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Earthquake insurer Southern Response off to Court of Appeal over rulings it's been deceptive, misleading

The Government's earthquake insurance company Southern Response is appealing a landmark court decision which found it had acted in a misleading and deceptive way.

A Christchurch couple say they've been left traumatised by the fight, which has dragged on for almost nine years.

Southern Response has lost in the Supreme Court and in the High Court - called deceptive, slammed for misleading a client and ordered to pay up.

And now, they're going in for more.

"The purpose of this appeal is to look at, 'Does Southern Response have a legal obligation to go back in time?' That's what we're clarifying," said Anthony Honeybone, Southern Reponse chief executive.

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Grant Cameron, a lawyer taking a class action against Government owned insurer Southern Response, spoke to Breakfast’s John Campbell. Source: Breakfast

"But more importantly, what we're trying to clarify is how to we do that?" he said.

The insurer is heading to the Court of Appeal after the High Court took the company to task for hiding information from a Christchurch couple and underpaying them by nearly $200,000.

The Government, which is footing the legal bill, says it wants more clarity.

"What this High Court decision does is open up a very broad definition, and potentially open up claims that have previously been settled," said Grant Robertson, Earthquake Commission Minister.

The Government is worried the case could lead to other old closed insurance claims being re-opened.

But that suggestion has been panned as "nonsense" by the claimants' lawyer, Peter Woods.

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Southern Response was formed to pay out Christchurch earthquake claims. Source: 1 NEWS

"In a situation where the insurer has made a misrepresentation, or it's been guilty of misleading and deceptive conduct, the agreement might be reopened. But if it's been straight, honest and acted in good faith it won't be reopened," Mr Woods said. 

The pressing problem for the Government is claims that Southern Response hid information from as many as 3000 homeowners in a similar way.

Lawyers say those residents were underpaid by as much as $300 million between them.

"It is possible that it could be that much. But what I can't speculate is if that's likely or not. I honestly don't know," Mr Honeybone said.

The nine-year battle is heading back to the ring, as thousands wait on the results.

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The Christchurch couple involved say they’ve been traumatised by the nine-year fight with Southern Response. Source: 1 NEWS