Red Zoners and CERA’s Residential Advisory Service

As is their continuing practice, CERA have announced a process – this time the Residential Advisory Service (RAS) – with no supporting detail. It commences on the 20th of May and might be the way to break through the problems between the insured, insurers and their project management organisations (PMOs).

With the 31 July departure date approaching a few are still stuck in the Red Zone because there is no closure with insurers. Could the RAS be the means of getting these people unstuck? To what extent will it help those in TC3 or TC2 with problems?

The potential value of the RAS for Red Zoners hinges on factors not yet public (or perhaps not yet worked out). On the face of it, the Service is likely to be suitable to process simple to moderately complicated issues of genuine misunderstanding, or an inability to pull all the bits together. It is optimistic to see the apparent premise of the Service, producing results through better provision of information and opportunities for conversations, as the solution to more complex or entrenched problems. 

The background against which the RAS will operate is bleak. The observation has been made that anxiety and humiliation is experienced by sensitive and honest people when they are forced into contact with people whose standards are commercial. This is a bewildering and damaging experience, being exposed to the brutal legalism and calculating adversarial approach of insurers and PMOs who have a different set of values, and very different rules of corporate and personal motivation and conduct.

Sometimes residents encounter employees not averse to misunderstanding, misleading or pressuring where they can. This puts residents at risk of being wilfully misled by one-sided policy, building code, and building contract interpretations. The result is loss of legitimate entitlement, loss of equity, and loss of wellbeing.

How will CERA ensure the RAS process is strictly neutral, free of the tactics of hard bargainers, and motivated to produce prompt, credible results?

The RAS Process (click the link to continue)

Where there is a disagreement the property owner rings a number and, if eligible, booked in. Fine. Then what? How will the process be handled? Will the process be fair in the eyes of the property owners?[1]  Possibly not.

There is clear cause for uncertainty and mistrust as the Service is a deal between CERA and insurers. Minister Brownlee has never wanted an advocacy system, insurers certainly don’t, so it is logical to hold the view for now that the RAS has not been set up with particularly pure motives (a time wasting, energy sapping Trojan horse perhaps?).

Traditional methods of handling disagreements involve arbitration, tribunals, or the courts. Facilitation by itself does not lead to resolution, and there is significant risk that a weak process (or weak or inexperienced facilitators) may become an opportunity for insurers or PMOs to field representatives who are practiced at being economic with the truth, aggressive, or both, to provide input that is self-serving, possibly intimidating, and push heavily for closure on improper terms.
From this arise some questions for Roger Sutton:

  • How will the service operate to ensure that it is not used as an accessory to the methods of insurers and PMOs?
  • Who will look to protecting the legitimate interests of those who are out of their depth and cannot afford the high cost of legal advice and support?
  • At what point does a disagreement become too complicated or intractable, and the Service backs away? What happens then?
  • How will the hard problems be addressed? 

Possible areas of risk to users of the RAS

Areas where the Service might fall short for Red Zoners are potentially issues for Green Zone residents too. No issues are likely to be Red Zone specific, however access, timeliness, and the quality and level of participation in the process are critical for Red Zoners.

Access: This is a fraught area. If everyone can use the Service then it will rival EQC in the time taken to close all cases. Apply a selection process and each applicant turned away is a potential OIA enquiry, particularly if there is not a review process. How will urgency of need be prioritised? Is the Red Zone a priority case? Are Red Zone cases too hard, and therefor excluded?

Timeliness: What is the expected average timeframe for a case, from start to finish? Clearly it will vary depending on the complexity of the problem(s), but credibility will hinge on the speed of the process and the number of delays experienced by residents. How will the cases of Red Zoners who have impending deadlines be handled? Once Red Zoners are in the system it would be a reasonable expectation on their part that CERA will not push or harass them into a decision, or out of their house, while the RAS process is underway. Is this how CERA sees it?

Appropriate participants: Organising the right people to meet with residents will be a key part of the process. What resources will insurers allocate to the Service, will these resources be the relevant case managers and, of great significance to rapid processing, will they have the authority to both speak for their company and to commit to anything at the time of the discussions? If not, is the process flawed? The same issues apply to the participation of EQC and the various PMOs regarding incomplete or disputed assessments.

Commitment: What levels of time and resource commitment will be made by the parties? As a notional example: if 200 Southern Response customers entered the system would Southern Response provide resources for customers to be processed in parallel, or just one at a time? How many facilitators will there be? How many days a week will they work? How many days a week will the RAS operate? Will they do evening or weekend sessions so residents don’t have to lose work time and possibly income?

