9th January 2013

A surge in earthquake-related legal challenges is the tip of the iceberg and could overload the court system, lawyers say.

Ministry of Justice figures show 53 cases were filed last year in the High Court, with more than half lodged in the past three months. Six have been settled, four of which were insurance-related.

Duncan Webb, a partner at Lane Neave, said those “angry enough, rich enough or frustrated enough” were heading to court.

Legal action was a last resort for most, he said.

“It’s only when everything else has failed that you finally say, ‘the only thing we can do now is litigate’,” he said.

A fast-track system to hear quake claims was set up in 2011 to give priority to urgent cases or those that raised issues affecting many property owners and their insurers.

The system allowed High Court trials to be held about 65 days after a claim was filed and required District Court cases that involved claims up to $200,000 to go before a judge within 50 working days.

Civil cases normally took up to a year to go to trial.

The High Court would receive “more claims and files than it can dispose of”, Webb said.

“Some will be complex and some will be subject to appeals, so this is going to keep the Christchurch courts busy for five or seven years, I would think,” he said.

Former children’s television host Olly Ohlson launched Project Red Zone on fundraising website PledgeMe to raise more than $30,000 for a High Court challenge against the insurance payout being offered for his Brooklands home. The house was deemed repairable but the land was written off by the Government.

Ohlson felt he should be paid full replacement value if forced to rebuild elsewhere.

Dallington couple Matt and Valerie O’Loughlin have also begun raising funds to fight for their red-zoned home.

Webb said these were test cases that would decide “a few important principles”.

“One of the important ones is whether a house in the red zone is a loss in insurance terms because it’s in the red zone, quite apart from the damage,” he said.

“It’s the first case that if it gets over that hurdle it could change the face of it. The more [successful cases] you have, the more strength the precedent will have.”

The O’Loughlins’ lawyer, Grant Shand, said he was preparing about 20 court cases involving insurance disputes.

A declaratory judgment, as had been proposed by Christchurch East Labour MP Lianne Dalziel, and class action would not succeed, Shand said.

“You’re going to achieve a similar outcome quicker through decisions in particular fact cases. A [client] is going to get a better outcome if a judge actually physically sees affected people.”

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