clrcrmck

Post Office can’t access records of all money paid to it by victims of the Horizon scandal

A parliamentary select committee was told that the Post Office is unable to access information to accurately calculate compensation for some Horizon scandal victims

The Post Office has admitted that due to limitations in underlying accounting systems, it does not have a record of all the money paid by subpostmasters wrongly forced to cover unexplained losses in their accounts.

The admission came during a parliamentary select committee hearing, focused on compensating victims of the Post Office Horizon Scandal, where government minster Paul Scully also promised fair compensation for the 555 victims so far left out of existing compensation schemes.

Thousands of subpostmasters repaid shortfalls that appeared in their accounts under threat of legal action. It was later proved in the High Court that the accounting shortfalls were actually computer errors.

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 and the establishment of the Justice for Subpostmasters Alliance (JFSA).

Facing questions alongside Scully in the Department for Business, Energy & Industrial Strategy (BEIS) meeting were Post Office CEO Nick Read, Carl Creswell, senior civil servant in BEIS, and Tom Cooper, director of UK Government Investments, which has a seat in the Post Office boardroom.

Questioned by MPs examining how the Post Office is compensating victims of the Horizon IT scandal, Read admitted some information required to build an accurate picture of losses suffered by subpostmasters is not available. “We recognise that bringing a claim over 20 years old is going to be complicated,” he said. “There are a number of sources of information to be disclosed. Pre-2005, it’s extremely difficult.”

Read said the Post Office has recognised this in how it has structured its compensation scheme. “We have had conversations with our independent panel, the final adjudicators of the compensation scheme itself, and we have said, ‘Clearly you will have to take into consideration where evidence is not available that when you determine compensation, this is a factor you will have to take into account, because people cannot prove what there shortfalls were’.”

Accurate assessment

Scully said the independent panel will “provide independence and a sense of distance and empathy to say [to claimants], ‘Okay, we appreciate you haven’t got the evidence and we haven’t got the evidence but lets work with you to make an accurate assessment acceptable to both parties’.”

BEIS select committee chair Darren Jones asked: “If subpostmasters were paying back shortfalls out of their own money into suspense accounts at the Post Office, why do you know who paid in what money, when and how much to give back to them?”

Read said this is because the Post Office does not have access to some of the records that go back to before 2005. “There will be areas of evidence that won’t be possible to identify and we have made it clear to our panel that this should be taken into account,” he said, adding that information even after 2005 is incomplete due to underlying system limitations.

Another difficulty identifying payments by subpostmasters to cover unexplained shortfalls is that the money went into a general suspense account, rather than a dedicated one.

Understanding what was paid back is essential, as millions of pounds were handed over to the Post Office to cover shortfalls wrongly reported by the computer system, known as Horizon, used by subpostmasters to run Post Office branches.

In fact, the group of 555 former subpostmasters, who took the Post Office to court and succeeded in proving computer errors were to blame for losses, funded a detailed analysis to ascertain the sums they repaid, which was calculated to be £8.5m. Beyond the 555, there are thousands more subpostmasters that suffered life-changing losses, which they had to repay to the Post Office.

Damages

The 555, as they are known, were awarded £57.75m in damages, but after paying their legal costs, they were left with about £11m. The government has so far refused to pay the legal costs to leave the victims with the full damages.

During the hearing, Scully admitted this is unacceptable and the government is working on resolving this unfairness. “We are working closely with the 555 to make sure they have access to compensation and justice just like any other people that have been wronged over the last 20 years,” he said.

Scully said that only the creation of a mechanism to compensate the 555 is holding the government back from doing so, and added that he is meeting with the 555’s legal representatives on January 19.

Alan Bates, former subpostmaster and victim of the Horizon scandal, established the JFSA in 2009, soon after revealing the scandal to Computer Weekly. Following the select committee hearing and the comments by Scully on compensating the 555, he told Computer Weekly: “I have had years of fighting with this lot’s promises but they mean nothing until the money is on the table.”

“We have not had a relationship of trust. For example, the government and Post Office keeps saying that the settlement agreed was in good faith, but after that, we discovered they had withheld lots of information that proved the computer system was at fault.”

He said there are some positive signs that the government will pay the 555 was it owes them. “I think they realise there is a big problem they need to sort out,” said Bates.

The Post Office Horizon scandal may never have been exposed and innocent people would still be living with criminal records with little hope of justice had it not been for the actions of the 555 victims, who are part of the Justice for Subpostmasters Alliance.

Correct allegations

In December 2019, at the end of a High Court battle between the JFSA and the Post Office, judge Peter Fraser confirmed that allegations made by subpostmasters about errors in the computer system were right. He also described the Post Office’s denial of anything contradicting what the system – known as Horizon – said was today’s equivalent of maintaining that the Earth is flat.

As part of the settlement, the Post Office agreed to set up a compensation scheme known as the Historic Shortfalls Scheme. This was to compensate subpostmasters and former subpostmasters that had experienced losses and suffering as a result of Horizon errors. The Post Office expected about 200 applicants, but in the short application window about 2,500 were accepted onto the scheme. A total of 777 compensation offers have been made so far in the Historic Shortfall scheme, with 22 of these not accepted by claimants.

The Post Office said 122 more subpostmasters have come forward since the scheme application closed and that it will seek to find a mechanism to address these.

The High Court judgements also paved the way for subpostmasters convicted of financial crimes after unexplained losses to appeal their convictions. There were 736 subpostmasters convicted of crimes such as theft and fraud based on Horizon data, and so far 72 have had convictions overturned. Subpostmasters with overturned convictions have access to an interim compensation payment of £100,000 while their full compensation claims are established. So far, £5.7m has been paid out.

Separately, the chair of the statutory public inquiry into the Horizon scandal has confirmed that it will specifically look at the compensation received by the 555 subpostmasters as part of its remit. Until yesterday’s confirmation, this was not certain.

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

Read more on Financial applications

SearchCIO
SearchSecurity
SearchNetworking
SearchDataCenter
SearchDataManagement
Close