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.