The Press on Labour’s Christchurch policy

June 10th, 2014 at 3:00 pm by David Farrar

editorial:

The idea of extending the jurisdiction of the District Court to create what would amount to a specialist earthquake court is undoubtedly eye-catching.

Its aim would be to provide a faster, less costly (to claimants at least) jurisdiction to deal with the multiplicity of disputes that have arisen over earthquake claims.

Whether it is necessary and whether it would achieve its aims, or achieve them without introducing perverse incentives, needs significant analysis. Insurance disputes can be complex and difficult. A new court is unlikely to make them any easier, though it may have the potential to streamline the process through them.

The High Court has for some time devoted large resources to a specialist list to deal with earthquake cases.

It began in May 2012 following a commitment by the Chief High Court judge that earthquake cases be dealt with as swiftly as the court’s resources permitted.

Most judges in the High Court are experienced and highly skilled commercial practitioners, well equipped to deal with insurance disputes.

A serious line-up of similarly skilled judiciary would be a bare minimum requirement for the newly proposed court.

’s idea would allow claims of up to $1 million to be brought before the District Court, which has less expertise in complex commercial matters and would require expanding its jurisdiction from the present limit of $200,000.

Simply finding judges equipped to handle the work could be a problem. Labour says they would be found from among retired judges (which means they would be 72 or older) or suitably qualified senior lawyers.

What The Press is saying is that cases will be heard by retired district court judges, rather than high court judges.

Labour also says the government would cover all costs which means that claimants would have an incentive to lodge a claim, no matter how weak it was.

That’s the real problem. The courts would get swamped.

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26 Responses to “The Press on Labour’s Christchurch policy”

  1. Jack5 (5,285 comments) says:

    What do insurers and world re-insurers think about this?

    Without reinsurance to lay off odds around the world, our insurance industry would likely collapse, or at the very least become excruciatingly expensive.

    Will the big reinsurance firms overseas accept a regime with special courts?

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  2. peterwn (3,337 comments) says:

    There is a way of getting speedier settlements from insurance companies and others. Currently, the interest rate on judgments is 5% and cannot be compounded. Judges should be able to set an appropriate interest rate and it should be compounded. The current rate and no compounding has the perverse effect of encouraging insurance companies and others to drag the chain on settlements.

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  3. alloytoo (582 comments) says:

    So the whole country gets a round of insurance rate increases because every prick who failed to insure himself adequately is going to take a punt at the insurance company on our tax dime.

    Where exactly is this a good policy?

    Bearing in mind that anyone who does take this up will never get insurance in NZ ever again.

    The irony in all this however is that the insurance companies are doing everything in their power to settle Christchurch claims as quickly as possible, because every day’s delay costs them money and leaves them vulnerable to inflationary cost increases.

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  4. burt (7,434 comments) says:

    In the new socialist world order this will not be a problem as there will only be one insurer ‘KiwiInsurance’ !!!!

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  5. BeaB (2,164 comments) says:

    We’ll be the ones paying for this. As if we aren’t all paying enough extra because of the earthquakes.

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  6. David Garrett (7,701 comments) says:

    Peterwn: Well said…make the interest rate 20% p.a – compounding – and the settlements would come thick and fast

    Pity it’s so bloody cold in Christchurch…I quite like the sound of “earthquake specialist”…

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  7. Rich Prick (1,750 comments) says:

    “Labour’s idea would allow claims of up to $1 million to be brought before the District Court”

    All Labour is focused on is the court of first instance. Does Cunliffe have no idea how litigation works? There will be all the usual appeals to the High Court, Court of Appeal and possibly even the Supreme Court, especially if the jurisdiction is increased to $1m. The appeals process will take years. Or will Cunliffe circumscribe any rights of appeal? That’ll have insurers and reinsurers out of New Zealand’s tiny premium pool faster than ever.

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  8. burt (7,434 comments) says:

    David Garrett

    The cold in Chch won’t be a problem for somebody billing $350/hour 9 hours a day to the tax payers.

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  9. burt (7,434 comments) says:

    Rich Prick

    Does Cunliffe have no idea how litigation works?

    Check his CV, I think he was instrumental in designing the Westminster System !!!!

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  10. Rich Prick (1,750 comments) says:

    Crikey, the Westminster System as well as the adversarial system. He’s been a busy lad.

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  11. m@tt (637 comments) says:

    “That’s the real problem. The courts would get swamped.”

    No. The real problem is insurance market failure meaning almost four years after the earthquakes there are still so many unsettled claims that there is a possibility the courts could be swamped if they all took action.
    How that action takes place is not the problem.

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  12. davidp (3,585 comments) says:

    How about the government pay all the legal bills of any citizen who wants to sue an MP, without any regards to the merits of the case. The cost to be financed by a levy on MPs salaries.

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  13. thedavincimode (6,890 comments) says:

    I’ve just realised that what I’d assumed to be the odd crack in the gib stopping from natural movement must be ‘quake damage. Even though I don’t live within a bull’s roar of Christchurch, I’m sure I felt a bit of a wobble at the time.

    Better get that claim for an internal re-paint under way pronto. Thanks Dave.

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  14. Viking2 (11,684 comments) says:

    This has to be a joke. Really it does.
    Our court system is beyond slow. Its worse than the EQC settlement rate.
    Ask any Property manager what has happened since our Tenancy Tribunal has been shoved from Mobie to the Justice dept.
    Gone from a hearing in15 days to six weeks or worse.

    From 10 days for mediation to take a punt.

    Go there at your peril.

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  15. RRM (10,104 comments) says:

    Labour also says the government would cover all costs

    You’re welcome!

    We’re not pumping enough taxpayer’s money into Christchurch already. We need to subsidise people’s private dealings with their insurers, too.

