Bonuses of Post Office bosses could be reclaimed in Horizon compensation scheme

UK taxpayers could have to pay as much as £1bn in compensation to former Post Office workers wrongly convicted of theft due to the defective Horizon IT system.

Post Office bosses could be ordered to hand back their bonuses after the government agreed to award “proper compensation” to hundreds of postmasters who exposed the Horizon IT scandal.

Ministers vowed to set up a compensation scheme for the 555 postmasters who fought a years-long legal battle against the body, culminating in a landmark High Court ruling in 2019.

Despite leading the way in exposing what has been described as “the UK’s worst miscarriage of justice”, the group ultimately received just £20,000 each in compensation.

About £46 million of the £57.75 million damages paid out by the Post Office to conclude the case went towards the claimants’ legal fees, due to a “no fee, no win” deal with their legal funders.

Rishi Sunak, the chancellor, said that the new payout scheme would be created in the coming months to support the group, which he said played a “crucial role” in bringing the scandal to light.

Ministers have already earmarked about £1 billion in taxpayer-funded compensation for claims associated with the scheme, although the vast majority of victims have yet to receive a penny.

More than 700 postmasters were wrongly prosecuted for theft, fraud and false accounting between 2000 and 2015 as a result of discrepancies caused by software made by the Japanese firm Fujitsu.

Post Office scandal: will justice ever be delivered?

Paul Scully, the postal affairs minister credited with pushing the Treasury into opening up the new scheme, said that the IT giant could be targeted in a bid to recoup some of the compensation. Asked in the Commons about seeking finance from Fujitsu, he said: “We will push as much as we can.”

When pressed on whether the government would recover compensation costs, including the bonuses of Post Office executives, from those who presided over the scandal, he insisted that “nothing is off the table”.

“The UK taxpayer should not be on the hook for other people’s mistakes,” he added.

The framework of the scheme is yet to be agreed, although Scully said that it could mirror the historical shortfall scheme (HSS) set up to compensate a broader pool of postmasters who suffered losses due to Horizon. This could mean that the 555 postmasters could be awarded compensation for past losses and expected future losses, as well as for the wider impact on their lives.

The agreement was made after months of lobbying by postmasters, many whom were left bankrupt or became homeless.

Scully blamed delays on agreeing the compensation package on concerns that Therium, the company that funded the group litigation, could make a claim for part of the additional money. He said that after extensive talks, the firm had decided to waive its rights.

Postmasters called for money to be awarded at the earliest opportunity, pointing out that dozens of victims have died without seeing justice.

Alan Bates, who set up the Justice For Subpostmasters Alliance and was the lead litigant in the High Court case, said: “We need to get something to people soonest. People are desperate.”

He suggested that the government could initially pay back the £46 million the group spent on legal fees before each individual case is determined.

“What we heard from the minister was a step in the right direction,” he said. “All seemed quite positive, but the devil is in the detail and that’s what we are waiting to hear.”

Bates added that a “huge gulf in trust” remains between victims of the scandal and the government.

Scully said that families of deceased postmasters would be able to claim through the new scheme, as will those declared bankrupt.

The Post Office spent £43 million on legal and consultancy fees dragging the group of 555 postmasters through the courts.

In his judgment after the conclusion of the case in 2019, Mr Justice Fraser said that the Post Office’s reliance on Horizon was “the 21st-century equivalent of maintaining that the Earth is flat”.

Since the ruling, more than 70 postmasters have gone on to have their convictions overturned, allowing them access to a separate compensation scheme.

Margaret White, the former manager of the Banbury Road Post Office in Oxford, became the latest to have her conviction overturned today, having previously admitted two counts of false accounting relating to a £28,000 shortfall.

She was given a sentence of 51 weeks in prison, suspended for two years, at Oxford crown court in 2007, as well as two years’ supervision and 150 hours of unpaid work.

Quashing the convictions at the Court of Appeal, Lord Justice Holroyde, sitting with Mr Justice Picken and Mrs Justice Farbey, said: “We are satisfied that Mrs White’s convictions are unsafe.”

A public inquiry into the Horizon scandal, led by former High Court judge Sir Wyn Williams, is continuing.