A class action is building against Southern Response, the New Zealand Government-owned company handling the Canterbury earthquake claims of AMI Insurance.

IAG bought AMI in 2012 but the Christchurch-based insurer’s quake claims were taken over by the Government. Southern Response was created to deal with them.

GCA Lawyers has more than 100 customers signed up to the action and will decide by the end of this week whether to proceed. The litigants have to fund the action.

Southern Response CEO Peter Rose told insuranceNEWS.com.au the company will “vigorously defend” any class action. “We are concerned it will create significant delays for customers involved in any legal action.”

GCA Senior Solicitor Tim Gunn says claimants continue to face long delays and complain of failures of communication, clarity and transparency.

Some homeowners have been given dates for rebuilds only to find they have changed, or that full rebuilds have been recategorised as partial rebuilds, he told insuranceNEWS.com.au.

“People are very unclear where they stand. A lot are joining the action through frustration, feeling they are being divided and conquered.”

Property owners have suffered financially through having to pay rent, storage and travel costs, and some have stress disorders, Mr Gunn says.