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Government should face legal deadlines on paying Post Office victims

The government should face a legal deadline on paying Horizon scandal victims and unfair previous settlements should be reopened, MPs have been told - amid further boardroom controversy at the Post Office

Karl Flinders
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Published: 27 Feb 2024 16:53

The government may have to reopen previously agreed financial settlements with subpostmasters and should face legally binding deadlines on making payments to victims of the Post Office scandal, MPs have been told.

During a mammoth five-hour business and trade select committee hearing, MPs heard that the complexity and unfairness of schemes for the financial redress of former subpostmasters is leading to slow and often unfair settlements.

Witnesses called for a legally binding deadline on when payments should be made, and raised the need to reopen settlements that were agreed by victims without legal representation. There was also a call for Horizon IT supplier Fujitsu to be made to commit to a contribution to the compensation costs, currently estimated to be over £1bn.

Three scandal victims, former subpostmasters Alan Bates, Tim Brentnall and Tony Downey, told the committee of their struggles in claiming the money owed to them as well as compensation for their suffering.

The meeting followed recent government promises that payments would be fairer and speedier. Bates told MPs that this is certainly not the case regarding his claim: “As far as I know it is just sat there. We refused the [initial offer] and that is where we are in the process.”

At the beginning of this month Bates turned down an offer of compensation from the Post Office, which he described as “derisory” - he said the offer was less than 15% of the amount he claimed for, a sum which had been put together by financial specialists appointed as part of the compensation process.

Downey said he is in a similar situation. He started his claim 16 months ago, and received an offer eight months ago, “which was nowhere near where it should have been.” He said that when denying his full claim, the Post Office refused to accept that the mental health problems and bankruptcy he suffered were a result of his Horizon-induced branch shortfalls - and that the Post Office also claimed he had paid off a personal mortgage that simply did not exist. 

Meanwhile Brentnall, who had a wrongful conviction overturned in 2021, has spent the last three years putting together his claim which is about to be submitted. “It has taken that long to build the claim because of the amount of detail and information the Post Office insists we put in the claims,” he said.

All three are in different financial redress schemes, with Bates under the group litigation order arrangements, Brentnall in the overturned convictions scheme and Downey in the historic shortfalls scheme.

James Hartley, a lawyer at Freeths solicitors, which represents hundreds of subpostmasters, said his clients are “exhausted and traumatised by the process” of claiming what is owed to them.

He said the underlying principles of the redress schemes might be right but “they are not working for our clients.” He said the process is “too legalistic” and is often “offensive”. He estimated that at the current rate it will take an “unacceptable” one to two years to settle his clients’ claims.

Neil Hudgell, a lawyer at Hudgell Solicitors, agreed with the timescale. He said there is “too much lawyering going on” and he raised the prospect that previous agreements, made by victims without legal representation, may be unfair and should be reopened: “Cases we think are closed probably are not because of undersettlement.”

Committee chair, Liam Byrne MP, said MPs will have to amend forthcoming legislation on the scandal when it comes to Parliament to insert hard deadlines for the government to provide financial redress. Hudgell said deadlines will only work if the offers are appropriate.

During the hearing it was also revealed that only eight lawyers are working for the Post Office on processing applications compared to 23 at Freeths alone, which does not include those working for other legal firms representing victims, such as Hudgell Solicitors and Howe & Co.

The committee was later caught in the crossfire of the political spat between secretary of state for business and trade Kemi Badenoch and former Post Office chairman Henry Staunton - who was sacked by Badenoch. During Staunton’s evidence disputing Badenoch's claim that he had been under investigation over his behaviour, Staunton produced an 80-page document that showed Post Office CEO Nick Read was under investigation by the organisation's HR department. Staunton also said that Read had threatened to resign more than once over his pay - despite Read earlier denying to the committee under oath that he had ever considered quitting his job.

Computer Weekly first exposed the Post Office scandal in 2009, revealing the stories of seven subpostmasters and the problems they suffered as a result of flaws in the Horizon system (Read all Computer Weekly articles on the scandal below).

Also read: What you need to know about the Horizon scandal. 

Watch: ITV’s Post Office scandal documentary, Mr Bates vs the Post Office: The real story. 

Here are all Computer Weekly articles about the scandal since 2009

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