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Witness Name: Car! Creswell
Statement No.: WITN11730100
Dated: 2 October 2024
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF CARL CRESWELL
I, Carl Creswell, will say as follows.
INTRODUCTION
1. tam Director, Post Office Policy and Business Engagement, in the Department
for Business and Trade. In this statement I refer to that Department and its
predecessors as “the Department”. I have prepared this ‘corporate’ statement
on behalf of the Department in response to the Inquiry’s request for evidence
dated 26 July 2024 and its supplementary request of 31 July 2024 (together,
“the Rule 9 request’), in order to assist the Post Office Horizon IT Inquiry in
relation to the Department's role in providing redress for those affected by the
Horizon scandal.
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I have been employed by the Civil Service since September 1998. My previous
Senior Civil Service roles include being Director for Better Regulation. As a
Deputy Director, I was responsible for helping to establish the Competition and
Markets Authority (CMA) and the Institute for Apprenticeships and Technical
Education (IfATE). My experience has included sponsoring the CMA, IfATE,
Acas and Citizens Advice.
I became the Department's Director responsible for Post Office policy in April
2019 and established an expanded policy team to support me. Prior to 2018,
advice to Ministers on policy towards the Post Office had been provided by
UK Government Investments (“UKGI"). Further detail on the evolution of Post
Office governance has been supplied to the Inquiry within Gareth Davies's first
and second witness statements (WITN11020100 and WITN11020200).
Initially I was also responsible for the Department's relationships with several
sectors of the economy, including retail and professional and business
services.
Over time my work has focussed increasingly on Post Office matters. I am the
appointed Senior Responsible Owner (“SRO”) for Horizon-related redress
within the Department. My only other responsibilities now are as joint Director
responsible for a Business Engagement Unit that supports Ministers and the
Permanent Secretary. I estimate that Post Office policy responsibilities take
up around 80% of my time. Those responsibilities include:
(i) The Department's policy relating to the Post Office, including the
Government's network targets for the Post Office and its requirements
for subsidy and investment;
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(ii) All matters relating to Horizon redress for postmasters, including
supervision and funding of Post Office’s delivery of the schemes
described below and direct management of the Department's schemes;
(iii) The Department's role as a Core Participant in the Inquiry, including the
submission of evidence.
My team and I work in partnership with UKGI on oversight of the Post Office's
business. UKGI also played a prominent role in the early phase of Horizon
redress, but progressively withdrew from that in 2022 and 2023 as the
Department's own capacity grew. I now have around 70 staff working on Post
Office matters. This number has grown substantially since the Department
took direct responsibility for delivery of some redress schemes.
Although the Rule 9 request is focused on the Group Litigation Order scheme
(‘the GLO scheme”) and the Horizon Convictions Redress Scheme
(‘HCRS"), these being the schemes created and administered by the
Department, I have also taken the opportunity to address in this statement the
Department's overall involvement in and approach to redress in the wake of
the Horizon scandal.
I have prepared this statement with extensive support of Departmental
officials, the Government Legal Department and counsel. Its contents are true
to the best of my knowledge and belief. I am authorised by the Secretary of
State for Business and Trade to make it.
All figures are accurate as at close of business of 30 August unless otherwise
stated. For simplicity, throughout this statement the term “postmaster” is used
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for those receiving or applying for redress. Most of these individuals are
postmasters or former postmasters, but some are postmasters’ assistants or
have similar related roles.
BACKGROUND
9. The Department recognises that the appalling effects of the scandal on its
many innocent victims will be long lasting, and some can never be reversed.
Ministers intend:
(i) To establish, through the Inquiry, the full truth of what happened;
(ii) Based on the Inquiry’s findings and recommendations, to take steps to
ensure that similar events can never happen in future; and
(iii) To provide financial redress to postmasters that is full and fair, whilst
recognising that no amount of money will turn back time.
10. IThe Department recognises that it has political responsibility for the response
to the scandal. Furthermore, much of the cost of remedying the scandal is
being financed from public funds. The Department has therefore been closely
involved in making decisions on redress, even for schemes delivered by the
Post Office. I describe in more detail below the Department's involvement in
the various schemes.
11. The independent Horizon Compensation Advisory Board, established in
January 2023, provides advice to Ministers on policy issues affecting the
schemes. Its Terms of Reference (which are being expanded to include the
HCRS) preclude it from becoming involved in individual cases. It meets every
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six weeks. Reports are published within a few days of each meeting on gov.uk
[Horizon Compensation Advisory Board website (BEIS0001026); Terms of
Reference (BEIS0001027); report of relevant meetings - of 29 August 2024
(BEIS0001028); 17 June 2024 (BEIS0001029); 7 May 2024 (BEIS0001030);
25 March 2024 (BEIS0001031); 28 February 2024 (BEIS0001032); 22
February 2024 (BEIS0001033); 10 January 2024 (BEIS0001034); Future
Approach to Compensation Report (RLIT0000288)]. The members of the
Horizon Compensation Advisory Board are:
e Professor Christopher Hodges (Chair) — an expert in Alternative Dispute
Resolution;
e Former MPs, the Rt Hon the Lord (James) Arbuthnot of Edrom and the
Rt Hon the Lord Beamish (Kevan Jones), both long-term Parliamentary
campaigners for the postmasters; and
e Professor Richard Moorhead — an expert in legal ethics who is leading
Exeter University’s project on the scandal.
A Programme Board, including senior officials from across the Department,
HM Treasury and a senior official involved in another Government redress
scheme, is responsible for ensuring consistency across the various Horizon
redress schemes, including those run by the Post Office. The Programme
Board is supported by underpinning project boards that scrutinise the
individual schemes — see paragraphs 53, 63, 120 and 212.
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13. Significant policy recommendations from the boards are put to Ministers for
decision, taking advice where appropriate from the Advisory Board. Where
necessary, collective agreement is sought across Government.
ORIGINS AND EVOLUTION OF THE VARIOUS COMPENSATION AND REDRESS
SCHEMES
14. As the Inquiry knows, the programme by which redress is delivered has
evolved over time, with new schemes created that build on existing schemes.
As is obvious, and as I address in more detail below, it would with hindsight
have been better if a single centrally-designed and administered redress
scheme had been instituted at the outset.
The High Court settlement
15. The December 2019 GLO settlement resulted in a payment of £42.75 million
to compensate the 555 GLO postmasters (plus £15 million legal costs).
However, this was a negotiated commercial settlement and most of the
settlement payment went to the company which funded the litigation rather
than to the postmasters who had brought it and for whose losses the
compensation was intended to provide redress. The remainder — which the
Department understands to be about £11 million — was distributed between
postmasters by the postmasters’ steering committee, supported by their legal
advisors, Freeths. The Department understands that this was done based on
a formula relating to assessed need.
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SS
Under the terms of the settlement, the Post Office also agreed to set up a
group to consider whether and how to address shortfalls attributed to
postmasters. This became the Historical Shortfall Scheme, later renamed as
the Horizon Shortfall Scheme (“HSS”). The HSS was intended to be
independently funded and administered by the Post Office itself, in their initial
expectation that around 200 people would be eligible. In the event, twelve
times that number applied for the scheme before November 2020, meaning
that the Post Office could no longer afford the liability. The Department
therefore stepped in to fund costs exceeding the £87 million provided by the
Company, and to oversee delivery of the scheme.
Redress for Overturned Convictions (“OC")
The first court decision to overturn criminal convictions was made in
December 2020. In July 2021 the Post Office established interim payments of
£100,000 (funded by the Department) to alleviate immediate financial
pressures for exonerated individuals. The Post Office also established
arrangements (funded and overseen by the Department) to negotiate redress
with those who had been exonerated.
In the light of uncertainty about the appropriate level of redress for non-
pecuniary losses, the Post Office (with the Department's strong
encouragement) agreed with postmasters’ legal advisors to commission an
Early Neutral Evaluation (“ENE”). Lord Dyson was jointly instructed by Post
Office and postmasters’ lawyers; his fees were paid by the Post Office. He
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19.
20.
21.
22.
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conducted this evaluation in July 2022 based on a group of ten cases and
produced guidance on the treatment of non-pecuniary losses. Subsequently,
the Department encouraged the Post Office to increase interim payments from
£100,000 to £163,000, and to pay the increased amount quickly.
In 2023, principles for pecuniary losses were developed with input from
claimants’ legal representatives and the Department. Drawing on these
principles, redress arrangements for overturned convictions were developed
into a remediation scheme.
At the Department's request, interim payments were increased to £200,000 in
July 2024 to bring them into line with those being offered in the HCRS.
GL
After the launch of the HSS, the JFSA campaigned to secure redress for GLO
claimants comparable to that paid to their peers in the HSS. Ministers had
great sympathy with the aims of this campaign. However, because the GLO
litigants had agreed with POL that the settlement agreement was “full and
final’, it was not easy to find a legal basis by which the Department could apply
public funds to top up the payments made to GLO litigants pursuant to the
GLO settlement agreement.
In March 2022 it was concluded that temporary powers in the Appropriation
Acts would offer a proper legal route to make additional payments, allowing
Ministers to announce the GLO scheme.
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23.
24.
25.
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In September 2022, an informal consultation on the scheme was published on
the gov.uk website in the form of a letter from the Postal Affairs Minister to
GLO members, dated September 2022 (BEIS0000892). Respondents were
invited to provide their views on their preferred option for scheme delivery and
their preferred choice of body to deliver the scheme. Out of 44 respondents
who specified their delivery preference, 39 identified the Department (rather
than the Post Office) as their preferred choice to deliver the scheme. A
summary of responses and key trends was published on gov.uk in December
2022 [Informal consultation on the design and delivery of the Group Litigation
Order GLO scheme, (RLIT0000357) J.
In accordance with postmasters’ wishes, Ministers decided that this scheme
should be operated by the Department rather than the Post Office. The Post
Office is not involved in the scheme’s governance, or in decisions on individual
cases. Its only role in the scheme is in disclosing information held in its files.
HCRS
By 2023 it had become clear that many innocent convicted postmasters had
not been and would not be exonerated in an appropriately timely manner
through the established criminal appeal framework. The Advisory Board raised
concerns about this, set out in their letter and accompanying paper of 14
December 2023 to the Lord Chancellor (BEIS0000893) and (BEIS0000894)
. In light of their concerns, Ministers decided to introduce primary legislation
to exonerate convicted postmasters.
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26.
27.
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Parliament legislated on a cross-party basis to enact the Post Office (Horizon
System) Offences Act 2024, which received Royal Assent on 24 May 2024.
The Act overturned postmasters’ convictions en masse in England, Wales and
Northern Ireland. Similar legislation was enacted in Scotland. The Department
launched the HCRS in July 2024 to provide financial redress to this group.
Improvements to the schemes
Over time, the Department has regularly engaged with stakeholders —
principally affected postmasters and their legal representatives — to find ways
to improve the design and implementation of the various schemes. Changes
agreed by Ministers have included:
Engaging postmasters’ representatives in scheme design
27.1 The GLO scheme was designed in discussion with the JFSA and their
legal representatives (who were funded for that purpose by the
Department). Their input was instrumental in shaping the scheme's
principles — and particularly its process. Likewise, the HCRS was
developed in light of feedback on the GLO scheme (and the Post Office-
administered redress process for Overturned Convictions), in close
consultation with postmasters’ legal representatives.
