This is UKBA's guide to dealing with complaints and paying compensation for incorrect processing of applications, for loosing documents, etc...
Section 11 Compensation guidance starts on page 42 of the PDF
Note that this is a general guide. Applications done on the basis of EU law have hard legal processing time limits, and there is likely an even stronger basis for compensation when those limits are exceeded.
Also of note from the FOI response:
With regards to [question about how many Residence Card applications took longer than the legal maximum of 6 months to process] since April 2006 50,744 out of a possible 291,479 European applications were decided outside of service level agreements.
I can confirm that the Agency is taking measures to ensure that all cases will be within service level agreements by November 2009. These include:
• Recruitment of additional case working resource via internal transfer of resource; recruitment of temporary staff and external recruitment for fixed term appointment, casual and agency staff. Indeed during the period from April to July 2009 the dedicated resource for European Casework rose by over 500%.