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Christchurch quake insurer loses court appeal, opening govt up to potentially huge payout

Southern Response, the government-owned insurer responsible for settling Christchurch quake claims, has failed in its bid to have a court decision against it overturned.

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The test case against Southern Response could cost taxpayers more than $300 million. Source: 1 NEWS

Today’s Court of Appeal ruling potentially leaves the Treasury liable for claims worth hundreds of millions of dollars.

Last year, the High Court found the agency had misled and deceived Christchurch couple Karl and Alison Dodds by keeping a higher estimate to rebuild their quake-damaged home secret.

The couple therefore settled for $895,000 – considerably under the true estimate.

The Dodds were awarded costs by the High Court of nearly $179,000.

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Ali Jones told TVNZ1’s Breakfast there are potentially hundreds more than the 200 Southern Response has identified. Source: Breakfast

Southern Response appealed against that decision, but in a ruling released today the Court of Appeal dismissed that.

It did, however, reduce the amount awarded to the Dodds by $10,656. And it threw out the Dodds’ own appeal claiming general damages for stress.

It was understood by 1 NEWS that the original High Court judgement against Southern Response could potentially cost taxpayers $300 million as Southern Response hid information from as many as 3000 homeowners in a similar way.

Finance Minister Grant Robertson, confirming the appeal last year, said the decision had not been taken lightly but was in the best interests of taxpayers.

This afternoon, a spokesperson for the minister said: "We have received the Court of Appeal’s decision for the Karl Gregory Dodds and others v Southern Response case, and we will now be taking some time to assess the Court’s findings.

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Claimant responds to earthquake insurer Southern Response's decision to appeal rulings it's been misleading

"Ministers will be making no further comment until all parties have had an opportunity to consider the findings and to determine their next steps."