Red Claims policy

Introduction

1.1 A Red Claim is where a third party seeks to claim financial compensation from National Highways for damage or injury incurred whilst on our strategic road network (SRN).

1.2 The Highways Act 1980, (‘the Act’) is UK’s primary legislation to deal with the management and operation of the road network in England and Wales. As England’s highways authority for the SRN, National Highways must comply with all parts of the legislation. For the purposes of this policy, the company should specifically look to Section 41 of the Act, and its duty to maintain the SRN to ensure the safety of all highway users.

1.3 Section 58 of the Act provides a defence for the company (as the highways authority) in any legal action for damages where it is alleged that the injury or damage resulted from our failure to maintain the SRN properly. To secure such a defence, we will need to prove that all reasonable measures were taken to ensure the highway was not dangerous to traffic or pedestrians.

1.4 National Highways' three imperatives of safety, customer service and delivery sets focus on ensuring that everyone who uses or works on the SRN get home safe and well. The company is committed to delivering the services and improvements needed to reduce the number of incidents on the SRN which result in a Red Claim.

Policy statement

2.1 This policy sets out the legal requirements and procedures National Highways has to follow on receipt of a Red Claim where it is alleged that damage, injury or loss has occurred because of alleged negligence or breach of statutory duty under Section 41 of the Act by National Highways or its service providers.

2.2 It will be considered that a breach of Section 41 has occurred if a claimant can prove:

(a) the highway was in such a condition that it was dangerous to traffic or pedestrians
(b) the dangerous condition was created by the failure to maintain or repair the highway, and
(c) the injury or damage resulted from such a failure.

2.3 This policy is owned by the Director of Network Claims and Transformation and has been approved by the National Highways Executive and Finance Executive Committees.

Policy scope

3.1 Anyone who believes they have suffered loss, injury or damage resulting from an actionable defect on the SRN which National Highways are responsible for can pursue a claim for compensation. This may include, but is not limited to, claims made by:

• members of the public using the network
• owners of property adjacent to the network
• utility companies
• National Highways staff members

3.2 The incident must have occurred on a road or land for which National Highways are the highway authority or legal owner. Claimants will be directed to the Local Highways Authority (LHA) where appropriate. Where a road has been de-trunked under Section 265 of the Act, claimants will be referred to the relevant LHA.

3.3 By virtue of the terms and conditions of the Design Build Finance Operate (DBFO) contract, the responsibility for handling, progressing and resolving claims for incidents on DBFO roads rests with the DBFO contractor.

3.4 Types of claims that can be submitted include personal injury or fatality, vehicle damage, property damage (subsidence and flooding), inconvenience or loss of business and reduction of property value.

3.5 Claims resulting from street works are dealt with by the Statutory Undertaker subject to the appropriate Section 81 (of the Act) notices being issued.

3.6 Successful defence of red claims relies on everyone involved in the process understanding their roles and responsibilities. Key roles include:

• the National Highways Red Claims Team, responsible for claims handling and resolution
• National Highways' Regional Operations Teams, who are responsible for the timely notification of incidents which may result in a red claim and any evidence required to determine liability
• National Highways' commercial teams, responsible for setting up new contractual agreements with service providers and providing specialist commercial advice
• service providers, contracted to maintain and operate the SRN on behalf of National Highways
• National Highways' legal advisors, providing legal advice and support to our claims team

Requirements for this policy

4.1 All claims must be received in writing, either:

• by using the Company’s own damage report form (TR137/HE1)
• by using the Claim Notification Form (PL1 or EL1) submitted via the Ministry of Justice Electronic Claims Portal (personal injury claims)
• by letter of claim submitted by solicitors or insurers
• by issue of court proceedings.

4.2 Under Civil law, the burden of proving negligence or breach of statutory duty rests with the claimant. They must also be able to prove their injury, damage or other financial losses. The claimant must prove these things ‘on the balance of probabilities’.

4.3 All claims must be supported with appropriate evidence. This may include, but is not limited to evidence of the damage caused, witness statements from those in attendance, police reports, meteorological reports, photographs and medical reports.

4.4 All claims must be investigated with the assistance of the relevant regional teams within the Operations directorate. Where the investigation falls to the regional maintenance and renewals service provider, all supporting defence case evidence should be provided on a TR137/HE2 form with supporting documentation (as referred to in paragraph 4.3 above). This is in line with the claims team service level agreement.

4.5 Throughout the process, accurate record keeping by the operations directorate and the relevant service provider is essential to ensure that the company can refer to all aspects of the case in hand to ensure that:

• the defence case is in line with Section 58 of the Act is robust
• information is retained (in line with company policy on information management and security) and accessible for future reference by internal staff.

4.6 If National Highways intends to pursue a defence under Section 58 of the Act, all documentation relied upon to provide a defence must be disclosed when the outcome is communicated to the claimant in writing.

4.7 Our service providers or contractors have a contractual obligation to keep the network safe, and in doing so, provide National Highways with the information required to enable a section 58 defence. If we establish that this contractual requirement has not been met, we may seek an indemnity from them should the prospects of successful prosecution under Section 41 be deemed reasonable. The legal time limit for claiming an indemnity is two years from settlement of the claimant’s action.

4.8 Alternatively, if legal proceedings are issued against us, we may seek to add the service provider or sub-contractor as an additional defendant to the action if we believe there are sufficient merits for doing so.

