UK drivers are paying millions of pounds more for their motor insurance because of inflated compensation claims for damage to roads by contractors hired to repair them, according to a leading insurance adjuster.
The charge follows a successful appeal by CMA, a claims management and investigations company, on behalf of a motor insurer that had a £440,000 repair bill reduced by £309,000 after a review by government lawyers.
In December 2016, an accident involving a Mercedes-Benz E-Class resulted in a section of the Higham Road Bridge on the A45 in Northamptonshire being damaged. National Highways, the government-owned organisation responsible for building and maintaining motorways and major roads in England, commissioned Amey, a contractor, to repair the bridge. As part of the work, Amey installed temporary traffic lights and a barrier that it left in place for two years until permanent repair work began in 2019.
Amey eventually billed National Highways £440,000 for its work, which the organisation paid before then billing the Mercedes driver’s insurer. However, CMA established that £276,000 of Amey’s £440,000 repair bill was for the traffic management scheme alone and that National Highways had paid Amey’s total bill without first checking that it was fair and reasonable.
Following CMA’s intervention, the Government Legal Department (GLD) appointed an independent quantity surveyor to review Amey’s work. Concerning the traffic management claim, the surveyor said: “There’s nothing that we’ve reviewed that could justify a cost of £276,359.77 that Highways England [renamed National Highways in August 2021] states has been paid out.”
Following the GLD’s review, National Highways and CMA agreed a reduced claim of £131,000.
CMA managing director Philip Swift, a specialist in strategic road network claims scrutiny, said: “We deal with overstated road incident claims every day, but this is an especially egregious example. How did Amey come to charge £309,000 too much? Why did National Highways simply pay, no questions asked? We’ve repeatedly warned National Highways that its checks aren’t robust enough and its contractorsare taking advantage.”
Colin Lowther, head of service delivery at National Highways, denied that the organisation had been overcharged by Amey and said it has “robust” processes in place to ensure costs can always be accounted for “National Highways is entrusted with billions of pounds of public money every year, and we work diligently to ensure that every penny is spent appropriately,” he said.
A spokesperson for Amey said the repair work it carried out was different both in scope and in time from that considered by the government-appointed quantity surveyor. “Amey rigorously ensures that it always provides value for money maintaining the highway network to a high safety standard,” they added.
