EQC seeks clarity on ‘on-sold overcap’ issue

9 November 2018

The Earthquake Commission is working with a group of homeowners to seek legal clarity on EQC’s liability for on-sold overcap claims.

An ‘on-sold overcap claim’ is a claim that has been sold since the earthquakes, and has subsequently had unscoped or missed damage identified, and costed at more than the EQC cap, and the customer cannot recover the overcap amount from their private insurer.

EQC and the parties to proceedings have agreed on a claim that will be determined in a test case and the hearing has been set down for 26 August 2019 in the Christchurch High Court.

Deputy Chief Executive Canterbury and External Relations, Renée Walker says that EQC’s current position is that settlement of earthquake damage is settled up to the cap limit for each event under the Earthquake Commission Act.

“As we are all too aware, there are limitations to this position. Under the EQC Act, we cannot pay more than the cap.

“The test case will test where EQC’s liability for incomplete or incorrect assessments, incorrect repair methodologies and defective repairs, and EQC’s liability for the full cost of repairs once determined.”

Ms Walker says that EQC is seeking to have all the issues for the on-sold overcap test case determined at a single hearing, which will give the greatest clarity to the largest number of homeowners who may be affected by these issues.

“The solicitors for the homeowners have applied to have the case, and the legal issues, considered in two parts. However, EQC believes that the parties can achieve a more timely and efficient process by having one hearing instead of two.

“The hearing will be a significant step in enabling homeowners with on-sold overcap issues to move forward. In the past where a customer’s entitlement is unclear, EQC has worked with the customer to resolve the claim, including by seeking guidance from the Courts.

“EQC has taken this approach successfully on a number of occasions by initiating or co-operating in test cases and Declaratory Judgment proceedings arising out of the Canterbury earthquakes,” Ms Walker says.

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