An independent and transparent Advisory Board
27.2 The Horizon Compensation Advisory Board was established in January
2023 to provide Ministers with advice on delivery of the GLO scheme.
Its remit was expanded in March 2023 to include oversight of the HSS
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and OC. It is being further expanded to include delivery of the HCRS.
Reports of its meetings are typically published on gov.uk within a few
days. The Board's advice has assisted in making improvements to the
schemes.
Assessing legal costs by means of a tariff
27.3 Having decided to provide support for postmasters’ legal costs in the
GLO scheme, the Department chose to do so via a tariff agreed with
law firms through mediation prior to the scheme’s launch (see
paragraph 133). This took the issue of costs off the table and enabled
the parties to focus exclusively on the content of claims rather than
fees. The HCRS has also implemented a tariff, agreed with claimants’
legal representatives.
Fixed Sum Offers
27.4 The optional fixed sum offers of £600,000 on OC and HCRS and
£75,000 on the GLO scheme and HSS have enabled smaller claims to
be resolved quickly and reduced the stress for these postmasters in
engaging with the full claim process. They have also allowed effort to
be focussed on the larger claims. So far, 52 OC postmasters and 150
GLO scheme postmasters have taken this route. See paragraphs 56,
64, 83 and 191.
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Interim payment policies
27.5 All schemes offer interim payments either reactively to alleviate
hardship or proactively. These policies enable redress to go to
postmasters in advance of their full claims being settled. See
paragraphs 57, 64, 79 and 189189.
Top-ups on claim submission
27.6 To encourage early submission of OC pecuniary claims, the
Department announced that interim redress payments would be topped
up to £450,000 upon receipt of a full pecuniary claim. HCRS will take
the same approach upon submission of a full claim. In the GLO scheme
postmasters’ redress is topped up to £50,000 at the same stage.
Target for issue of initial GLO offers
27.7 In December 2023 the Department committed to a target of making a
first offer to 90% of postmasters who have submitted a full claim within
40 working days. It is currently achieving this target. More details are at
paragraph 122.
Benefits disregard
27.8 To better address the financial hardship affecting individuals impacted
by the Horizon scandal, the Department worked with DWP to introduce
a benefits disregard for all Post Office redress schemes. This disregard
came into force in July 2023. This means that payments received by
postmasters no longer count towards the capital limit for means-tested
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benefits and pension credits and therefore do not affect their eligibility
to claim for them.
Neutralising the impact of taxation on redress
27.9 In June 2023, the Department announced additional payments to HSS
postmasters to ensure that they did not face additional tax liabilities as
a result of their redress. Payments under other schemes have been
exempted from tax. See paragraph 36.
Changes in the GLO scheme’s Principles and Guidance in respect of the
bandings used for some heads of loss
27.10 This stemmed from media comments which prompted advice to
Ministers from the Advisory Board (Advisory Board report of fourth
meeting, dated 29 March 2023, RLIT0000297). See further at
paragraph 169.
Additional interim payments
27.11 The Department agreed to make additional interim payments to any
acquitted GLO scheme postmaster who had not already received more
than the interim redress paid to those who were convicted, agreed
following the Inquiry's previous hearings on compensation. See
paragraph 80.
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28.
29.
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Regular reports on progress
27.12 Regular reports on progress and pinch-points in each scheme have
been commissioned by the Department from Sir Gary Hickinbottom
(OC pecuniary claims), Dentons (GLO) and Post Office (OC non-
pecuniary and HSS) in response to a discussion between the Minister
and the Advisory Board [Advisory Board report of eleventh meeting,
dated 22 February 2024, RLIT0000272)] . The reports for July (July
2024 report on GLO Compensation Scheme progress (RLIT0000358);
July 2024 report on HSS Scheme progress, (BEIS0000835); July 2024
report on OC progress - non-pecuniary (BEIS0000833); and July 2024
report on OC progress — pecuniary, BEISO000834] have been
published on gov.uk and on the Post Office website.
The Advisory Board was consulted on many of these changes, and in some
cases suggested them.
In May 2024 the Horizon Compensation Advisory Board published a paper
reflecting on the lessons of Horizon for future redress schemes [Future
approach to compensation report, Horizon Compensation Advisory Board
paper,(RLIT0000288) J]. In July 2024 the National Audit Office published a
report following a review of recent Government redress schemes: “Lessons
learned: Government compensation schemes” [National Audit Office
government compensation schemes report,( RLIT0000366 I
The
Department welcomes both reports and is considering their findings.
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GENERAL ISSUES
The Post Office’s role
30. As noted above, the GLO settlement agreement required the Post Office to
establish a group to consider whether and how to address shortfalls attributed
to postmasters, and this was the genesis of the HSS. The Department is not
aware of any suggestion at that stage that this scheme should not be delivered
by the Post Office.
31. I However, when designing the GLO scheme the Department consulted with
postmasters on their preferred choice of body to deliver the scheme. It
accepted clear representations from postmasters and their legal
representatives that that scheme should be delivered by the Department. That
approach has also been followed for the HCRS.
32. I Some stakeholders have suggested that the Department or some other body
should take over delivery of the HSS and OC schemes. The Department is
concerned that this might delay the delivery of redress under those schemes.
33. The Department considered a recommendation from the Horizon
Compensation Advisory Board that it should create a route to appeal against
HSS awards which is independent of the Post Office. On 9 September 2024,
Ministers announced their intent to establish this appeals process, delivered
by the Department's Horizon Redress Unit.
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Consistency between schemes
34. The Department has focused on ensuring redress to postmasters in similar
circumstances is consistent, regardless of the scheme under which they fall.
All schemes are designed so that redress is either agreed bilaterally or
decided by independent panels, including senior legal, accounting, retail and
medical experts as appropriate.
35. The processes of the schemes differ, reflecting the different circumstances of
the postmasters affected. However, the Department is satisfied that all
schemes are producing outcomes which are as consistent as is practicable.
36. There are some modest technical differences between schemes. Most
notably, there are differences of tax treatment. The impact on redress of tax
rules only came to the fore after delivery of the first Horizon scheme (the HSS)
was well under way. The GLO scheme, OC and HCRS payments were
exempted from income tax and other taxes. Because it would have been
difficult retrospectively to exempt HSS payments from tax, the Post Office
therefore makes top-up payments which have a similar effect. Further details
are set out in the Department’s response to the Inquiry’s Interim Report [DBT
response to the Post Office Horizon IT inquiry's first interim report, dated 26
October 2023, (RLITO0000359)] .
Pace of redress
37. The table below shows the progression of redress payments over the years.
[Year I Cumulative redress paid (£ million) ]
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High HSS oc GLOI HCRSI Total
Court Scheme
settlement
2019-20 ca.11.0¢ 11.0
2020-21 0.4 0.0 0.4
2021-22 7.0 6.5 13.5
2022-23 60.9 12.8 19.0 92.7
2023-24 57.7 25.8 26.7 110.2
2024- 36.7 16.4 51.7 3.4 108.2
25t
Total 11.0 I 162.6* 61.6 97.4 3.4I 336.0
All amounts except the High Court settlement include support for claimants’ legal costs
including VAT, but exclude the legal and other costs of the Department and the Post
Office.
All amounts paid or financed by the Department except where marked.
* Includes £86.7 million financed from the Post Office's own resources.
t+ Settlement payment from Post Office (not financed by the Department) less amount
paid to the funders of the legal action. Exact figure unknown as the Department and
Post Office were not party to the agreement between the JFSA and their funders.
¥ up to 30 Aug 2024.
Data on progress are published monthly on gov.uk [Financial redress data
website (BEIS0001035) as of 30 August 2024 (BEIS0001036) as of 31 July
2024 (BEIS0001037) as of 28 June 2024 (BEIS0001038) as of 31 May
(BEIS0001039) as of 24 April 2024 (BEIS0001040)as of 31 March 2024
(BEIS0001041); as of 1 March 2024 (BEIS0001042) as of 1 February 2024
(BEIS0001043) as of 11 January 2024 (BEIS0001044) GLO scheme data as
of 30 April 2024 (BEIS0001045)GLO data as of 14 March 2024
(BEIS0001046) GLO data as of 23 February 2024 (BEIS0001047)]. An extract
from the most recent table is below. It shows the numbers of final claims
received and settled under each scheme, as of 30 August 2024.
I Scheme Claims I Offers made Offers I Claims paid
_I received accepted
HSS 2,417 2,417 2,071 2,069
before
deadline
HSS 1,662 334 224 211
late
claims
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39.
40.
41.
42.
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Oc 73 62 57 57
GLO 263 253 207 201
HCRS : : : :
Total 4,415 3,066 2,559 2,538
It shows that 58% of the full claims received have now been settled. Over
recent months this figure has been declining because the number of new HSS
claims received (stimulated by the ITV drama Mr Bates vs the Post Office) has
exceeded the number of new settlements being reached.
There will be more claims to come, including:
(i) About 900 from those people whose convictions were overturned by the
2024 Act and are now eligible for the HCRS, which was launched on 30
July 2024;
(ii) 229 from those in the GLO scheme who have not yet submitted a full
claim;
(iii) I An unknown number under the HSS, which is still open for applications
and which saw a surge of applications following the ITV drama Mr Bates
vs the Post Office.
The Department recognises some postmasters have been suffering the
effects of this scandal for two decades or more. Even following the High
Court's judgments, the pace of redress has been too slow for some claimants
for a variety of reasons set out in the following paragraphs.
The scale of the scandal’s impacts has only emerged gradually since the
judgments were handed down. It is now known that at least 5,000 postmasters
were affected, when at the time of the High Court judgment the number
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43.
44.
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involved was envisaged to be much smaller. The Department was aware of
555 High Court litigants and initially informed by the Post Office that around
200 postmasters were expected to be eligible for the HSS, increased by the
Post Office in July 2020 to 500 postmasters expected to be eligible for the
HSS. It is not clear how many postmasters were expected at that time to have
convictions overturned but the number would not have exceeded an estimate
of 650 made in 2021.
On the Post Office’s assumption that many HSS claims would be relatively
simple, the HSS was set up in the expectation that postmasters would submit
their own applications. In reality, many claims were more complex than the
Post Office had assumed. The Post Office’s legal team and independent panel
had to do significant work to develop principles to assess claims consistently
and work with postmasters to clarify their claims, adding significantly to the
time taken.
Once it became clear in around November 2020 that the Post Office could not
afford to fund the HSS from its own resources, Government took around four
months to resolve the approach to funding. Further information is provided in
paragraph 18 of the Department's written submissions on compensation
provided to the Inquiry on 31 May 2022 [BEIS Submissions on Compensation,
dated 31 May 2022 (BEIS0000899)].
After the GLO postmasters agreed to a full and final settlement in the High
Court case, neither the Post Office nor the Department was under any legal
liability to pay further redress to those who were not convicted. Once it became
clear that the redress which unconvicted GLO postmasters had received
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through the High Court settlement was substantially less than that provided
under the HSS to postmasters in similar circumstances, Ministers recognised
the Department's moral responsibility to address this. However, the
Department lacked any clear statutory powers to provide additional redress
(or to finance the Post Office to do so). It took some time to identify the option
of using the Supply and Appropriation Acts to provide such authority — see
paragraph 21. That option has now been superseded by the passage of
specific primary legislation — the Post Office (Horizon System) Compensation
Act 2024.
