Establishing an approach to compensation

1. Assess the length of time and impact 

Compensation aims to restore tenants to the position they would have been in if things had not gone wrong. Landlords should consider:

• the length of time and impact this has had on an individual
• if the delays could have been avoided and take appropriate action to remedy
• if internal policies and procedures have been adhered to. When this is not the case, consider the overall impact on the resident

2. Consider individual circumstances

The impact of a service failure can affect residents in different ways, even if, superficially, it looks the same.

• give attention and acknowledge the impact on the residents’ circumstances
• insufficient attention to individual circumstances may cause a complaint itself, only to be compounded by a failure of redress
• comparing sums can be superficial and misleading. landlords should consider them under the same assessment process

3. Provide a clear compensation framework

The Ombudsman recommends landlords implement a separate compensation policy in addition to their complaints policy. This will help ensure payments are fair and consistent.

• ensure policies are reasonable and fair, with clear refund policies compensating from the point the error occurred
• compensation claims should be easy for residents to understand and follow
• ensure clear information on claims from insurance providers. Landlords should assist residents where required

4. Evaluate the effectiveness of redress

Often, higher awards of compensation from the Ombudsman are seen where the landlord has a compensation policy but does not apply it in their complaints process.

• landlords should ensure that compensation policies and processes are followed, calculations should be checked to ensure they are accurate
• address the root cause of the issue, even when reasonable compensation is awarded.

5. Good communication

Often it is not clear what compensation has been awarded and why. Landlords should be open and transparent to manage resident expectations

• time and trouble caused should not be conflated with distress and inconvenience – these are different things and they should be addressed individually
• redress should be made clear, ensuring all of the issues raised are addressed where appropriate

6. Avoid arbitrary payments

Compensation should be set on a clear and consistent structure to ensure fairness.

• inconsistent increases in compensation following a complaint risk raising the expectations of residents losing sight of lessons learned from what went wrong
• discretionary practices are unfair to other residents who may not have followed the landlords complaints procedure

7. Learning from complaints

Most decisions from the Ombudsman’s investigations are not severe maladministration. It is important senior leaders also understand what works in upheld decisions versus others.

• findings of reasonable redress indicate a functioning remedies policy
• exploring a common approach to compensation with resident groups can support reasonable redress
• consider an open and transparent compensation calculator accessible to residents, with provisions for individual circumstances
• increased awareness of complaints is positive and should be seen as an opportunity for learning, where possible landlords should consider early resolution