Government ‘has nothing against’ paying 555 subpostmasters fair compensation

The government has nothing against the principle of repaying the £46m legal costs and fairly compensating subpostmasters who defeated the Post Office in the Horizon group litigation.

During a meeting with the legal representatives of victims of the Post Office Horizon scandal, government officials did not argue against the principle of repaying the money, but want to find a way of doing so without setting a dangerous legal precedent in changing an agreed settlement. There was no indication during the meeting that the government would not go beyond the compensation already paid to the claimants.

Lawyers at Howe & Co, representing 146 of the claimants, met with officials from the Department for Business, Energy and Industrial Strategy (BEIS), which owns the Post Office.

The claimants are part of the Justice for Subpostmasters Alliance (JFSA), made up of 555 former subpostmasters who took on the Post Office in the High Court in 2019, proving that computer errors had caused unexplained accounting shortfalls for which they were blamed. Some were convicted of financial crimes and were jailed, and many more were made bankrupt and left penniless. Howe & Co is not representing the JFSA, but 146 of its members.

After the judge ruled in their favour, the claimants were awarded £57.75m damages, but after legal costs were taken out, they were left with just £11m to share. Claimants who had lost businesses and homes received derisory sums.

Since then, affected subpostmasters who were not part of the group of 555 have been offered compensation, as have those who have had criminal convictions overturned following the court judgment – 72 so far.

The government has repeatedly said that the £57.75m payment to the court victors was a full and final settlement and there was nothing more it could do – but it has  stated recently that it wants to pay fair compensation to all victims, including the 555.

Howe & Co arranged the meeting to find out whether government promises that fair compensation will be given to all victims will be followed through.

David Enright, a partner at the legal firm, told Computer Weekly: “We met [BEIS] officials yesterday to look them in the eye and demand that government gives force to the minister’s statement to the select committee last week, and immediately returns the legal and legal funding costs to the 555 subpostmaster claimants in the civil case that exposed the scandal of the largest miscarriage of justice in British legal history.”

Enright said there was no argument against doing this in principle, but the government did not want to set a precedent of changing a legal settlement after it had been made. “Nobody turned to me in the meeting and said ‘wait a minute, we had a full and final settlement – we can’t beyond that’. There was no argument about the principle. The only questions they were raising were about methodology.”

At the BEIS select committee hearing last week, minister Paul Scully said that only the creation of a mechanism to fairly compensate the 555 was holding the government back from doing so.

Enright added: “I have no doubt that we have won the argument in relation to the ‘principle’ of the payment of the legal and legal funding costs. I also provided BEIS officials with a clear and efficient method through which it could repay those monies to subpostmasters.”

He said the Post Office has the means to do so because it has been given subsidies worth £1bn by the government to cover compensation costs, it is morally the right thing to do and it can overcome the precedent setting because this is a “very unique case”. He said the method of payment should be straightforward, with the government returning the legal costs to solicitors Freeths and the JFSA to distribute among the 555, whom it represented in the court battle that ended in 2019.

The firm is representing the subpostmasters on a pro bono basis and no claimants will be charged. “These people have had enough of legal costs – we are doing this because it is the right thing to do,” said Enright.

“We have no financial interest at all and don’t want any of the legal funding that comes back. We did this because we believe it is the right thing to do, so have worked hard on a pro bono basis.”

The computer system used in Post Office branches, known as Horizon, was introduced in 2000 to automate branch accounting, replacing paper-based processes. Subpostmasters almost immediately started suffering unexplained losses, for which they were subsequently blamed. Many were sacked, lost their businesses or went bankrupt. More than 700 were prosecuted and some spent time in prison. There are suicides linked to the scandal, and many others have suffered and still suffer from stress-related illnesses caused by their experiences.

The JFSA took the Post Office to the High Court in a group litigation, which they won. The 2019 judgment found, after years of Post Office denials, that Horizon was to blame and the Post Office agreed to pay compensation to 555 JFSA members. It was forced to set up a compensation scheme for people affected by the errors who were not claimants in the litigation.

Back in 2009, Computer Weekly told the stories of seven subpostmasters affected by the problems, which led many more who had suffered losses to come forward, leading to the establishment of the JFSA (see timeline below of Computer Weekly’s coverage since revealing the scandal in 2009).