EQC Action Group Settlement - landslide victory or confirming the status quo?

Litigation

A High Court claim for a series of declarations filed by a group of Christchurch home owners against the EQC has been recently settled, with both parties advising “there is no material disagreement” between them....

Whilst the home owners have announced that the outcome is a landslide victory, the EQC maintains that the outcome simply reiterates principles that they already apply.  We think that some of our clients will raise their eyebrows at this!

A joint statement has been released as part of the settlement which sets out principles that EQC is obliged to follow in dealing with claims for cover for earthquake damage.   In summary the joint statement confirms:

  1. EQC is obliged to fix earthquake damage to an ‘as new’ state, and in accordance with current rules and legislation.  The terms ‘like for like’ or ‘pre-earthquake state’ are acknowledged as not being the appropriate standard.

  2. EQC cannot decline to cover releveling of an earthquake damaged floor simply because the MBIE Guidelines might suggest that the floor is within an acceptable tolerance level.

  3. If undamaged areas of the house (such as wiring) are affected or compromised in the course of the earthquake damage repair works then EQC must also cover the additional cost of work on those undamaged parts.

  4. Cash settlements are to be calculated by virtue of the same test as is mentioned above (not ‘like for like’ or ‘pre-earthquake state’).

The statement does provide direction and authority which will assist and reassure home owners about their EQC cover entitlements.  Although EQC does not admit wrongdoing, EQC may need to revise its public information guides such as the “Customer Guide to the Canterbury Home Repair Programme”, which refers to EQC repairing a home to its ‘pre-earthquake state’.

We anticipate that this joint statement will prompt many Christchurch homeowners to reassess and reconsider their own settlements or EQC repairs.  Whilst each case will turn on its particular facts, if EQC has applied an incorrect standard to cash settle repairs or undertake repair works, the homeowner may have an entitlement to additional value or relief.

If you consider that your cash settlement or home repair strategy falls into this category we invite you to contact our litigation team for advice.

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