Cack-handed government compensation scheme prolongs suffering of Horizon scandal victims

The government is prolonging the suffering of victims of the Post Office Horizon scandal by excluding them from compensation schemes and sending confusing messages.

Government statements are raising, then dashing, the hopes of victims that they will at least receive fair compensation for the damage and suffering inflicted on them by the Post Office.

Thousands of subpostmasters were wrongly blamed and punished for accounting shortfalls at their branches, which were later proved in the High Court to have been caused by computer errors. They lost businesses, homes, many were prosecuted and sent to prison, and there are suicides linked to the scandal. In 2009, Computer Weekly told the stories of seven subpostmasters affected by the problems (see timeline of Computer Weekly articles below).

Since the High Court Group Litigation  Order (GLO) ended in 2019, the Post Office has been forced to set up compensation schemes for all former subpostmasters affected. But a group of 555 subpostmasters who took the Post Office to court, proving that unexplained losses were due to computer errors, have so far been excluded from compensation schemes that exist only because of their GLO victory. The government has stated repeatedly that the £57.75m they received after the GLO was full and final payment, despite the fact that only £11m was left after legal costs were paid.

As was recently reported by Computer Weekly the government appeared to be extending a compensation scheme for former subpostmasters who had had convictions overturned, to include those prosecuted but found not guilty, including GLO claimants.

In a letter dated 13 January to former Essex subpostmaster Sue Palmer, who is one of the 555 who won the GLO, Paul Scully, Department for Business, Energy and Industrial Strategy (BEIS) minister, said the Post Office proposed to follow a process of alternative dispute resolution to reach full and final settlements with victims. “Members of the GLO who have had criminal convictions overturned are eligible for compensation as part of the overturned criminal conviction settlements,” wrote Scully.

In the same paragraph, he said: “The compensation is open to all those who were prosecuted, including those not convicted, and will be determined based on individual circumstances.”

Mrs Palmer was prosecuted by the Post Office in 2004 for financial crimes following unexplained losses, but was found not guilty. People who were prosecuted, but found not guilty, lost businesses, homes, thousands of pounds and had their lives turned upside down.

After Mrs Palmer’s hopes were raised last month, Scully this week dashed her hopes and those of others who were part of the GLO.

In a follow-up letter to Mrs Palmer, dated 2 February, Scully wrote to “clarify a point [in letter of 13 January] which might have created a misunderstanding”.

He wrote: “I stated that members of the GLO who have had criminal convictions overturned by the courts are eligible for compensation as part of the overturned criminal conviction settlement process. I then went on to explain that in addition to those members of the GLO, compensation is also open to individuals who were prosecuted but not convicted, and that such claims would be determined on individual circumstances. I wanted to clarify my explanation that because of the terms of the settlement, this does not refer to members of the GLO who were prosecuted but not convicted.

“The position in relation to members of the GLO who were prosecuted but not convicted is different to those who were convicted under the terms of the settlement agreement. The position of people who form part of this group is that they have already fully settled their claims against the Post Office. I recognise your deep frustration at the fact that because the group agreed the settlement with the Post Office that it would be a full and final one.”

In his letter to Mrs Palmer last month, Scully made clear that BEIS knew that she was part of the group of 555 GLO claimants, but did not say that, as a result, she was excluded.

Scully added that he is continuing to work with members of the GLO to “see what can be done”.

Mrs Palmer said her hopes were dashed when she received the latest letter. “I am still fighting,” she said. “Why am I still fighting? They say they want to give people their money back and compensation – well, I am here right in front of their face.” 

Computer Weekly revealed recently that the government had made about £1bn in subsidies available to the Post Office to cover compensation costs.

Mrs Palmer said the previous letter in January,  which implied she could get compensation as part of the scheme for those prosecuted, made her feel like a weight had been lifted off her shoulders – but the latest letter has devastated her.

On Scully’s claim of a misunderstanding, she said: “There was no misunderstanding – it is just that the government has back-tracked.”

David Enright of Howe & Co Solicitors, who represents over 150 subpostmaster victims, including Mrs Palmer, said: “I have seen the letters sent by the minister to Mrs Palmer. In all my years of practice, I have never seen a clearer example of a breach of legitimate expectation. In layman’s terms, the minister promised on 13 January, in writing and in his capacity as a minister, that Mrs Palmer would have access to the Post Office’s interim compensation scheme. Yesterday, he appears to have gone back on his word.

“There is an important principle in law called legitimate expectation. In practice, if a minister or government department makes an unequivocal promise, the courts can, and will, hold them to that promise if they seek to break their word. Mrs Palmer has authorised me to say that she is now actively considering judicially reviewing Mr Scully’s actions and we are consulting a leading barrister in judicial review and public law on such action.”

But again the subpostmasters who bravely took the Post Office to court at huge expense, exposing the scandal, are being left out of the compensation scheme. It is now 20 years since some of them had their lives ruined by the scandal.

Former subpostmaster and Horizon victim Alan Bates, who led the 555 claimants to court, described the mixed messages as “the usual BEIS incompetence.”

Bates, who met BEIS officials last week on behalf of the 555 victims, added: “This has been going on for years, building up people’s hopes and then dashing them.”