Councils owed £9.3m from property damage caused by vehicles: research

Local authorities across England could be owed at least £9.3m in unclaimed costs after property damage by vehicles in the past five years, research by loss recovery firm Corclaim has suggested.

A mass freedom of information request to all 332 local authorities in England, to which 214 responded, showed that between 2017 and 2022, an estimated £91m 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.

ULR is the process of recapturing costs and expenses – such as repairs, policy excess and other associated costs – that may be incurred if council-owned property has been involved in an incident that was not the fault of the local authority or its employees.

With an estimated 1 in 6 incidents having a traceable third party, at least £9.3m could be recovered through ULR and reinvested by local authorities, Corclaim suggested.

Ian Evans, partner and head of operations at Corclaim, said: “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 own losses in relation to property damage.

“ULR can be overlooked by councils, possibly because they are unaware the opportunity exists or are fearful of ULR costs – resulting in thousands of pounds’ worth of unclaimed losses annually. In fact, our research revealed that approximately 1 in 14 local authorities are not using ULR at all.

“With continuing budget costs, local authorities are looking to claw back as much cash as they possibly can and ULR is one way to do this. Losses can still be recovered for a period of six years post-incident, so the accidents referenced in our freedom of information request can still be recovered – even if they took place back in 2017.”

Evans added: “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.

“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.”