The British public should now be familiar with the plight of former subpostmasters who suffered life-changing hardship at the hands of the Post Office, which blamed and punished them for accounting losses caused by its own computer system.
The overturning of the wrongful criminal convictions of subpostmasters for crimes such as theft and fraud are understandably dominating the headlines, as there have been 63 so far, with many more expected, out of a total of 736 convictions based on computer evidence.
The wrongful prosecution of subpostmasters has been described as one of the biggest miscarriages of justice in UK history, and it has no match in terms of the number of people wrongfully prosecuted.
However, there is another major injustice playing out in the background – one which the government seems less eager to resolve.
The same faulty computer system that led to subpostmasters wrongfully receiving criminal convictions and, in many cases, prison sentences, also caused financial losses and destroyed the lives of thousands more.
A Computer Weekly investigation in 2009 first revealed the plight of the subpostmasters in interviews with seven of those who had suffered at the hands of the Fujitsu-supplied Horizon IT system, which at the time the Post Office claimed had no faults but was later proved to be error prone (see timeline below for more).
It was a decade later, in December 2019, that a High Court trial came to an end, with 555 former subpostmasters having successfully sued the Post Office. The subpostmasters claimed the Horizon IT system used in branches was to blame for accounting shortfalls – the Post Office said this was wrong.
High Court judge Peter Fraser confirmed that Horizon errors could cause unexplained accounting shortfalls. In fact, he went further. In his judgment, Fraser described the Post Office’s denial that Horizon could be to blame as “the 21st century equivalent of maintaining that the Earth is flat”.
Big news
It was at this moment that the Horizon scandal, which had been playing out since the computer system from Fujitsu was introduced in 2000, became big news.
The 555 subpostmasters, grouped together in the Justice for Subpostmasters Alliance (JFSA), had defeated the Post Office and its government backers in court, paving the way for potentially hundreds of former subpostmasters to have their criminal convictions overturned. Without this group of subpostmasters, the scandal that is widely known about today may never have come to light.
The 555 subpostmasters who brought the case also forced the Post Office to open a compensation scheme for any subpostmasters who experienced losses caused by Horizon errors. About 2,500 subpostmasters have applied for the scheme, known as the Historic Shortfalls Scheme, and an estimated £300m of taxpayers’ money is expected to be used to pay what these people rightly deserve.
Every subpostmaster who has their conviction overturned will receive compensation, with each of them being offered an interim sum of up to £100,000 before the final sums are calculated.
If it had not been for the 555 subpostmasters who took the Post Office to court and won, despite the government-owned organisation throwing an estimated £100m in legal costs defending itself, none of this would have been achieved.
It is for this reason that the Post Office’s decision to exclude the 555 from the compensation scheme is seen as a massive ongoing injustice.
The government said the compensation of £57.75m awarded to the 555 subpostmasters after the High Court battle was a full and final payment. What it did not publicise is that after the subpostmasters paid their legal costs, which were ramped up by the Post Office’s attempts to avoid defeat, they were left with just £11m between them.
Legal costs
The government is refusing to pay the £46m legal costs for the subpostmasters, meaning these victims are being left with paltry sums. In many cases, the money does not even cover the sums initially paid to the Post Office to cover unexplained shortfalls, and in some cases, it won’t even cover the travel costs individuals have amassed during their campaigns for justice.
“I am getting penalised for defending myself. If I’d lost and been sent to prison, I would be better off. That’s our justice system. I seem to be exempt from any group of victims”
Nicola Arch, former subpostmaster
These people lost businesses, homes and life savings. Many found their health also deteriorated due to stress. They were forced to pay back thousands of pounds of unexplained losses, which did not actually exist. Many avoided prosecution because they fought the Post Office in court, but were ruined financially.
Former subpostmaster Nicola Arch, who suffered unexplained accounting shortfalls, is one example.
In 2002, when the Post Office prosecuted her for theft and false accounting, she was found “not guilty” at Bristol Crown Court, but lost everything in the process. She now finds herself in a position where she does not fall within the Post Office’s Historic Shortfalls Scheme as one of the 555, and as she was not convicted she does not qualify for the compensation scheme for those wrongly convicted.
