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Thousands of Christchurch homeowners to take class action against Southern Response in landmark ruling

There's been a huge victory in the Supreme Court tonight for quake-affected homeowners in Christchurch.

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The landmark court decision allows 3000 homeowners to take massive class action against Government-owned insurer Southern Response. Source: 1 NEWS

The landmark decision allows 3000 homeowners to take massive class action against Government-owned insurer Southern Response.

Last year, the Court of Appeal ruled an "opt-out" class action suit could be brought against Southern Response on behalf of former policy holders.

The latest Supreme Court battle was Southern Response's attempt to have that overturned.

Today the court ruled the earlier decision would stand, quashing Southern Response's appeal.

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It could end up costing the Government’s earthquake insurance company tens of millions of dollars. Source: 1 NEWS

GCA Lawyers, the law firm battling for the class action suit to stand, says the decision is "hugely significant".

"It confirms there is a legal pathway for ordinary people to access justice and hold powerful corporations to account," the firm told 1 NEWS in a statement today.

The class action alleges Southern Response misled and deceived its policy holders when it settled claims before October 1, 2014, by sending people a cost estimate missing significant items of costs.

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The practice, described by the High Court as deceptive and misleading, was widely used by Govt-owned insurer Southern Response. Source: 1 NEWS

As it's an opt-out case, it means almost all policyholders will be represented, rather than requiring people to actively sign on to be represented.

Earlier this year, it was ruled the state-owned insurer needed to pay back damages to Karl and Alison Dodds, after the High Court found they had been misled about the cost of rebuilding their quake-damaged home.

If it's used as a precedent in the class action case, it could leave the Government on the hook for up to $700 million in payments to Christchurch homeowners.