161021 Kier re. Pain/Gain

From: [redacted]@kier.co.uk>
Sent:21 October 2016 10:44
To: Ops Dst
Cc: [redacted]
Subject:FW: URGENT – IMMEDIATE: FOI 743,153 -[redacted] . Deadline: 20/10
Attachments:Draft FOI 743153.docx; Final DCP Insurers Leaflet – v1_0.pdf

Good Morning ,

It was great speaking with you yesterday.
I had a chat with [redacted] last night as I believe this FOI has been covered in previous responses to CMA but they have just slightly re worded it so [redated] is kindly having a look through the many submitted to allow those to be reference.

I had a go at re drafting this last night although have made some changes again this morning especially around the Lump Sum charging aspect as I believe this could have been twisted and it wasn’t completely correct as under the ASC contract there is a risk based approach in operation. So this means that during tender contractors under the ASC will make an assessment in relation to how many recoverable from third party occurrences there will be thus making the Lump Sum payment less as it would fundamentally only cover the untraced claims.

However as we are not working in a perfect World our anticipated recovery proportion is far lower than expected so even with the recoverable claims and the LS we are out of pocket and must incur this loss.

However to govern this every year a reconciliation is carried out by contract with the HE and if we suddenly had an influx in honest culpable drivers then we would return some of the Lump Sum monies however the reality is this will unfortunately never be the case as if cars are not demobilised they often drive away and are not raced therefore meaning we as a business suffer that loss directly.

I have also referenced the Insurance Leaflet which I have attached for reference in the response and this can be sent to CMA. They have had this previously but this clearly answers his query. I believe in the query about how incidents are paid for he is trying to pull up the fact we charge an out of hours multiplier to reflect the increased cost of getting those teams in off standby. So he is trying to say is there a difference with the over threshold packs we send to HE and the under’s we pursue directly. The truth is from a display point of view there absolutely is but when we spent many months with industry leading insurers they felt it was fairer to represent he overtime charges against the specific claim rather than bleeding it across all incidents or charging the minimum call out periods i.e. 4 hours.

On the over threshold claims we would show the whole chargeable period i.e. the 4hrs minimum out of hours as the HE completely accept this formatting and it’s the same for a repair when it may take 9 hours but with 3 hours left there won’t be time to do another job so we have a right to recover the unproductive time as it costs us money directly because of a damage repair as opposed to us progressing scheme / maintenance work. But the insurers would rather get to the same cost in a different way so if they are on site for 20 mins then we would apply the relevant multiplier if it was out of hours to recover the same amount. Its just formatting differences. All incidents within CORE operational hours however do not have a multiplier applied as it would not be valid as the teams are on shift and this is seen as fair.

We as a contractor have worked hard with insurers and the HE to improve the transparency of information and we often pass savings back to an insurer through things like shared TM or utilising existing TM. If we utilised existing TM we have a right to share that cost with the claim however we take a pragmatic view and do not as if it was already available we remove the charges completely. This saves the insurers money fairly and they have been really pleased with this. Then on other occasions where we can bundle more repairs together we proportion TM costs evenly again passing over a saving to the insured.

If you want to run through any of this or want any advice on others feel free to contact me anytime and I think you, [redacted] and I are on the same page its key we have a consistent responses with these

Kind regards