19/01/2021

England Highways

Damage to Crown Property [DCP] Claim Costs

210104 to ICO re the NSoRC FoIA

IC-39411-G7Q7

04/01/2020 to the ICO:

Abbreviations:

• ABI – Association of British Insurers
• DoV – Deed of Variation
• NSoRC – the national Schedule of Repair Costs (21/06/2019 to 31/10/2019)
• Third Parties (TP) – drivers, fleets, hauliers or their insurers

Introduction

With regard to the issues, please bear in mind:

  1. the NSoRC was handled by a select few at Highway England who then liaised with loss adjusters and insurers – though the latter via the ABI.
  2. There was an intention to apply the NSoRC process nationwide.  However, the Authority u-turned; the process was to be a roll-out yet when it failed, it was said to be a pilot.
  3. The Authority was to obtain feedback and publicise their exchanges. As an example, I spoke with the Authority for about an hour about the process and the intended publication was conveyed.  It did not occur.
  4. I do not believe insurers put pay to the process. I know of not one insurer who took issue with the process and most would have left it to the likes of us – who raised both positive and negative comment in the early stages
  5. I believe the process restricted profiteering/ exaggeration by contractors who caused the process to fold

It appears (and the NSoRC demise is further evidence) contractors control the Authority; that the tail wags the dog.

Evidence

I spoke with two parties about the process and my request is, to a great extent (coupled with the original Authority presentation of the NSoRC and subsequent post – here), based upon the Authority’s statements which can be found here:

The Request(s):

  1. The pre-implementation and ongoing assessment of the benefit to Third Parties and HE. I am particularly interested in the information indicating the recovery rates is £1 in every £5 and how, given HE are brining claims in-house, the benefit is perceived as being other than for HE and HE alone.
  • This I believe is self-evident; benefits are being cited for others yet the statement appears unsustainable, contradictory
  1. Engagement with the insurance industry; information to and from
  • I understand there was engagement with the ABI. However, this was sort-lived, that the Authority withdrew.
  1. Responses for and feedback against the NSORC; all feedback from those involved. I anticipate personal data will be redacted but the identity of commercial entities will remain
  • it was said there would be feedback publicised
  1. Questions raised by all parties (within and without HE) about the process and the responses

Various parties had been spoken with and the issues were to be circulated.  I have yet to see these.

  1. Examples in Areas 9, 10 &12 of ‘The contractual arrangements between Highways England and its service providers, containing separate regimes for claims above and below a £10,000 threshold, and different pricing methodologies, leading to varying labour and equipment rates and therefore
    significantly different repair costs being applied to similar repairs’

This request is based upon the Authority’s own statement and contradictions, save that I accept there are ‘separate regimes for claims above and below a £10,000 threshold, different pricing methodologies

The request is intended to obtain information about:

  1. varying labour and equipment rates (and therefore)
  2. significantly different repair costs being applied to similar repairs

‘a’ could not be clearer – there are differing rates applied.  Yet this should not be the case and if there are rates, there are schedules of same in one format or another

‘b’ should not be the case.  There should be no ‘significantly differing costs.  It is not the regime or pricing methodology that causes the ‘significant’ difference, this is a nonsense.  It is the application of uplifts that are unapproved, unauthorised.  A fact subsequently (08/2020) highlighted by a Judge – the Authority’s own witness shas stated unauthorised uplifts appear to have been applied.

The defined cost process has been described to us and the Courts as an ‘actual cost’ or ‘base rate’ to which an uplift is applied. The defined cost (however it is arrived at) is common to both TP and HE.

The above highlights what should have occurred what courts were told was occurring but which was not complied with.  Contractors, in the name of the Authority, are prepared to misrepresent facts to Judges. The Authority was content to sit back and let this happen – or incapable of restraining their suppliers.

  1. How could the difference ever be more than the difference between ‘fee’ to HE and TPCO to a Third Party i.e. no more than 20% approx.. as opposed to the stated ‘significant’?

This is simple logic.  Appendix A to Annex 23 set out a process, one that meant a Third Party would be ‘charged no more than’ the sum of an equation.  The Authority kept the process secret, Kier Highways did not mention it and charged what they could get away with form day-one, contrary to the contract which required:

  • Highways England was to be charged base rate (defined cost) plus a fee (about 8%)
  • A Third Party as was to be charged base rate (defined cost) plus an overhead (about 20% in some areas, 25% in others)

The difference should be no more than about 17% (25% – 8%), however, it ran to 200%+

  1. How it was determined the costs did not sufficiently reflect the ‘open market’,
    a. which ‘open’ market and
    b. the data relating to this

This is the NSoRC process, the reason for it commencing, being considered necessary, for months of work to be undertaken by the NSoRC team. I am seeking all related information

I was informed the NSoRC (work commencing early 2019) was required because the Authority realised they had overlooked agreeing on DCP (damage to Crown property) rates in any ASC (contract) – obviously false.

  1. Your better understanding of the requirements which will need to be met to enable a National Schedule to be successfully implemented

This was what the Authority as seeking; what did they acquire?

  1. Your engagement with contractors following implementing NSORC; all information to and from, to this date. This will include all information to and from contractors setting out the suspension of NSORC; notification, feedback, implications How it affects them, their charging and claims), actions and intentions

Please see above.  I believe the above is self-explanatory.  I believe contractors caused the demise of the NSoRC, not insurers.

I do not believe the Authority has the ability to dictate to their contractors.  The contractors would need to be engaged when commencing/considering the process and during, then to be told ‘you can stop’.

Kier, for example, put in place a new documentation process that would have required time to develop implement.  They were being asked to stop this, to undo this work.

Did any contractor raise an objection, wish the process to continue? What was the reaction?

It should be noted that with regard to Kier Highways, the Authority has subsequently (2020, backdating to 01/2019) altered the contract to assist their contractor to pursue higher sums from Third Parties.  To do so, the Authority and contractor entered into a DoV.

There was no such DoV presented with regard to the NSoRC and none to ‘undo’ it.  I am expecting to be provided with all exchanges that demonstrate the initial approach to the contractors, the intentions, the process and their responses; positive/negative and whether they were prepared to engage/participate or accept.

Ultimately, I expect to receive their rejection and the Authority’s circulation that the process was to be terminated and why together with any response

  1. The final assessment of NSORC, all reports and feedback.

I anticipate the NSoRC provided reports/responses to the NSoRC about its benefits, failings and future plans.  I would also expect reports to have been complied for the likes of the national Audit Office with whom I raised the issue and who were to monitor the progression.