Why Post Office victims are still fighting for full compensation

More than two decades have passed since Sir Alan Bates first challenged the government-owned Post Office over shortfalls in his branch’s accounts.

Five years after being vindicated in court — and almost a year since an ITV dramatisation spurred a political vow to expedite redress — he is still awaiting full compensation from the British state.

As the process grinds on, a sense of unfairness has set in among victims, many of whom chafe at the gulf between lowball compensation offers made to them and the handsome financial rewards collected at the time by the scandal’s perpetrators.

“I wasn’t asking for anything along the lines of senior management, but all these people were being paid shedloads of money, millions for utter failure,” Bates told the Financial Times. “They destroyed a national institution and wrecked the lives of innocent people . . . it just seems wrong.”

Bates was the lead claimant in a 2019 High Court case that helped unravel an affair in which nearly 1,000 Post Office branch managers were convicted between 1999 and 2015 for offences including theft and false accounting using flawed evidence from Fujitsu’s Horizon system.

So far, only one in 10 of the convicted sub-postmasters and those involved in the High Court case have reached a final settlement. Bates has rejected two offers, with the most recent amounting to one-third of his initial claim.

Sub-postmasters and their legal representatives say that “full and fair” redress has been difficult to draw out from successive governments.

While a long-running public inquiry into the affair concluded this week, many victims are still locked in a glacial, bureaucratic process of offers and appeals that could end up back with the courts.

Bates is now considering taking legal action to force the government to set a formal cut-off date to make offers by March next year, and is considering a separate appeal if he cannot reach a personal settlement. “If once again we end up in court, it won’t just be for myself, it will be for all claimants,” he added.

For critics, the Post Office schemes reflect the shortcomings in most government programmes. No single department or agency is responsible for establishing how compensation works or should be administered and officials are left to develop the contours of any scheme from scratch.

“Each time a new scheme needs to be set up the officials have no option but to go back to basics and default to an adversarial system involving lawyers on both sides,” said Christopher Hodges, chair of the government-appointed Horizon Compensation Advisory Board.

“The whole thing then gets unbelievably complicated, formal and very slow,” Hodges added. “We need a culture that simplifies what would otherwise be a rather objective and aggressive set of negotiations.”

In a report on government compensation schemes published this year, the National Audit Office said that a lack of co-ordination gave way to a “relatively slow, ad hoc approach” and that this was often accompanied by “mistakes and inefficiencies in the design of schemes” resulting in delays in payouts to claimants.

The NAO recommended that the Cabinet Office set up a “centre of expertise” within government to provide guidance, expertise or a framework for agencies seeking to set up a redress scheme.

Meg Hillier, Labour MP and chair of the House of Commons Treasury select committee, said that she expected the government to “demand value for money” but noted that persistent delays and the complexity of schemes often led to mistakes that “compound the original harm”.

The Post Office’s various schemes were beset with problems in their design — including HM Revenue & Customs taxing lump-sum payments made for lost earnings, which resulted in a sizeable portion of redress being returned to the state. This required legislation to fix, but only came to the fore last year after hundreds of claims in the Horizon Shortfall Scheme (HSS) had already been settled.

Some sub-postmasters felt pressured to accept a lump sum, with participants in the HSS scheme receiving no help with legal costs. Post Office lawyers were also criticised for using “without prejudice” confidentiality clauses in a letter that led victims to feel unable to seek counsel.

“There wasn’t sufficient independent oversight of that scheme. It was driven by the Post Office,” said James Hartley, the lawyer who represented the sub-postmasters in the 2019 case. “You take a step back and go these are people who caused it.”

He added: “There was an inherent risk that claims were going to be unsettled.”

Kevin Hollinrake, a Conservative MP and former postal affairs minister, said that during his tenure there were attempts to speed up the claims process with fixed-sum awards.

“The problem is when people submit a full claim. Calculations are complex and you require the input of forensic accountants and medical experts,” Hollinrake told the FT. “There’s no easy way to do this. After all, you are managing public money.”

Former prime minister Rishi Sunak’s decision to exonerate Horizon victims en-masse earlier this year — after the scandal broke into the public awareness following the ITV drama — was partially aimed at speeding up the process for redress. Lawyers had estimated it would take nearly two decades for the Criminal Cases Review Commission, the body responsible for investigating potential miscarriages of justice, to process appeals and enable convicted sub-postmasters to put in a claim for compensation.

But critics say the compensation schemes also struggle to handle deeply traumatic experiences with the required sensitivity and pragmatism.

Bates has been unable to agree with the Post Office the redress he should receive for two decades of work leading a campaign for justice. Although officials told the FT they were sympathetic to this part of his claim, they have yet to reach a settlement.

One government official said that it was difficult, however, to manage victims’ expectations with some sub-postmasters making claims outside the scheme’s framework. “When you reach the point where expectations are wide of the mark, it becomes a tangle of lawyers,” they said.

A government spokesperson said that officials were working tirelessly to provide “full and fair redress”. “This government will continue to listen to subpostmasters about what they need from the schemes,” they added. 

The Post Office said: “Today’s Post Office is focused, alongside government, on paying redress to victims of the Horizon IT scandal as quickly as possible so they can move forward with their lives.”

For Bates and other sub-postmasters, frequent clashes with officials means a two-decade experience seeking justice and closure feels needlessly prolonged.

“The schemes were not meant to adopt a purely legalistic approach, but they [the Post Office and the government] have turned it into one,” Bates said. “Redress is about the principle. It’s about fairness.”

Visualisation by Cleve Jones in London