28/12/2019 in response to an email from Highways England of 16/12/2019
To: Tim Reardon @ highwaysengland.co.uk
Dear Mr Reardon,
Thank you for your email of 16/12/2019. I will respond in respect of each Area separately.
You are citing judgements selectively.
With regard to HH Godsmark, the pertinent section is:
It seems to me that the only sensible interpretation of the authority is that it relates to cost of repair to Highways England. Otherwise it would not reflect the measure of damages by reference to diminution in value.
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.
Yet this is what is occurring.
BBMM, in your name, misrepresented facts to the Court thereby preventing the Judge from undertaking the desired comparison of rates. You have repeatedly referred us to the Courts to resolve matters yet your witnesses distort facts to Judges.
Contrary to your recent statement, Highways England prevent me giving evidence.
Additionally, contrary to HH Godsmark, BBMM continue to add 10% to their costs i.e. in the name of Highways England, BBMM ignore parts of the judgement that reduces its overstatement. Specifically HH Godsmark wrote:
Whilst I can see the basis for using CECA Dayworks rates in arriving at a repair cost I can see no basis for immediately then departing from those rates by adding an additional 10%. The additional 10% Administration Charge is not a reasonable addition to the CECA rates and would thus lead to an unreasonable repair total. It is disallowed.
Full Judgement here: https://www.englandhighways.co.uk/15-02-2018-derby-county-court-bbmm-for-highways-england/
It is evident ‘reasonable’ is not practiced by Highways England. We are directed to the Courts by you, an environment in which your contractors are prepared to distort facts in your name.
COLES V HETHERTON
You appear to have no moral dilemma about the application of Coles v Heatherton. Your lawyers (Corclaim) expressed concern (see below) though the post appears to have been removed from their web site.
Whilst it strikes me peculiar ‘Coles’ is applied in your environment, a monopoly contractor providing a public service which, if you undertook the repairs, would be charged at cost, ‘Coles’ appears to fit with Appendix A to Annex 23. In ‘Coles’ the insurer (RSA) sought about 25% above cost. Your contractor is to uplift by the TPCO, which I have not seen exceed 25.29%. In fact they ignore the process often adding many hundred percent.
My concern is the state-enabled exaggeration and fraud on an industrial scale. A reasonable uplift on base rates is desirable. Hence, you did not need the NSoRC, you simply need your contractors to comply with the process sin place.
SCHEDULE OF RATES & VEXATIOUS
12/11/2019, your Counsel stated to the Tribunal rates exist however, it was ‘not cost-effective’ to provide them. I would welcome an explanation of the costs involved. I am aware Mr Vardon was provided AIW rates in 2018.
In addition to the 175 requests/reviews (at least 15 responses stating ‘held’) you are aware there are schedules of rates for above and below threshold matters. Whilst the above and below threshold rates may look to be similar, they should be identical.
I am content to be provided below or above threshold rates in Area 9. They should be the same. There is a schedule, if not held by you then by your contractor (on behalf of you) please supply it.
It may seem to you (despite my writing/evidence) the differences are in how the overheads are applied, between what Kier charge HE and then what they charge insurers, but the differences are so great as to be unreasonable and well outside the contractually agreed uplifts.
I have been prepared to accept the uplifts applied to base rates but contrary to your understanding that there are differences in how overheads are applied, the only difference should be the overhead. Why is this now wrong?
- Why is the underlying rate not the same?
- What harmonisation of the rates occurred in 2016?
Highways England state (31/10/2019)
‘We will revert to pursuing claims based on the actual cost of carrying out the repairs …’.
This returning to the rates we know (see over £10,000) is acceptable, what is unacceptable is statements by Kier that they use the same rates below threshold.
- Why are Kier not using ‘actual’ reasonable costs when billing Third Parties?
THE TRIBUNAL – DIFFERENCES WERE ALL EXPLICABLE.
The Tribunal was considering the existence of the Area 3 schedule of rates, they were not presented substantial evidence about the difference in above and below threshold rates. However, once again, you are selective in your presentation. The paragraph continues:
The Tribunal found that, on the evidence before it, the rates used for operatives who had undertaken repairs and related work, did indeed materially vary depending on whether the works were set as above or below the £10k threshold.
The noteworthy statement is that there is a significant difference in charges below and above threshold. There should not be!
I refer you to my comments above and your belief the rates look the same, the difference is in the way the costs are applied and that the rates (above and below threshold) were to be harmonised, should be consistent.
