Pressure on government to pay fair compensation to subpostmasters left out of current schemes

MPs have called on the government to properly compensate the group of subpostmasters who fall outside established schemes to compensate victims of the Post Office Horizon scandal.

The government minister in charge of the Post Office said he is working with those left out to resolve unfairness, but a recent letter to the chairman of the group representing the subpostmasters repeated the government’s claim that they are not entitled to more compensation.

In a House of Commons debate, MPs raised the issue of the continuing unfair treatment of the 555 subpostmasters who took the Post Office to court, at great financial expense, to expose the Horizon IT scandal.

Subpostmasters and their staff were financially ruined after being wrongly blamed and punished for unexplained accounting shortfalls, yet despite it being proved that the anomalies were caused by computer errors, many remain in serious financial trouble.

Victims of the scandal paid back losses that only existed on the Horizon computer system used in branches, many of them having to sell their houses to raise the money to do so. More than 700 subpostmasters were criminally convicted, many of them sent to prison.

A High Court group litigation brought by a group of 555 subpostmasters proved, after years of campaigning, that the computer system used in Post Office branches was to blame for losses for which they were held responsible.

The Post Office settled out of court with the subpostmasters, paying £57.75m damages. But after legal costs were paid, the subpostmasters were left with just £11m between them, despite losing businesses and homes, and having their lives ruined.

After the court victory, the Post Office established a compensation scheme for subpostmasters affected, but barred those who had taken it to court from taking part. About 2,500 former subpostmasters have been accepted onto what is known as the Historic Shortfalls Scheme.

The High Court victory also paved the way for subpostmasters to have wrongful criminal convictions for theft and false accounting overturned. So far, 72 have successfully appealed and will be compensated by the government. They were each offered an interim payment of £100,000.

Some of the 555 are included in this group and will get compensation, but the rest are excluded from both schemes.

Department for Business, Energy and Industrial Strategy (BEIS) minister Paul Scully acknowledged that if were not for these 555 victims, the scandal might never have been fully revealed. “I recognise what they have done and that none of this would have been possible without their work,” he said. “The 555 performed a massive public service by exposing the wrongdoings of the Post Office and I recognise the deep frustration they have that the settlement with the Post Office is a full and final one and that they don’t qualify for compensation schemes.”

Scully added: “I have met some of those people and will always continue to work with them to see what more we can do.”

But Alan Bates, who chairs the 555’s campaign group, the Justice for Subpostmasters Alliance, said Scully has not been working with the group to resolve this.

In fact, in a letter to Bates just two weeks ago, Scully reaffirmed the government’s position that the court settlement of £57.75m was a “full and final” payment. He wrote: “So far as unconvicted subpostmasters who participated in the group litigation are concerned, your organisation has already agreed with the Post Office a full and final settlement, which it is understood to have catered for shortfalls.”

Bates said he believes the 555 are being punished for taking the Post Office to court.

In 2009, a Computer Weekly investigation revealed that subpostmasters were being blamed for unexplained accounting shortfalls, which began to happen soon after accounts at branches were automated by the introduction of the Horizon system from Fujitsu (see timeline below of Computer Weekly articles since it first revealed the Horizon scandal in 2009).