Commercially Sensitive

19/04/2017 – Ms Granville of Kier Highways provided evidence to a Court when the issue turned to the costs being presented by Kier / Highways England:  

Ms Granville:
“They are also commercially sensitive figures, I would … “

THE DEPUTY DISTRICT JUDGE:
“I do not think you are going to hide behind commercial sensitivity for the purposes of avoiding proving your case
.”


How can information that is used to compile an invoice presented to a Third Party (driver, fleet or insurer) be considered ‘commercially sensitive’; why is this exemption (to the FoIA) cited to prevent the public being able to ensure they are being charged in accordance with a schedule of charges?  Why is ‘the Employer’ (Highways England) not obliged to disclose information, including commercially sensitive information pursuant to a Disclosure Request?  Just how commercially sensitive are these figures when they accompany every claim (1000’s per annum) and a contractor provided a breakdown of the costs they incur – click here


  • For further arguments that support disclosure – click here

It appears the intention is to keep those invoiced from information that would enable them to make an informed decision. This is evidenced by the conduct with regard to contracts; in 2014 a contractor entered into a contract with Highways England.  The contract (model) is available on line to include Annex 23 which deals with ‘Third Party Claims’. However, what was not disclosed until 2017 was the Appendix to this Annex, the document that states how the charge should be compiled, the maximum to be charged.  This process was not followed by the contractor – more about Appendix A to Annex 23 can be read by clicking here.

It may be claimed by a Public Authority that information you are seeking, relating to their appointed contractors, is ‘commercially sensitive’, and that the information is exempt from disclosure under Freedom of Information legislation.  Section 43 of the Freedom of Information Act provides a qualified exemption (subject to a public interest test) in respect of trade secrets and other commercially sensitive information where disclosure is likely to prejudice the interests of any person or party, such as Highways England (HE), a council or Transport for London (TFL).

This response concerns us, it does not appear appropriate.

The Public Authority:

  • Replace their responsibilities by engaging a contractor who they enter into an agreement with for above £10k restorations, can audit but:
  • Place a contractor in a privileged, monopolistic position of trust and allow them to price, invoice and recover how they see fit form the public*, without monitoring on below £10k claims. Additionally, prevent the public from ascertaining what arrangement HE have with the contractor to enable any comparison between charging rates

*public – drivers, fleets and insurers (as opposed to the Public Authority).

It is the public who are prejudiced by the non-disclosure, who are forced to make uninformed decisions about charges.  Meanwhile, the Public Authority looks on in silence despite being conversant with all aspects pre-payment of their invoices and in the knowledge the public are being charged a premium.

  • Should the Public Authority  be providing the same protection to the public as they secure for themselves and insisting that the charges are identical and the process transparent?

Before this arrangement, it appears reasonable to assume that the total cost of a repair would have no effect upon how the invoice is complied, of the schedule of rates used or the method of presenting the costs.  Now, the Public Authority has placed a substantial proportion of their administration (sub-threshold claims) with a contractor who is not subject to FoIA, who is not monitored by the Authority.

The Public Authority has every advantage.

  • Why would the Public Authority not wish to afford the public the same protection as they sought and obtained?
  • Why do the Public Authority believe that only they should have the advantage of considering invoices presented in relation to a schedule of rates and a contract
  • As the PA has permitted the contractor to ‘do as they want’ on sub-threshold claims, is it not all the more reasonable for the contractor to be subject of some control and accountability, for there to exist a reasoned set of rates?
  • If the higher schedule of rates used by the contractor reasonable for the repair, why are these not exactly the same as those agreed with the Public Authority?
  • Why do the PA and the contractor believe it appropriate to charge more to the public?

Tender

The public Authority understandably wish to obtain the best value when engaging a contractor.  As guardians of the public purse, the PA has a responsibility to the public.  A contractor will be expected to submit to a tender process, likely be requested to present information, enter into a contract which will include the basis of charging, find themselves subject to audit and accountable to the Authority.

The public, subsequently presented an invoice by the contractor may well consider that the document is ‘from the Government’; something that they are obliged to pay.  This is incorrect, but all too many such invoices have bene virtually rubber-stamped by those to whom they were presented.

