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Department for
Business, Energy
& Industrial Strategy
Government response to the Business,
Energy and Industrial Strategy Committee
Post Office and Horizon — Compensation:
interim report
April 2022
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Darren Jones MP
Chair, Business, Energy and Industrial Strategy Committee
House of Commons
Parliament
Westminster
SW1A OAA
14 April 2022
Dear Darren,
POST OFFICE: HORIZON
The Government thanks the Committee for its interim report on Post Office and
Horizon Compensation.
The Horizon scandal has had a devasting impact on postmasters. That is why we set
up the Post Office Horizon IT Inquiry to get to the bottom of what happened, ensure
the right lessons have been learnt and to avoid the situation being repeated in the
future.
The Government has also supported compensation to those affected by this scandal.
We continue to ensure that the right support is provided.
As I announced on 22 March via a Written Ministerial Statement (UIN HCWS705), the
Government has committed to making additional funding available to give those in the
GLO group compensation similar to that which is available to their non-GLO peers.
On Historical Shortfall Scheme (HSS) offers, the Government is committed to ensuring
offers are made as quickly as possible and I am pleased that 51% of offers have now
been made. As I have said in the House, the Government has set the Post Office an
ambitious aim of making 100% of HSS offers this year.
For those who have been wrongly convicted, the Government shares the Committee’s
desire to see work to trace and support postmasters with Horizon-related convictions
progress without delay. Setting up an independent body would take significant time
and potentially delay resolving this issue, which for some has been ongoing for 20
years. The Government has therefore been working with the Post Office to find
alternative ways of addressing these issues to ensure that affected postmasters — who
have already waited too long for justice — can get a resolution as quickly as possible.
I would like to thank the Committee for all its hard work on this issue.
Yours sincerely,
PAUL SCULLY MP
Minister for Small Business, Consumers & Labour Markets
Minister for London
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Introduction
The structure of this paper corresponds to the recommendations in the Committee’s Post Office and
Horizon — Compensation: interim report from 17 February 2022. The recommendations taken from
the Committee’s report are in bold italics and are each followed by the Government's response.
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The 555 Group Action Litigants
Recommendation 1: We demand that the Government as a matter of urgency commit to ensuring
that the 555 are fully compensated for all of their losses on the same basis as other victims of this
scandal receiving compensation. (Paragraph 17)
Government's response:
The Government has acted on this issue. The Government announced on 22 March 2022 that it will
make funding available to ensure postmasters who took part in the Group Litigation Order (GLO) case
are not financially disadvantaged by their decision to litigate against the Post Office. Members of the
GLO group will be able to access similar compensation to that available to their non-GLO peers.
The Government is consulting informally with affected postmasters on how this compensation should
be delivered. The Government will announce the results of those discussions to Parliament in the
coming weeks.
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Prosecuted Sub-postmasters and ‘unsafe’ convictions
Recommendation 2: We recommend that the Government urgently set up an independent
intermediary body as a trusted first point of contact for those wrongly convicted because of Horizon,
in particular for the 576 convicted sub-postmasters who have not yet come forward. The
independent body should be appropriately resourced to support these victims to begin the process
of overturning convictions and seeking the compensation they are entitled to. POL and BEIS should
co-operate fully with this body. It is crucial that, if such a body should be established, it has proper
engagement with the sub-postmaster community and their representatives. (Paragraph 23)
Government's response:
Although supportive of the intent behind the recommendation, the Government does not propose to
set up a new independent body to undertake these functions. The Government is keen to see work to
trace and support postmasters with Horizon-related convictions progress without delay and is
concerned that setting up such a body would take significant time. The Government and the Post
Office are therefore seeking to work with existing independent bodies to address these issues.
Since the Select Committee met with Nick Read and Paul Scully in January 2022, the Post Office and
BEIS have been working to establish a process of intermediary contact for those who have not yet
applied to have their convictions overturned and support for postmasters who have had their
convictions overturned and are seeking compensation.
Ongoing Activity to Offer Support
The following actions are being taken in light of the Committee’s recommendations:
i. I The Post Office has agreed with the independent Criminal Cases Review Commission (CCRC)
that they will contact all identified postmasters with Horizon-related convictions who have
not responded to previous communications from the Post Office. (More detail on this below.)
ii. The Post Office continues to coordinate with the Non-Post Office Prosecutors, including the
Department for Work and Pensions, Royal Mail Group, the Crown Prosecution Service, the
Crown Office and Procurator Fiscal Service, and the Prosecution Service for Northern Ireland.
Each of those organisations is making their own contact with postmasters and the Post Office
is undertaking extensive disclosure to support each of these organisations.
The Government has encouraged the Post Office to take further action in this area, including
appointing an intermediary body to provide independent advice to postmasters who come forward,
including to assist them with routes to compensation, to provide information on the availability of
legal advice and to strengthen the available emotional and well-being support.
Further background information is set out in the sections below.
As of 25 March, there were 955 postmasters identified as having received criminal convictions relating
to their involvement with the Post Office from the period in question. Of these, 706 were prosecuted
by the Post Office, 203 were prosecuted by other bodies and 46 were not based on evidence
connected to Horizon.
Post Office Prosecutions
The Post Office is aware of 708 Horizon-related convictions resulting from Post Office prosecutions
(see below for detail on prosecutions undertaken by other bodies). Of these, the Post Office has
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contacted 640' former postmasters. This number includes 91 postmasters that the Post Office has
newly traced and contacted since the BEIS Select Committee hearing. The Post Office continues to
proactively seek contact details of all the individuals involved, using credit and tracing agencies where
appropriate. The Post Office has so far been unable to contact the remaining 68 postmasters.
Of the 549 postmasters previously contacted (i.e. excluding the 91 more recent contacts), there are
still 172 postmasters who have not responded to the Post Office’s contact attempts. As the Committee
states, this could be down to a lack of trust in the Post Office. The Government fully understands these
concerns given postmasters’ previous experiences.
To address concerns about trust and independence of the process, on 21 February 2022, the Post
Office came to a formal agreement with the independent CCRC regarding it making direct contact with
convicted postmasters.? The CCRC began contacting the 172 postmasters mentioned above in the
week commencing 14 March, providing them with information on their options and routes to
compensation.
To address the second part of the Select Committee’s recommendation regarding an independent
point of contact for postmasters, in addition to the role of CCRC mentioned above, the Government
has encouraged the Post Office to actively explore options to establish an independent point of
contact for postmasters. We understand discussions are in an advanced stage with a service provider
to fulfil this role.
Finally, the Post Office is also looking to provide further support for the emotional well-being of
affected postmasters by extending existing services. Currently there is a helpline (provided by Optima
Health) that is available to postmasters applying to the Historical Shortfall Scheme; the Post Office is
working to extend their service to other postmasters affected by Horizon issues.
