Compensation Policy. 1 Statement of intent

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1 Policy: Compensation Policy Author: Adrian Stones Signed off by: Board 27 Sept 07 Effective date: 1 October 2007 Policy last reviewed and approved: Due for review: See corporate timetable Compensation Policy 1 Statement of intent 1.1 SHL are committed to providing good quality services in an efficient and effective way. We aim to meet all our service targets; however we recognise that there are times when we fail to provide the high levels of service we have set and as a result our customers are inconvenienced. This policy sets out our approach to making without prejudice payments to limit dissatisfaction on the rare occasions our service fails. This policy must be used in conjunction with our customer feedback policy and procedure. 2 Policy Statement 2.1 The policy states under what circumstances an automatic compensation payment can be made. Where a customer claims compensation above an automatic payment, the policy sets out what circumstance SHL take into account in making a discretionary compensation payment. This policy covers SHL s statutory responsibility to make payments under the following legislation: - The leasehold reform, housing and urban development act 1993 (right to repair) - Housing Act Land compensation Act 1973, Planning and Compensation Act Statutory Home Loss Payments 3 Implementation 3.1 Definition A customer compensation payment is a without prejudice payment made where a customer has been inconvenienced unreasonably. We will pay it in

2 an attempt to make amends for inconvenience caused and to minimise the level of dissatisfaction that a customer may feel as a result of a service failure. We will make a customer compensation payment where the customer has been unreasonably inconvenienced. SHL will always make a compensation payment for service failures in right to repair, displacements, home disturbance and loss of amenities, damage to property, failure to keep an appointment. SHL recognises that there will be occasions when a compensation payment will be made as a result of a customer complaint being upheld. SHL also believe that payments should be available without a formal complaint having to be made. SHL accept that it is important to quickly recognise where we have failed to deliver our services to the required standard. Once such failures have been identified, we must ensure that our procedures for making good those failures are followed. A payment will not be made where the fault is that of a third party e.g. failure on the part of a utility company. SHL will not make payments for problems resulting from matters beyond our control SHL insure the structure of properties but customers are responsible for insuring their fixtures, fittings and contests. We will regularly remind customers to take out appropriate insurance but the responsibility will remain theirs. SHL have a tenants contents insurance scheme which will be regularly promoted. SHL may make a payment to cover the excess paid by tenants if they make an insurance claim. Any such payment will be made in accordance with the discretionary payments section of this policy. Where any monies are owed to SHL we will use any compensation payment to clear debt either in full or part, unless: - This would cause genuine hardship - The customer has incurred expense in resolving the issues about which the compensation is being paid If there is any balance of a compensation payment still to be made it will be issued directly to the customer When a customer makes a claim SHL will:

3 - Act reasonably and fairly at all times - Look at all claims on their individual merits - Listen carefully and give due attention to the customer s point of view - Pay automatic payments within 10 working days and discretionary within 20 working days - Always aim to reach an agreement with which the customer is satisfied SHL are committed to managing our resources effectively and payments will be kept to a reasonable level. Automatic Payments Compensation will be automatically paid in the following circumstance following the completion of a compensation form. Automatic payments include: - Right to Repair - Home Loss and Disturbance - Damage to customer property - Loss of facilities - Additional costs of alternative heating/electricity Right to Repair Right to Repair legislation gives the right to customers to have small emergency or urgent repairs carried out quickly and to receive payment if we fail to meet our obligations on the second occasion. Customers will be entitled to 10 plus 2 per day for every day that the repair remains outstanding to a maximum of 50. A compensation payment will only be considered on failure of qualifying repairs as identified in the right to repair regulations. This means the repair must: - Have an estimated value of less than Be classified as an emergency repair SHL will not make a payment where the customer has failed to allow us or one of our contractors access to inspect or carry out the repair having been given a reasonable opportunity to do so. The scheme will become payable if we fail on two occasions to complete

