The man that state agency Southern Response has allegedly been spying on says the agency is trying to stifle its critics.

Photo: RNZ

The government agency is in charge of settling the outstanding quake claims of former AMI customers in Christchurch, but is now under investigation by the public sector watchdog, the State Services Commission.

The Commission is looking into whether Southern Response breached standards of integrity and conduct for state servants in its hiring of security company, Thompson and Clark.

Commissioner Peter Hughes will announce who will lead the inquiry and its terms of reference next week.

Southern Response chair Ross Butler said the contractor was hired in 2014 to carry out a security review and assess the level of risk faced by staff.

Staff had a right to be able to interact in an environment safe from threats or harm, he said.

But customer Cameron Preston said claims by the agency that he was trying to intimidate it, by sending daily emails demanding action over his case, are a smokescreen.

"Spending taxpayers' money to get information to then lean on the police to come around and sort of talk to me, I think that's far worse intimidation."

Mr Preston said he had obtained papers showing Southern Response had spent $170,000 on Thompson and Clark's services from the start of 2014 to April last year.

His claim had long been settled and he could only guess the agency's ongoing interest in him was to do with his non-paid advocacy work for those struggling to settle their own claims.

He would be surprised if he was the only client Southern Response had been spying on, he said.

A lawyer who is suing Southern Response on behalf of earthquake claimants told Morning Report he was intimidated by private investigators for another government agency in 2013.

Mr Shand said he sought his own file and found a report by the private investigator which had done investigation into his financial background and family.

"The intention from the file of using it, was to try to intimidate me from not acting for people for suing Southern Response."

"Also in the file was numerous communications amongst Southern Response hierarchy about trying to spiteful me and stop me from being involved."

"There was also communications to and from the press, trying to get the press to publish negative articles on me - again to try to prevent me from acting for people against Southern Response," Mr Shand said.

Mr Shand said he has never seen this done before for a general insurance claim, like an earthquake claim.

He said it's highly unusual and is being done to intimate people.

In a statement, Thompson and Clark said it did not disclose who its clients were or comment on its operations.

But it said it did operate within the law and industry guidelines.