Possibly, the Authority’s lawyers are struggling with the fog?
For many years we have dealt with factual aspects of Highway claims. We have witnessed insurers try to present arguments only to be systematically kept from relevant information, Highways England undertaking multiple U-Turns to hide evidence and prevent transparency.
The Courts have our sympathy; only one side plays by the rules with claimants content to make false statements seemingly in the knowledge their misrepresentations will be ignored by Highway England, the evidence of wrongdoing hidden.
It appears contractors have a substantial hold on the Authority.
To our knowledge no defendant has ever presented the simplistic argument ‘existence of a cheaper price means the repair cost is not recoverable’. All we have asked is to pay the agreed cost, the charges, in some contracts. Instead, these are withheld and Courts advised that there is no alternative measures – whereas there are.
Similarly, the age of Crown property is seldom an issue, though occasions arise where significant improvements arise as a result of the reinstatement.
The Claimant does not only need to demonstrate reasonableness, they must also be truthful, honest when making their representations. If they could succeed by being forthright, why are they not?
We have always supported contractor profit being necessary, obviously so – we want contractors to be profitable. The road network is called ‘strategic’ for a reason, it needs to be maintained by reliable, consistent companies. We have desperately tried to abide by the Authority’s own rules insofar as profit is concerned – 25% uplift (which includes profit) appears reasonable on ‘actual costs’. Some clearly do not understand the difference between profit and profiteering:
- Profit: financial gain. For example, the difference between the amount spent in buying, operating or producing something and the amount earned
- Profiteering: to make or seek to make an excessive or unfair profit
Some contractors make an excessive profit, they exaggerate. To quote Highways England’s legal team (12/11/2019) ‘exaggeration is fraud’.
Claims being paid will not cause insurance premiums to rise for us all. Highways England and Insurers know there will be over 30,000 incidents on the highways each year, they result in repair costs and the insurers of negligent drivers will pay. What does affect premiums is exaggeration and unreasonable charges.
Insurers, just as contractors, make profits – or hope to. Insurers will pay for repairs to the network, they do not expect to burden the public purse through avoidance of liability. What they do expect of a Public Authority is honesty and accuracy.
Highways England is reaping what it has sowed … for years the Authroity has allowed a dual pricing system, not just a difference in uplift on actual costs, but a completely different set of base rates.
- To the Authority, who agreed to pay over-claims that total over £10,000, a contractor uses ‘mates rates’. These are ‘actual costs’ that see a mark-up generally sub-10%.
- To an Insurer (driver, fleet or haulier), who must pursue under-£10,000 bills themselves (they are not paid by the Authority), a contractor should use ‘mates rates’ and add a larger uplift, about 25%.
Do the math’ … an insurer should be billed about 15% more than the Authority. They are not, the bills can be 100%, 200% or greater to an insurer.
How do we know? Because we receive above and below threshold claims, we can compare the rates for operatives, vehicles and materials. Third Parties (drivers, fleets, hauliers or their insurers) have been ripped-off with Highways England standing by, fully aware of the facts because we presented them in person to the Authority over 2 years ago (21/06/2017).
The NSoRC did not fail simply because the process was wrong, there is also the issue of a chasm between ‘actual rates’ and ‘insurer’ rates; too wide to be bridged. Insurers know, to a great extent, what ‘actual costs’ are. Is it likely contractors are prepared to willingly forgo their years of huge mark-ups – or that the Authority will compensate them form the public purse?
We understand if a party has negligently caused damage to the property of another the law provides that the negligent party should compensate the wronged party ‘appropriately’. We expect the Authority and their contractors to act appropriately.
It is apparent, for some, credibility and integrity are only expected of others, just words, as opposed to conduct they will demonstrate. Others expound ‘transparency’ and ‘benefit’ promising ‘actual costs’ whilst doing their utmost to keep these rates secret.
Rather than produce a set of rates, Highways England now claims it failed to agree on a schedule of rates for damage to Crown property (DCP). This ‘price list’ for assets (operatives, plant and materials), a basic component of a contract, was overlooked not on one contract but multiple since 2012. Therefore, the Authority, when trying to determine whether a claim is reasonably priced can do little more than hold a finger in the air.
Years ago we asked the Authority what they were charged for an operative, the reply; ‘the contractor said £70.32 / hour as at 12/2015’. The actual figure … £23.71 + 6.5%.
- £70.32 / hour is what Third Parties were charged … what happened to the contractually agreed 25% (on £23.71)?
Woe betides a driver, fleet or haulier causing damage after 5pm of a weekday. That £70.32 became over £100/hour and of a weekend £140/hour all because this was the uplift said to be paid to the operative – or so we and the Courts were told. But it was not, the operatives were said to work 8am to 5pm and paid the uplifts after these hours. According to the operatives, they work shifts, receive no uplift and even overtime is at flat rate.
The Authority seemingly cannot grasp what we mean by ‘profiteering’; a situation very different from making an honest buck!
Highways England do not have the resources to check claims, we are told it is ‘too expensive’ to do so! However, even if they had the time, it is claimed there is no pricing schedule to provide the relevant staff against which to reconcile costs, ensure they are correct. Previously, it was apparent our role was in part Authority Claims Auditor, a necessary function given not one above£10,000 claim presented by a contractor and paid by the Authority, was correct!
It appears Highways England has a new remedy – continue to pay contractors without checking the bills are correct then place claims with lawyers. Insurers can meet the reconciliation costs.
Another reason for the creating of a foggy environment could be more straightforward; distracted by the Authority’s latest actions, insurers (Third Parties) will not look to the £millions they are owed by contractors, acting in the name of the Authority.
The real question is whether we want an effective, transparent Authority employing honest contractors or an organisation that permits and assists contractors to fleece drivers, fleets, hauliers or their insurers. It may already be too late. We approached the Authority in good faith, with incontrovertible evidence. A willingness to try and ‘shoot the messenger’ as opposed to addressing the problem (which remains), suggests the Authority is compromised, unable to function appropriately, their credibility and integrity beyond repair.