Post Office Compensation

Sarah Jones Excerpts

Monday 18th September 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

With permission, Madam Deputy Speaker, I will make a statement on the latest steps the Government are taking to ensure that swift and fair compensation is made available to postmasters whose Horizon-related convictions are overturned.

This House is aware of the distressing impact that problems with the Post Office’s Horizon IT system have had on the lives and livelihoods of many postmasters. Starting in the late 1990s, the Post Office began installing Horizon accounting software, and over the years the Horizon accounting system recorded shortfalls in cash in branches. Between 1999 and 2015, those shortfalls were treated by the Post Office as caused by postmasters, and that led to dismissals, recovery of losses by the Post Office and, in some cases, criminal prosecutions. We now know that Horizon data was unreliable. I pay tribute to colleagues on both sides of this House, and in the other place, who have supported postmasters in their efforts to expose the truth and see justice done.

The Government have supported the Post Office to make significant interim payments up front—set at £163,000—to those with overturned Horizon convictions. We are also funding the Post Office to reach final settlements with these postmasters. To date, 86 convictions have been overturned. The Government and the Post Office have been clear that we want to see the victims receive swift and fair compensation. I have been monitoring the delivery of compensation to those with overturned convictions, and more than £21 million has been paid out to date. Although good progress has been made on personal damages, such as for mental distress and loss of liberty, thanks in large part to a successful early neutral evaluation process overseen by Lord Dyson, progress on full and final settlements has been slower.

That is why I can announce today that the Government have decided that postmasters who have their convictions on the basis of Horizon evidence overturned should have the opportunity, up front, to accept an offer of a fixed sum in full and final settlement of their claim—the sum will be £600,000. It will not be up to £600,000; it will be £600,000. There will be no requirement for evidence to support the claim, other than the ability to demonstrate that the individual has an overturned conviction. We have arrived at that figure by looking at existing claims that have been processed and applying a generous uplift. This will be delivered by the Post Office, with funding from the Government. To be clear, this up-front offer is available to those postmasters whose convictions have been overturned as they were reliant on Horizon evidence at the time. This payment will be made net of any sums already received, such as interim payments and partial settlements, to settle the claim fully.

Any postmaster who does not want to accept this offer can, of course, continue with the existing process. It will therefore be completely optional to accept the offer of £600,000, and the Government will continue to fund the legal costs of these postmasters to ensure that they receive independent advice ahead of making a decision. However, we hope that the change I am announcing today will provide more reassurance and quicker compensation to those postmasters who would prefer this option over going through the full assessment process. Almost certainly, there will be fewer people taking the option of the full assessment process. To be clear, any postmaster who had their conviction overturned as it was reliant on Horizon evidence and who has already reached a settlement with the Post Office for less than £600,000 will be paid the difference.

Postmasters who have been wrongfully convicted have some of the most severe circumstances, having lost clean records and, in some cases, their liberty, and having suffered significant financial losses and an overwhelming impact on their lives. The Government recognise that those postmasters have suffered gravely in relation to the Horizon scandal, and for too long, and so should be able to settle their claim swiftly if they wish. The Post Office is contacting the legal representatives of eligible postmasters with further information about this offer. I appreciate that some details will need to be worked through, such as how long the up-front offer remains open. I am committed to consulting the Horizon Compensation Advisory Board, which includes Members of this House, such as the right hon. Member for North Durham (Mr Jones), and Lord Arbuthnot, on this matter to make sure we get this right. However, we did not want to delay informing postmasters that there will be an optional quick and straightforward route to settlement. Postmasters may choose to have their claim fully assessed if they prefer, whereby each claim is assessed on the basis of its individual losses.

The Post Office will continue to process these claims as quickly as possible and we are encouraging it to continue to work actively with postmasters’ legal representatives to make offers and payments as soon as possible. The Post Office has made offers to all 73 formerly convicted postmasters who have submitted a claim for non-pecuniary damages—non-financial personal losses. Awards for non-pecuniary damages are guided by Lord Dyson’s early neutral evaluation. With regard to pecuniary damages—financial losses—only 21 claims have been submitted to date and the Post Office has made offers on 12 of these, five of which have been accepted.

The Post Office has been engaging with claimant advisers on pecuniary principles for assessing financial losses to support swifter formulation and assessment of claims. The Post Office plans to move to a remediation model of claim assessment, involving an independent assessor to facilitate settlements and resolve disputes. This remediation approach will bring greater transparency to the existing process.

We know that hundreds of postmasters were convicted during the period when Horizon was in use. The Post Office contacted over 600 postmasters to help them to appeal their conviction and that work was later taken over by the Criminal Cases Review Commission as an independent party. However, still only 86 convictions have been overturned to date and we recognise that there are a number of postmasters who have not yet sought to appeal their conviction. It is for the courts to decide whether a conviction is unsafe, but we encourage all postmasters who think their conviction may be unsafe to come forward and start the process. We hope that being transparent about the level of compensation available via a straightforward route will encourage even more people to seek to overturn their conviction.

