• EQC legal disputes dropped

Hundreds of homeowners have dropped legal disputes with the Earthquake Commission (EQC), opting instead to restart direct negotiations.

It's part of an effort to minimise future legal costs to the cash-strapped Government-owned natural disaster agency, which has spent $50.3 million on legal costs since the 2010 Canterbury earthquake. 

The commission spent $10m on legal costs in 2018, which was up on its 2017 spend of $8.2m ($9.5m with GST). EQC's annual legal spend has generally increased since the quakes.

EQC Minister Megan Woods said she wanted to see "money being used to settle people's claims so that they can get on with their lives, and not unnecessarily fighting them in the courts".

Woods requested EQC change its approach to dealing with legal actions. The commission contacted those in litigation to restart discussions and offer mediation options to try and reach settlement. 

Since late October, 708 cases have been transferred from litigation to a settlement process, of which 269 have been resolved. About 439 EQC claims are still embroiled in legal disputes. 

It's another sign of progress at an organisation that has shown signs of a turnaround since a critical report, released last June, slated EQC as hamstrung by disorder and dysfunction. 

EQC has now settled about ,2600 of the 3,600 claims that were open when the report dropped, but they are still dealing with about 2200 currently as more have been reopened in the interim. 

Woods said the number of claims still being reopened was a concern, and there was no way to know how many more there might be, but she was adamant people's houses would be fixed wherever there was a liability to EQC. 

She said this year the focus would be on the "fair and swift settlement of claims", but more broadly it was time to start thinking about what changes were needed to make EQC fit for purpose into the future.

What these changes might look like will be guided by an inquiry, lead by Dame Silvia Cartwright, who is aiming to have a draft report ready by the middle of the year. Woods said that timeframe "may well be too ambitious".

The other significant piece of work was rebuilding the National Disaster Fund (effectively EQC's pot of money), which was topped up by a Crown payment of $50m on November 1, after it plummeted from about $6.1b before the 2010 quake to less than $200m. It is the first time in EQC's 72-year history the Crown Guarantee has been called on. 

That burden will fall on Sir Michael Cullen, the former labour finance minister, who took up the board chair role on November 1. Woods said Cullen was settling in "incredibly well" and brought a vast amount of experience with big funds. 

Woods said she was confident New Zealand was "as ready as any country can be" for another major disaster but there was still more to learn. 

'ONE STOP SHOP'

The Greater Christchurch Claims Resolution Service was described by Woods as a "one-stop shop" for quake claimants when it opened in October. 

Since then, more than 500 homeowners trying to settle with either EQC or Southern Response have signed up to the service, which offers engineering, legal and other settlement advice and mediation services. About 60 of those signed up have reached settlement. 

Private insurance companies are yet to sign up to the GCCRS, but Woods said discussions were "well advanced". 

"I'm pretty confident we'll get private insurers playing more of a role, now that we've kind of been able to show that it works operationally."

 

 - Stuff



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