ILV Claims Update

We have begun to settle the 669 land claims that had been put on hold due to a legal challenge brought by private insurers, IAG and Tower, in relation to the way we settle Increased Liquefaction Vulnerability (ILV) land damage.

We are now settling the claims without prejudice, which means that regardless of the outcome of the litigation the claimants can keep their settlement. Where the payment is for the reduced value of land due to increased vulnerability to liquefaction or flooding due to earthquake damage (called Diminution of Value), the claimant does not have to make any repairs. 

The settlements are, on average, for around $25,000 per claim.

By way of background, IAG and Tower took High Court litigation against EQC in 2017, challenging our policy for settling ILV damage. We had previously proactively sought confirmation of aspects of our approach from the High Court (through a declaratory judgment).  The Court confirmed in 2014 that ILV was damage covered by the EQC Act and also confirmed the reduced value of land due to earthquake damage (Diminution of value) was an appropriate settlement method in certain circumstances.

We have started to make payment in settlement of these land claims ahead of the litigation, based on EQC’s known liability. (In some cases, where the homeowner has signed over the claim to their private insurer through a Deed of Assignment, this payment will be made directly to the insurer.) We understand this litigation will not be heard in the courts until the end of 2019, and we didn’t want to wait any further. The outcome could be many months after any hearing.

In a small number of cases, private insurers have notified EQC that they have completed or paid for works that EQC considers to have repaired a customer’s land damage. In those instances EQC will continue to investigate settlement options as these repairs fall outside of current EQC policy but may have acted to remediate ILV land vulnerability.

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