While OC claims for non-pecuniary losses were often submitted and settled
quickly after Lord Dyson's Early Neutral Evaluation (July 2022), submission
and assessment of pecuniary claims was much _ slower despite
encouragement from the Post Office and the Department. Before the
underlying legal principles for financial losses had been established,
pecuniary cases were settled through a negotiation process and this resulted
in long delays between submission of claims and settlement, with the first
claim settled in September 2022. However, even after the principles were
established following the ENE and the lead cases settled, the pace of
submission of pecuniary claims to the OC has been relatively slow. This may
be, in part, due to stress on claimants involved in developing such claims, in
conjunction with the need to compile an evidence base which may date back
many years, and where it may be challenging to access records and provide
such information after so much time has passed.
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47.
48.
49.
50.
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The Department began to consider making a fixed sum offer within the GLO
scheme in summer 2023, but no announcement was made until January 2024.
In some instances, settlement of claims has been delayed by disputes around
legal costs. Following the announcement that a £600,000 fixed sum offer
would be available to OC claimants, it was not possible to reach settlement or
make payments to claimants until Post Office had reached agreement
regarding their legal costs for these claims. There remain disputes regarding
legal costs, though these can be referred to the Independent Assessor Panel
where agreement can be reached, following the appointment of Sir Gary
Hickinbottom as Chair of the Panel in April 2024. It is unusual that such
disputes would result in delays to settlement or redress being paid to claimants
as this payment usually takes place before legal costs are settled.
The preparation of claims for the GLO scheme has taken longer than the
Department had anticipated. In part, the Department underestimated the
complexity of the disclosures which Post Office would be required to make,
which had an unexpectedly long delivery time. Furthermore, preparation of
forensic accountants’ expert reports is taking much longer than anticipated.
The Department is working with postmasters’ lawyers to establish what can
be done to accelerate this.
The Department has taken a number of steps to increase the pace of redress
across schemes, working with the Post Office in respect of the HSS and OC:
(i) Making substantial fixed offers across all schemes for those who wish to
take them;
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(ii) Where appropriate, making partial payments as soon as any aspect of a
claim is agreed, even if final settlements are likely to take additional time;
(iii) I Offering interim and hardship payments wherever appropriate;
(iv) Working with postmasters’ lawyers to enable and encourage them to
submit claims as rapidly as possible;
(v) Setting a target of 40 working days for the Department to make an offer
from receipt of a full GLO or HCRS claim. The target is being achieved
in 90% of GLO cases. No full HCRS claims have yet been received.
THE HORIZON SHORTFALL SCHEME
51. As I observe above, the terms of settlement in the GLO litigation required the
Post Office to establish a group to decide on its approach to the shortfalls
attributed to postmasters. This led to the establishment of the HSS as a
redress scheme for postmasters who had not been amongst the litigants. In
line with standard requirements for major Post Office expenditure, the
settlement envelope proposed by the Post Office was approved by the
Department, with financial and technical advice from UKGI and the consent of
HM Treasury.
52. As the November 2020 deadline for applications to the HSS approached, it
became plain to the Department that, because the number of applications
greatly exceeded Post Office’s original estimate, the company would not be
able to afford it as expected. At that point the Post Office applied for funding
from the Department on the grounds that the scheme’s cost would exceed the
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53.
54.
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resources available. The Department and UKGI scrutinised this proposal,
including the scheme’s affordability to the Post Office, in discussion with HM
Treasury. It was agreed that the Post Office would make available additional
funding for the scheme through the sale of its telecoms business, taking its
total contribution to about £87 million, and that Government would fund the
remainder. Ministers announced this in March 2021.
Because any cost of the scheme above £87 million would fall on the taxpayer,
as a condition of funding, the Department took a role in governance of the
scheme from February 2021. It formed an HSS Steering Committee, whose
members were officials from the Department, UKGI and HM Treasury. Its
Terms of Reference are exhibited [HSS Steering Group Terms of Reference,
(BEIS0000900)] . The committee is responsible for decisions including the
establishment of principles on which awards would be based. Its role is set out
in an Operations Agreement with the Post Office [HSS Operations Agreement
with Post Office (UKGI00017881)]. It has usually been able to reach decisions
on cases within a week of proposals being submitted. UKGI provided valuable
support on financial, legal and analytical issues, particularly in supporting the
Department to challenge the legal principles which the Post Office was
developing for the HSS.
As the scheme has developed, Post Office has been given greater autonomy
in respect of decisions on individual cases, although decisions in cases
meeting specified “exceptional case criteria” are still approved by the
Department. In no case has any offer been made at a level lower than that
recommended by the scheme’s independent panel.
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55. The Department monitors the scheme and its impact through management
information provided by the Post Office and monthly monitoring meetings with
the Post Office and through feedback from postmasters, their lawyers and
other stakeholders.
56. Proposals for changes to the scheme may be made by either the Post Office
or the Department and are determined through the scheme’s governance
structures, with recommendations on significant decisions made to Ministers
and, where appropriate, HM Treasury. Examples that the Department has
instigated include:
e The option for postmasters to receive a fixed sum payment of £75,000
to settle their claim on a full and final basis.
e The provision of top-up payments to ensure that the amount of redress
is not unduly reduced by tax.
57. There has been extensive engagement with Post Office on these measures
before implementation. The Department has also worked collaboratively with
the Post Office on other interventions, including:
e The provision of additional funding to allow late applications to be
considered, without examining the reasons for the lateness.
e The introduction of hardship and interim payments to assist claimants
facing difficult personal or financial circumstances.
58. The Department has accepted the recommendation of the Inquiry’s Interim
Report that it and the Post Office should set a closure date for applications to
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the HSS, though no date has yet been set. When a date is confirmed, the Post
Office will write to all past and present postmasters who are not involved in
one of the other Horizon schemes (around 24,000 postmasters) to invite any
further applications ahead of the closure date. The Department is considering
other means of publicising the end date for applications.
The Department acknowledges the criticisms of the HSS, including the lack of
availability of guidance in relation to consequential losses at the beginning of
the scheme and the lack of professional support to make a claim, which may
have affected the framing of some claims and therefore the outcomes to those
claims. The Horizon Compensation Advisory Board, taking into consideration
these criticisms, recommended that these issues be addressed by providing
a route for appeals for postmasters who had previously settled, that would
operate independently from the Post Office’s HSS process.
On 9 September 2024, the Minister announced that the Board's
recommendation had been accepted. This appeals process will enable
claimants who have settled their claim under the HSS to have their case re-
assessed. It will be delivered by the Department, which will apply the lessons
learned from redress schemes to date to ensure that the process is easy for
postmasters to engage with and that outcomes are delivered at pace. Further
details will be announced in the coming months. There will be no obligation for
postmasters to appeal their settlement and no doubt many will be content that
their claims have been resolved fairly.
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OVERTURNED CONVICTIONS
61. I When the Courts overturned the first group of Horizon-related convictions in
December 2020, the Post Office needed to address redress claims for
malicious prosecution on the part of people with overturned convictions. Given
the number of convictions which had resulted from prosecutions during the
Horizon era it was apparent that the potential total liability could be very large.
62. In light of the pressure on the Post Office’s resources from the HSS, as
described above, it was apparent that the Department would need to finance
these additional liabilities through public funds. As in the HSS, the Department
and UKGI took on roles in the governance of both individual cases and
scheme policy, as well as monitoring progress and considering stakeholder
views. The Department initially had approval over all offers. It now approves
only those which meet defined exceptional case criteria. These are set out in
an Operations Agreement with the Post Office [Overturned Convictions
Operations Agreement with Post Office (BEIS0000902)).
63. The scheme is subject to the strategic direction of the Department’s Horizon
Redress Overturned Convictions (“HROC”) Board (formerly Post Office
Overturned Convictions (POC) Board), which was established in August 2021.
Its Terms of Reference are exhibited [HROC Board Terms of Reference,
(BEIS0000903)] . The purpose of this Board is to provide overall strategic
direction from the Department's perspective to ensure successful delivery of
the Overturned Convictions scheme. This includes approving the principles,
ensuring Post Office implement agreed processes and criteria for payments,
overseeing redress offers and ensuring these are delivered in line with funding
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64.
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letters, signing off changes to principles, ensuring appropriate assurance of
Post Office decisions is undertaken, and maintaining oversight of overall
delivery performance of the scheme. Its members are Departmental staff
(including myself as the SRO for the programme and representatives of the
Department's Legal and Finance teams) and HM Treasury officials. In the early
phases, Board membership included a Non-Executive Director of the
Department, and UKGI's shareholder representative on the Post Office Board
as an observer. Where appropriate, the Board can choose to escalate issues
to the relevant Minister.
OC decisions which the Department has instigated or agreed include:
e The July 2021 announcement that interim payments of £100,000 would
be made to individuals as their convictions were overturned. The
Department pressed for this figure to be increased to £163,000 in
October 2022 following Lord Dyson’s Early Neutral Evaluation process,
and the Department decided to increase the amount again in July 2024
to £200,000 to bring the interim payment amount in line with that offered
on the HCRS.
e The announcement of full funding for the scheme in December 2021.
e The offer to all eligible OC postmasters, announced in September 2023,
of the option to settle their claims on a full and final basis for a total fixed
sum of £600,000 inclusive of interest, instead of making a claim for their
individual losses. This decision was instigated by the Department.
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65. The Department approved the overall change for OC to become a
‘remediation process’, supporting the following actions: the appointment of
retired Court of Appeal judge Sir Gary Hickinbottom to chair an independent
panel to assess the pecuniary losses of those postmasters with overturned
convictions where disputes arise, and to ensure that there are no undue
delays in the process leading to the settlement of pecuniary claims. Sir Gary
has also taken on a case management role for the OC scheme. This is
intended to expedite offers being made and settlement being reached.
GLO SCHEME
Commencement
66. On 10 February 2023, the Department opened registration for the GLO
scheme. Postmasters’ legal advisors (and any unrepresented postmasters)
were invited to fill out a Registration Form and return it to the Department. The
registration form was a short document which requested basic personal
details, the name of the postmaster’s legal representative and identifying
information to enable the Post Office to begin work on disclosure.
67. IThe scheme operates according to Alternative Dispute Resolution principles.
In March 2023 the Department appointed Dentons as the scheme’s Claim
Facilitators and Addleshaw Goddard as the Department's legal advisors. Their
roles are described more fully below.
68. On 23 March 2023, the Department opened the scheme and invited full claims
to be submitted onto the Dentons Direct platform.
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Eligibility criteria
69. Section 2 of the published document ‘GLO Compensation Scheme Guidance
and Principles’ [GLO compensation scheme Guidance and Principles — v2,
(BEIS0001048)] outlines eligibility criteria, the previous version of this
document is [GLO compensation scheme Guidance and Principles,
RLIT0000280}.
70. IThe Guidance and Principles require that in order to be eligible for the GLO
Scheme,
“2.1.2 You must have been a postmaster in the action Alan Bates
and Others v Post Office Ltd pursued under a Group Litigation
Order in 2016 and a party to the Settlement Agreement dated 10th
December 2019 with Post Office Limited (“the 2019 Settlement’).
2.1.3. Your application and time with Post Office must not involve
or relate to any criminal conviction(s); claims from convicted
postmasters will be processed by Post Office once the conviction
has been overturned. Please note, if you were prosecuted but not
convicted, or you received a caution, you are eligible for the
Scheme.”
