Zurich Insurance- The Housing Scandal

3Pay provided the litigation funding for claimants’ to successfully litigate against Zurich Insurance, with a claim for £25M. The claim was settled in 2022, within less than 18 months, and garnered press attention featuting in the UK’s Sunday Times. The details of the case are below:

Zurich Insurance, one of the world’s largest insurers, settled a high-profile case in 2022 involving leaseholders of Meridian Quay, Swansea, in the UK. The case, funded by 3Pay, accused Zurich of fraudulently approving unsafe flats without proper inspections. This led to a compensation claim of £25 million. The settlement, reached just before the trial, raises crucial questions about the responsibility of major corporations and the safety nets in place for homeowners.

The leaseholders, represented by solicitors from Walker Morris, argued that Zurich, a £54 billion company, falsely certified the safety of their homes. The case shed light on the fact that industry-inspected flats, numbering up to 366,000 and housing 681,000 people, were found to have fire risks. This is extra concerning post the Grenfell disaster.

Zurich’s transfer of 94,000 active policies to East West, a small offshore-owned insurer that went bankrupt within two years, further complicated the situation. This move shifted liability to the Financial Services Compensation Scheme (FSCS), leaving hundreds of flat-owners with Zurich warranties struggling to receive payouts. The FSCS has paid £7.8 million on 96 East West claims, but many are still awaiting justice.

Angela Curtiss, a Meridian Quay leaseholder, revealed the challenges faced by homeowners, including faulty fire barriers, extensive leaks, and cracked foundations, rendering their homes unsellable. In a High Court claim, Curtiss and 150 leaseholders alleged fraudulent issuance of warranty “cover notes,” falsely claiming final Zurich inspections.

The former Zurich surveyor’s admission of fraud and the subsequent attempts by Zurich to strike out evidence led to a High Court judge finding the insurer’s actions as “disproportionate and oppressive.” Zurich was ordered to pay 75% of the leaseholders’ share of unnecessary costs. This amounted to almost £300,000.

The wider implications of this case extend to homeowners at the John Green Building in Bradford, where serious structural fire risks and roof leaks are alleged. Flat-owners claim Zurich fraudulently issued warranty “cover notes” without proper inspections, impacting their ability to secure mortgages.

The case against Zurich is a stark reminder of the hidden housing scandals affecting countless families. The quest for justice continues. Homeowners fighting not only for compensation but also for systemic changes in the industry to prevent such catastrophes in the future. 3pay exists to offer funding in cases where litigants cannot to do so themselves- giving them their access to justice.