I am pleased to provide the House with an update on the other areas of Post Office compensation. To date, £79 million has been paid under the Horizon shortfall scheme, with offers made to 99% of the original cohort of applicants. The Post Office has made offers for 58% of eligible late claims.

Under the group litigation order scheme, the Department has paid £22 million to date. We also announced interim payments in June last year, and 99% of claimants have received the share of the £19.5 million to which they are entitled. The scheme opened for full applications in March this year. To date, 32 claims have been submitted and first settlements have been reached. I am pleased to inform the House that my Department will be publishing data online regularly on the progress of compensation delivery.

In addition to providing compensation, it is important that we learn lessons so that something similar can never happen again. That is why the Government have set up the Post Office Horizon IT inquiry and put it on a statutory footing to ensure it has all the powers it needs to investigate what happened, establish the facts and make recommendations for the future. The inquiry is progressing and we will continue to co-operate fully to ensure that the facts of what happened are established and lessons are learned. I commend this statement to the House.

[Sarah Jones (Croydon Central) (Lab)]

I thank the Minister for his statement and for advance sight of it. This is, of course, an issue of great importance and I thank him and his Department’s civil servants for the progress they have made and the work that has gone on to achieve it.

As this is my first time speaking on the matter from the Front Bench, may I put on record my tribute to the Justice for Subpostmasters Alliance and to all those who have campaigned for decades for compensation, justice and truth? I also recognise the efforts of Members across the House on behalf of their constituents, as well as the work done by colleagues in the other place. In particular, I thank my right hon. Friend the Member for North Durham (Mr Jones). As the Minister said, he is unable to be in the House today but he has played an instrumental role in helping to chart a route to justice for thousands of people and we wholeheartedly thank him for that.

The House is in unanimous agreement that the Horizon scandal has been a shocking injustice. Indeed, I think it is no exaggeration to say that it is one of the greatest scandals of modern times. While we continue to hear in the public inquiry the accounts of lives torn apart by the scandal we can never lose sight of how devastating its impact has been on those victims.

Labour will act in good faith on any announcements that aim to facilitate justice for those involved in the Horizon scandal. Having listened to the Minister, I understand the logic behind the approach that he has announced today, but I would be grateful if he answered some initial questions. First, how many people does his Department anticipate will take up this offer? Secondly, what assurances can he give the House that the compensation being offered to those 86 individuals whose convictions have been overturned will be at a sufficient level? I have spoken to one MP today who has a case in which various accumulated costs amount to millions of pounds. What can the Government say in response to the question that, if people go through the full scheme, the compensation would be much higher? I would be grateful if he addressed what he thinks the balance is between his figure and what other people might expect to get.

Thirdly, while I welcome what the Minister has said, the wider issue, as he mentioned, is the much larger group of people whose convictions have still not been overturned. I know that there have been some proactive attempts to engage with them, but the Minister must share our frustration with the lack of progress. What more can he do to expedite this process of reaching out, contacting and talking to those people?

We understand the logic behind today’s announcement, but we would appreciate the Minister’s thoughts on those issues. As I said earlier, we are happy to work in good faith with the Government to get this right and take one of the many steps required if we are to make amends for what has been the most insidious of injustices.

[Kevin Hollinrake]

I am very grateful to the shadow Minister for her questions. First, may I welcome her to her place? I look forward to our exchanges across the Dispatch Box. I echo her comments in relation to the Justice for Subpostmasters Alliance. I met Alan Bates very early on in my tenure as a Post Office Minister. He has done an incredible job and we would not be as far on as we are without campaigners such as Alan and, as the shadow Minister said, people across this House who have worked so hard to ensure that the overall cases are heard and that people are treated fairly in terms of compensation.

I thank the shadow Minister for her support for today’s initiative. Eighty six people have come forward so far. That is frustrating because we think that there should be about 600 in total who are reliant on Horizon evidence. We are frustrated, but we are keen to do what we can. We believe today’s announcement will help. People can see that they will not have to go through months of claims assessments and that they will not have to engage with lawyers unless they wish to do so—and we will cover the costs of doing that—so it will be a quick and easy process for people. Anything that is said across this Dispatch Box that encourages people to come forward would be welcome. We will continue our efforts elsewhere, to make sure that the people concerned are contacted and are aware of this particular option for them.

On the levels of compensation, this will not take away from the original route. People can still go down the full assessment route. If somebody thinks they have a claim worth millions of pounds, they may well decide to go down the full route. However, I would also say that we know of about 60 people who have sadly passed away while awaiting compensation. Clearly, that is wrong and an injustice. For some people, it will be the right thing just to be able to take this money and draw a line under the whole sorry situation. If people feel they have a claim, which is at a much higher level, they can go down the same route, as that option is still available to them. That is a judgment that they will have to make in conjunction with their legal advisers. I thank the shadow Minister for her comments.