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Further Submissions on Compensation
IN THE MATTER OF THE POST OFFICE HORIZON IT INQUIRY
FURTHER SUBMISSIONS ON BEHALF OF
POST OFFICE LIMITED
INTRODUCTIO!
1, These submissions are provided further to Post Office's submissions on compensation dated 31 May 2022
("May Submissions"). The purpose of these submissions is to update the Chair on a number of the points
addressed in Post Office's May Submissions they accordingly address certain (but not all) of the questions
raised by the Chair in his announcement dated 10 May 2022, regarding: (A) the Historical Shortfall
Scheme (the "HSS") and (B) final compensation for subpostmasters and subpostmistresses
("Postmasters")' with quashed convictions.
2. The information and statistics contained in these submissions reflect the position as at the end of June
2022.
A. HSS
Issue 2. Whether there has been delay and, if so, the cause(s) of delay in processing applications under
the HSS
3. Post Office wishes to emphasise at the outset that it recognises the importance to all those affected of
ensuring that applications made under the scheme continue to be processed at pace and that applicants are
provided with timely offers of fair compensation.
4. In line with this goal, in the course of the past 3 months, offer letters have been delivered to applicants at
a rate of approximately 125 per month. This has meant that at least 67% (1,582) of eligible applicants?
have received offer letters to date. Post Office is on course to provide at least 95% of eligible applicants
Subpostmasters and subpostmistresses are both types of "Postmaster", but a Postmaster can be a
limited company, partnership, or limited liability partnership, as well as an individual that contracts with the
Post Office in their capacity as a Postmaster in the network
Since Post Office's May Submissions, there has been a slight increase in the number of eligible applications, from
2,368 to 2,370. Minor changes in the number of eligible applications are not unusual and may arise where, for
instance, applications are suspended or withdrawn, Conversely, changes may be attributable to the fact that, as
applications progress through the assessment process, on occasion it becomes clear that the applicant actually
intends to claim for different tenures. For example, an applicant may have started the business as a Postmaster in
their individual capacity but subsequently entered into a partnership with a family member or set up a corporate
body and contracted with Post Office Limited via that entity, and wishes to claim both in their personal capacity
and on behalf of the corporate body. In such cases, rather than limiting the application to just that individual or
entity which strictly applied to the scheme, the scheme treats the same set of documents as giving rise to the
appropriate number of applications, in order to consider and resolve each claim separately.
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Further Submissions on Compensation
with offer letters by the end of this calendar year. It remains the case that there have been no instances in
which Post Office has offered an applicant a lower amount of compensation than that recommended by
the Independent Advisory Panel. Post Office has also offered to pay compound interest in respect of all
Horizon Shortfalls and Consequential Losses where appropriate,
5. This progress in processing applications has resulted in a total of approximately £16,590,000 having now
been awarded in compensation payments under the scheme to 1,242 (52%) eligible applicants, which
represents an average payment of £13,357. As noted in its May Submissions, Post Office anticipates that
this average figure is very likely to increase as the scheme continues to process applications concerning
more substantial and complex heads of loss.
6. To date, 115 applicants have formally engaged the dispute resolution process, of which 31 have now
reached agreement on the amount of compensation(27%). Post Office has conducted Good Faith Meetings
with 47 applicants and Escalation Meetings with 7 applicants, with a further 11 Good Faith Meetings
scheduled for the coming weeks.’ No mediation has yet been required in order for a settlement to be
reached, although Post Office anticipates that one case may require mediation in the coming weeks.
Issue 3. The provision which has been made for applicants to obtain independent legal advice in respect
of their claims under the HSS and whether it is adequate
7. Post Office has now received requests to contribute to the legal costs of 45 HSS applicants, all of which
Post Office has paid or is in the process of paying in accordance with the published scheme terms. In
addition, in 2 cases payments have been made in respect of costs incurred by applicants prior to them
having received a compensation offer under the scheme (for example, in relation to the costs of providing
medical records in support of a claim for personal injury). Payments have otherwise related to costs.
incurred by the applicant in connection with advice received on whether to accept the offers of
compensation made to them.
8. Post Office's May Submissions explained that, under the scheme, applicants are entitled to a contribution
towards the costs of obtaining independent legal advice in relation to their offer and the proposed
settlement terms. Post Office is currently considering whether contributions towards further legal or other
professional costs can be made available to applicants to help resolve their claims, Post Office will, of
course, update the Inquiry on the outcome of that consideration in due course.
5 See paragraphs 8.2 and 8.3 of the HSS Terms of Reference, in relation to the Good Faith Meeting and Escalation
Meeting stages of the scheme's dispute resolution procedure.
Post Office will contribute £1,200 (inclusive of VAT) towards the costs of such advice, save where Post Office
offers to pay the applicant’s claim in full (or largely in full), where it will instead contribute £400 (inclusive of
VAT).
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Further Submissions on Compensation
B. Final Compensation for SPMs with Quashed Convictions
Issue 5. The principles which are being applied to the calculation of final compensation payments
9. Since its May Submissions, Post Office has received (largely) quantified claims from 3 more Postmasters
with quashed convictions, which it is considering, and further information from I further Postmaster. This
brings the total number of (largely) quantified claims to 6, Post Office has also received 5 further
applications for interim payments. Offers have been made in 3 cases; the 2 most recent applications are
currently being processed.
10. Whilst the parties have been working hard to try and resolve the claims made by former Postmasters for
compensation arising out of the overturning of their convictions, one area which it has proved challenging
is non-pecuniary damages. These are damages which are not actual financial losses but reflect the impact
on the former Postmasters' lives, such as their mental health or reputation within the community, and.
penalise Post Office for its poor conduct.
11. While there is case law in this area which indicates what likely awards might look like, the current
circumstances here are unique. In order to find a way to resolve this issue Post Office and a number of the
former Postmasters, represented by Hudgell Solicitors, have agreed that the issue of non-pecuniary
damages should be referred to an early neutral evaluation ("ENE"). This is a process where a respected
evaluator expresses a view on the likely outcome, if the matter were to go to court.
12. Lord Dyson has kindly agreed to act as the evaluator for this process and the fact that it is without prejudice
and confidential allows a more open and less formal process. While the outcome is not binding on the
parties, it is hoped that it will allow these issues to be resolved in a timely manner. It is anticipated the
evaluation will be concluded by the end of July.
13. Post Office has made significant progress with the claimants in without prejudice negotiations in relation
to the first 2 fully-quantified claims. Post Office anticipates that the ENE process referred to above will
assist the parties in reaching an agreed resolution of the non-pecuniary aspects of these claims.
14. Post Office acknowledges the concerns of Postmasters in relation to the status of interim payments. Post
Office has engaged with HMRC to ensure that the removal of any claw-back provisions will not affect the
tax status on which the payments were made. Post Office received that confirmation from HMRC on 4
July 2022 and will be proceeding accordingly.
5 July 2022
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