f. Discrete topics relevant to all schemes
Insolvency
4.251. A number of claimants in HSS, OCS and GLOS became insolvent. In many instances, that was a direct consequence of such claimants being held liable for illusory shortfalls at their branches. The majority of those claimants were, in due course, declared bankrupt. Some claimants entered into an IVA.
4.252. By the time of the hearing I conducted on 8 December 2022, it had become clear that the fact of bankruptcy or the existence of an IVA was, potentially, a significant complicating feature in seeking to finalise financial redress under the schemes then existing. In the Chair’s Statement, I indicated that I would obtain my own legal advice about a range of issues likely to arise in claims made by persons who had been made bankrupt or who had entered into IVAs.[234]
4.253. On or about 20 March 2023, I received written advice from Ms Catherine Addy KC.[235] In due course, Ms Addy KC’s advice was disclosed to Core Participants and published on the Inquiry’s website.
4.254. The primary issue for claimants who had been declared bankrupt or who had entered into IVAs was how much of any payment made to them under HSS, OCS or GLOS would be claimed on behalf of their creditors.
4.255. Ms Addy KC was able to provide me with an authoritative opinion about matters of principle. As she pointed out however, in relation to some claims in HSS and OCS, there were relevant factual circumstances to be taken into account in individual cases about which she had no knowledge.
4.256. Ms Addy KC’s elucidation of the relevant principles accorded, essentially, with the views held about those principles by the Department. However, on one issue, there was a difference of view as between Ms Addy KC and the representatives of the Department on the one hand, and the Trustee in Bankruptcy of a number of claimants in GLOS on the other. The issue was whether payments received by claimants who had been declared bankrupt would form part of their estate in bankruptcy. Ms Addy KC’s view, subject to qualifications which I need not explain, was that they would not; that was principally because such payments were being made voluntarily, and because the claimants had no legal entitlement to the same.
4.257. In her advice, Ms Addy KC made the practical suggestion that this disputed issue could be resolved using the vehicle of an application to the Court under Section 303 Insolvency Act 1986. In the Interim Report, I recommended that such an application should be made.[236]
4.258. The Minister accepted the recommendation. She brought proceedings against the Trustees in Bankruptcy of Ms Suzanne Palmer in which she sought Directions pursuant to Section 303 Insolvency Act 1986.[237]
4.259. Ms Palmer had been declared bankrupt (and discharged from bankruptcy) many years prior to GLOS being established. The Trustees in Bankruptcy had assigned to her the various causes of action which had permitted her to participate as a claimant in the Group Litigation. In the proceedings brought under Section 303 of the 1986 Act, her Trustees in Bankruptcy maintained the position that Ms Palmer’s right to apply for or receive financial redress under GLOS constituted “property” forming part of her bankruptcy estate and that they were contractually entitled to recover a proportion of any payment to her under the terms of the assignment by which relevant causes of action had been assigned by the Trustees to Ms Palmer.
4.260. His Honour Judge Cawson KC (sitting as a High Court Judge) did not agree. Following a detailed analysis of the relevant statutory provisions and case law, the learned Judge concluded that Ms Palmer’s entitlement to claim and receive compensation under GLOS, and any compensation she received under that scheme, did not constitute “property” which vested in the Trustees and, further, that Ms Palmer was under no liability to account to the Trustees for any part of any sum that she might receive under GLOS by virtue of the terms of the assignment.
4.261. From time to time during the course of the Inquiry, I have received correspondence from claimants who have asserted that their Trustees in Bankruptcy, and/or the Official Receiver have claimed and, indeed, received sums which constitute a significant proportion of the financial redress which would have been paid to such claimants had they not been declared bankrupt. I understand fully the frustration of claimants who, as they see it, have been and are being deprived of a significant proportion of the sums which would have been paid to them had they not been made bankrupt. However, as I have said on numerous occasions in many different contexts, it is simply not open to me to adjudicate on individual claims or, in effect, to provide advice to claimants as to how they should act in their individual claims. I am aware that the Post Office in HSS and the Department in OCS/HCRS and GLOS may pay for claimants to obtain advice about their insolvency issues which affect them personally. All I can do is encourage affected claimants to obtain such advice.
