The government compensation payment was announced ahead of the impending start of collective action for the Southern Response

The government announced a cash package for Southern Response applicants whose homes were damaged in the Canterbury earthquake, ahead of a class action lawsuit that could have seen the reopening of thousands of settled claims.

Earthquake Commission Minister David Clark announced Monday that the pre-emptive package will be offered to eligible document holders who have settled with the Southern Response before October 2014.

A spokesman said they would not disclose how much money had been set aside at this stage, in the interest of a “fair solution”, but would disclose the amount that was paid after the incident.

This comes after the previous Karl and Alison Dodds case in August.

Read more: * Crown’s insurer, Southern Response will not appeal Dodds earthquake insurance decision * Southern Response response on Dodds decision has been largely denied * Southern response in recent attempt to avoid class-action “unsubscribe” lawsuit over earthquake payments

The Supreme Court found that the state-owned earthquake insurance company, Southern Response, was involved in “deceptive and deceptive” behavior when it changed the couple tens of thousands of dollars after writing off their earthquake-damaged home.

Southern Response had a policy to produce two different Detailed Repair / Reconstruction Assessments (DRAs), which determined a customer’s home repair costs.

The first, known as the acronym DRA, was introduced to the client and showed lower costs than the DRA office, which was not provided.

The Dodds reached a settlement with the Southern Response in December 2013, based on the brief Darfur Regional Agreement they obtained, which showed that rebuilding their home would cost approximately $ 895,000.

They weren’t aware of the DRA office at the time, which was over $ 200K.

Supplied via RNZ

Carl and Alison Dodds were misled by the Southern Response Team over a quote for the rebuilding of their home in Christchurch.

Supreme Court Judge David Gendall found that the Southern Response misled the Dodds into believing that this was the full cost of rebuilding, and ordered the Southern Response to pay them an additional $ 178,894.

The appeals court upheld the Supreme Court’s decision, and the crown chose not to pursue it any longer.

Another couple in Christchurch, Brendan and Colin Ross, have initiated proceedings against Southern Response on similar grounds.

But they took their case as a collective action, which means they represent an estimated 3,000 document holders who may have been similarly misled.

Joe Johnson / Staff

Brendan and Colin Ross are representing a class action lawsuit against the Southern Response, after their home was damaged in earthquakes.

While the hearing on Ross’s class-action lawsuit is still some time away, the Supreme Court recently decided that the case should proceed on a “no-participation” basis, which means that any class member, as defined by the court, is automatically adjudicated. Conducting what they do not actively withdraw.

Secretary Clark said the pre-emptive package is providing an extra push for clients in a situation similar to Dodds.

It will be overseen by an independent panel consisting of former Waymacarry County Mayor David Ayers, attorney Nina Khoury, former Canterbury Police District Commander Sandra Manderson and Audit and Risk Director Fiona Mulz.

Joe Johnson / Staff

Brendan and Colin Ross’ home was damaged in the earthquakes.

“The launch of this package aims to address the unfairness of those who settled their claims before October 2014, compared to those who settled later,” said Clark.

“I acknowledge the length of time the ongoing judicial process has taken and the pressure this is causing for plaintiffs.”

Since the package will affect some policyholders who are likely to be a part of the current Ross Collective Court case, Southern Response will go to court to confirm that it can reach out to these policyholders about the package on Monday.

But for those who wish to come forward, it is unlikely that a court decision will be made before the new year.

Elias Rodriguez / Getty Images

Seismic Committee Secretary David Clark.

“I appreciate that individual claimants will want to resolve this issue as quickly as possible. This package provides a way to solve the problem without long and costly legal procedures,” said Clark.

“The court cases have so far been helpful in obtaining an explanation on how to apply the findings fairly to policyholders in a similar situation and have communicated the principles of this package.”

Generally, policyholders who have settled a monetary claim for earthquake damage to their homes through the Southern Response or AMI between September 10, 2010 and October 1, 2014 will be eligible.

But a spokesperson said not everyone will qualify for compensation.

If Southern Response manages the home rebuilding or repair, if the policyholder already has contingent costs and professional fees negotiated over the settlement amount, or if the policyholder has an insurance policy for an insured sum and has already received his full entitlement under his AMI policy , not qualified.

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