Christchurch City Council has no power to impose stricter building-strengthening rules, according to a court ruling that could save insurers millions of dollars.

After the first earthquake hit the city in 2010 the council moved to require building owners to strengthen to 67% of new-building code requirements, up from 34%.

The Insurance Council of New Zealand (ICNZ) challenged this policy and won its case in the High Court.

Although the council did not argue this decision, the University of Canterbury and another building owner took it to the Court of Appeal, which last week upheld the original ruling.

The court says ICNZ was concerned greater strengthening would raise the cost of earthquake repairs, with owners then claiming the cost from insurers.

“If a 67% requirement was to be imposed, the estimated increase to the repair bill of insurers could run into hundreds of millions of dollars,” the judgement says.

ICNZ CEO Tim Grafton says the ruling “will bring a great deal of confidence to those involved in the Canterbury recovery program, because construction can now proceed with complete certainty about the minimum standards for building”.

He told insuranceNEWS.com.au settlements have already been delayed because it was unclear whether they would be calculated on a 34% or 67% rebuild.

Strengthening to 67% could slow the rebuild considerably, he says.

The university owns many heritage sites in Christchurch, and some of its Gothic Revival-style stone buildings were badly damaged in the quakes. It has 20 working days to appeal to the Supreme Court.