ACC is seeking legal advice on whether it should pay out on claims from people who became ill because of the water contamination crisis in Havelock North.
Photo: RNZ / Rebekah Parsons-King
A government inquiry into the outbreak criticised Hastings District Council and Hawke's Bay Regional Council this week for failing to protect the town's drinking water.
More than 5000 people fell sick during the gastro bug outbreak in August last year, and at least three people were left with a chronic condition known as Guillain Barre syndrome.
It may have also contributed to three deaths.
The inquiry found neither council had substantial plans in place to deal with the campylobacter contamination, which was likely caused by sheep faeces.
ACC said people who became ill after drinking contaminated water were not covered unless the water became unsafe through a criminal act.
"ACC can only provide cover for claims which meet criteria outlined in our legislation, and the Accident Compensation Act says the ingestion of bacteria is not considered an accident unless it is the result of a criminal act."
"We are seeking legal advice as to whether the infringements of regulations admitted by the councils, as outlined in the Government Inquiry report, can be considered criminal acts under our legislation."
It said once it received legal advice, if needed, it would reconsider the declined claims.
Lawyer Warren Forster said ACC needed to be proactive and settle claims from people made sick from the outbreak upfront.