PM's leak advice savaged

By ANDREW LAXON and VERNON SMALL

A top building lawyer wants the Government to stop telling owners of leaky homes to seek legal advice and set up a full commission of inquiry to establish liability.

Experienced arbitrator and barrister Derek Firth described repeated "see your lawyer" advice from Prime Minister Helen Clark and Internal Affairs Minister George Hawkins as mischievous and hollow.

He said it was virtually impossible for individual homeowners to get compensation through either the court system or mediation, unless a commission of inquiry first determined broad guidelines for liability.

The Government yesterday killed off an attempt by the National Party to set up a weathertightness tribunal for fast-track mediation and resolution of legal disputes.

It is promising to come up with its own mediation plan, which is expected to be announced today.

But Mr Firth - who previously headed Simpson Grierson's construction and energy law department and has ruled on about 40 building cases as an arbitrator - said mediation was no use unless the Government took steps to clarify the law.

"The problem is that if the mediation is going to be based on people's legal rights, it's a complete hotch-potch.

"Some have rights in arbitration under contract, some will have rights in negligence through the courts, and the same people could have different avenues of attack against different defendants.

"Without some leverage, I don't think a mediation process would get anywhere because people can just crawl back into their legal holes."

Mr Firth said many homeowners could not afford claims against a large number of defendants or justify the legal cost if the damage was less than $100,000.

Unlike the United States, New Zealand had no provision for class actions, which meant it was very difficult to establish broad legal precedents applying to all cases.

In a paper prepared for an Auckland conference next week on legal issues surrounding leaky buildings, Mr Firth writes: "When the public is confronted with a crisis of the proportion of this one, such statements as 'leave it for the courts' or 'leave it to the legal process' are as mischievous as they are hollow.

"Special measures are called for, if only because of the scale of the problem."

He told the Herald that a commission of inquiry could consider hundreds of cases and establish legal guidelines dividing the burden of liability between defendants, including builders, developers, architects, councils and the Government.

The guidelines would effectively reverse the onus of proof, forcing defendants to show why the rules should not apply to them in particular cases.

Mr Firth said this principle, known as a rebuttable presumption, was not unusual. It already applied to natural disasters such as oil spills.

However it would work only if the Government was prepared to waive statutory protection for its agencies, so the commission could determine their share of responsibility.

"I'm quite sure that the wider public would see the fairness of that."

Earlier, National Party leader Bill English said there were questions about the Building Industry Authority's legal liability, given its knowledge of the problem and its statutory responsibilities to achieve a sensible and practical building code.

He called upon the Government to release its legal advice from the Crown Law Office on the leaky building crisis, saying National believed it might cover this issue.

Helen Clark refused on the grounds that the report was covered by professional legal privilege.

The Government also rejected National's plan to set up a weathertightness tribunal through an amendment to the Construction Contracts Bill now before Parliament.

The tribunal would have used mediation as a first step but issued a binding decision if there was no agreement.

Mr English said the proposal would have offered a fast resolution of issues of liability. Many affected homeowners were heavily mortgaged and could not afford a lawyer.

"We have dozens of cases of young couples, retired people, widows with children.

"These are good average New Zealanders who've worked hard to get their own home and they deserve the support of the Parliament and the Government ... What we are seeing at our meetings is heartbreak."

Mr English said there were potentially thousands of homeowners whose houses were rotting now but did not know they had a problem.

He criticised Mr Hawkins, who had said yesterday that he was not informed of the problem by the Building Industry Authority until the end of April.

"George Hawkins looks stupid. This has been in the newspaper for six months."


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Further reading
Feature: Leaky buildings

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