Non-Post Office Prosecutions
There is a subset of postmasters who were prosecuted between 1999 and 2019 by prosecutors other
than the Post Office: Department for Work and Pensions, Royal Mail Group, the Crown Prosecution
Service, the Crown Office and Procurator Fiscal Service, and the Prosecution Service for Northern
Ireland.
The Post Office has proactively offered to share information and provide assistance to these
prosecutors to enable them to discharge their duties of post-conviction disclosure and in relation to
any appeals against conviction. The Post Office has also agreed to extend the use of the specialist
tracing company to conduct a tracing exercise on behalf of the other prosecuting bodies, upon
request.
In February and March 2022, the Post Office held roundtable discussions with these prosecutors to
discuss necessary actions. The meetings were constructive, and all prosecuting bodies expressed
commitment to tracing and engaging with the postmasters they prosecuted. The contact tracing has
reached different stages across the prosecuting bodies, with some having already made contact and
+91 recent mailout + 172 no response to mailout + 6 nonconvicted + 34 requested no further contact +8
bespoke contact + 10 ID&V in progress + 42 awaiting disclosure request + 17 disclosure requests in progress +
117 disclosure requests made + 32 applications at CCRC + 5 CACD appeals + 35 abandoned appeals /
convictions upheld +71 overturned convictions = 640
2 The Criminal Cases Review Commission is the official independent body that investigates potential
miscarriages of justice https://ccrc.gov.uk/
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others not yet. Department for Business, Energy and Industrial Strategy (BEIS) officials attended these
meetings as observers.
As of 23 March, the Post Office is assisting the Public Prosecution Service of Northern Ireland with
tracing postmasters, with other prosecuting bodies agreeing to request assistance once their initial
reviews are complete. In addition, the Post Office has offered to provide disclosure of documents that
the Post Office holds and has started this activity for all prosecutors.
The Government and the Post Office are endeavouring to ensure that there is consistent treatment of
postmasters no matter the prosecuting body. The intention is to give equivalent support to that being
given to those postmasters prosecuted by the Post Office; this includes giving other prosecutors access
to tracing services, extending the contact and tracing by the CCRC (where appropriate), and allowing
affected postmasters access to the well-being helpline.
Recommendation 3: The Government must confirm how long it expects it to take for final
settlements to be made to sub-postmasters after they have received their interim payments. The
Government should set out what criteria they are using to determine final payments, alongside
indicative examples of what claimants can expect in terms of overall compensation, which should
include compensation for consequential losses. (Paragraph 25)
Government's response:
The Post Office aims to make offers for an interim payment within 28 days of an eligible claim being
received. All 66 of the interim payment offers made as of 31 March 2022 occurred within 28 days. A
few payments were, however, delayed in complex cases where a postmaster had died or was made
bankrupt; however, these have all now been resolved. Final compensation settlements are
determined through individual negotiations between the claimants’ legal representatives and the Post
Office. The length of time this will take depends upon how long it takes claimants’ advisers to submit
their claims and to reach a settlement agreement with the Post Office’s legal representatives. BEIS,
with support from UKGI, has full visibility of this process. The Post Office is committed to moving these
negotiations forward as quickly as practicable and is working with the first two postmasters whose
legal representatives have submitted a fully quantified claim. The Government is working to support
this process in whatever way it can.
Final compensation payments will be determined on a case-by-case basis. When responding to claims,
the Post Office is using a set of legal principles prepared following legal advice and with input from
BEIS and UKGI based on current case law; they will be updated as necessary. These principles will
inform the offers made in response to claims and the approach adopted when compensating specific
heads of loss and assessing the available evidence. The principles will support a consistent approach
to determining postmasters’ settlements while still allowing the flexibility needed to take into account
each individual postmaster’s particular circumstances. This will help ensure that fair compensation is
paid (while appropriately stewarding public funding) and claims are settled as quickly as possible.
All compensation will be assessed on a case-by-case basis, and payments made in response to claims
for pecuniary losses, both direct and consequential, which may include loss of past and future
earnings, alleged shortfalls and other costs incurred; as well as claims for non-pecuniary losses such
as mental distress, personal injury, injury to reputation and loss of liberty. It is anticipated that
payments will also be made in respect of interest and to address tax liabilities.
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Recommendation 4: We recommend that the Government provides monthly updates on the number
of interim payments made, the number of final payments made, and the range of amounts paid out
to reach full, fair and final settlements. Because of the nature of the Horizon scandal, transparency
on these issues is crucial to restoring trust. (Paragraph 26)
Government's response:
The Government accepts the Committee’s recommendation and has agreed with the Post Office that
it will publish this information on its website,’ subject to the caveats regarding privacy outlined below.
This includes the information requested on interim payments and will be updated on a monthly basis.
The Post Office has also committed to sharing the latest management information data with the Select
Committee each month to enable the Committee to continue to track progress.
To ensure privacy for the claimants, the range of amounts paid for final settlements will only be made
available once a critical mass of settlements has been reached. Immediate publication of settlement
details could jeopardise the privacy of individual claimants.
Recommendation 5: We recommend that the Government provides regular updates when
compensation is refused for sub-postmasters who have had their convictions overturned, the
reasons for this and if subsequent compensation is sought and awarded. The Government should
ensure that POL provide us with details of the mediation for those seeking compensation after
overturning a conviction, including the process, how independence is achieved, the numbers using
it, and what the outcomes have been. We also recommend that BEIS explains its role in signing off
this mediation process and the nature of the oversight that it and UK Government Investments
(UKGI) are providing. (Paragraph 29)
Government's response:
Further information is provided below in response to the Committee’s requests.
Interim compensation payments of up to £100,000 are available to postmasters who meet the
following criteria: i) their Horizon-related conviction has been overturned by the Courts; ii) they do
not belong to the group of postmasters whose convictions were overturned but were not opposed by
the company on public interest grounds (more information on this below); and iii) they have submitted
aclaim to the Post Office. If these three grounds are met, then interim compensation will be provided.*
To date, three claims for interim compensation payments have been declined for the reason given in
point ii) above. In each case, the Post Office did not consider Horizon evidence to be essential to the
prosecution in accordance with the Court of Appeal’s 2021 judgement in Hamilton and others;
however, the Post Office did not oppose the quashing of these convictions, as it would not have been
in the public interest to hold a retrial (which is the procedure in Crown Court appeals). Although these
postmasters are not eligible for an interim payment, they may still submit a claim to the Post Office
for compensation, which will be considered on its merits.
The Settlement Process
3 https://corporate.postoffice.co.uk/en/historicaLmatters/historical-matters-progress/historical-convictions-
and-compensation-information-on-progress,
4 The Post Office has published information on the routes to compensation for postmasters on its website:
https://corporate.postoffice.co.uk/en/historicatmatters/historical-matters-progress/post-office-
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Each settlement requires an individual negotiation between the legal representatives of the
postmaster and of the Post Office. The representatives will need to discuss all the matters in the claim
to work out where agreement can be reached. Where it is not possible to reach agreement, the parties
may jointly agree to a mediation. Mediation is a flexible, voluntary and confidential form of Alternative
Dispute Resolution (ADR), in which a neutral third party assists parties to work towards a negotiated
settlement of their dispute. Should it be necessary to move into mediation, the parties will agree on
the appointment of a mediator to examine the areas of dispute and work towards a resolution.