71. I Redress may be claimed by the estates of deceased postmasters who would
have been eligible.
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72.
73.
74,
75.
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Application process
Section 3 of the published document ‘GLO Compensation Scheme Guidance
and Principles’ [GLO compensation scheme Guidance and Principles — v2,
(RLIT0000280)] outlines the application process. All the relevant claim forms
and guidance can be found on gov.uk [GLO Registration Form,(BEIS0001049)
; GLO Compensation Scheme application form,(BEIS0001050)] .
Postmasters’ legal advisors were invited to present all losses in the application
form and to submit it onto the Dentons Direct platform, alongside all relevant
information and evidence. Postmasters were encouraged to explain in as
much detail as possible the particular loss being claimed, the specific amount,
how the loss was caused by a Horizon shortfall and any steps the postmaster
took to attempt to reduce the loss. The Department recognised in its
communications that, given the length of time which had passed, “there would
be an absence of evidence”.
Any postmaster choosing not to have legal representation would be granted
access to the Dentons Direct platform to submit their application. However, all
claims in the scheme have been made by legal representatives.
The Department also recognised that some GLO members might find it difficult
to engage in this process. The guidance therefore outlined that postmasters
could simply submit their Schedule of Claimant Information used for the High
Court case in order to receive an offer from the Scheme.
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Communication
76. The GLO Scheme was developed by the Department in discussion with the
JFSA and Freeths, both of whom already had established contacts with the
great majority of GLO members. The Department understands that the JFSA
circulated regular updates to members about these discussions. Ministers
wrote letters to all GLO postmasters:
e On 2 September 2022 (BEIS0001026) to seek their views about options
for design of the scheme;
e On 7 December 2022 [Minister Hollinrake letter to postmasters,
(RLIT0000284)] to inform them of the outcome of that consultation and
encourage them to appoint a lawyer and begin developing their claims;
and
e On 23 March 2023 [GLO scheme letter to postmasters, (RLIT0000283)]
to inform them that the scheme was open to receive claims.
77. These letters were transmitted to GLO members with the help of the JFSA and
Freeths. They were also placed on the Department's website and amplified by
Parliamentary announcements — see for example Hansard record Horizon
Compensation debate March 2023,(RLIT0000360)) .
78. I Communication with postmasters in respect of initial interim payments was via
Freeths. Following the scheme launch, communication with postmasters
about individual claims has been made via their legal representatives. (All
GLO postmasters were legally represented in applying to the scheme.)
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79.
80.
81.
82.
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Interim and top-up interim payments
From August 2022, Freeths delivered initial interim payments to GLO
postmasters on behalf of the Department. A£19.5 million total was shared pro
rata to the individuals’ shares of the High Court settlement (described in
paragraph 15 above). To receive these payments, GLO postmasters were
required to engage Freeths (who had been their legal representatives during
the High Court case). Payments were made without further application.
In April 2023 the Department made additional interim payments to any
acquitted GLO postmaster who had not already received more than the interim
redress paid to those in the OC who had their conviction overturned, topping
up the interim redress to £100,000. This followed discussions with
postmasters’ legal representatives; no further application was required.
The Department has also made further interim payments to other GLO
postmasters suffering particular hardship — for instance a risk of bankruptcy or
loss of a home. Such payments have been based on request from their legal
advisors, based on whatever evidence they have been able to provide. The
Department has made 96 such further interim payments since January 2024.
Further information is at paragraph 149.
Finally, where a postmaster has challenged the Department's initial offer in
response to a full claim, the Department has made an interim payment of 80%
of that offer without further application.
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Fixed sum offer process
83.
84.
85.
86.
On 12 January 2024, the Department announced the introduction of a Fixed
Sum offer of £75,000, which mirrored the previously announced approach on
the Overturned Conviction scheme (see paragraph 64). The relevant claim
form for this offer Fixed sum offer claim form (BEIS0001051)] was published
on gov.uk on 26 January 2024 and was circulated to the postmasters’ legal
representatives in parallel. This route does not require any disclosure from
Post Office or any expert evidence.
To take advantage of this offer, the postmaster’s legal advisor submits the
Fixed Sum Application form to Dentons. Addleshaw Goddard prepares an offer
of £75,000 less previous interim payments, which the Department checks and
approves. The offer letter does not contain any assessment by head of loss.
It lists the deductions of previous payments and offers the remaining total.
The postmaster’s legal advisor receives the offer and the postmaster submits
a signed offer letter in reply before payment is made. There is no challenge or
appeal under this option.
Full assessment process
The process and form for applying for a fully assessed claim were first
published on the gov.uk website on 23 March 2023, including a question and
answer page [The GLO Compensation Scheme - questions and answers,
dated 23 March 2023; updated 29 November 2023 (BEIS0001053) updated 7
February 2024 (BEIS0001054) updated 5 April 2024 (BEIS0001055); updated
7 June 2024 (BEIS0001056)].
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87.
88.
89.
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Recognising the mental health damage which has been caused by the
scandal, paragraph 1.2.5 of the scheme Guidance and Principles
(BEIS0001048) state that “If you feel that you are unable to engage with this
[full application] process, you can simply submit your documentation from the
High Court, including your [Statement of Claimant Information], to the
Scheme. This may not produce the optimum outcome but will still allow your
claim to be considered.” No postmaster has yet chosen to take this approach.
The full application process requires at a minimum a fully completed
application form, which is completed by the postmaster’s legal advisor, plus
any expert evidence reports as agreed with the Department (see paragraph
136 below). Post Office Limited provides disclosure which may include a
Shortfall Analysis which is a summary of the data of shortfalls and any
repayments recorded on the Horizon system. All documentation involved in
the claim is submitted to Dentons. On receipt of these documents, Addleshaw
Goddard, review the paperwork and consider if any Requests for Information
(“RFls”) are required in order for a full assessment of the claim to be made. If
the postmaster has not already received interim payments to the value of
£50,000 then their redress will be topped up to that level on submission of a
complete claim.
RFls submitted to postmasters’ legal advisors vary from case to case but can
typically relate to requests for any supporting documents that are referenced
in the claim that have not been included in the bundle, clarification of facts or
provision of information such as durations of leases. The Department has
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encouraged Addleshaw Goddard to make RFls by phone where possible to
expedite the RFI process and avoid unnecessary legal costs on both sides.
90. In the case of RFls to the Post Office, requests are typically for a Shortfall
Analysis, confirmation of the date that the Horizon system was installed or
replaced, or for details of the reason for branch closure (particularly where this
happened after the postmaster left the branch). The Department or Addleshaw
Goddard may ask the Post Office for clarification of facts in the Shortfall
Analysis if the wording is unclear or if there is unfamiliar terminology in any
Post Office disclosure documents.
91. The scheme’s Claim Facilitators, Dentons, are responsible for promoting
settlements between the parties, but do not themselves assess claims and
therefore do not issue RFls, although they may communicate an RFI request
from the Independent Panel or Reviewer or chase a response to an RFI.
92. Addleshaw Goddard then review the claim in line with the scheme’s Guidance
and Principles and submit a recommendation to the Department as to the
redress to which the postmaster is entitled. The Department reviews the
recommendation and asks questions as necessary, before approving or
amending the offer. For the avoidance of doubt, it is the Department, not
Addleshaw Goddard, that is the decision maker.
Full assessment: offer letter
93. The offer letter from Addleshaw Goddard to the claimant's legal representative
details the amount offered, overall and broken down by head of loss, as well
as detailing any deductions for previous payments. A detailed explanation of
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the assessment is contained in an annex to the offer letter for fully assessed
claims.
94. The terms and conditions on which the offer is made are stated in the letter
and the postmaster is required to sign below these terms on the offer letter to
accept. The standard conditions are set out in the example GLO offer letter
[Example GLO offer letter (BEIS0000904)).
95. From time to time there may be a need to amend these standard conditions in
respect of particular claimants. Where revisions are required, they are agreed
with the claimant's legal representative.
Full assessment: response to offer
96. The postmaster may choose to accept the offer in full or challenge any
elements of it that they are unhappy with. If accepting in full, the postmaster
signs the offer letter and their legal advisor returns it to the Department
together with a request for payment.
97. — If challenging the offer or any element of it, the legal advisor writes to Dentons
and Addleshaw Goddard explaining which heads of loss are challenged, and
on what grounds. At this stage the Department tops up previous interim
payments to 80% of the offer.
Full assessment: reviews and appeals
98. Rather than an award followed by a review or appeal, the process is based on
the principles of alternative dispute resolution. In many cases, the
Department's initial offer has been accepted by the postmaster. If the
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postmaster instead chooses to challenge the offer, the Department considers
the challenge and may make a revised offer. Where necessary, discussions
between lawyers for the Department and the postmaster follow. These are
facilitated by Dentons where required.
99. Only if Dentons reach the view that redress will not be agreed bilaterally in this
way do they put the case to the GLO Independent Panel, which comprises a
KC, an accountant and a retail or medical expert as decided by Dentons based
on the facts of the case. Following its first discussion the Panel makes a non-
binding assessment which will inform further discussion between the parties.
If they still cannot reach agreement, the Panel makes a final assessment. The
Panel's Terms of Reference are exhibited [Terms of Reference of the GLO
Scheme Independent Panel (BEISO000905)].
100. To date, 195 cases have been agreed bilaterally: only two have been heard
by a first Panel. A further 30 offers remain under consideration by postmasters
or in discussion between the parties. It is not possible to consider trends in
Panel cases in the absence of a larger sample.
101. If either party believes that there has been a manifest error, procedural
irregularity or substantive error of principle in the Independent Panel's final
assessment of the claim, or if the Panel's final assessment is substantially
inconsistent with the Guidance and Principles, they may refer the case to the
Independent Reviewer, Sir Ross Cranston, whose decision is final. The
Reviewer's Terms of Reference are exhibited [Terms of Reference of the GLO
Scheme Independent Reviewer, (RLIT0000287)]. So far, no cases have been
so referred.
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102. The Reviewer’s Terms of Reference require him to:
“assess whether the Independent Panel's final assessment:
e was substantially inconsistent with the Guidance and
Principles
e reflects a manifest error, procedural irregularity or a
substantive error of principle.”
Payment
103. Every week, each legal advisor sends a single Transfer of Funds Request
(TFR) to the Department for the total value of all redress payments accepted
by their clients in that week. This TFR must be accompanied by a document
detailing the individual redress payments included within the TFR, including
the individual’s name, GLO reference number, payment type (e.g. interim or
final), and date of acceptance. The Department reviews the above documents
and processes payment via BACS.
104. The Department aims to process payments within a week of receiving a TFR.
It estimates that payments will be completed within ten working days of TFR
submission. Including the time taken for postmaster representatives to submit
a TFR, the Department aims to make payments to postmasters’
representatives within 21 days of receipt of the signed Offer Acceptance Form
and Terms. If payment is made outside that period, the Department will
recalculate the interest due in accordance with the Scheme Guidance and
Principles.
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105. The Department can expedite payment for hardship requests that are urgent.
