The government has reached an out-of-court settlement with 16 uninsured Christchurch homeowners who had property in the residential red zone.
The group were not paid out for the value of their houses, as those payments were confined only to those with insurance.
But the Court of Appeal recently ruled this was illegal and the government today agreed to pay the litigants 80 percent of the pre-earthquake value of their homes.
All of them had already been paid 100 percent of the value of their land.
The government resisted including uninsured properties in the red zone buy-out offer it made to 7700 households, because of the the moral hazard involved.
It believed doing so would penalise those who had paid for insurance.
The litigants, known as the Quake Outcasts, argued the clearance of homes in the red zone had destroyed any value left in their properties and it was unfair for them not to be included in the offer.
Christchurch Rebuild Minister Nicky Wagner said the settlement could have wider implications.
She said the government may consider extending the payout to the roughly 100 uninsured homeowners who were not part of today's settlement, but this decision would be left until after the election.