By Andrew Hooker*
In recent days there have been some startling revelations in the media about Southern Response carrying out investigations into clients and lawyers. The contents of some of the interviews airing on the radio and in the media would be well suited for a John Grisham novel.
We have heard stories about Southern Response apparently instructing private investigators to obtain highly personal information about lawyers acting for people suing Southern Response, information about financial and personal matters, and suggestions that Southern Response intended using information to pressure the lawyers to not act for people against them.
Similar revelations have come from high profile claimants such as Cam Preston, who has been quite public in his criticism of Southern Response. Visits by the police and other apparently intimidatory actions, also at the behest of Southern Response.
Quite rightly, the State Services Commission is looking into these issues because Southern Response is a government-run and taxpayer funded organisation. This company ought to be bound by very high ethical standards, and should these allegations be proven, it would seem unlikely that Southern Response has met its obligations as a government-run organisation.
But even if Southern Response was a private insurance company, it would owe very important duties of good faith to its customers, and undertaking collateral investigations into lawyers representing those customers with the apparent intent of convincing the lawyer not to assist those claimants, would have to look like a breach of this fundamental obligation.
Insurance companies investigate claims all the time. I was in fact long ago involved in the establishment and running of a major insurance investigation company. People make fraudulent claims and it is part of the legitimate business of an insurance company to investigate claims and identify fraud. No one is suggesting that there is anything untoward about an insurance company wanting to investigate a claim to ascertain whether there is any fraud and whether the claim is completely genuine.
In my role as a plaintiff’s lawyer, I represent numerous people making claims for disablement under income protection policies. These people are routinely placed under surveillance, and I have seen hundreds of detailed surveillance reports showing the lengths to which an insurance company will go to watch people who are receiving an income benefit. That is also quite acceptable.
However, when the investigations include following claimants to their visits with their lawyers, the line must start getting rather blurred.
Over the years, I have on occasions been well aware that insurance company investigators have been in the vicinity and/or have followed my clients to meetings they are having with me. That is not to suggest that in any way the investigators have attempted to obtain information about those meetings. But following claimants to visits to their lawyers does seem a little bit beyond the pale.
That, however, pales in comparison to what is now being suggested. If Southern Response has indeed been spending the taxpayers’ money to conduct investigations into solicitors who are representing its customers, so as to find personal information about those solicitors, Southern Response has well and truly crossed the line. And if it established that Southern Response was doing this with the specific intention of obtaining information in an attempt to gain ammunition to silence or neutralise those solicitors, then that is reprehensible.
No doubt there will be investigations, and Southern Response will have an opportunity to respond at the appropriate time and in the appropriate arena.
What all of this says is that it is time the games in Christchurch stopped. There are genuine people in Christchurch in genuine suffering and with munted houses. It is of serious concern that the two organisations dominating the media at the moment (EQC and Southern Response) in relation to poorly handled Christchurch claims are both government-run organisations. Perhaps the inquiry needs to go a little bit further than the management of Southern Response and EQC.
Hopefully, when the new Minister for EQC launches her inquiry, the terms of reference will be wide enough to peel back all these onions and obtain some truth. If there has been misconduct, then there must be accountability.
But more importantly, these poor people need their claims resolved.
*Andrew Hooker is the managing director of Shine Lawyers NZ, and practices as a specialist insurance lawyer in Auckland. He also runs an insurance information website - www.claimshelp.co.nz
21 Comments
An important question is where and how this virulent anti claimant culture started. How was it able to take root and flourish in a democracy that has legislation to protect its citizens from such behaviour. Everybody knows that on a day by day basis Insurers have to deal with fraudulent claims, that they are versed and geared to deal with them and the cost of managing that is built into their premiums. It is relevant that this course only really took hold after the September 2010 EQ, when the extent of February & July EQs became obvious.
