Housing Ombudsman publishes new guidance on compensation

The guidance is intended to set out the Ombudsman’s position on:

• when it orders compensation in its casework
• how it calculates appropriate sums of compensation
• how a landlord’s offer of compensation is considered within its framework.

The Ombudsman noted that compensation is not aimed at being punitive or a regulatory fine but seeks to put residents back in the position they would have been had service failings not happened.

The guidance has been published at the same time as the Ombudsman’s latest ‘learning from severe maladministration’ report, which is focused on compensation awards.

The report is split into three sections.

The first looks at landlords not applying their own compensation policies correctly. Cases highlighted include a landlord failing to offer compensation despite a resident and her four-year-old child living in damp and mould for three years.

The second section looks at when landlords increase the compensation after its stage 2 response.

“This misses the opportunity to put things right for the resident at an earlier stage. One landlord offered over £2,000 more in compensation when the complaint was referred to us,” the Ombudsman said.

The final section examines the difference between the Ombudsman’s orders and the landlord’s offer.

The Ombudsman said that “sometimes the difference was significant. For example, we offered 10 times the compensation to a resident living with a leak for years because the landlord’s award was so low.”

Richard Blakeway, Housing Ombudsman, said: “Compensation is emotive. When times are hard and budgets tight, for both residents and landlords, this can drive the wrong behaviours. It can result in residents expecting unrealistic redress for failings. Or organisations being institutionally reluctant to compensate.”

Suggesting that there should be a single vision of fair compensation shared across the sector, he added: “At the heart of compensation is fairness. Individual circumstances will lead to different awards but the core principles driving decision-making should be common.

“Non-financial orders, like apologies, matter greatly too. But fair compensation can go a substantial way towards restoring trust amongst residents and prevent complaints escalating to us.

“A virtuous cycle of improving complaint handling and proactive learning to prevent complaints will longer-term also reduce the need for compensation.”

Harry Rodd