8 December 2022
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(10.00 am)
The Usher: Good morning everyone. This is just to let you know that unfortunately we need to pause for about ten minutes. The hearing will be starting probably about 10.10, I would think. Thank you very much, I’ll come and do another announcement shortly.
(10.02 am)
(Proceedings delayed)
(10.15 am)
The Usher: Ladies and gentlemen, thank you for your patience. We are trying to resolve an important technical glitch, so now the hearing has been deferred until 10.30. Thank you. I shall announce again when we’re ready to start.
(10.16 am)
(A short break)
(10.33 am)
The Usher: Ladies and gentlemen, a quick update: the Chair would like to make a brief announcement so he’ll be coming in shortly. Thank you.
Sir Wyn Williams: This not what I had in mind, but I’ve come in because I want to know from those who intend to speak how long, realistically, they want because, although there is a great public interest in having a live feed, in my view, there’s a greater public interest in dealing with this expeditiously today and also giving people a reasonable amount of time.
So there’s a limit on how long I’m prepared to wait for a live feed – that’s what it boils down to – but it would obviously assist me if people could explain how long they intend to take.
So let’s go by the batting order, I think Mr Chapman was first up.
Oh, sorry, Ms Gallafent. There we are, I’m completely disoriented, I’m sorry.
Ms Gallafent: I will be definitely 45 minutes, possibly a little bit longer.
Sir Wyn Williams: Right.
Mr Chapman: Ten minutes.
Sir Wyn Williams: So that’s an hour-ish.
Mr Moloney: 25, sir.
Sir Wyn Williams: Mr Henry?
Mr Henry: 40, sir.
Sir Wyn Williams: Mr Stein?
Mr Stein: 45. We have clients who are wishing to hear this and wishing to view it and have been waiting to do so.
Sir Wyn Williams: No, no, I follow all that.
Mr Stein: So we may need, even a few minutes right now, just to discuss this particular issue.
Sir Wyn Williams: Well, on the basis of your estimates, we can reasonably delay for at least another 30 minutes, which is what I’m prepared to do. We resume it at that point. But, of course, I’ll be holding you all to your estimates much more strictly, even than usual.
(10.35 am)
(A short break)
(11.00 am)
Sir Wyn Williams: Give us a factual update, Mr Beer.
Mr Beer: Yes, of course. I’m afraid it’s not been possible to resolve the technical issue that is preventing the Inquiry from presently streaming the proceedings. That is an issue to do with this building’s connectivity. However, if you do decide to proceed, sir, I have been told that a transcript of today’s proceedings will be made as we go along and, in fact, will be displayed for people in this room in the usual way. But, more importantly, that will be uploaded to the Inquiry’s website at the conclusion of proceedings today.
An audio and visual recording of today’s proceedings will also be made and that will also be uploaded to the Inquiry’s website in the normal way, so people who missed the proceedings unfolding today can watch them back after they have concluded.
So, essentially, what is missing is the live YouTube feed, which means that members of the public who are not in this room, and those Core Participants who are not in this room, will be unable to see and hear the proceedings, as they unfold.
Sir Wyn Williams: My inclination is that, in those circumstances, although it’s not ideal, it’s better than adjourning, which is the option, in effect.
Mr Stein?
Mr Stein: We have clients that have been emailing my instructing solicitors asking for when the live stream is going to be available and hoping that they will be able to take part in this remotely. On the other side of the coin, there is the practicality that, if we adjourn from today’s date, what further date would we get, when would that be, and the like.
Our rather reluctant but necessarily practical answer is to agree, sir, that we go ahead today, partly, I must admit, in my own mind thinking that I am last in terms of the speaking order and we may well resolve problems by the time we get there, at least for my own part.
Sir Wyn Williams: Yes, well, I’m not sure if Mr Beer mentioned this, but if the live stream is rescued, then it will begin as soon as it can. So there is that possibility but, obviously, we can’t rely on that possibility.
Mr Stein: Thank you, sir.
Sir Wyn Williams: I also think it is important to explain that, if there had been live evidence, particularly of important witnesses, I might have taken a different view. But I think, given that we are simply dealing with submissions, the balance falls in terms of carrying on. So that’s what we’ll do.
Ms Gallafent?
Submissions by Ms Gallafent
Ms Gallafent: Good morning. Thank you, sir. As you know, I appear on behalf of Post Office, we are grateful for the opportunity to update the Inquiry on developments in relation to issues of compensation. In our opening statement, at the beginning of Phase 2, we provided a short update on developments since the compensation hearings of July, and last week we submitted detailed written estimates setting out developments to the end of November.
For the purpose of today’s hearing, I intend to structure our oral submissions by the reference to the key conclusions reached by you, sir, in your progress update, dated 15 August of this year, focusing on those conclusions, which concerned matters for which Post Office has responsibility, and leaving aside, for the time being, those conclusions which you’ve indicated may be considered in Phase 5 in due course.
I do so having particular regard to your indication in that document that, if it became clear in subsequent weeks that progress was too slow, in particular finalising a Group Litigation Scheme and/or making payments thereunder, you would very likely determine that you should deliver to the minister an interim court, pursuant to the Inquiries Act, containing specific recommendations.
I start, sir, if I may, with the Historical Shortfall Scheme. At first the issue of the pace of making offers, paragraph 7.2 of your update.
So far as the pace of making offers of compensation is concerned, you noted in your previous update, this had quickened considerably during the course of the previous 12 months. That pace has been maintained in the last four months, in each of which month the Post Office has exceeded its target for the percentage of offers made in respect of eligible applications.
From the group of applications made before the original extended deadline in November 2020, as of yesterday, Post Office has made offers to 2,240 applicants. That represents offers in 94 per cent of eligible applications. Sir, as you’ll be aware, the target by the end of this month is 95 per cent. I was told shortly before coming into the hearing room this morning that if just four more offers go out today, we will have made 95 per cent as of today. We anticipate four, if not more, offers will be going out today.
The total value of the offers made to date is approximately £74 million, including interest and the deduction of withheld tax.
Of those offers, 1,804 applicants, which is over 80 per cent, have accepted the offer made to them, and payments have been made in 98 per cent of those cases. That amounts to a total value of payments at approximately £44.5 million, again including interest and the deduction of withheld tax.
There currently remain just 134 applicants who have not yet received an offer letter. Now that’s usually in the light of a case specific complexity, meaning it’s been slower to progress to the point of an offer. They can broadly fall into three categories. The first is applications with complexities concerning insolvency or bankruptcy.
Now, it has taken longer to establish the relevant circumstances of these applications, in the light of the potential interest or interests of the bankruptcy or insolvency practitioners, such as the Official Receiver. To date, offers have been made in 19 of such cases.
Separate to that the Independent Advisory –
Sir Wyn Williams: Ms Gallafent, do you have a figure for how many insolvency cases there are, in the HSS, even approximately?
Ms Gallafent: I don’t, but I’m sure someone will be able to tell me when I’m on my feet. But we’re talking about 134 in total and this is one of the groups of people, which is a dwindling number, if I can put it in that way.
There are also, within this category, a group of cases where a claim has been made of losses flowing from the bankruptcy or insolvency and the Independent Advisory Panel is considering the fair approach to be adopted in that case. Post Office expects to make offers in respect of those claims early next year. The second category where things have taken slightly longer is applicants who were prosecuted but not convicted.
Now, with the benefit of the progress made on the issue of non-pecuniary losses for postmasters who were prosecuted and convicted – and I’ll come on to that in the context of the second process in relation to overturned historical convictions in due course – again, the Independent Advisory Panel is considering the fair approach to this category of applicants and expects to make offers again in respect of them, again, early next year.
The third group of somewhat slower cases –
Sir Wyn Williams: So that I’m clear, these are people who were prosecuted but not convicted –
Ms Gallafent: Yes.
Sir Wyn Williams: – who did not form part of the GLO.
Ms Gallafent: Exactly, sir, and I’ll come on to that in due course.
The third category then, in relation to the HSS, where matters have been slower than otherwise, is where information is required from the respective applicant or a third party in order to fairly assess them. So that might include circumstances in which responses are outstanding for the applicant, for example, if someone has ill health and there is a delay in responding, or outstanding requests from the National Health Service, for example, in terms of medical records in support of a personal injury claim.
As soon as information is received, the panel will consider the application and an appropriate offer letter will be prepared and sent. Again, in this context, Post Office is particularly mindful of the importance of striking the appropriate balance between the speed of decision making and considerations of fairness.
For completeness, I note, in this context, the points raised by Hudgell Solicitors in their written submissions, in a section entitled “Independence Issues” that, in fact, concerns the question of heads of loss, which they say were not identified until after the initial offer has been made by Post Office.
It’s unnecessary, for my purposes today, for me to go into the detail of the three cases they identify but I would emphasise that Post Office’s position is that the purpose and value of the good faith meeting, under the procedures of the Historical Shortfall Scheme, is to be able to discuss exactly those sorts of issues and any other issues that might arise, in order that revised offers can be made as appropriate.
Sir, you may like to note that such revised offers have been made to applicants, whether or not they’ve had legal representation and, to assist, sir, to date, 29 applicants have received revised offers of increased value, before going on to settle their claims as part of either the pre, post or during the good faith meeting stages, none of whom had legal representation.
Now, there are points made in relation to delays in holding good faith meetings. You may wish to note that 100 of those meetings have been held since the scheme began. 21 are planned over the next two months. Again, I’d emphasise that a good faith meeting isn’t held in every case where an initial offer is rejected.
In more than half of those cases, following interactions between the applicant and the Post Office, which are prompted by Post Office seeking to understand the reasons for rejecting, the offer is accepted without proceeding to a good faith meeting.
Where a good faith meeting is offered, either upon request or proactively, an applicant is offered three dates on which to attend. Delays can occur where other parties, such as legal representatives or medical practitioners, are part of the process, or where additional information is requested as a prerequisite to the good faith meeting.
But, again, I’d make the point, which is Post Office continues to look at ways to streamline the dispute resolution process, including the good faith meetings, to reduce the time taken, whilst continuing to ensure that it enables applicants and applications to be resolved fairly and in good faith.
Can I turn to late applicants, dealt with at paragraph 7.3.
Sir Wyn Williams: Before you do, just so I can keep track of what you say, have I got this right: there have been 100 good faith meetings?
Ms Gallafent: Yes.
Sir Wyn Williams: In 29 of them, there’s been an increase in the offer where people are unrepresented, yes?
Ms Gallafent: No, the increases in the offer where people are unrepresented, that may have been before a good faith meeting, at a good faith meeting or afterwards.
Sir Wyn Williams: So have you got any information about what has happened after a good faith meeting in terms of increase or acceptance?
Ms Gallafent: Yes, and I’ll – those are set out in our written submissions. I can take you to them at paragraph – yes, we have set those out. Yes.
Sir Wyn Williams: Thank you. Right.
Ms Gallafent: So I was just picking up on the ongoing consideration of ways we can streamline the process.
Moving then to late applications, paragraph 7.3, these are obviously applications that are made or will be made after the 27 November 2020 deadline for the scheme. For the purposes of today, I’m not going to focus on the reasons for delay in determining whether those applications should have been accepted or rejected into the scheme. I obviously recognise that’s a matter to which the Inquiry may wish to return to in Phase 5, but I intend instead today to provide an update on developments since BEIS’s announcement on 6 October that, as of that date, it had extended its financial support to Post Office so that it could accept eligible late applications as part of the scheme.
Post Office has now written to all but one of the 230 postmasters who previously told it that they wished to join the HSS, after the November 2020 deadline, inviting them to join the scheme, providing them with an application form and the Consequential Loss Principles and Guidance. On 12 October Post Office also put a notice on the Historical Shortfall Scheme website, inviting further such applications, linking to a late applicant specific question and answer document and the application form. Sir, we provided copies of those documents to go with our written submissions for your note.
As at yesterday, Post Office has received 93 late applications, of which 66 contain a complete set of information. At this stage, Post Office has assessed 68 claims for eligibility under the scheme. I note that some applications contain more than one claim, for example, if there was more than one Post Office under that particular postmaster.
There should be confirmation of eligibility sent to applicants in the next week or so, once identification and verification checks are also complete. 27 of the late applications, are partially complete and we are contacting applicants for missing information.
Sir, one of the other key conclusions in the progress update was that any applicant whose claim is rejected by reason of having been made after 27 November 2020, should have the right to have that decision reviewed by the Independent Advisory Panel, and the scheme amended to make that clear.
Now, the website for the scheme confirms that applicants are asked to explain why they were unable to submit an application by the November 2020 date, provides, by way of example, they didn’t know about the scheme, were poorly, overseas, caring for a relative.
Post Office has recently updated the question and answers on the website to clarify the approach to be taken in circumstances where a late applicant has provisionally been declined by Post Office, on the basis that they’ve not provided a sufficient reason for missing the original deadline. Such applicants will be presented with a further opportunity to provide one, and Post Office will suggest a list of the reasons that might apply, in their cases.
If an applicant still cannot provide a reason or their reason isn’t, for whatever reason, accepted by Post Office, it will let them know and the matter will be referred to an independent third party for a final decision.
Post Office considers that this will provide the requisite independence for determining the issue, but without adding to the workload of the Independent Advisory Panel and, therefore, risking slowing down its consideration of other substantive claims.
To date, no applications have been provisionally declined by Post Office, on the basis that the applicant hasn’t provided a sufficient reason.
In the light of the revised Q&A document, the Post Office expects there will be very few, if any, applications deemed to be ineligible on the grounds of absence of a reason for lateness alone.
