c. Has financial redress been delivered promptly?
6.129. There can be no doubt that financial redress has been delivered promptly to those claimants who have, to date, submitted claims within HCRS. The scheme was launched almost one year ago and all, or virtually all those who claimed and have accepted the Fixed Sum Offer of £600,000 have been paid. What follows therefore, is concerned only with HSS, OCS and GLOS unless I make an express reference to HCRS.
6.130. Following the tumultuous battle fought out in the Group Litigation it should have been obvious to the Post Office and the Department that the ending of the litigation was just the first of many staging posts which they would face before the wrongs perpetrated by and in reliance upon Horizon could be put right. Three such staging posts were signalled loud and clear in the Deed of Settlement itself. First, the Deed contained a contractual requirement imposed upon the Post Office to set up HSS. Second, it acknowledged the likelihood that at least some, if not all, of the claimants within the Group Litigation who had been convicted of criminal offences would have their convictions quashed. The quashing of convictions, if that occurred, would very likely open the door to claims for malicious prosecution which, if successful, would lead to very large sums being paid out by way of financial redress. Third, although the Post Office had paid out a large sum of money to settle the Group Litigation (a total of £57.75m) the claimants themselves, had, individually and collectively, received modest amounts compared to the true value of their claims. The Post Office was aware of that and, in my view, the likelihood that this would be a source of considerable angst for many of them (if not all) if, or more likely, when postmasters who had not been claimants in the Group Litigation received awards in HSS which were commensurate with the true value of their claims. In such circumstances JFSA and Sir Alan Bates were very likely to demand further redress for the claimants in the Group Litigation. I would have expected that all these issues and their potential ramifications would have been considered in detail before any scheme to provide financial redress was developed and launched.
6.131. My observations in the preceding paragraph are not made with the benefit of hindsight. Rather, they are a description of the obvious consequences (or, at the very least, the reasonably foreseeable consequences) of the terms of settlement of the Group Litigation.
6.132. Nonetheless, I can understand why the Post Office and the Department acted as they did in the immediate aftermath of and in the months immediately following the settlement of the Group Litigation. No doubt, they felt under pressure to act promptly (and to be seen to be acting promptly) to honour the commitment to establish HSS. I have no doubt, too, that the claimants in the Group Litigation and their advisors were encouraging the Post Office and the Department to set up the scheme with some speed. Further, the evidence received by the Inquiry demonstrates that by the time that HSS was opened for claims in May 2020, the Post Office and the Department apparently shared three expectations.[327] First, that the number of claims to HSS would be of the order of a few hundred. Second, that many, if not all, of the claims would be comparatively modest in amount. Third, that all claims would be submitted to the Post Office by 14 August 2020 and dealt with expeditiously thereafter. Quite how those expectations were formed and took hold remains something of a mystery. I have no doubt, however, that this was the mind set of both the Post Office and the Department in May 2020. Given that mind set, it is easy to understand why the Post Office and the Department thought it appropriate to deliver HSS as a discrete scheme as quickly as they reasonably could.
6.133. All that said, it is very difficult to understand how that mind set survived beyond a few months of the launch of HSS and certainly beyond the end of 2020. By 27 November 2020, the Post Office had received 2,417 eligible claims in HSS. Discussions were in progress between the Post Office and the Department about how these claims were to be funded, although there was always only one credible answer given the financial stress under which the Post Office was operating. Further, on 10 December 2020 the convictions of six former postmasters were quashed at the Southwark Crown Court and, by that time, (i) many cases had been referred to the Court of Appeal (Criminal Division) by the Criminal Cases Review Commission and (ii) the Post Office was poised to concede that many of the convicted persons whose conviction had been so referred should have their convictions quashed.[328]
At that stage, at the very latest, I would have expected a thorough appraisal of the way forward in respect of financial redress for all persons who might claim an entitlement and, in particular, whether there should be one scheme or separate schemes for all eligible claimants. By December 2020 no payments to claimants in HSS had been made. Indeed, the issue of funding such payments had still to be resolved. It was not as if HSS had begun to deliver and there could be no going back!
6.134. I have no doubt that all these events combining together should have caused the Post Office and the Department to pause and think through the best way forward. However, it seems to me to be an inescapable conclusion that they did not do so. In my view, the Post Office, the Department and Ministers simply failed to grasp how difficult it would be to provide appropriate financial redress in a timely fashion to all those who were or would very likely become eligible.
6.135. That conclusion is supported by the way in which this Inquiry evolved. It is clear from the evidence of Sir Alex Chisholm, the Permanent Secretary at the Department between 5 September 2016 and 13 April 2020, that he favoured a non-statutory inquiry which would be over quite quickly.[329] That form of inquiry was announced on 10th June 2020. I was appointed to chair such an Inquiry on 29 September 2020. The expectation, upon my appointment, was that I would report within about 9 to 12 months of September 2020. The terms of reference of that non-statutory inquiry included a requirement that I should assess whether HSS had been delivered properly. Yet the Post Office and the Department must have known at the time of my appointment that the number of claimants in HSS had vastly exceeded their expectations, that funding of such claims had not been resolved and that no submitted claim had been considered. Realistically, an appropriate assessment of HSS was never possible in the time scale envisaged for the non-statutory inquiry.
