An earthquake insurance resolution service has been criticised by the courts for convincing a dying man his earthquake insurance claim was strong, despite lawyers advising otherwise.
Ricky Bligh ended up with more than $600,000 of legal costs from High Court action over his damaged house near Darfield, Canterbury.
Bligh's lawyers Grant Shand Barristers and Solicitors dropped his case on the day of his 2016 trial after litigation funder Claims Resolution Services Limited (CRS), headed by Bryan Staples, pulled funding at the last minute.
Bligh, who was terminally ill at the time and died in December, re-launched his case with GCA Lawyers in 2018. He unsuccessfully sought more than $1 million from insurers the Earthquake Commission (EQC) and IAG to rebuild his two-storey home.
In a recent High Court decision, Associate Judge Dale Lester said internal emails from CRS showed Staples had taken "a position at odds with the experts and lawyers" which Bligh had picked up on and was influenced into taking "a hard-line approach to litigation".
"There were various exchanges where the lawyers indicated that Mr Bligh had a weak case. Mr Staples emphatically disagreed in his emails in response, urging the lawyers to recheck their experts and to visit the site," the judgment said.
Bligh contacted CRS in late 2012. CRS had a damage assessment for Bligh's house done by Earthquake Services Limited, of which Staples is a sole director. The assessment said Bligh's house needed a full rebuild.
On Staples' advice, Bligh filed action in the District Court in July 2013.
A mid-2000s engineers' report which surfaced shortly afterwards did not support claims the property suffered severe quake damage. Other reports from experts hired by CRS suggested the quake damage was not enough to justify a rebuild.
Bligh's lawyers tried to convince him not to go to court in the lead-up to the trial.
The judge said Staples' evidence tried to give the impression CRS had cut itself off from the case after it was filed, which he did not accept because as a funder, CRS should have known what was happening.
Bligh contacted CRS in late 2012. CRS had a damage assessment for Bligh's house done by Earthquake Services Limited, of which Staples is a sole director. The assessment said Bligh's house needed a full rebuild.
On Staples' advice, Bligh filed action in the District Court in July 2013.
A mid-2000s engineers' report which surfaced shortly afterwards did not support claims the property suffered severe quake damage. Other reports from experts hired by CRS suggested the quake damage was not enough to justify a rebuild.
Bligh's lawyers tried to convince him not to go to court in the lead-up to the trial.
The judge said Staples' evidence tried to give the impression CRS had cut itself off from the case after it was filed, which he did not accept because as a funder, CRS should have known what was happening.
He said CRS had a "considerable amount of control" over the claim, evident because Bligh followed Staples advice and rejected his lawyers advice, and because CRS could have cancelled funding if its advice was not followed.
"CRS was dealing with a client who was vulnerable by virtue of his financial position and poor health. It encouraged Mr Bligh into litigation by providing a report which promised a rebuild. It bolstered his view over the course of three years, at least at times against the advice of lawyers and experts ... or ... it failed to provide the advice on the claim that it committed to provide."
Lester said CRS "failed until the eleventh hour to meet its self-imposed obligation" to give Bligh advice, and could not reverse its advice a week before trial and not take responsibility for it.
Bligh's estate was ordered to pay EQC $213,000 and IAG $202,000 in costs from when the first trial was dropped though to the end of the later trial date. Bligh's estate and CRS were ordered to jointly pay EQC $156,000 and IAG $81,000 in costs over the abandoned trial, with Bligh liable for one-third and CRS two-thirds. CRS was ordered to pay Bligh's estate $15,000.
GCA Lawyers held a mortgage on Bligh's house capped at $100,000, put in place to cover its costs, while EQC and IAG had second and third mortgages on the house.
Bligh's son Hayden Bligh said his father had more than $600,000 in legal costs for the case. The estate had no money, and he and his three brothers paid the funeral costs.
He believed his father was convinced by Staples to pursue the case, and had seen emails between the two talking up how strong the case was.
Bligh said the matter played on his father in his last days; "I think towards the end dad felt he failed us four boys, he definitely regretted it".
He said it was unfair those unable to afford to challenge their insurers were forced to put their house or equity on the line or just accept their insurers' offer; "it just seems a bit of a bully tactic really".
An IAG spokeswoman said they would not enforce costs against Bligh's estate. She did not say whether IAG would seek full costs from CRS for those jointly payable by CRS and Bligh's estate.
EQC deputy chief executive Renée Walker said EQC would also not be pursuing costs from Bligh's estate, but would pursue CRS for costs it was jointly liable for.
Staples said CRS withdrew from the case when it learned some information provided to them by Bligh was incorrect. He said CRS did not accept a number of aspects of Lester's judgment and would be appealing the decision.
GCA Lawyer's Grant Cameron said the company had been paid about a quarter of its normal fees for the case.
In May, one of Bligh's original lawyers, Grant Shand, was censured and fined by the NZ Lawyers and Conveyancers Disciplinary Tribunal over unsatisfactory conduct relating to his handling of Bligh's case.
Read the full High Court judgment here.