Canterbury earthquake claimants are hopeful they may be able to salvage tens of thousands of dollars they thought they had seen the last of, via a class action lawsuit against Southern Response.
The government-owned insurance company was responsible for settling claims by AMI policyholders, but Christchurch lawyer Grant Cameron says "hidden costs" led to significant underpayments to about 3000 people, including homeowners Brendan and Colleen Ross.
In 2011, the Ross's approached Southern Response to get a detailed repair analysis (DRA) document for their earthquake damaged house, which gave an estimated cost of repairs. It was based on that figure they opted to buy another house.
Mr Ross said he later learnt the DRA they were given was an abridged version of the one their insurer got, leaving out one page of costs.
"Unknown to us, there was separate costing that we became aware of later on, after we went through the Privacy Act and got our details from Southern Response," he said.
"The difference was - in our case - at least $140,000."
Claimants Colleen and Brendan Ross. Photo: Supplied
Ross Williamson and his wife Ellie faced a similar situation in 2012. After settling, he spoke to Mr Cameron and was told about the extra page of costings.
"We were so worried about a settlement to get out of Christchurch our health was suffering. We had to get away from the liquefaction," he said.
"When we found out that they did us out of $130,000, we were quite upset."
In 2014, the matter came before the High Court and Southern Response changed its DRA process.
But Mr Cameron said the Ross's and the Williamsons were among thousands of people who settled before 1 October, 2014 and never received compensation.
He estimated the total figure owed is about $300 million.
This morning, Mr Cameron announced he had the backing of Australian law firm Maurice Blackburn, which was taking class action to recover the costs.
Mr Williamson said it was great news for people like himself and his wife, who couldn't afford to face Southern Response as individuals.
"It's finally got the ball rolling and we've been on tenterhooks... we thought this wasn't going to happen - after five or six years, you tend to think that," he said.
Mr Cameron was inviting any other Southern Response policyholders who settled before 1 October, 2014, to come forward and join the class action.
Nikki Chamberlain Photo: Supplied
He was confident people could recover their missing money and hoped it would be a relatively quick process.
"Many class actions unfortunately do tend to be quite protracted. There's a lot at stake, a lot of complications, and matters can drag on for a long period of time," he said.
"However, in this case, everybody has already settled... and I think for a variety of reasons this government is far more motivated to sit down and look at reasonable ways of resolving it. So my personal expectations are a matter of months rather than a matter of years."
The class action is happening on a no-win no-fee basis.
Claimants don't know exactly how much it will cost if it is a win, but expect lawyers could take a cut of about 20 to 30 percent.
University of Auckland law lecturer Nikki Chamberlain said class action could provide access to justice when it was otherwise uneconomic or inefficient.
But she said people taking part needed to check it was the right option, with the right boundaries in place.
"Normally in these situations there will be a litigation funding agreement, and [that] will outline the terms upon which the litigation funder would be paid and the costs associated with their involvement. So I would suggest that anybody who is thinking of looking into any class action to carefully review a litigation funding agreement to see if they are happy," she said.
Southern Response were approached for comment, but a spokesperson declined. As the case is currently before the courts, they said it would be inappropriate to comment.
Mr Cameron said he was looking forward to seeing the case through to its completion.