4.262. Finally, a word, in brief, in respect of claimants under HCRS.
4.263. I have no idea whether there are claimants in this scheme who were, at some stage, insolvent and who were made bankrupt or concluded an IVA. It would be very surprising, however, if there were no such claimants, given that the number of claimants in this scheme will eventually constitute many hundreds. Certainly, the scheme anticipates that there will be such claimants, since, as I have said, HCRS makes provision for the recovery of legal fees by those claimants who seek advice about insolvency issues. At first blush, at least, the principles which have been applied in claims under OCS, should be equally applicable in claims under this scheme. To date, I have received no indication that the issue of bankruptcy will be treated any differently in HCRS to OCS. In accordance with Ms Addy KC’s advice, any cause of action for the tort of malicious prosecution will have crystallised no earlier than 25 May 2024 (the date of the coming into force in England and Wales of the 2024 Act). That will have been many years, in all probability, after anyone eligible under HCRS was declared bankrupt and discharged therefrom.
The Horizon Compensation Advisory Board
4.264. This narrative is taken, primarily, from the written evidence provided to the Inquiry by Professor Christopher Hodges OBE.[238]
4.265. The Horizon Compensation Advisory Board (“the Advisory Board”) was constituted in late 2022 or early 2023 in order to advise ministers in relation to GLOS. Professor Hodges was appointed as the Chair of the Board; its other members were The Right Honourable Lord Arbuthnot, The Right Honourable Lord Beamish (at the date of his appointment, Kevan Jones MP) and Professor Richard Moorhead (Professor of Law and Professional Ethics at the University of Exeter). By the spring of 2023, the remit of the Board was extended in that it was asked to provide advice to Ministers in relation to all the redress schemes then existing.
4.266. In his witness statement, Professor Hodges identified four parts of the Board’s Terms of Reference. They are:
“1. The Board’s aim is to help DBT to ensure fair and prompt compensation to Postmasters affected by the Horizon scandal and related issues.
2. It will advise DBT Ministers on how best to manage the delivery of the GLO Compensation Scheme announced in December 2022, with the aim of ensuring that it:
provides fair compensation to GLO Postmasters
does so promptly – and certainly before the deadline of August 2024; and
does so consistently with the expectations of Parliament that public money is spent in line with the Accounting Officer’s Duties.
3. It will advise DBT Ministers in respect of DBT’s oversight of other strands of Horizon- related compensation by the Post Office, including the Historical Shortfall Scheme, arrangements for compensation in respect of overturned historic convictions and compensation for Postmaster detriment.
The Board will not consider individual cases for compensation.”[239]
4.267. As its name suggests, the function of the Advisory Board is to advise. It has no executive, administrative, managerial, governance, policymaking or implementation roles. It does not exercise “oversight”.[240]
4.268. In the early months of its existence, the Advisory Board considered whether it should recommend “architectural changes” to Ministers with a view to combating delays in the delivery of the schemes. It considered three options: (a) removing the Post Office from the governance, administration and delivery of the schemes in which it was involved in those capacities; (b) replacing all schemes with a single new scheme; and (c) changing the existing schemes from an “adversarial” model to an “inquisitorial” model.[241]
4.269. To quote Professor Hodges:
“Highly attractive as one or all of these options may have been, we concluded that such major changes were not feasible in view of the circumstances of the history of this scandal and the established status of the HSS and OC schemes, plus the established reliance of many victims on their lawyers. A significant number of claimants under the HSS scheme had already reached resolution. Any major structural changes would upset the expectations of claimants who are currently in the system, raise concern for the significant number who had already concluded settlements, all leading to destabilisation and issues of trust…”[242]
4.270. Notwithstanding its rejection of the options described above, the Advisory Board has constantly sought to suggest constructive reforms. Over its lifetime the Advisory Board has advised that: (a) a reviewer should be appointed for GLOS; (b) an appeal process should be created in HSS; (c) a reviewer should be appointed for HSS; (d) a leading former Judge should be appointed to chair the Pecuniary Loss Panel in OCS; and (e) a culture change should occur within all schemes which would involve a departure from a strictly legalistic approach to the assessment of financial address to a “more flexible and compassionate approach”. Such a culture change, in the view of the Advisory Board, would be wholly in keeping with the stated aim of Ministers that financial redress provided to claimants should be full and fair.[243]
4.271. In the Interim Report, I made the following recommendations:
“Recommendation 1: The Horizon Compensation Advisory Board should not be
prevented from monitoring individual cases in which compensation has been or is to be determined by paragraph 4 of its Terms of Reference. It must be one of the core duties of the Board that it monitors whether compensation payments are full and fair.
