Christchurch homeowners taking part in a class action against their insurer have been misled into believing they have nothing to lose, a court has been told.
Government-owned insurer Southern Response is facing a class action by 46 of its customers, who say it has failed to meet its obligations to settle their claims for earthquake damage to their Christchurch homes.
The company is today challenging their right to take the action in the High Court in Christchurch, arguing their cases are unique and should be heard separately.
Mark O'Brien QC, speaking for the company, said the lawyers taking the class action had told homeowners they had nothing to lose, but this was far from the truth.
He said, if the case succeeded, the litigation funders that were putting up the money to fight it could claim a fee of up to 15 percent of whatever customers received from Southern Response, and lawyers would receive another 5 percent on top of this.
The lawyer for the claimants, Francis Cooke QC, said the company was guilty of undervaluing the cost of settling its clients' insurance claims.
Mr Cooke today told the court about a claim from Southern Response that one of those taking part in the class action, Cam Preston, was confrontational.
He said the amount the company was willing to pay Mr Preston started at just under $180,000 but eventually rose to $480,000.
Mr Cooke said this showed customers needed to show determination in order to get what they were entitled to from the company.
Justice Mander had already indicated he was likely to reserve his decision on whether the class action could proceed until the new year.