Taxation
106. Government enacted secondary legislation on 18 March 2023, the effect of
which is that no income tax, capital gains tax or national insurance
contributions will be payable by any party in respect of any payment as part of
the GLO scheme [The Post Office Horizon Compensation and Infected Blood
Interim Compensation Payment Schemes (Tax Exemptions and Relief)
Regulations 2023 (BEIS0000906)].Legislation was also enacted from 9
October 2023 to relieve payments from inheritance tax [The Post Office
Horizon Shortfall Scheme and Group Litigation Order Compensation
Payments (Inheritance Tax Relief) Regulations 2023 (BEIS0000907)]. Both
measures were retrospectively applied from 1 August 2022.
107. Legislation was introduced in the Finance Bill 2023 to provide an exemption
from corporation tax on redress payments made under the GLO scheme, and
an exemption for any onward payment of that redress to an individual. The
measure has a retrospective effect so applied from 8 August 2022 when the
first payment through GLO to a corporate was made.
108. As a result, HMRC has not collected and will not collect any tax on any
payments made under the GLO Scheme.
Bankruptcy
109. As the Inquiry is aware, the Department held the view that none of the GLO
scheme redress payable to bankrupt postmasters should be diverted to
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110.
111.
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insolvency practitioners to meet their costs and creditors. Most insolvency
practitioners (including the Official Receiver) accepted this position, which was
endorsed in the opinion provided to the Inquiry by Catherine Addy KC.
However, Moore UK, which was the trustee in bankruptcy in respect of 16 GLO
bankrupt postmasters, did not agree.
Having failed to reach agreement with Moore UK and following consultation
with affected postmasters, on 9 December 2022 the Department agreed to
enter a settlement with Moore UK which set out how much of the interim
compensation should go to creditors. This agreement was made on the basis
that the department reserved its position with respect to final payments under
the scheme. Payments to Moore UK and GLO claimants were made on 21
December 2022. These interim compensation payments were enough to clear
the debts of all but 9 GLO claimants.
On 2 May 2023, following the Opinion provided by Ms Addy KC, the
Department asked Moore UK to confirm if they agreed with the Opinion, or if
not, to confirm whether they were willing to apply for a direction under section
303 (2) of the Insolvency Act 1986. It was the view of the Department that
section 303 (2) gave the trustee of a bankrupt's estate clear standing to seek
a direction from the court, as opposed to the Department who was not a party
to any of the bankruptcies. On 19 June, Moore UK confirmed that they would
not waive their right to final compensation made under the scheme, and that
they would speak to the solicitors acting for the bankrupt individuals to discuss
a proposal to resolve the issue. On 1 August, Moore UK confirmed they would
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112.
113.
114,
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not seek an application to Court for a direction but would consent to the
Department doing so.
Following the recommendation in the Inquiry’s interim report in July 2023, the
Department therefore agreed to apply for directions from the court itself
pursuant to section 303 of the Insolvency Act 1986. On 2 August, the
Department agreed with Moore UK that each party would bear its own costs
of the action. Claimants were notified on 17 August in writing of the
Department's decision to take this step and were updated as the case
progressed. On 6 September, the Department asked one postmaster affected
by Moore UK's stance to be named as an interested party without the need to
participate in proceedings themselves. The application was made on 16
October 2023. The Department asked for it to be expedited.
In advance of the hearing, with the agreement of postmasters’ legal
representatives, the Department issued provisional offers so that those
postmasters who had submitted claims could consider the Department's
position in the meantime. Further interim payments were also made against
the personal losses to alleviate financial hardship.
Following the application by the Department, the High Court declared (in a
judgment of HHJ Cawson KC handed down on 5 July 2024) [Full Palmer
Judgment — SSBT and Abdulali & Anor [2024] EWHC 1722 (Ch),
(BEIS0000908)] and [Palmer Approved Order, dated 5 July 2024,
(BEIS0000909)] that in respect of postmasters who were declared bankrupt
prior to the announcement of the GLO Scheme:
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115.
116.
117.
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e any redress received by GLO Scheme postmasters did not, at the
commencement of their bankruptcy, exist as and does not constitute
‘property’ within the meaning of section 436 of the Insolvency Act 1986
("the Act");
e did not form part of the ‘bankrupt's estate’ within the meaning of section
283(1) of the Act; and
e did not vest in the Joint Trustees in Bankruptcy pursuant to section 306
of the Act.
This judgment aligns with the position of the Department, the advice provided
to the Inquiry by Ms Addy KC and the position taken by all other affected
Insolvency Practitioners. As a result, any ex gratia payment made pursuant to
the GLO Scheme after 5 July 2024 will be after-acquired property within the
meaning of section 307(2)(c) of the Act and will not form part of the ‘bankrupt’s
estate’ of the postmaster within the meaning of section 283(1) of the Act.
Claimants were notified by the Department of this outcome on 5 July 2024.
Where the Department had made a provisional offer, this was converted into
a formal offer by 12 July. The remaining claims will be provided with a formal
offer in the usual way when a full claim is submitted.
A Q&A document is being prepared for postmasters and their legal advisors
to provide clarification on the judgment and how annulments can be taken
forwards if the postmaster wishes to do so, as the department remains
committed to paying the reasonable legal costs of these where the bankruptcy
was caused by Horizon shortfalls.
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Administration and oversight
118. The Department is responsible for administering the scheme. It receives
recommendations on individual cases from its legal advisors, Addleshaw
Goddard. Following the Department's review of those recommendations,
Addleshaw Goddard makes offers to postmasters’ lawyers on behalf of the
Department.
119. Dentons are the GLO scheme’s Alternative Dispute Resolution experts. They
provide the portal on which postmasters’ legal advisors submit claims; where
necessary they facilitate bilateral discussion of disputed offers; and they
support the Independent Panel and Reviewer in their work (described above).
120. Governance of the scheme falls to a Steering Group made up of Departmental
officials, which I chair as the SRO. Terms of Reference are exhibited [GLO
Steering Group Terms of Reference (BEIS0000910)].
121. Decisions on individual offers are made by me as the SRO or, for certain
cases, my deputy. Cases which meet defined exceptional case criteria must
also be approved by the Department's finance and legal teams; where they
may be novel, contentious or repercussive they must also be approved by
Treasury officials.
Performance targets
122. During the Second Reading of the Post Office (Horizon System)
Compensation Bill on 19 December 2023, the Minister announced that the
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Department had set the target of making 90% of initial offers within 40 working
days from receipt of a full claim.
123. In measuring its performance against this target, the Department regards a
“full claim” as a claim which the Department, with advice from its legal
advisors, considers does not need any further evidence for every element of
the claim to be assessed. Should the Department consider further evidence is
needed in order to make a full assessment, the 40-working-day target will not
start until such time as the required evidence is received from the postmaster
or any other source. The Department regularly engages postmasters’ legal
advisors to ensure that they have a clear understanding of the information
which the Department needs in order to assess claims. At close of business
on 6 September 2024 six requests for further information were in the hands of
postmasters’ lawyers. Of these, two were for claims where an initial offer had
already been made whilst four related to claims that were not yet considered
complete. Addleshaw Goddard were considering a further 32 claims to
determine whether they were complete. The oldest of these has been with
Addleshaw Goddard for 28 working days. If it is determined that a claim was
complete on receipt, the 40-day target begins from the day on which it was
received, not the day on which it was determined to be complete.
124. The Department began publicly reporting against this target as part of its
monthly data publication from February 2024 onwards [Financial redress data
website, (BEIS0001035) as of 30 August 2024, (BEIS0001036) as of 31 July
2024 (BEIS0001037) as of 28 June 2024 (BEIS0001038)as of 31 May
(BEIS0001039) as of 24 April 2024 (BEIS0001040)as of 31 March 2024
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(BEIS0001041) as of 1 March 2024 (BEIS0001042)as of 1 February 2024,
(BEIS0001043) GLO scheme data as of 30 April 2024 (BEIS0001045) GLO
data as of 14 March 2024 (BEIS0001046)GLO data as of 23 February 2024
(BEIS0001047)], once retrospective data going back to the launch of the
scheme had been collated and verified.
125. Asof1 February 2024, 70% of postmasters had received their first offer within
40 working days of submitting a full claim because the initial assessment of
some complex cases had raised issues that required policy positions to be
developed. Performance gradually improved, and the 90% target was first
achieved as of 24 April 2024. Performance has further improved due to the
introduction of the Fixed Sum Offer. Performance in respect of complex cases
has also improved due to the resolution of the initial policy questions.
126. In each monthly publication since 30 April 2024, the Department has met or
exceeded the target, with no initial offer taking longer than 60 days.
Reviews of administration and performance
127. Ministers, supported by the Advisory Board, have been and remain highly
engaged in scrutinising officials on the administration and performance of the
scheme, and they review progress on a very regular basis. Officials’ work is
informed by correspondence and meetings with GLO scheme postmasters’
legal advisors and other supporters, Parliamentarians (including the Business
and Trade Select Committee), proceedings in the Inquiry, comment in the
media and some GLO members themselves. Review is also supported by
periodic advice from specialists in other parts of Government, including the
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Government Legal Department, the Government Actuary’s Department and
the Government Internal Audit Agency.
128. This process of review has led to the improvements to the scheme which are
included in the list at paragraph 27 above.
129. The Department expects to continue to make improvements to the GLO
scheme. The first challenges to offers have been received in recent months.
The Department, with the advice of Addleshaw Goddard and in discussion
with Dentons, is considering comments from postmasters’ legal
representatives on what improvements to this element of the process can be
made. In the coming months the Department will also receive and respond to
feedback from the first cases which go to the GLO Independent Panel.
Accessibility of the process
130. The Department designed the scheme in discussion with the JFSA and
Freeths. Although the HSS had been designed to ensure that claims could be
prepared by postmasters themselves, without legal assistance, the
Department decided to take a different course because it seemed likely that
the GLO scheme claims would typically be larger and more complex than
those for the HSS.
131. The Department was also of course aware that the GLO scheme postmasters
had been legally represented for the purposes of the High Court case and had
developed claims in that context with lawyers’ assistance. (No such
preparation had been done for HSS postmasters.) Whilst the claims
developed for that purpose were by no means complete — for instance they
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did not generally consider the quantum of redress, and (to minimise costs) few
postmasters had medical assessments — they provided a helpful starting point
for the development of claims for the purposes of the scheme.
132. Informal discussion between individuals familiar with the two schemes’
processes suggests that the quality of claims received for the GLO has,
understandably, been significantly higher than the quality of HSS claims. This
has had consequences for the schemes’ respective timelines. In the GLO
scheme, the involvement of lawyers means that claims take a long time to
prepare but can be responded to quickly. By contrast, the Department
understands from discussions with the Post Office that HSS claims have
required a great deal of preparatory work by the Post Office’s lawyers and
panel before they have been ready for consideration, so whilst claims may be
submitted more quickly, their determination has been slower.
133. At the outset of the scheme, the Department agreed to meet postmasters’
reasonable legal costs — including the costs of expert evidence — by means of
a tariff agreed with the firms representing significant numbers of postmasters
(Freeths, Howe and Co and Hudgells Solicitors). The agreed tariff was
published on gov.uk in February 2023 [GLO tariff of reasonable legal costs,
(RLIT0000281)]. The Department and Ministers encouraged all postmasters
to instruct a lawyer to assist with their claim and support them through the
process.
134. The costs tariff stated:
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“The Government strongly welcomes the commitment of these legal
advisors not to seek fees from their clients in addition to its support for
reasonable costs. It strongly advises claimants not to engage any
lawyer who asks for payment, either during the claims process or
when redress is paid, as this may mean that eventual redress would
be reduced by legal costs which the claimant would not be able to
recover.” [Emphasis in original].
