On March 2016 the Court of Appeal in Prattley Enterprises Ltd v Vero Insurance New Zealand Ltd [2016] NZCA 67 dismissed an appeal by an insured against the High Court’s refusal to set aside a settlement agreement on the grounds of mistake. It also comments on the inappropriateness of a Risk Worldwide person (George Keys) purporting to give “expert’ evidence when that person had a financial interest in the outcome of the claim. Prattley claimed that it was mistaken in relation to a settlement agreement it entered into with Vero about damage to Worcester Towers at Cathedral Junction. In August 2011 Prattley settled all claims with Vero for $1,050,000. That was Prattley’s estimate of the building’s pre-earthquake market value. Prattley insured the building for indemnity value with a sum insured of $1,605,000. In July 2012 Risk Worldwide became involved and claimed $8.8M gross from Vero. The Court decided that there was no mistake claim and the settlement agreement was enforceable. It also decided that the indemnity value of the building was its replacement cost less depreciation.
EQC announces plan to settle drainage claims
7 Mar 2016
The Earthquake Commission (EQC) is rolling out an assessment programme for sewer and stormwater pipes suspected of having earthquake damage, starting this month (March).
EQC’s General Manager of Customer & Claims, Trish Keith, says it currently has about 2,500 drainage claims but expects this could increase to about 6,000 with most claims being settled with cash payment.
“EQC’s focus has been getting houses repaired and people back in their homes. But we are now in a position where we can address the issues with drainage,” Mrs Keith says.
“It has been some time since some drains were inspected. To ensure we have the best information about all potentially-affected properties, EQC has decided that all sewer and stormwater drains where owners have lodged a drainage claim which hasn’t been settled yet, will be inspected whether an inspection has already been done or not.
“The commission has contracted some of Canterbury’s largest drainlaying firms, all of which are licensed with the New Zealand Plumbers, Gasfitters and Drainlayers Board, to carry out the work at no cost to homeowners. These contractors are also Certifying Drainlayers, which is the highest qualification available.
“When inspecting the drains, the drainlayers will obtain a CCTV recording, identify the location and nature of any earthquake damage, recommend a repair strategy for any identified earthquake damage and provide an estimated cost of repair to EQC.
“Where earthquake damage is confirmed, EQC will determine a cash settlement on the basis of the repair strategy recommended by the drainlayer. The same process will apply for new claims lodged during 2016.”
Mrs Keith says EQC will provide additional support for customers who have a genuine need for assistance in finding and hiring contractors to carry out their drainage repairs after they have received their cash settlement.
”The Earthquake Commission Act allows EQC to choose to settle claims by cash payments. But
homeowners can have confidence that if further damage is discovered during the repair process they can get in contact with EQC and, if we agree the damage is earthquake-related, an additional payment to cover additional costs may be made,” Mrs Keith says.
For more information on EQC’s approach to drainage claim settlement, visit the EQC drainage claim website page.
Here is a link to the report by the Parliament Finance and Expenditure Committee in its annual review of the 2014/15 performance and current operations of Southern Response Earthquake Services Limited. This is the first review of Southern Response. The report raises concerns about the ability of Southern Response to settle all claims within the amount allocated by the Government and the payment by Southern Response of bonuses to staff based on their claim settlement record. Southern Response so far has paid $3.3M to staff as bonuses. The Committee was concerned about the possibility that policy holders were not receiving their correct entitlement to enable the staff to receive a bonus. The report also notes that Southern Response has spent about $10M on legal fees and has budgeted a further $4M for this year.
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