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Minister promises ‘fair and speedy’ compensation for 555 subpostmasters who defeated Post Office

Government says it wants to ensure a fair pay-out for the 555 subpostmasters who defeated the Post Office in a legal battle but were then excluded from the resulting compensation scheme

In a Zoom meeting with subpostmasters, the government has promised “fair and speedy” pay-outs for the 555 victims of the Horizon IT scandal who have been excluded from the Post Office’s compensation scheme.

In the meeting with prime minister Boris Johnson and Department for Business, Energy and Industrial Strategy minister Paul Scully, three subpostmaster victims told their stories and demanded fair compensation.

The three – Tracy Felstead, Dionne Andre and Michael Rudkin – are among a group of 555 subopostmasters who successfully sued the Post Office for damages in the High Court in a group litigation order (GLO). The Post Office blamed and punished them for accounting shortfalls, but after years of campaigning, a High Court judge found that the errors in the Post Office’s Horizon retail and accounting system were to blame.

The scandal is two decades old, having begun when the Horizon system was introduced in 1999/2000. It was in 2009 when a Computer Weekly investigation revealed the stories of seven former subpostmasters who had had their lives devastated after being blamed for unexplained cash shortfalls (see box below for Computer Weekly’s coverage of the story since 2009). Subpostmasters were sent to prison and have lived with criminal records for decades.

This has become the widest miscarriage of justice in British history and 45 subpostmasters, wrongly prosecuted for financial crimes, have had their convictions quashed, with many more expected to follow. A total of 736 subpostmasters were prosecuted by the Post Office based on Horizon evidence between 2000 and 2015.

After the Post Office was defeated in court by the subpostmasters, it was forced to set up a scheme to compensate those affected. But the 555 subpostmasters who won the case are excluded from what is known as the Historic Shortfall Scheme, with the government insisting that the £57.75m they were awarded in damages was “full and final”. But after legal costs were paid, the subpostmasters were left with just £11m between them.

After this was shared out, they were left with a “pittance”, according to former subpostmaster Mr Rudkin. On average, victims were left with just £20,000 each, which in most cases didn’t even cover the money they had been forced to repay the Post Office, despite having not actually taken anything. Subpostmasters had to sell their homes, re-mortgage, were made bankrupt and suffered family breakdowns and illness.

Through the Post Office Historic Shortfall Scheme, which exists only because of the court victory for subpostmasters, 2,400 subpostmasters who suffered at the hands of Horizon’s faults but were not part of the group litigation, have applied and are receiving much larger sums of money.

Only the government is standing in the way of fair compensation for the affected subpostmasters.

Computer Weekly understands that in the Zoom meeting, Ms Andre told Johnson and Scully: “We battled 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’.

This has caused anger among subpostmasters, MPs and members of the public, who believe the 555 should receive the same treatm

“We don’t want anything we don’t deserve, we want what’s right and what’s fair.”

During the Zoom meeting, Scully committed to paying the 555 “fair and speedy” compensation.

Mr 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.”

Ms Andre said 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 GLO.

Freeths, the solicitors that represented the subpostmasters in the High Court, has all the information and calculations about how much compensation each should receive. “They have all the numbers and in regards to compensation, it shouldn’t take long. Freeths has all the documentation,” Ms Andre told Johnson and Scully.

Scully said: “We will work with you to get something that is fair and speedy.”

Alan Bates, the former subpostmaster who led the 555 claimants in court, said that as part of the GLO, a significant amount of work was done by the legal team to calculate the damages that should be awarded to victims.

“We have had enough of apologies and we are tired of words – we need to see deeds,” he said.

The government has already committed to cover the cost of the Historic Shortfall Scheme for affected subpostmasters because the Post Office cannot afford it. Post Office CEO Nick Read has urged the government to pay the 555 fair compensation.

In a speech, Read said: “Although the parties entered into a full and final settlement of the group litigation in good faith, it has only become apparent through various news reports since, quite how much of the total appears to have been apportioned to the claimants’ lawyers and funders.

“Should those reports be accurate, it is at least understandable that the claimants in those proceedings should continue to feel a sense of injustice, even in circumstances where they also agreed the settlement in good faith.”

Peer James Arbuthnot, a long-time campaigner for justice for the subpostmasters, said the government’s continued refusal to pay the costs and properly compensate the 555 group litigants is shameful.

“The Post Office/government wrongfully took, and is keeping, the money of the litigants,” he said. “It is simply wrong for them to refuse to pay it back.

“I also consider that the settlement was forced on the litigants, and should not be relied on by the Post Office/government. The Post Office, with the backing of the government’s limitless money, outspent the subpostmasters in a bitter legal battle where the Post Office was always behaving aggressively, secretively, mendaciously and oppressively.”

Arbuthnot said more information has emerged since the GLO finished, which could not be considered at the time. This includes details of Post Office staff being instructed to shred documents that could undermine its claim that the Horizon system was robust.

He added that compensating the 555 group litigants is something that should be decided by the inquiry or by a court. “It should not be for the government or for the Post Office to determine the rules to apply to the compensation for those they have treated so badly,” he said.

Solicitor Nick Gould, who represented three subpostmasters appealing their convictions, said there should be an immediate and unconditional interim payment to those who have had their convictions overturned. “Any compensation is likely to run into long and complex arguments,” he said. “I don’t believe anyone could say the review currently looking at compensation and other payments for victims is working at a speed which could be deemed appropriate or acceptable to those who are waiting for their money.”

During the Zoom call, Johnson apologised repeatedly and said the government will try to find a way forward. “What is so awful about it is it is just not your fault,” he said.

Mr Rudkin demanded a full statutory judge-led inquiry to identify where fault lies in the scandal.

Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009

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