As IAG and Southern Response's limitation periods for claims resulting from the February 2011 earthquake nears, a Christchurch lawyer says the current situation is a "bloody mess".
Protest signs outside IAG's Christchurch office. Photo: RNZ / Maja Burry
IAG told Checkpoint with John Campbell it will be enforcing a 30 June deadline on filing court proceedings against it in response to disputed insurance claims arising from the earthquake.
Southern Response has a 4 September deadline. The deadlines are made under the Limitation Act, which restricts legal claims to no more than six years after the date of "the act or omission on which the claim is based".
Peter Woods, head of litigation at law firm Anthony Harper, said there are potentially thousands of claims that will surface in the coming years for damage which hasn't yet been uncovered.
Many of those claims will follow faulty repair work carried out by the Earthquake Commission (EQC), Mr Woods said.
Half of EQC's current claims are for re-repairs.
Mr Woods and his law firm have represented hundreds of homeowners whose claims have gone over the $100,000 cap, meaning they're passed on to their insurers. If there's a dispute they can go to court, but IAG and Southern Response will have a total defence to their claims after the limitation periods expire.
"I think EQC is going to be exposed to the total claim," Mr Woods said.
"If they aren't able to process these homeowners' claims within the limitation period, then a homeowner will be entitled to go back to them and say 'well look I'm in this predicament because of your failure to meet your statutory obligations, your failure to assess the damage properly and your failure to repair it, then EQC you're on the hook for the full amount."
Mr Woods believes there are potentially thousands of claims out there.
"There are a lot of people who will have trusted EQC to do the job properly, but they will find out, particularly for pre-1970s homes, the job hasn't been done properly and they've got a real problem with their foundations. And that's what we're seeing, and in every case those claims have gone over cap."
Many pre-1970s homes have a perimeter ring known as rubble foundations, which aren't completely made of concrete, he said.
"Unfortunately EQC treated them as if they were modern concrete foundations and they've really messed that up. It's a bloody mess, it really is."
EQC is defending 316 court cases related to the Canterbury earthquakes, of which 58 are in the district court, 257 in the High Court and one in the Court of Appeal.
While EQC doesn't have a legal responsibility to assess homes it believes may not have been repaired up to standard, it should still contact homeowners, Mr Woods said.
"Those people who don't know at the moment, and EQC aren't telling, may not find out until they come to sell their house in a few years' time, when someone says to them 'sorry I'm not going to buy your house because your foundations are stuffed'.
"Morally, I think as a state service, it knows it's messed that up, it should be approaching those people rather than just leaving them to rot."
