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Post Office and Horizon IT scandal – Government and Post Office must take urgent action on compensation for sub-postmasters

17 February 2022

The Government should urgently commit to ensuring that the 555 group action litigants, who took the Post Office Ltd (POL) to court and who exposed the Horizon IT scandal, be “fully compensated” for all their losses on the same basis as other victims of this scandal receiving compensation, says the Business, Energy and Industrial Strategy (BEIS) Committee in a report published.

The report also registers the Committee’s deep concern that, despite the efforts that the Post Office Ltd has made to contact sub-postmasters who were subject to ‘unsafe’ Horizon convictions, so few have approached POL to begin the process of overturning them. The report recommends the Government set up an independent body as a trusted first point of contact for those wrongly convicted because of Horizon, in particular for the 576 convicted sub-postmasters who have not yet come forward.

The Committee’s report makes a series of recommendations in relation to the three different routes that sub-postmasters can follow to claim Horizon compensation, from the 555 Group Action litigants, from unsafe convictions, and from the Historic Shortfall Scheme.

The report also expresses concerns about the time taken to make settlements to sub-postmasters who have had their convictions overturned and also criticises the slowness of payments made under the (separate) Historical Shortfall Scheme (HSS). The Committee make a series of criticisms regarding the HSS, including a lack of support for, and engagement with, sub-postmasters, questions concerning the independence of the scheme, and fears compensation claims are too low and risk leaving Horizon victims without fair compensation.

Chair's comment

Darren Jones, Chair of the Business, Energy and Industrial Strategy Committee,said: “The Post Office-Horizon scandal is one of the largest miscarriages of justice in British history, subjecting sub-postmasters, postal workers and their families to the most appalling hardship. The Government and the Post Office must speed up their efforts to deliver full, fair and final compensation for every single victim - justice will not be done unless they do so.

“It is clearly entirely unacceptable that the group of 555 victims who first brought this scandal successfully to court are being left in a worse position than those who are being compensated thanks to their action. There is no valid reason to exclude the 555 from being fully compensated and the Chancellor must come forward with the required funding now.

“We have published this interim report on compensation because of the urgency to get this right now. However, when Sir Wyn Williams concludes his statutory inquiry, we will return to our full Parliamentary inquiry regarding corporate governance issues at the Post Office and oversight of Post Office decisions by the Business Department and UK Government Investments.”

The Committee’s report examines the costs of settling the Horizon scandal, with costs including those concerning the settlement to the 555 group, monies set aside for the Historic Shortfall Scheme and for interim payments for those who have overturned their unsafe convictions. The report notes that in December 2021 BEIS had identified a new £685.6 million direct grant to POL for the Post Office Historical Matters subsidy scheme and calls on the Government to explain whether this direct grant is to cover the whole estimated cost of the Horizon scandal and whether this includes money assigned for achieving a fair settlement with the 555.

The report recommends the Government provides regular updates when compensation is refused for sub-postmasters who have had their convictions overturned, the reasons for this and if subsequent compensation is sought and awarded. The report also recommends the Government provides monthly updates on the number of interim payments made, the number of final payments made, and the range of amounts paid out to reach full, fair and final settlements.

The Committee’s report examines the structure and establishment of the Historic Shortfall Scheme (HSS) , the dispute resolution process, and concerns of similarities between the HBOS Reading scheme and of the role of Herbert Smith Freehills. It stresses the need for support for sub-postmasters who are making claims through HSS, because so much of the necessary paperwork and records to establish claims were not stored by the Horizon IT system or retained by POL. Similarly, the Committee is concerned that sub-postmasters have access to independent advice when assessing whether compensation offers fully cover their losses.

Further information

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