Parliamentarians ask for economic sanctions for slow payments

A group of MPs say compensation to victims of the Post Office scandal is not being paid quickly enough and are calling on the government to face financial penalties if the process is not speeded up.

The Business and Commerce Select Committee said binding deadlines were needed, and that any money resulting from missed deadlines would go to claimants if they were not met.

The committee also called for the Post Office to be removed from its role in compensation plans and called for more transparency about how much it pays for lawyers.

The government said it was “working tirelessly” to resolve the claims “at a faster pace than ever before.”

Committee chairman Liam Byrne MP said: “The blame lies with the Post Office, but ultimately the government is the shareholder of the Post Office and acts on our behalf.”

The government is already analyzing the role of the Post Office in compensation plans.

Between 1999 and 2015, hundreds of subpostmasters were prosecuted and convicted based on information from a faulty accounting system, Horizon, that made money appear to be missing.

Some subpostmasters were unjustly imprisoned, many were financially ruined and some have since died.

One of the accused, Seema Misra, was eight weeks pregnant when she was wrongfully imprisoned.

Talking to the BBC After being appointed an OBE in the King’s New Year list for her role in the campaign for justice, she said it was a recognition of the “scale of injustice and scandal”.

The scandal “hasn’t been resolved yet,” he said, recalling the “really difficult time” he’s had since his legal battle with the Post Office began in 2008, three years after he bought the Western Post Office. Byfleet in Surrey.

She served four and a half months in Bronzefield Prison and gave birth to her second child with an electronic tag.

A public inquiry into the scandal heard the final presentations in Decemberwhere he took evidence from lawyers representing the Post Office, the creators of Horizon, Fujitsu, and the Department for Business, as well as victims and former Post Office bosses.

The select committee report, which comes a year after an ITV drama about the scandal catapulted the issue into the public spotlight, said compensation plans were still “poorly designed” and payments were still “not sufficiently rapid”.

It found the application process was akin to a second trial for victims, adding that lawyers administering the schemes were making millions while the vast majority of money set aside for reparations had not yet been paid.

The committee’s recommendations include providing direct legal advice to victims and strict deadlines for administrators to approve claims, with financial penalties if they take too long.

Only around £499 million of the budgeted £1.8 billion has so far been paid to more than 3,000 claimants. The committee said that meant 72% of the budget had not yet been paid.

Many of the cases with more complicated claims have not yet been fully settled.

“This is very simple: It’s wrong, it’s wrong, it’s wrong,” Byrne said.

“There are still thousands of victims who have not obtained the reparation to which they are entitled.

“This is the biggest miscarriage of justice in British legal history,” he said, adding that there were “exorbitant legal costs that, frankly, are skyrocketing.”

Speaking to the BBC, he said that “for every £4 the taxpayer pays in compensation, £1 goes to the lawyers.”

Byrne added that strict deadlines and fines would help the government and the Post Office “get a grip”.

A Post Office spokesperson said the firm was “focused on paying for a repair as quickly as possible”, adding that its spending on external law firms was kept “under constant review”.

“Our chairman said at the public inquiry in October that the redress schemes administered by us should be transferred to the government, and we will support the Department of Business and Trade in any decision they may make on this matter,” the spokesperson added.

There is four compensation plans for victims and two are overseen by the Post Office.

The government’s Post Office Minister, Gareth Thomas, said in December that the Labor government was considering taking responsibility for the company’s plans.

The Post Office told the select committee in December that legal fees had accounted for £136m of the cost of administering Post Office-run schemes since 2020, representing around 27% of the compensation paid.

Some of the committee’s recommendations for improvement were previously rejected by the previous Conservative government.

Strict deadlines associated with financial sanctions were scrapped on the grounds that they had “no positive effect” on accelerating claims and “could unfairly penalize lawyers for matters beyond their control,” the previous government said in May.

Meanwhile, Hudgell Solicitors, which represents hundreds of former subpostmasters, welcomed the committee’s recommendations, saying they would simplify and speed up compensation schemes by removing “unnecessary obstacles to justice” which it said had been repeated in hundreds of cases.