6.136. Additionally, of course, by September 2020 there were a very significant number of convicted persons whose convictions would be quashed – as it happens without opposition from the Post Office in most of the cases referred to the courts. I cannot understand how this eventuality alone, did not cause the Post Office and Department to pause and reflect upon whether those who would become entitled to redress should be combined in one scheme. Yet so far as I am aware, there was no such reflection or, if there was, the possibility of one scheme was rejected.
6.137. On 22 April 2021 the Court of Appeal delivered its judgment in Hamilton. I recommended to the Minister that the non-statutory inquiry should be converted to a statutory inquiry under section 15 of the Inquiries Act 2005. He readily agreed and the conversion of the Inquiry took effect as from 1 June 2021.
6.138. Yet even before any meaningful step could be taken in the converted Inquiry the Minister made the announcement of 22 July 2021 about interim payments for all those persons whose convictions had been or would be quashed. The first step on the way to OCS had come into effect. However, the decision to provide interim payments (not in itself in any way objectionable) was taken without any or any apparent consideration of whether there should be one scheme or process or more for all those entitled to redress. That is despite the Department’s insistence that both HSS and OCS should be administered and delivered by the Post Office.
6.139. Meanwhile the claimants in the Group Litigation were complaining ever more loudly that the sums they had received in settlement of their claims were wholly inadequate. Ministers and the Department accepted that they were right. Very properly, in my view, they worked out a way to provide additional financial redress to those claimants. So far as I am aware, however, they did not consider whether this redress should or could be delivered in one comprehensive scheme open to all eligible claimants.
6.140. GLOS was announced on 22 March 2022. It was made clear that this scheme would be administered and delivered by the Department. On 6 and 13 July 2022 I held the first two hearings which were concerned exclusively with financial redress. By this time, some of those addressing me were suggesting that the three schemes in being (one fledgling) were not fit for purpose and that there should be one scheme to cater for all eligible claimants. That suggested way forward had gained considerable traction by the time of the hearing on 10 December 2022. Unfortunately, the planning and development of such a scheme would have involved a complete re-appraisal of how to proceed with inevitable and substantial delay. In the Chair’s Statement I wrote:
“52. I have no doubt that if there were no compensation schemes yet in existence and that I was making a recommendation about a process for compensating wronged SPMs with a blank sheet of paper there would be considerable merit in there being one scheme with a completely independent advisory board and independent assessors determining levels of compensation. However, that is not what exists. There are 3 Schemes in various stages of their development which are functioning in substantially different ways. In my view it would not now be possible to appoint a person or board to supervise all the schemes without there being a significant risk of substantial delay as a result. In relation to all schemes that would be very undesirable. In relation to [GLOS], however, such delay could be disastrous.”[330]
6.141. In due course, the Advisory Board reached a similar conclusion.
6.142. The failure to consider appropriately whether all eligible claimants would be better served by one scheme was compounded by further failures. First, the Post Office (in HSS and OCS) and the Department (in all three schemes) failed to understand, fully, the scale and complexity of the task which confronted them when they planned and launched each scheme. Second, as each scheme unfolded, the Post Office, the Department and Ministers laboured under misapprehensions about the speed with which they could deliver redress and the difficulties inherent in resolving many of the claims, especially those of substantial value. As HSS has unfolded, the Post Office and the Department have consistently underestimated its scale and struggled to understand the complexity of many of the claims within it. As claimants came forward in OCS, the Post Office underestimated the complexity and the magnitude of some of the claims and the time it would take to resolve the most difficult cases. In both those schemes the Department underestimated the complexity of many of the claims and the time it would take to resolve them; in relation to GLOS it harboured expectations about how quickly it could deliver redress which were frankly unrealistic.
6.143. I am satisfied that the development, implementation, administration and delivery of three separate schemes (two administered by the Post Office and one administered by the Department) has caused very substantial delays in providing redress to claimants. I am confident that if the idea of developing one scheme had been considered appropriately and in detail in 2020 and/or 2021, the Post Office, the Department and Ministers would have agreed that it represented the best option for providing to all eligible claimants financial redress which was prompt.