Sir Wyn Williams: If that is the case – and obviously I accept what you tell me, Ms Gallafent – doesn’t this seem a great rigmarole to go through, going back and forth about reasons as to why they haven’t applied in time, when the reality is going to be that they’ll be accepted?
Ms Gallafent: Sir, I wouldn’t anticipate it as a great rigmarole; it may be a sentence added to the application form.
Sir Wyn Williams: The time is important in this case and I am anxious to avoid unnecessary bureaucracy. Anyway, there we are.
Ms Gallafent: Of course, sir. Your recommendation or, as it were, key conclusion was that there should be an independent person to review, if required. That we have accepted or put in place.
Sir Wyn Williams: But that was on the basis there might be a fight over it, Ms Gallafent. If there’s nothing to be a fight over it then –
Ms Gallafent: We anticipate it is unlikely, sir.
Sir Wyn Williams: All right.
Ms Gallafent: You may recall in our opening statement, at the beginning of Phase 2, we indicated that Post Office was considering whether there should be any variations to the current approach under the scheme to processing applications that were made by late applicants, and it was suggested that would be subject to ensuring any such variations but not result in any less fair a process.
Having considered the issue further, I can confirm that Post Office has no intention to introduce any variations in this respect. Late applications which are accepted as eligible will be processed in exactly the same way as those received prior to the November 2020 deadline.
Can I turn to the subject of legal advice and assistance? Again, in line with your recommendation, sir, as I explained in our opening statement, with effect from 10 October of this year, Post Office has been offering to pay the reasonable legal costs of the remaining applicants in the scheme, whose claims are of a higher value and more complex than those which were previously settled.
Since that date, Post Office has invited applicants, who consider they may require additional support, to discuss and ultimately, we hope, agree the position with them.
We hope that this ensures that applicants may obtain the assistance they require in confidence that Post Office will pay those reasonable legal costs.
But since 10 October of this year, there have been 29 requests received for legal fees. Post Office has endeavoured to work through those fee requests as quickly as it can, to avoid delay in processing applications and with a view to establishing a more standardised, and therefore quicker and easier, basis for cost claims going forward.
As of yesterday, agreement has been reached with Hudgell Solicitors on initial sample cases, as well as a general process for assessing the reasonableness of the costs. It is hoped that agreement can similarly be reached quickly on the applications received from other representatives.
The next key conclusion I propose to address is interim payments. I indicated in our opening submissions in October that Post Office would be keeping under review the issue of whether it should reconsider its policy on interim payments and it has now done so.
As recently announced on its website, to assist postmasters, including those who may be experiencing financial difficulties or suffering from health issues, Post Office will consider making an interim payment to an applicant of up to £30,000, in advance of its sending a final outcome letter, once it’s accepted the application, informed the applicant it met the eligibility criteria and identified the likely shortfall amount.
Post Office has particularly confirmed it will not ask for such payments back, whatever the ultimate outcome of the claim. Moreover, if an applicant has received an offer but needs more time to review or dispute it, Post Office will also consider making an interim payment of at least 50 per cent of the offer.
As well as updating the website to this effect, the ability to request an interim payment will be specifically drawn to the attention of any applicants who enter the scheme’s dispute resolution process and each application for such a payment will, in due course, be assessed on a case-by-case basis.
Post Office didn’t consider that a revision to the scheme’s terms of reference, as you’ve suggested, was necessary, either as a matter of jurisdiction or in order to publicise the availability of such payments. Of course, in making these submissions, we hope to make awareness of the potential for interim payments amongst applicants and potential applicants. In substance, however, we have accepted your recommendation in this respect.
Before turning to the key conclusions in relation to overturned historical convictions, can I just anticipate one point raised in the written submissions of Howe+Co, in relation to the unusual position of an individual who it seems may have been effectively running a Post Office branch, whilst not a postmaster or an employee of the branch.
The position of that individual is particularly complex, and Post Office will be reviewing her position further and reverting to Howe+Co as soon as it is able to do so.
Turning, then, to overturned historical convictions. I start with the payment of interim payments.
Of the 83 convictions that have been overturned on appeal, to date, applications for initial interim payments have been made in 82 cases; the solicitors representing the remaining case have indicated and confirmed they didn’t wish to apply for an interim payment.
Initial interim payments have been offered in 79 cases and accepted in 77, with two pending acceptance. Those two offers were only issued in the last week or so. The remaining four cases consist of the three public interest only cases, which I’ll come on to, and the one who has confirmed that an interim application will not be made.
Post Office has, in addition, made second additional interim payments in respect of three cases and offered a second interim payment in a further three cases.
As at yesterday, the combined value of those interim payments is, approximately, £7.975 million, so very little under £8 million.
You will also, sir, wish to note that, in the light of Lord Dyson’s findings in the early neutral evaluation process –
Sir Wyn Williams: Can I just stop you to say that the live stream is now working, so that you are on screen, as they say, Ms Gallafent.
Ms Gallafent: Excellent. Thank you for the warning. It could have gone horribly wrong if I hadn’t been tipped off, thank you.
So I was just dealing with the amount of interim payments made to date, just short of £11 million.
You’ll also wish to note that, in the light of Lord Dyson’s findings, in the early neutral evaluations process, Post Office decided to increase the value of future interim payments it may make up to £163,000.
20 claimants who have previously received an initial interim payment, but unable to submit a non-pecuniary claim, have been offered a further top-up payment of up to £63,000 from on or around 1 December of this year.
Of those, 17 have accepted the offer and payment has been processed for payment before the end of this year.
Again, the historical matters section of the Post Office’s website was updated on 11 November, to reflect the provision for interim payments at this level, and legal representatives have been informed. This should ensure that all claimants who are eligible for an interim payment have the opportunity to receive up to £163,000 by the end of this year.
Sir, in relation to your reservations concerning the three cases in applications for interim payments have been declined, which we’ve described as the “public interest only cases”, as we explained in our opening statement, it has been agreed with Hudgell Solicitors to go to independent mediation, in order to seek to resolve these disputes and we continue to work constructively with the solicitors in relation to this process.
In a related conclusion, sir, you indicated that Post Office should not be the final arbiter of applications for interim payments if the claim is rejected. In line with its approach in relation to the public interest only cases the, Post Office agrees that it should not be the final arbiter in such cases, although reiterates its view that it appears unlikely that the issue will rise again.
Sir, in your progress update, you identified two alternative routes by which claimants in the group litigation, who were acquitted, should be able to claim compensation, either by way of them being apply to Post Office in the same way as those with overturned historic convictions currently do, or by applying to the Group Litigation Scheme announced by the Secretary of State.
In circumstances where the Group Litigation Scheme is intended to deliver compensation for GLO members who were not convicted of criminal offences, which would obviously include those but not limited to those who were acquitted, Post Office has not taken any steps to include them in its own processes for providing compensation.
In this context, I wish to make it clear though, although Hudgell Solicitors suggested in their written submissions that applications by GLO claimants could already have been accepted by Post Office, we suspect this is a typographical error. The GLO ex gratia scheme will be delivered directly by BEIS, as yesterday’s announcement by BEIS confirmed, but the applications were never to be made to us.
Can I move –
Sir Wyn Williams: What you were anticipating on behalf of the Post Office is that non – those who were acquitted but who did not form part of the GLO can be dealt with under HSS –
Ms Gallafent: Yes.
Sir Wyn Williams: – and those who were acquitted, who were part of the GLO, will be dealt with in the GLO scheme –
Ms Gallafent: Exactly.
Sir Wyn Williams: – so that there is a route for everyone; is that what you’re telling me?
Ms Gallafent: Yes, exactly, sir.
Contingency planning, if I may move to that topic. In order to address your conclusion that there should be contingency planning as to how disputes about final compensation payments are to be resolved, in the event that negotiated settlements are not possible, I start by setting out progress to date. Together with claimants and their legal representatives, Post Office continues to make good progress in settling the claims of postmasters with overturned Horizon related convictions.
Again, as at yesterday, the position as is as follows: Post Office has reached full and final settlement covering both pecuniary and non-pecuniary losses with two claimants, both of whom had participated in the ENE, the early neutral evaluation process.
Starting then with non-pecuniary claims, which, as you know, was the subject matter of the ENE process, I start with the cohort of claimants who participated in that process. There were ten such claimants. Post Office has made non-pecuniary settlement offers to all ten of those ENE claimants. Of those, six of the ENE claimants have settled and been paid the non-pecuniary element of their claim.
One claimant has already received the value of the non-pecuniary element to their claim via two interim payments, and the other three claimants have accepted terms of settlement that payment cannot be made by Post Office until insolvency arrangements have been finalised.
Moving to claimants who were not participants in the ENE process, Post Office has received non-pecuniary claims from a further 43 claimants – again, I exclude the three public interest only claimants from that figure – all of whom have overturned Horizon related convictions. Of those 43, Post Office has made offers in respect of 33 of those claims, and the total value of those offers – and these, of course, figures exclude the ten ENE claimants – is approximately £4.23 million. Again, that excludes the value of the offers of interim payments already made in the same cases.
Of those 33, offers have been accepted in 26 of those claims.
Payments have already been made in 19 of those claims, within the agreed payment terms of 28 days from receipt of signed acceptance letters. I’d emphasise, in practice, Post Office endeavours to pay much quicker than this timescale, usually around ten days if possible.
Of the other seven, four are scheduled for payment today and payment for the other three, and those acceptances were only received on 5 or 6 December; payment will be made as soon as practicable.
Post Office has now made a total value of approximately £3.1 million, by way of final compensation, again excluding offers of interim payments made in those same cases.
The remaining ten claims, in which offers had not yet been made, were only received at the end of last month, they are under assessment by Post Office with the intention of issuing offers before Christmas.
Post Office expects to receive three further potential non-pecuniary claims by the end of this year; assuming that is the case, is on track to have made offers in those by the end of the year or, if claims arrive later than expected, early January of next year.
Together with UKGI and BEIS, it is working hard to see that this is accomplished and, again, we would like to take this opportunity to reiterate Post Office’s encouragement to all potential claimants to come forward with their claims as soon as possible.
As we explained in our opening statement, Post Office will of more help and support to any claimants with overturned convictions who do not currently have the benefit of legal representation, to ensure they’re aware of the opportunity to take their non-pecuniary claims forward on an expedited basis and are aware of what they need to do so.
In addition, I’d like to flag up one further development in relation to non-pecuniary damages. Post Office recently updated the historical matters section of its website to make it clear that it will seek to finalise compensation that is over and above the interim payments of up to £163,000, for personal or non-pecuniary damages at the earliest possible opportunity, whilst awaiting claims or finalising settlements in relation to pecuniary aspects of a claim. This to ensure that payment of compensation is not unnecessarily delayed.
Can I pause here to return to the issue of bankruptcy, which has been raised by several of the postmaster representatives. The difficulties that that issue gave rise to in the overturned historical convictions context, has been considered at a high level within Post Office, discussed with BEIS, discussed with His Majesty’s Treasury. It is hoped a position will be reached early in the New Year.
Those representing postmasters in these cases will know that Post Office’s position is that there is no justification for delaying the settlement of non-pecuniary losses in order to consider estates’ potential claims. We will obviously, sir, update the Inquiry, as soon as we have any developments in this respect.
Sir Wyn Williams: As far as you were aware, are there points of legal principle, in respect of persons who have been made bankrupt, who are either discharged or undischarged, which are standing in the way, so to speak, of progress, or is the law agreed and giving effect to it is proving difficult?
Ms Gallafent: Opinions differ, and there is one, as I understand it, estate which takes a different view to the views taken by others. So we hope to make some progress in respect of coming to an agreed position. So there is a legal dispute, not with Post Office – we’ve made our position clear – but there is a legal dispute.
Sir Wyn Williams: There is a legal dispute?
Ms Gallafent: Yes, there is. But, as I’ve indicated, we hope to make progress relatively rapidly in that respect.
Sir Wyn Williams: Well, I’m only musing aloud but I might take my own legal advice about this.
Ms Gallafent: I don’t think Post Office would seek to dissuade you from that, Sir Wyn.
Can I move to pecuniary claims. As I’ve noted, two of those have already been settled as part of those full and final settlement agreements. Post Office has received a further six claims with supporting schedules of loss, since my open anything statement, in relation to which Post Office is working with the solicitors concerned on evidential matters to enable opening offers to be made.
The claims for pecuniary losses that we’ve received to date are complex. They require significant legal expertise to assess. In order to maintain the momentum of the process in these circumstances, of providing offers to claimants in respect of pecuniary losses, Post Office will be looking to make partial settlement payments to claimants in respect of agreed heads of loss as it’s done previously.
More broadly, Post Office is in active discussions with claimant representatives about the best way to approach the calculation of compensation for pecuniary losses, with a view to arriving at a set of principles which is agreed by all concerned. These discussions have included consideration of incorporating oral hearings into the process.
It’s hoped that the principles and processes will be clarified in the New Year, and a basis for consideration of future claims for pecuniary loss is established.
In this context, we note the suggestion made by Howe+Co, that the development of a scheme has caused exceptional delay. Let me emphasise, as demonstrated by the progress made in respect of non-pecuniary claims submitted by Hudgell and Co (sic), following the ENE, representing 71 of the 83 persons whose Horizon convictions have been overturned, it’s clear, we submit, that the absence of a formal scheme has been no impediment to the bringing of, and settlement of, claims.
The alternatives are not, we say, as Howe+Co suggest: that the absence of a formal scheme means that postmasters would be required instead to take the risk of commencing formal legal proceedings. I would note that proceedings have not been commenced in any of the claims in which offers have been made to date.
At the risk of repetition, I would again emphasise that Post Office would encourage all potential claimants to present their claims as soon as they are able to do so, in relation to pecuniary loss.