Status of outcomes

A wider issue is that of the decisions reached. Once a particular issue is resolved, will details of what is agreed be public? Will the resolution reached be considered by all participants to be a precedent? If yes, then it needs to be published in some detail to allow other situations with the same circumstances to be sorted outside the Service. If not, then we have another secret CERA process and considerable unnecessary duplication and delay as the same set of circumstances are reconsidered multiple times.

Interim conclusion

At this stage CERA will have to work hard if the RAS is going to be offered to those in the Red Zone. If it won’t be available to them then that is an act of prejudice against those most urgently in need of it.

For residents in the Green zones the Service has some potential but more detail is required before getting excited. It might be the service becomes just a souped up version of the CERA hubs.

Given the track record of Minister Brownlee, EQC, and insurers so far there is a risk that this will become primarily an exercise in looking good without any significant change to current practices.
[1]  NOTE: The wording on the CERA web site is prejudicial against the resident where it says: “(you) believe you are in disagreement with another party over your repair or rebuild process.” Chances are most residents will feel the situation is more concrete than that: they ARE in disagreement and have lived with it for some time.

CERA’s Residential Advisory Service

Yesterday the Government announced (here) the establishment of a Residential Advisory Service that will start operating next month. It is not an advocacy service, as has long been sought and occasionally promised. Rather it is:

… designed to assist those who are facing complex issues, are confused over conflicting advice, or who are in disagreement with other parties.  It will work by identifying potential solutions, preventing unnecessary disputes arising, and contributing to a smooth and timely rebuild process.

On paper at least the service looks as though it will be useful in a number of situations.

The service will assist property owners to find the best way to address the challenges they are facing and gain a clearer understanding of their own repair and rebuild process. A range of technical experts will be available to support the service. The service’s independent advisers will be able to request direct advice and/or suggestions from these experts. Funding arrangements for the service are still being finalised, with costs shared between CERA and other agencies and organisations.

Some residential property owners may need general advice. Others may find it more helpful to have an independently facilitated multi-party meeting, where they can meet with representatives of the organisations relevant to their circumstances. Everyone’s circumstances are different, and one solution may not work for all situations.

There are restrictions on the situations in which it can, or cannot, be used: 

This service may be available to you if you are an earthquake-affected residential property owner and you:

  • believe you are in disagreement with another party over your repair or rebuild process, or
  • are not confident about or do not understand the complex matters associated with your rebuild or repair process.

However, you cannot use the service if you:

  • have filed legal proceedings against your insurer (if your issue is insurance related), or
  • are participating in EQC mediation (if your issue is EQC related), or
  • are trying to deal with your situation through the Insurance and Savings Ombudsman process or any other dispute resolution service.

The preliminary operational details, including phone numbers to call to book yourself into the service, are here. Hopefully this service will give some priority to those stuck in the Red Zones so they can get out as quickly as possible. Click on the link to see the operational details.  

The Residential Advisory Service provides independent assistance to residential property owners. It helps them to understand and negotiate progress the repair and rebuild process. What will the service offer? The service will assist property owners to find the best way to address the challenges they are facing and gain a clearer understanding of their own repair and rebuild process. Some residential property owners may need general advice. Others may find it more helpful to have an independently facilitated multi-party meeting, where they can meet with other parties or representatives of the organisations relevant to their circumstances. Everyone’s circumstances are different, and one solution may not work for all situations.

 

Criteria – who can use the service?

This service may be available to you if you are an earthquake-affected residential property owner and you:

  • believe you are in disagreement with another party over your repair or rebuild process, or
  • are not confident about or do not understand the complex matters associated with your rebuild or repair process.

However, you cannot use the service if you:

  • have filed legal proceedings against your insurer (if your issue is insurance related), or
  • are participating in EQC mediation (if your issue is EQC related), or
  • are trying to deal with your situation through the Insurance and Savings Ombudsman process or any other dispute resolution service.

 

How does the service work?

