The cross-party Commons Business and Trade Committee has called for the Post Office to be removed from the compensation process with 72% of cash set aside still not paid out
Almost three quarters of the cash set aside to compensate postmasters hasn’t been paid out, shameful figures show.
A damning report has called on the Post Office to be kicked out of the process to put the Horizon IT scandal right. Just £499million of the £1.8billion assigned for payouts to victims has been paid out – meaning 72% is unspent.
MPs have voiced their outrage after it emerged Post Office bosses had paid £136million in legal fees. The cross-party Commons Business and Trade Committee says there must be fines if compensation targets are not met.
Alarming data shows that 14% of postmasters who applied before the original 2020 deadline have still not settled their claims. Committee chairman Liam Byrne said: “Payments are so slow that people are dying before they get justice. But the lawyers are walking away with millions. This is quite simply, wrong, wrong, wrong.”
It comes after four former postmasters – Lee Castleton, Seema Misra, Chris Head and Jo Hamilton – were awarded OBEs in the New Year Honours list acknowledging their years-long fight for justice. They vowed to continue fighting for justice.
In its report, published today(WED) the committee demanded legally-binding timeframes for compensation to be paid. If these are not met, victims should be awarded additional payments, MPs agreed.
The document said schemes are “so poorly designed that the application process is akin to a second trial for victims”. It also pointed to high admin costs.
So far, it found, Post Office Ltd has spent £136 million on Herbert Smith Freehills, the external legal firm for the HSS and Overturned Convictions scheme. This is equivalent to 44% of the actual sums paid out to victims so far.
Of that, £67million was costs to administer the Horizon Shortfall Scheme. But in spite of this victims have been offered no legal advice in submitting their claims.
Mr Byrne said a “practical, common-sense plan” is needed to reboot the redress system. He said: “Victims should have upfront legal advice to help make sure they get what’s fair.
“We need hard deadlines for government lawyers to approve the claims with financial penalties for taking too long. Crucially, we need the Post Office, which caused this scandal in the first place, taken out of the picture.”
More than 900 subpostmasters were convicted for theft and fraud between 1999 and 2015 due to glitches with the Horizon system which made it look like they were stealing cash.
Millions of pounds have been paid out to 3,300 victims across several compensation schemes, as many lost their livelihoods and reputations in the scandal.
The shocking ordeal was dramatised in ITV’s Mr Bates vs the Post Office. Alan Bates, who led the campaign for justice, was awarded a knighthood last year(2024).
The first compensation scheme was launched as part of an agreement between 555 wronged postmasters and the Post Office. The group took the company to court in the famous Bates & Others v Post Office Ltd case, which concluded in 2019.
But the Government initially said the 555 involved in the legal action would not be entitled to payments under the newly-created scheme. Promised payments were hampered by long delays.
In 2021 Post Office chief executive Nick Read said: “The Post Office simply does not have the financial resources to provide meaningful compensation.” He called on ministers to plough more cash into the compensation scheme.
It took until 2021 for the Government to pledge “speedy” payouts to the 555 involved in the court case. But in 2023 the Horizon Inquiry heard serious concerns about the way compensation schemes were being managed.
