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  1. Government Computing
March 23, 2023

Postmasters who exposed Post Office Horizon IT scandal will finally get compensation

The original trailblazers who took legal action against the Post Office can finally recoup the losses from their legal battle.

By Sophia Waterfield

The postmasters who exposed the Post Office Horizon IT scandal from the 1990s will be eligible for compensation under a new scheme. The UK government say that this will ensure that the people who took the first High Court legal action against the Post Office can claim some of the money lost through associated costs of funding their landmark case. 

Post Office sign outside a building
The GLO compensation scheme will mean the original campaigners can receive compensation from the Post Office Horizon Scandal. (Photo by shawnwil23/Shutterstock)

The compensation scheme for group litigation order (GLO), which opens today, will recognise the unique position of these postmasters, making sure they will have access to compensation on the same basis as other postmasters who were wronged by the actions of the Post Office and the Horizon system.

The affected postmasters will be able to apply directly to the Department for Business and Trade for compensation and cases will be settled in line with an alternative dispute resolution model without the need to go to court. Postmasters in this group whose convictions have been overturned can receive compensation through a separate programme delivered by the Post Office, said the government. 

Post Office Horizon system cost people their jobs and freedom

The Horizon system, developed by Fujitsu, was installed across the Post Office network, a public sector organisation at the time, in 1999. Its purpose was to handle transactions, accounting and stocktaking. From the first day, postmasters reported bugs with the system, which showed significant financial shortfalls in branches’ accounts. 

Regardless, the Post Office demanded sub-postmasters cover the shortfalls. Between 2000 and 2014, 736 managers were prosecuted based on information on shortfalls shared with the Post Office through the Horizon system. Some postmasters and mistresses were sent to prison and charged with false accounting and theft. 

A 20-year legal battle by campaigners managed to prove that the ‘theft and false accounts’ was the result of bugs within the software, rather than from human action. Many of those convicted have had their convictions overturned.  

The original postmasters who took the first High Court battle against the Post Office agreed on a settlement worth £45m plus legal costs in 2019. This turning point led the UK government to set up the Post Office Horizon IT Inquiry. 

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Postmasters still haven’t recouped the losses from associated costs in taking on the Post Office

However, while successful in their legal challenge, the first campaigners lost most of their money from their settlement to the associated costs of funding the case. They were also ineligible for the Historical Shortfall Scheme, which was created to compensate others who were affected by the Post Office Horizon scandal. 

To correct this, a new compensation scheme has been launched. 

“The trailblazing postmasters who exposed the Horizon scandal were instrumental in securing justice for all of those affected,” said Kevin Hollinrake, Post Office minister. 

“We will keep fighting for the postmasters and their families, and it is right that they will now receive full and fair compensation for the pain and suffering caused by this scandal.”

In December 2022, the government announced an Independent Advisory Board to guide ministers on the scheme, chaired by Professor Chris Hodges. 

“The advisory board welcomes the creation of this GLO compensation scheme,” said Professor Hodges. “While compensation cannot truly deal with the injustices faced by the victims of the post office scandal, we do believe it can help. “

As of March 7, the Post Office has paid more than £17.5m in overturned historical convictions compensation. Out of the 84 postmasters and former postmasters with overturned historical convictions, 79 had received interim payments totalling over £10.2m. 

For the Historical Shortfall Scheme, 96% of eligible claimants have now received offers of compensation, totalling £82.9m. The government says that the Post Office is working to issue offers to remaining claimants as soon as possible.

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