4 the qualifying repair in the set timescales. Qualifying repairs and timescales: Repair within 1 day Repair within 3 days Repair within 7 days Total loss of electric Partial loss of electric Leaking roof power power Unsafe power or lighting socket, or electrical fitting Partial loss of water supply Door entry phone not working Total loss of water supply Total or partial loss of gas supply Blocked flue to open fire or boiler Total or partial loss of space or water heating between 1st November and 30th April Blocked or leaking foul drain, soil stack, or (where there is no other working toilet in the dwelling-house) toilet pan Toilet not flushing (where there is no other working toilet in the dwelling-house) Leaking from water or heating pipe, tank or cistern Insecure external window, door or lock Total or partial loss of space or water heating between 1st May and 31st October Blocked sink, bath or basin Tap which cannot be turned Loose or detached banister or hand rail Rotten timber flooring or stair tread Mechanical extractor fan in internal kitchen or bathroom not working SHL must attend the repairs within the agreed timescales from when the customer reported them to us or becoming aware of the need for them. In many cases we will be able to make safe or temporarily repair the problem. Our obligations will then have been met and we will arrange for a return visit to complete the permanent repair. Home Loss and Disturbance If a customer is permanently displaced to allow redevelopment or

5 improvement works they are eligible for a statutory home loss and disturbance payment. The payment is only payable for tenants with one year s tenancy and only where the tenant has unequivocally been required to move. The amount of home loss payment is 4,000. A discretionary home loss payment can be made by SHL in accordance with the non automatic payments of this policy. Customers who are required to move due to repairs and maintenance can be compensated by a Disturbance Allowance. There is no fixed limit but compensation should be paid to cover expenses of moving and reestablishment, this can include: - Removal costs - Reconnection of equipment - Recharges for redirection of post, telephone etc - Adaptation and refitting of shelving, fitted wardrobes, curtains, floor coverings etc. Damage to customer property in the course of repair of improvement work SHL will take every care when carrying out works to a customer s home. Nevertheless accidents happen and we will deal with them as quickly as possible. Customers should keep all evidence of damage for inspection. The customer should also contact their own contents insurance company to see if they can make a claim. If the customer has no contents insurance and feel that the SHL have been negligent and want to make a claim directly against SHL, they must write to The Insurance Officer Stevenage Borough Council Daneshill House Danestrete Stevenage SG1 1HN The letter must give details of the date and place of the incident, how the injury/damage happened, the extent of injury/damage and the amount being claimed from SHL. It must also explain in what way SHL or their employee has been negligent or in breach of a statutory duty. When the letter is received an acknowledgement will be sent to the customer by SBC insurance and the claim will be investigated. When the

6 investigation is complete SBC Insurance will be contact the customer again. The claim may be forwarded to SHL s insurers. Loss of Facilities Overnight If any part of the home becomes unusable by our customer or any of the major amenities are unusable overnight e.g. heating, hot water as a result of delayed or inadequate repairs that are SHL s responsibility SHL may compensate the tenant. The amount of compensation is calculated as a percentage of the rent debit. Loss of rooms: If a major repair is being carried out with the tenants in occupation and a room (excluding second bathroom or WC) is unusable as a result compensation may be paid as a percentage of net rent as follows: - 50% for loss of kitchen, bathroom or WC - 33% for loss of a bedroom, living room or dining room Compensation will not be paid if the room was not in ordinary use or if there are alternative rooms available for use. Compensation will not be paid where the defect has arisen out of a customer s failure to take adequate measures to keep the property in good repair or has failed to give access to carry out the repair. Additional costs of alternative heating/ additional electricity Where one of SHL s contractors have provided an alternative form of heating following disrepair the contractor shall reimburse the customer for electrical energy used and inconvenience suffered at a rate of for each 24-hour period, or part thereof, while the customer s boiler is out of service from the time of first attendance. Failure to keep an appointment Compensation may be payable when SHL has made a firm appointment (of which there is a written record) with a customer for access to their home and this appointment is not kept without good reason or we have failed to rearrange the appointment with the customer in advance and this causes loss of earnings and/or major inconvenience. In all cases compensation will be 15 and the tenant will not be asked to provide proof of loss of earnings to receive this.

