Crown will not fight court decision against state-owned quake insurer Southern Response

The Crown will not fight an appellate court decision earlier this month against earthquake insurer Southern Response which could potentially leave the Government on the hook for $700 million in payments to Christchurch homeowners. 

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Earlier this month, a judge ruled the state insurer misled a Christchurch couple about the cost of rebuilding their quake-damaged home. Source: 1 NEWS

Minister responsible for the Earthquake Commission Grant Robertson said in a statement today the state-owned insurer would be paying back damages awarded by the court to Karl and Alison Dodds. 

Last year, the High Court found the agency had misled and deceived the 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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State-owned insurer Southern Response has lost an appeal after it was found guilty of misleading a Christchurch couple. Source: 1 NEWS

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

In a statement today, Southern Response’s General Manager Casey Hurren said, "We accept the Court of Appeal’s findings and, while we regret that Mr and Mrs Dodds have been in the middle of this, we are pleased that this court decision has provided us with some of the principles on which we will be able to base our response to other affected policyholders.

"We are now working closely with the Government to formulate that response in more detail."

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

Robertson also said the Government wanted to find "a fair and enduring resolution for the outstanding Canterbury earthquake claims".

"That means being able to use the findings of the Court of Appeal to help inform and respond to other policyholders who are in a similar situation to Mr and Mrs Dodds," he said.

Minister for Greater Christchurch Regeneration Megan Woods said the decision today wasn't about the couple's individual case, but rather about "needing greater clarity from the courts on how to fairly apply the findings to other policyholders in a similar situation".

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

"I am pleased for Mr and Mrs Dodds that this process is now concluded for them. We acknowledge that this has been a difficult process for them, and Minister Robertson and I have again extended a sincere apology to them for the fact that they had to go through this appeal process," Woods said.