Critics are describing the Labour Party's proposals for a special 'Earthquake Court' in Christchurch as misguided and a nonsense.
Leader David Cunliffe and deputy David Parker have announced a range of policies dedicated to the recovery of Christchurch if Labour is elected to power on 20 September.
An earthquake-damaged home in the suburb of Sumner. Photo: RNZ / Diego Opatowski
On Monday, Mr Cunliffe warned the insurance industry and the Earthquake Commission (EQC) that if they did not improve, a Labour government might further regulate them.
The Earthquake Court would be a division of the Christchurch District Court to clear more than 10,000 insurance claims that haven't been settled, and would deal with claims of up to $1 million.
Labour leader David Cunliffe at Monday's policy launch. Photo: RNZ / Nicola Grigg
The Crown would pay lawyers' costs and witnesses fees, Mr Cunliffe said, but would then recoup these from insurance companies and EQC as a levy in proportion to the size of the awards granted by the court.
"Insurers are paying for the cost of this new court. If they are not cooperating to speed up these claims that would be very costly for them. And ultimately, if the system doesn't deliver the results that we expect, then we have the option to further regulate."
Insurance Council chief executive Tim Grafton believes the policy is misguided and lawyers would be the only winners.
"It's a really bad precedent when the state requires you to pay for people to see you. We just think that that's a wrong-headed approach to things. And there are many free services available to enable them to resolve these disputes, which are largely of a technical rather than a legal nature.
"I can understand the common sentiments to move things along quickly. The danger here is that people will head off into a court action, rather than going down the line of free services that can resolve their disputes of a largely technical nature and move on and get into that rebuild repair queue."
Mr Grafton disputed Labour's statistic that 10,000 insurance claims remain unresolved, saying 87 percent of the 22,500 claims of $100,000 or more have been settled.
Earthquake Recovery Minister Gerry Brownlee said on Monday that the District and High Courts are already holding additional sittings to work through the claims, and Labour's idea is nonsense.
Mr Brownlee said the only guarantee that claimants wouldn't pay would be if the case was successful.
High Court action vow
The Labour Party also said it would throw out a High Court action being sought by the Earthquake Commission.
The EQC and the Christchurch City Council are seeking a declaration from the court on whether the commission should help pay for flood mitigation and prevention work to protect families whose homes are now flooding.
Deputy leader David Parker said the hearing, set down for October, would be thrown out if Labour is in power.
Mr Parker said there was no point wasting money on court action when everybody knows what the right thing to do is.
