State Enabled Exaggeration on an Industrial Scale

Where a driver causes damage to the strategic road network (SRN), in many Areas, Kier Highways react, report and reinstate.  Generally:

  • if the bill is over £10,000, Kier is paid by Highways England who then approaches the driver, fleet, haulier or insurer (Third Party) for repayment of their outlay
  • if the bill is under £10,000 Kier cannot claim from the Authority, they must pursue the  Third Party themselves

The billing process is wonderfully simple; common ‘base rates’* (cost) were to be used and to these added an uplift – about 8% to the Authority and about 25% to a Third-Party.  The difference … about 17%.

*a.k.a. ‘defined costs or ‘notional rates’ or ‘nominal rates’.

But, from day-one, 01/07/2014 in Area 9, Kier Highways has never complied with the process but used their own obviously flawed process that saw gross exaggeration – ‘1153‘. Put simply, they worked out the total costs of carrying out these responsibilities and divided by an assumed number of accidents (1153). The assumed number was ridiculously low, so the ‘averaged’ cost applied to third party insurers was grossly overstated. Caught out, 10/2015 their new methodology was also contract-non-complaint exaggeration in another guise – an AIW (operative) to the Authority may cost £25/hour, to a third party, over £100/hour … a difference of 400%, not 18%!

Kier was assisted in their conduct as the Authority kept the public-protective section of the contract secret and neither Highways England nor Kier Highways mentioned it.

Even knowing that the contract contained ONE process the Authority took no action when a second was utilised. Worse still; aware of the conduct they ignored it, undertook a supposed independent enquiry with the help of KPMG, who appear to have been misled and provided false information.

It is axiomatic of both Highways England and Kier to suppress any information or document that contradicts their stated position.

06/2019, the Authority’s ‘reasonable rates’ process (the NSoRC) commenced but was abandoned 10/2019. Highways England state this resulted from Insurer’s taking issue with the practice but when has the Authority considered the interests of Third parties? At that time we offered our own input such that insurers interests were represented and that market rates could be set out in a clear and transparent manner. This offer was ignored…

03/2020, rather than have Kier adopt the Authority’s schedule of market-tested rates, Highways England was persuaded to vary the contract terms to authorise the use of grossly highly charging rates than they (Highways England) would ever pay, just Third Parties. And so back to the ‘1153’ approach, being those who pay will cover all their costs, whether it reflected that particular incident or not. It is acknowledged by Highways England that many damage claims are never traced to a particular vehicle or incident, so someone has to pay!

08/2020, CARDIFF COUNTY COURT

A Judge considered two specimen matters, part of many stayed claims, the judgement identifies:

  • a lack of professionalism in the administration of the Highways England contract
  • a seemingly amateur state of affairs concerning the provision of information
  • no signed contract could be produced
  • inconsistent and deficient evidential documentation to support the alleged incident (we commonly see claims for damage that is subsequently identified to have occurred on a different day or location, even to have occurred before the particular accident itself)
  • Area 6&8 Deed of variation was not effective because the contract had already come to an end.
  • Use of ‘defined costs’ containing uplifts apparently in the absence of any authority
  • Costs for materials were not properly substantiated

Incredibly, the above concerns, anomalies and contradictions were identified within 2 claims that Kier and Highways England knew were destined for consideration before a Judge!  It is unsurprising we at CMA have yet to encounter a correctly priced Kier Highways claim.

THE JUDGEMENT

a copy of the Judgement can be found here

QUESTIONS OF THE AUTHORITY

We have written to the Authority seeking information arising from the Judgement.  Our request can be found here.