Independence is achieved by both parties agreeing on the mediator and the process to be followed.
The parties retain control of the decision whether or not to settle and on what terms. To date, no
negotiations have reached a stage where the parties jointly consider it to be beneficial to have a
mediation.
Government's Role
The Government has responsibility for providing the funding for settlement payments, agreeing
significant decisions in relation to the settlement strategy and monitoring the Post Office’s progress
towards reaching final settlements. BEIS, supported by UKGI, has been involved in the design of the
compensation programme and holds regular monitoring, decision-making and working group
meetings, both internally and with the Post Office. This includes sign off on processes, principles and
oversight on initial cases. This is to ensure that negotiations are advancing in line with the
Government's desire to see timely and fair compensation delivered to postmasters.
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The Historical Shortfall Scheme
Recommendation 6: In responding to this report, we expect the Government to explain how the
Historic Shortfall Scheme differs from the HBOS Reading scheme and what safeguards have been
built in to avoid the problems that the latter scheme experienced. (Paragraph 35)
Government's response:
The Government is aware that Herbert Smith Freehills was employed by Lloyds Banking Group to
provide legal support in relation to the HBOS Reading compensation process. We are also aware that
the All-Party Parliamentary Group on Fair Business Banking submitted a complaint to the Solicitors
Regulatory Authority (SRA) in July 2020, relating to Herbert Smith Freehills’ involvement in the HBOS
Reading Scheme. The SRA confirmed following that investigation that “they looked at all the available
information and decided to close the matter with no further action”.®
The Historical Shortfall Scheme differs from the HBOS Reading Scheme in some important areas:
i. I Whereas in the HBOS Reading Scheme it has been reported that claimants found it
difficult to claim consequential losses, in the Historical Shortfall Scheme claims for
consequential losses® are clearly in scope.”
ji. I Whereas there was some reported criticism that the HBOS Scheme set a high evidential
standard for claims for direct and consequential losses, the Historical Shortfall Scheme
seeks to account for evidential issues when assessing all types of claims, including for
direct and consequential loss. This approach is explained in the Historical Shortfall Scheme
guidelines, which explain that “where the postmaster is unable to satisfy the burden of
proof in relation to their claim, their claim may nonetheless be accepted in whole or in
part if the Scheme considers it to be fair in all the circumstances’ .® Further detail can be
found in the response under Recommendation 15 below.
Whereas it has been reported that in the HBOS Reading Scheme there was no opportunity
to appeal an offer (or no offer),® the Historical Shortfall Scheme offers claimants
opportunities to meet with the Post Office to discuss any concerns with their offer as part
of the Dispute Resolution Procedure and refer the matter to another form of Alternative
Dispute Resolution. This includes the option of mediation with an independent mediator.
More detail about the Dispute Resolution Procedure can be found below in the response
to Recommendation 8.
iv. IThe HBOS Reading Scheme is reported to have used a panel made up of senior Lloyds Bank
personnel,’° whereas the Historical Shortfall Scheme has put in place an independent
5 http://www.law.com/internationakedition/2021/02/09/mp-slams-regulator-as-hsf-lloyds-investigation-
comes-to-an-end,
® http://www.cranstonreview.com/Content/Documents/The%20Cranston%20Review_v2.pdf
Thttps://www.onepostoffice.co.uk/media/47793/historicalshortfallscheme_consequentiallossprinciplesandgui
dance.pdf
Shttps://www.onepostoffice.co.uk/media/47793/historicalshortfallscheme_consequentiallossprinciplesandgui
dance.pdf
9 http://www.cranstonreview.com/Content/Documents/The%20Cranston%20Review_v2.pdf
1° http://www.cranstonreview.com/Content/Documents/The%20Cranston%20Review_v2.pdf
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advisory panel of legal, forensic accounting and retail specialists to make
recommendations on claims.
Recommendation 7: We ask the Government to seek clarity from the Post Office Ltd. (POL) on the
basis on which offers are made, in particular whether claimants were aware before agreeing to take
part in the Scheme of its terms of reference and methodology and what rights, if any, were waived.
(Paragraph 38)
Government's response:
No rights are waived by postmasters in joining the Scheme. Agreement on the part of the postmaster
that a settlement is full and final (meaning the postmaster cannot make any further claims against the
Post Office in relation to the matters settled) only happens if the postmaster accepts the settlement
offer made, thereby compromising his or her claim and bringing the process to an end.
The Historical Shortfall Scheme’s process and methodology are outlined in its Terms of Reference,”
which were made available on the Post Office website as part of the application process. In particular,
points 7 and 8 in the document explain that applications will be assessed by an Independent Advisory
Panel,” and it makes claimants aware of the Dispute Resolution Procedure should they be dissatisfied
with the outcome of their claim assessment. All applicants to the Scheme were required to sign a
declaration stating that they had observed and agreed to the Terms of Reference before they
proceeded with their application. In addition, paragraph 8.6 of the document states that “[a]ny
settlements reached shall be on a full and final basis and shall not be capable of being reopened save
in the event of fraud”.
When an offer is made, claimants are reminded that they can seek independent legal advice prior to
accepting the offer. As outlined further in the response to Recommendation 16, the Post Office will
reimburse up to £1200 of these costs. Claimants can alternatively choose to reject offers made in line
with the Independent Advisory Panel’s recommendation and instead follow the Dispute Resolution
Procedure steps to settle their claim.
Recommendation 8: We ask POL to explain how it ensures that the ADR process is fully independent
from the Scheme, how many claimants have used it, and what the outcomes have been. We also
recommend that the Government provide us with details of BEIS and UKGI’s oversight role in the
Scheme’s ADR process. We specifically note that 22 offers have been turned down by claimants and
we recommend that the Government confirm whether these rejections ended up in the Scheme’s
ADR process and, if so, what the outcomes are. We recommend that BEIS explains its role in
assessing those offers that have been rejected. (Paragraph 39)
Government's response:
41 https://www.onepostoffice.co.uk/media/47295/historicalshortfallscheme_termsofreference.pdf
22 N.B. All references in this document to the ‘Independent Advisory Panel’ or‘Panel’ are singular; the Post
Office has appointed additional panel members with similar level of qualifications and experiance to the
original panel to assist in the effective running of the scheme and to ensure that individual cases are
progressed as quickly and efficiently as possible. Each case will be assessed by three members of the
Independent Advisory Panel comprising one legal specialist; one forensic accounting specialist; and one retail
specialist.
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The Government accepts the Committee’s recommendation and has set out more detail on these
points below.
