Payments for worry and distress: Criteria for considering payment
Our factsheet “Complaints” says:
“If you think our actions have affected you particularly badly, causing you worry or distress, tell us straight away. In some cases we may be able to make a small payment to acknowledge this and apologise.”
Two important points arise from this. First, we must have made a mistake or caused unreasonable delay if we are to consider making a payment for worry and distress. Second, we are asking customers to let us know if they have been affected particularly badly. As with a claim for costs, we should not generally be proactive in making payments for worry and distress. But the same exceptions apply, so for example if it is obvious that our actions have caused worry and distress and the customer has been particularly badly affected, there is no need to wait for the customer to make a claim.
Normally, however, it is fair to assume that if a person has been particularly badly affected by our mistake or unreasonable delay they will mention it early on when they contact us. So we would not normally expect a person to raise the matter at the latter stages of a complaint, or for an agent to raise this on behalf of the client if the client is unaware of our error.
The words “particularly badly” are capable of various interpretations, but they mean that we will make such payments only in the more serious cases. They should certainly not be seen as the norm. Having said that, it is possible that some business areas are likely to encounter cases where a payment for worry and distress is appropriate more often than other business areas. For example, a significant number of the TCO’s customers rely on the tax credits we pay, and failings on our part can potentially affect those customers particularly badly.
In order to judge, listen to what the customer tells you about the impact of our mistake and consider what our mistake was. And remember also that worry and distress can manifest itself in a number of ways. It may be necessary to make some very sensitive judgements here, but the following ideas may help:
- Consider the person involved. Our mistakes and delays may affect certain people more seriously than others. Examples may include elderly customers, people who have been recently bereaved or people who are unwell. But do not generalise. Treat each case sensitively and on the circumstances surrounding it.
- Look at the impact. A mistake, which you consider to be fairly minor, may have had a major impact. An incorrect penalty notice may have arrived on the day of a funeral. Or a short delay in paying a tax credit may have meant a customer going without over a weekend. We do not expect staff to second guess what impact our mistakes may have had, but once the customer has explained the impact to us we need to consider what amount of payment might be appropriate.
- Consider how long the problem went unresolved. For example, has our customer endured inconvenience and distress over a protracted period of time as a direct result of our mistake and inability to rectify matters?
Payments for worry and distress are made only to individuals, since companies and other organisations do not have feelings. Some companies however are in effect a “one man band” with only one director or where both husband and wife are directors. Even with larger concerns there may be exceptional instances where our actions have had an adverse impact on a particular director, partner or employee. You should not rule out making payments in these cases where the particular individual is the person affected by our actions.
In the case of system failure (see CRG5550), if our error affects a customer particularly badly, then consider a payment for worry and distress in accordance with our general guidance on financial redress. Remember, however, that it is not our policy to compensate for the notional or hypothetical cost of a customer’s “own time”.