6.144. I am satisfied, too, that had it not been for the introduction of Fixed Sum Offers in all three schemes, the Post Office and the Department would now be many years away from delivering financial redress to all of the claimants in all of the three schemes. As it is, I have very considerable doubts about whether all the unresolved claims in OCS (notwithstanding their transfer to HCRS) and GLOS will be resolved by the end of 2026. The chances of all claims in HSS being resolved within that timescale are remote. In all probability, HSS will be in existence for some years yet, whether or not a date is set after which no further claims will be considered. In his closing submissions on behalf of the Core Participants represented by Hudgell Solicitors, Mr Moloney KC and his legal team wrote:
“Despite public commitments on the part of the Post Office and Ministers to full, fair and prompt compensation, the Inquiry might conclude that until a change in political momentum in January 2024, behind the scenes an overly legalistic, slow and potentially obstructive attitude operated to constrain the amounts of compensation paid. Loud echoes of that obstruction continue.”[331]
Those sentiments are a commentary not just upon whether redress has been delivered promptly, but also whether recipients have received sums which are full and fair. It is difficult to argue that this succinct criticism is not appropriate, at the very least, for a significant number of claims.
6.145. Quite apart from the criticisms levelled against the Post Office, Department and Ministers above, the delivery of financial redress to many claimants in HSS, OCS and GLOS has been bedevilled with unjustified delays which are or have been referable to the administration of the schemes themselves. On any view, financial redress in all three schemes has not been delivered to very many claimants “promptly”. I turn to highlight the most egregious examples of delay in respect of each scheme.
Delay in HSS
6.146. In my view, the following are incontrovertible examples of unjustified delay.
6.147. Under the scheme as first published, claimants were required to submit their claims by midnight on 14 August 2020 which end date later became midnight on 27 November 2020. Notwithstanding the passing of that expiry date, claimants continued to submit claims. A little more than two years went by before a decision was made as to whether such “late claims” (as they became known) would qualify for consideration under the scheme. The underlying cause of this lengthy period of indecision was the inability or unwillingness of the Department to conclude a funding agreement with the Post Office in respect of the late claims.
6.148. On 14 June 2023, the Advisory Board suggested that an appeal process should be introduced into HSS. As I understand it, that suggestion was never opposed by the Post Office and, I infer, it was welcomed by the claimants in HSS. More than a year went by before, on 30 July 2024, the Minister announced that an appeal process would be introduced into HSS which would be administered by the Department. On 8 April 2025 the process envisaged by the Department was published. In my view, a period of more than one year before a decision is taken upon any recommendation by the Advisory Board is far too long. Given a delay of that magnitude in the decision making process, a period of about nine months is far too long for implementing the decision.
6.149. On 25 October 2023 the Advisory Board recommended a Reviewer. That proposal was considered and implemented in the same leisurely way that occurred in respect of the appeal process.
6.150. In the Interim Report, I recommended that a time limit should be specified by which all claims to HSS should be submitted after which no further claims should be entertained. That recommendation was accepted by the Department on 26 October 2023. However, no such time limit has ever been fixed. Under questioning at the Inquiry, Ministers expressed themselves to be unwilling to specify a time limit even months into the future and even though, by the time of their oral evidence, thousands of letters had gone to current and former postmasters inviting them, in effect, to make claims to HSS if they considered that they satisfied the eligibility criteria.
6.151. As of 30 January 2025, there were 210 complex cases and 104 standard cases which had been submitted to the Post Office before 27 November 2020, but which remained unresolved. I anticipate that no more than a small number will have been resolved since that date. A period of between four years and six months and five years for resolving such claims is simply far too long. There are very likely 105 complex claims and 41 standard claims which are unresolved which were submitted to the Post Office between 27 November 2020 and 31 December 2023. All those claims will have been in the pipeline for a minimum period of 17 months and some for far longer. That is not acceptable.
6.152. I find it difficult to pinpoint the reasons why the delays highlighted above came about. However, I am convinced that one of the principal reasons must have been a failure on the part of the Post Office, the Department and Ministers to grasp, quickly enough, just how complicated the administration and delivery of this scheme would be once claimants were numbered in thousands as opposed to hundreds. By 27 November 2020, more than 2,400 claims had been made. In my view alarm bells should have been ringing much louder than was apparently the case that there would be claims within that number which would be extremely difficult to resolve. Yet, at the compensation hearings in July 2022, both the Post Office and the Department focussed their attention on that which they had done (essentially, they had met targets for making offers by choosing to deal with modest claims) as opposed to laying bare the very difficult issues which were arising in a significant number of cases, and in which there were very significant obstacles to settlement of those cases.
6.153. I acknowledge that some of those issues and obstacles were debated at those hearings and in the hearings which followed in December 2022 and April 2023 – in particular, issues relating to insolvency and taxation. However, the available evidence now demonstrates that, even at that stage, the claimants on the one hand and the Post Office and the Department on the other had very different views as to the value of particular heads of claim and claims overall in a significant number of cases. While some of the submissions made on behalf of Core Participants made it clear that the parties were far apart in their valuation of some claims, the Post Office and the Department were very slow and/or reluctant to acknowledge the scale and extent of the differences.