The Terms of Reference for the Historical Shortfall Scheme were developed by the Post Office in
consultation with, and endorsed by, the legal representatives for the claimants’ steering group in the
2019 group litigation. This included endorsement of the three-stage Dispute Resolution Procedure,
which is outlined in the Scheme’s Terms of Reference published at the launch of the Scheme.
The first two stages of the Dispute Resolution Procedure, the Good Faith Meeting and the Escalation
Meeting, provide an opportunity for the Post Office and its legal representatives to engage with a
claimant who has rejected the Post Office’s offer to explain the rationale behind the offer and to
consider any additional evidence provided by the claimant. If the claimant does not wish to accept the
offer following the Good Faith Meeting, he or she has the option to request an Escalation Meeting
with a senior manager from the Post Office, who will further consider the claim, any new evidence
and seek to negotiate a mutually acceptable outcome. However, if the dispute remains unresolved
after these first two stages, either party can then refer it to the independent mediation service
provided by the Wandsworth Mediation Service. The mediation process is independent of the Scheme
and is funded by the Post Office with no charge to the claimant under the Historical Shortfall Scheme
Terms of Reference.
In response to concerns raised by Parliamentarians, the Post Office has set up a dedicated Dispute
Resolution Team to develop, support and implement the Dispute Resolution Procedure from
beginning to end. The Dispute Resolution Team will provide help and support to postmasters as an
initial point of contact and throughout the process, including attending Good Faith Meetings when
deemed helpful, and with the prior agreement of the postmaster. The Post Office has redeployed four
Senior Managers as ‘Customer Champions’ who have real life experience of running Post Office
branches; they will support the Historical Shortfall Scheme full-time, with five more anticipated to join
the Dispute Resolution Team by end June 2022.
As of 25 March 2022, no rejected offers have been referred to mediation. If mediation ultimately
proves unsuccessful, the Scheme’s Terms of Reference set out that disputes for claims of less than
£10,000 will be resolved through civil proceedings in the county court, whereas claims for over
£10,000 will be determined through arbitration.
As of 25 March 2022, 1106 offers have been made, of which 966 (87%) claimants have responded and
of which 911 (94%) have accepted (i.e. 82% of all offers made by 25 March have been accepted).
Of the postmasters who have responded to the offer, a total of 59 (6%) formally disputed the offer
and have entered the Dispute Resolution Procedure. Of the 59 postmasters who have entered the
Dispute Resolution Procedure, 21 have subsequently accepted an offer before reaching the mediation
stage.
These 21 are included in the total 911 accepted offers above, and can be broken down as follows:
e 16 accepted the offer prior to the Good Faith Meeting (Stage 1 of Dispute Resolution
Procedure)
¢ 4accepted following the Good Faith Meeting
e accepted at the Escalation Meeting (Stage 2 of Dispute Resolution Procedure).
The 38 cases currently within the Dispute Resolution Procedure (as of 25 March) are at the following
stages:
33 https://www.onepostoffice.co.uk/media/47295/historicalshortfallscheme_temsofreference.pdf
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* 13 — Post Office is progressing a response to the Claimant (arising from a combination of
actions being taken before and after GFM)
e 19 — Post Office is awaiting a response from the Claimant (arising from a combination of
actions being taken before and after GFM)
* 6-—Good Faith Meetings to be held.
BEIS and UKGI provide oversight and challenge functions, as appropriate, regarding the Dispute
Resolution Procedure. BEIS and UKGI receive the regular management information and updates from
the Post Office to enable monitoring of the Dispute Resolution Procedure on behalf of the BEIS
Steering Committee.** The Government is closely monitoring how the process is working as more
postmasters are starting to move into the Dispute Resolution Procedure, to ensure the process allows
postmasters the opportunity to present their case properly and with the right level of support. For
example, the Post Office has shared lessons learned and consulted BEIS and UKGI on its continuous
improvement of the Scheme’s Dispute Resolution Procedure. The numbers of cases in dispute and the
stages they have reached through the process are presented to and discussed at operational level with
BEIS and UKGI officials at fortnightly meetings and are included in the monthly performance
monitoring meetings and quarterly reviews attended by the BEIS Director, who is BEIS’ Senior
Responsible Officer for the Scheme. The fortnightly meetings provide a forum for UKGI and BEIS
officials to raise any concerns or challenge specifically on the Dispute Resolution Procedure.
Within the Post Office, cases in the Dispute Resolution Procedure are managed daily and formally
reported fortnightly to programme governance, and monthly in governance updates from the
Historical Matters programme team to the Historical Remediation Committee, a sub-committee of the
Post Office Board.
BEIS does not assess the offers that have been rejected by claimants, as the Scheme Terms of
Reference set out the conditions for these entering the Dispute Resolution Procedure. Rather, the BEIS
Steering Committee has right of approval over the set of principles that govern each stage of the
Dispute Resolution Procedure: these include for example, specific courses of action in cases where a
claimant articulates new elements of their claim or submits additional supporting evidence for their
claim. Where specific cases fall outside of these principles these will be escalated through the relevant
governance (in Post Office and in BEIS). Moreover, Scheme-wide issues that affect cost and/or
precedent come to BEIS for approval as per an Operations Agreement between BEIS and the Post
Office. BEIS and UKGI will continue to monitor the Dispute Resolution Procedure outcomes to ensure
that this process is working effectively, and postmasters are properly supported.
Recommendation 9: In response to this report, POL and BEIS should provide details of who was
consulted in drawing up the Scheme, what issues were raised by those consulted, and how those
issues were addressed. We also recommend that POL and BEIS set out what opportunities were
given to claimants to raise concerns after the Scheme was opened and how those concerns were
addressed. (Paragraph 42)
Government's response:
The Government accepts the Committee’s recommendation.
44 The Steering Committee has membership from BEIS and HMT, and UKGlattend meetings as observers.
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An outline for what eventually became the Historical Shortfall Scheme was set out in the 10 December
2019 Settlement Deed which settled the GLO, which was approved by BEIS.
As explained above, the founding principles of the Scheme were developed by the Post Office in
consultation with, and endorsed by, the legal representatives for the claimants’ steering group in the
group litigation. The GLO mediators Charles Flint QC and Stephen Ruttle QC also approved the “cost-
effective and accessible mediation scheme” component contained within the settlement deed. The
Terms of Reference and the 3-stage Dispute Settlement Resolution approach were also discussed and
endorsed by the GLO group as set out in Question 8 above.
The Historical Shortfall Scheme was signed off by Post Office’s Board via its GLO sub-committee. The
Board included the BEIS Shareholder Representative. From October 2020, it became apparent from
much higher-than-expected numbers of applicants that Government funding might be needed;
therefore, formal BEIS and UKGI governance and oversight arrangements for the Scheme were
established in January 2021, with Government funding announced in March 2021.
