The claim has been presented to insurers, with each AIW being charged at / hour with a multiplier of 1.5x bringing the total to / hour.

Transcription

1 Date: 12 Apr 2017 Your Ref: Kier Highways Ltd GC\***** Our Ref: U02A472 Highways England Dear Tim, Loss date: 5/08/2016 damage to Crown Property Claim value: 4, We are instructed in respect of the above matter by *********** who appear to insure the vehicle alleged to have caused damage to Crown Property ( street furniture ). Mr (redacted) of CMA has recently drawn my attention to an you sent him in which you appear to have overlooked the evidence he has sent but referred him to your audit of 01/2016. The audit was obviously lacking, flawed. You also advised Highways England pay the same as Third Parties for AIW s (emergency attendance staff) see Appendix I. We have, on a number of occasions, evidenced that your understanding is patently wrong. I draw your attention to this claim which Mr (redacted) has raised with me. The incident occurred 08/2016 i.e. at a date at which you state Highways England are paying / hour for an AIW (Appendix I). The AIW staff attending the incident at 6:30am were Mr X and Mr Y: Mr X & Mr Y The claim has been presented to insurers, with each AIW being charged at / hour with a multiplier of 1.5x bringing the total to / hour. The above should be compared to a claim presented to Highways England following an incident a week earlier, our reference U04B286 your reference HE112/009/SG753. The AIW staff attending the Page 1 of 7

2 incident were again Mr X and Mr Y: Mr X & Mr Y However, they are charged to Highways England at / hour plus 7.38% fee i.e / hour: Mr X & Mr Y Page 2 of 7

3 It will be noted that on both occasions, the AIW s were working outside of Core Hours, defined by Kier as 8am to 5pm. Kier are keen to convince Third Parties that their AIW s work this 9 hour shift producing their Guide the relevant extract from which appears at Appendix II. Ms (of Kier Highways) of Kier has stated to a Court that AIW s work 8am to 5pm and if they work outside of this they are paid the multiplier charged. We believe this to be a false statement. It is evident from the IMF s (above) that the AIW s were working outside of core hours on both occasions: 05/08/ /07/2016 Location when contacted: M6 responded 06:00hrs arrived 06:30hrs Location when contacted: M6 responded 21:20hrs arrived 21:30hrs Highways England have not been charged a multiplier. The AIW is one small facet of the claim, the excessive charging applies to all aspects. Appendix A of Annex 23 On 06/03/2017, a copy of Appendix A to Annex 23 was placed in the public domain and sets out the principles to be followed when calculating the maximum amount to be claimed for damage to Crown Property when the Provider is pursuing a claim against any third party to recover the costs involved in the name of the Employer (Highways England). The amount to be claimed is no more than: Total Defined Cost for Items plus: Third Party Claims Overhead. Therefore, the charge to third parties for an AIW should be: plus Third Party Claims Overhead. Ms (of Kier Highways) has stated to a Court that the above process is followed. It is not. Ms (of Kier Highways) has stated the Third Party Claims Overhead is 20.58%. the AIW should therefore be charged to third parties at plus 20.58% i.e / hour, not / hour. It is evident: 1. Charges to TP s (which includes insurers) are baseless and have been misrepresented. 2. Highways England lack understanding of the processes and rates: a. The rate charged to HE is not understood by HE b. The audit failed to identify non-compliance with the contract 3. Appendix A of Annex 23 which dictates the process for charging TP s in Area 9 has not been complied with since the inception of the contract 07/ The application of multipliers is wrong. KHL are charging, as an example, 1.5x for an operative working out of core hours (8m to 5pm) claiming they pay staff this. The evidence in our possession evidences: Page 3 of 7

