Government widens subpostmaster miscarriage of justice compensation

The government has indicated a widening of the compensation scheme it established for subpostmasters who have had criminal convictions overturned in the Horizon scandal by opening it to those who were prosecuted but not convicted.

Last week, Computer Weekly revealed the government had made about £1bn in subsidies available to the Post Office to cover compensation costs. And in a letter to Horizon scandal victim Sue Palmer, who was prosecuted by the Post Office in 2004 for financial crimes following unexplained losses but found “not guilty”, Department for Business, Energy and Industrial Strategy (BEIS) minister Paul Scully revealed a change in the government’s stance.

Last year, after scores of people had criminal convictions for financial crimes overturned, the government agreed to pay them interim compensation of £100,000 while full compensation was worked out. So far, 72 former subpostmasters have had their convictions overturned, having been wrongly blamed, prosecuted and convicted for criminal offences after their branch accounts showed unexplained shortfalls. They can claim compensation through what is known as the Alternative Dispute Resolution process.

In 2019, after years of campaigning, it was proved in the High Court that errors in the Post Office’s Horizon system were to blame for accounts showing losses that didn’t actually exist. But victims who were found “not guilty” at trial were not included in the compensation scheme for those who had their convictions overturned. While these people did not receive criminal records, their lives were ruined, with many losing their businesses and livelihoods and suffering stress-related illness. BEIS confirmed that compensation for subpostmasters who have been prosecuted but not convicted is part of the same Alternative Dispute Resolution process as compensation for postmasters who have had Horizon convictions quashed. 

Scully’s letter, dated 13 January 2022, is an about-turn from the government’s position just six weeks earlier, made clear in a previous letter to Mrs Palmer on 1 December 2021. She originally wrote to the minister in August last year, explaining the situation victims who had received a “not guilty” verdict found themselves in. Scully replied three months later: “I understand the strength of feeling by postmasters like yourself who only received a portion of the £57.75m settlement paid by the Post Office. However, a full and final settlement was reached between the claimants in the group litigation order (GLO) and the Post Office. There is nothing further the department can do at this time.”

After the 555 claimants in the GLO paid their legal costs, they were left with about £11m to share. Mrs Palmer and the others were left with derisory sums.

After receiving this, a furious Mrs Palmer wrote to the minister again. She said: “…perhaps we could have a face to face meeting so you can explain how you came to the decision that some people who were prosecuted are more important than others compensation wise. Only the outcome was the same for me, guilty/not guilty.”

But in the latest letter to Mrs Palmer, Scully referred to the compensation scheme for the wrongly convicted and said it would be open to all prosecuted subpostmasters, including those not convicted.

“The government has recently announced that it will fund the Post Office so that it can make full and final compensation payments to postmasters whose historical Horizon-related criminal convictions have been overturned. This is a major step in helping resolve the issues created by the Horizon IT scandal,” he wrote.

“The Post Office proposes to follow a process of Alternative Dispute Resolution to reach full and final settlements with postmasters. Members of the GLO who have had criminal convictions overturned are eligible for compensation as part of the overturned criminal conviction settlements. The compensation is open to all those who were prosecuted, including those not convicted, and will be determined based on individual circumstances.”

The Post Office prosecuted Mrs Palmer in 2004 for financial crimes including theft and false accounting following unexplained losses of about £9,000 in her Essex branch. She pleaded not guilty and was found not guilty after a three-day trial. But she had her Post Office branch taken from her. She lost her home, which was bought as part of the business, when she had to repay her loan, and the stress was cited as a significant cause of a heart attack suffered by her husband. Adding to her suffering, a local newspaper wrongly reported that she had received a guilty verdict. 

Separately, solicitors Howe and Co, the legal representatives of 150 former subpostmaster victims, will meet with the BEIS on 19 January to discuss fair compensation for all victims of the Horizon scandal.

David Enright, a partner at Howe & Co, said: “We have been pretty robust on pushing for compensation and it has borne some fruit with an agreement for the meeting and we will continue to push Paul Scully on the issue.

“There have been positive signs from the government that it will pay full and fair compensation to all subpostmasters who suffered as a result of Horizon failures.

“The meeting will allow us to look them in the eye and see if they mean what they say,” said Enright.

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