The ongoing running and administration of the Historical Shortfall Scheme is overseen by specific
policy and delivery teams within BEIS. This includes oversight and approval of letters to former and
current postmaster applicants, principles established from test cases, operational agreements for the
Scheme and process maps. This list is not exhaustive but indicative of the oversight that BEIS (as
supported by UKGI) have over the running of the Historical Shortfall Scheme.
The Scheme was designed with the intention of providing a route to compensation for current and
former postmasters who had faced shortfalls. It also removed the requirement for legal action against
the Post Office which would have come with obvious legal, financial and emotional pressure. The
Scheme’s independent Panel was also empowered to have regard to ‘fairness’ countered by any
perceived power imbalance between the postmasters and the Post Office.
The Terms of Reference developed by the Post Office and endorsed by the legal representatives for
the claimants’ steering group in the group litigation included:
i. I The three-month application window for postmasters to apply and provide evidence of the
basis for the application. It also should be noted that, although the Scheme closed to formal
applications in August 2020, there was an extension until November 2020 for applications
following a clarification of the eligibility criteria.
ii, The principle that, once an application has been made, either party may write to the other to
request relevant information. Each party is required to co-operate in providing any
information which the other party may reasonably request.
iii. The three-stage Dispute Resolution Procedure, which is described in the response to
Recommendation 8 above. The Terms of Reference also outline the agreed principle for how
cases should proceed following this Dispute Resolution Procedure.
Regarding the second issue raised as part of this recommendation, if a claimant has concerns about
the Historical Shortfall Scheme or their application, they can raise these with the Post Office by e-mail
or post. The Post Office manages a process to accommodate complaints related to the Historical
Shortfall Scheme, which are routed to the appropriate team and addressed individually. Responses
are signed off by a senior manager at the Post Office and escalated to the HM Operations Director if
deemed necessary. This process acts as an oversight function, helping Post Office address potential
issues as they are identified.
When contacting the Post Office, claimants can make them aware of their circumstances or changes
to them, which are then fed into a prioritisation process. Cases that are prioritised fit into one of three
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levels (Critical, High, Medium) based on conditions including severe financial hardship, terminal illness,
risk of personal hardship and old age. Prioritisation can happen in the first instance (i.e. when an
application is submitted), or at a later stage when a claimant identifies an issue.
Furthermore, the Post Office has prioritised claimants for interim payments in circumstances where
concerns have been raised about the impact of the speed of progress on the claimant. As of 5 April
2022, 24 interim payments have been made on this basis.
Recommendation 10: The Government must explain how consequential losses will be assessed
under the Scheme with a range of indicative examples that draw on offers that have already been
made. (Paragraph 44)
Government's response:
The Government recognises the importance of ensuring that postmasters are compensated for
consequential losses. The Post Office has been clear from the start of the Scheme that consequential
losses would be covered under the Historical Shortfall Scheme.
In establishing the Historical Shortfall Scheme, an initial round of test cases was used as the basis for
the creation of the Case Assessment Principles. These principles were approved by the Independent
Advisory Panel and by BEIS’ Steering Committee and set out the underlying legal principles which will
be applied to claims within the Historical Shortfall Scheme to ensure consistency of approach.
The ‘Consequential Loss Principles and Guidance’ document, published on the Historical Shortfall
Scheme website, sets out the main principles and the process that is being followed in the case of a
consequential loss claim.” The Historical Shortfall Scheme application form asks applicants to identify
any shortfall losses as well as any consequential losses caused by a Horizon shortfall. In this instance,
a consequential loss is defined as a “financial or non-financial loss that is not a Shortfall Loss”. Types
of consequential loss may include but are not limited to: loss of earnings; loss of profits; loss of
property; loss of opportunity/loss of chance; penalties/general or increased costs of financing;
bankruptcies/insolvency; legal and professional fees; stigma/damage to reputation; personal
injury/harassment.
Consequential loss claims are assessed by Herbert Smith Freehills and put to the Panel to consider
against the legal principles to determine whether, on a balance of probabilities, the loss can be
attributed to a Horizon shortfall. This assessment takes into consideration the following legal
principles; however, this list is not exhaustive and may depend on the individual circumstances of the
claim:
Causation — Whether the Horizon shortfall caused the consequential loss
Remoteness — Whether the consequential loss was reasonably foreseeable at the time of the
Horizon shortfall.
Mitigation — Once causation is established, the extent to which the consequential loss was or
could reasonably have been mitigated by the postmaster.
{Shttps://www.onepostoffice.co.uk/media/47793/historicalshortfallscheme_consequentiallossprinciplesandgu
idance.pdf
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Quantum - The object of the assessment will be, so far as the award of a sum of money can do
so, to put the postmaster into the position that the postmaster would have been in but for the
Horizon shortfall.
Sufficient evidence may be required to prove a consequential loss claim, particularly in situations
where a claim for consequential loss refers to a situation that is only known to the postmaster. The
Independent Advisory Panel is, however, well aware of the issues around lack of evidence and lapse
of time since claimants may have suffered a consequential loss, and as a result they have a degree of
discretion to award ‘fair offers’ based on the facts of each case. The principles will be updated as
necessary in the light of Panel decisions on individual cases and wider consideration on the handling
of appropriate losses.
Indicative examples:
Claimant A included claims for shortfalls, loss of remuneration and increased insurance costs.
Following assessment by the Independent Advisory Panel, the offer made by the Post Office included
losses for all of the claimed areas as well as for compensation connected to dismissed employees, for
distress and for compound interest.
Claimant B included claims for shortfalls, loss of retail profit and time spent on shortfalls. Following
assessment by the Independent Advisory Panel, the offer made by the Post Office included losses for
all of the claimed areas as well as compound interest.
Recommendation 11: We recommend that the Government in consultation with POL set out the
reasons for involving POL in assessing claims, how this was discussed with stakeholders and how
they dealt with any concerns stakeholders may have raised regarding POL’s involvement. We also
recommend that POL set out what steps have been taken to ensure independence, including how
robust challenge is achieved and the numbers of initial recommendations rejected or amended by
the Independent Panel. We further recommend that Government explains how BEIS and UKGI are
providing oversight of the Scheme with practical examples of how, if at all, it has intervened to
ensure independence. (Paragraph 49)
Government's response:
The Government accepts the Committee’s recommendation.
In establishing the Historical Shortfall Scheme, the Post Office was determined to ensure that all those
impacted received full, fair and final compensation. Independence is built into the foundations of the
Historical Shortfall Scheme via the Independent Advisory Panel and the Scheme is overseen by BEIS
with the support of UKGI.
Involvement of Post Office
The involvement of the Post Office in assessing claims arose from the Group Litigation Order
settlement, which required the Post Office to establish and administer a scheme to deal with shortfalls
which relate to previous versions of Horizon (sometimes referred to as Legacy Horizon, Horizon Online
or HNG-X) for postmasters who were not part of the Group Litigation Order settlement.