    Their election hoardings should read: LABOUR: someone else will pay for everything, because why should you?.

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  16. burt (7,434 comments) says:

    Labour – spending your money faster than you can earn it – every single time we are in government !

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  17. Auberon (779 comments) says:

    I doubt Labour really believes this could actually come to fruition.

    What they fail to acknowledge when they say a disgraceful 10,000 insurance cases are yet to be settled is that’s down from around 200,000 – so we’re nearly there!

    And how many of those cases are in dispute? Bugger all. Probably in the low hundreds, if that.

    Then there’s the fact they’d have to change the law to extend the jurisdiction of the District Court, and recruit all the judges and others required to staff up their new court.

    Then, by the time all that was done they’d discover all the previously outstanding insurance claims had been settled, and those which remained in dispute had already found their way into the District or High Court.

    The whole policy is bloody nonsense.

    As I say, I suspect they know that. The Press editorial was terribly polite.

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  18. kiwi in america (2,314 comments) says:

    The numbers of unresolved claims are now in the low four figures – a good chunk of these are in the east and some in the residential red zone. A majority likely will be Labour supporters so already on board. Labour think they have the government on the ropes over the earthquake rebuild. There is no denying a weariness in Christchurch to all things related to the earthquake recovery. Labour point to the Chch East by-election as proof National are in trouble (big Mike Williams was spinning the CE by-election disaster for National line on Nine to Noon on Monday). The truth is that the CE result was little different than the results from the Mt Albert by-election in 2009 for National except Labour put its 500 delegates to its 2013 Conference on the streets of CE for an entire afternoon to locate its scattered supporters and it had Jim Anderton overseeing the GOTV on the day – all in an electorate that is ground zero for the earthquakes and where anti government sentiment would be at its absolute highest. Labour had the tail wind of the positive media coverage post Cunliffe’s primary win AND all Leaders Office staff and resources to throw at the by-election to ensure a good result. When you weigh all these benefits to Poto William’s candidacy, it was actually a poor result for Labour but hey the ongoing delusion keeps Labour’s foot soldiers locked in denial.

    Cunliffe and Labour have also misread wider NZ sentiment to the Chch earthquakes and the tax payer’s largesse thus far. Whilst most are supportive of the government’s support, there is a weariness indeed impatience at the handout mentality shown by the more vocal opponents of the rebuild efforts. The antics of the coalition representing the fools who never had insurance is a classic case in point – suing the government for a lack of generosity for an ex gratia payment made to the voluntarily uninsured sends a message to other NZ tax payers that some in Chch think the government should have an unlimited cheque book for the quake rebuild. Promising a taxpayer funded special court to spray even more taxpayer dollars on top of the $15 Billion already committed runs the risk of alienating more voters around NZ than the few in Chch swayed by Labour’s earthquake court scheme.

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  19. burt (7,434 comments) says:

    Kiwi in america

    So like most of Labour’s policies – poorly though out and only floated to see if it is popular enough to increase their polling results ?

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  20. Paulus (2,712 comments) says:

    Jack5

    You are correct.
    Reinsurers have been very benevolent towards New Zealand in the Christchurch Earthquakes, but they would only take so much shenanigan with this new scheme.
    I see that Labour now want a new State Insurance (KiwiAssure) – like the one they sold for approx. $850 million to the Norwich Union, who stripped it and resold to the Australian Group IAG.

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  21. kiwi in america (2,314 comments) says:

    burt
    Correct – a knee jerk reaction to the left’s disastrous polling in their favourite Roy Morgan poll.

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  22. David Garrett (7,701 comments) says:

    burt: With respect, there you betray your lack of knowledge of legal practice…because of all the inevitable lost and otherwise unbillable time in a day, you would need to be “at work” for at least 12 or 13 hours in order to bill nine of them…those sort of hours long since lost their allure for this boy…2-3 billable a day is enough to keep the wolf from the door…and that means sitting at the computer for five hours or so….on a good day

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  23. Alan (1,087 comments) says:

    “Does Cunliffe have no idea how litigation works?”

    hmm, if only he had someone that knew about this stuff he could chat through ideas with on an informal at home.

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  24. Bingo99 (94 comments) says:

    This has clusterf#@k written all over it.

    A massive root cause of the original delays was a solitary judicial review on reinstatement that found in favour of the insurers, making EQC cover reinstate after each individual “event” rather than at the conclusion of a cluster of “events”. This meant EQC was obliged to apportion damage to individual seismic “events” to satisfy reinsurers, which brought everything to a massive standstill.

    A single judge is the cause of the misery we’ve seen.

    Oh and why am I putting “event” in quotation marks? Because there’s no legal definition of an event… EQC just created an arbitrary measure of 5.0 richter to enable it to administer claims in an unprecedented environment of ongoing seismic shocks and explain that to reinsurers. It’s nowhere in the EQC Act either, meaning the judge’s decision could technically apply to each of the thousands of seismic tremors in Christchurch. But of course, no one actually records all the damage each time, so it’s impossible to prove.

    So yeah – the judiciary is NOT capable of handling the complexity of the aftermath of a heap of earthquakes. Just a terrible idea.

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  25. G152 (422 comments) says:

    Thats the trouble with having a Parliament full of lawyers

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  26. burt (7,434 comments) says:

    David Garrett

    With respect, there you betray your lack of knowledge of legal practice…because of all the inevitable lost and otherwise unbillable time in a day, you would need to be “at work” for at least 12 or 13 hours in order to bill nine of them…

    No, no. no – this is tax payers money you don’t need to demonstrate any value in how it’s billed. You will need to adjust your attitude a bit or you’ll miss out on some other peoples money you could easily get you hands on.

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