For years we have explained how National Highways (formerly Highway England and the Highways Agency) has lost control of its suppliers resulting in the state-enabled exaggeration of claims against Third Parties (drivers, fleets, hauliers or their insurers) who damage the Strategic Road Network (SRN), more about which can be read here.
01/2022, it came as no surprise to learn Kier and National Highways have been involved in corrupt practices, that bribery was occurring – read more here.
This website highlights the processes and costs associated with emergency events, generally known as ‘Damage to Crown Property’ (DCP) incidents, which arise following collisions, spills, and fires. In particular, we highlight the conduct of:
- National Highways – formerly Highways England before which they were the Highways Agency
- Kier Highways Ltd – a contractor engaged by Public Authorities engaging in contract non-compliance and exaggeration of claims
- Birmingham City Council (BCC) – their tumultuous relationship with Amey and subsequent engagement with Kier Highways
- Balfour Beatty Mott MacDonald (BBMM) – the Area 10 contract (2012 to 04/2019) and what appears to be the misleading of a Judge to secure higher payments from Third Parties
For years, Authority contractors have abused their monopoly position and rather than charge reasonable rates, acted contrary to contracts mispresenting facts to Third Parties and the Courts. It appears Highways England is so compromised as to be unable to address the issues; the state-enabled exaggeration on an industrial scale. There are a few things to understand about the environment:
Threshold
In some Areas the contractor effectively agrees an ‘excess’ (deductible), that they will be responsible for claims below a threshold, typically £10,000:
- Above £10,000 attendance & repair cost total, saw the contractor bill Highways England who paid without any liability consideration. The authority would then approach an at-fault Third Party for reimbursement.
- Below £10,000, contractors received no payment from the Authority but had to pursue their outlay from the at-fault Third Party.
Defined Costs
These are ‘base rates’ or the actual cost (pre-profit) of an item – staff, operative or plant. These should be the same on above and below threshold claims; the cost of an item, its hourly rate, is unaffected by the incident – it is the number of hours (at that rate, the ‘defined cost’) that will vary.
For years the Authority has obstructed the release of defined costs. These rates would have highlighted the abuses being undertaken in the Authority’s name. Instead, they were kept secret; ‘held’ but commercially sensitive, then they were ‘not held’ and ultimately they were held – and supplied to us!
The Abuses
When billing Highway England for works, it appears contractors are aware sub-£25,000 the Authority rubber-stamps bills for payment, does not reconcile them re-payment. Overstatement is rife but in some instances, the Authority is unable to obtain recovery from the contractor – there is no incentive for them to bill correctly, just the opposite.
Below £10,000, when billing a Third-Party, a contractor ignored the contract, billed what they could get away with, and were left to get on with it by the Authority. Another contractor mispresented facts to the Court to assist in being paid much higher rates.
Commonly Cited Law
- Coles v Heatherton
In brief, ‘reasonable costs’ are permissible. Whilst this sounds straightforward and there may be a range of ‘reasonable’ costs, those utilized by contractors are as high as they feel they can get away with and to prevent checking, relevant supportive correspondence is withheld. There is a lack of transparency.
Highways England’s lawyers Shakespeare Martineau LLP’s post on Coles has since been removed but can be read here – Inflating Costs to Make a Profit
Kier Highways, for example, agreed rates with the Authority to be used for billing Third Parties. It is apparent they found them unappealing, too low as they did not use them contrary to the contract, from day one. Of concern is that having eventually understood the issue, the Authority (2020), rather than telling Kier to comply, varied the contract to allow Kier to charge higher rates – more than the Authority is billed! This behavior and the reasonableness of rates should also be considered in relation to:
para 25: ‘It would be odd if a tortfeasor was liable to Highways England for diminution in value of a damaged chattel in one sum if sued by Highways England itself and in a different sum if sued by Highways England via BBMM.’
para 36: ‘… the court cannot ignore the evidence given on behalf of the claimant by Mr Cairns (the Authority/contractor witness). In summary, on this issue his evidence was to the effect that the costs calculated for the purposes of the claim did include uplifts for which he was unable to find authority within the contract.’
More about the Authority and its loss of control of the SRN can be read here.
A brief history of events, a timeline, can be found here – 2013 onward
For registered users: More detail can be read here.