How the BBRS makes decisions and awards

Our powers to make financial and non-financial awards

The BBRS assesses each case on a fair and reasonable basis. For more information on how decisions are made, please click here.

When a complaint is upheld, the BBRS will tell the bank to put things right. This may include an award, which may be financial or non-financial, in favour of the customer.

The BBRS will recommend an award which is fair and reasonable, taking into account all relevant information available.

How we calculate compensation

  1. Financial loss
    If the BBRS finds that a bank’s unfair act or omission has caused financial loss, it will try to put customers back into the position they would have been if the bank had not made that mistake. To do that, the BBRS will look at the situation the customer was in after the bank’s unfair act or omission started to impact its finances. The BBRS will also determine what the likely position would have been if the bank had acted fairly and reasonably. Generally speaking, the amount by which the customer is worse off is the financial loss and the amount of compensation that the BBRS will award.
  2. Non-financial loss
    Resolving complaints includes assessing non-financial impacts of a bank getting things wrong. The BBRS can award fair compensation if it concludes that a customer has experienced any of the following:

    • Distress
    • Inconvenience
    • Pain and suffering
    • Damage to reputation

    The BBRS may make this type of award even if there is no quantifiable financial loss in the case overall.

    When determining whether an award for non-financial loss would be appropriate, the BBRS will take account of relevant law, regulations, regulators’ guidance and standards and (where appropriate) what the Chief Adjudicator considers to have been good industry practice at the relevant time.

    Please note that the BBRS cannot make awards to individual shareholders or directors. Awards are only made in favour of the business itself.

  3. Tax on compensation
    Tax may be payable on compensation. This will depend on the type of compensation that is awarded and the customer’s financial position. Tax treatment will depend on each individual case and customers are advised to contact HM Revenue and Customs to confirm the position. Because of our principle that the customer should be put in the position it would have been if the bank had acted fairly and reasonably, if there are any additional tax liabilities because of an award, this sum (plus any reasonable costs in calculating it) should be covered as part of the compensation.

Putting things right without paying compensation

The BBRS may decide that a bank needs to take other steps to put things right that do not involve paying any money. This could involve directing the bank to do something in addition to, or instead of, making a financial award.

For example, if a bank’s mistake caused a payment to be late and upset a supplier, the BBRS may tell the bank to give the customer a letter so it can show the supplier that the delay was the bank’s fault.

The BBRS might also require an apology or other statement on the record.

Recommended amounts and recommended actions

The BBRS’ rules set financial limits on the awards it can require banks to pay successful complainants.

For the historical scheme this is £350,000, in line with the Financial Ombudsman Service award limit. For the contemporary scheme, the award limit is £600,000.

The BBRS can recommend an award above these limits, and the relevant bank is required to consider these recommendations reasonably and in good faith. The banks have formally acknowledged the expectation that they will pay amounts we recommend above the binding limit, but it is ultimately their decision whether or not to do so.

Where we make a recommendation, the bank should let us and the customer know whether they will meet it before the customer has to decide whether or not to accept our award. If a bank agrees to meet our recommendation, it will become binding on them like the rest of the award. If it declines to do so, it will give its reasons to both the customer and the BBRS.

The same principle applies to actions that the BBRS recommends a bank should take as part of resolving a complaint.

For additional information please see the relevant provisions here.

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