There have been thousands of legitimate and honest Canterbury EQ claimants faced with EQC and Insurance assessors who have gone to great lengths to deny EQ damage and deny the claimant their legitimate entitlements under their policies. Who are these people, who from longstanding and recent accounts, are quite happy to lie. Why are they like that, what or who motivates them, and who condones that behaviour as an employer. In short, who pays the piper?
At the end of the day, when you think about it, it can only be about money. It started with EQC & the perhaps, well intended MBIE guidelines which as found in the High Court have no legal standing over policy entitlements, and was then advanced by the Insurers, following suit, why not? It would appear that amongst it all,by far the most complaints have been against EQC & Southern Response, two government agencies. Do believe that confirms that it is all about money and that the last National Government fixated about balancing the books went outside of its statutory obligations to maltreat their citizens, rather than protect them. Therefore there must be a Royal Commission. This cannot be allowed to happen again, anywhere in NZ.
Very well put. We are in the middle of this mess with the toxic Southern Response machine, dishonest bulders etc. Just last night I asked my partner "Why are these people like this. Why do they lie? Were they abused as children, or what?" I shudder to think what they are like in their personal lives.
Hoping for an improvement with the change of regime, but not holding our breath. There will be a lot of platitudes uttered before any real accountability emerges. Although at least it is refreshing to see SR and EQC being exposed in the news every day lately. Gives us strength to fight on.
Have heard several people on National Radio say it makes them embarrassed to be a NZer, and how amazed they are that their own government could do this to them. Exactly how we feel.
Too right Pharos. Being Government employee, i would venture an opinion in that there are many managers in Government, and likely other organisations, with psychopathic tendencies. They firmly believe that their view is the right one and any differing opinion is wrong. They are generally unscrupulous when it comes to stifling opposition when it can't be done by weight of argument. Internally this can and does cause some fairly toxic politics. Unfortunately organisations tend to be willing to promote people like this because they are seen to get "results", but they don't look at how they got the results. The difference between management and leadership.
murray86. Your depiction of some individuals within the CHCH EQ scene is on the money. I've encountered them too many times. An attitude of superiority was not uncommon among some categories of recently promoted decision makers unused to handling so much power and money, at the height of the EQ response. I could relate more than a few heated stand up confrontations and escalations to higher authority, that were required to get these people off their pedestals. I suspect this god complex could well be behind the SR events in CHCH. If attempts were indeed made to influence or intimidate lawyers or advocates, that was contemptible behaviour which undermines the integrity of our system. It must be called out and severely sanctioned.
My general experience was that ignorance and misplaced self confidence, rather than malicious intent, explained most situations where insurer and EQC staff erroneously dug in. Engineers not properly briefed, not understanding insurance obligations or falsely believing they had final authority, were a common cause.
Based on the reported horror stories it's easy to arrive at the conclusion there was a formalised strategy to deprive people of their entitlements. Like most conspiracy theories this falls down, when the extensive network of collaborators required to facilitate it is considered. My experienced based view is that, with the exception of the actions of a comparatively modest number of sociopaths, narcissists and assorted power freaks, most injustices are explained by incompetence. In my experience the vast majority engaged in EQ resolutions were well intended and out to help as best they could.
I believe that the virulent anti-claimant culture started at EQC, where some senior management, including the CEO and the head of claims both came from ACC. Their claims handling experience started from a base of suspicion, not customer service.
I don't believe that the MBIE Guidelines were "well-intentioned". They were designed to save money, and placate the insurers and re-insurers with a strategy to limit their exposure, and certainly not to help meet claimants policy terms. There was no representation from consumers or homeowners in compiling the Guidelines, yet there was from insurers and EQC. The Engineering Advisory Group (EAG) was part of the game to provide a veneer of credibility to that strategy. MBIE have subsequently made it very clear that the guidelines do not replace policy terms or building code requirements, but the damage has been done, as EQC and insurers in many cases assessed and repaired to the guidelines. Google "Adrian Cowie Operation Hoodwink " to see how the floor level part of the guidelines was "cooked".
Southern Response didn't like being called out by its behaviour, or having protests outside its door, and rather than address claimants legitimate concerns, it saw them as the enemy, Other insurers may have had similar views.
