The High Court has found that Southern Response behaved deceptively in a case that a leading litigation lawyer said has far-reaching effects.
Justice David Gendall said in a judgment handed down Friday that the Crown-owned earthquake claims company was disingenuous in the way it presented the entitlements through a document called a Detailed Rebuild Assessment (DRA) for Karl and Alison Dodds’ earthquake-damaged home.
“Editing or redacting parts of such an important assessment document, and then suggesting it is the complete and only assessment of total rebuild cost as occurred here, is misleading and deceptive,” the judgment said.
“This is an extremely important result, not just for the Dodds, but for up to approximately 3,000 homeowners who settled their insurance claims with Southern Response, based on the Detailed Rebuild Assessment supplied by Arrow for Southern Response,” he said.
The Doddses were awarded $178,894.30, plus interest and costs.
“Southern Response, at a senior management level, decided to exclude costs from the DRAs supplied to homeowners. That decision meant that homeowners were misled into believing that the DRA was an accurate assessment of the cost to rebuild their homes. That decision meant that potentially thousands of homeowners were paid less than Southern Response calculated it would cost to rebuild their homes,” Woods said.
Taxpayers could be on the hook for hundreds of millions of dollars because of the practice, according to an estimate by Southern Response, he said.