4.9 The Red Claims team must provide a decision on liability on all cases and communicate the decision to the claimant or their representatives. If the company intends to pursue a defence under Section 58 of the Act, supporting documentation should be provided to clearly explain the reasoning.

4.10 All decisions on liability are based on the facts and evidence available. We will take the advice and opinions of our legal advisors, apply the law (Section 41 and 58 of the Act), previous case law and our understanding of the of court’s potential position to determine the likely litigation risk.

4.11 An admission of liability constitutes a decision. If we do not intend to contest a claim, the company will communicate this to the claimant or their representative in writing as soon as possible.

4.12 If we are unable to provide evidence for a defence under the Act, liability is likely to be admitted and settlement for any losses agreed. Where liability is admitted, settlement will be made on fair terms if the value sought by the claimant is supported by evidence. We will seek evidence of loss and, where applicable with high value or complex claims, refer to our legal advisors. For personal injury claims, we will seek medical evidence and settle with reference to Judicial College Guidelines and previous case law.

Litigation

4.13 Where court proceedings are issued against or served on National Highways Company Limited, all court papers and supporting documentation is referred to our legal advisors. In such cases, our legal representatives will be responsible for the management of the claim They will take over conduct of the claim on our behalf, and will be supported by the red claims team.

Thresholds

4.14 The following types of claim must always be fully investigated regardless of quantum or value:

• Claims involving personal injury
• Any claim falling into a category where there are well established policy reasons to deny liability (for example debris, encounters with our winter maintenance fleet)
• Any claim which might be attributable to a statutory undertaker (for example faulty reinstatement, damaged or misplaced manhole cover)
• Any claim which arises from roadworks that are subject to a separate independent contract (for example road resurfacing works in which the contractor indemnifies National Highways against all third-party claims)
• Any claim which appears to be one of many arising from the same incident or cause (for example multiple vehicle accidents, stone chippings) to ensure consistency.

Financial delegations

4.15 Once the value of the claim has been agreed, the following authorising officers can approve the final settlement in line with the company’s delegation process:

Every decision is counter signed by either a claims manager or team leader.

Right to challenge our decision

4.16 Authority to overturn our decision on liability can only be made through a court of law. Challenges relating to the way we have handled the claim can be made through the company’s complaints procedure. This is designed to review the way in which the claim has been handled in accordance with our established internal process. Should the challenge reach stage three of the process – referral to the Independent Complaints Assessor and Parliamentary Ombudsman - both bodies are only able to review the way the claim has been handled. They do not have the authority to overturn the original decision made.

Related guidance and procedures

5.1 The following links may provide useful guidance and information:

Section 41 of the Highways Act 1980

Section 58 of the Highways Act 1980

National Highways complaints procedure

Network Management Map - providing the location of all DBFO contracts

Pre-action protocol for personal injury claims

Pre-action protocol for low-value personal injury (employers’ liability and public liability) claims

Monitoring

6.1 The policy owner is accountable for the review of this policy either on an annual basis, or on identification of a material change to the process or to legislation affecting the policy. The policy owner is also responsible for monitoring compliance with the principles contained within this policy, and for determining any enforcement activity that may be required on identification of non-compliance.

6.2 Service Level Agreements (SLAs) have been defined and agreed to provide improved customer service and business management for third party claims. The timeframes reflect the requirements of both the Pre-Action Protocol for Personal Injury Claims and the Pre-Action Protocol for low value personal injury claims. The full list of SLAs are provided in Appendix 1.

6.3 These SLAs will be used to measure performance and identify instances of non-compliance. Management information reporting will be used to monitor adherence with these SLAs and present findings to those accountable for enforcement activity.

6.4 Financial forecasts are provided at month end, which can be used to inform the organisation of our liabilities and highlight potential financial risks.

Records management

6.5 A formal record of all actions must be held during the lifespan of the claim. Documents are held in company archive for 10 years.

Fraud checks

6.6 National Highways reserves the right to conduct any checks required to identify potential fraudulent claims. If there is reason to suspect fraud or dishonesty we may refer the case for investigation to our counter fraud team.

Policy breach

7.1 Failure to comply with this policy by an internal staff member could result in reputational damage and increased costs for National Highways. A continued failure to comply with the principles this policy, and the accompanying process will be investigated and may lead to disciplinary action being taken.

7.2 Failure to comply with this policy by a service provider may result in indemnity compensation under the terms of the contract.

7.3 Failure to meet the legislative timescales for deciding on a personal injury claim may result in additional costs to Highways England associated with applications for pre-action disclosure.

7.4 Failure to provide sufficient evidence or prove causation may result in a claim being denied by National Highways' internal Red Claims Team.

Definitions

Appendix 1 - Service Level Agreements (SLAs)

Defined SLAs for the red claims process are set in accordance with the Pre-Action Protocol for Personal Injury Claims and the Pre-Action Protocol for low value personal injury claims as defined in the Civil Procedure Rules:

Timescales for personal injury claims submitted via the online Ministry of Justice portal:

• Acknowledgement within 24 hours
• Accept or Reject the claim within 15 working days
• Decision on liability must be provided within 30 working days for Employer Liability Claims (EL), 40 working days for Public Liability Claims (PL), and 15 working days for Road Traffic Accidents (RTA) in order for the claim to remain within the claims portal and therefore benefit from fixed costs
• Where liability is admitted, and settlement agreed, payment of the settlement amount and fixed costs must be paid within 10 working days of such agreement

If the any of the above time frames are not met, the claimant can give notice that they intend to withdraw the claim from the portal and fixed costs will no longer apply.