in the US and Canada and are also on the rise in Australia after the Federal Court of Australia Act was amended in 1992 to introduce “representative proceedings”. I am of the opinion that it is critical that a class action regime emerge in New Zealand. I am moved to hold this view because of the outrageously high costs for the average individual to access justice and the time taken for a case to be heard – I welcome the development of representative action wholeheartedly. I believe class and representative actions have the potential to effect massive and much needed social change in an environment increasingly shifting in favour of corporate interests. Class action litigation allows individuals access to the courts by pooling a large number of claims which would not have been financially viable for the claimants individually and very importantly it holds the promise of a more level playing field on which powerful defendants (such as the Government, private insurers and banks) can be held to account.
I suggest that all dissatisfied, under-settled and not-yet-settled insurance claimants watch this space attentively as the lawyers ponder on your (and their) best approach to start taking on the insurance corporates at their own game. I will report the actions as they arise, but the only thing to remember is – it can’t work without your participation……..
 an earlier event or action that is regarded as an example or guide to be considered in subsequent similar circumstances.
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