[…]
Recommendation 3: The Horizon Compensation Advisory Board shall, as part of its
advisory role, consider whether, in its view, full and fair compensation is being paid out to applicants under the three schemes, and shall advise the Minister and the Post Office accordingly at three monthly intervals.”[244]
4.272. The Advisory Board resisted the acceptance and implementation of those parts of my recommendations which would have involved it in the scrutiny of individual cases. There was an exchange of correspondence between the Board and me.[245]
4.273. In its response to recommendations 1 and 3, which was published on 26 October 2023, the Department wrote:
“3. Recommendations accepted in part
The Advisory Board’s aim is to help the department to ensure fair and prompt compensation to postmasters affected by the Horizon scandal and related issues. The department agrees that, in delivering this aim, it may be helpful for the Advisory Board to be given anonymised information about individual cases.
However, the department endorses the view expressed by the Board in the report of its 31 July meeting, and in its letter of 15 August 2023 to the Inquiry, that it would not be ‘possible or advisable for us to intervene in the determination or outcomes of individual cases, nor to give an opinion on individual outcomes, or an opinion that full and fair compensation is being paid out to individuals’.
4. The Terms of Reference allow the Advisory Board to advise the Minister whenever it sees fit. Reports of its six-weekly meetings are communicated to the Minister and published.”[246]
4.274. I understand the reasons why the Advisory Board resisted my recommendations and why the Department accepted my recommendations in part only. However, as I will develop more fully in my conclusions, one of the consequences has been a complete lack of appropriate independent scrutiny of offers and settlements in HSS. That is of particular concern given that many claimants in HSS have never been and are not represented by lawyers.
4.275. During the course of the last calendar year, the Advisory Board met on 10 occasions. It held its first meeting of 2025 on 22 January and most recently, so I believe, it met on 24 April 2025. I have read and considered the minutes of all those meetings and without doubt, the Advisory Board continues to keep a careful eye (so far as it can) on the administration and delivery of financial redress under the schemes with which the Inquiry is concerned, and it continues to advise the Department on the reform of processes within all schemes. By way of example, at its meeting on 22 January 2025, the Advisory Board expressed the firm view that it supported the aim of ensuring HSS claims were administered separately from the Post Office. That was a view which might be thought to be at odds with views it expressed previously. (See paragraph 4.269 above). However, I note that the Board was careful to qualify its support for the change by suggesting that such an aim should be implemented “as far as possible”.[247]
Parliamentary Oversight – Select Committees
4.276. The Business and Trade Committee has issued two recent reports relating to the financial redress schemes under consideration in the Inquiry.
4.277. On 5 March 2024 it published a report entitled “Post Office and Horizon redress; Instructions to Deliver” which followed evidence sessions before the Committee on 16 January and 27 February 2024.[248] Its main conclusions and recommendations were: (1) That the Post Office should be removed from the administration and delivery of HSS and OCS; (2) HM Government should legislate to create legally binding time limits for delivering financial redress to postmasters and pay “financial penalties” to postmasters in the event that time limits are not met; and, (3) HM Government should review and then simplify the evidential requirements of the claims processes in each scheme, especially as they related to medical evidence for personal injury, consequential loss and reputational damage.
4.278. On 5 November 2024, the Committee received significant further evidence from three persons who have made claims under three different schemes, their lawyers and Sir Gary.[249] On 19 November 2024, the Committee received evidence from Ministers, Departmental officials, lawyers who act for the Department and the Post Office, and as the Scheme facilitator for GLOS and Mr Nigel Railton and Mr Recaldin.[250] On 1 January 2025, the Committee published its report which contained 17 recommendations together with the reasoning underpinning them which are of obvious relevance to the Inquiry.[251] I have read the transcripts of the evidence given to the Committee and I have considered the report of the Committee with care.
4.279. The Committee regarded HSS as “the worst of the redress schemes”.[252] It was so concerned about the administration of HSS and the delivery of redress thereunder that it devised what it described as “a ten-point plan” for the future delivery of redress under the scheme. It recommended that the Government should implement that plan as soon as possible which was in the following terms:
“1. The Post Office should be removed from delivering redress to claimants through the HSS.
