The Post Office Horizon scandal, which began over 20 years ago, has had a devastating impact on the lives of many postmasters. Starting in the late 1990s, the Post Office began installing Horizon accounting software, but faults in the software led to shortfalls in branches’ accounts. The Post Office demanded sub-postmasters cover the shortfalls, and in many cases wrongfully prosecuted them between 1999 and 2015 for false accounting or theft.
The High Court group litigation order case against the Post Office brought by 555 postmasters exposed the Horizon IT scandal, which had seen many postmasters forced to “repay” to Post Office sums that they had never received. In March 2022, the then Chancellor announced that further funding would be made available to ensure that members of the group litigation order will receive similar levels of compensation to that which is available to their non-group litigation order peers.
On 2 September my predecessor wrote to all postmasters in the group litigation order group to ask for their views about whether BEIS or the Post Office should deliver the compensation scheme, and whether it should be organised along the lines of the historical shortfall scheme or based on an alternative dispute resolution approach. There was very strong support for the alternative dispute resolution scheme, to be delivered by BEIS. Today I am announcing that this is the route that we will follow.
The informal consultation also requested views on other issues related to the scheme. Unsurprisingly, there was considerable concern among postmasters that the scheme should be subject to properly independent input. In the light of this, we have decided to create an independent advisory board chaired by Professor Chris Hodges, an expert in alternative dispute resolution. The membership of that board will include Lord Arbuthnot and the right hon. Member for North Durham (Mr Jones), who are recognised by colleagues across Parliament for many years of outstanding campaigning for the wronged postmasters. The advisory board will be supported by a BEIS secretariat.
Since the consultation closed a great deal of work has been done to develop the details of the scheme, drawing on the detailed comments made in response to the consultation. I am today writing to members of the group litigation order with further information about how the scheme will work.
We are now asking claimants to prepare preliminary information about their claims. In parallel, we are working to engage alternative dispute resolution specialists and lawyers to deliver it. Those experts should be on board in early spring, and at that point full claims will be submitted. I hope that compensation will start to flow before the summer, and that most cases can be resolved before the end of 2023.
We have already announced that we will meet postmasters’ reasonable legal costs in claiming under the scheme. To enable lawyers to get to work on preparing claims, we are today announcing details of the costs tariff for the early phases of the scheme, which have been set by independent costs draftsmen. We will shortly be inviting claimants’ lawyers to make proposals for the expert evidence which they will need. I am also pleased to say that the compensation payments will be disregarded for benefits purposes—once secondary legislation is in place.