There has been commentary recently about the length of time EQC customers have to issue proceedings challenging a settlement for a claim made under the Earthquake Commission Act 1993 (EQC Act). There have been suggestions that legal proceedings must be issued before 4 September 2016 to ensure they are brought before the deadline in the Limitation Act 1950 and Limitation Act 2010 (together, the Limitation Act).
EQC’s position is that it does not consider the six-year limitation period, in the Limitation Act, runs from the date of each Canterbury earthquake. It follows that there is no 4 September 2016 deadline to bring Court proceedings challenging an EQC claim settlement for damage caused by the 4 September 2010 earthquake.
EQC’s customers can rely on this statement and the explanation below in any proceedings brought after 4 September 2016.
EQC will approach the six-year limitation period for each land, building and contents claim from each earthquake, as running:
- where an EQC claim has been settled, from the date EQC settled that claim;
- where an EQC claim has not yet been settled, from the date when EQC settles or declines that claim; or
- where a claim is declined, from the date that EQC declines the claim.
Further explanation is set out below on how EQC calculates your limitation period.
EQC reserves the right to change its approach to the application of limitation periods, but if it does so it will give public notice of that change. Any such changes will not have retrospective effect, and will not be relied on by EQC until 6 months after the date EQC has published public notice of its change on its website.
When is the settlement date of a claim?
If your land, building or contents claim has been settled, EQC will calculate the limitation date for that claim from its settlement date.
If your claim has been settled by payment:
- The limitation period starts running from the date EQC makes payment in settlement of your claim under the EQC Act.
- Where EQC has made one or more “top-up” settlements for a claim, then the date will be calculated from the most recent settlement payment.
- If no payment is made because the settlement due is less than the excess amount, the date will be calculated from when EQC communicates its settlement position to the customer.
If your claim has been settled through repair under the Canterbury Home Repair Programme (CHRP):
- The limitation period starts running from the date of practical completion of the repairs.
- If there have been further repairs carried out by EQC after the date of practical completion, then the date will be calculated from the most recent date those further repairs were completed.
When is the date that a claim has been declined?
If a claim has been, or will be, declined (which may also be described as “not accepted”, “closed”, or other similar language), the customer will have received correspondence from EQC communicating that decision. The limitation period will begin to run from the date in that communication.
What if my claim hasn’t been settled or declined?
If a claim has not yet been settled, and has not been declined, then the limitation period will start to run only when the claim is settled or declined.
Q. Why doesn’t EQC announce an extension of the limitation date, as insurers have done?
EQC’s approach to limitation periods takes into account the circumstances of each individual claim and allows customers six years after that claim was settled or declined to decide whether to bring legal proceedings.
Insurers have announced extensions of the limitation date because some consider that under their policies the limitation period starts running from the date of each earthquake. However, EQC does not consider that is the case for claims under the EQC Act.
How the Limitation Act applies to policies provided by private insurers may differ between policies and people should talk with their private insurer and potentially their lawyer about their individual claims.
Q. What is the date of practical completion?
The date of practical completion is the date that EQC and its building contractor agreed that the repair work to your property was completed, apart from minor issues that could be rectified without affecting the use of the property.
Q. What should I do if I disagree with my claim settlement?
If you have any concerns with your settlement or become aware of new information relevant to your claim, then you can raise this with EQC for review. This can be done by making a complaint to EQC, following the instructions set out here.