Our latest research has revealed that local authorities across England could be owed at least £9.3 million, from unclaimed costs due to property damage alone in the past five years. That’s not counting the even greater sums recoverable from council-owned vehicle damage.
In this article, our partner Ian Evans discusses what councils can do if their assets are damaged following an incident.
Property and vehicle damage
There is a large volume of council-owned property and vehicles that are damaged on an (almost) daily basis. And, while it is usual for local authorities to be insured for any liabilities, in a lot of cases, there is no or limited insurance for their losses in relation to property and vehicle damage.
What many people don’t know, is if the damage was caused by others – usually vehicle users – losses can, in fact, be recovered. While some incidents may seem minor, repairing and replacing property and vehicles can end up being costly. Uninsured loss recovery (ULR) is often overlooked by councils, possibly because they are unaware the opportunity exists or are hesitant about the costs involved.
Our research found that this has resulted in millions of pounds’ worth of unclaimed losses each year, which can be reinvested back into the local community.
Our research
Our mass freedom of information request to all 332 local authorities in England showed that between 2017 and 2022, an estimated £91 million was spent repairing council-owned property that had been damaged by vehicles in more than 171,000 incidents – 60% of which was not recovered through either insurance policies or uninsured loss recovery (ULR) methods.
Ian says:
Examples from our freedom of information request include campervans hitting car park barriers, stolen cars smashing into street signs and on-site contractors causing damage during works. ULR also applies to fleet vehicles, such as someone tail-ending a council-owned car or bumping into a bin lorry, as long as the negligent party or vehicle is identified. With continuing budget costs, councils are looking to claw back as much cash as they possibly can, and making use of ULR is one way to do this.”
Read more of Ian’s comments on this in LocalGov.
What is ULR?
ULR is the process of recapturing costs and expenses you may have incurred if your property or vehicle was involved in an incident that was not the fault of you or your employees. Depending on your insurance policy, these losses may be ‘uninsured’ and if not covered, can include repairs, policy excess and, in the example of vehicle damage, loss of use.
In our experience, ULR does not always get the attention it deserves among the public sector; local authorities may not have recovery agents appointed and sometimes, the task is an add-on to a council employee’s day job, meaning the returns are generally lower than they could be. In fact, our research revealed that approximately 1 in 14 local authorities are not using ULR at all.
To counter third-party insurer challenges and maximise recoveries in the shortest time possible, it is also necessary to issue court proceedings on many claims. The right ULR provider will be able to handle this as part of their basic service package.
Making a ULR claim
The local authorities we work with have quite detailed and evolved processes in terms of getting vehicle or property damage repaired. Any kind of repair to vehicles or property needs to be dealt with quickly to make sure there are no health and safety risks to the public, and to ensure a vehicle is back on the road as soon as possible.
Once a repair has been facilitated, a council or its appointed facilities/repair management provider can flag recoverable matters for submission to their chosen ULR provider. While any potential claimant has six years from the date the incident occurred in terms of the limitation period to pursue a claim, we recommend this typically happens as soon as possible post incident to maximise cash flow.
While evidence can be gathered after the event, the preference is to have all processes embedded in advance of any potential claims to ensure the correct information is collated at the time, rather than retrospectively, which can hamper recovery opportunities.
An average settlement time of 26 weeks can be significantly affected, positively or negatively, by the availability of documentation and evidence.
While, ultimately, it is usually insurers that pay claims, the people causing damage are largely local residents, so it is vital councils ensure their chosen ULR provider can handle reputational factors in their process.
Incorporating ULR going forwards
For starters, local authorities should evaluate their current internal policies and procedures, to make sure they know what to do if one of their properties or vehicles is involved in an accident that was not their fault.
To secure a successful recovery, councils should collate the name, address, phone number and vehicle registration of the person who caused the damage, as well as details of what happened, at the time of the incident. Police and witness details – again, names, addresses and phone numbers – will also help a claim. Trying to chase people, witnesses and police for information afterwards can be less productive.
Councils should also try and obtain images or video footage, if possible, of the vehicle in situ as well as the damage caused. CCTV footage can be erased after 30 days, so make sure it is downloaded and stored securely before this deadline. Failing to do these basics can cost your council a significant amount of money.
Claims submitted will, of course, be subject to scrutiny and insurers will ask for documentation. A lack of documentation does not mean you cannot recover a particular loss but the better evidenced the claim is, the better your prospects.
Many local authorities focus their attention on claims against the council, but with a proper ULR solution in place – which is often on a commission basis and only payable at the conclusion of a successful recovery – local authorities could maximise their loss recovery with no upfront fees and reinvest these funds into services in their local areas.
Get in touch with our ULR experts
If you wish to discuss any of the points above, please don’t hesitate to contact our team. You can call us free on 03300 945 100, or request a call back.
We are continuing to build on our West Midlands presence, with the return of Legal Director Michael Brooks.
Michael has re-joined the business following nine months as Partner and Head of Recoveries at Flint Bishop. This followed nine years with us, where he was instrumental in helping to build and develop our uninsured loss recovery division. Michael has more than 18 years’ litigation experience and specialises in recovering losses for businesses that have sustained loss or damage to property resulting from the action of others, and has a breadth of knowledge dealing with claims for property damage, personal injury, and credit hire.
