UK Royal Mail faces deadline in compensation dispute
Royal Mail has until next month to prove it did not short-change business customers seeking compensation for poor service following a row between the company and some of its biggest clients. Nigel Stapleton, chairman of regulator Postcomm, is investigating Royal Mail’s compensation scheme, which has paid out only half the Pounds 70m that customers expected.
Meanwhile, in the next few weeks Postcomm will be making statements on how the liberalisation of the postal market is progressing and on forthcoming price control talks with Royal Mail. The regulator is expected to suggest fully opening the market to competition sooner than the original April 2007 target.
Under Royal Mail’s new compensation scheme, the state-owned postal group is obliged to make payments to its domestic and business customers if it misses its quality of service targets.
Royal Mail missed all 15 of its targets for the year ending March 31 2004, and said last month that it had so far paid out Pounds 16.5m to domestic customers and Pounds 35m to business customers. But, according to calculations by Postcomm and bodies representing mail users, it should be paying at least Pounds 70m.
Royal Mail has said the discrepancy stems from the scheme’s rule that compensation is given only to companies that pay 80 per cent of their bills within 21 days. Many companies that have missed out on compensation because of late payment say that not only is 21 days not enough to process the invoices involved, but Royal Mail has never upheld the 21-day rule and did not tell customers that it would apply it strictly in the case of compensation.