HH Goldmark’s statement (above) cites such variance being ‘odd’. Furthermore, there should be no variance where Appendix A to Annex 23 applies, indeed (based on the evidence of your witnesses) in any Kier managed Area. The Tribunal finding continues:
It was accepted by the Tribunal however, that below £10k, additional factors were involved, most notably
- a risk element (the contractors having to undertake their own recovery of fees),
- variations on account of TUPE conditions (where some workers might be subject to different terms and conditions) and
- other variable factors in relation to the incident attended to (e.g.: out of hours, whether having to take a team of workmen away from one job to attend to this one) etc.
The additional factors have no bearing on RATES. Dealing briefly with each:
i. is addressed by the TPCO (percentage uplift)
ii. results in small variations – I acknowledged and accept this, it is evidenced in the 2018 rate release. However, there is no variance when billing below threshold to a TP – all operatives are at the same (exaggerated) rate.
iii. has no bearing upon RATES, it affects COST. AIW’s for example (who I cite as they are common to most if not all claims) work shifts but Third Parties and Courts are deceived about this. AIW’s. They are not taken away from another role that has a bearing upon costs.
‘iii’ is telling; an AIW operative has a base rate, this is unaffected by what they do or when they do it.
KIER SCHEDULE OF RATES
Could you also remind Mr O’Sullivan of his 02/2019 assurance;
“the very minimum that is going to happen as a result of this call, or certainly as a result of the judgment is that we will have a schedule of rates published by Kier, so that this thing is transparent”.
I am awaiting the schedule.
Your blanket ban on rates not only appears inappropriate because you were going to provide me a schedule (above) but you have acted vexatiously by citing ‘commercially sensitive’ (i.e. ‘held’ but exempted) 175 times! I am seeking the rates Kier was to harmonise in 2016, the rates you are aware Kier possesses.
- no response – copied 14/01/2020
- no response – email of 20/01/2020 to Highways England
Corclaim (a business name of Shakespeare Martineau LLP) post:
Coles v Hetherton – Subrogation ruling creates a moral dilemma for fleet operators
The practice of inflating costs to make a profit when pursuing claims arising from non-fault accidents has been given the green light by the Court of Appeal and some fleet operators may choose to follow their example.
The Court of Appeal has now concluded that cases brought against Royal Sun Alliance Insurance (RSAI) over how it recovers repair costs following non-fault accidents are groundless. As a result, the practice used by RSAI, which has allowed them to inflate the cost of vehicle repairs and pass on the bill to the at-fault driver’s insurer, has been judged both reasonable and legitimate. In handing down his decision, The Honourable Mr Justice Cooke ruled that RSA’s practices were legal and that any appeal against his judgment was likely to fail.
This ruling has upheld an earlier ruling, by the Commercial Court in June 2012, when the court determined that as long as the vehicle repair costs being recovered by the non-fault insurer were ‘reasonable’ they did not necessarily have to represent the actual costs incurred. In reaching his decision, he also pointed out that the loss is sustained at the point the damage is done, not at the point that the repairs are carried out.
In practice this means that RSAI can continue removing any discounts earned on labour or repair costs, and applying an administrative charge to the overall bill, before passing it on to the at-fault driver’s insurer. It also means that other insurers and larger fleet operators, who regularly carry out non-fault vehicle repairs, can choose to do likewise if they wish.
So where does that leave us? Well of course views will differ. In mine there is likely to be a moral dilemma for some, but the position of the Court of Appeal in this matter is crystal clear. It is perfectly legitimate for those incurring losses associated with non-fault vehicle repairs to add on the value of any discounts they may have negotiated with garages and to apply an administrative charge too. The application of such costs has been found to be perfectly reasonable.
All of a sudden recovering such [inflated] losses has become palatable. While the priority for fleet managers will obviously be getting vehicles back on the road as quickly as possible, the losses incurred as a result of non-fault accidents now represents a commercial opportunity, which they can take advantage of if they wish.
There is a moral issue here too as clearly adding costs into the recovery process could cause insurance costs to escalate and eventually all users of commercial vehicle insurance would end up paying for this through higher premiums.
However, others will take the view that while the commercial opportunity exists they would be foolish not to take advantage of it.
Corclaim is a business name of Shakespeare Martineau LLP, a limited liability partnership registered in England and Wales with number OC319029 and authorised and regulated by the Solicitors Regulation Authority with number 442480. A list of members is available for inspection at the registered office; No 1 Colmore Square, Birmingham, B4 6AA. Any reference to a ‘partner’ in relation to Corclaim or Shakespeare Martineau LLP means a member of the LLP or an employee or consultant with equivalent standing and qualifications. Service of documents by fax or email is not accepted.