Between 2000 and 2013, 700 postmasters were prosecuted for theft or false accounting. It later transpired that a new IT system called Horizon, which was installed by the Post Office in 2005 had contained bugs, errors, and defects that caused financial discrepancies in thousands of postmasters’ accounts.
As a result, some postmasters were given criminal convictions, whilst others were made bankrupt after being made to pay the shortfall on their accounts. MPs have since called this the “biggest miscarriage of justice” in recent history.
Compensation issues for victims of the postmasters scandal
In 2019, 555 postmasters brought a lawsuit to the High Court. This was settled by the Post Office for £57.75 million after evidence from the postmasters exposed the Horizon IT scandal. 75 postmasters had their criminal convictions overturned and the Government decided that a public inquiry would take place to investigate the Post Office and Fujitsu who created Horizon and their role in the scandal.
The aftermath of the ruling resulted in the Post Office setting up a “Historical Shortfall Scheme”, which was to be used to compensate postmasters who had not been involved in bringing action to the High Court. The aim was to help those who had to repay thousands of pounds due to financial shortfalls due to errors in the Horizon IT system.
However, this was controversial as it meant that the 555 postmasters who brought the High Court Case would be ineligible to apply for any compensation under their legal settlement. This was argued as being unjust as these postmasters were instrumental in exposing the scandal. It was further noted that a lot of the initial settlement was used to pay their legal costs.
Government scheme
The Government announced that it would set up an interim compensation package for postmasters who brought the legal case in 2019. This would be for a total of £19.5 million, with the Government further promising that more than £1 billion would be set aside to compensate anyone who had been caught up in the scandal.
£780 million had been earmarked for at least 75 postmasters who had their criminal convictions overturned as well as for other postmasters who are awaiting their convictions to be quashed in the future.
In December 2022, the Government announced that the postmasters who brought the first legal action could start preparation for their compensation claims ahead of submitting applications. It was proposed that claimants would be given £900 as part of legal fees to prepare for their claim.
The business secretary, Grant Shapps stated:
“I am acutely aware of the pain and suffering that these postmasters and their families have been through as part of the Horizon IT scandal. As business secretary I will always stand by them.”
Bankrupt victims
The legal burden of bringing claims most largely affected bankrupt victims of the Horizon Scandal. During the ongoing public inquiry, it was found that postmasters who were made bankrupt after being wrongly prosecuted were only receiving a fraction of what was due to them as the rest was being paid to the official receiver.
A barrister representing one of the victims stated during the inquiry that the receiver had no authority other than to settle the debts of bankruptcy in full, but the intervention, in this case, meant that victims were left with little to no compensation for the miscarriage of justice faced by them. In one case, a client who was awarded £259,000 ended up being offered £8,000.
The Post Office and Government are now being asked to consider whether the schemes in place are unfair for victims, furthermore, lawyers representing the victims have argued that the cost of bringing claims is much more than the £900 per case that the Government has proposed to give to claimants for legal fees. They have argued that without their advice, victims could be under-compensated.
Comment
The 2019 High Court judgment resulted in hundreds of Postmasters getting some level of justice after having their lives disrupted by false allegations of fraud by the Post Office. However, the fallout from this is ongoing and the public inquiry is further highlighting that the miscarriage of justice faced by these victims is being perpetuated by the schemes and assistance being provided.
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