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SRCCA - Media Release 11 April 2020

MEDIA RELEASE

SOUTHERN RESPONSE CONCEALMENT CLASS ACTION

Southern Response conceals large sums from Policyholders – in one case, $447,129.50!

11 April 2020

Background

The Southern Response Concealment Class Action encompasses about 3000 people and is pursuing recovery of several hundred million dollars from the Crown.

The case alleges Southern Response, a government entity, misled and deceived its customers when proposing insurance claim settlement terms by deliberately withholding from its customers the true cost of rebuilding their earthquake damaged homes. It did this by sending the customer an abridged version of its repair/rebuild estimate which left out significant cost items including: contingencies, project management costs and design fees. In many cases the concealed costs amounted to six figure sums.

Some customers found out about the extra costs after they made Privacy Act requests and obtained copies of their Southern Response file. Those files revealed the full repair/rebuild estimates concealed from policyholders.

In July 2015 the Supreme Court held Southern Response’s behaviour to be unlawful and so all policyholders expected the company to correct its gross error. Instead, the company decided to correctly settle only those settlements that occurred after 1 October 2014 and to ignore the 3000 policyholders it now knew to have been incorrectly settled prior to that date.

In August 2019, Southern Response the High Court found the company had engaged in misleading and deceptive conduct and ordered it to pay Mr and Mrs Dodds more than $200,000 in damages.

Despite these court decisions, in September Minister Grant Robertson claimed that, the government still needed “clarity” and Southern Response lodged appeals in both the class action and the Dodds’ case.

GCA Lawyers, solicitors for the class action, was authorised by many affected policyholders to seek explicit information about what was concealed from them. Southern Response has now responded by providing data in relation to the first batch of approximately 200 policyholders.

Southern Response data confirms the scope of concealment

Grant Cameron, Solicitor for the class action, confirmed today that:

“The data received is shocking. Generally, the amounts concealed are in six figures, with the average concealment on this limited sample, being more than $149,000.”

“A couple of policyholders have suffered concealment of around $330,000 and one policyholder had $447,129.50 concealed from them.”

“If ultimately, all 3000 policyholders are entitled to recover the concealed funds, Southern Response will face over $400M in compensation, damages and costs” he said.

Mr Cameron confirmed that the collection of policyholder data is ongoing and that any policyholders who settled before 1 October 2014 who don’t know how much has been concealed from them, can contact GCA Lawyers, and steps will be taken to retrieve the data relevant to their personal situation.

On 23 and 24 May, the Supreme Court was scheduled to hear Southern Response’s appeal against a Court of Appeal judgment in favour of the class. That hearing was adjourned owing to the Covid-19 crisis and the lockdown that immediately followed. The parties are awaiting another hearing date.

Inquiries to: Grant Cameron, 0274 323 066, or grant@gcalawyers.com

03 365 1347

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