2. If the Post Office cannot be taken out in a timely way, complex cases should be transferred to the Department immediately, while the Post Office looks to automate standard payments for simple cases.
3. Claimants should be provided up-front legal advice, paid for by the scheme’s administrators.
4. There should be an explicit over-riding instruction to lawyers to use best en- deavours to assess claims and deliver justice that is swift and fair.
5. The Independent Panel must meet full time until the majority of cases have been assessed.
6. An independent adjudicator should be appointed to act as a case manager throughout the scheme.
7. Claimants should be given the benefit of the doubt with the evidence provided in support of a claim.
Offers should be made at the top of the range for each category of loss.
9. Challenged offers should move into external mediation rather than be reas- sessed by the Independent Panel.
10. Binding timeframes for each stage of the process should be imposed, with financial penalties awarded to the claimant if those deadlines are not met.”[253]
4.280. The Committee’s report went on to provide 10 specific recommendations (Recommendations 1 to 10) which “fleshed out” the plan and the reasons underpinning it. I do not consider it necessary to quote each of those recommendations word for word. They are sufficiently summarised by the terms of the plan itself.[254]
4.281. In relation to GLOS, the Committee had three concerns which it translated into three specific recommendations.
4.282. The Committee was particularly concerned about delays in the administration and delivery of the scheme. Specifically, it was concerned about “the slow speed” of tabling final offers to claimants, i.e. the length of time which occurred between the making of a first offer and further offers culminating in a final offer. The Committee recommended (Recommendation 11) that the Department should aim to achieve the goal of completing GLOS by March 2025, albeit that it recognised that for some cases this would not be possible. It recommended, too, that binding timeframes should be specified for each stage of the scheme with financial penalties awarded to individual claimants if timeframes were not met in that claimant’s case.
4.283. The Committee’s second concern was that the role of the Independent Reviewer was “too restrained”. It recommended (Recommendation 12) that Sir Ross Cranston should be given greater powers to “case manage Group Litigation Order claims throughout the whole process”.[255]
4.284. Finally, the Committee was concerned that the Department and its lawyers made unnecessary requests for further information following submission of claims. These unnecessary requests contributed to a delay in the making of offers to claimants and also had the effect of offers being made which were “unfair”. The Committee sought to eliminate requests for further information, save in very specific circumstances when a case facilitator agreed. It recommended (Recommendation 13):
“… requests for information should only be made in order to increase the offer value to claimants, or in the rare instance where there may be reasonable concern about a claim’s basis of calculation. A claim’s named case facilitator should have a defined role in swiftly considering whether request for information is reasonable for the above purposes.”[256]
4.285. A major concern of the Committee in respect of HCRS was the evidence which suggested that there were difficulties in identifying and notifying individuals that their convictions had been quashed. The Committee considered itself hampered by a lack of data surrounding this issue. Accordingly, it recommended (Recommendation 14) that the Government should “set out a plan for how it [would] notify postmasters in the scope of the Act of their right to redress plus timeframes in which these issues would be resolved”. It also recommended that the Government should update the Committee on a monthly basis with data in respect of England and Wales, Scotland and Northern Ireland as to:
“(a) How many people are under consideration as qualifying for remedies under [the relevant legislation].
How many people have been confirmed as qualifying for the reliefs specified by the Acts?
The number of people who have been written to about their right to redress.
How many people that have been paid under [HCRS].
The total amount that has been paid to claimants under [HCRS] and the total cost of administering the scheme.”[257]
4.286. The Committee made two further recommendations in relation to HCRS. It recommended (Recommendation 15) that the Department should ensure that redress offered under “a full assessment settlement” was never valued at below the optional Fixed Sum Offer which was initially available to a claimant.[258] In the words of the Committee, the “fear factor” should be removed. It also recommended (Recommendation 16) that the Government should introduce binding timeframes for each stage of the process with financial penalties awarded to a claimant if the deadlines were not met.[259]
4.287. Recommendation 15, the removal of the “fear factor”, was not confined to HCRS. The Committee recommended that it should be removed in respect of all four schemes which the Inquiry is considering. That is clear from its wording.
