The government is to compensate hundreds of sub-postmasters who helped expose the Horizon IT scandal but lost out after seeing their compensation payments swallowed up in legal fees.
Chancellor Rishi Sunak said ministers will be setting out details of the scheme in the coming months to ensure the sub-postmasters receive the same level of recompense as others wrongly accused of financial crimes due to the faulty software.
The group of 555 sub-postmasters brought the case which resulted in a landmark High Court ruling in 2019, paving the way for millions of pounds in future payouts and which led to the Court of Appeal quashing a series of wrongful criminal convictions.
Chancellor of the Exchequer Rishi Sunak (pictured) has said the sub-postmaster victims of the Horizon scandal, who lost out on compensation after their funds were swallowed up in legal fees, will now be eligible for a new scheme
Hundreds of sub-postmasters were sacked or prosecuted between 1999 and 2015 after reported shortfalls which were eventually attributed to a glitch in IT system rolled out by the Post Office in 1999 (pictured: former post office workers celebrating outside the Royal Courts of Justice)
The Post Office spent £ 32million to deny any fault in their IT system, before capitulating
What was the Horizon computer system and how did it go wrong?
Between 1999 and 2015, hundreds of postmasters were sacked or prosecuted after money appeared to go missing from their branch accounts (file image)
Horizon, an IT system developed by the Japanese company Fujitsu, was rolled out by the Post Office from 1999.
The system was used for tasks such as transactions, accounting and stocktaking. However, sub-postmasters complained about defects after it reported shortfalls – some of which amounted to thousands of pounds.
Some sub-postmasters attempted to fill the gap with their own money, even remortgaging their homes, in an attempt to correct an error.
Between 1999 and 2015, hundreds of sub-postmasters were sacked or prosecuted due to the glitches. The ex-workers blamed flaws in the IT system, Horizon, but the Post Office denied there was a problem.
In case after case the Post Office bullied postmasters into pleading guilty to crimes they knew they had not committed.
Many others who were not convicted were hounded out of their jobs or forced to pay back thousands of pounds of ‘missing’ money.
The Post Office spent £ 32million to deny any fault in their IT system, before capitulating.
However, the postmasters and postmistresses said the scandal ruined their lives as they had to cope with the impact of a conviction and imprisonment, some while they had been pregnant or had young children.
Marriages broke down, and courts have heard how some families believe the stress led to health conditions, addiction and premature deaths.
But, because of a ‘no win, no fee’ agreement with their legal funders, Therium, they received only a fraction of the tens of millions they were awarded – about £ 20,000 each.
Speaking previously, Alan Bates, a former sub-postmaster and founder of the Justice for Sub-postmasters Alliance representing the 555 individuals, said the group received a £ 56.75million settlement in 2019, but that £ 46million went directly towards the cost of legal action .
‘After that was removed, around £ 11m was left, averaging around £ 20,000 per person,’ he said.
‘Unfortunately, each claim is closer to £ 700,000 in actuality of what people have lost to put them back in the position they started had the Post Office not done what they did.’
At the same time, the group found they were ineligible to apply to the Historical Shortfall Scheme (HSS) which was set up by the Post Office to compensate those who had to personally cover shortfalls in their branch accounts due to the problems with Horizon.
The Treasury said the new scheme would ensure the 555 would see the same level of compensation as those who claimed through the HSS.
In a statement, Mr Sunak said: ‘The Horizon IT dispute has had a devastating impact on postmasters and their families, with many losing their livelihoods or being wrongly convicted for crimes they did not commit.
‘Without the efforts of these postmasters, this terrible injustice may have never been uncovered so it is only right that they are fully compensated and fairly.
‘That is why we have set up this new compensation scheme for those who played a crucial role bringing this scandal to light, which I hope provides a measure of comfort.’
Business minister Paul Scully, responding to an urgent question in the Commons, said: ‘As well as apologies and accountability, people want proper compensation to be paid.’
He added: ‘Following extensive negotiations with the company, I’m really pleased that Therium have agreed to waive their rights to any claim on this compensation, meaning that we can now proceed.’
Former Labor minister Kevan Jones, on costs, said: ‘We’ve got to get this right now, it is a step forward, I accept that, but it will not go away minister, he knows that.
‘Can he just tell the Treasury that, no matter how much it’s going to cost – because this is going to cost quite a lot of money – I do not know whether yet he’s actually established how much? Has he got an open check book now from the Treasury, because he might need it. ‘
Mr Scully replied: ‘I’d love say I’ve got a blank check from the Treasury but that’s clearly not going to happen from this place.’
MPs pressed the Government to protect taxpayers’ cash and ensure that Fujitsu, which installed and maintained the Horizon IT system, contributes.
Mr Scully said: ‘We will push as much as we can and every avenue to tackle compensation from wherever it comes from.
‘It shouldn’t be the UK taxpayer that’s picking up the tab for other people’s problems.’