Compensation for non-financial loss
We understand that a business's mistake can affect you practically or emotionally, as well as financially. The information on this page is intended to help consumers understand our approach to awards for types of non-financial loss.
If you've lost out financially, we'll look to put you back into the position you would have been in if the business hadn't got it wrong.
But we understand that a business's mistake can affect you practically or emotionally, as well as financially. For this reason, the rules we follow say that we can award fair compensation if you've experienced any of the following:
- distress or inconvenience
- pain and suffering
- damage to your reputation
When we might award compensation
It can be stressful when things go wrong. If we think a business hasn't treated you fairly, we'll look at the impact this has had on you – not just how you lost out financially.
We'll consider whether compensation is appropriate in each case. Some people don't want to talk about distressing issues and they might understate the problems it has caused for them. Others are happy to share the details of their experience.
So we listen carefully to both sides, looking at the facts and evidence when assessing the impact, to decide what’s fair.
When we might not award compensation
There needs to be more than just a minor inconvenience or upset. For example, we’re unlikely to award compensation for minor delays due to a business’s phone line being busy or getting your name wrong.
We also don’t compensate for events that happened outside of the business’s control. For example, you might need to make a claim on your home insurance following a burglary. The event itself is distressing, but we wouldn’t ask the insurer to pay you compensation for the impact of the burglary.
However, if the claim wasn’t handled properly, we might consider compensation for the extra upset this caused.
Examples of awards for trouble and upset
The amount we award will depend on the individual circumstances. Here are some examples of the range of awards we might make.
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Moderate (less than £500)
A business put right an administrative problem only after you had to write and phone them repeatedly. It caused you some inconvenience but you weren’t put to any other trouble.
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Substantial (£500 to £2,000)
Mistakes made by the business led to a county court judgement being incorrectly registered against you, which meant your mortgage application was rejected. This caused you considerable embarrassment, upset and inconvenience.
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Severe (£2,000 to £5,000)
A business underpaid your pension for a significant period of time, meaning you experienced reduced living standards. This caused you considerable long-term distress and embarrassment.
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Extreme (£5,000 or more)
Your made plans to sell your home and relocate for work. The business decided to withdraw its mortgage offer, but didn’t tell you when it should have done. By the time they did it was too late to change your plans. Given the significant changes you were making personally and professionally, this had an extreme and long-term impact on you.
What we take into account
We look at everything that’s happened and then assess what would be fair compensation overall.
The same mistake could have a different impact on different people. So we might award different amounts in similar cases.
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Same mistake, different impact
A business sent Susan’s bank statement to the wrong address. The person who received it returned the unopened statement to the business. Susan was worried but it didn’t cause any further issues for her. The business apologised for its mistake and offered her moderate compensation.
Another business made a similar mistake. They wrongly sent Jennifer’s mortgage statement to her previous address where her violent ex-partner still lived. As a result, Jennifer’s new address was revealed. Her ex-partner broke into her home and assaulted her. She had to spend five days in hospital.
Although the second mistake seemed minor, the impact was severe. We told the business to give a much larger award for the physical harm and distress Jennifer suffered.
When we look at inconvenience and loss of your time, we may ask for evidence of how much time you’ve spent. We don’t make awards based on units of time, but instead we look at the overall impact the business’s mistake had on you.
We might also ask for supporting information, for example, if you tell us it had a significant impact on your health.
We also take into account whether there was anything you could have done to reduce the impact of a business’s mistake on you. If we agree there were steps you could have taken, we might decide it’s fair for a business to pay less compensation.
We don’t normally pay compensation to someone else complaining on your behalf, for example, a family member or solicitor.
Compensation for limited companies, sole traders and partnerships
You may want to make a complaint to us if your limited company has been inconvenienced. We can award compensation for this. But the company itself can’t be ‘distressed’, so we wouldn’t award compensation for this.
The compensation can only be paid to the company itself, not you or anyone else personally as a shareholder or director.
However, if you’re a sole trader or a partner in a partnership, you can make a complaint about something that’s affected your business. You can generally be awarded compensation personally.