6.154. I appreciate, of course, that HSS has a Dispute Resolution Procedure which could have been used to resolve apparently intractable disputes. In the Progress Update I made the point that the existence of such a Procedure was one of the features of the scheme which gave me confidence that appropriate financial redress could be delivered to the claimants. Yet no more than a handful of disputes have been the subject of successful mediation, and no disputes have been referred to arbitration. It appears to me to be crystal clear that if claims have not been resolved by negotiation, with very limited exceptions, they have as yet not been resolved at all. I am sorry to report that the current Dispute Resolution Procedure has singularly failed to facilitate the speedy resolution of disputed claims.
6.155. It would be easy for me to suggest that the fault for such an impasse, to a degree at least, must rest with both the claimants on the one hand, and the Post Office and the Department on the other. While it is of course possible, and perhaps even likely, that in some individual cases the claimant, the Post Office or the Department (or all three) have been guilty of unjustified intransigence or delay, such behaviour is unlikely to account for the volume of cases remaining unresolved over ever increasing periods of time. In my view, it is far more likely that the principal reason for the volume of unresolved cases has been the absence of any person independent of the claimants, the Post Office and the Department who has taken overall and pivotal responsibility for driving the parties towards settling their differences.
6.156. The plain fact is that in OCS, GLOS and HCRS, specific independent persons have been appointed whose task it was and/or is to facilitate the resolution of disputes about the value of claims. In OCS, Lord Dyson showed how the appointment of a distinguished and independent person could quickly lay the ground rules for the resolution of disputes about non-pecuniary losses. Sir Gary Hickinbottom (and his fellow Board Members), in respect of pecuniary losses in OCS and, if necessary, HCRS, can provide the same sort of impetus towards resolving those disputes. In GLOS Dentons and Sir Ross act wholly independently of the claimants and the Department with each having discrete but important roles which are calculated to facilitate settlements between the claimants and the Department in cases where the assessment of losses proves genuinely difficult.
6.157. I have no doubt that if Recommendations 6 and 7 are accepted and implemented swiftly there will be an immediate beneficial effect upon the speed with which claims can be resolved.
6.158. The Post Office now maintains that the administration and delivery of HSS should be undertaken by the Department and that if that governance change was made many more complex and standard cases would be resolved.
6.159. It claims that it has always held that view. I doubt whether that is correct. Mr Read maintained in his evidence that he had always been of the view that HSS and OCS should not be administered by the Post Office.[332] He has been the Chief Executive Officer during all material times. He and the Post Office are inclined to suggest that his view has represented the views of the Board of the Post Office over time.
6.160. There can be no doubt that Mr Read engaged in correspondence with the Minister in 2021, suggesting that it was more appropriate for the Department to administer “the process of settlements directly”. The Minister rejected that suggestion.[333] However, in my view, this exchange of correspondence related only to the administration and delivery of OCS. A fair reading of the closing written submissions of the Post Office conveys the impression that both the Post Office and the Department always considered that the Post Office was contractually bound to administer and deliver HSS by virtue of the GLO Settlement Deed.[334] Such a view, if held in 2020/2021, would hardly suggest that the Post Office then considered that HSS should be administered by the Department. Whether the terms of the Settlement Deed did bind the Post Office, as an institution, to administer and deliver HSS for the whole time that it existed may be an interesting exercise in interpretation. If the terms do have that effect, of course the Post Office would be obliged to continue the administration and delivery of HSS even now.
6.161. I am satisfied that in 2021 the Post Office made an attempt to persuade the Department to administer and deliver OCS. I do not accept that it sought to persuade the Department to administer and deliver HSS, certainly not prior to its launch.
6.162. Whether the Post Office has always maintained the view that HSS should be administered and delivered by the Department is in any event of academic interest only. I say that because, for many years the Department has steadfastly resisted any suggestion that it should administer and deliver HSS. I accept the evidence which I heard of a view within the Department (and in Government more generally), that the Post Office should be responsible for clearing up its own mess.[335] Further, there is certainly substantial support now for the view that the administration and delivery of HSS would be improved if the Department, as opposed to the Post Office, was responsible for those matters. This is very much the view of Messrs Railton, Read and Recaldin and the Post Office as an institution. That is also the view expressed by the Business and Trade Committee, by a number of claimants in HSS, and many former postmasters who are Core Participants.
6.163. The Department still does not agree with those views at least at the present time. It suggests that the Post Office should continue to administer and deliver HSS and that there should be close monitoring of the Post Office by the Department. It recently responded to the Business and Trade Committee’s recommendations by asserting that it “continues to consider whether the Department should take responsibility for making first offers”.
6.164. I do not consider that the Post Office should be removed from delivering and administering HSS at this stage or in the foreseeable future. In reaching that conclusion I leave out of consideration whether the Post Office is contractually bound to continue to deliver HSS itself. I base my view only upon whether the removal of the Post Office from the administration and delivery of HSS would likely improve its administration and delivery.