“The Department should act swiftly to remove the fear factor from the [HCRS], ensuring that the redress offered under a full assessment settlement is never valued at below the optional fixed-sum redress which was initially available to a claimant. It should further communicate this change to current claimants and consider whether undue pressure may have formed a part of the decision of some settled claimants to opt out of a full assessment. The approach established under this recommendation for fixed-Sum settlement offers should be applied as a matter of general principle across all schemes.”[260]
4.288. For the avoidance of any doubt, let me spell out what this recommendation would mean if implemented. The Fixed Sum Offer available in each of the schemes would become a guaranteed minimum payment for every eligible claimant. Those who opted for a full assessment of their claims would do so knowing that they would either receive an award in excess of the fixed sum or the fixed sum.
4.289. For completeness I should mention Recommendation 17. This was a recommendation to the effect that the Department should publish “a regular transparency report detailing external legal costs incurred under all schemes”.[261]
4.290. The Department published its response to the Committee’s report on 25 March 2025.[262] It accepted in full two of the recommendations made in respect of HSS (points 4 and 6 of the 10 point plan) and accepted aspects of recommendations 1 and 2 (which it considered together), 5, 8 and 9. Recommendations 3, 7 and 10 were not accepted. None of the recommendations made in respect of GLOS or HCRS were accepted save that some of the reasoning underpinning Recommendation 11 was accepted. Recommendation 17 was accepted. It is worth stressing that the Department did not reject, outright, the recommendation made by the Committee that the Post Office should be removed from the administration and delivery of HSS. Rather it signalled its intention to “continue to consider whether it should take responsibility for making first offers” under the scheme.[263]
4.291. On 25 March 2025 the Committee took the unusual step of asking the Department “to re-consider and re-draft its response to [the] report and address [the] recommendations in full, especially the future of the [HSS] oversight”. At the time of writing, I am not aware of any further response from the Department.[264]
4.292. I do not regard it as any part of my function to adjudicate between the Committee and the Department. However, in formulating my own views, I have given appropriate weight to their competing views. Although the report and the response do not form part of the evidence (strictly so called) adduced before the Inquiry they are sources of information and informed opinion which cannot be ignored.
Delaying Financial Redress
4.293. In his witness statement dated 6 September 2024, Mr Henry Staunton, the chair of the Post Office Board between December 2022 and January 2024, described his early dealings with the Department and, in particular, the then permanent secretary, Ms Sarah Munby.[265] Mr Staunton received a letter from her dated 9 December 2022; they met on 5 January 2023. Mr Staunton maintained in his statement, and repeated in oral evidence, that he made a note of what had been said at the meeting more or less contemporaneously.
4.294. Mr Staunton described the contents of his conversation with Ms Munby at paragraphs 19 to 23 of his witness statement. In those paragraphs he also identified the documents which are acknowledged to be records of the conversation.[266] In summary, Mr Staunton maintained that Ms Munby gave him the clear impression that the Government wanted the Post Office to “go slow” on delivering redress to postmasters.[267]
4.295. Mr Staunton was questioned about the passages in his witness statement and the documents identified in footnote 265 during the course of his oral evidence on 1 October 2024.[268] I do not think it necessary to quote extensively from the transcript of Mr Julian Blake’s questions and Mr Staunton’s answers. I say that for this reason. Mr Staunton readily conceded that neither in his own note of the meeting, nor in the note of the meeting prepared by Ms Munby’s private secretary on 6 January 2023, was there any express reference to financial redress for postmasters. Further, there was no reference to remediation (even obliquely) more generally. If, as Mr Staunton would have me conclude, Ms Munby had even hinted at it being the desire of Government that the Post Office should “go slow” on compensation, either at that time, or at some future time in the lead up to a general election, I would have expected that to have been clearly recorded in the notes of the meeting. His suggestion in his oral evidence that his notes were never intended to record all that was said was I fear, unconvincing.
4.296. The conversation between Ms Munby and Mr Staunton took place just a few days before I published the Chair’s Statement. It was also just a few weeks after the Leading Counsel for the Post Office and Counsel for the Department had sought to provide reassurances at the hearing on 8 December 2022, that financial redress in HSS had speeded up substantially in 2022, that settlements of non-pecuniary losses in OCS had started to pick up and that settlements could be made to all claimants in GLOS by August 2024. The stance adopted by the Department, in particular, at the hearing on 8 December 2022 was wholly at odds with their encouraging Mr Staunton to the view that there should be a “go slow” on providing redress to postmasters. Such a stance would have been disingenuous and cynical. That is not a conclusion which I would reach without compelling evidence.