The Government believes that the Post Office cannot fully move on until it has righted the wrongs of
the past and that it is therefore appropriate that the Post Office itself takes responsibility for making
amends to the postmasters affected by the Horizon IT issues and that the Government holds it to
account for doing so in a fair and consistent manner. The Government agrees that it is also right, for
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the reasons outlined by the Committee, that the Post Office itself is not the judge and jury in
assessment of individual claims.
Claims in the Historical Shortfall Scheme are assessed using Case Assessment Principles, which set out
the underlying legal principles which will be applied to ensure consistency of approach, as explained
in the response to Recommendation 10. As highlighted in that response, these Case Assessment
Principles were approved by a Director-level Steering Committee in BEIS before the first offers could
be made.
The first stage of assessing a claim involves an independent Legal Case Assessment by Herbert Smith
Freehills. This takes into account the information provided in the application and the shortfall analysis
information provided by the Post Office from its branch and historical record sources. Herbert Smith
Freehills’ initial assessment is passed to the Independent Advisory Panel which includes experts from
the retail, forensic accountancy and legal sectors, who review the initial assessment and the facts of
the application. The Independent Advisory Panel can request further information or recommend an
offer be sent to the postmaster based on its assessment of the evidence.
As noted previously, Herbert Smith Freehills’ role is to assess claims purely against legal principles and
present options for the Panel to consider quantum of compensation. The Panel can then also exercise
its discretion to recommend what it believes to be a ‘fair offer’ when considering the facts of the case
in the round. Government supports the Panel in this approach. As of 5 April 2022, there have beenno
cases where the Post Office has offered an applicant less than the Panel has recommended.
Oversight from BEIS and UKGI
BEIS Steering Committee’s oversight of Herbert Smith Freehills’s recommendation to the Independent
Advisory Panel and the final offers subsequently recommended by the Panel is supported by an
anonymised weekly case review process. The purpose of this is to check that the assessments and
recommended offers are consistent with the Case Assessment Principles, and to identify any cases
that require discussion and/or approval.
BEIS, supported by UKGI, has oversight of the pipeline of cases being submitted to the Independent
Advisory Panel, as well as of the subsequent decisions made by the Panel. Through this governance
framework, the BEIS Steering Committee has challenged Herbert Smith Freehills and the Post Office
on various issues, including how to treat unquantified claims.
As an example, in March/April 2021, BEIS challenged the Post Office’s proposed approach to
investigating shortfall claims. As a result, the Post Office amended its approach and opted for a
‘tailored investigation’ approach based on the evidence from claims that were fully investigated.
The BEIS Steering Committee has a right of approval over all offers made by Post Office to applicants,
and reviews Independent Advisory Panel recommendations that fall within a ‘review criteria’ range;
this includes, for example, complex claims above a certain value, or cases where the Independent
Advisory Panel’s recommendation differs materially from the options presented in Herbert Smith
Freehills’s Legal Case Assessments. The BEIS Steering Committee can also sample a proportion of cases
on a regular basis. However, BEIS officials are extremely mindful of the need to preserve the Panel’s
independence, and therefore any intervention once a Panel recommendation has been made would
be focussed on ensuring the Case Assessment Principles are being applied. The case review framework
enables BEIS and UKGI officials to have sight of the more complex or potentially contentious cases, in
an anonymised form, as they move through the case preparation stages. This provides an opportunity
for Government’s views to be considered before a case is put to the Panel for a recommendation.
Questions raised so far have particularly focussed on better understanding the Panel’s approach to
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decision-making and in particular understanding how the Panel is ensuring, as far as possible,
consistency of outcomes across the HSS claimants.
BEIS’s ongoing oversight of the Scheme includes scrutiny of monthly management information
provided by the Post Office and monthly and quarterly performance monitoring meetings with the
Post Office. The Operations Agreement between BEIS and the Post Office sets out that the monthly
monitoring meeting includes (but is not limited to): management information covering all applications
to the Scheme showing the status of applications; an up-to-date cashflow forecast; an up-to-date cost
estimate for the Scheme (including explanatory notes); any major changes to the risks / issues
assessment reported at the quarterly Senior Responsible Officer meeting; and information to monitor
the Post Office’s and BEIS’s responsibilities under the Public Sector Equality Duty (PSED).
Recommendation 12: We recommend that the Government ask POL to set out and share stretching
monthly targets and outturns on how the backlog of claims is being addressed. We also recommend
that BEIS and UKGI in their oversight role give monthly updates on what actions they are taking to
ensure these targets are agreed and met. (Paragraph 55)
Government's response:
The Government accepts the Committee’s recommendation.
The Post Office has increased the capacity of the Independent Advisory Panel to deal with this and are
now making good progress. At the 11 January 2002 Select Committee evidence session, Minister Scully
set out his ambition that 100% of initial offers will be made to Historical Shortfall Scheme claimants
by the end of 2022.
At the same Select Committee evidence session noted above, the Post Office Group Chief Executive,
Nick Read, made a commitment that the Post Office will have provided initial compensation offers to
95% of claimants by the end of 2022. As of 31 March 2022, compensation offers have been provided
to over 50% of claimants and the Post Office is confident it will meet its year-end commitment.
The Post Office has published its targets for this year as 50% offers made by the end of March and
95% for the end of the year. They have met the first of these targets and will update their ongoing
progress on a monthly basis on their website.!°
The response to Recommendation 11 above gives a detailed explanation of BEIS’s ongoing oversight
role. Although the Government accepts the Committee’s recommendation to provide an update on
actions taken to ensure targets are agreed and met, the Government suggests that this is done on a
quarterly, rather than monthly basis. By doing so, BEIS, supported by UKGI, will be able to provide a
more rounded update which reflects the full extent of the oversight work taking place during that
time, including materials from the quarterly and monthly meetings between BEIS, UKGI and the Post
Office.
Recommendation 13: It is worrying to hear that many of the claims awarded so far may be towards
the low end of the compensation scale. To dispel any fears that Horizon victims are not being
compensated fairly we recommend that the Government ask the Post Office to provide information
showing the spread of average claims paid out so far with a commitment to sharing such details
16 https://corporate.postoffice.co.uk/en/historica-matters/historical-matters-progress/historical-shortfall-
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going forward to ensure transparency and trust in the Scheme. We also recommend that the
Government is explicit about how BEIS and UKGI are providing oversight of the appropriateness of
offers made to claimants. (Paragraph 57)
Government's response:
The Government accepts the Committee’s recommendation.
There have been 2,365 eligible claims to the Historical Shortfall Scheme. Each case is complex and
unique, requiring specific examination of the details of the case and the circumstances in each.
To support the aim of ensuring consistency and fairness of approach, the cases have been grouped
into cohorts which share similar levels of complexity. To enable early progress, the first cohorts
included the least complex cases and were generally lower value claims, which means that the
awarded amounts are expected to be lower than those that will be made in later cohorts where more
complex and substantial heads of loss are included.