While I have the opportunity, I would also like to reiterate publicly, Post Office’s encouragement to convicted postmasters to consider their options for appeal. We’ve already set out in our written submissions the lengths that Post Office has gone to, both independently and working together with CCRC, to ensure that all convicted postmasters are contacted and encouraged to consider the options for appeal.
Today, I’d just like to highlight a recent and important development in relation to support for such persons. In February of this year, the BEIS Select Committee recommended the formation of an independent body to support individuals with potentially relevant convictions, who may, understandably, be reluctant to engage with Post Office, due to the distress their historic convictions may have caused them.
Post Office has now agreed a package of support for such individuals through Citizens Advice. This service aims to provide preliminary information around the appeals process, the support which may be available through Legal Aid, information around benefits, and help to guide individuals to emotional support tools.
Sir, as you will be well aware, Citizens Advice is a well known and trusted brand with experience of supporting members of the public on challenging matters such as this.
This service went live on 17 November this year, with a dedicated microsite on the Citizens Advice web page. Post Office’s website also provides a link to the relevant page and it’s working with Citizens Advice to raise awareness of this service through social media channels and a banner on the Citizens Advice homepage.
In addition, a telephone helpline will be available, through which trained agents will be able to answer questions affected individuals may have.
Citizens Advice will track any calls received on the helpline outside of working hours. Individuals will be able to request a callback by completing a form on the website in addition.
Against this background, whilst we entirely agree with Howe+Co’s submission that something must be done to contact people whose convictions could be challenged, that process, including the Post Office working together with the CCRC, has already been underway for many months and will now be firmly supported by the role to be played by Citizens Advice.
In conclusion, having regard to the progress set out in our written submissions and I hope highlighted in my oral submissions today, against the key conclusions in your progress update, insofar as Post Office has responsibility for those matters, it is our respectful submission that such progress could not reasonably be characterised as too slow in all the circumstances, such as to justify delivering an interim report to the Minister containing specific recommendations.
Post Office does, of course, though, welcome any further views or guidance you may have and, of course, we stand ready to provide search updates on compensation issues as the Inquiry may find of assistance as the hearings progress.
Can I just make two further points. The first is –
Sir Wyn Williams: Before you do that, while it’s in my mind, going back to people who have been convicted but who haven’t yet engaged with trying to get their conviction overturned, am I right in thinking that the Criminal Cases Review Commission may not be the quickest and suggest route, especially for those who have never appealed before? In other words, if you were convicted in, shall we say, 2010, for the sake of argument, you didn’t appeal, presumably the quickest route now is simply to apply out of time for the leave to appeal to the Court of Appeal, without involving the Criminal Cases Review Commission, provided, of course, you can bring yourself within the terms of the Hamilton judgment.
Ms Gallafent: I’ll defer to Mr Moloney but I understand that to be the case.
Sir Wyn Williams: Is that right, Mr Moloney, or have I set a hare running?
Mr Moloney: No, sir, you’re absolutely right. It’s the involvement of the Criminal Cases Review Commission in alerting people to the possibility of appeal, whether by way of the CCRC, if they’ve had a previous appeal, or they were convicted in the Magistrates Court, which the CCRC are were dealing with. Otherwise then straight to the Court of Appeal is the quickest way.
Sir Wyn Williams: Right. Well, if I found difficulty in getting that squarely in my head, it may not be surprising that many other people find the same difficulty.
Mr Moloney: Including me, sir.
Ms Gallafent: The first was I was going to pick up – very helpfully my solicitor has indicated, you asked, sir, about the number of applications in which insolvency or bankruptcy issues have arisen. As of 6 December, there are 72 applications in the Historical Shortfall Scheme, in which either the Post Office understands the course of action rests in the insolvency bankruptcy or practitioner, or it’s currently unclear whether or not it does. Work is ongoing to establish where it sits. That includes the 19 applications in which offers have been made.
In addition, there are approximately ten of the 30 dissolved company applications which may be impacted by insolvency or bankruptcy issues. Again, the processing of those applications is ongoing.
Sir, I sense a keen interest on behalf of all postmasters and, sir, you as well we will certainly seek to update I think on perhaps a proactive basis without waiting to be invited, how things go in relation to insolvency and bankruptcy issues, in both the OHC and the HSS context.
Sir Wyn Williams: It’s just the feeling I’ve got that this seems to be quite a difficult problem –
Ms Gallafent: Yes.
Sir Wyn Williams: – and we want to solve it.
Ms Gallafent: We also share that.
Sir Wyn Williams: I was using “we” in every sense of the word “we”.
Ms Gallafent: Absolutely, I’m very grateful.
Sir, just one further matter, if I may, on the subject of restorative justice. Post Office notes the points made by Howe+Co on restorative justice in their written submissions. They rightly recognise this is not a compensation issue and, as such, we say it doesn’t properly fall within the scope of today’s hearing but, nevertheless, we’d wish to make two points in this context.
The first is that Post Office does not consider that its offer, which I made, sir, you may remember, in my oral opening submissions, for senior members of Post Office to meet directly with affected postmasters in order to listen to them and make suitable apologies, requires the establishment of a formal scheme or process, necessitating the involvement of solicitors on either side.
It’s approach to arranging meetings will be flexible and sympathetic to those affected and supported by the existing dispute resolution team, who already support applicants to the HSS, many of whom are former postmasters themselves.
The second point is that Post Office’s offer reflected exactly what was requested on behalf of the Core Participants represented by Howe+Co in their opening oral submissions. What we understand now to be proposed in their written submissions is that, in the absence of Post Office and BEIS agreeing to establish what they would describe as a restorative justice fund, you, sure, should make a formal recommendation of the establishment of such a process and funding.
Sir, of course, that goes well beyond the previous indication of what was sought in this context, and I venture to say it’s equally a matter that would appear to go beyond the scope of the terms of reference of this Inquiry.
Can I just look to my left and right to confirm if there’s anything further that I need to –
Thank you very much indeed, sir, for that opportunity. I may have strayed a few minutes past my time but I’m very grateful.
Sir Wyn Williams: I think you are well within a margin of appreciation, to use a phrase we’re no longer allowed to use.
Ms Gallafent: Thank you, sir. Thank you.
Sir Wyn Williams: Yes, Mr Chapman?
Submissions by Mr Chapman
Mr Chapman: I’m hoping the microphone is picking me up from me here, I’m getting some feedback. Can you hear me okay?
Sir Wyn Williams: Can everyone hear, Mr Chapman?
Mr Chapman: Hopefully that’s better. Thank you, sir.
I make these submissions on behalf of the Department for Business, Energy and Industrial –
The Department wishes to begin by reiterating its commitment to ensuring subpostmasters receive full and fair compensation as quickly as possible, and this remains a key ministerial priority. As the Department said it would at the July hearings, it has listened to the concerns about compensation arrangements, engaged with them, and taken action where necessary.
Whilst there will always be room for improvement and much work remains to be done, the Department believes that the general trajectory is now broadly positive but, as always, it would welcome your views. I’ll address each of the three compensation schemes in turn, starting with the Post Office administered schemes, the Historical Shortfall Scheme and the Overturned Historical Conviction scheme before turning to the BEIS scheme, the Group Litigation Scheme.
Up first, the Historical Shortfall Scheme. Like the Overturned Historical Convictions compensation and unlike the Group Litigation Scheme, the HSS is a scheme designed, established and administered by POL but the Department has some levers of influence, and it has not shied away from using them where necessary. As you know, the Department has encouraged POL to speed up the HSS process, and set POL the target of issuing offers to all HSS claimants by the end of this year.
As you noted in your progress update, that was an ambitious target, intentionally so, and with some regret, the Department recognises that POL will not meet it.
Even so, POL has been making relatively good progress and the Department’s clear expectation is that offers will have been made in most of the remaining cases by the end of January.
Once a formal proposal concerning late applications was made by POL, the Department worked diligently to arrange and confirm the substantial additional public funding required. It welcomes POL’s confirmation that applications following the scheme’s closure will be accepted, provided that a sufficient reason for the failure to make the application within the window is given, and it also welcomes the confirmation of the role of an independent review in case of disagreement.
Sir Wyn Williams: Mr Chapman, I’m a bit it confused now, because I think Ms Gallafent was more or less agreeing with me that they were going to be accepted. You put it in a much more guarded way and I’d hate there to be any divergence between BEIS and POL over this.
Mr Chapman: I don’t think that there’s any divergence at all.
Sir Wyn Williams: So I shall carefully note what Ms Gallafent said and proceed on that basis, shall I?
Mr Chapman: I think that’s fair.
Sir Wyn Williams: Good.
Mr Chapman: The Department is very pleased to note that the previous cap on reasonable legal expenses has been removed, with POL reimbursing all reasonable legal costs, both at the offer stage and for claimants going into the dispute resolution process.
Finally, on the HSS, the Department welcomes the development that POL has made provision for interim payments, irrespective of personal circumstances and in addition to hardship payments.
Turning to the Overturned Historical Convictions compensation, the Department is reasonably pleased at the progress being made, as just described by Ms Gallafent, though clearly there remains some way to go. It welcomes the positive progress being made on the non-pecuniary damages claims and it welcomes the increase to the ceiling for interim payments, including the top-ups for those who received interim payments previously.
Can I just add this: the Department is very conscious of the practical hurdles facing subpostmasters in making pecuniary damages claims and, in order to help facilitate the process, the Department has worked with HMRC to enable easier access to historic tax return data, so that claimants can particularise their claims with confidence. The Department encourages postmasters and their representatives to bring forward their claims as soon as they are able to.
Turning to the Group Litigation Scheme, unlike the other two schemes, the Group Litigation Scheme is being set up by BEIS and, as one would hope, reasonably good progress is being made. As you know, the Chief Secretary made a statement in Parliament yesterday to announce the shape of the scheme, following, as promised, consultation with the GLO claimants and their representatives.
In line with the views of the substantial majority of those who responded, the scheme will follow an ADR model, and will be administered directly by BEIS, not POL.
The scheme will be overseen by an independent advisory board, which will be chaired by Professor Christopher Hodges, an academic who is an expert in ADR matters, and its membership will include Lord Arbuthnot and the Right Honourable Kevan Jones MP, both of whom have long and distinguished records as campaigners for the postmasters.
The claims themselves will be considered and assessed by an independent panel. The expectation is that the full compensation awards will begin before the summer, with most cases being resolved by the end of next year. The Department has now invited claimants and their legal representatives to begin preparation of claims and has announced support for claimants’ initial legal costs: the costs of first engagement with lawyers.
Sir Wyn Williams: That hasn’t been met with universal approval that, has it?
Mr Chapman: It hasn’t. The amount is specifically for initial engagement with lawyers and arrangements of payments of reasonable legal costs, beyond initial engagement and the costs, indeed, of acquiring expert evidence, where necessary, are being finalised.
Sir Wyn Williams: I appreciate that there will be a need to work out rates of pay, putting it loosely, but the phrase that had been used consistently was “reasonable legal expenses”, in previous announcements.
Mr Chapman: Can I be clear, sir, that it remains the Department’s position that postmasters engaging in this scheme will be entitled to recover reasonable legal expenses.
In the meantime, the Department has made interim payments totalling over £16 million so far, and covering 85 or over 85 per cent of claimants.
It, of course, understands that interim payments are really important, and especially so for some GLO claimants. It continues its concerted work to resolve issues concerning interim payments where they haven’t already been made. In relation to the 16 bankrupt GLO claimants, who have not yet received an interim payment, you’ve heard about the issues with one insolvency practitioner in particular, which the Department is seeking to resolve as soon as possible.
We would encourage you, sir, to follow up on your suggestion that you might take your own legal advice on that issue, and we would be very happy to set out in a little more particular detail what precisely that issue is, in writing, if that would be helpful.
Sir Wyn Williams: Well, I think if I do decide that it’s appropriate for me to take legal advice, I would probably ask my legal team to engage with all the relevant lawyers as to the appropriate questions to ask.
Mr Chapman: Yes, we’d certainly be happy to engage in that process.
It may prove to be the case – it is hoped that it’ll prove to be the case – that it’s possible to resolve that issue, and to resolve it shortly.
If it’s not –
Sir Wyn Williams: The quicker you do it, the less likely or the less need for me to engage in it.
Mr Chapman: Well, it is and, of course, we’ll keep you informed.
Sir Wyn Williams: Yes.
Mr Chapman: If it isn’t looking likely to resolve it very quickly, then the Department will make partial interim payments, which will not cause the potential problems which full payments, full interim payments might cause within the next week.
Finally, most GLO members who were acquitted of Horizon offences have already received more in compensation than the £100,000 interim payments which have been made to those who were convicted. However, the Department has recognised the force of the concern that you raised in relation to the handful of GLO members who are not in that position. They will receive additional interim payments under the GLO scheme, rather than being transferred to the POL-administered OHC scheme.
Sir Wyn Williams: Yes, and my concern there was over the substance not the form.
Mr Chapman: Yeah. I hope that addresses it.
Sir Wyn Williams: Yes.
Mr Chapman: Can I briefly turn to a couple of other related matters.
First, the Department is very pleased to note that POL is committed to setting up a compensation scheme to cover lost remuneration caused by suspension and, indeed, any consequential losses. The Government has committed to providing the funding to the Post Office to cover those payments and the Department will oversee the process to ensure it’s delivered promptly.
The second point: the Government has committed to legislating, at the earliest opportunity, to exclude all Post Office and Horizon related compensation payments from the calculation of capital limits for means-tested benefits and pension credits.
That is in addition to the announcement made in September that no tax will be payable on compensation payments made under the OHC scheme.
So to conclude, the Department believes that compensation issues are now generally progressing fairly well, but it would of course welcome your views on any areas for improvement.