He says: “I am thrilled to be back at Corclaim, which is a forward-thinking firm that offers true work-life balance thanks to its empowered working principles.
“I am looking forward to focusing on the quality of work we deliver for our clients, while also contributing to the continued growth of the uninsured loss recovery team and developing individuals in the team – both in terms of their technical knowledge as well as career progression.”
Mark Merrell, our Head of Corclaim, said: “We are delighted to welcome Michael back to the firm. His wealth of knowledge and expertise has always been – and will continue to be – a real asset to us. With such vast experience, he will also be at the forefront of developing our team members.”
Ian Evans shares his thoughts on the current petrol price hikes, increasing vehicle maintenance costs and demand for semiconductor chips, and the pressures these issues are placing on fleet operators throughout the UK.
Fleet managers may well be feeling the sting of recent cost surges, and may expect to see damage to their bottom line overall. Margins are more important than ever before. Global politics and the economy are non-negotiable and, as a result, businesses should look to maximise the impact they can have on the company budget by considering factors that are within their control.
Price hike challenges and supply chain issues
After wholesale prices for crude oil surged, prices at the pumps continue to increase, sometimes on a daily basis. This has worsened following the Russian invasion of Ukraine, and is one of the biggest expenses fleet operators face in the current climate. RAC’s Fuel Watch found that the average litre of unleaded petrol at UK forecourts reached a record high of 167.3p in March, while diesel hit 179.9p a litre.
Ongoing supply chain issues and the continuing global shortage for semiconductor chips is making it virtually impossible to manufacture new vehicles without missing certain electrical components. According to the Society of Motor Manufacturers and Traders, there was a 34% fall in large fleet registrations in March 2022 – which is typically the most important month for sales.
The demand has impacted the used car market, with the shortages creating unprecedented demand and prices soaring by an average of 30%. This had led to longer wait times for vehicles – with fleet operators facing delays of around a year for certain models. This makes it ever more important to keep fleets in good condition.
Repair costs have increased due to inflation on prices for parts, workforce shortages and supply chain issues. This means servicing and maintaining fleet vehicles is becoming more expensive and time-consuming, and leaves many fleet operators without the use of their vehicles for extended periods of time.
Solving the problem
Given the rate at which petrol prices are increasing, you could start by reviewing your company’s fuel purchase strategy and ensure you are utilising tools such as a fuel card, which offers discounts at the forecourts. Planning driver journeys and refuelling early will eliminate the need for urgent topping ups at more expensive places, like motorway service stations. It’s also a good idea to encouraging fuel-efficient driving. Better use of gears, maintaining tyre pressure and cutting down on air conditioning use can help cut bills significantly, so it is worth training your employees in proper driving habits to help reduce fuel mileage.
Other options include installing telematics, such as G-force systems to monitor heavy braking or actual incidents, and black box software to track speeds. Camera access from within the vehicle, such as reversing cameras, is a good way to minimise minor incidents where manoeuvring in tight spaces and any dash-cam footage of actual incidents is gold dust to enable early decisions on liability.
Finally, uninsured loss recovery (ULR) can help fleet managers claw back money. All too often, ULR is overlooked by many in the industry – resulting in thousands of pounds’ worth of unclaimed losses. However, in a time when cash is key, this solution can help in combatting escalating costs. The priority for fleet managers after an incident will, of course, be getting vehicles back on the road as quickly as possible. However, due to time-consuming repairs, this is not always possible at present, and you may find loss of use, revenue or hire costs escalating. These losses incurred as a result of non-fault accidents represents a commercial opportunity, which can be taken advantage of with the appropriate ULR provisions in place.
How can ULR help?
To begin with, businesses should reflect on their internal procedures and policies to ensure they know what to do if one of their vehicles is involved in an accident that was not their fault. Make sure all your drivers understand the importance of getting full details including photographs of the vehicle (especially if is it a company vehicle with a livery on it), areas of damage and if possible, the other driver.
The impact of failing to carry out these basics can cost your business significantly. While it is not usually relevant to the recovery of losses, taking photographs of the inside of the other vehicle to show whether there were any passengers and how many is always a good idea. It is also important to remain diligent and keep on top of paperwork and communications with your insurer – this can sometimes feel like a full-time job, but it is vital to recovering the money you’re owed.
You can put forward whatever claims you like. However, they will, of course, be subject to scrutiny and insurers will ask for documentation. A lack of documentation does not mean you cannot recover a particular loss, but the better the documents are, the better your prospects. For example, if you have a claim for loss of profit, you need to show the workings out; just providing details from a spreadsheet is not usually enough.
While some incidents will be fault claims, it is important to have a proper ULR solution in place to minimise claims spend on non- or partial-fault incidents.
Many fleet operators will, rightly, concentrate on the cost against the business in fault incidents, but it is not an either or – having a proper ULR solution in place is imperative to maximising loss recovery and helping to reduce overall spend.
Contact our team for ULR support
If you’d like to discuss uninsured loss recovery with our experts, and see how we could help your business, don’t hesitate to get in touch. You can call us free on 03300 945 100 or request a call back, and we will call you.
Author: Ian Evans