135. Only two postmasters have legal advisors who have not agreed to this
principle: these cases are a matter of concern to the Department.
136. During the design of the scheme, the Department accepted representations
that to achieve fair outcomes postmasters would need to have access to
expert reports from forensic accountants and/or doctors. The tariff of legal
costs includes provision for the funding of such evidence. This funding
requires case-by-case approval from the Department. It is for postmasters and
their lawyers to decide whether to seek funding for expert evidence.
137. The Department has approved funding for forensic accountancy evidence in
340 cases and funding for medical expert evidence in 327. It declined funding
in 51 cases (in which the Department accepted the claimed loss without the
need for further evidence). The Department has set itself a target of
responding to such requests within 15 working days. This target has been met
in 688 of these 718 cases. In no case did the time taken exceed 31 working
days.
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138. Since the tariff was agreed, there have been some limited changes in the
scheme. For instance, the introduction of the £75,000 fixed sum offer will have
substantially reduced the cost to postmasters’ lawyers involved in developing
such claims. Other changes (such as unanticipated work with bankrupt
claimants) will have tended to increase costs. The Department has had some
representations from postmasters’ lawyers to the effect that some specific
increases should be reflected in amendments to the tariff. The Department
had paused consideration of these requests pending the agreement of a
parallel tariff for the HCRS. Now that has been secured, the Department is
returning to this issue in discussion with postmasters’ legal advisors.
139. The quality of claims being submitted by legal advisors has on the whole been
adequate to enable fair assessments since initial teething problems were
resolved. The Department's conclusion is that the tariff arrangements are
sufficient to provide postmasters with high quality legal representation, subject
to further consideration of the specific issues referred to in the preceding
paragraph.
140. All registered postmasters took legal advice in submitting their claims,
although one applicant for a fixed offer subsequently decided to represent
themselves.
141. An equalities impact assessment was conducted ahead of the launch of the
scheme to ensure accessibility issues were identified. If a postmaster needed
reasonable adjustments in order to access the scheme’s processes, the
Department would accommodate those. Dentons would help identify where
there may be barriers to completing claims and advise the Department
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accordingly (for example, where a postmaster prefers postal applications or
correspondence, this would be facilitated by Dentons). The Department
ensured publications on gov.uk were available in an accessible format and
provided a postal address for applications where there were postmasters with
no access to the internet.
142. Because all postmasters making applications to the GLO scheme have been
legally represented it is not possible directly to assess the impact of legal
advice on applications.
143. The tariff of support for reasonable legal costs included allowance for the costs
of taking cases to dispute resolution or the independent Panel. Dentons would
support postmasters who chose not to instruct a lawyer, though this has not
yet been required by any postmaster.
Waiting times
Eligibility
144. As this scheme is for a closed cohort, eligibility is verified against the list of the
original 555 postmasters, excluding those who had a Horizon related
conviction. Eligibility is assessed at the point of registration and the majority
of postmasters were registered for the scheme in 2023. Eligibility for later
registrations is carried out within minutes and is usually completed on the
same day.
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Interim payments
145. Initial interim payments were paid ahead of the formal launch of the scheme.
To receive a payment, postmasters had to give a straightforward instruction to
Freeths at the Department's cost. Freeths would then communicate the fact of
that instruction to the Department.
146. The Department does not retain information concerning the dates on which
Freeths informed it that it had been instructed by the various postmasters, and
so it cannot confirm the average length of time between notification and interim
payment. However, the payments were announced on 30 June 2022. The first
interim payments were made by the Department on 7 August 2022. By 12
September 2022, 399 payments totalling £15.3 million had been made.
147. Delays in postmasters receiving their interim payment related to those who
chose not to instruct Freeths or who were unable to do so. Some related to
the estates of deceased postmasters were delayed where probate had not
been granted, either because the postmaster had passed away relatively
recently or because the executors chose not to seek grant of probate because
the estate was small. All of these have now been resolved.
148. Other delays to interim payments arose where postmasters had capacity
issues, were in an Individual Voluntary Arrangement or bankruptcy, or were
dissolved companies. All but one of these cases has now been resolved. The
remaining case is a company which has since been wound up. The
Department continues to work with Freeths to resolve this final case.
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149. Claimants can request further payment if they are facing hardship, financial or
otherwise, and their interim payment has not been sufficient to alleviate that
hardship. There are no defined criteria in any scheme for what qualifies as a
‘hardship,’ given the need for flexibility in individual circumstances. The most
urgent requests have been for those who are at immediate risk of eviction, risk
of bankruptcy or those who have serious health issues. Less urgent requests
that have been accepted include postmasters who have outstanding debts to
pay, cost of living struggles, to alleviate stress or anxiety, or to repay family
members who have lent money to the postmaster.
150. Requests are assessed on a case-by-case basis, using the evidence provided
to justify the amounts and minimise the risk of overpayment. Requests have
only been rejected if the postmaster’s submission does not provide evidence
of losses exceeding the requested payment.
151. Interim payments for therapy or medical treatment are also automatically
approved on receipt of a medical report that supports the need for treatment
and where the expert’s professional opinion is that on balance of probabilities
the injury was caused or worsened due to events related to Horizon.
152. On receipt of a full claim, the postmaster’s interim payment is topped up to
£50,000 if they have not already received this amount in previous payments.
153. If an offer is formally challenged, the postmaster enters the dispute resolution
process and 80% of the offer is paid.
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Average waiting times
154. The time between submission of a complete application and payment to the
postmaster's legal representative includes:
e The Department's consideration of the application and issue of its initial
offer (for which the target is to issue 90% of offers within 40 working
days);
e The postmaster’s consideration of the offer and response to the offer
letter indicating acceptance, which the Department requests within 28
days; and
e The Department's payment process, which the Department aims to
complete within 21 days.
155. The average period to complete all these processes is 37 days for a fixed sum
offer and 62 days for an individually assessed one. There is no target set for
this period because part of it is under the control of the postmaster and not the
Department.
156. Final redress may be delayed pending grant of probate if a postmaster sadly
dies during the scheme process.
Trends and complaints
157. No complaints about the scheme have been made through the Department's
formal complaints procedure.
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158. There has been extensive stakeholder comment about the scheme. The main
issues raised have concerned:
e the pace of disclosure by the Post Office;
« the time taken to deliver redress; and
e the use of “bands” in the scheme’s Guidance and Principles.
Disclosure from the Post Office
159. Some information essential to claims — for example, details of remuneration,
dates of dismissal and detailed Horizon accounting records — is held only by
the Post Office. The Department understands that the information is held in
multiple forms and locations and requires redaction to remove the details of
third parties (for instance, the bank account details of Post Office customers).
Both paper and computer records are involved.
160. Disclosure did not begin as rapidly as it should have because in developing
the scheme the Department underestimated the complexity of the task and its
cost to the Post Office. Discussions with postmasters’ legal advisors and the
Post Office about disclosure had begun by November 2022. The categories of
documents to be disclosed were agreed with Post Office in March 2023 but
improvements were made over summer 2023 on presentation and format of
disclosure taking on board feedback from postmasters’ legal advisors
(explained further below). The Post Office deployed a team of over 50 people
for about a year, completing all disclosure work (subject to any remaining
follow-up enquiries from claimants’ lawyers) in June 2024.
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161. The Post Office GLO disclosure team has now been largely stood down and
only handles ad hoc requests for shortfall analysis from the Department or any
requests for further information that may be submitted by legal
representatives.
162. The Department recognises that it should have agreed disclosure
arrangements and associated funding with the Post Office at an earlier point.
Once the process began, disclosure was completed by prioritising cases in an
order that was submitted by legal representatives. Post Office provided regular
updates to the Department about its delivery plan which originally forecast
completing disclosure in July or August 2024. As above, Post Office completed
its disclosure in June 2024. The plan included weekly disclosure and shortfall
analysis targets, which were consistently met from about September 2023
onwards.
163. The Department understands that the Post Office has received 28 Requests
for Information seeking additional or clarified disclosure, and has responded
to 24 of these within a 15 working day target agreed with the Department.
Time taken to deliver redress
164. The Department shares the frustration of postmasters and others at the
current overall pace of the scheme, which is largely driven by the rate at which
applications are being received. The Department has received 238 full
applications, and in recent months they have continued to arrive at a rate of
about 20 per month. The Department is working with postmasters’ lawyers to
identify what it can do to increase this rate. It understands that the time taken
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to produce expert forensic accounting reports has been a critical factor, but
that process is now nearing completion.
165. Aside from fixed sum cases, the majority of applications are supported by
these forensic accountancy reports. The July 2024 report on the GLO scheme
produced by Dentons in August 2024 stated that:
“Many of the moderate and complex claims require expert
evidence from forensic accountants and/or medical experts.
Certain claimant legal representatives initially reported delays of
several months in obtaining expert reports. This was said to be
due to:
e there being a limited number of forensic accountants, in
particular, who will agree to produce expert reports for the
standard level of fee permitted by the Department; and
e those experts not having enough capacity to undertake the
volume of work required.
Our understanding is that the pinch point around the ability to
obtain expert evidence in a timely manner is decreasing, with a
good number of required expert reports having been instructed
(and some completed)”
166. The Department agrees with this assessment. It notes that the tariff permits
claimants’ lawyers to request funding above the standard amount provided for
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in the tariff. The Department has agreed such requests on 60 occasions and
has not rejected any.
167. A pilot scheme has been agreed by the Department and Freeths for the
submission of less deeply evidenced forensic accountancy reports that can be
prepared more quickly. The first four claims submitted under this arrangement
have been approved straightforwardly. The Department would like to see more
cases submitted under these arrangements to reduce the delays caused by
the preparation of accountancy reports. However, it understands that some
postmasters are reluctant to submit less than full evidence.
168. The Department has received feedback that postmasters and their
representatives would like more timely responses to challenges to offers,
requests for additional interim payments and other requests from postmasters’
legal advisors. The Department accepts this feedback and is improving its
monitoring of the progress of claims to ensure that it gives responses at all
stages of the process which are as prompt as possible.
Use of “bands” in the scheme’s Guidance and Principles
169. The GLO Guidance and Principles (BEIS0001048) sets out bands for redress
in respect of reputational damage; harassment; and distress and
inconvenience. Paragraph 1.1.3 of the amended version published on 29
November 2023 states that:
“These bands and ranges are not limits on what can be claimed
under the Scheme. They should instead be used as an indicative
guide for you, your lawyers and the Independent Panel (as
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defined below). The Scheme expects there will be some cases
where the facts of the case demand awards significantly higher
than the upper figure for the top band. Each case will be looked
at in the round and decided on its merits, guided by
considerations of fairness. If you cannot agree the amount of
redress bilaterally with the Department, it will be decided by the
Independent Panel.”
170. The descriptions of the bands were set in the light of information provided by
Freeths, reflecting the knowledge which they had acquired during the High
Court case of the impacts typically experienced by GLO postmasters. The
values associated with each band were set by the Department. They reflected
awards which had been made by the HSS independent panel for similar losses
to ensure consistency with the HSS (a key objective for the GLO Scheme).
Those awards were in turn quantified in the light of past awards by the courts
in similar circumstances.