6.165. My analysis is as follows.
6.166. Those Post Office employees and their legal representatives who are currently involved in the administration and delivery of HSS will, going forward, be involved, primarily, in the following functions. First, the task of assessing the eligibility of those claimants who opt to accept the Fixed Sum Offer. Second, assuming the eligibility criteria are met, making the arrangements necessary to ensure payments of £75,000 to eligible claimants are made promptly. Third, deciding upon the offers to be made to those claimants who opt to have their claims assessed and to whom offers have not yet been made. However, it must be borne in mind that the decision about the level of offer to be made to claimants is taken after advice is received from an independent advisory panel and may also be subject to approval from the Department. Fourth, making the arrangements necessary to ensure payments are made promptly to those claimants who accept offers made to them. Fifth, (if it is not abandoned as a consequence of the roll out of the appeal process and the recommendation I make below), participating in the current Dispute Resolution Procedure.
6.167. No useful purpose would be served by removing the Post Office from the function of assessing eligibility for Fixed Sum Offers. The most difficult task, in the vast majority of cases, in assessing eligibility for acceptance of such offers is to ascertain whether or not a relevant shortfall exists. That cannot be done, save by reference to information held by the Post Office themselves or obtained by the Post Office from other sources. Once that information is available to the Post Office and scrutinised by them, a decision on eligibility can be made. I can think of no reason why the administration of HSS would be improved if this function was removed from the Post Office.
6.168. Once eligibility is established, payment can be authorised. I have heard or read no suggestion that the Post Office is guilty of undue delay in making payments of the fixed sum once eligibility is established. I infer that the process for authorising payment works satisfactorily.
6.169. In summary, there is no reason why the function of administering the process surrounding the Fixed Sum Offer should be removed from the Post Office. In reaching that conclusion, of course, I appreciate that there is a cohort of claimants (or perhaps more accurately, former postmasters who are Core Participants) who distrust the Post Office to such an extent that they would wish them to be removed from all involvement in any part of all the financial redress schemes. I understand entirely why many postmasters and former postmasters have very considerable reservations about virtually anything that is done by the Post Office. However, the administration of the Fixed Sum Offer is, in reality, an administrative and mechanical process which is far better done by the body which has accumulated approximately five years’ experience of scrutinising information to ascertain whether or not relevant shortfalls exist.
6.170. The involvement of the Post Office in claims which are to be assessed poses more difficult problems. As explored in paragraph 4.102 above, I have received evidence, which I accept, that the approach of Herbert Smith Freehills and, by extension, the Post Office, to the assessment of appropriate offers is too legalistic and fails, too often, to give the postmaster the benefit of the doubt.[336] I have also received direct evidence which shows that on occasions first offers which are rejected are followed by offers which are increased very substantially. That tends to suggest that the independent advisory panels, on occasions, adopt the same legalistic approach. However, as I have said, it has not been suggested by any Core Participant (or anyone else) that the independent advisory panels should be removed from the process of formulating offers.
6.171. The consistent evidence from the Post Office has been that it has never made an offer to a claimant which was less than the offer proposed by an independent advisory panel. Indeed, the Post Office has consistently maintained that, on occasions, it has made offers to claimants which has exceeded the offer suggested by an independent panel. No evidence was adduced before me which contradicted that assertion, and the survey evidence can be interpreted as providing some support for what the Post Office has said on this issue.[337]
6.172. I cannot see what advantage would be gained by removing the Post Office from participating in the process which results in a first offer being made to a claimant. I say that, not least, because the proposal is to replace the Post Office with the Department. What would that achieve in relation to the settlement of the complex cases? In effect, the Department already has the last word in such cases.
6.173. The Post Office will have no part to play in the delivery or administration of HSSA. In essence, HSSA creates an appeal process which is internal to HSS and in which the decisions which are binding on an appellant, the Post Office and the Department are made by persons who are wholly independent, namely by an appeal panel or the Reviewer.
6.174. AS HSSA contemplates, there may be some claimants who are making their way through the current Dispute Resolution Procedure. Those claimants will have the option to switch to HSSA. However, if they do not, the only stage of the Dispute Resolution Procedure which binds a claimant is arbitration. If any arbitration occurs the arbitrator will, without doubt, be wholly independent of the Post Office.
6.175. As it happens, I cannot see any advantage to a claimant in remaining in the current Dispute Resolution Procedure. That procedure does not operate under the ‘best offer’ principle. In order to get to a point where a binding decision is made the claimant would have to engage in arbitration. No one has yet done so in five years! I could, of course, recommend that fairness demands that the ‘best offer’ principle should operate in the Dispute Resolution Procedure, but to what end when the only means of achieving a definitive outcome involves very costly arbitration.