The Post Office now regularly publishes updates on their website on the progress being made with
compensation as outlined in Recommendation 12 above.’”
The Post Office is committed to continued transparency in its public reporting and management
information provided to the Government — including, amongst many other things, the spread of
average claims, which it will publish on its website and include in regular reports within appropriate
governance packs within the Post Office itself and provided to BEIS and UKGI.
The BEIS oversight of the appropriateness of offers made to claimants takes place through approval
of the Case Assessment Principles, the weekly case review process and consideration by a Director-
led Steering Committee as outlined in Recommendation 11 above.
Recommendation 14: We recommend that POL shares details, with relevant examples, of how it
takes the absence of information into account when it makes its initial recommendations for claims
and how the Independent Panel reflects on such cases. We recommend that POL sets out how many
claims have been refused by the Scheme or rejected by claimants, where an absence of information
has been relevant. We also recommend that BEIS and UKGI confirm what safeguards it agreed when
signing off the Scheme for cases were there was a lack of records. (Paragraph 63)
Government's response:
The Government accepts the Committee’s recommendation.
It is recognised that, due to the absence of records and the amount of time that has passed since
losses were incurred, postmasters may face challenges in evidencing their claim. The Scheme was
therefore designed so that a lack of supporting information would not be a barrier to entry to the
Scheme and claims made to the Scheme would not be rejected on the sole basis of a lack of
information at application stage.
Elig y:
17 https://corporate.postoffice.co.uk/en/historica-matters/historical-matters-progress/historical-shortfall-
sche:
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An ‘absence of information’ would not, of its own, cause a claim to be made ineligible and excluded
from the process. If a claimant cannot provide a value of their loss, the claim is simply classified as
‘unquantified’.
Claims Where No Award was Offered:
As of March 2022, the Post Office has issued 12 outcome letters with no award. Only 1 of these 12 ‘no
award’ claims is classified as ‘unquantified’.
Rejected Offers (Rejected by Claimants):
As of March 2022, 59 offers have been rejected (out of 1106 cases where offers have been made). The
Post Office has reviewed the 59 cases and determined whether an offer reduction due to lack of
claimant information was applied to the disputed case. Preliminary findings are that 11 cases (18.6%
of 59 total disputes) appear to have had the offer reduced due to lack of claimant information,
although it is worth noting that on a number of occasions the offer was increased despite a lack of
claimant information.
The Government supported the Post Office’s appointment of an Independent Advisory Panel, which
includes retail, legal and forensic accountancy experts to make recommendations on the Historical
Shortfall Scheme applications. As set out above, Herbert Smith Freehills initially undertakes a Legal
Case Assessment making initial recommendations. This is then sent to the Independent Advisory Panel
for their assessment. In making its decision the Panel may accept, amend or reject the
recommendations made by Herbert Smith Freehills and provide its own independent view on what
offers to make to claimants. It also has the discretion to take into consideration a lack of supporting
evidence when making its recommendations, so that an applicant who has clearly articulated a claim
will not be disadvantaged if there is a lack of records to support their claim. The Case Assessment
Principles used by the Independent Advisory Panel to assess each claim cover the scenario where
claims do not provide supporting information.
As of 31 March 2022, two applications have been rejected by the Panel in cases where no supporting
evidence was provided by the claimant. The Panel considered that it did not have sufficient evidence
to support the claims.
Please see below an example of how the Post Office and the independent Panel consider cases with
evidential issues.
Case example:
Claim: Particularised claim with no/limited evidence: “The evidence of a Horizon shortfall and
repayment are contained in the application form and subsequent Request for Information. Despite
the absence of documentary evidence, the Panel finds these compelling. The Applicant describes the
relevant events with clarity and in real detail. The Post Office has no evidence to the contrary. Non-
Disclosure Agreement data appears to evidence the existence of shortfalls. This was a one-off large
error, without explanation. Claim to be awarded in full.”
In responding to the second part of this recommendation, it is first important to note that the
Historical Shortfall Scheme was designed by the Post Office with input from Herbert Smith Freehills
and in line with the Terms of Reference endorsed by the GLO. It was subsequently approved by the
Post Office Board, on which a Government representative sits. Ministers were sighted on, but not
asked to approve, the proposal approved by the Post Office Board regarding the delivery of the
Scheme.
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Once it became clear that Government funding was required to support the compensation costs of
the Scheme (Autumn 2020), Government took a more active role in the governance of the Scheme
but maintained a commitment to keeping the assessment process independent. The BEIS Steering
Committee was closely engaged and input into the Case Assessment Principles developed by the
independent Panel to ensure fair and consistent treatment of claimants while ensuring value for
money. Any amendments to the Case Assessment Principles are subject to approval from the BEIS
Steering Committee; this provides Government with clear sight of any change in approach.
Recommendation 15: We ask the Government to confirm that the burden of proof should not rest
solely with the claimant, not least because POL itself hasn’t kept appropriate records, including
itemisation of which postmasters paid what amounts to individual suspense accounts. The fact these
funds were merely added to the overall profits of the Post Office during those applicable years
should be sufficient to agree that claimants must be given a significant level of benefit of the doubt
when compensation is being calculated. (Paragraph 64)
Government's response:
The Government accepts the Committee’s recommendation.
The terms of the Historical Shortfall Scheme include provisions for those who do not have access to
evidence to support their claim. The guidelines for the Historical Shortfall Scheme state that “where
the postmaster is unable to satisfy the burden of proof in relation to their claim, their claim may
nonetheless be accepted in whole or in part if the Scheme considers it to be fair in all the
circumstances”.
This guideline is designed to ensure that all former and current postmasters who have suffered losses,
or their beneficiaries, can make an application to be considered to receive compensation. The Case
Assessment Principles for the Independent Advisory Panel take this into account and accommodate
such applicants.
This can be seen in the following case example:
Claim: Despite evidential uncertainty, the Independent Panel awarded the claimant all of the claimed
£50,000 related to shortfall losses, based on the claimant’s account and the fact that this was not
contradicted by Post Office records for part of the eligible period. The Independent Panel highlighted
that evidential uncertainty was to be expected given the lapse of time since the shortfalls occurred.
Recommendation 16: We recommend that the Government liaise with the Post Office to establish
how many of the 2,500 claimants have been offered support through the Scheme, at which point
support was offered, if costs were covered, how much was paid on average, and what the nature of
that support was and who provided it. We also recommend that BEIS and UKGI set out what
oversight they provided of any support that was given through the Scheme, how they ensured that
it was independent and how it was evaluated. (Paragraph 67)
Government's response:
The Post Office is committed to ensuring that all applicants to the Historical Shortfall Scheme are
provided with adequate support throughout the application process, which is, of course, a sentiment
shared by Government. An independent well-being helpline was established by the Post Office from
the beginning of the Scheme to provide counselling for anyone contacting the Post Office. This exists
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alongside the additional training and support which has been given to the Post Office’s Customer
Support Centre and Branch Support Centre agents when dealing with Historical Shortfall Scheme
applicants, including how best to deal with their queries.
