Averaging Kier Claim Costs

Kier state their admin’ costs presented to drivers, fleets, hauliers and insurers (Third Parties) are ‘averaged’ across the network. But:

  1. The contract (Areas 9, 6&8) does not require this to occur.  Much of the admin’ is addressed by the uplift percentage – the Third Party Claims Overhead.
  2. In reality, this ‘averaging’ does not occur and facts are misrepresented:

We understand Kier admin’ staff do not keep timesheets, that these ‘general roles’ are averaged.  Whilst this may seem reasonable, the averaging process is unnecessary as claims should be priced by use of ‘defined costs’ to which is added the TP Claims Overhead percentage – as described within Appendix A to Annex 23 of the contract.

But Kier has never complied with Appendix A to Annex 23! 

The nature of averaging or obtaining an arithmetic mean,  should cause annual admin’ costs to be apportioned equally between claims.  But this does not occur, costs vary from claim to claim contradicting statements made to the Courts.  The following are extracts from Statement of Truth: 

Highways England witness, Kier Highways Ltd’s (Kier) former claims manager, Sophie Granville:

Ms. Granville added:

More recently, a witness for Highways England, Mr Greg Cairns, Commercial Manager at Kier Group (West Yorkshire,) made a statement of truth:

‘By way of further explanation if that is required, although it is largely contained in the insurer’s guide document, the costs under “planning” are put together as result of averages across the previous 12 month period. In other words we calculate the average time spent on planning or repair for each and every incident that we deal with across the whole network and then we allocate an appropriate amount of that based on the nature of the incident under review, It is almost certainly the case that the averages contained here are an under valuation of the actual costs Involved.

Mr Cairns added:

We maintain that this is the best way to assess these costs because it is very difficult to keep accurate records for each element of planning on each case and we feel that the assessed costs are a reasonable reflection of the work done In these areas’

Another Kier employee, a Highways England witness, Jack Postill a Kier Highways surveyor in the West Country, provided a statement of truth in respect of a Highways England matter presented to Bromley county Court in which is included the explanation:

By way of further explanation if that is required, although it is largely contained in the insurer’s guide document, the costs under “planning” are put together as a result of averages across the previous 12-month period. In other words, we calculate the average time spent on planning of repair for each and every incident that we deal with across the whole network and then we allocate an appropriate amount of that based on the nature of the incident under review.


But there should be no need to ‘average’ planning’ because Appendix A (item ‘d’) makes it very clear:

Planning repair of damageis addressed by theThird Party Claims Overhead

The contract is NOT being complied with.

Furthermore, if ‘averaging’ were applied across the whole network, for each and every claim, we would expect to see Highways England charged the average on each of the claims presented to them. But claims presented to the Public Authority, over-threshold (£10,000) i.e. larger incidents, are not billed using ‘averaging’.

How is the charge for ‘planning’ be an average when Highway England are excluded from the calculation?

 

 

 

 

 

 

Area 6 & 8

08/02/2018 – W09C584

Planning time rate total
Asset Inspection Watchman 1 1.00 £65.75 £65.75
Asset Inspection Watchman 2 1.00 £65.75 £65.75
Staff involved with Incident identification
DCP Manager 0.50 £55.75 £27.88
DCP Technical Assistant 1.00 £22.05 £22.05
DCP Technical Assistant 1.00 £22.05 £22.05
Staff involved in the planning of repair
TM programmer 1.00 £65.75 £65.75
Assistant to Area manager 0.25 £55.75 £13.94
Network Occupancy Manager 0.25 £55.75 £13.94
Supervisor 1.50 £55.75 £83.63
Asset Engineer 0.50 £43.93 £21.97
Depot clerk 1 0.50 £22.05 £11.03
Storeman 1.00 £37.70 £37.70
Total: £451.42
Staff involved with pricing completion
DCP Manager 0.50 £55.75 £27.88
DCP Technical Assistant 1.00 £22.05 £22.05
Total: £49.93