171. In the light of some concerns expressed in the media, the Advisory Board
reviewed the use of bands in the scheme. The Board's conclusions and
recommendations were published in the report of its fourth meeting
The Board recommended that
“the scheme’s Guidance and Principles should be revised to make clear
that:
. the bands were not limits but indicative guidance to
postmasters, their lawyers and the Independent Panel
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. each case would be decided on its merits
. the figures for each band were derived from decisions
made by the HSS Independent Panel on HSS cases where
there was good reason to expect cases were generally less
serious. The more serious cases were likely to still be going
through dispute resolution. The GLO Compensation
Scheme expects to find some cases where the facts of the
case would demand awards significantly higher than the
upper figure for the top band.
. if a postmaster’s redress cannot be agreed through the
Alternative Dispute Resolution process, they have the right
to have it considered by the Independent Panel including a
KC and other experts
. as for other aspects of redress, where the Principles and
Guidance set out bands, decisions would be taken by the
Independent Panel based on the facts of each case looked
at “in the round” and guided by considerations of fairness”
172. These recommendations were fully implemented (and are reflected in the
extract above from the Guidance and Principles).
173. In the view of the Department the bands provide helpful guidance to
postmasters, lawyers and officials about likely redress under these heads of
loss, clarifying postmasters’ expectations and ensuring consistency between
cases. They are no more than guidance: in some cases, redress has been
agreed which substantially exceeds the top of the highest band.
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Case-specific issues
174. Individual issues can slow down the progress of any particular case. This can
range from the provision of further evidence that the Department considers it
needs in order to review the claim to disagreements between the Department
and the postmaster’s legal representatives on points of principle. Some of
these issues may also require legal representatives to have further
engagement with postmasters.
175. The report on scheme progress prepared by Dentons (BEIS0001032)
provides further information.
Horizon Convictions Redress Scheme (HCRS)
Convictions overturned by legislation
176. The Horizon scandal is the most widespread miscarriage of justice in British
history. The Courts have overturned 111 convictions for Horizon-related
offences. But given the relatively low numbers of postmasters who were
coming forward to appeal, Ministers recognised that many victims had lost
faith in the justice system and wanted no further involvement with it. The length
of time since the original convictions also meant that in many cases there was
little or no evidence to help postmasters appeal their cases. Because of these
unprecedented circumstances, Parliament enacted the Post Office (Horizon
System) Offences Act 2024, which quashed convictions in England, Wales
and Northern Ireland which met specified criteria. The Post Office (Horizon
System) Offences (Scotland) Act 2024 made similar provision for offences in
Scotland.
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177. The Department has established the HCRS to provide financial redress to
postmasters across the UK who had their wrongful convictions quashed by
these Acts. The scheme is being delivered by the Department's Horizon
Redress Unit.
Commencement date
178. The HCRS was launched on 30 July 2024.
Communication
179. To ensure that potential applicants are aware of the scheme, the Ministry of
Justice (England and Wales), the Scottish Government Justice Directorate
(Scotland) and the Northern Ireland Executive Department of Justice
(Northern Ireland) have been working to identify those who have had their
convictions overturned. They are writing to those in scope of the legislation to
confirm that their conviction has been quashed and to direct them to the gov.uk
pages to register for HCRS.
180. An open letter was published in May 2024 and an updated letter in July 2024
to update those affected on the timelines for receiving letters. The July letter
pointed towards the HCRS as a way to ‘self-identify’ ahead of receiving a letter.
181. On the launch of the scheme, a Written Ministerial Statement asked those
affected to self-identify via the gov.uk website. On the same day the
Department published a registration form and guidance materials online.
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182. Links to the HCRS registration page were shared via legal representatives
who are representing postmasters, the media and the Horizon Compensation
Advisory Board.
183. The Department is communicating primarily via email with applicants to the
scheme or with their lawyers if legally represented.
184. The Department has encouraged those who have not received a letter but
believe that they are eligible to register for the HCRS scheme in the Minister’s
announcement to the House of Commons; in a Press Notice [HCRS Press
Notice, dated 30 July 2024 RLIT0000361)]; and in published guidance
(Registration details for the Horizon Convictions Redress Scheme,
RLIT0000313).
Eligibility criteria
185. Those whose convictions have been quashed by the Post Office (Horizon
System) Offences Act 2024 (BEIS0000911) or Post Office (Horizon System)
Offences (Scotland) Act 2024 (BEIS0000912) are eligible for the scheme. The
scheme is UK-wide.
Application process
186. All the steps to apply for the scheme are set out on gov.uk [Guidance Horizon
Convictions Redress Scheme (HCRS): applying for financial redress,
RLIT0000307].
187. In summary:
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e An individual registers for the scheme via the gov.uk page
(RLIT0000313). An individual may register either having received a letter
from the relevant justice authority that their conviction has been quashed
or because they think their conviction is in scope of the legislation but
they have not received a letter.
e Alegal advisor may also register on behalf of someone whom they are
representing. A personal representative may register on behalf of
someone who is incapacitated or deceased.
e The Department co-ordinates with the relevant justice authority to
confirm whether the person’s conviction has been quashed by the
legislation. If so, the Department confirms that they are eligible for the
scheme. If not already legally represented, the Department encourages
the postmaster to seek legal advice and shares the scheme’s legal costs
framework [Horizon Convictions Redress Scheme (HCRS): legal cost
framework, (RLIT0000362)] ).
e The Department asks for ID documents to verify the postmaster’s
identity.
188. The latter stages of process for financial redress are set out below, covering
preliminary payment, fixed sum, detailed assessment and dispute resolution.
Interim payments and top-up interim payments
189. Once a postmaster has been confirmed eligible for the scheme and their
identification has been verified, they are entitled to receive a £200,000
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preliminary payment. The form [Horizon Convictions Redress Scheme:
Preliminary payment application form, (BEIS0000913)] ) is available online
and is sent to the postmaster at the same time as requesting their ID
documents so the payment can be paid promptly. The form is submitted to the
Department via email. The form asks the postmaster to complete a fraud
safeguarding measure (signed declaration) and to provide their bank details
and any information about bankruptcy or Individual Voluntary Arrangement
(IVA).
190. Once a postmaster has put forward a fully substantiated claim for assessment,
they are eligible for a payment of £250,000 on top of the preliminary payment
of £200,000. This will be paid upon submission of the full assessment
application form alongside supporting evidence.
Fixed sum payments
191. Apostmaster can choose between the fixed sum of £600,000 or to have a fully
assessed claim. The Department is encouraging postmasters to seek legal
advice on this decision by prompting all unrepresented postmasters to
consider engaging a solicitor (which the Department funds according to the
scheme’s legal costs framework). The Department also encourages the
applicant to refer to the documents available online (e.g. assessment
framework) or individually to them (e.g. disclosure from the Post Office or
HMRC, see paragraph 195). The process for accepting the fixed sum is to
submit the form, which is available online [Horizon Convictions Redress
Scheme: Fixed Settlement Application Form, (BEIS0000914)] ), to the
Department via email.
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192. Once a £600,000 fixed sum is accepted, the Department will send a settlement
deed to formalise the position before payment is made. The £600,000 is paid
with the original preliminary payment deducted. There is no appeals process
for this option, and once the fixed sum is accepted the postmaster cannot opt
for the detailed assessment at a later stage.
193. As of 6 September, three postmasters had accepted the £600,000 fixed
payment.
Disclosure of relevant information and documentation
194. The Department has published the HCRS assessment framework [Horizon
Convictions Redress Scheme (HCRS): assessment framework,
(RLIT0000363)}) online. It sets out the principles against which an application
for full assessment will be assessed.
195. Post Office will provide disclosure for those who held a direct contract with the
Post Office. The approach to disclosure builds on lessons learned from the
GLO scheme. The company will provide a disclosure package which will
include information such as their contract with the Post Office, their
remuneration, their rights under the Royal Mail Colleague Share plan, and
other relevant information which is still held. Postmasters will be given access
to a secure online portal to access this information when their preliminary
payment is made. More information can be requested, which the Department
will facilitate.
196. Claimants can also request their historical earnings information from HMRC,
where the Department has agreed a bespoke process with a turnaround time
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of 10 working days. This information is used for assessing loss of earnings
due to the conviction.
Full assessment
197. The process for applying for a detailed assessment is set out online [Horizon
Convictions Redress Scheme (HCRS): request a detailed assessment,
RLIT0000310)] . The full assessment application form is available at the same
link. The application form asks for a detailed account of the damages suffered
due to the conviction and any supporting documentary evidence which the
postmaster still holds to support their application. The Department's aim is that
a full assessment of the application can be made at the earliest possible
opportunity. The form covers both pecuniary and non-pecuniary losses.
198. The Department is funding legal advice to support with the application as well
as provision for expert evidence, according to the legal costs framework (see
paragraph 207). As above, it also encourages postmasters to review their
disclosure from the Post Office and HMRC to support their application.
199. The Department has not yet processed any detailed assessment applications.
Challenges and appeals
200. As in the GLO, the scheme is based on the principles of alternative dispute
resolution. The scheme’s processes are set out online (RLIT0000307). As no
claims have yet been assessed, none has reached dispute resolution. The
Department will make an initial offer, which can be either accepted or
challenged. If challenged, there may be further discussions, provision of
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further evidence or explanation by either party, and the Department may make
a revised offer.
201. If agreement cannot be reached bilaterally, there are two stages of alternative
dispute resolution:
e Stage 1 — facilitated discussions. The external firm will facilitate
discussions between the parties.
e Stage 2 — Independent Panel. A panel will be put in place with legal,
retail, accountancy and medical expertise. Depending on the dispute at
hand, one or more experts will form the Panel to determine the dispute.
Third-party assessors / reviewers
202. The Department has procured an external law firm via open tender, Addleshaw
Goddard, to advise on claims for detailed assessment. Addleshaw Goddard
will be responsible for the initial assessment of the claim according to the
assessment framework established by the Department (RLIT0000363) The
Department will review their advice and ask questions as necessary, before
approving or amending the offer. No claims for detailed assessment have yet
been submitted.
203. The Department has procured Dentons also by open competition to support
the scheme’s alternative dispute resolution process.
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Accepting an offer
204. Ifapostmaster accepts their offer, they will be asked to sign a settlement deed
to formalise this. Their claim in the scheme will then be closed.
Taxation
205. HCRS is exempt from UK income tax, capital gains tax and National Insurance
contributions, and is relieved from Inheritance Tax under The Horizon
Convictions Redress Scheme and Horizon Shortfall Scheme Fixed Sum
Award (Tax Exemptions and Relief) Regulations 2024 (BEIS0000915) ; and
The Social Security (Contributions) (Amendment No. 4) Regulations 2024
(BEIS0000916) .
Bankruptcy
206. The Department sought legal advice on the position of whether payments
pursuant to the HCRS scheme vest in the bankruptcy estate for postmasters
who were made bankrupt and have been discharged. Its position is that these
sums do not vest in the bankruptcy estate and, so long as the postmaster’s
bankruptcy has been discharged before their conviction was quashed (Royal
Assent of the legislation), no parts of the redress should be paid to creditors.
This position is agreed with the Insolvency Service in England, Wales,
Northern Ireland and Scotland. If a bankruptcy has not been discharged prior
to Royal Assent, then the trustee in bankruptcy can claim an interest in the
redress in accordance with the Insolvency Act 1986. Depending on the
individual's circumstances, they may seek an annulment. The HCRS also
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pays for financial losses incurred if the prosecution and conviction caused the
individual to go bankrupt.