7 If the customer claims a greater loss a discretionary payment may be made in accordance with the non-automatic section of this policy. If a contractor fails to keep an appointment in line with this policy the contractor will be liable to pay the 15 compensation. SHL will make the payment on behalf of the company, and will deduct the fee plus a 15 admin fee from the monies owed to the contractor. Discretionary payments Discretionary compensation payments can be made to customers where we have significantly failed in providing a service. There are a number of factors that should be taken into account when deciding how much payment should be made. Specific financial losses have been incurred. In such cases, we must make a decision on whether it was reasonable for the complainant to incur costs in relation to the circumstances of the case, such as: the complexity of the case the circumstances of the complainant whether the complainant is vulnerable Where something owned by the complainant has lost value, an objective assessment of the loss may be possible, assessed where appropriate by an independent valuer. Where items of relatively low value are involved, it would not normally be appropriate to seek an independent valuation. In such cases, a reasonable judgement should be made. The complainant may have incurred costs which would not have been necessary but for the negligence or inaction of SHL. In all such cases, what has to be decided is whether it was reasonable for the complainant to incur these costs. Normally, compensation in these cases will relate to reasonable actual expense incurred. The complainant has spent an unreasonable and significant amount of time pursuing the matter. In the assessment of the time and trouble payment, consideration should be given to all relevant factors in the case which could include, for example: The passage of time, including response times by the organisation in relation to the nature of the problem The amount of time and effort which the complainant had to devote Difficulty experienced by the complainant in dealing with the organisation The degree of inadequacy in the response by us to letters, phone calls and visits

8 Whether the inadequate response by us resulted to any extent from wilful action, as opposed to poor administration. Exceptional distress has been caused by the events (including anxiety, frustration, uncertainty, worry, inconvenience or outrage): This needs to have regard to all the circumstances including: The severity of the distress The length of time involved The number of people affected (for example, members of the complainant s family as well as the complainant) Whether the person affected is vulnerable and affected by distress more severely than most people. A tenant has to live in poor conditions for longer than reasonable. Payment Matrix for payments in non-automatic cases As circumstances vary significantly for discretionary payments, the guideline has to be broad, but the following matrix provides guidance on the likely maximum values which could be awarded, based on the level of SHL responsibility and the level of impact on the customer s quality of life the problem has created: SHL no responsibility SHL partial Responsibility SHL full responsibility Major Impact Medium Impact Low Impact No Impact Monitoring the policy The policy will be monitored by the PIOs who will produce reports for SMT and Managers on where compensation payments have been made. They will also review compensation payments made to customers alongside the information we have from the customer census to look fro trends and address these if necessary. 4 Responsibility 4.1 The Directors are responsible for the implementation of this policy across their directorate. They are also responsible for agreeing to all discretionary compensation payments.

9 Managers are responsible for making automatic compensation payments to customers. Where a discretionary payment is required, managers will set out the grounds for this before having the director agree to it. 5 Consultation 5.1 The policy has been consulted on through the customer pool, the external and internal customer focus group, at Stevenage Day, van with a plan and FOSTA. 6 Review 6.1 The compensation policy will be reviewed annually. A report on how much compensation and the reasons for it will be looked at by SMT, subsequent changes to policy will be consulted on and approved by the Board. 7 Delegated Authorities 7.1 Responsible Committee: Delegation: Formulation and monitoring of policy and procedures: Board Amendments to policy: Board Implementation of policy: Director of Resources Monitoring of implementation: Delivery and Implementation Committee. 8 Associated Documents 8.1 Internal: Compensation Procedure

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