Overall, 2006/07 was Royal Mail’s best annual performance for Quality of Service on record.

For the full-year Royal Mail beat the new standards for bulk mail in the amended Licence, as follows:

Our bulk mail compensation scheme (the Industry Compensation Scheme for Delay) came into effect on 1st January 2004 and applies to all postings of the products listed below:

• 1st and 2nd Class Printed Postage Impressions (PPI) (including Packetpost and Cleanmail) 
• 1st and 2nd Class Response Services 
• Mailsort 1, 2 and 3 (including Walksort) 
• Presstream 1 and 2

This compensation scheme is set out in Postcomm’s Standards of Service Compensation Scheme decision of 7th October 2003.

We take our quality of service targets very seriously, and our Bulk Compensation Scheme is a way of demonstrating to our customers our commitment to achieving high quality of service, and a means of compensating customers fairly and consistently when we do not achieve targets.  Royal Mail's compensation scheme is the best of its kind in the world - a unique and fair scheme.

If you have a contract with us for one or more of the products listed above, and we miss our quality of service target for the Licence Grouping in which the product is placed by more than 1%, you may be entitled to receive compensation from us.

From April 2006, Compensation payments have been based on overall product performance during the year using groupings of products against our quality of service targets agreed with Postcomm, and do not relate to individual postings.

If we fail our annual quality of service targets for any of the groupings of products listed above by more than 1%, you may be entitled to compensation. Eligible customers will be compensated based on a percentage of their yearly spend on the product concerned. For example, if we miss a service target by 1.2%, eligible customers will receive compensation, by way of a credit against future invoices, of 1.2% of their annual spend on that product. The maximum level of compensation that will be paid is 5% of an account’s yearly spend on any one product. If we miss our target by less than 1%, no compensation is due.

We have agreed with Postcomm that there are certain circumstances where Royal Mail is not obliged to pay compensation to customers. These include:

• Any expenditure on mailings that were not compliant with the terms and conditions of the contract for the relevant product are excluded from the sender's annual expenditure that we use to calculate the compensation due. 
• Where the event giving rise to the claim was caused by circumstances outside Royal Mail's control, for example exceptionally severe weather conditions, acts of terrorism and vandalism and acts of third parties with whom Royal Mail has no contractual relationship 
• In relation to items posted with another postal operator 
• Where a sender is in default of credit terms, without reasonable excuse*

There may, therefore, be a number of reasons why a customer is not entitled to compensation, but in the majority of cases it will be because either compensation is not payable on that particular product, or that they are in default of their credit terms without reasonable excuse.

*Exception for being in default of credit terms
Royal Mail is not obliged to pay compensation under the scheme “where a sender is in default of credit terms, without reasonable excuse”.  ¤ Postcomm and Royal Mail interpreted this as meaning that a customer would have to pay to terms 80% of time over the course of a year in order to be eligible for compensation. Where 20% or more of invoices on an account were in default of credit terms, Royal Mail did not pay compensation unless the customer had a reasonable excuse for being in default.

Bulk Mail Compensation Scheme Judicial Review Outcome – Revised Payments for 2003/04, 2004/05 and 2005/06

The scheme is set and ultimately enforced by Postcomm. Postwatch thought that the interpretation of “in default of credit terms” was incorrect, Postwatch judicially reviewed Postcomm in relation to this interpretation of the scheme and also on the question of whether Royal Mail is entitled to refuse to make any compensation payment at all when the exception applies. Postwatch was successful in their judicial review but the decision was appealed by Royal Mail to the Court of Appeal.

The Court of Appeal’s Judgment
The Court of Appeal ruled in March this year that:

1. The scheme does allow Royal Mail to refuse to make any compensation payments in circumstances where the exception applies;
2. In applying the exception of “where a sender is in default of credit terms” Royal Mail has to look first at whether the relevant account is in default / arrears as at the specific date on which compensation falls to be paid. If the account is not in default / arrears on that date compensation is payable.

It is for Royal Mail to determine the date on which compensation falls to be paid, although this must be within 3 months of the date on which the final adjusted and audited quality of service performance figures for the relevant financial year are accepted by Postcomm.

¤ Paragraph 20(b) of the Standards of Service Compensation Scheme, dated 7th October 2003

 Process
Royal Mail has considered the relevant dates for 2003/04, 2004/05 and 2005/06 (ie those dates on which compensation fell to be paid) and has reassessed eligibility for compensation as against those dates. The relevant dates, to which Postwatch has indicated its agreement, are:

• 2003/04- 23rd August 2004
• 2004/05 – 5th September 2005
• 2004/06 – 23rd August 2006.

There has been no change to the services in respect of which compensation was payable for those years. Only accounts related to the bulk mail services where compensation was payable due to quality of service performance of those services are eligible for compensation and have been reassessed.

Royal Mail has taken the following steps:

1. Reassessed eligible accounts to establish whether they were in default / arrears at the relevant date. If an eligible account was not in default / arrears at that date then compensation is payable. 
2. Accounts that were in default / arrears as at the relevant date have then been assessed to establish whether 80% or more of invoices were paid on time over the course of the relevant financial year. If they were then compensation is due.

To be eligible for compensation under any other circumstances, a customer will have to establish to Royal Mail that it had a reasonable excuse for being in default / arrears on the relevant date.

If the customer has not received compensation in respect of that account where it is due following this reassessment of eligibility, their account will now be credited with the appropriate compensation.

It has taken a little while for Royal Mail to reassess eligibility as it needed to create an entirely new process and then do the analysis of all customer accounts. This process has now been completed and credits are being paid to customer accounts with effect from 16th July 2007 and should be completed by end of August 2007.

If you have not received a credit to your account by 17th August 2007 and you think that you are eligible, please complete the online enquiry form, or send the downloadable version of the form (at the bottom of this page) to us at the address below detailing the accounts you wish to query.

There are no scheduled payments for the 2006/07 financial year as RM met all the Bulk Mail targets that were agreed with Postcomm. Some customers have been eligible to receive a compensation credit recently as a result of the Bulk Mail Compensation Judicial Review (as detailed earlier) in respect of previous years compensation. If you have received a credit recently and you feel this is incorrect or if you.

In order to make the handling of enquiries as efficient as possible for all our customers, enquiries and appeals should be submitted using the online enquiry form, or send the completed downloaded version of the enquiry form (at the bottom of this page) to us at the following address:

Royal Mail Compensation Scheme
PO Box 37
BOLTON
BL4 9WY

We aim to respond to all customer enquiries in writing, within 30 days.We are unable to process customer enquiries over the phone.

We will provide you with an explanation of the outcome of our review.

Before you make an enquiry please check out our frequently asked questions - the answer's likely to be here. But, if you do need to contact us, you can do so by completing the online enquiry form and choosing an option that relates to your query. You'll then be asked for just a few more details relating to the option you select.

Please note, in order to help us process appeals for 2005/6 it would helpful if you could log these with us as soon as possible, preferably before 31st October 2007.

• Read our frequently asked questions to get all the answers on bulk mail compensation
• If you need to contact us complete our online enquiry form
• Alternatively print, complete and post the following PDF forms:
  - Get your compensation paid by cheque
  - Get compensation for closed Royal Mail accounts
  - If you think there's a mistake, or you haven't received any compensation
  - Any other enquiries relating to Bulk Mail Compensation