“I am getting penalised for defending myself. If I’d lost and been sent to prison, I would be better off. That’s our justice system,” she said. “I seem to be exempt from any group of victims.”
Litigation settlement
Due to the costs of defending herself and the failed prosecution, Arch lost her business, home, health and reputation. As one of the 555 who took the Post Office to court, she received £8,500 – almost 20 years after her original court battle with the Post Office. This was part of the High Court litigation settlement after the money left after costs was awarded to claimants.
The emotional strain has been huge on Arch and many others. “My father died 16 years ago, so he will never know any of this, and my 16-year-old son only knows his mum involved in the Post Office scandal,” she said.
Former subpostmaster and JFSA member Jo Hamilton, also one of the group of 555, had her criminal conviction for false accounting overturned in the Court of Appeal in April this year. She will receive compensation for the wrongful conviction. On those denied fair compensation, she said: “Until there is no breath in my body I will continue to fight this. It’s so wrong, it’s disgusting.”
There is wide public and political pressure for the government to right a wrong by fairly compensating the subpostmasters who exposed the scandal’s true extent. Conservative peer James Arbuthnot, who has been campaigning for justice since taking on Hamilton’s case as her MP many years ago, said the settlement in the litigation was unfairly forced on subpostmasters and the government should “stop hiding behind it but instead set it aside”.
“The Prime Minister has said that the subpostmasters must be looked after, and the minister in charge of the Post Office, Paul Scully, has said that all of them must be fairly compensated,” said Arbuthnot. “If both ministers now break their word then it will add still more disgrace to the way in which the subpostmasters have been treated.”
Totally unfair
The government is well aware of this injustice and has discussed it directly with some of the victims. In a Zoom meeting in May, attended by prime minister Boris Johnson, Department for Business, Energy and Industrial Strategy (BEIS) minister Paul Scully promised former subpostmasters Tracy Felstead, Dionne Andre and Michael Rudkin that the government would work with them and other victims to ensure they were quickly and fairly compensated for the devastation the Horizon scandal had caused to their lives.
During the meeting, Rudkin told Scully and Johnson: “It is totally unfair. I know you are looking at the legal term that it is a full and final settlement for the 555, but when you take out the legal expenses, most subpostmasters actually got less than the amounts they paid back that they were wrongly blamed for taking.”
Scully said: “I totally get that, and this is something we have to go away and think about. I want to do this as quickly as possible because you have waited long enough.”
“It is highly doubtful that there is even one of the original 555 victims who brought the initial civil action against Post Office who feels they have now had justice and financial redress for what the Post Office did to them”
Alan Bates, JFSA
Andre told Johnson and Scully: “We battled for years and years through the courts to get people to see what happened, and now you have gone to all the others not involved in the litigation and said, ‘OK, we will give you your money’. We don’t want anything we don’t deserve, we want what’s right and what’s fair.”
She added that it need not be complicated for the government to work out fairer compensation because all the calculations were done by the 555 subpostmasters’ legal team as part of the group litigation. It is now four months since Scully’s promise to sort things out as quickly as possible, but Rudkin said he has not even been contacted about it.
In a message to members of the JFSA, Alan Bates who formed the group in 2009 and led the 555 in court, said: “It is highly doubtful that there is even one of the original 555 victims who brought the initial civil action against Post Office who feels they have now had justice and financial redress for what the Post Office did to them.
“Despite the utterly damning judgments by the court, the experience of the 555 victims over many years is that Post Office and government has little more than malice aforethought when dealing with the 555, determined to make them continue to financially suffer for daring to publicly expose their failures to manage and oversee Post Office in the way they had a statutory duty to do so.
“The evidence for that can clearly be seen in the way they have refused to pay the £46m costs of the legal action the victims group had to pay because Post Office and government failed in their duties. Post Office has even refused to allow the victims group to enter its Historic Shortfall Scheme to recover the £8.5m wrongly taken from them due to Post Office’s flawed Horizon system during the time they were serving subpostmasters.”
Peer Arbuthnot told Computer Weekly: “This ghastly saga of unfairness, intimidation, deception and cruelty needs to end, right now.”
Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009
May 2009: Bankruptcy, prosecution and disrupted livelihoods – postmasters tell their story.
September 2009: Postmasters form action group after accounts shortfall.