Sir Wyn Williams: Thank you.
Right, I think we’ll take a ten-minute break not least to allow the transcriber to have a break, and then we will continue with Mr Moloney.
(11.58 am)
(A short break)
(12.13 pm)
Submissions by Mr Moloney
Sir Wyn Williams: Yes, Mr Moloney?
Mr Moloney: Thank you, sir, these submissions are on behalf of Hudgell Solicitors and Hudgell Solicitors represent 72 claimants under the Historic Shortfall Scheme, 71 persons whose convictions have been overturned and six persons in the group litigation scheme.
Our submissions identify and address some of the specific practical issues arising in connection with the different types of compensation claims and we address them in the following order, sir: compensation under the Historic Shortfall Scheme; compensation for subpostmasters with overturned historic convictions; and compensation for Group Litigation claimants. I’ll take those in order, sir.
Firstly, the HSS. We’ve sought to deal with our submissions by reference to your progress update, sir, and your – this is dealt with at paragraph 133 to 152 of your update and we deal with just a few issues.
Firstly, what were referred to in the progress update, sir, as “independence issues”. We raised a concern in July that heads of damage would were being missed by those operating the HSS, and raised questions as to how that might happen. We’re very conscious that the Inquiry intends to review the operation of the HSS in stage 5, but what we say is, by way of update, sir, just to keep you abreast of the continuing experience of Hudgell Solicitors, as matters proceed.
Of course, the only data we have is from the Hudgell Solicitors’ cohort as well, so we can’t say this is in any way representative and, of course, we’ve listened to what Ms Gallafent said this morning on behalf of Post Office Limited.
But only three HSS applications where Hudgell Solicitors are instructed have reached the good faith meeting stage, and a decision then taken by the panel on whether or not to make a revised offer and, in each case, sir, the experience of Hudgell Solicitors has been that an improved offer has been made and, in each case, there is evidence that the amount paid to claimants can be significantly affected by the failure to identify appropriate heads of claim.
We have set out the details of those three cases in appendix A to our submissions, sir. I don’t propose to take you to them because you have the details within the body of the submissions, in any event. But Case 1 – and these are of course anonymised, for obvious reasons – Case 1 initially received a net offer of £46,799.52 in December 2021. Hudgell Solicitors served evidence in relation to their case on 7 March 2022, and then some eight months later, on 10 November this year, sir, she received a revised net offer of £140,126.37.
That, sir, is close to £100,000 and that difference, that significant difference, was accounted for by compensation for loss of earnings following resignation, which we say, sir, should have been a very obvious head of loss to have appreciated.
Sir Wyn Williams: So that I understand your criticism, am I right in thinking that, when the lady presented her claim on her own, she hadn’t identified a loss of earnings, but you would say there obviously must have been one, which the panel should have investigated; is that the point?
Mr Moloney: Should have asked the question basically, sir. The must have been, is what we’d say about that. Then Case 2, an offer of £3,752.26 in January 2022. That was simply a shortfall of £2,000 and associated interest.
A good faith meeting took place in July 2022 and the revised offer was received on 17 November and that revised offer was greatly increased to £63,331.89, and that included compensation for losses arising from resignation and distress and inconvenience that had not been considered by the original panel.
Then in Case 3, the applicant received a net offer of £21,691.23 in March 2022, a good faith meeting in June 2022, and a revised offer of £34,862.61, on 17 November, same day as Case 2 and just a week after Case 1 and, again, two heads of damage which were not present in the original claim were identified and proceeded with and an increased offer made.
Those are the only three examples we have, sir, of cases dealt with by Hudgell Solicitors, which have preceded to a good faith meeting which, of course, is the next stage along from the offer, and then resulted in a decision on an offer, not simply a revised offer, but a decision on an offer following that good faith meeting. There have been no other decisions on offers, and so each time there’s been an upward revision of the offer when an offer has been made.
The identification of those heads of damage has led to significantly increased offers, which, of course, sir, has – it affects the wellbeing of the claimants who have suffered some time ago, and that’s the importance of it, sir, getting their lives back on track.
The second aspect we’d like to refer to, insofar as the HSS is concerned, is delays, sir. Now, one of the concerns of the Inquiry in the progress update was that no decision had been made on whether to accept late applications into the HSS, and we’ve had an update from Ms Gallafent this morning as to what’s happening now, so far as those late applications are concerned, sir.
But the position now, sir, is that late applications have only been provisionally accepted into the HSS. So you reported, sir, earlier this year, we’re some months down the line, they’ve been provisionally accepted into the HSS, reasons for the lateness of the applications have been requested, those reasons have been supplied very quickly but, thus far, there’s been no confirmation that any application has been fully accepted into the scheme and no first offers have yet been made in any of the cases.
So we’re encouraged by what was said this morning, but it has to be seen, sir, and, of course, we hope this isn’t a cheap point but, of course, if these cases had been accepted into the scheme, then we might be some distance away from 95 per cent, rather than just four offers way from 95 per cent of all the applications.
Additionally, sir, there have been significant delays in the operation of the HSS beyond the stage of first offers. The experience of Hudgell Solicitors is that a good faith meeting is usually only possible some two months after the request for such a meeting. The suggestion is that some delay may be occasioned by the need to secure medical expertise to the GFM, to the good faith meeting. Again, we’re on a very limited sample, sir, but the experience of Hudgell Solicitors is that, in the number of GFMs that they have conducted, there’s been – there have been no medical experts present at those good faith meetings.
You can see, sir, from the three cases we identified in appendix A, as it were, the timetable for the, first of all, setting of the GFM and then the making of the revised offer – and you can see, sir, from those three cases that it was between four and seven months until the revised offer is made after a GFM.
Hudgells have conducted GFMs in 11 cases so far – these figures may now be out of date because there have been a couple more over the past few days – and they’re awaiting decisions as to revised offers in nine cases, a further 16 GFMs are scheduled to take place from January onwards and ten claimants have requested a date for a meeting but are still awaiting one. So there is some significant pendency so far as these cases are concerned.
Only one Hudgell case has reached the stage where a mediation is to take place. That mediation was requested on 21 September 2022, and the reply with the proposed date was not received until 24 October 2022 and the mediation is now scheduled to take place in January 2023. So that again, sir, gives some indication of the delays which are part of this system at the moment.
Plainly, sir, the concern expressed by you at paragraph 135 of the progress update, that the fulfilment of the targets that Post Office and BEIS had set themselves for making HSS offers should not be achieved they expense of a proper and thorough appraisal of individual applications before an offer of compensation is made, is one that the Inquiry can return to at stage 5 but we simply update the Inquiry today as to the experience of Hudgell Solicitors, and say, as well, sir, that we don’t know the reasons for the delays.
As the Inquiry is aware, one major area of concern was the significant delays in the making of offers for compensation in claimants in the HSS scheme who have been declared bankrupt. Offers in those cases have now begun to be made but, regrettably and as predicted, most of the damages, under the terms of such settlements, are being paid for the benefit of the Official Receiver.
The Official Receiver is receiving first call on any compensation relating to financial losses and we have attached two examples to our submissions, as Appendix B, sir, of letters from the HSS to applicants explaining what will happen to the award that is made by the HSS to them. Case 4 we’ve referred to – the first case we’ve referred to is Case 4.
The HSS panel decided on an award of £259,359, and the applicant has now been offered £8,000 of that award and the Official Receiver is to receive 251,000 of the offer. That applicant, sir, had run a successful business as a subpostmaster for 20 years, his business was ruined and he suffered with poor mental health after the shortfalls he experienced, and the £8,000 is intended to compensate him for his distress, the rest is for the Official Receiver because of property related matters. That’s the division that’s being made, so far as damages are concerned: personal damages, as it were, for the claimant; property damages for the Official Receiver.
Then the second case, Case 5, we’ve referred to it as, out of an award of £24,999.32, the applicant has been offered £4,500 whilst the Official Receiver is to receive £20,400.32. The Official Receiver has no authority, other than to settle the debts of the bankruptcy in full, and with the compensatory interest applying, the likelihood is that any award for financial losses will very often be completely swallowed up when those debts are paid, and the issues surrounding bankruptcy are often complex and frequently require specialist legal assistance.
As currently appears to Hudgell Solicitors, the HSS takes no account of whether the root cause of bankruptcy was or may have been shortfalls generated by Horizon software and compensation is intended to put the claimant in the position they would have been in, if they’d not been adversely affected by the unreliable of Horizon.
So, sorry, sir –
Sir Wyn Williams: I was just, as you were speaking, so I’ll ask you now – and if it’s embarrassing in any way to answer, then please say so – but are these figures that you’ve mentioned, in terms of the offer under the HSS, would they have been acceptable as figures, if I can put it in that way? Forget the split between the Official Receiver –
Mr Moloney: I’ve not had conduct of the cases, sir, but –
Sir Wyn Williams: No, but what I’m trying to establish, essentially, is whether these figures – if you remove the trustee for the moment – would have been acceptable. That’s point number 1. If they’re not, then there’s an ongoing issue under the HSS. If they would have been acceptable, I imagine there’s now an ongoing dispute as to whether all this money should be paid over to the Official Receiver. So there are two aspects to it. That’s what I’m trying to get at.
Mr Moloney: Indeed, sir, and Dr Hudgell will correct me when I inevitably get this wrong but, essentially, those offers would not have been accepted but they are merely illustrative of the division of the award, as it were, and –
Sir Wyn Williams: So it’s designed to persuade me, if I needed persuasion, that there could be a very significant amount of money at stake for the individual involved on this bankruptcy issue?
Mr Moloney: That’s it, sir.
Sir Wyn Williams: Right, okay.
Mr Moloney: Also, sir, just to elaborate upon that point very briefly if I may, that, of course, the purpose – and underlying that submission, is, of course, that the purpose of compensation is to attempt to put the person back in the position that they would have been but for the unreliable operation of Horizon software. So many of the debts which were accrued by this person, in the first place, which led to bankruptcy, were caused by the shortfalls before that and then the way their business then collapsed and then, of course, people have mortgage payments.
It’s that litany, sir, that you’ve heard so many times during the course of the impact hearings. With this outcome, what happens is that all of the debts that they accrued, all of the debts that led to the bankruptcy, whilst essentially there’s a compensation award given to them, that gets swallowed up by the debtors, rather than them, so they’re not being put back into the position that they would have been but for the unreliable operation of the Horizon software.
They’re being left with, in Case 4, £8,000, when, even on the assessment of the HSS, they should have got £259,000.
Sir, we did make a point about the agreement of reasonable costs but there’s been progress in relation to that, and we say nothing further about that.
Then, finally, we’ve made a point about the provision of medical assistance, assistance for the commission of medical reports, and about how that has not really been available in the experience of Hudgell Solicitors, and Hudgell Solicitors understand there is a need to deal with claims expeditiously. The commissioning of a medical report may delay the making of a first offer but it’s also important that applicants are properly compensated for any personal injury they’ve suffered, and a broad-brush approach to this issue, is a serious injustice again for applicants.
If we could just move very quickly, sir, to the application process which you dealt with at paragraphs 142 to 145 of the progress update, and just really highlight, just for your continuing consideration, sir, the problems that have been experienced by claimants in the HSS.
The burden of proof is a difficulty for many claimants, and there have been deductions made from the award with – in the experience of Hudgell Solicitors – what they see as no apparent basis and other than the principles of fairness.
One of the reasons for the frustration as to the reductions for the absence of documentation is just what they were encouraged by Post Office Limited to do at the time at which these shortfalls were occurring. We’ve referred you, sir, to a document that we’ve received during the course of the disclosure, and page 77 of that. We don’t ask for it to be brought up but if I just, if I may, read what it says at page 77 of that document the reference you have:
“Making good losses. If you have not obtained authority to hold the loss within the suspense account, you will make good the discrepancy after the final stock unit has rolled to the CAP and then make good the loss involved, this involves placing the cash for the amount of the loss in your till.”
So, sir, that’s a process, a procedure, which would not provide a ready audit trail for demonstrating the making-up of shortfalls.
Equally, sir, so far as the application process is concerned, in terms of calculating loss of earnings’ claims and consequential loss rising, Post Office uses the Network Transformation scheme leavers payment, sir, and that is a redundancy package based calculation of up to 27 months pre-cessation salary and takes into account that Post Office could have terminated the applicant’s contract with just three months’ notice. So within the terms of the contract was the option for the Post Office to terminate the contract with three months’ notice. That’s taken into account.
Going back to Case 4 that we referred to, sir, the man who had run a successful business for 20 years, ended up being made bankrupt, there would have been no reason for him to have been given three months’ notice and we say that’s an arbitrary consideration in the circumstances that that can form part of the assessment of the requisite compensation in an HSS application. We say that’s not always appropriate, and can lead to a significant underpayment (unclear) true loss.
Moving on, sir, if I may, to compensation for subpostmasters with overturned historic convictions.
We say that the early neutral evaluation conducted by Lord Dyson proved effective in providing the parameters for settlement of non-pecuniary loss claims and, as Ms Gallafent has outlined this morning, they have been progressing well since Lord Dyson provided his report.
We are happy to say that – as Ms Gallafent has reported – the dialogue between Hudgells and Post Office solicitors has resulted in the payment of an extra £63,000, and that will come before the holiday period, we understand, and that’s a very happy situation for the people who have been able to set up their non-pecuniary claims.
The position in respect of respect for claims for pecuniary losses is less happy but it’s not disastrous, sir. In our submissions, we identify delays that are occurring but there is progress and we’re confident that that progress will continue.
As you’ve heard, sir, two claims have been settled and paid in full, but they remain the only claims for pecuniary losses to have been settled.