4.297. Ms Munby has made two witness statements for the Inquiry.[269] In the first of those statements she dealt in detail with her meeting with Mr Staunton on 5 January 2023. Paragraph 17 of her statement is a denial, in the strongest terms, that she told Mr Staunton or implied that the Post Office should stall on making redress to postmasters. In her words “I did not say anything that could sensibly be understood to convey that implication”.[270]
4.298. No useful purpose would be served by a detailed recital of the points made by Ms Munby in support of her denial of Mr Staunton’s allegation against her. It suffices that I say that having considered this discrete issue with care, I cannot accept that Ms Munby said anything which could, reasonably, have been interpreted as a suggestion by her that the Post Office should stall or delay the delivery of compensation.
Full and Fair Compensation
4.299. Paragraph 9 of Mr Creswell’s First Witness Statement reads as follows:
“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:
…
…
To provide financial redress to postmasters that is full and fair, whilst recognising that no amount of money will turn back time.”[271]
This paragraph of Mr Creswell’s witness statement was not a surprise. From the launch of HSS, the Department and Ministers repeatedly asserted that postmasters and other eligible claimants in the various schemes should be awarded financial redress which was “full and fair”.
4.300. The Horizon Advisory Board, very soon after it came into being, “stated our core belief that compensation should be “full and fair”” and that “Board members agreed that…..as with the general law, the goal should be to restore the claimants to the position that they would have been in if the scandal had not happened.”[272]
4.301. In its written submissions to the Inquiry at the conclusion of Phase 7, the Post Office insisted that the governing principles underpinning awards of financial redress to those eligible under both HSS and OCS were that such awards should be “full and fair”. In relation to HSS, the Post Office relied upon the Terms of Reference of the Independent Panel which contained the overriding objective that the Panel should “assess and recommend to Post Office a fair outcome for eligible claims”.[273] In OCS, the Operations Agreement between the Post Office and the Department confirmed that the “shared objective of POL and DBT [was] to see that affected Postmasters received swift and fair compensation for credible claims against POL”.[274]
4.302. However, the reality is that the words “full and fair” are capable of meaning different things to different people. That is acknowledged explicitly by Professor Hodges in his witness statement and I can do no better than quote what he says on this issue:
“42. Individuals’ views on what constitutes ‘full and fair’ can differ, since these concepts are principles and values that involve individual judgement in concrete situations, especially in complex situations. In giving practical reality to individual outcomes that are ‘just’ or ‘fair’, a number of considerations apply that may require fine judgement in balancing different considerations and different values such as delivering speed and closure.
For example, the following considerations might arise:
a. The need to ensure that all elements of loss and damage have been identified and compensated. This can be assisted by having checklists of types of loss and damage (heads of damage). However, this can result in lengthy and legalistic lists that can seem confusing to a non-lawyer.
b. The need to ensure that every type of loss receives full and fair compensation. This requires consistency in several dimensions – between different claimants whose individual circumstances have both similarities and differences, and between the Horizon victims and all those who receive compensation awards from the courts generally. This leads to two broad categories of loss:
i. Individual sums that have been ‘lost’ and need to be ‘repaid’, such as sums paid by SPMs to the Post Office, or other specific sums that can usually be quantified fairly readily (pecuniary damages).
ii. Elements of loss or damage that present much greater challenges of quantification (non-pecuniary damages), such as sums paid for mental distress, for loss of income that would have been earned had the original wrong not occurred. These situations need:
1. Firstly, precedent in order to achieve consistency (and to be aligned with the extensive list of sums, ranges and considerations set out in the Judicial College Guidelines (currently 17th Edition) as applied by the courts), and
2. secondly, evidence from experts, especially medics and psychiatrists in relation to the nature – duration and severity of psychological and physical damage, and from accountancy professionals in relation to the quantification of what a person or business would have earned if they had continued to operate without closure or bankruptcy (quantifying the counter-factual situation).”[275]
4.303. More succinctly, the assessment of what constitutes an award which is, full and fair, may differ markedly between different decision makers unless strict criteria are laid down and applied consistently. It would be most unfortunate if the amount of redress payable to a particular claimant was, to a degree, dependent upon which panel or decision maker considered the claim.