The service involves three steps: STEP 1 When you contact the Residential Advisory Service, a staff member will take you through a short assessment to see whether your circumstances meet the criteria for the independent advice provided by this service. If your circumstances don’t meet the criteria, the staff member will tell you about other support services that are more appropriate to your circumstances. STEP 2 If your circumstances meet the criteria, you will be offered a face-to-face meeting with an independent advisor. At that meeting, the advisor will gather information to work out where you are in the repair and rebuild process. If necessary, they will seek further information from the agencies involved, and will have access to an independent panel who have technical expertise in the areas relevant to your circumstances such as insurance. STEP 3 If you have been identified as having a particularly complex or difficult set of circumstances, you may be offered the opportunity to attend a multi-party meeting to clarify the issues you are facing and help you to find a solution to them. This meeting will be independently facilitated. Or you could choose to deal with your circumstances through a dispute resolution process (like the Insurance and Savings Ombudsman). Where appropriate, the service may support assist you to access this.

 

How do I access the service?

You can access the Residential Advisory Service through self-referral by calling 03 379 7027 or 0800 777 299 NOTE added 22 April: CERA have deleted the access information and added a note to the effect the Service will be available from the 20th of May. Small word changes have been made and are indicated in the original post by strikeout for deletions or highlighting for added words.

EQC has changed it’s Apportionment information yet again, and removed an important review provision

Yesterday EQC made major changes to the wording of its web page on apportionment (here). The information now available is less than what was put up on the 4th of December.

If you are new to apportionment,  information on the current page will not give you as good a picture of what apportionment is as the earlier material.

Of great importance is removal of information from the earlier version on what to do if you didn’t agree with your apportionment assessment:

What to do if you don’t agree with how damage has been apportioned

Where EQC hasn’t done a physical assessment of damage after each event, we generally work out apportionment by allocating a proportion of the total damage value to each event (rather than allocating specific damage – such as broken tiles – to an event).

If you think you’ve been adversely affected by EQC’s apportionment of damage and you have evidence of damage on certain dates (eg, photographs), you can provide these to EQC and ask us to reconsider your apportionment.

This is missing from the latest version with no explanation as to why this has occurred. Now that it is gone, does that mean the opportunity to have your assessment reconsidered has now been wiped? How can it exist one day and then just disappear the next? Surely there is a right to have some review process, especially considering the on-going gross incompetence displayed by EQC assessors over the last two years? 

The problems arising from EQC continually changing the content of it’s FAQ pages has been drawn to the attention of staff of the Office of the Auditor General. The grounds for this action were that it is a systemic problem of great importance to the general public, and that there may be issues of probity involved as well. We will have to wait to see what, if anything, happens. Sadly the long periods of time taken by public “watch dog “ organisations like the Audit Office and the Office of the Ombudsman to ponder the issues mean great harm is done while they deliberate.

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Just not coping – a problem relationship with an insurance company

The New Zealand Herald has reported the case of a Christchurch man who threatened to set fire to himself as a protest against the treatment he was receiving from his insurance company (here). The circumstances are complicated, as they often are, and the relationship between the man and his insurer had got to a very bad state. Considering the rough handling a number of us have had from EQC, insurance companies and others it is not a surprise to hear that the relationships deteriorated as much as it did. As all the power resides on one side of discussions and negotiations, an increasing number of people have diminishing respect or tolerance for those inadequate or incompetent (and amoral?) employees of the insurance industries they have the misfortune to be forced to deal with. Sadly these employees are not being sufficiently guided, controlled or mentored and the checks and balances that are supposed to be in place just don’t seem to work until situations become desperate. Perhaps Minister Brownlee might like to direct some of his plain speaking to the wider insurance industry? Maybe time for an in-depth review of the performance of the insurance industry? .

Disturbing public order in the name of protest

Last year’s TIME Magazine Person of the Year was the protester. Public protest actions brought down dictators in Tunisia, Egypt, and Libya. The Occupy movement put economic inequality and financial reform on the agenda.

This is the opening of media law barrister Steven Price’s article on the website NZLawyer online (here).  The article discusses the value of protest speech and looks at the difference between what is considered protest, and what is deemed abuse, in the context of the UK and New Zealand. A particularly interesting part is Steven Price’s list of his top ten reasons why protest speech is undervalued. Number 10 reads:

10. Protesters are annoying: Might this be the biggest factor? Protesters are often self-righteous, disrespectful, combative, tunnel-visioned, and whiny. They dress badly. Some are crackpots. I suspect the police and judges find it difficult to see them as social critics with something important to say.

He concludes with the following:

We have come a long way from the lofty constitutional principles I described at the outset. And that is really my point. The grubby daily business of the law is much more closely related to these factors, I think, than the free speech ones. And that’s disturbing, because we can’t tell in advance which of these protesters will turn out to be our age’s anti-slavery campaigners or suffragettes.

A good read.