As far as four other cases are concerned, final settlement proposals have been awaited for months and, in appendix E – and there is no need to take you to appendix E, we’ve again included the details within our written submissions – they were submitted, previously submitted in June this year and one in August. There were requests by Post Office for further information, they were all dealt with expeditiously and there have been significant delays, we say, by Post Office at each stage, and still no substantive response to any of the claims.
We hope that there will be a response to the claims very soon and the reason for the delay in Post Office making proposals for settlement is not known to Hudgell Solicitors.
We had hoped and expected that the initial six claims would provide an adequate and appropriate framework for the process of the remaining claims, in essence, a sort of parallel to the early neutral evaluation process. But the delay of months has meant that that expectation hasn’t materialised but there is will on both sides for that to happen with these cases and we hope that we will be able to resolve that very soon.
In addition to difficulties encountered by some bankrupt claimants under the HSS scheme that we’ve referred to, problems have also recently arisen in the Overturned Historical Conviction cases in which bankruptcy is a feature.
It’s fine with those cases which fall under the auspices of the Official Receiver; we’ve managed to resolve that, with the Official Receiver indicating that they’ve no further interest. But, as you’ve heard from Mr Chapman, there are three other cases where they are being dealt with by a different insolvency practitioner.
Two of those people are Noel Thomas and David Blakey, and the insolvency practitioner initially relinquished any interest but then, following advice from King’s Counsel, they’ve now claimed an interest in part of the damages, and this has held up payment of damages for non-pecuniary losses.
So this is separate to the situation that Mr Chapman has just indicated, because that refers to the Historic Shortfall Scheme. This the Overturned Historical Convictions cases. It’s not a scheme, they are cases –
Sir Wyn Williams: Well, it’s a different scheme, but would the principles governing it be the same or not?
Mr Moloney: No, they’re not, sir. But we’ve seen – we’re addressing it, and we’ve had no assistance from Post Office until very recently, but they are slightly different, sir, and it may be that I might be revealing confidential details if I were to say now, but we would be happy to assist in any way we can, sir.
But it is the same principle in this way, sir, that this compensation is designed to put people in the place they would have been if they hadn’t suffered and, in particular, in these cases, they hadn’t been prosecuted and convicted.
So that’s what this compensation should try and achieve and, plainly, if a large portion of the damages is being taken from them, in the same way that it is with the HSS, then that is obviously significant injustice, we’d say, and that, essentially, Post Office – if the bankruptcies were caused by the actions in the first place, it’s incumbent on them to do all it can to ensure that these people are put in the position they would have been in but for the unreliability of the Horizon software.
Sir Wyn Williams: I’m not sure to what extent I can, in truth, delve into these matters, but since I’m having a bit of a go this morning, it seems to me there’s almost two different issues. One is your assertion based on what BEIS and Post Office have said, that there should be full and fair compensation. Which is another way of saying you should be put back into the position if this had never happened to you.
On the other hand, there’s the legal position of a person who has been made bankrupt to his trustee in bankruptcy, or her trustee in bankruptcy. It’s that latter point, I think, that BEIS and POL were inviting me to dip my oar in, so to speak, not the former point, if I can put it in that way. What do you think about those issues, Mr Moloney?
Mr Moloney: Sir, one solution, which might not be attractive to BEIS and POL, is that the actual level of compensation paid is increased so that the debtors that are required to be satisfied by the Official Receiver or the insolvency practitioners can be paid, and the postmasters can be put in the position that they would have been in, but for the unreliability. That seems to us to be the most straightforward way: that both are taken care of.
Sir Wyn Williams: The trouble is I’m not sitting over the road; I’m sitting in a completely different capacity.
Mr Moloney: Indeed, sir. But that seems to us the way through. It’s more expensive, but it may be that there are a limited number of cases of this nature which might mean that it didn’t become too onerous for POL and BEIS.
Sir Wyn Williams: All right. Well, I think I’m getting a feel for where the various roads might lead.
Mr Moloney: Thank you, sir.
Then finally and very briefly, sir, compensation for the Group Litigation claimants.
Hudgell Solicitors don’t represent many of the claimants in this scheme, and so we’ve very limited observations to make.
Sir Wyn Williams: Yes.
Mr Moloney: But they’ve taken part in two round-table meetings with Post Office and other interested solicitors, and they are pleased to see the announcement yesterday. But as with other subpostmasters, although they’re not subpostmasters’ lawyers, but they’re not as invested in this as others, then they have concerns about the funding of this particular scheme.
The biggest threat to the success of the scheme at the outset is the size of the panel and the resources available to process applications, but Hudgell Solicitors are pleased to see that a panel of independent people has been appointed to oversee its work.
So to conclude, sir, although the ENE process has facilitated significant progress in the Overturned Historical Convictions non-pecuniary loss claims, there has been some delay with the pecuniary loss compensation, and the position of bankrupt claimants is also of specific continuing concern, which has not been properly addressed by Post Office or BEIS, although they have begun to address it in the week leading up to this compensation hearing, sir.
So we respectfully ask that the Inquiry continue to review the cases and review the issues relating to compensation as proceedings continue through 2023. Whilst there have been difficulties, Hudgell Solicitors see no reason why most, if not all, current claims for compensation by their clients realistically cannot be resolved in the course of 2023, and the Inquiry’s continued attention to the issues around compensation can only help to ensure that the desired closure is achieved. Thank you, sir.
Sir Wyn Williams: Thank you, Mr Moloney.
Mr Henry, I’ll give you a choice. You can have a quarter of an hour now, and we break at 1.00, or we can break for lunch now and you can have your continuous period of 40 minutes.
Mr Henry: May I ask you, sir, if we break for lunch now.
Sir Wyn Williams: By all means. So we’ll start again at 1.45.
(12.44 pm)
(The Short Adjournment)
(1.45 pm)
Sir Wyn Williams: We’re down to two this afternoon, as you can see. Our colleague is unavoidably having to go somewhere else.
Yes, Mr Henry?
Submissions by Mr Henry
Mr Henry: Thank you, sir.
There are two issues. The first is the continuing and inexcusable delay in delivering compensation to the wronged, to the innocent, and that will also include whether the awards proffered are even remotely approaching acceptability.
The second, which is inextricably entwined with the first, is whether POL will accept that it deliberately denied, obstructed and delayed appellate rights, needlessly, unjustly and wrongly prolonging the suffering of those that it had devastated, either by civil judgments and bankruptcy, or criminal convictions.
Wholly unjustified, iniquitous prolonging of suffering which, without exaggeration, you might even compare to torture, because these are people who were destroyed by the legal system, as Professor Moorhead in his evidence before you expressed, as long ago as February, his concern that this tragedy, these appalling injustices, had been facilitated and perpetrated by legal services, and to deny people their Article 6 rights, both as to contesting the charges against them – and that is beyond question – but then to suppress and bury the very exculpatory material, the very information that would allow them to go before a court and say, “I was wrongly convicted, this judgment against me ought to be set aside”, is a degree of wrongdoing of such magnitude that it is without precedent.
And BEIS is also, as we have submitted, responsible.
We come to the buzzword, the slogan: full and fair compensation. Well, of course, sir, as you well know, no amount of money can right the wrong, undo the harm and heal the wounds caused by these terrible events. “Terrible” is indeed a strong word but it almost becomes an understatement, sir, if one adds to the appalling injustice of wrongful conviction or wrongful civil judgment, a deliberate and malignant desire or policy to suppress the truth, so that even the senior courts are deceived, so that these appellate rights, which are sacred in our system of justice were effectively destroyed for years.
Now, an integrity test can easily be determined by POL’s approach to these two questions: first, did the Post Office deliberately interfere with or obstruct convicted defendants rights of appeal? Second, if so, was its purpose in doing so improper?
Sir, I invite you now to ask Ms Gallafent those questions because, although she has submitted this morning that she does not wish to address them until Phase 5 of this Inquiry, these awards are going on now and there should not be any further delay, such as the delay, for example, in argument that was expressed in Hamilton that “Oh no, you don’t need to deal with ground 2 abuse, let ground 2 abuse be resolved in the malicious prosecution hearings, the malicious prosecution claims”, and the court robustly, albeit belatedly, but robustly rejected that approach.
So if I may, sir, with your permission, I shall sit down and give way to Ms Gallafent to answer those two questions which arise from the argument that has been posed because it is important that they are resolved as soon as possible, and that there should be no more pettyfogging or equivocation on the matter, because this goes to the actual gravamen of what is under consideration here: the wholesale contamination of civil and criminal justice by a private prosecutor who had a trusted reputation, was a public corporation, and historically an arm of the executive.
Such inequality of power, such a disparity in status between the unfortunate agent and the oppressive master, allowed this to happen, before 37 Crown Courts around the country, 37 Crown Courts, involving over 700 people, over a 20-year period, and that is why, sir, it ought to be resolved right now, right now, without any more delay, dilatoriness or prevarication.
So, sir, I ask you to invite my learned friend to answer those questions: deliberate interference for a wrongful purpose.
Sir Wyn Williams: Well, I’m not going to make any kind of direction, Mr Henry, as I’m sure you appreciate. Whether or not Ms Gallafent wants to say anything is a matter entirely for her at this stage.
Ms Gallafent: Thank you, sir. No.
Mr Henry: Well, that may be a matter of profound regret, not of course for my learned friend who acts on instructions, but it may be a matter of profound regret, and we shall see – by their fruits you shall know them, sir. We shall see whether this is performative breast beating or an actual realisation of the enormity that has been done.
Before addressing, in particular, the pernicious effect of delay, I want to come, if I may, to a central premise of the argument as to why we submit that deliberate denial of appellate rights for a malicious and malignant purpose is a live issue here.
As the CCRC noted, the Post Office’s attitude towards disclosure tends to prove that the intransigence identified by the honourable Mr Justice Fraser in the Post Office’s conduct of the Horizon Litigation beset the manner in which they conducted criminal prosecutions.
It was as a consequence of an ineffectual GT (Grant Thornton) report commissioned by the CCRC, which relied on the transaction logs, that the CCRC then decided that that report was of little utility and they would have to await the decision of Mr Justice Fraser in Horizon number 6.
The transaction logs themselves, sir, would not reveal the bugs, errors and defects which would have been apparent from the ARQ data, and of course, they were not aware of the PEAKs. So, therefore, at paragraph 47 of their statement of reasons, they decided that they would have to await the Horizon litigation, which they then described as revealing a fundamental shift in understanding.
Now, that is why, sir, we went into exhaustive detail in our document on compensation, on the extraordinary, almost unbelievable conduct of that litigation, both the common issues and also the Horizon litigation. Because, sir, it appears to be, again, inextricably linked to the issue of openness, transparency and candour. Those criminal appeals in Hamilton and others were literally hanging by a thread on the resolution of Horizon number 6.
But I now want to turn to the pernicious effect of delay in relation to a convicted individual, leaving aside for this moment, of course, that two of those with Ms Page and Mr Schwarz, we are proud to represent, Ms Arch and Mr Castleton, were never convicted – never convicted. But let’s deal with a conviction.
First of all, which would be common to Ms Arch as well, the unjust shunning and suspicion after they had been dismissed and the rumours circulate, the gossip, about “They’ve robbed our pensions, they’ve robbed our granny’s pension”; the wrongful dismissal, the use, again, of the law to dismiss them.
The criminal conviction that followed wholesale breaches and utter dereliction of the Criminal Procedure and Investigations Act, the duty of disclosure, the Code for Crown Prosecutors, the Attorney General’s guidelines on disclosure, where the private prosecutor who should act still as administer of justice, particularly when they are a public corporation acted as an unscrupulous, ruthless and remorseless party.
Incarceration. Then the unjust judgments that follow. I now actually involve those who were not convicted, unjust civil judgments, bankruptcy, unjust property seizure. Damages, confiscation, compensation to POL. All based on entirely fictitious, utterly baseless computer-generated losses.
The ruined health, both mental and physical. The intractable stress-related illness, autoimmune disorders, PTSD. The impaired and shattered earning capacity. The fact that you don’t get a job because, of course, under the CRB and then the DBS, these matters are disclosable.
You are effectively a convicted person, even though you are completely innocent. The pensions contributions that have never been made; the National Insurance contributions that have not been made, and then the loss of perhaps capital, undoubtedly, both sunk into businesses and also in property, replaced by poor housing, caused by one’s reputational damage, consequent as well upon one’s loss of liberty.
Now, I’ve dealt with those in the abstract, the generic. I now want to transpose them on to a living human being who is here today, Janet Skinner, who was, from the time she started at the Post Office really the darling or the pet of the Post Office, back in the early 1990s, and did phenomenally well, and was respected and liked and admired by all of her colleagues, and then had it all taken away.
Of course, you know that she was charged with theft and false accounting. She was advised that, on the strength of the “evidence”, in inverted commas, she should plead guilty to false accounting and did so, in the hope that she would not be sent to prison but, of course, she was.
As she walked beside me today she nearly stumbled, and she limps and I asked her why. She has nerve damage from cervical vertebrae four downwards, she has neuropathy from an autoimmune disease that struck her down in 2008, after she’d been released from prison. Is it just a coincidence? Is it too remote? Is there going to be some clever legal argument about causation? Some novus actus because some virus descended from the North Sea and landed in a cup of coffee in her house in Hull? Who knows.
She was told she was never going to walk again. She limps and will always limp because of it.
Her house was repossessed but, fortunately, she secured a sale. But when she was released from prison, she couldn’t find anywhere to live. So she had to live in condemned housing – condemned housing – with her then 14-year old son, Matthew, who is now 31; her 17-year old daughter Toni, who is now 35; living in condemned housing. Those two children traumatised by the fact that their mother, as I said to you, refused to see them while she was in prison because she did not want to see them and she more importantly did not want them to see her in prison garb.