4.304. I am also conscious that on occasions, there can sometimes be a conflict between what is considered to be full redress and what is assessed as ‘fair’. If all decision makers within all the schemes assess awards to claimants by adhering strictly to the legal principles which would be applied in the courts, I am convinced that many objective and well-informed observers would probably conclude that the assessed awards were both “full and fair”. If, however, such applicable legal principles had the effect of reducing the sums claimed or, in some instances, extinguishing heads of loss completely, some might suggest that the legal principles themselves were unfair. In their evidence, both Mr Recaldin and Mr Read came close to suggesting that some legal principles applied in the courts would be unfair if applied to claims under the schemes. They certainly considered that the application of some of the legal principles applied in the courts might lead to awards which were “ungenerous”.[276]
4.305. As I have said already, I have always understood that decision makers under all the schemes may depart from legal principles applied in the courts in order to achieve an outcome which is fair. The problem is that there is very limited statistical evidence available as to whether that ever occurs and, if it does, how frequently. The one strand of evidence which might suggest that it occurs on occasions comes from the survey of claimants in HSS. That evidence demonstrated that 8% of those who completed the survey and who had submitted claims valued in the range £20,000 to £60,000, received offers which were higher than the sums which they had claimed. It would be very unusual, at the very least, for a claimant in a court case to be awarded more than the sum claimed!
4.306. The issue of whether financial redress awarded to claimants is “full and fair” is most likely to arise as a cause for concern in claims which have been or will be the subject of assessment. In OCS, GLOS and HCRS, all claimants have the opportunity to obtain legal advice, paid for by the Post Office/Department before they make a choice between assessment and opting for the Fixed Sum Offer. It is very likely that with appropriate advice the claimants in those schemes are able to make proper judgments about whether the Fixed Sum Offer is “full and fair” for them, or at the very least, acceptable to them. However, the opportunity to obtain legal advice which is paid for is not afforded to claimants who wish to consider the merits of the Fixed Sum Offer in HSS. How is that fair as between the claimants in HSS and the claimants in each of the other schemes? How is a claimant in HSS, to make an informed decision about whether the Fixed Sum Offer constitutes acceptable redress, never mind redress which is “full and fair” when the claim as calculated would exceed the Fixed Sum Offer by a modest amount? What is the justification for the Department’s steadfast refusal to countenance funding legal advice for those who wish to make an informed decision about the merits of the Fixed Sum Offer in HSS? These are questions to which, in my view, the Department has provided no answers which convince me that its stated position is justified.
4.307. I say “the Department” and not “the Department and the Post Office” in the sentence immediately above quite deliberately. The Post Office explicitly supports the view that claimants in HSS who are contemplating accepting the Fixed Sum Offer should be afforded the opportunity of obtaining legal advice on that issue which is paid for by the Department in advance of making the decision.[277] There will no doubt, be many claimants for whom the choice between assessment and the Fixed Sum Offer will be obvious. It is most unlikely that they will wish to engage a lawyer just because the Department will pay. For some claimants however, the choice between assessment and accepting the Fixed Sum Offer will be very difficult.
Value for Money
4.308. Managing Public Money is a Treasury document which sets out the main principles for dealing with financial resources in the public sector.[278] These principles were examined in evidence to assess what impact they may have had on the delivery of financial redress to claimants. In particular, I wished to understand whether value for money considerations played a part in individual assessments of claims or was a general concept which applied to the schemes looked at in the round.
4.309. In her evidence Ms Munby provided an overview of the structure and application of these principles and her role as Permanent Secretary and the Principal Accounting Officer for the Department. Ms Munby informed me that there were four core concepts which the Accounting Officer had a requirement to test: regularity, propriety, value for money and feasibility. Any new and major initiatives needed to be assessed by each of these criteria. That assessment had taken place as the schemes were being established.[279]
4.310. Whether value for money was directly linked to the level of redress offered was said to be dependent on the ministerial steer as to the objective, policy goal or intent.[280] The intent throughout her tenure as Permanent Secretary was the same: financial redress was to be “full and fair”. That did not mean, however, that steps would not be taken to minimise the costs associated with each scheme. By way of example steps were taken to minimise administration costs and prevent fraudulent claims and technical errors.[281] She was adamant however, that this should not be taken to imply that an individual claim would be settled at anything less than “full and fair”, which, she repeatedly maintained, was the ministerial intent throughout.[282]
4.311. Ms Munby’s evidence was essentially consistent with the evidence given by Ms Gratton, Mr Creswell and the current and former Departmental Ministers.[283] Each, in their own way, maintained that value for money considerations did not impact upon individual assessments of financial redress so as to reduce those assessments below what was “full and fair”.
