Government consults lawyers over leak liability

By FRANCESCA MOLD and PAULA OLIVER

The Government has asked lawyers whether it has any liability for the leaky building crisis that could cost homeowners millions.

The Prime Minister said yesterday that the Crown Law Office had been instructed to provide an opinion about whether the Government faced any liability.

Helen Clark said there was no suggestion that the Government should be held liable for the leaky buildings crisis affecting thousands of New Zealanders.

"This is a Government that doesn't shirk responsibility. If the finger is pointed directly at the Government, we do something.

"But in this case, we are looking at a problem that has come straight out of the building and design industry and where houses are certified by councils.

"The best advice you can give anyone right now is to go to a lawyer."

The Crown Law Office advice would be given to Internal Affairs Minister George Hawkins this week.

Mr Hawkins emerged from a meeting of local government delegates in Wellington yesterday telling homeowners they should get their own legal advice.

More than 100 delegates met behind closed doors to sort out a response to a Building Industry Authority report released last week that estimated the repair bill could reach $240 million.

The report blamed architects, developers, the industry and councils for contributing to the problem, which has left thousands of homes leaking or rotting.

Councils are also among those under fire from homeowners with leak problems and like others, they are keen to avoid admitting any liability.

"You and I know that if we admitted liability the insurance company says, 'You've done it, you pay for it'," said Local Government New Zealand president Basil Morrison.

"So we're saying, 'No liability, but we've got a problem here. How can we help?"'

The delegates, who represented 74 territorial authorities, also claimed that repairs would cost much less than $240 million, and might reach only $40 million.

That was described as "total nonsense" by leading leak investigation firm Prendos, which already had $30 million work of its own, said director Greg O'Sullivan.

The council delegates proposed a four-pronged package to deal with the leaky homes problem:

* An expert group of building inspectors to inspect all leaky buildings and estimate the national repair cost.

* A mediation service to help decide who should contribute to fixing properties.

* A special bench of district court judges, assisted by neutral lawyers, to give homeowners legal advice.

* A community fund for homeowners to use as a last resort.

Details of how the package would work, and who would pay for it, had not been determined.

Mr Hawkins spoke to the delegates, but only after asking journalists to leave.

National Party leader Bill English accused the Government of washing its hands of the disaster: "Sending these people to their lawyers is not the answer."

National has urged the Government to set up a fast-track dispute resolution process to deal with liability and compensation.

* If you have information about leaking buildings,
email the Herald or fax (09) 373-6421.

Further reading
Feature: Leaky buildings

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