So she could get nowhere to rent and she hasn’t worked because she can’t work, since 2008.
Now, the emotional trauma visited on her children, will that be compensated, the fact that they were living in condemned housing with their mother? The fact that they were traumatised by the fact that their mother was taken away from them when one was 14, the other 17? They’re now 31 and 35. They were asked to compose statements on the effect of this upon them and, as they did so, they wept.
The trauma attenuates across time and space and it doesn’t go away. It doesn’t go away, as Janet Skinner said to you, sir, in the impact hearings, “No amount of money is going to make this better”. These people have been changed. They have been changed in a way that not even you or I can see, and one knows from medical science that that is right, that stress of this profound nature, trauma of this profound nature, actually affects people at a cellular level.
It is now beyond question that mitochondria, which are the actual driving force of human existence, providing energy and communication, are badly affected by stress, and that is why, sir, it is not a coincidence that, in the whole history of this saga, you have people who have already died, who have committed suicide, and who all have, as a group of people, an unusual incidence of physical and psychiatric health issues.
That is because of the appalling suffering to which they were needlessly subjected but, more importantly in the context of this matter, it was inordinately and wrongly prolonged.
Now with great humility, sir, you will realise that not even with the powers vested in you, you don’t have the power to do anything to right that wrong. Your duty is to the truth, but these profound wrongs have affected these people in ways that we may never understand, and which also may not be legally recoverable, which is why one really does make this submission, that full and fair compensation should not be a box-ticking exercise going through a tort textbook but should actually reflect upon that vital question: where would these people be now had they never suffered this appalling injustice, that the trajectory of their lives had not been flattened or crushed by false accusation and then the denial over many years of a right of appeal?
That is why I really adopt Mr Moloney’s point that, yes, the Official Receiver can devour an award, but there wouldn’t be creditors if these people had not been branded, shamed, convicted or otherwise destroyed in this inexcusable manner, by Britain’s most trusted brand.
That is what full and fair compensation requires, sir. Not that the Official Receiver, the trustee in bankruptcy, takes that which is owed to the creditors, but to ask oneself why Mr Castleton, who sank so much money into that business, who had had a distinguished career serving his country, then in the City, and then decided that he wanted a change of pace in his life and would become a subpostmaster, ended up being bankrupted, ended up being shunned and, as you heard from me when I made an opening statement, the atrocious degradation and cruelty shown to his child, his daughter, by those who thought that they were better than her because her father was a thief.
As I’ve said, the damage is extraordinary; like a stain, it spreads. It was not contained for over 20 years and it may never be eradicated because of that, and that is why the full measure of damages is required and justified in affirmative answers in due course, from the Post Office, and the paymaster, BEIS, to those two questions that have been posed: those two questions, simple questions, sir, simple questions which would reveal so much if they were answered, as opposed to that silence.
Or your question earlier today, sir, where you were talking about artificial obstacles. You didn’t use the word “pettyfogging” but the “unnecessary bureaucracy”. I mean, that might have been necessary if there was going to be a fight, you said, but did you get any categorical assurance from those representing the Post Office?
“Oh no, no, it’s not going to be a fight.”
You got this: “It’s unlikely”.
We’re not here to deal in likelihoods, sir. We’re here deal with addressing the reputational damage, the mental health and physical health that has been scarred, the future earnings that would have been missed, the opportunities that could have been grasped that never were, and all unnecessarily prolonged by a decision at the highest level that they would rather preserve commercial and reputational matters, as opposed to doing justice to the victims.
As you saw, sir, the Post Office was receiving advice on compensation from the same Mr Simon Clarke who wrote the Clarke Advice in 2013. Why? Why did it take a further seven years – eight, in fact, before the resolution by the Court of Appeal’s judgment – for the matter to be put beyond question?
Why in the interim, before that, was there that tooth and claw last-ditch stand before Mr Justice Fraser in those two trials where some extraordinary events occurred, which need not trouble us now because, of course, they’re in the forefront of your mind.
So I want to conclude, sir, by thanking you for arranging this hearing, requiring BEIS and POL and also the UKGI to appear before you, and for BEIS and POL to answer your questions and explain what they claim to have done in resolving this issue of compensation.
But I still come back, sir, to those two questions which have not been answered, and they will be the test of whether this is more words, words, words. Words, words, words, which you have read last night and words, words, words, which you have heard today. But still, some of the submissions heard this morning have the capacity to amaze.
I mean, what parallel universe does POL inhabit when stating that the lack of a formal scheme has been no impediment to the settlement of pecuniary losses? How so, particularly when Ms Felstead waited half her life to be cleared and had to wait until the 19 October to have the unjust confiscation order made against her back in 2002 repaid with interest?
So from the 23 April 2021 to 19 October 2022, that was not settled. It is interesting to note, sir, that she had been convicted on 26 April 2002 and had to wait until 23 April 2001 to be vindicated.
But I return to her, Ms Skinner and also Mrs Misra. With Mrs Misra as well, I would wish to say a few words now about the extraordinary suffering that she endured, together with her husband and children.
Let us not forget, sir, that from 2005, they were trying to make their business work. In 2010, after sinking family money into the business, to satisfy wholly fictitious shortfalls, she was sent to prison, pregnant. From 2010 to 2021, she had to wait like Ms Felstead and Ms Skinner, and it is now nearly 2023 and, of course, a claim has not yet been submitted in her case but it is that long delay before her name was cleared that is a matter we respectfully submit that ought to be taken into account: the impact on her children, the impact on her husband, who descended into alcoholism. Families get ripped apart.
Those who would normally be sometimes the people to whom one would seek solace and support, become ashamed because of the myth of the Post Office’s infallibility as a national institution that their own flesh and blood had acted with malign and clandestine dishonesty, and that is a matter that has destroyed families in a way that can never be healed or compensated.
But we come back to this annoying question, or those two questions that have not been answered and, again, before closing – and I promise you, sir, that this is my last submission – Tracy Felstead, Janet Skinner and Seema Misra, against all the odds, and against considerable opposition from all quarters, pursued ground 2. You will know, sir, from submissions I’ve already made but also from the history of that case, that ground 2 was bitterly opposed.
So it is, sir, that we respectfully submit that, notwithstanding the protestations to the contrary, what you have heard today is again part of the disconnect between rhetoric and reality. Returning very briefly to the Historical Shortfall Scheme, the fact that POL has published statistics that 75 per cent of those claims have already been settled, causes one justifiable concern, given the manner in which it has previously approached this matter, and one wonders if there may need to be now a reopening of those awards, given the penetrating analysis on behalf of Hudgells by Mr Moloney about how the unrepresented can be, again, taken advantage of.
So it is shameful, embarrassing and beyond comprehension that those exemplars put before you by Mr Moloney actually happened before lawyers came in to resolve the matter. One asks “Why is it so difficult? Why does it take so long to act with integrity?”
Why does it take so long to do the right thing, particularly since these people were subjugated, they were victims of effectively state power, an agency or public corporation that oppressed them, criminalised them, when they’d served that institution with loyalty, with kindness to their customers and with integrity, and yet they were degraded in that way and deprived of the means to clear their names.
It all started, even before the very beginning. First, they were sloppy, they were slow, they were incompetent. It was all their fault. Then, of course, for that 1 per cent or less who were subject to those latent bugs, errors and defects, and the remote tampering with the system, they were lying, dishonest thieves, and yet year on year, as this irrefutable evidence built up, it was covered up, it was buried and, with it, the Post Office realised that they were burying them.
In conclusion, sir, if that is not taken into account, and if that is not amply and properly recognised and factored in to the awards that are to be made, then this whole compensation scheme or schemes will not be fit for purpose.
This not benevolence, this not Lady Bountiful giving alms. This is to restore people to the position that they would have been and might have been, what they would have achieved – a bright 19-year old, Tracy Felstead, who lost her entire adult life through the Post Office’s malevolence.
So you can’t just give them a sort of mechanical or merely functional sum, based on a box-ticking exercise. There has to be a qualitative assessment of these people’s potential, the assets that they lost and the opportunities that they were denied, all because of this malignant culture of secrecy and non-disclosure.
Those two questions, unanswered, will continue to hang over the head of those who represent the Post Office but, more importantly, those who are the directing mind of the Post Office. It is a profound shame to this country, that, even after all that has been done wrong, that silence, even today, persists.
Those are our submissions, sir.
Sir Wyn Williams: Can I just be clear that I’ve got right in terms of the persons whom you represent?
Ms Felstead, Ms Misra, Ms Skinner and Mr Parekh fall to be compensated under the Overturned Conviction scheme, as I understand it.
Mr Henry: Yes, that is correct, sir.
Sir Wyn Williams: Mr Castleton and Ms Arch will fall into the GLO scheme that Mr Chapman referred to this morning –
Mr Henry: Correct, sir.
Sir Wyn Williams: – and Mr Shiju falls into the Historical Shortfall Scheme –
Mr Henry: Correct, sir.
Sir Wyn Williams: – and is currently in the process of going through that scheme.
Mr Henry: Yes.
Sir Wyn Williams: Thank you.
Mr Henry: Thank you, sir.
Sir Wyn Williams: Thank you, Mr Henry.
Mr Stein. Mr Henry was correct almost to the last minute in terms of his prediction, and I’m just a bit concerned about the shorthand writer.
Would you like a short break before Mr Stein starts because I wouldn’t want to interrupt him, and he’s likely to be about the same length of time.
The Transcriber: A short break would be great, thank you.
Sir Wyn Williams: Fine, we’ll have a short break and then resume with Mr Stein.
(2.25 pm)
(A short break)
(2.35 pm)
Sir Wyn Williams: Mr Stein.
Submissions by Mr Stein
Mr Stein: Sir, good afternoon. I will remain seated as I have done for other submissions throughout this Inquiry.
As you know, I represent, briefed by Howe+Co solicitors, 156 Core Participants, as well as supporting applications being made by other subpostmasters, mistresses and managers within the scheme.
Sir, one of the advantages, perhaps, of going last today, not that I can just therefore take the entire afternoon that’s left, but –
Sir Wyn Williams: You certainly cannot!
Mr Stein: – one of the advantages is this: it’s allowed us time to consider the various emails and contacts that we’ve had from clients that we represent, because they have been listening, now that the live feed has been restored, and they have been taking account of what has been said by all of the parties who have made submissions before you.
The summary answer from our client group as to what they have heard, rather sadly, is they hear that next week or in the New Year that things are going to happen, that schemes will change, that there will be something being done about funding, there will be something being done about individual compensation claims.
So, as an example, Sinead Rainey, who has been mentioned today by Ms Gallafent, her particular position is one that is very difficult. She wasn’t in fact, if you like, the subpostmaster but she acted as in the position of the subpostmaster, and that was recognised at the time because the Post Office pursued a debt against her.
Now, we hear today that her position will be addressed in the next few weeks.
So the difficulty that our client group has, in the responses that we’ve had so far today, is that they only hear “Delay, sometime later, something will happen”. They don’t hear that work is ongoing. They don’t hear about what has happened in the background.
So, sadly, sir, we suggest that the product of what we have had today, through the compensation hearing that you arranged as part of this Inquiry, has been, of course, useful but not enough.
Yesterday, we saw a product arising out of a lack of controlling mind across these compensation schemes. We had served upon us in the afternoon the proposed scheme for GLO members, the litigation group members. What we see as lacking in relation to the compensation schemes variously being discussed today is a lack of controlling mind, lack of cohesion, lack of intelligence, being placed into these schemes across the board.
We shouldn’t be in a situation whereby, essentially, there are different choices and different types of systems being put forward in relation to people that have essentially the same issues as subpostmasters, mistresses and managers.
Of course we represent people who are right now hurting. These are people who are finding it very difficult and it’s irresistible to say that we are looking towards a Christmas break or holiday break, whereby people are thinking about how they can finance that and how they can manage through that period.
Now, the truth here is that the Post Office has fought and fought and fought to prevent the truth coming out, and against the fair provision of compensation, to those that have been harmed by this most public of IT scandals. My instructing solicitors, Howe+Co, have worked tirelessly with campaigners to shame the Post Office into recognise something that they must compensate subpostmasters.
Regarding compensation, the standout issue that has bedevilled the provision of timely compensation for those that have suffered so much at the hands of the Post Office and BEIS has been the failure to make provision for reasonable financial costs of claimants, so that they can have legal advice and representation.
Sir, we’re not just talking about a couple of people who need help. These are hundreds of subpostmasters with complex, compound claims that can only be assessed and presented with the support of expert solicitors with experience in difficult compensation cases.
It seems to us and those we represent that the Post Office and BEIS seek to wind back the clock and pretend, like Bobby Ewing returning from the dead in Dallas, from one episode to the next, that it was all a bad dream.
Sir, I’m sure you remember Dallas very well.
The Horizon System was defective.
Sir Wyn Williams: Don’t tempt me, Mr Stein!
Mr Stein: Sir, the Horizon System was defective. It’s a reality.
We suggest, as we’re learning through the evidence in Phase 1 and Phase 2 of this Inquiry, that the true extent of the losses to subpostmasters, managers and their assistants are unlikely to be known for some time. We believe very strongly that we may, so far, have only seen the tip of the iceberg. It will be a matter for another time for us to assess and consider how much damage had been caused, as we look at the range of factors which contributed to the shortfalls and losses seen by subpostmasters. But it does seem very likely, from what we have heard in the evidence so far, that many subpostmasters will not have understood that the losses they suffered and came to their door were not their fault but the fault of the Horizon System.
