About 3000 Canterbury homeowners have been sent letters inviting them to join a class action lawsuit against three companies that supplied allegedly substandard steel mesh.
Auckland firm Adina Thorn Lawyers has proposed taking the lawsuit against the companies which are also set to be prosecuted by the Commerce Commission this year under the Fair Trading Act.
The steel mesh, alleged to be below the national building standard, is typically used in concrete slab foundations and driveways.
The letter stated that if the companies were found guilty in the Commerce Commission's prosecution they would face fines but this was "very unlikely" to deliver financial compensation to affected home owners.
"Unless the owners of affected properties take legal action, they will likely face losses in terms of re-sale values, as well as possible complications with insurance claims in the event of an earthquake," it said.
The three companies were not named by the Commerce Commission but one, Steel & Tube, chose to identify itself. Steel & Tube said the commission's decision in relation to itself was about the application of testing methodologies and mistaken use of a testing laboratories logo on test certificates, not the performance characteristics of its seismic mesh.
Adina Thorn Lawyers senior associate Richard Hart said homes which received the letters had been chosen based on having had a building consent issued during the four years that the non-complying mesh was being supplied.
He acknowledged the firm did not know whether it had been used in any of the specific homes it sent letters to.
The 3000 was just a subset of potentially affected homes with the total number "too difficult to obtain at this stage," Mr Hart said.
"This is a potentially serious problem, we don't want to alarm people but on the other hand it's an opportunity for people to perhaps find out a bit more and find out whether or not [joining the lawsuit] is worthwhile."
Letters had been sent to new Auckland subdivisions as well but Mr Hart said Canterbury had the potential to be worse affected due to the possibility of future seismic activity in the region.
Steel & Tube communications manager Tanya Katterns said Adina Thorn had not provided information to support its claims that re-sale values and insurance claims could be affected.
"We believe our seismic mesh ensures building safety," she said.
Last year Ministry of Business Innovation and Employment general manager building system performance Derek Baxter said he was not concerned that the mesh posed a safety risk for newly built houses and was confident they would still comply with the Building Code.
The Structural Engineering Society has also said homeowners should not be unnecessarily concerned about the steel mesh in their houses.
The city council referred questions from The Star to the Commerce Commission. A spokeswoman for the commission said it did not wish to comment on the class action.