6.176. I had presumed that the Department considered it inappropriate to remove the Dispute Resolution Procedure as an option for claimants as a route by which redress could be obtained since it had been a feature of HSS since its inception. However, I now understand that it takes the view that “Post Office’s commitments under the GLO settlement deed mean that DRP must remain open and cases cannot compulsorily be transferred into the new process.”[338] While I acknowledge that this may be a possible interpretation of the Settlement Deed, this seems to me to be an unnecessarily cautious approach. Who does the Department suppose will either wish, and have the right to enforce the provisions relating to dispute resolution in the Settlement Deed, given that the parties to the Deed are the GLOS claimants, their solicitors and the Post Office? The Dispute Resolution Procedure has singularly failed to function as it was intended. HSSA will provide for claimants an appeal system in which, it is said, they cannot lose and in which there are no costs consequences of losing, which on any view, is a very generous provision. They will also have a very generous period of time (nine months) in which to decide whether or not to appeal.
For those few claimants who might prefer a mediated settlement, a mediation could be arranged by consent during that nine month period. The good faith meetings and the escalation meetings contemplated within the Dispute Resolution Procedure are no more than opportunities for negotiation. Such meetings can occur within the same nine month period. Nonetheless, I would not go so far as to say that all claimants currently within the Dispute Resolution Procedure should be transferred to the appeal process against their will. Accordingly, I recommend:
13. The current Dispute Resolution Procedure in HSS should be closed once all claimants currently within the Procedure have either (a) settled their claims or (b) transferred to HSSA. No claimant who is not in the Dispute Resolution Procedure when HSSA opens should be eligible to join the Dispute Resolution Procedure.
14. During the nine-month period afforded to claimants to submit an appeal to the Department in HSSA, the Post Office shall engage in negotiations and/or mediation with any claimants who notify the Post Office of a desire to seek a negotiated or mediated settlement of their claim.
6.177. There are two important remaining issues which I must address, which arise from the unjustified delays in HSS. The first relates to what can be done to reduce the unduly lengthy periods of time which often elapse before first offers are made in complex cases. I appreciate of course, that the Post Office has sought to combat this by increasing the numbers working in the Remediation Unit, by engaging a sufficient number of lawyers and increasing the numbers who sit on panels. These measures however, are not of themselves sufficient. What is called for, in my view, is an appointment as suggested in Recommendations 6 and 7 i.e. the appointment of a suitably qualified lawyer to carry out the same sort of role as is performed by Sir Gary Hickinbottom when dealing with pecuniary claims in OCS. I envisage that the person appointed might be designated as the overall chair of the independent advisory panels and be given the power to issue directions in all cases (including the power to issue directions solely with the aim of enforcing earlier directions relating to time limits). As I have already said, the Advisory Board should be invited to help formulate relevant powers and it may be that Dentons, Sir Gary and Sir Ross should also be consulted (although that is a matter best left to the judgment of the Post Office and the Department and all concerned Core Participants). Put shortly, there is a clearly established need for someone with relevant legal and administrative experience to take hold of the cases which have yet to be assessed and drive them forward to the first offer stage. Thereafter of course, the claims will either be settled or they will enter (as I believe to be appropriate) HSSA.
6.178. The second issue relates to a recommendation I made in the Interim Report. Recommendation 8 in that Report was to the effect that a date should be set after which no further claims under HSS would be entertained. That recommendation was accepted in October 2023. Nearly 21 months has now gone by but there is no sign that such a date has been or will be set.
6.179. I cannot understand why that is. We are now about five years and six months on from the Deed of Settlement which gave birth to HSS. We are more than five years on from the date when the scheme opened. I can see no possible objection in principle to a date being set after which no further claims will be entertained. There would be a certain symmetry if the chosen date was 27 November 2025 i.e. five years after it was anticipated that the scheme would close to new claimants. Such a date would still afford some months for postmasters to make decisions about how to proceed. However, in my view there does need to be finality. Therefore, I feel compelled to recommend:
15. No claims for financial redress under HSS shall be entertained after midnight 27 November 2025.
Delay in OCS
6.180. Interim payments have been paid very promptly to claimants in OCS whose convictions have been quashed.[339] Such payments began in the summer of 2021 and were paid promptly, as and when convictions were quashed thereafter.
6.181. By the summer of 2022, however, very little progress had been made in reaching full and final settlements with those whose convictions had, by then, been quashed. Indeed, until the advent of Lord Dyson’s neutral evaluation in July 2022 very little progress appears to have been made of any kind, certainly so far as could be discerned in the outside world.
6.182. By 8 December 2022 (i.e. about four months after Lord Dyson delivered his neutral evaluation), when Ms Gallafent KC made submissions at the hearing on that date, 53 claimants had submitted non-pecuniary loss claims; 33 offers had been made by the Post Office and 26 such claims had been settled. At the hearing on 27 April 2023 Ms Gallafent KC informed the Inquiry that the number of claimants who had submitted claims for non-pecuniary losses had risen to 69, that 67 offers had been made and that 55 offers had been accepted. In contrast, as of 27 April 2023, there had been no more than a small number of claims which had been made for pecuniary losses. 14 such claims had been made (although three had not been fully particularised) and four such claims had been settled. If there were any claims in which both pecuniary and non-pecuniary losses had been settled completely, they were very small in number.
