Your options

With the deadline looming, here is an update on where the Class Action stands and your options:


As expected, the insurer is becoming very concerned about the imminent class action and is seeking to undermine it. Some policyholders have been told that there will be an “urgent reassessment” of their claim, but that “this will take a little bit of time”. Others who have tried to take up the offer of free legal advice about the class action have been told they cannot see the independent lawyer without meeting with the insurer first, or that they cannot do so until Southern Response has approved payment of fees.

Having received many promises from Southern Response over the last four years you will be able to recognise these tactics for what they are – more delay, and an attempt to deflect you from the best solution.

We think that, except for those in the class action, nothing will change!


With the deadline for joining the Class Action being Friday 10 July 2015, you will need to make your decision this week and, with that in mind, you will need to think about these points:

  • Over 3000 policyholders have been waiting 4.5 years for their claims to be actioned.
  • Claims should have been settled within 2 years but policyholders have faced endless delays.
  • The insurer has failed to:
    • Perform its fundamental obligation to indemnify. (You paid your premiums, your insurer promised to repair or rebuild, to an ‘as new’ standard. It hasn’t done that).
    • Manage claims in a ‘professional and efficient’ manner (as required by the policy)
  • Evidence to be called in the class action will show a pattern across claims of;
    • the insurer misleading policyholders as to their true policy options so that it could control the outcome through Arrow managed repair/rebuild options, deficient damage assessments,
    • inaccurate assessment of the repairs needed, grossly underestimating as to the ‘value of repair’, large numbers of reassessments,
    • insurer recycling of Claims Managers,
    • extraordinary delays,
    • misinformation as to policyholder entitlements,
    • nil, or little progress etc.
  • The evidence suggests the insurer has claims ‘on hold’ until policyholders indicate a willingness to settle on the insurer’s terms.
  • Usually, policyholders usually don’t have any evidence of their own to prove their true position.
  • Once independent expert advice has been obtained, the evidence shows that the insurer is commonly estimating the value of the repair or rebuild at about 40-50% of the true claim value.


a. Do nothing

Sit tight and wait for the insurer to pay what’s fair. The experience of the past 4 ½ years shows that this means eventually, policyholders will be forced to accept whatever the insurer offers.

The Amended Crown Support Deed says that the settlement of claims is intended to be spread over 8-10 years. Policyholders are about half way through the process and have no idea when their claim will actually be resolved. In practical terms, it seems that policyholders are held in a ‘holding pen’ until such time as they give up, and accept the insurer’s terms.

b. Do something

Until recently, there was only one option: litigate alone.

For those with money, this is the most cost-effective choice. After legal advice and all relevant expert reports have been obtained (e.g. geotechnical, structural engineers, registered surveyors, quantity surveyors) the policyholder can get a fair resolution. However, even though it only has defective, non-expert, assessments, the insurer often rejects the policyholder’s expert advice.

This forces the policyholder to either compromise (move towards the insurer’s terms) or go to court. Going to court will resolve the claim but very few take this step. The vast majority find the cost of proceedings, is beyond them. (Experts may cost $10-30,000 plus GST and High Court proceedings might cost $25-150,000, depending what is required to the point of resolution).

Most policyholders will not take proper legal advice, or if they do, they find they cannot face the costs of experts and litigation. They are forced back to a ‘do nothing’ position.

c. Litigate as part of a class

The class action will enable you to come together with other policyholders in a ‘representative action’ process that is guaranteed to resolve each and every claim.

How the action will work

The class action will progress in 2 stages. The first will establish the insurer’s breach of contract but the court will also be asked to resolve preliminary questions, like:

  • what does an ‘as new’ condition mean? what are the true settlement options available under the policy?
  • has Southern Response managed claims in a professional and efficient manner?
  • what assessments are required for TC3 and Port Hills properties?

We will present evidence from independent experts in the insurance industry about how claims should have been handled and where necessary, will get expert evidence about the damage to you property so in the second stage of the action, the value of the claim and damages due to you can be quantified.

The Southern Response Class Action will resolve your claim!

The Benefits

In joining you receive the following benefits:

  1. A clear legal strategy led by Francis Cooke QC. The action is supported by a major Australian litigation funding company, Litigation Lending Services, and will proceed on a ‘NO WIN NO FEE’ basis. This means that you pay nothing unless the claim is successfully resolved.
  2. The action is proceeding on terms where you will be NO WORSE OFF. Where you can produce a settlement offer or DRA dated before 29 April 2015 (the date the class action was announced) the ‘House and Outside EQC scope’ figure in that DRA will be used as the minimum amount that you can recover after fees are deducted. In addition to paying ALL LEGAL COSTS, the funder will also pay ALL EXPERT COSTS where necessary. (The funder will also pay any adverse court costs in the unlikely event of such an award ever being made by the court).
  3. Being in the action will ensure unity, mutual support, and a much enhanced prospect of early settlement.
  4. The class action will conclusively resolve all claims.

For the first time, you can seize CONTROL over your claim and your future.

Moving forcefully ahead by this means is in fact the only sensible option, if you want to step out of the ‘holding pen’ and resolve your claim.


GCA Lawyers has a huge amount of experience in insurance law. Over the last four years, we have acted for hundreds of policyholders against their insurers on both domestic and large commercial claims. In overall we have settled claims worth many tens of millions of dollars. We know how to get insurance claims sorted and we get results.


You need legal advice to properly understand what is being proposed any why. Both you, and any independent lawyer, will need to speak to us, and such discussions are at NO COST. If the class action isn’t the best option for you, we will make that very clear. We are available to meet at short notice as required.

You, or your lawyer can obtain more information by: phoning us at 365 1347 or by emailing us at