Post Office warns MPs it needs Government help to compensate 2500 postmasters after Horizon IT scandal saw some wrongly jailed for false accounting and theft as it doesn’t have the ‘financial resources to compensate a miscarriage of justice on this scale’
- 950 postmasters were prosecuted for a variety of charges from 1999, but many of these cases were later linked to problems in the Horizon computer system
- Post Office has offered compensation to 777 of 2,500 who have applied for it
- Its chief executive warned that it will need help from the Government to pay
- ‘The Post Office itself doesn’t have the financial resources to compensate a miscarriage of justice of this scale,’ Nick Read told MPs
The Post Office has warned it will need Government help to compensate all 2,500 postmasters who applied for it over a 20-year scandal that saw some of them serve prison sentences.
Its chief executive, Nick Read, told MPs today that he hopes that lawyers and staff working on the case can make offers to the vast majority of the claimants by the end of the year.
Remuneration has so far been offered to less than a third (777) of the 2,500 postmasters who applied for it, but Mr Read has warned that the Post Office will need Government help to ensure everyone eligible is properly compensated.
‘The Post Office itself doesn’t have the financial resources to compensate a miscarriage of justice of this scale,’ he told the Business, Energy and Industrial Strategy Committee.
The postal service had set aside £153million so postmasters could sue the organisation, it was reported in March last year – as the state-owned business’ annual report revealed it had been plunged £307million into the red.
The Government – the Post Office’s only shareholder – has pledged that it will foot the bill for the final compensation payments to the wrongly convicted workers.
The 555 postmasters who exposed the scandal with a successful group action in the High Court had won a legal settlement of £58million – but after legal fees they were left with less than £20,000 each for their years of hurt.
Nick Read told MPs today that he hopes that lawyers and staff working on the case can make offers to all but a handful of the claimants by the end of the year
‘The Post Office itself doesn’t have the financial resources to compensate a miscarriage of justice of this scale,’ Mr Read told the Business, Energy and Industrial Strategy Committee
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, subpostmasters complained about defects after it reported shortfalls – some of which amounted to thousands of pounds.
Some subpostmasters attempted to plug the gap with their own money, even remortgaging their homes, in an attempt to correct an error.
Between 1999 and 2015, hundreds of subpostmasters 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.
In total, 950 postmasters were prosecuted for a variety of charges from 1999, but many of these cases were later linked to problems in the Horizon computer system.
Some of the postmasters were sent to prison for false accounting and theft. So far, 72 convictions have been overturned.
Mr Read said that 66 of those people who have seen their convictions overturned have applied for an interim £100,000 payment designed to ‘bridge the gap’ until a full settlement can be reached, Mr Read said.
The Post Office has paid out interim payments to 57 of these.
‘As soon as (convictions) have been overturned … the Post Office will be paying those interim payments within 28 days,’ said business minister Paul Scully.
But the Post Office is yet to be able to contact 127 of the 736 former postmasters whose convictions were linked to Horizon.
‘It is my intention that we do give full and final compensation of all the victims of the past and their families,’ Mr Read said.
He added: ‘There is an enormous amount of complexity associated with making sure we get absolutely right how we compensate those postmasters.
‘And most importantly that it’s full, it’s fair and it’s final.’
Hundreds of subpostmasters had been sacked or prosecuted between 1999 and 2015 after reported shortfalls which were eventually attributed to a glitch in an IT system rolled out by the Post Office in 1999.
The Post Office spent £32million denying any fault with their IT system and even bullied postmasters into pleading guilty to crimes they knew they had not committed.
The Post Office has since apologised to postmasters and the Government has launched a judge-led public inquiry, which held its first live session last year.
A Post Office spokesman said: ‘We are fully and transparently engaging with the Government’s statutory inquiry.’
Shortly before the committee hearing started, the Government pledged that it will foot the bill for the final compensation payments to the wrongly convicted workers.
The Post Office has said it is unable to cover the payments for the exonerated individuals but the Government – as its only shareholder – confirmed it will pay.
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