clrcrmck

News

Post Office pays 400 subpostmasters compensation for losses caused by computer errors

The Post Office has so far compensated 400 subpostmasters who suffered losses because of errors in the organisation’s Horizon computer system

Karl Flinders
By
Published: 21 Jun 2021 11:05

The Post Office has so far compensated about 400 subpostmasters who suffered losses as a result of computer errors that they were wrongly blamed for.

In a scandal that spanned two decades, subpostmasters were forced to cover unexplained accounting shortfalls. Subpostmasters began experiencing account shortfalls soon after the Horizon system, from IT supplier Fujitsu, was introduced in 2000 to replace manual processes.

They were told by the Post Office that they were responsible for the losses and those that refused to repay the shortfalls, many them suspecting that the computer system was causing the problems, were prosecuted.

A total of 736 subpostmasters were prosecuted, with some serving prison sentences. A total of 47 have had their criminal convictions overturned, and many more are expected to follow.

Some subpostmasters were made bankrupt, given criminal records, and at least one suicide has been linked to the scandal.

A High Court case, which ended in December 2019, saw 555 subpostmasters sue the Post Office and revealed that the Horizon computer system was bug-ridden and caused unexplained losses.

Following a devastating court defeat, the Post Office set up its Historic Shortfall Scheme to compensate subpostmasters who had suffered losses due to computer errors. About 2,400 were accepted onto the scheme, but the 555 subpostmasters who forced the Post Office to court, through expensive litigation, are excluded.

When the court case was settled in 2019, the Post Office paid £57.75m in damages, but because the subpostmasters used litigation funding, £46m of the settlement went in costs, and only £11m was left for the 555 subpostmasters, who are part of the Justice for Subpostmasters Alliance (JFSA).

A Computer Weekly investigation in 2009 first revealed the plight of the subpostmasters in interviews with seven of those affected (see timeline below).

Many of them lost their businesses, livelihoods, properties, life savings and even their liberty. One subpostmistress who was wrongly convicted of theft was sent to prison and lost her livelihood, but received only £8,000 compensation.

Former subpostmaster Alan Bates, who formed the JFSA and led the court battle, said: “It is good someone is getting some benefit from the £46m it cost the 555 group, who continue to be punished by the Post Office, which refused to allow the 555 to seek financial redress through the Historic Shortfall Scheme.”

A Post Office statement said: “Around 400 compensation payments have been made through the Historic Shortfall Scheme and other claims are progressing. We are committed to fairly resolving claims, with assessment by an independent panel, and are keeping people updated on their cases.”

The JFSA has called for the government, which owns the Post Office, to pay the £46m legal costs of the 555 subpostmasters, but the government is refusing, repeatedly citing the 2019 agreement as full and final.

Only the government is standing in the way of the legal costs being met after current Post Office CEO Nick Read, who joined the organisation after the court case, urged the government to pay up.

In a speech in April, Read said: “Although the parties entered into a full and final settlement of the group litigation in good faith, it has only become apparent through various news reports since, quite how much of the total appears to have been apportioned to the claimants’ lawyers and funders.

“Should those reports be accurate, it is at least understandable that the claimants in those proceedings should continue to feel a sense of injustice, even in circumstances where they also agreed the settlement in good faith.”

The JFSA is demanding that the statutory public inquiry into the Post Office scandal look at financial redress for the 555 JFSA members. The inquiry was given a statutory footing following pressure from campaigners.

“What we need to understand is the damage caused, which needs to be put right as well as holding those responsible to account,” it said.

Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009

Read more on IT for retail and logistics