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Judicial intervention 'inevitable' as Post Office compensation valuation falls short

Lawyer negotiating compensation for victims of Post Office scandal says the two sides are 'poles apart' on valuations

Judicial intervention is “inevitable” as the Post Office and legal representatives of wrongfully convicted subpostmasters are “poles apart” on compensation valuations in negotiations, Computer Weekly has learned.

In a letter to the law firm representing the Post Office, Herbert Smith Freehills, the lawyer negotiating on behalf of 61 former subpostmasters that were wrongly criminally convicted, wrote that while progress has been made on the value of pecuniary losses, the two sides are “some way apart” on the valuation of non-pecuniary losses.

Neil Hudgell of Hudgell Solicitors wrote that the Post Office values non-pecuniary losses, which include “loss of liberty, damage to reputation, psychiatric injury and other aggravated and exemplary damages,” in five figures, while the claimant lawyers put it in six figures

“In other words, for a conviction dating back to the early 2000s you [Post Office] place a value at most at £5000 per annum, or £100 a week. On those numbers, as you would expect we are poles apart,” wrote Hudgell.

He said progress is being made for the valuation of pecuniary loss, which can be mathematically calculated, but the valuation gap on non-pecuniary losses, makes some form of judicial intervention an “inevitable consequence” as “the only workable solution to move this forward.”

Over 700 former subpostmasters were convicted of crimes after being blamed for unexplained accounting shortfalls based on evidence from the Post Office’s Horizon retail and accounting system used in branches, which was later proved to be error prone. It is the most widespread miscarriage of justice in British history with convictions overturned for a total of 73 of those convicted so far, 61 of which are represented by Hudgell.

In 2009 Computer Weekly revealed the scandal with the stories of seven subpostmasters affected by the problems (see timeline of Computer Weekly articles since it broke the story in 2009.) 

In the letter Hudgell vented the frustrations of clients yet to be fully compensated, despite many years and even decades of suffering: “Our clients feel that not enough is being done quickly enough and that Post Office continues to control the narrative. In particular, frustrations are heightened when public statements talking of early settlements do not translate into actions on the ground.”

Hudgell said the firm is minded to recommend a “more cost effective and potentially quicker route to High Court proceedings is through some form of Alternative Dispute Resolution (ADR) mechanism.”

But he said this cannot be done until there is a settled position on a number of matters.

He demanded an open admission of liability from the Post Office, in respect of all his clients, other than three contested cases. “This proposition has so far been resisted by your clients but there can be no continuing justifiable basis for doing so, other than as a cynical negotiating ploy. If there is to be ADR and it fails we simply do not wish to have to tackle that issue at a later date.”

Hudgell also demanded further interim payments because an ADR process will “inevitably take many months to conclude.”

“We remind you that many of our clients are elderly, in poor health and that time is very much not on their side,” wrote Hudgell.

“Worries about this litigation continue to blight their lives; they need closure and comfort in their later years. Moreover, many have acute psychiatric diagnoses, recovery from which will only be brought about by closure.”

He said initial interim payments went towards settling debts for many victims and only scratched the surface of the losses suffered: “Many of our clients simply cannot afford for these claims to go on for many more months. We are not prepared to countenance a situation where they have to settle off claims below their true value because of a short-term financial need or closure.”

The Post Office said in a statement: "We want to provide full, fair and final settlements and are urging the Government, who are the funders of the compensation, to help us reach agreement with the legal representatives of the postmasters and therefore be able to make payments as soon as possible.”

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

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