The Insurance Council of New Zealand (ICNZ) has condemned Labour Party plans to establish an arbitration tribunal for Canterbury earthquake disputes if it wins next month’s national election.

“This is a misconceived, poorly thought through, seat-of-the-pants policy that runs roughshod over natural justice,” ICNZ CEO Tim Grafton said. “Insurers are committed to settling claims as quickly as possible, but the proposed tribunal is not the right way to do it.”

ICNZ says more than 95% of residential claims are settled, the industry has helped establish and fund the Residential Advisory Service to help people navigate the process, and insurers have waived Limitation Act rights to give people more time to settle claims.

Labour says the tribunal would comprise senior members of the legal profession and be operational “as soon as possible” next year.

It would have “an inquisitorial focus” as an alternative pathway for claimants, the Earthquake Commission (EQC) and insurers to resolve disputes. There would be a three-week deadline on all participants following filing to supply relevant documentation.

Mr Grafton says the short deadline is “laughable” given the complexity of contested expert evidence and other issues, while the vast majority of claims would be settled by the time the tribunal is in operation.

“The proposed power to compensate for undue delays that have already happened is retrospective and therefore flouts the rule of law,” he said.

Labour has also committed to hold a royal commission into the EQC if it wins power on September 23.