A good overview Pharos and now that it is in the public arena that Govt depts consider it OK to investigate claimants without any evidence of attempted fraud it legitimizes that practice enabling the public to do likewise to EQC and insurers including their Lawyers, names addresses photos and comment on any perceived conflicts or malpractice becomes OK. SR in investigating claimants and their Lawyers had a clear intent to blackmail or at least "persuade" those investigated that other possibly non relevant information discovered but embarrassing would be used in an attempt to minimize a claim cost. Of course this is wrong and two wrongs may not equal a right but if you set the rules you cannot complain when those rules are used against you. Every economic downturn has produced whistle blowing and next time will be no different and if the above events are typical now future events will be brutal.
Let's not forget that, once you hire professionals to do some hunting for you, why, they will farm the hunted in order to prolong their contract. Happened with possums, rabbits, now claimants. Quelle surprise.
Of course it's gotten way out of hand. But that pressure by the investigators to hype up the threats, so that they get to do more intensive investigaterating, and for longer, should not be under-estimated. All in the name of Mitigation....which, under another heading, is why we are infested with Elfin Safety wallahs, foobarring productivity as they Keep us Safe from Ourselves....
Yes true enough, it demonstrates the predatory elements in both business and our society. A glaring and disturbing example was how Mohamed Al Fayed was conned out of millions by investigators inventing facts, false news nowadays, to perpetuate their income from the supposed British conspiracy to assassinate his son and more famous partner.
What a crying shame that the boot wasn't on the other foot ... and there was extensive surveillance of Fletchers , the cowboys doing repairs , the boof-headed incompetent friends of EQC employees who got highly paid jobs as damage assessors ...
Oh , we could go on & on about the debacle that is the quake response , and all under the eyes of the city council and the Gnats big man on the job , woodwork teacher Jumbo Gerry ...
No "response quality data", but a telling anecdote for you middleman. A friend who is engaged in an intractable dispute with Southern Response, spent a decade heading up reconstruction projects in Afghanistan. He said that on a trustworthiness scale, the Afghan officials he dealt with ranked significantly higher than Southern Response.
Enjoyed your anecdote, Gillybee. Images of southern response as the Taliban have me chuckling this morning. But not really a laughing matter when you have the misfortune to get an intransigent twat of an insurer case manger with a messiah complex, assigned to your claim. However the perspective I'm challenging Gummy over is not at the individual and too often painful case level, it's rather the sweeping assertions of a chronic systemic failure of the EQ response in CHCH, when directly or implicitly compared with benchmark disasters elsewhere. My view l is that these assertions are wrong and I'm yet to see convincing evidence to the contrary.
AMI were dodgy and the Government regulators weren't doing their job of making sure they had enough capital. Then they had to confiscate our shares in the company to cover up what happened. Then they had to minimise the payouts by pretending it was the AMI policy holders at fault. Every Southern Response policy owner deserves to be paid because their policy was repudiated before the earthquake even happened..we were conned into buying from them. Imagine if Lotto didn't pay out to a winning ticket..or the TAB didn't pay out a winning bet..we didn't know an earthquake would happen we made a bet it might and paid for the ticket in full and we won that bet. Pay up.
Whoa, Southern Response having more covert methods, and direct influence than the SIS. That weights the game a bit too much into the highly unethical territory... is that even legal? How has it not been outlawed in clear enough terms with severe penalties? Surely it skirts close enough to blackmail to exert influence for financial benefit, (not even close to a standard insurance investigation to reduce fraud).
The latest CE of Southern Response was previously a manager at Stream who are the PMO’s for Tower Insurance. There was mention I believe, in an earlier interview, that another Insurance company might have used the same investigators for the same purposes. No more than idle speculation but Is there a connection?
Very important that the air is completely cleared by an enquiry that has terms of reference expansive enough to achieve that, and let all parties affected know exactly what has or has not been done in regard to their privacy.
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