Finding your way

The comprehensive spending review meant local authorities were faced with having to decide how best to use their resources in order to balance the books. Ridwaan Omar looks at the impact of the cuts on councils' ability to defend highways claims and analyses the courts’ attitude to a “resources argument” being put forward.

The main litigation area for local authorities is highway claims, where they tend to self fund such claims. We have all seen news headlines showing the state of the highway network across the country. The headlines highlight the reality of what is happening on the ground in terms of the difficulties many local authorities are facing in being able to comply with the existing national code of practice for highway maintenance management. The recent Audit Commission report found that highway authorities were planning to cut their road budgets by between 10 and 40%. The situation has worsened in recent years with severe winter spells where roads have deteriorated further with the resultant reactive patch repairs being unable to cope with the usage and underlying condition of the road. The lack of funding and resources does mean that long term planned maintenance schemes are either cut or scaled back whilst highway authorities are carrying out reactive repairs. The planned schemes are a cheaper alternative in the long term than the increasing costs of reactive repairs which are currently being undertaken and increasing in number. A false economy many may think.

A recent Asphalt Industry Alliance report found that compensation claims over potholes have risen 13% in England over the past 10 years, 25% in Wales and 87% in London. The estimated cost of repairs to the highway caused by potholes was put at £13bn. Given the state of the economy, local authorities are faced with the reality of having to balance the books with highway budget reductions being the norm and a consequence. Highway authorities are under a statutory duty contained within section 41 of the Highways Act 1980 to maintain the highway at public expense. In effect this has meant keeping the state of the highway in a condition so as to make it reasonably passable without danger for ordinary traffic. Historically, highway authorities have either adopted the national code of good practice or had their own codes setting out their own procedures usually bettering the national code standards.

How will this change?

Firstly, the resources issue impacts on requiring immediate budgetary cuts. This has tended to fall on reducing staffing numbers either through voluntary retirement or redundancy. It seems obvious but worthwhile saying that reducing staff numbers from those involved in ensuring the statutory duty is fulfilled will create real difficulties and have a real impact on the highways authority’s ability to satisfy its own code of practice and thus its ability to defend such claims based on the section 58 special defence available to them.

As highway inspectors leave the authority, whilst many are prepared to continue to assist in historical claims where their involvement is vital, there will be the handful where they no longer wish to assist. This has an evidential impact on being in a position to defend such claims in the event they became litigated and the matter proceeded to trial. The courts usually expect highway inspectors involved in the inspection procedure to be giving evidence in order to add credibility to the special defence.

Many highway authorities who have often had their own codes of practice for highway maintenance will need to be looking at their own codes to consider whether they can reduce the burden of cost by reducing their standards to the national accepted standards. Any variation clearly needs to be documented and risk assessed to avoid the obvious claim by the claimant that it followed as a result of the accident.

The recent Court of Appeal case of Wilkinson v City of York Council [2011] 18/1/2011, sets out guidance as to how the courts will consider and decide on cases where arguments are being put forward that they had to vary the standards from the national code due to budgetary considerations.

Briefly, the facts of the case involved a cyclist who fell from her bike in May 2006 when her front wheel hit a pothole. The council inspected the road on an annual basis. This was challenged by the claimant as being too infrequent and inadequate in accordance with the national standards. The council had clarified the reason for the departure was due to financial constraints including limited manpower.

The matter eventually proceeded to the Court of Appeal. Lord Justice Toulson, delivering the leading judgment, held that whilst accepting the national code was not a statutory document but simply a guide, any variation from the national code should be derived following a risk assessment and not simply based on financial considerations. In considering the special defence afforded by section 58, the court held that this involved an objective judgment based on risk and “it afforded a defence to a claim for damages brought against a highway authority which was able to demonstrate that it had done all that was reasonably necessary to make the road safe for users, not an authority which decided that it was preferable to allocate its resources in other directions because other needs were more pressing than doing what was reasonably required to make the roads safe.” The court found that the annual inspection was thus inadequate.

The importance of ensuring that highways are correctly classified is highlighted by the above case. There are likely to be more challenges to the adequacy of their frequency of inspections. Highway authorities should have regard to the classification definitions and guidance within the national code and should ensure that a proper and adequate risk assessment is undertaken based on locality, traffic levels and other relevant factors where they are able to justify the setting of an inspection frequency.

Lord Justice Toulson highlighted the fact that it was up to Parliament to allow financial resources to be taken into account within section 41 as they had allowed in other sections of the Highways Act. An example being section 41(1A), relating to the “duty to ensure, so far as is reasonably practicable, that safe passage along a highway is not endangered by snow or ice”. This does allow the courts to take into account policy considerations and factors relating to financial and manpower resources. Highway authorities usually set out their winter maintenance policy and procedure in a code where resources are often a reason why different categories of highway are given different priorities for gritting or snow clearance purposes.

There are other considerations such as repair timescales, manner of inspections and definition of safety defects which also need to be taken into account.

The highway budgets are likely to be squeezed or even further reduced over the next few years. Ensuring that highway authorities have in place the procedures and policies which are reflected on the front line will be a vital factor in maintaining the success which many councils have enjoyed over recent years in being able to defend such claims.

Ridwaan Omar is an associate at Forbes. He can be contacted on 01254 222457 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it.. Follow the firm’s insurance team on Twitter: @ForbesInsurer.