Limitation reprieve for unresolved earthquake claims
It is a long-standing aspect of the law in New Zealand that
court proceedings must be brought within a certain time period
after the act or omission that gave rise to the claim, generally
six years. This is known as a "limitation period". The
limitation period provides some certainty, so that people cannot be
sued for something that happened decades ago, and can move on
without looking over their shoulders.
In some situations, there can be uncertainty over when the six
year period begins. As the six-year anniversary of the first
Canterbury earthquake approaches in September 2016, insurers, the
Earthquake Commission (EQC), and insureds have all been considering
when the "start date" for calculating the six-year period
was, and when the six-year limitation period expires.
EQC's liability is under the Earthquake Commission Act, and
is different to the insurer's liability, which arises under the
policy. There are therefore different issues in respect of
EQC has announced that it does not consider that the six-year
limitation period runs from the date of each Canterbury earthquake.
Where an EQC claim has already been settled, the six-year time
limit for bringing court proceedings will run from the date EQC
settled that claim;
Where an EQC claim has not already been settled, the six-year
time limit for bringing court proceedings will start running when
EQC settles that claim; or
Where a claim is declined, the six-year limitation period will
run from the date that EQC declines the claim.
Different types of policy wordings have resulted in different
views about limitation periods for insurers. However, in an
announcement made today through the Insurance Council of New
Zealand, AA Insurance, FMG, the IAG brands, MAS, Tower and Vero
have agreed not to raise a limitation defence for any residential
claim relating to the Canterbury Earthquakes where proceedings are
filed in the courts before 4 September 2017.
The statement said that "our members have agreed that 4
September 2017 is the earliest date a Limitations Act defence may
be used. This minimum time extension has been agreed in the
interests of customers. By that date, we fully expect almost all
claims to be settled."
This will avoid the need for people to rush to file proceedings
before the expiry of the six-year period from the date of the
earthquake which damaged their home.
It is important to note that this announcement is only made on
behalf of the insurers named above. Southern Response, with whom
many Cantabrians are dealing in relation to their earthquake
claims, are not one of those named, and they have not announced the
position they are taking on this issue.
Both the Earthquake Commission and the Insurance Council have
noted that the law around limitation periods can be confusing and
rather technical. Anybody with any doubts about their claim should
obtain legal advice.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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