Further support has been established for those who have submitted applications. The Post Office
Historical Matters Remediation Team assists with queries received and can also provide updates on
progress of individual applications. This team can also advise on claims which require prioritisation
due to additional circumstances communicated to them from applicants. From the beginning of the
Scheme’s development, the Post Office recognised that there would be some applicants who would
require prioritisation given their circumstances. Further information on the prioritisation process can
be found in the response to Recommendation 9.
A Post Office representative with in-depth knowledge of running a Post Office branch is now involved
in the Dispute Resolution Procedure to help resolve any issues raised by postmasters via their
participation in both the Good Faith Meetings as well as the escalation meetings where they not only
provide support but also guidance based on real experience.
The Post Office has set out their terms for providing legal support on their website:’® “Postmasters
who would like to take independent legal advice to enable them to consider the terms of the offers
made to them will have a period of four weeks to do so. Post Office will contribute a sum of £1,200
inclusive of VAT towards the cost of such independent advice save that, in cases where Post Office
offers to pay the applicant’s claim in full (or largely in full), Post Office will contribute a sum of £400
inclusive of VAT towards such independent advice.” This commitment is set out in the Terms of
Reference and within the text sent out with settlement offers. The Government supported this
decision when proposed by the Post Office.
The number of postmasters who have been offered support through the Scheme so far are outlined
below. The following figures are accurate as of 18 March 2022:
i. Pre-Offer Support — this has so far been limited to 3 requests (authority to act costs,
provision of medical records) for a total of £326.
ii. Post-Offer Legal Support — a small number of claimants have submitted invoices for the
reimbursement of these legal fees: 9 claims totalling £6.5k. The take up of legal support so
far has been low because very few claims have been escalated to a Dispute Resolution
Procedure. As the more complex cases proceed, it is expected that the take up will increase.
Details on the available legal support are included in the offer letter to claimants.
iii. I Well-being Support — up to the end of Q4 2021, the third-party well-being support service
had been used for 16 calls/sessions of well-being support and counselling.
The Government and the Post Office keep the matter of support provided to postmasters under
review. As has been explained previously in this response, in Autumn 2020 the Government
committed to funding the Historical Shortfall Scheme, and therefore subsequently Government took
a significant role in governance of the Scheme. Through its role as Shareholder, the Government holds
regular meetings with the Post Office, including monthly updates specifically on the Historical Shortfall
Scheme. During these meetings, the Post Office provides updates on progress and the Government is
given an opportunity to challenge, both on specific operational issues (e.g. case assessment progress)
and strategic issues (e.g. support to postmasters). In these meetings, officials have, for example,
pressed the Post Office to consider its representation at the dispute resolution meetings, the structure
of dispute resolution meetings and the journey postmasters take from one stage to the next in
28 https://Avww.onepostoffice.co.uk/media/108595/independentadvisorypaneltor_feb2022.pdf
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providing informal opportunities to resolve issues. Alongside challenge from Parliamentarians, this
has resulted in meaningful changes to the process, which should improve the postmaster experience.
Recommendation 17: We have recommended in this Report that the Government set up a properly
resourced independent intermediary to assist sub-postmasters seeking to overturn convictions and
seek compensation. We recommend that this same body should also be tasked with assisting sub-
postmasters who are accessing the Historic Shortfall Scheme. This should include providing
claimants with access to forensic accountants and legal experts who can offer advice to help ensure
that claims are as robust as possible, that offers take account of all the losses suffered and that
claimants do not suffer significant detriment because records have not been kept by the Post Office
or other relevant organisations. (Paragraph 69)
Government's response:
As noted in Recommendation 2, the Government is supportive of the intention behind the
recommendation but is concerned that the time needed to set up such an independent body is likely
to lead to additional delays and ongoing frustration for affected postmasters.
Furthermore, the Historical Shortfall Scheme has already closed for applications and as of 31 March,
the Scheme is 51% of the way through offers being made and assessment is underway on applications
more widely.
When the Historical Shortfall Scheme was devised, independence was built into the foundations of
the Scheme and decision-making process. This includes the use of an independent advisory panel to
make recommendations to the Post Office on settlement offers under the Scheme, as set out in the
response to Recommendations 8 and 11.
The Scheme also aims to ensure that postmasters are not penalised for a lack of evidence, as set out
in the response to Recommendation 15. In addition, postmasters already have access to support
during the process through various measures, including:
i. access to an independent well-being helpline that was established at the beginning of the
Scheme to provide counselling for anyone contacting the Post Office;
ii. I a commitment from the Post Office to cover legal fees incurred by postmasters up to £1,200;
and
iii. I support of a Post Office representative with in-depth knowledge of running a Post Office
branch during the Dispute Resolution Procedure (more detail on this support is covered in
Recommendations 8 and 16).
Independent support
Given the Committee’s recommendation for further independence and the need for support for
claimants in the Historical Shortfall Scheme, as noted in Recommendation 2, the Government has
advised the Post Office to take further action in this area, including appointing an intermediary body
to provide independent advice to postmasters who come forward, to assist them with routes to
compensation, the availability of legal advice and to strengthen the emotional and well-being support
being provided to postmasters.
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Recommendation 18: The Government must explain whether this direct grant is to cover the whole
estimated cost of the Horizon scandal and whether this includes money assigned for achieving a fair
settlement with the 555. (Paragraph 72)
Government's response:
The information requested by the Committee is provided below.
After the Committee’s 11 January hearing, on 2 February 2022, the Minister for Small Business,
Consumers and Labour Markets wrote to the Committee setting out costs to date and expected final
outturn costs relating to the Post Office and Horizon Issues. His letter was published on the
Committee’s website on 9 February.”?
As set out in the Minister’s letter, the £685.6 million is not a direct grant to the Post Office. It is the
maximum budget cover agreed by HM Treasury to pay full and final compensation to postmasters
whose Horizon-related criminal convictions are overturned as well as to those postmasters who were
prosecuted but not convicted. This sum is in addition to the £94.4 million maximum budget cover
made available to pay interim compensation payments of up to £100,000 to postmasters whose
convictions are quashed. This funding includes compensation for members of the 555 who have their
Horizon-related criminal convictions quashed. It does not include any element in respect of other
Group Litigation Order claimants including those who were prosecuted but not convicted, whose cases
will be addressed as part of compensation for the GLO group more generally (see response to
Recommendation 1 above). Separate funding has been agreed to allow the successful completion of
the Historical Shortfall Scheme.
19 https://committees.parliament.uk/publications/8841/documents/89132/default/(Posted on the Business,
Energy and Industrial Strategy Committee Correspondence website at
https://committees.parliament.uk/committee/365/business-energy-and-industrial-strategy-
committee/publications/3/correspondence/)
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