Odeon hit with "unusual" distress payout

Ombudsman Tony King awarded a total £2,000 distress and inconvenience payment – shared between trustees and employer – after mistakes by the employer and Hewitt Associates, the administrator.

The distress was caused to Mrs Lane, a former Odeon general manager, by a £3,000 drop in her pension calculation.

Lane’s last benefit statement from Hewitt stated the provision to be around £5,000 a year when the true figure was £2,000, owing to a mix-up between basic salary and pensionable earnings.

Though the ombudsman doubted Lane would have made a different decision on retiring early had she known the true position of her pension savings, he determined Odeon should match the £1,000 already paid to the member by the trustee to compensate her for the “disappointment” caused.

Anne-Marie Winton (pictured), a partner at Nabarro, said the unusual split payment was “very high”. 

She said: “The ombudsman’s office seemed to be particularly influenced by her financial and personal circumstances and the fact each party seem to blame another for the mistake."

"This determination has raised the bar for distress and inconvenience awards, and these usually are around £500."

The ombudsman made the payout due to the “considerable stress and inconvenience” caused to Lane, who suffered a heart attack in 2008, and whose mortgage is currently in arrears. 

He said: “Awards of compensation are usually modest; this figure, taken together with that payable by the trustee, reflects the unusual and extreme circumstances of this case."

Mark Howard, a partner at Barlow Lyde and Gilbert, said case law set the precedent an award for distress should only exceed £1,000 in "exceptional circumstances".

"However, in this case the Trustees offered £1,000 for distress and inconvenience  before it got to the Ombudsman," he said.

"Where such an offer is made - and it is not  taken and the case goes on to the the Ombudsman  - the Omnbudsman will often go  with the level of the offer originally made when making an award for distress  and inconvenience." 

A spokesperson for Hewitt said the company respected the ombudsman's decision. Odeon was not immediately available to comment.