Royal Mail's compensation schemes for delay and loss and damage

Postcomm has published a decision statement to conclude the review of Royal Mail’s retail compensation schemes for loss, damage and delay.

In December 2007, Postcomm outlined proposed changes to Royal Mail’s compensation schemes to make them fairer and more suited to customer needs. The regulator has conducted a public consultation and worked closely with Royal Mail and Postwatch to address concerns about the complexity of Royal Mail’s current compensation schemes for retail customers and some inconsistency in how they are applied.

In April 2008, a set of final proposals was published, announcing that we were minded to accept Royal Mail’s proposed changes to its retail compensation arrangements for lost, damaged and delayed mail. Having considered the one response received, Postcomm has not made any changes to the arrangements set out in this document.

The key changes, which will come into effect on 1 August 2008, are:

For items posted with Royal Mail which have no intrinsic value (for example a 1st or 2nd class letter), or where a claimant cannot provide proof of posting, there will be compensation for loss, damage and delay of a minimum of six 1st class stamps (currently worth £2.16);
For items that have an intrinsic value, with proof of posting with Royal Mail and proof of value (such as an invoice or receipt) customers will be entitled to a postage refund plus compensation for actual loss up to the value of the item, or 100 1st class stamps (currently £36), whichever is the lowest ;
compensation for delayed retail mail will become payable one day earlier than at present – three working days after the due delivery date instead of four;
£5 and £10 payments for delay and substantial delay will be discontinued, except for Special Delivery Next Day (not posted on account) Redirected retail mail will now be eligible for compensation for delay; and
users of the Articles for the Blind service will now be able to claim compensation for loss, damage and delay.

The new compensation arrangements simplify and align the processes for making a claim, the evidence required to support a claim, and the compensation payments themselves.

Royal Mail estimates that the new arrangements will result in a slight overall increase in the total compensation payable under the retail scheme.

Postcomm is still considering whether to remove the bulk compensation scheme from regulation when it makes a final decision on Royal Mail’s application for suspension of the scheme and the so-called “C-factor” in 2007-08 due to industrial action arising from its transformation plan.

Royal Mail's compensation schemes for delay and loss and damage

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