It not reasonable to believe the public would take a rational approach to such an invoice; it is presented by a contractor, appointed by a Public Authority?  Why would the contractor rates not have been scrutinised, found to be reasonable and agreed with the authority?

The fact is the contractor rates charged to the public are of no interest to the Public Authority; the contractor can ‘do what they want’.

Should a contractor invoice carry a notice to this effect; that the charges bear little or no resemblance to those agreed with and charged to the Authority instructing them?

A contractor’s invoice covering letter reads (T06473):

Under the duties delegated to us by Highways England (we) act as the Roads Authority for the (name) Motorway and as such is responsible for the repair of any damage / clear-up operation.  The cost of this work has to be recovered from the person responsible.

But what is the ‘cost’?

The letter adds:

I enclose our final invoice … together with a detailed breakdown of the works undertaken.

But the breakdown is far from ‘detailed’ and should not be accepted as such.

HE permit their contractor to charge what they want (can ‘get away with’?) yet keep the public from understanding how the rates and process differs from the system agreed between the contractor and HE.  On the one hand HE:

  • has a fixed, contracted, documented schedule of rates to which they can refer when presented an invoice.
  • Is familiar with processes, handles claims and construction related issues on a daily basis
  • Has dedicated staff to address queries
  • Can undertake an audit
  • Is the supplier a contractor is more likely to assist (disclose information) if queried by the ‘hand that feeds’.

On the other:

  • A driver, fleet or insurer has limited exposure to such claims, less experience and likely little data from which to understand processes and appreciate rates.

The process means a contractor can charge what they want (can ‘get away with’?) yet keep the public from understanding how the rates and process they are presented differ from the system agreed between the contractor and HE.  The FoIA appears to have been diluted (click here for moreinformation about Dilution of the FoIA) by Highways England (and others), there is a lack of transparency and the public are falling victim to this.

What about the commercial interests of a driver, fleet or insurer whose situation is prejudiced because a contractor, undertaking a Public Authority role, can operate in secrecy.

HE’s approach to this is that ultimately the issues can be aired in a Court of Law.  Why should a driver, fleet or insurer be caused additional inconvenience, distress and financial hardship simply because a Public Authority enables their contractor to operate unsupervised?

If the Public Authority believe relevant information will be released due to potential or actual proceedings, if this is the only route left open to a driver, fleet or insurer, why would it not be agreed that said data will be released sooner rather than later?

And if the contractor will not release information to enable a driver. Fleet or insurer to be able to make an informed decision, should HE not insist upon such action?  Why permit dual standards; helpful to HE, obstructive to drivers, fleets and insurers?

HE’s own Green Claims manual was specific on the subject of disclosure:

Pre action protocols encourage an early exchange of information to avoid litigation and support the efficient management of proceedings. The court is unlikely to look favourably on a situation where by one party would not have brought the case to court had they been in possession of all the facts, but the other party saw fit to withhold certain facts. We must disclose any evidence, which either sustains or prejudices our case.

We applaud HE’s stance that they protect the public purse.  But what about protecting the public?

Is it right that HE can enter into formal agreements with eyes wide open and obtain the best deal for themselves but the very people for whom they work (the public) are subject to another set of rates, higher pricing and different pricing methods (such as multipliers for ‘shifts’) that HE have no interest in, do not authorise or agree?

There is also a concern that HE do not understand their own environment.  When asked about aspects, we were supplied incorrect information.  We suspect this is because so many duties have been passed to contractors that HE have lost experience, knowledge.

Drivers, fleets and insurers are also kept from HE’s concerns about their own contractors.  For example, in November 2014, HE became aware that a contractor was effectively ‘holding their finger in the air’ to price claims; that rather that use a recognised methodology, the contractor was relying upon experience.  This was not disclosed to the public (drivers, fleets and insurers).  Indeed, HE did not even review sub-threshold matters despite learning of an issue with the pricing methodology on their own claims! The information was not placed in the public domain.


For further arguments that support disclosure – click here