The Insurance Council of New Zealand today firmly rejected Labour’s plans to set up an Arbitration Tribunal against insurers in Christchurch. “This is a misconceived, poorly thought through seat-of-the-pants policy that runs rough shod over natural justice” said Insurance Council Chief Executive Tim Grafton. “Insurers have been at pains to settle claims in Canterbury as quickly as possible- over 95% of all residential claims are settled.   Insurers are committed to settling claims as quickly as possible, but the proposed tribunal is not the right way to do it. “Insurers helped establish and fund the Residential Advisory Service (RAS) to help people navigate through their claims. This is the service Labour are pledging more money to. Insurers waived their rights to close of claims under the Limitation Act to help people to have more time to settle their claims in response to public demands. “We already have a free system available to homeowners to take complaints against insurers already. “We also have a justice system in New Zealand where judges sit in judgement over cases. What does it mean to our sense of justice when Labour picks lawyers to run an inquisition over insurers? “Who are these lawyers? Will their decisions be appealable consistent with the rules of natural justice? What is an undue delay? “RAS, IFSO, Parliamentary Ombudsman, and EQC have also adapted their existing processes to try to settle disputes before having to go to court. These schemes have also been successful in resolving claims. “Claims settlement delays have been contributed to by homeowners and by EQC. Would Labour be suggesting that homeowners and EQC could be liable to insurers for undue delay?  If EQC is to pay, then where will that money come from? Taxpayers? “Insurers are still receiving over-cap claims from EQC, 7 years after the first earthquake. EQC would have to be a party to Labour’s scheme as EQC is involved in every residential Canterbury Earthquake. Is Labour suggesting EQC is liable to pay for its delays? Three weeks to submit documents is laughable given the complexity of contested expert evidence, apportioning loss between events, etc. in so many of these disputes. “Would the tribunal only be able to look at unsettled cases, or would it be able to reopen settled cases and consider whether there has been delay?  If the suggestion is to open up full and final settled claims, this raises serious concerns about Labour’s commitment to uphold contract law. “The proposed power to compensate for undue delays that have already happened is retrospective, and therefore flouts the rule of law. Labour expects the tribunal would not be operating until 2018 – by which time the vast majority of claims will have been settled. What will be left for the tribunal to do?