Let me then turn to the position of BEIS and the Post Office and we should say, for the record, that part of the problem with BEIS and the Post Office is that they have no experience of engaging with and compensating victims. Ms McMahon, who is an incredibly experienced solicitor who works at Howe+Co, she and I have discussed what is requiring. The client doesn’t just fall in the door and you say, “Right, here we go”.
You establish essentially a meeting with the individual client to set out what is going to happen. There then needs to be, within the rules that solicitors comply by, through the SRA, the Solicitors Regulation Authority, client care letters, letters that clearly set out a case plan and letters that also deal with the question of how cost is going to be dealt with through the process.
By the time that has happened and gone through, we’re talking about an hour or two gone already of solicitor’s time.
What is happening, therefore, is that, in terms of setting out the schemes that, as an example – we’ll deal with it in more detail in a moment – under the GLO, there needs to be an understanding of what actually happens when you’re dealing with people that have such complex needs through compensation.
Unsurprisingly, we say, there may have been very few, if any, compensation schemes where the perpetrators call the shots and control the process. BEIS, we suggest, does simply not understand that traumatised people do not appreciate prototype schemes being placed on websites without any advance notice and without provision of the draft scheme to those who represent them.
In light of these recent events, we say that you, sir, should recommend with an interim report that all schemes are overseen by an independent person, with power to resolve disputed issues between the parties, a trusted individual, such as Lord Dyson, who has overseen the recent neutral evaluation.
The brutal reality is that, notwithstanding progress that has been discussed today and progress made mainly in relation to interim payments, subpostmasters continue to suffer as they did in July. There has been a lack of progress where progress is most urgently needed.
Now, sir, you are aware from our written submissions and from the file that we have presented to the Inquiry, that we have set out within those submissions and schedules many accounts of our clients, and I will not go through all of them. Nevertheless, whilst you have this material, this is a public hearing and there needs to be a recognition on the public recording of the ongoing harm caused by the Post Office, and so I will summarise.
Sir, in relation to the file we presented, you’ll find this at page 2. I have it behind tab 1 but, using the pagination bottom right-hand corner, which is consistent throughout the file, this is page 2. I will not read of all entries but parts of some.
I refer to Peter Worsfold. He said in July that he had not been able to repay his 94-year old mother. This month, December, he says he has received interim compensation and it has helped pay some debts. He is concerned that, receiving compensation in dribs and drabs means that he and other subpostmasters cannot invest and receive income to look forward to in old age. He has effectively lost 20 years of business. Importantly, he instructs that the compensation he received did not touch the sides of what he has lost.
Virendra Bajaj:
“My current financial position is worsening day by day and the whole cost of living is petering me off a cliff edge. I worry constantly how I will be able to afford the bills. I can only pay off nominal amounts of the debt, and I have been told it will take 100 years to pay it all back. Mentally draining, stressful and exhausting.”
Robert Thomson:
“I’ve been fighting five years to get my name cleared. In that time, I’ve only had one payment which was very beginning when this case was getting looked into. Does no one realise the financial strain you’re putting on me and my family?”
Brent Whybro:
“I feel that the inertia in the whole process is extremely frustrating and alongside the ongoing Inquiry this just as to the strain.”
Joanne Foulger:
“Christmas is going to be a struggle. Christmas dinner will be microwaved. Disappointment after disappointment is making a hole so big that I feel I’ll never be whole again.”
Shala Ahmed and Faisal Aziz:
“We’re worried if this winter we will be able to heat our home and serve meals to our large family at the same time. The interim payment we were given will only last couple of months considering the rising energy bills and inflation overall.”
He discusses his older children who have started to hide their needs. His 13-year-old daughter had a tear in her school shoe:
“She didn’t tell us about it, and decided to glue it needed to save money.”
Anonymous witness, I’ll refer to by the last three digits 293:
“My experiences regarding the compensation process and claims submission have been difficult due to the length of time that has elapsed. It has caused mental stress. My financial pressures have affected by earning capacity, unable to work full time and overtime as I used to. Applying for loans of high interest in order to get through this time and borrowing from friends and family members.”
James Withers:
“There appears to be no thought or compassion for the victims from them, or how most of the victims are actually struggling. They seem to make it their mission to delay the outcome as much as they possibly can.”
Joan Bailey, the wife of the Core Participant Lawrence Bailey:
“Our financial circumstances are we still have a mortgage on our property, mortgage should have finished in 2021, and loans for the business. We’re still paying out payments to the bank out of our pensions and we are looking forward to the day when final compensation is paid. Only then we will feel it is over.”
Victor Price:
“I have for many years had mental health issues I was not aware of, until I had lost everything. We agreed to sell everything and just move into our caravan. This we did for two years. We’ve been renting ever since. We don’t want charity, we just want some form of compensation to make up for the years we have paid in rent.”
Thomas Brown:
“The compensation process has been extremely unreliable. I was simply told that my case was complicated and they would be in touch. It once again left me in a state of financial difficulty. The Government has agreed that the bankruptcy should be paid back in full. The only people in disagreement were the trustees. However, because I’m in such a desperate financial state I had no choice but to accept the 51 per cent I was offered. This had a detrimental impact on my mental health as it dragged up all the past trauma caused by the Post Office over the years.”
Now, sir, later on we’re going to be referring to those as the 51 per cent cases, the bankruptcy cases, that have been dealt with like that.
Thomas English:
“We were seriously abused by the management whose wages were contributed to by our investments. The fact that I, as a retired police officer and former Royal Marine, could have my reputation trashed by the management of a supposed organisation that the pillar of the establishment, the thing really eats you up and it does so now and I haven’t had the suffering of others at the extreme end of this manner.”
Donna Gosney:
“I was one of the many ex-subpostmasters forced into bankruptcy, solely due to the scandalous, damning and bullying bestowed on me by the Post Office.”
Sir, those are some of the individuals, and there are others that are mentioned within that schedule.
We mention that because we need to make sure that, not just the Inquiry panel, not just the Inquiry Team, but everybody understands that this is ongoing suffering that is happening right now and we’re talking about the need to deal with people right now.
I take you now to the written submissions we have put forward on behalf of our client group, and turn, please, to pages 8 and 9 and coincidentally paragraphs 8 and 9., and I want to touch on Heather Williams’s case.
Paragraph 8 of our written submissions.
The effect that BEIS and POL’s delay is having on our clients is starkly demonstrate, we suggest, by the case of Heather Williams. She spoke to Mr Enright, my instructing solicitor, on 1 December 2022. She told Mr Enright that shortly after the announcement of the GLO scheme she was informed by Freeths on a Friday that she would receive a significant sum by way of interim payment. However, on the following Monday she was told that she would receive nothing because she is in an IVA. Ms Williams’s debt, in respect of the IVA, is less than 2,000.
Ms Williams has very little money. Her accounts with her electricity and gas providers are £2,000 in arrears. She is worried that her power will be cut off. Consequently, she doesn’t heat her home. She often eats pot noodles. Three weeks ago, Ms Williams had a bad fall at home because she was tired and weak from not having eaten. During this time she says she was in so much pain, cold and hungry and all alone. She was unable to get up from the floor for over two days and she finally managed to crawl to where her phone was but it was out of charge. Luckily she could get to her charger and she was able to call for an ambulance. She remains in hospital.
She is desperate to receive an interim payment, which she believes would sort out all of her problems, and she still received no compensation.
Subpostmasters need and deserve the support of competent solicitors such as Howe+Co and where required, advice from counsel, and input from medical or other experts, in order to present their cases in the best possible light, and they should not have to do it on the cheap or be forced, as they are now, to go cap in hand to the perpetrator for some type of time-to-time funding.
Further, we say that all subpostmasters, whether within the Historic Shortfall Scheme the Overturned Historical Convictions scheme, or the Group Litigation scheme as proposed, should be entitled to aggravated damages. Sir, you will be very familiar with the case law, the 1972 case of Broome v Cassell, where aggravated damages were considered in relation to the following context: the high-handed malicious, insulting or oppressive behaviour that would justify going to the top of the bracket, in terms of damages, and awarding as damages the largest sum that could be fairly regarded as compensation.
Well, the judgment of Mr Justice Pumfrey, as he then was in Nottinghamshire Healthcare v News Group Newspapers in 2002, where frankly he could have been referring to a situation as we have heard in the human impact hearings.
He put it this way:
“An award of damages, while awarded with a view to compensating the claimant for his loss has regard to the injury to the plaintiff’s proper feelings of pride and dignity, humiliation, distress, insult or pain, caused by the circumstances of the defendant’s conduct.”
We suggest, sir, that the situation of the subpostmasters and mistresses who fall to be compensated fall within that very highest bracket.
We often hear representatives of the Post Office and BEIS say the words that they are sorry on behalf of their client organisation. They do it in well delivered apologies when they have to. But we suggest that the way those organisations have treated compensation and support for subpostmasters make those apologies seem empty and bereft of compassion.
In summary, and despite what has been said by the Post Office and BEIS in their written submissions and orally today, the current situation is this: there is no agreed scheme for the provision of compensation for those maliciously prosecuted. We have heard today that those who were prosecuted but acquitted will be dealt with within the schemes the GLO scheme and the people who have been prosecuted scheme.
Even after yesterday’s manoeuvring in relation to the proposed GLO scheme, there is no agreed GLO scheme. This is what has been set out by Government.
The original HSS scheme is questionable and we will remember the submissions that you heard – going now back in time when we were also, I think, able to watch the beginnings of a cricket game through our windows across the place where we were sitting at the time – that the HSS scheme is questionable at best, in the way it sought to minimise compensation rather than ensuring that ancillary losses for pain and suffering are identified and provided for.
Now, this has all been hugely frustrating for those who are trying to help the victims here. Howe+Co have worked tirelessly, I suggest, on these areas and have endlessly corresponded with POL and with BEIS. But my firm of solicitors, Howe+Co, have not received a penny from POL or BEIS for the work associated with attending meetings, canvassing their client views and making detailed submissions at BEIS’s request.
The issue of funding for solicitors never sits well with making submissions when you’re talking about compensation, but with this number of clients, firms such as Howe+Co must be funded to have at least parity of ability to make representations on part of the cases that they represent.
On the other hand, of course, when Post Office and BEIS reply, they do so via their lawyers or via their team members, paid for out of their payroll, or instructed solicitors assisted, where needed, by counsel. On 17 November this year, the Minister announced that BEIS had spent £53.4 million on legal and administrative costs for the HSS to date, with £7 million spent and £31 million projected to be spent on legal advice on the overturned convictions.
There is, we suggest, strong evidence from that, if nothing else, that what is going on here is a clear inequality in arms.
Yesterday, and confirming that the only way that the Government, in whatever guise, BEIS or its wholly-owned subsidiary, the Post Office, reacts to this continuing scandal, we had the announcement from BEIS and the Right Honourable Grant Shapps MP standing up in Parliament stating that the GLO scheme had a particular shape.
Never has there been a better illustration that the Inquiry cattle prod touching the backside of the state is the only way that progress is going to be made.
Now, we know that the intention behind this announcement is that the members of the GLO will have a scheme which will enable them, I quote, “to receive similar compensation to their peers”.
This will require a calculation of their losses and damages in just the same way as is required for those who are being dealt with under any other of the frameworks or proposed frameworks. Just as an example, Ms McMahon, who I mentioned earlier, an experienced solicitor at Howe+Co, with experience of individual claims, she started to look at what might be required for any individual case, and tried to start putting it together so that she would have an example of what may be needed, while putting aside the starting point, which is client engagement letters, conversations at the start.
So far, in relation to one example, it led to something like 400 pages of disclosure from the Post Office, those include call logs from EPOS, the EPOS part of the system, when working as a subpostmaster.
It includes consideration of the shortfalls, the reason why you need the call logs is because you need to argue what the shortfalls are and they need to put the two together. HMRC records is something like 20 pages. GP records, 100 pages. That’s without, essentially, starting the case. That’s just gathering the materials.
The Minister’s press release yesterday states that what we are paid is £900 per claimant to prepare a claim, covers, we think, something approximately like something in the region of two-and-a-half hours. This will not cover client conferences reviewing disclosure, taking a proof of evidence, investigating and supporting the claims, preparing instructions to experts, preparing schedules of loss, et cetera, and this will not be sufficient for the instruction of counsel to provide an advice on quantum.
It would assist, sir, and it would assist this Inquiry, if you had clarity on payments of costs thus far to Herbert Smith Freehills. Sir, you may find also useful information from Freeths who have referred in their letters to Government costs.
Then just after 2.00 pm yesterday, Howe+Co were sent the email from Mr Brightwell, signing itself off as GLO Compensation Department for Business, Energy and Industrial Strategy, which now sets out that the £900 is an initial allowance, apparently determined by a cost draftsman with further cost allowance for the remaining phases up to, including submissions of claims to be published in the next few weeks.
So we move on from £900 as a starting point, to now this is an initial amount, an initial allowance, and then further applications are going to be need to be made in order to make progress with the proposed GLO scheme.
So it’s going to be worthwhile, just for a moment, to compare the announcements from BEIS yet with the correspondence from the Post Office this week. Sir, you should have before you a letter dated 5 December, I’m very grateful.
Now, the letter is from the Post Office dated 5 December, top right-hand corner, in correspondence, thanking Howe+Co solicitors for their letter and correspondence for 27 November. This is titled “Compensation Claims”, and then references to thanks for participation in meetings and the like.
Third paragraph, from Mr Recaldin, the Director of Historical Matters, Post Office Limited:
“We do not believe that your various comments regarding the payment of reasonable fees in respect to of these matters claims is correct. It has always been the position that Post Office will meet the reasonable costs in relation to the compensation claims. Our only concern is the question as to what is reasonable.
