Class action announcement, December 2016
- Created: 16 December 2016
You may see some media coverage over the next few days regarding the class action and the High Court decision released today.
Please see our statement below:
The High Court today ruled, “by a rather fine margin”, that the revised claim by the Southern Response Unresolved Claims Group is sufficient to allow the Group to proceed with a class action.
“Southern Response is disappointed with the proposed process. It is concerned that a representative action based on what the Court described as a “reasonably tenuous” claim will not efficiently and fairly resolve each customer’s individual earthquake claim. Southern Response believes that the amendments to the claim, made to allow a representative action, have no basis.
The Court said that it had reached its decision “by a rather fine margin”. The Court also indicated that the resolution of Group members’ individual insurance claims will now likely be postponed until after the Group’s revised group claim is dealt with. This is likely to delay the resolution of individual claims of Group members.
“As a result, Southern Response is considering its options, including an appeal.
Southern Response welcomes the Court’s decision that Group members may have been misled about some aspects of the class action, and the Court’s requirement that the Group’s Australian funder and lawyers must take corrective action. The Court has said that the funder and lawyers must send a Court approved explanatory letter to Group members setting out the correct position. Following that letter, all Group members will have 21 days in which they can choose to withdraw from the Group and the funding agreement, at no cost.
“Since the initial application to the Court a number of members of the Group have settled their claim with Southern Response and withdrawn from the class action. This includes several settlements achieved since the second application was heard on 19 October 2016.
“We will continue to offer customers the opportunity to seek two hours of free, expert, independent legal advice around the conditions of the class action to ensure they are well informed of the risks of being locked into this litigation.
“We are encouraging customers with disputes to use less costly, more efficient and probably faster methods of dispute resolution rather than litigation, including mediation, Residential Advisory Service, Breakthrough Services or the Insurance and Financial Services Ombudsman.
“Since the Australian funder became involved in 2015, we have successfully settled approximately 2,317 over-cap claims. In total we have settled 81 percent (6,441) of our nearly 8,000 over-cap house claims and 98 percent of our 21,701 out-of-scope claims.
“Further, in the last 3 months we have settled almost 20 percent of claims that were open as at 1 October 2016.
“As we enter the final stages of our programme, we remain committed to settling all customers’ claims, including Group members.”