Southern Response Class Action – Details of the Court of Appeal Decision

As our blog post yesterday announced, the Court of Appeal Judgement in the Southern Response Class Action[1] has found in our favour on all key matters discussed at the appeal.

1. Justice Gendall’s decision in his High Court[2] was right to grant leave for a representative action to proceed. The Court of Appeal has confirmed that now has leave to proceed as a Class Action, rejecting Southern Response’s argument that there could be no true common issue or “strategy”.

2. The representative action procedure is a just and efficient means of dealing with these claims. The Court of Appeal determined that proceeding with a representative action would allow the group to pursue claims that would resolve “critical issues of fact and law for each of the claimants, in an effective and efficient manner” (paragraph [54] of the judgement). During the appeal, there was an emphasis on the importance of access to justice. For many members of the class action, their home is their only asset and without the ability to proceed as a class, they wouldn’t have the resources to seek a fair and reasonable resolution of their claim through the courts.

3. The group is entitled to bring evidence of a pattern of conduct by the insurer directed at minimising claim values. The Court specifically commented that it felt the class action group may well be able to prove that Southern Response did formulate and apply a strategy “to misrepresent the nature of claimants’ contractual rights, and to delay the processing of those claims, in breach of its contractual duty of good faith” (paragraph [44] of the judgement). Such proof would have to come through the evidence of multiple claimants as to how their claims were handled by Southern Response.

The Court of Appeal also confirmed that there is no unfair prejudice to Southern Response if leave to continue as a representative action is granted.

The Court also rejected Southern response’s claim that alleging a strategy was the groups’ attempt to “dress up what is in reality a collection of separate claim and separate issues,” (paragraph [44] of the judgment).

4. Southern Response is likely to be required to provide information about these proceedings to its other unsettled insureds. Potentially, this could see new members joining the action. It’s anticipated that Southern Response will be required to provide information about the representative action proceedings to all policyholders with unsettled claims.

The opt-in order to allow other members to join the class action granted by Justice Gendall, was informally stayed until the Court of Appeal decision had been reached. With the delivery of the Court of Appeal’s decision, potential members now have 3 months from 30 October 2017 to join the action (until 30 January 2017).

This decision of the Court of Appeal is important, not only for Southern Response policyholders, but also for anyone who might need a class action to provide access to justice before the New Zealand Courts. This case clarifies the law surrounding ‘representative actions’ and it will make it much easier for similar groups to obtain court support soon after filing proceedings.

Importantly, the judgment illustrates how, from the outset the class action has been an entirely appropriate mechanism to advance policyholder’s claims. It sets the scene for prompt progression of the case and we anticipate early progress towards resolution.

If you would like to learn more about the Southern Response class action, or how GCA Lawyers may assist you with your litigation needs, contact Grant Cameron on (03) 365 1347 or 0274 320 020.


[1] Southern Response Earthquake Services Limited v The Southern Response Unresolved Claims Group [2017] NZCA 489

[2] The Southern Response Unresolved Claims Group v Southern Response Earthquake Services Limited [2016] NZHC 3105

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