UPDATED 1.27pm: A crisis averted.

That from the Insurance Council after the Supreme Court ruling in its favour following a battle over toughened building codes in Christchurch.

The University of Canterbury approached the court, arguing insurers should have to pay for extra strengthening work of quake-prone buildings, so they're able to withstand greater shaking.

Insurance Council CEO, Tim Grafton, says that if the university had its way, huge costs would've been put onto insurers throughout the country.

"The legal requirement is 34 percent, but the university may reinstate to 67 percent, but that's not a requirement that the insurer has to meet."

As it stands, buildings are only deemed earthquake-prone if they're expected to fail in a moderate sized earthquake.

The University argued that, under the current act, the city council could force owners of quake-prone buildings to carry out strengthening work much higher than the current threshold - but the Insurance Council disagreed.

Three supreme court judges have reached a unanimous decision to support the Insurance Council, while acknowledging the limitations of the current building act.

That'll be a blow to the university, which is refusing to comment at this stage.