6.183. During 2023 there were three important staging posts in the evolution of OCS. First, after what can properly be categorised as a tortuous process, the Pecuniary Principles were more or less finalised, although they were not adopted, formally until early 2024. Second, on 18 September 2023 the Fixed Sum Offer of £600,000 was announced. Third, in October 2023 Sir Gary Hickinbottom was nominated to chair the Pecuniary Loss Panel (the nomination being confirmed in February 2024).
6.184. The Fixed Sum Offer was introduced with the very specific aim of speeding up financial redress in OCS. In my view it was pitched at an amount which would tempt many claimants and quite deliberately so. Its introduction was very much supported by the Minister. As I have said, 62 claimants had accepted the Offer by 30 April 2025.
6.185. The data in relation to the other claims in OCS is set out in paragraph 4.195 and 4.196 above. It is disappointing to note that of the 23 claims which have been fully particularised and submitted to the Post Office (a) only 10 have progressed to full and final settlement and (b) there is complete disagreement about all aspect of the claims in seven cases. The remaining cases are ones in which agreement has been reached about certain aspects of each claim.
6.186. 13 claimants have yet to submit claims of any kind (save interim payment claims).[340] However, I do not attribute the fact that 13 claims are yet to be submitted to delays on the part of the Post Office or the Department. Certainly, I have received no evidence to demonstrate that is the case.
6.187. All witnesses who addressed the issue of delay were in agreement that Sir Gary has engaged in active case management of all the claims brought to his attention with a view to encouraging claimants and the Post Office to settle their differences. Despite his best efforts however, I am aware of only one claim being referred to the Pecuniary Panel. The determination made by the Panel will bind neither the Claimant nor the Post Office, so in the event of disagreement the options are that one side capitulates, the parties engage in mediation, or the claimant engages in litigation.
6.188. It is very hard to escape the conclusion that progress overall in OCS has been far too slow. 28 persons whose convictions have been quashed are yet to settle all their claims.
6.189. I appreciate that the availability of interim payments in OCS (which have been paid promptly) may have removed the need for full and final redress to be delivered as quickly as would normally be expected. I cannot help but think however, that for too many claimants full and fair financial redress has not been delivered promptly. In this regard, I am surprised that, notwithstanding the efforts of Sir Gary, to resolve cases, the number of assessed claims which have been resolved is still very low – a total of nine – and only one case has made its way to the Pecuniary Panel. There can be no doubt, in my view, that but for the arrival of Fixed Sum Offers, there would be many more cases which would be wholly or partially unresolved.
6.190. I should also record that I have received one communication to the effect that the claimant has accepted the Fixed Sum Offer simply because the prospect of assessment and the time it would take would be unpalatable (a word of my choice which summarises the sentiments expressed in the communication).
6.191. I welcome the fact that OCS and HCRS have been merged. It makes no sense whatsoever to have two different schemes for persons whose convictions have been quashed. I can but wonder why it was ever thought necessary to have two schemes in the first place.
6.192. That said, I see no reason why the merger should improve the speed of redress to any claimant who seeks to have a claim assessed. As a matter of fact, no claims have been made in HCRS in which assessment is sought and the chances of that occurring in the future seem slim when £600,000 is on offer as an alternative. If such claims are made however, they will, I infer, probably be assessed in much the same way as they are currently assessed in OCS. Non-pecuniary losses will be assessed against Lord Dyson’s neutral evaluation; pecuniary losses will be assessed in accordance with the Pecuniary Principles. If what I shall refer to as ‘first stage’ negotiations fail to produce a settlement the claim can progress to the point when a panel chaired by Sir Gary makes a non- binding determination.
6.193. Sir Gary was announced as the chair of a panel in HCRS in December 2024. As I have said, given the merger, I infer that he will chair one Panel which will be made up of personnel already serving the Panel in OCS and indistinguishable in terms of process from that which has been established already in OCS. In short, I infer that moving the OCS claims to HCRS simply means that assessment will continue as before but in the merged scheme.
6.194. I do not anticipate that an appeal structure will be established in the merged scheme or that a reviewer will be appointed. I say that for this reason. OCS has operated on the basis that settlements binding upon claimants and the Post Office are achieved only by a consensual agreements. Binding settlements or determinations are not imposed upon claimants in OCS (I presume) in order to avoid a conflict with their rights to make claims for malicious prosecution which, in effect, is the backstop position. In these circumstances there was never a need for an appellate structure or a reviewer in OCS because if a claimant and the Post Office could not agree following a non-binding determination from the independent Panel, the claimant could engage in mediation (if the Post Office agreed) or pursue arbitration or civil litigation. For the sake of clarity however, it would be appropriate if the Department made a public announcement either confirming the inferences I have drawn, and the assumptions I have made, or explaining the true position. I recommend:
16. The Department shall make a public announcement in which (a) it clarifies whether there will be any differences in the process for assessing financial redress, as between the merged HCRS and OCS, and the process currently operating in OCS and, if so, (b) it explains what those differences in the process will be.
