Benchmarking Distress and Inconvenience: Defending Against Exaggerated Non-Financial Detriment Claims

The round number for upset

Complaints about administration often add a figure for distress and inconvenience that has no relationship to what happened. Claims-management letters ask for £5,000 or £10,000 as a matter of course. Paying it to close the file resets the firm’s own scale, and the next letter asks for the same.

The Financial Ombudsman Service publishes bands for non-financial loss. They run from nominal awards, in the region of £100, up to severe awards of £5,000 and above where the impact on the complainant was serious and prolonged. An ordinary delay, corrected, with an apology, sits at the bottom of that scale. It does not sit at the top because the letter asked it to.

What the band is attached to

The assessment uses the contemporaneous log, not the adjective in the complaint.

• How long the failing lasted, and how many times the client had to chase.
• What they had to do: repeat a document, miss an appointment, borrow, or rearrange a completion.
• Whether health, bereavement or another vulnerability made that effort harder, and whether the firm knew.
• What the firm did when it found out, and how quickly the practical problem was undone.

A proposal anchored to the published band, with that log cited, is a defence. A proposal that matches the complainant’s number, to avoid an Ombudsman referral, becomes the evidence in the next claim that the firm values routine upset at several thousand pounds.

Summary

Distress awards follow the Ombudsman’s bands and the time the client actually lost. The log is the benchmark. The figure in the letter is not.