4.312. Not surprisingly, a number of questions were addressed to Ministers and Departmental witnesses about whether the Fixed Sum Offers represented value for money. All of those called to give oral evidence supported the view that, in the round, the Fixed Sum Offers represented value for money even though each acknowledged that individual claimants were sometimes much better off than would have been the case had their claims been assessed.
4.313. The most detailed account of how the concept of value for money was considered in practice was given by Mr Creswell.[284] In particular he referred to the discussions which occurred within the Department and between the Department and HM Treasury in the summer of 2023 relating to the proposed Fixed Sum Offer for claimants in GLOS. He said the Department’s objective was to achieve “timely and successful delivery of full and fair compensation for GLO claimants”. The Department considered and analysed different policy options including a proposal for a Fixed Sum Offer for £100,000. The policy went through a value for money assessment by the Accounting Officer and HMT before a decision was reached that Fixed Sum Offers would be offered in the sum of £75,000.[285] When questioned on this in oral evidence he highlighted the repercussions on other schemes as a consideration.[286]
4.314. In his closing submissions on behalf of the Department, Mr Chapman vigorously disputed any suggestion that the concept of “value for money” had ever played a role in the assessment of payments to individual claimants. He defended the Fixed Sum Offers introduced in all the financial redress schemes and maintained that they represented value for money overall, even if in individual cases, some claimants received substantially more than they would ever have received had their claims been assessed.
4.315. The written closing submissions of the Post Office were to the same effect.[287] They strongly asserted that the concept of value for money had not been a factor in diminishing or depressing offers made by the Post Office to claimants either in HSS or OCS. “Value for money” was a concept relevant only to the administration and delivery of the schemes as a whole.
4.316. The Post Office sought to make good that point by reference to the Terms of Reference of the Horizon Redress Overturned Convictions Board.[288] At page 1 of that document, the following appears:
“Both redress schemes [HSS and OCS] share two main objectives:
To see Postmasters whose convictions are overturned be offered full and fair financial redress.
To design and operate the redress schemes in a manner which represents Value for Money (“VfM”) for the taxpayer.”
4.317. In its closing submissions on this issue the Post Office made no reference to evidence given by Mr Alisdair Cameron, its former Chief Financial Officer and Mr Staunton, its former chair.
4.318. At paragraph 22 of his second witness statement, Mr Cameron expressed concern about decisions being made on financial redress which he felt, prioritised the interests of the Department over the treatment of postmasters.[289] He expressed the view that decisions were being made slowly and, for convicted claimants, less generously than originally forecasted.[290] At paragraph 142 of his first witness statement, Mr Cameron stated that the Post Office had the financial incentive to pay compensation quickly and generously because they carried the burden of the costs of administration. His concern was that the processes to which the Post Office had to adhere to receive that payment from Government were bureaucratic and complex.[291] In his oral evidence he came close to asserting that value for money considerations did play a part in individual assessments. Mr Staunton quite explicitly said so.[292]
4.319. Finally, I should record that there seemed to be an acceptance in oral evidence that until late 2023, greater emphasis was placed by Ministers upon the delivery of financial redress which was “full and fair”, whereas from late 2023 to the present time the emphasis has been placed upon delivering compensation promptly. In that regard the Post Office expressly asserted in closing submissions that it welcomed this shift in emphasis. It maintained that in HSS it had hired more individuals to process more claims, increased the frequency of escalation meetings, offered face-to-face negotiations rather than resubmitting disputed claims to a panel, and explored whether the process of analysing shortfalls should be automated. I have no reason to doubt the accuracy of those submissions. Following their oral evidence, written statements were received from Mr. Hollinrake and Mr. Creswell which appeared to row back from that part of their oral evidence which had suggested the shift in emphasis described in the first sentence above.[293]