“You are correct in that it may indeed be in the best interests of the subpostmasters that a set of defined fee parameters be agreed within the framework of the compensation process so that there can be clarity in this regard. We would therefore invite you to provide us with a breakdown of your proposed costs so that we may open a dialogue and work towards an agreement in respect of this issue.”
The one thing that we all agree on is the principle that people within the GLO proposed scheme, GLO claimants, be put in the same position as the other claimants with identical claims arising out of the same scandal. Yet the Post Office and their owners, the Department they report to, BEIS, are suggesting that representation and reasonable payment for fees should be allowed for in two different ways: one tranche by tranche on application for each part as you move forward; and the other it seems by an acceptance of reasonable fees, yet to be agreed within a framework.
Now, this is either the Post Office or BEIS deliberately treating the GLO litigants less favourably than other SPMs who fall to be compensated, or it shows that the left hand still does not know what the right hand is doing. Either way, this gives the impression of chaos. That chaos has not lifted since we were back here in July, and so that is one of the good reasons why we need an interim report.
There is, sir, nothing new or magical about legal costs. Hourly rates are set by the court, and in any civil litigation, if costs and disbursements are not agreed, they will be subject to taxation by a cost master or judge. It is perfectly standard for there to be a final independent arbiter on costs, issues, rather than the defendant keeping the matter to itself, dolling out sums where it says, and exercising total control.
Let me be clear. Howe+Co, and the other firms acting on behalf of subpostmasters, are well-known firms who are very experienced in acting on behalf of claimants in civil proceedings. They know what needs to be done. They know what sort of costs will be incurred, and they are used to the costs taxation process.
We are not seeking to reinvent the wheel. We merely seek some level of parity of representation with the Post Office and BEIS. Simply put: fairness for subpostmasters.
May I then refer, please, to the complex cases, those that are being made bankrupt, and IVA clients.
It is absurd that some of the most vulnerable victims of the Post Office are languishing at the back of the queue. There should be no queue. Where cases are complex, or involve bankruptcies or IVAs, BEIS should divert resources to dealing with those problems rather than sidelining them. The unfeeling procrastination that has characterised the last few months must end.
Another reason why the bankruptcy cases should not be sidelined is that it was the actions of the Post Office that bankrupted our clients. Mr Shapps, in Parliament yesterday, in the points he was putting forward as he was addressing the introduction of the GLO scheme, accepted that there were those that had been bankrupted by the Post Office.
Those actions, in bankruptcy or turning to an IVA, those individuals are part of a truly shocking public scandal, and the clear duty of the Post Office and its owner, BEIS, is to clear the debts, restore the credit ratings of subpostmasters so that they can begin to live again.
Just as a personal aside, a couple of days ago I was sorting out some of my own insurance issues that are left to be dealt with and finally got around to, and one of the things that struck me was the question I was asked: had I ever been made bankrupt? The answer is no. One of the problems with bankruptcy is it acts a little like a conviction. It remains a stain on your character as you try and move forward and try and gain credit.
Now, sir, you’re aware of individuals in the position of Mr Sethi. You can see that in relation to the details that we’ve set out in the Howe+Co submissions at page 12, paragraphs 18 to 23. You’ll remember his powerful testimony that you had before you on the first day of the human impact evidence on 14 February 2002.
POL still has failed to progress Mr Sethi’s claim or pay any compensation to him. Must he, as he said in his evidence to you, die before any compensation is received?
Ms Sue Palmer’s case is a double whammy, and you’ll recall her position that BEIS originally refused to implement your recommendation on providing compensation for subpostmasters who had been prosecuted and acquitted. Now in respect of the GLO scheme, her position is set out amongst others at paragraphs 24-33.
BEIS suggests that the way forward is for her compensation to be paid 51 per cent to her, and 49 per cent to Moores, the administrators of her bankruptcy.
So I take you to the bundle if I can, please, again just briefly.
If you’ll go to page 14 of the bundle, bottom pagination, bottom right-hand corner. You’ll see this is a letter dated 30 November to Laura Pickering at Moores, the trustees in bankruptcy:
“Hi Laura, is there still no update? Please put me out of my misery. I need to know one way or another. Tomorrow is 1 December, 25 days until another miserable Christmas.”
Page 12, Thursday December 1, 2022 at 11.02. Message from Freeths Solicitors to Ms Palmer:
“Dear GLO postmaster”, et cetera.
So this is a response from BEIS in relation to her position, and the third paragraph tells us what is being suggested.
From BEIS:
“We recognise the need to get you some money quickly, so we plan to agree to monies being paid to you in line with the terms of the original assignment. You would have received a portion of the interim payment which relates to your personal losses. We will confirm with Moore whether any of the initial £11,000 fee is outstanding in each of your cases. Of the remaining amount, you would receive 51 per cent and Moore will receive 49 per cent. This decision only relates to your interim payment. How payments are treated under stage 2 of the scheme are yet to be determined.”
Page 11. Ms Pickering, again from Moore, to Ms Palmer:
“Dear Suzanne,
“No update at the moment, unfortunately. However, we are having a call with BEIS on Monday to discuss this matter further.”
Seeing the emails in relation to the subject today, nothing further has happened. That remains the basic position.
Can we, on her behalf and on behalf of those others that are stuck in this logjam in relation to these bankruptcies, can we ask why? Why is the suggestion that the compensation to Ms Palmer will be split between her and her trustees in bankruptcy? Well, of course we know the answer, as lawyers, but as someone registered as a bankrupt, her administrators manage her finances and are appointed to use monies that come to her for the benefit of her creditors, but the Post Office and BEIS put her there.
What must happen is one of two choices. For Ms Palmer and others in her situation, they must be funded to pay for legal representation to annul their bankruptcies. Because of the highly unusual circumstances of her bankruptcy, the bankruptcy order should not have been made.
Or, all her debts and bankruptcy fees must be paid or secured – in other words guaranteed – by a third party: BEIS and POL. And her bankruptcy must be annulled in order to for her to be able to move forward without that hanging over her head as a registered or previously – or discharged bankrupt.
Of those in an IVA, their debts must be paid by BEIS-POL and the IVA discharged. The notion of Ms Palmer’s compensation being split is unreasonable, unless it can be assured that for present purposes, her part of the split to the administrators will never count against her, or be deducted at a later stage from her overall compensation once BEIS and Post Office have settled the bankruptcy.
Sir, we are aware of the difficulties that the position of those that are in this situation pose to the Post Office and to BEIS. But the position is in fact, to a large extent, illusory. These individuals have been known about for some time, and we are here discussing this on the hearing that you have convened to consider what is going on just before Christmas 2012, so long after these events have taken place. If they have caused it, they need to solve it. They need to resolve it, and they need for these individuals to be move forward and be paid.
Now, we’ve had discussions in the margins of these hearings today with Mr Brightwell, and I know he is willing to meet and try and discuss the individual circumstances, and try and find a way forward. And we know that essentially there is a will to pay, but the will to pay must be a will, I’m afraid, to pay those individuals more than they might get otherwise in order to find their way through these bankruptcies. What must not happen is that their compensation should be split for something that has been at the cause of Post Office or BEIS.
So we suggest, sadly, that the Post Office and BEIS have created chaos, and that is adding to the suffering. There is a need for an urgent interim report from you, sir. The situation of so many of our clients is intolerable. BEIS has had a chance to resolve matters in July, but it did not take that chance.
Now, sir, we’ve not had sufficient time to evaluate the details of the prototype scheme that has been put forward. We do note that in relation to this scheme, that there are various issues.
Sir, very briefly, I don’t know whether you have this to hand, but I can read it if not.
Sir Wyn Williams: I think I may have it to hand. Hang on.
Mr Stein: Sir, I’m dealing with the document that was served yesterday, described as being the additional compensation for GLO members scheme process.
Sir Wyn Williams: Yes.
Mr Stein: Paragraph 13:
“The taxonomy will need to pay special attention to cases where technical difficulties can be expected, such as bankrupt or deceased claimants, company claimants, claimants whose partners are also claiming under this or other schemes, or claimants lacking capacity and no legally appointed representative.”
Well, sir, that’s the mention of those individuals in those particular positions, in other words “We’ll work it out sometime”.
Now within this, if you then go, please, to the references at page 21.
Sir Wyn Williams: Page or paragraph?
Mr Stein: Page, please, sir. Bottom right-hand corner of the pagination, page 21.
Sir Wyn Williams: Yes.
Mr Stein: “Consequential loss claims:
“The panel should apply the scheme consequential loss principles and guidance which are included at appendix 1.”
Well, sir, there is no appendix 1. The review and approval at paragraph 36:
“The version of the terms of reference was approved by the historical remediation committee on 20 June 2014.”
Sir, we know this a cut-and-paste document from earlier schemes that have been put forward. We know that because, if you go to page 22, you can see the heading is “Historic Shortfall Scheme Consequential Loss Principles and Guidance”.
Sir Wyn Williams: Sorry, my page 22 is headed “Consequential Loss Claims” –
Mr Stein: Yes, sir.
Sir Wyn Williams: – and my page 23 is headed “Historical Shortfall Scheme”. I just want to be sure I’m in the right place, that’s all.
Mr Stein: Yes, it’s being suggested it may just be the way it has been printed off.
Sir Wyn Williams: Yes, quite possibly. Could you just go back to the – you made a point about –
Mr Stein: Yes, sir. Well, wait, we have it.
Sir Wyn Williams: If you give me the paragraph number.
Mr Stein: 34, sir.
Sir Wyn Williams: Hang on. “The panel should apply”, yes, fine.
Mr Stein: “… the consequential loss principles and guidance that are included in appendix 1.”
Sir Wyn Williams: And there is no appendix 1, yes, I have that.
Mr Stein: If you have paragraph 36:
“The version of the terms of reference was approved by the historical remediation committee on 20 June 2014.”
Then, if you turn over the page, you then see the “Historical Shortfall Scheme Consequential Loss Principles and Guidance”, which I strongly suspect in fact is what is meant by appendix 1. But if you then glance through the number of pages that refer to consequential loss and the principles applied, which then takes us through from page 22 to page – yes, it goes to page 31. Glancing through that, sir, you will see, which, sir, your own work in the past, these are the principles set out for pain and suffering, loss of amenity that we will find if we were to turn our minds to it.
These are complicated matters that require considerable attention to detail. They require individuals to have representation that can cover these details from the earliest possible stages of meetings, reasonable costs must be paid.
All our clients are actually asking is that, bearing in mind they’ve waited decades to receive fair treatment, they want the ability to instruct solicitors to process their claims in the normal way, without having to go cap in hand to the perpetrators of this scandal. Now, sir, we’ve set out in detail, and I won’t repeat orally, the recommendations we sought in our written submissions. They concern the resolution of the complex cases or bankruptcy issues and the like.
Let me now turn just very briefly to restorative justice.
Sir Wyn Williams: This is your page 33 of your written submissions?
Mr Stein: Sir, yes.
Sir Wyn Williams: Fine.
Mr Stein: Now, in the same letter that I’ve referred you to a few minutes ago from the Post Office, the current position, as regards restorative justice, is that the Post Office suggest that they can be left to deal with meeting arrangements with subpostmasters, our clients, and that solicitors are not required.
Unfortunately, we have to say that the Post Office simply has not been listening to our clients in the Phase 1 hearings. Ex-subpostmasters, mistresses and managers don’t trust the Post Office and for very good reason, with the way that they’ve been treated for so many decades.
The years of denial of responsibility throughout those last 20 years are a good reason for the lack of trust and as, we suggest, is the hurt from the continuing response to compensation issues.
All our clients want is for them to have their lawyers, who they do trust, discuss terms for restorative justice with the Post Office and for their lawyers to be paid reasonable costs for doing so. They should not have to be made to do otherwise.
Now, we have also suggested, at page 34 of our written submissions, how restorative justice might look, including such an idea as an entrepreneur’s fund and bursaries for the families of subpostmasters. Our clients’ lives have been torn apart. They started businesses that they expected to see them through into their retirement, looking after their families, children that would have been brought up within subpostmaster branches and offices, where they’d been learning the value of small businesses, often torn apart by the actions of the Post Office.
Restorative justice is also about making sure that, in this particular matter, that the Post Office has actually learned lessons, and so far, rather sadly, it seems that the Post Office has not even started at school.
So enough is enough, sir. We suggest that there is a need for an interim report under Section 24.3 of the Inquiry Act and, sir, we ask you to carry through the suggestion you made that you made that you may do.
Sir, two last points. We ask that the process of compensation hearings in this Inquiry continues. We know it seems that it’s the only way to make sure that anything is done and I join with Mr Moloney in his submissions, which is to ask the Inquiry to ensure that it is able to continue oversight, in these individual hearings, of the compensation process as we move forward.
Second point: you’ve dealt with this largely by discussing matters with Mr Moloney regarding convictions and the progress of matters being dealt with at the Court of Appeal and I agree entirely with what he said. I’ll just add one small point.
The way the Court of Appeal is dealing with matters, sir, for your information, is that when subpostmasters or individuals come to them who are caught within this particular scandal, the Court of Appeal registrars’ office is contacting solicitors that have acted on behalf of those individuals in the past and are ensuring that they have representation, and we then go through the process – either Mr Moloney or myself or our teams – of considering the information, advising as to whether there is, in fact, a potential for the appeal to go further, and then putting forward grounds.
So there is a process and it doesn’t involve the CCRC.
Sir, forgive me for one moment. (Pause)
Sir, nothing else. Thank you, sir.
Sir Wyn Williams: Thank you. Right. Well, I think that concludes the oral submissions to supplement the written submissions that I’ve received. I will go away and think about them, and decide what to do about them. So there we are.
(3.20 pm)
(The hearing adjourned)