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The phrase "fail to compensate" is a correct and usable phrase in written English.
It is typically used to refer to an entity that does not adequately make up for something that has been lost or taken away. For example: "The company was heavily criticized for failing to compensate their workers for the overtime they had worked."
Exact(33)
But their efforts fail to compensate for the film's many deficits.
But its pace and structure fail to compensate for Mr Berenson's shallow protagonist.
Soft, succulent onions and sweet peppers frequently share the hot iron serving dish, but fail to compensate for dryness.
The industry says that government price controls outside of the United States fail to compensate drug makers for the huge costs of developing medications.
As the Institute for Fiscal Studies showed yesterday, the new "living wage" will fail to compensate low-income workers from the cut in tax credits.
A notice published in the Federal Register in 1988 acknowledged that Medicare "may fail to compensate adequately for the services" of doctors and nurses providing chemotherapy.
Similar(26)
It fails to compensate most victims of malpractice because most never file suit.
Juventus were never supportive of the relatives and failed to compensate them.
A pleasing orange sauce failed to compensate for tough, slightly undercooked duck, its skin thick with fat.
Kyrgyzstan's leaders have complained that the United States has failed to compensate the government adequately for use of the base.
Any capacity gained through extending lines or adding tunnels failed to compensate for losses like the Third Avenue el.
More suggestions(19)
fail to substitute
fail to reward
fail to pay
fail to counterbalance
fail to redeem
fail to tackle
fail to alleviate
fail to repair
fail to replace
fail to restore
fail to counteract
fail to satisfy
fail to rehabilitate
fail to accommodate
fail to reconcile
cases to compensate
failing to compensate
fail to fund
fails to compensate
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com