4 a. The staff working out of core hours routinely, operating a shift pattern b. The staff being paid no more for working outside of core hours If any aspect of the above is found to be correct (and we believe we can evidence beyond reasonable doubt the conduct) it is hard to conclude how the conduct is anything short of fraudulent. Please: A. Reprice your claim in accordance with the contract (ASC). B. Provide the defined costs C. Confirm the Third Party Claims Overhead. In the absence of B, the basis of the calculation i.e. not commercially sensitive but a necessary disclosure, we are unable to determine the total cost, we cannot make an informed calculation. We believe C to be 20.58%. Using known costs to Highways England and applying these to the claim, we believe (admittedly a guestimate) the total defined costs to be Assuming the TP claims overhead to be 20.58%, the claim is for 2, We refer you to your of 11/04/2016 (Appendix II), specifically: In over-threshold claims, Highways England seeks to recover the actual costs of undertaking the repair. We wish to pay you the actual costs of undertaking the repair : Please: D. Why are Highways England seeking more than this? E. Confirm this sum is agreed in full and final settlement Yours sincerely, Philip Swift Claims Management & Adjusting Ltd Page 4 of 7

5 Appendix I From: Reardon, Tim [mailto:tim.reardon@highwaysengland.co.uk] Sent: 05 April :26 To: Philip Swift <pswift@cmaclaims.co.uk> Subject: Kier charges Dear Mr Swift I refer to your letter of 24 March. The current charges levied by Kier are as follows: a) AIW staff hourly rate: b) AOW vehicle hourly rate: c) CO1 Standard Beam: These unit rates are inclusive of either a Direct Fee, Subcontract Fee and Working Area Overhead, whichever is appropriate, and which are set out in the contract between Kier and Highways England. For sub-threshold claims, Kier apply a third party claims overhead. A multiplier is applied to time related items such as staff and plant and varies according to time of day, whether it is a weekday or weekend and whether a Bank holiday. The multipliers were developed, we understand, in conjunction with the insurance industry. They are set out in the document published by Kier, Insurer s Guide to Incident Management and Claims Recovery, and they apply to all claims, above or below threshold. That Guide is sent out with every claim. For above threshold claims, the contract between the Kier and Highways England (as with other service providers) sets out a precise methodology for calculating the charges, including the relevant fee percentage. The below threshold claims include an additional third party claims overhead because, for example, in these cases Kier is pursuing the case the whole way through (rather than the claim being pursued against the insurer by Highways England) and therefore incurring additional costs. Nevertheless, notwithstanding there may be some differences, the conclusions of the January audit of the way in which Kier calculate their claims concludes that insurance companies are not being over-charged; differences either tend to balance out or the differences are not significant. We have noted your comments on the audit. We disagree with them. We believe the audit was conducted properly and we support its findings. As I have said before, Kier is responsible for justifying to you the sums claimed. If they cannot satisfy you have various legal avenues open to you. Highways England (and we think Kier) has supplied you with the information you should need in order to make an informed judgment. Yours sincerely Tim Tim Reardon General Counsel Highways England Bridge House 1 Walnut Tree Close Guildford Surrey GU1 4LZ Tel: Mobile: + 44 (0) tim.reardon@highwaysengland.co.uk Page 5 of 7

6 From: Reardon, Tim Sent: 11 April :10 To: Philip Swift Subject: FW: Kier charges Dear Mr Swift Referring to your of 6 April, the rates quoted were confirmed to us by Kier as the rates they charge Highways England and were current as at December The methodology for calculating the charges is that applicable to an NEC3 contract including both lump sum and cost reimbursable elements. This methodology is well-recognised in the market. The concept of the multiplier is used for the purposes of presenting the costs of sub-threshold claims to insurers and is the approach developed by Kier with help from the insurance industry. In overthreshold claims, Highways England seeks to recover the actual costs of undertaking the repair. We do not accept your comments in relation to the audit. Yours sincerely Tim Tim Reardon General Counsel Highways England Bridge House 1 Walnut Tree Close Guildford Surrey GU1 4LZ Tel: Mobile: + 44 (0) tim.reardon@highwaysengland.co.uk Page 6 of 7

7 Appendix II Page 7 of 7