Delay in GLOS
6.195. GLOS was announced by the Minister on 22 March 2022. One year and one day later, on 23 March 2023, the scheme was launched.
6.196. Throughout that period the Department knew that the statutory provision upon which it intended to rely to make additional payments to the claimants in the Group Litigation mandated that those payments should be made by 7 August 2024. It knew too, that GLOS would likely attract close to 500 claimants. It also knew, or should have known that there would be many difficult and substantial claims with which it had to deal. Yet, it asserted with confidence that all those claims could be submitted, assessed and paid between its launch on 23 March 2023 and 7 August 2024.
6.197. I do not understand, and I have never understood how the Department could have envisaged that GLOS either could or would be launched and completed in that space of time. As it happens of course, very belatedly, the Department accepted the need for legislation which would ensure that all claimants in GLOS could be paid further sums without there being a strict time limit by which payment had to be made. However, it was not until 25 January 2024 that the Post Office (Horizon System) (Compensation) Act 2024 became law.
6.198. On 10 January 2024, i.e. shortly before the Act became law, the Minister announced the Fixed Sum Offer of £75,000 in GLOS. The scheme had by then, been operating for approximately nine months. Progress in assessing claims had been slow, exacerbated by the Post Office being tardy to produce relevant documentation, and there being a shortage of accountants ready and willing to provide evidence to substantiate claims at the rates of remuneration made available by the Department. As in OCS, the impetus for Fixed Sum Offers was the need to speed up settlements under the scheme.
6.199. The possibility of Fixed Sum Offers had been under consideration since the summer of 2023 i.e. since a time shortly after the launch of GLOS. The Minister had yet to make his announcement of Fixed Sum Offers in OCS. Accordingly, I pause at this stage to ponder how it could have been that Fixed Sum Offers were, apparently, considered separately and sequentially in HSS, OCS and GLOS.
6.200. The plain fact is that Fixed Sum Offers were announced in OCS in September 2023 because progress in OCS was far too slow. In part at least, the slow progress was due to the difficulties inherent in assessing substantial claims. Yet the same problem was bound to arise in GLOS and had already arisen in HSS. I can only infer that the advent of Fixed Sum Offers unfolded as it did because a request to HM Treasury to fund Fixed Sum Offers in all the schemes then existing and prior to Mr Bates vs The Post Office, would have very likely been rejected.
6.201. More than two years has now elapsed since GLOS was launched. There is a total cohort of 492 eligible claimants which is very unlikely to increase. A total of 450 claims have been submitted to the Department, there are still 42 claimants who have yet to submit a claim.[341] 445 claimants have received offers in settlement and 304 claimants have accepted their offers.
6.202. At the time of writing, 156 Claimants have accepted Fixed Sum Offers; 148 claimants have accepted settlement offers which have been assessed. When Mr Creswell gave oral evidence, no more than about a third of the claimants who had opted for assessment had accepted the first offer made to them. A small number had accepted a revised offer. Two disputed assessed claims had been referred to an independent panel for a non- binding assessment. One of those assessments was returned to the panel for a binding determination; in turn that binding determination has been reviewed by Sir Ross.
6.203. By my arithmetic 188 claims (or perhaps a few less by the time this volume is actually published) remain unresolved. That represents about 38% of all claims. If those accepting Fixed Sum Offers are taken out of account, the percentage of unresolved claims which have opted, or will opt for assessment, is about 55% assuming as I do, that most, if not all of those 42 claimants who have yet to submit a claim, opt for assessment.
6.204. In my view the rate of progress and the process of settlement of claims in GLOS are very slow. In part that is explained by the difficulties involved in assessing the many complex claims which, presumably are alleged to have a value significantly more than £75,000. In part, the slow progress is also explained by the various non-binding stages which must be navigated before the point is reached at which a binding decision is made. In part too, claimants may be wary, understandably, about moving from stage to stage to a binding determination when there is a risk that they could end up worse off. That last problem, at least, will be alleviated if the ‘best offer’ principle is adopted for GLOS as I have recommended.
6.205. In summary, delivery of financial redress to many claimants who have opted for assessment has not been prompt. The number of claimants waiting for their claims to be assessed, and the number of claimants who have yet to submit a claim (likely to be of the order of 188 in total) is such that the Department will struggle to close GLOS by the end of 2026. Without the introduction of the Fixed Sum Offer, the picture would, undeniably, have been far worse.