Legal advice
207. The scheme pays for legal fees according to a framework (RLIT0000362) .
208. Nine firms have agreed to work within the framework and not deduct their
costs from their client's redress.
209. If someone registers with the scheme without representation, the Department
will encourage them to seek legal representation and direct them to the legal
costs framework, which includes contact details of law firms which are signed
up to the framework.
210. [tis open to other law firms to join the framework.
Administration and oversight
211. The Department is responsible for delivery of the scheme. Addleshaw
Goddard will provide legal advice to the Department on fully assessed claims.
The Department will make offers to the postmasters having reviewed this
advice.
212. Governance of the scheme falls to a Board, which I chair as the SRO for the
scheme. Members are officials of the Department and HM Treasury.
213. Significant policy recommendations from these boards are put to Ministers for
decision, taking advice where appropriate from the Advisory Board. Where
necessary, collective Government agreement is sought.
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214. No decisions on individual cases have been made yet.
Performance targets and trends
215. The HCRS is subject to the same target as the GLO scheme, aiming to deliver
first offers within 40 working days in response to 90% of complete claims. No
complete claims have yet been received.
216. The Department has contractual targets with its suppliers, including
Addleshaw Goddard, for the services they are providing to the Department.
Reviews of administration and performance
217. The administration and performance of the scheme are kept under continuing
review by Ministers, who will receive regular updates via officials. They may
also receive feedback from the Advisory Board. Despite the early stage, the
Department has already received feedback from claimant legal
representatives and the Advisory Board both in meetings and writing, which
has informed development of the scheme and its policies.
218. The performance and administration of the schemes are reviewed on an
ongoing basis. Internal management information packs will be generated
monthly, providing detailed data on key metrics such as claims received, offers
made, offers accepted and claims paid.
Redress bands
219. The HCRS assessment framework sets out indicative bands for non-pecuniary
damages. The Department's view is that use of these bands is a fair and
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effective way to award redress: given the similarities in cohort between the
‘Overturned Convictions’ and HCRS, the Department's aim is to achieve
similar outcomes between similar cases.
220. As the Department's assessment framework sets out, pecuniary damages are
highly dependent on the facts of the individual case. The actual loss suffered
must be assessed in each case and circumstances can vary significantly.
Bands for pecuniary losses are therefore inappropriate.
Anticipated timeframe
221. As of 6 September, the Ministry of Justice had sent letters to 178 individuals
to confirm that their conviction has been overturned. The Department had
received 270 registration forms. Not all of the individuals registering have yet
received letters from the Ministry of Justice, but the numbers of letters and
registrations are increasingly weekly.
222. The Department does not yet have final figures for how many people are in
scope of the legislation or know how many will apply to the scheme. There is
no deadline to register with the scheme and so its end date is unknown.
Statement of Truth
I believe the content of this statement to be true.
signet: I C. Creswell
Dated: ozfio/aq
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Index to First Witness Statement of Carl Creswell
WITN11730100
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No.
Document Description
URN
Control Number
01
Gareth Davies first witness
statement
WITN11020100
WITN11020100
02
Gareth Davies second witness
statement
WITN11020200
WITN11020200
03
Horizon Compensation Advisory
Board — gov.uk website
BEIS0001026
BEIS0001026
04
Horizon Compensation Advisory
Board — Terms of Reference
BEIS0001027
BEIS0001027
05
Horizon Compensation Advisory
Board- report of sixteenth
meeting, 29 August 2024
BEIS0001028
BEIS0001028
06
Horizon Compensation Advisory
Board- report of fifteenth
meeting, 17 June 2024
BEIS0001029
BEIS0001029
07
Horizon Compensation Advisory
Board- report of fourteenth
meeting, 7 May 2024
BEIS0001030
BEIS0001030
08
Horizon Compensation Advisory
Board- report of thirteenth
meeting, 25 March 2024
BEIS0001031
BEIS0001031
09
Horizon Compensation Advisory
Board-report of twelfth meeting,
28 February 2024
BEIS0001032
BEIS0001032
10
Horizon Compensation Advisory
Board- report of eleventh
meeting, 22 February 2024
BEIS0001033
BEIS0001033
1
Horizon Compensation Advisory
Board- report of tenth meeting,
10 January 2024
BEIS0001034
BEIS0001034
12
Future approach to
compensation report, Horizon
RLIT0000288
RLIT0000288
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Compensation Advisory Board
paper
13
Postal Affairs Minister letter to
GLO members, dated
September 2022
BEISO000892
BEIS0000892
14
Informal consultation on the
design and delivery of the Group
Litigation Order GLO scheme
RLITO000357
RLITO000357
15
Advisory Board letter to Lord
Chancellor, dated 14 December
2023
BEIS0000893
BEIS0000893
16
Accompanying paper to
Advisory Board Letter of 14
December 2023
BEIS0000894
BEIS0000894
17
Advisory Board report of fourth
meeting, dated 29 March 2023
RLIT0000297
RLIT0000297
18
Advisory Board report of
eleventh meeting, dated 22
February 2024
RLIT0000272
RLIT0000272
19
July 2024 report on GLO
Compensation Scheme
progress
RLITO000358
RLIT0000358
20
July 2024 report on HSS
Scheme progress
BEIS0000835
BEIS0000835
21
July 2024 report on OC
progress - non-pecuniary
BEIS0000833
BEIS0000833
22
July 2024 report on OC
progress - pecuniary
BEIS0000834
BEIS0000834
23
National Audit Office
government compensation
schemes report
RLIT0000366
24
DBT response to the Post Office
Horizon IT inquiry's first interim
report, dated 26 October 2023
RLITOO00359
RLITO000359
25
Post Office Horizon financial
redress data — gov.uk
BEIS0001035
BEIS0001035
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26
Post Office Horizon financial
redress data as of 30 August
2024
BEIS0001036
BE!S0001036
27
Post Office Horizon financial
redress data as of 31 July 2024
BEIS0001037
BEIS0001037
28
Post Office Horizon financial
redress data as of 28 June 2024
BEIS0001038
BEIS0001038
29
Post Office Horizon financial
redress data as of 31 May 2024
BEIS0001039
BEIS0001039
30
Post Office Horizon financial
redress data as of 24 April 2024
BEIS0001040
BEIS0001040
31
Post Office Horizon financial
redress data as of 31 March
2024
BEIS0001041
BEIS0001041
32
Post Office Horizon financial
redress data as of 1 March 2024
BEIS0001042
BE!IS0001042
33
Post Office Horizon financial
redress data as of 1 February
2024
BEIS0001043
BEIS0001043
34
Post Office Horizon financial
redress data as of 11 January
2024
BEIS0001044
BEIS0001044
35
Group Litigation Order (GLO)
scheme data as of 30 April 2024
BEISO001045
BEISO001045
36
Group Litigation Order (GLO)
scheme delivery target as of 14
March 2024
BEIS0001046
BEIS0001046
37
Group Litigation Order (GLO)
claim data as of 23 February
2024
BE!S0001047
BE1S0001047
38
BEIS Submissions on
Compensation, dated 31 May
2022
BEIS0000899
BEIS0000899
39
HSS Steering Group Terms of
Reference
BEISO000900
BEIS0000900
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40
HSS Operations Agreement with
Post Office
UKGI00017881
UKGI00017881
a
Overturned Convictions
Operations Agreement with Post
Office
BEISO000902
BEIS0000902
42
Horizon Redress Overturned
Convictions (HROC) Board
Terms of Reference
BEISO000903
BEISO000903
43
GLO compensation scheme
Guidance and Principles — v2
BEIS0001048
BEIS0001048
44
GLO compensation scheme
Guidance and Principles
RLIT0000280
RLITO000280
45
GLO Registration Form
BEIS0001049
BEISO001049
46
GLO Compensation Scheme
Application Form
BEIS0001050
BEIS0001050
47
Minister Hollinrake letter to
postmasters, dated 7 December
2022
RLIT0000284
RLIT0000284
48
GLO scheme letter to
postmasters, dated 23 March
2023
RLIT0000283
RLIT0000283
49
Hansard record Horizon
Compensation debate March
2023
RLITO000360
RLITO000360
50
Fixed sum offer claim form
BEISO001051
BEIS0001051
51
The GLO Compensation
Scheme - questions and
answers, dated 23 March 2023
BEIS0001052
BEIS0001052
52
The GLO Compensation
Scheme- questions and
answers, updated 29 November
2023
BEIS0001053
BEISO001053
53
The GLO Compensation
Scheme - questions and
answers, updated 7 February
2024
BEIS0001054
BEIS0001054
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54
The GLO Compensation
Scheme - questions and
answers, updated 5 April 2024
BEIS0001055
BEISO0001055
55
The GLO Compensation
Scheme - questions and
answers, updated 7 June 2024
BEIS0001056
BEIS0001056
56
Example GLO offer letter
BEIS0000904
BEIS0000904
57
Terms of Reference of the GLO
Scheme Independent Panel
BEISO000905
BEIS0000905
58
Terms of Reference of the GLO
Scheme Independent Reviewer
RLIT0000287
RLIT0000287
59
The Post Office Horizon
Compensation and Infected
Blood Interim Compensation
Payment Schemes (Tax
Exemptions and Relief)
Regulations 2023
BEISO000906
BE!S0000906
60
The Post Office Horizon
Shortfall Scheme and Group
Litigation Order Compensation
Payments (Inheritance Tax
Relief) Regulations 2023
BEIS0000907
BEIS0000907
61
Full Palmer Judgment — SSBT
and Abdulali & Anor [2024]
EWHC 1722 (Ch)
BEIS0000908
BEIS0000908
62
Palmer Approved Order, dated 5
July 2024
BEISO000909
BEIS0000909
63
GLO Steering Group Terms of
Reference
BEISO000910
BEIS0000910
64
GLO tariff of reasonable legal
costs
RLIT0000281
RLIT0000281
65
HCRS Press Notice, dated 30
July 2024
RLIT0000361
RLIT0000361
66
Registration details for the
Horizon Convictions Redress
Scheme
RLITO000313
RLITO000313
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67
Post Office (Horizon System)
Offences Act 2024
BEISO000911
BEIS0000911
68
Post Office (Horizon System)
Offences (Scotland) Act 2024
BEIS0000912
BEIS0000912
69
Guidance Horizon Convictions
Redress Scheme (HCRS):
applying for financial redress
RLIT0000307
RLITO000307
70
Horizon Convictions Redress
Scheme (HCRS): legal cost
framework
RLITO000362
RLITO000362
71
Horizon Convictions Redress
Scheme: Preliminary payment
application form
BEIS0000913
BEIS0000913
72
Horizon Convictions Redress
Scheme: Fixed Settlement
Application Form
BEIS0000914
BEIS0000914
73
Horizon Convictions Redress
Scheme (HCRS): assessment
framework
RLIT0000363
RLITO000363
74
Horizon Convictions Redress
Scheme (HCRS): request a
detailed assessment
RLIT0000310
RLITO000310
75
The Horizon Convictions
Redress Scheme and Horizon
Shortfall Scheme Fixed Sum
Award (Tax Exemptions and
Relief) Regulations 2024
BEIS0000915
BEIS0000915
76
The Social Security
(Contributions) (Amendment No.
4) Regulations 2024
BEISO000916
BEISO000916
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