Postmasters ruined by Post Office IT scandal offered ‘insulting’ £10k for reputational damage

Postmasters celebrate outside the Royal Courts of Justice after their convictions were overturned by the Court of Appeal - Yui Mok/PA
Postmasters celebrate outside the Royal Courts of Justice after their convictions were overturned by the Court of Appeal - Yui Mok/PA

Postmasters whose reputations were left in tatters by the Horizon IT scandal are being offered a maximum of just £10,000 for “severe” reputational damage, it has emerged.

A compensation scheme designed to recompense the postmasters who exposed the Post Office Horizon Scandal from the 1990s opened this week. The Department for Business and Trade said it is designed to ensure affected individuals receive “full and fair compensation”.

However, claimants who went to court will have their own scheme and Dan Neidle, founder of Tax Policy Associates Ltd, has called the new scheme “an insult” and “abhorrent”.

Postmasters won £43 million plus legal costs at the High Court in 2019 but individuals who went to court were ineligible for the compensation scheme set up for others affected by the Horizon saga.

The new scheme is for those who took the Post Office to court to enable them to claim remuneration for their unjust treatment.

The Post Office implemented a new accounting system in branches in the 1990s and an IT error led to shortfalls in branch accounts. Postmasters were forced to cover the shortfall and some individuals were wrongly prosecuted.

One aspect of the scheme is for stigma suffered as a result of the wrongful accusations and, in some cases, convictions. Other areas where people can claim are for harassment, personal injury, distress and inconvenience, and malicious prosecution.

Loss of community positions

Postmasters who claim for severe stigma or reputational damage as a result of the faulty Horizon software are eligible for a maximum of £10,000.

Criteria for a severe claim includes: adverse media reports; loss of community positions (eg councillor, local charity or sports club leader); being subject of verbal abuse (or verbal abuse directed at family members); feeling of being forced to move out of a local area; being subject of gossip, which took years to be forgotten; being unable to explain the position to the community as a result of Post Office’s reliance on confidentiality duties.

“The Post Office falsely accused thousands of postmasters of theft. But the level of compensation now being offered is an insult,” Mr Neidle tweeted.

“Your reputation in shreds for a decade? The local community convinced you were a thief? Forced to move? Maybe, just maybe, they’ll pay £10,000.”

People claiming for malicious prosecution, where they were sent to jail but not convicted or given a caution, will receive a maximum of £5,000.

Postmasters wishing to be compensated for harassment can apply for a maximum of £30,000, the document shows. This includes suffering invasive or oppressive conduct, multiple interviews, multiple house searches, and threats of prosecution and prison.

“I don’t understand how anyone involved in the process, particularly the Post Office and their lawyers, can think this is a fair outcome,” Mr Neidle said. “The Government needs to do much better.”

Mr Neidle, who uncovered the tax affairs of Nadhim Zahawi which led to his sacking as Tory party chairman, also criticised the way the Post Office is forcing postmasters to apply for compensation.

Many in their 70s and 80s

“Given many postmasters are in their 70s and 80s, requiring them to complete lengthy forms in practice means many won't apply.

“So the Post Office is benefiting from its own destruction of evidence. That’s abhorrent.”

Kevin Hollinrake, the Post Office Minister, said on Thursday: “The trailblazing postmasters who exposed the Horizon scandal were instrumental in securing justice for all of those affected.

“We will keep fighting for the postmasters and their families, and it is right that they will now receive full and fair compensation for the pain and suffering caused by this scandal.”

Christopher Head, an ex-postmaster from West Boldon, told The Telegraph: “The scheme on the outset appeared sufficient and we believed the words of the minister.

“However, after delving deeper into the principles of the scheme, it appears the compensation for defamation/damage to reputation are completely derisory.

“The cap of £10k in this scheme is outrageous. The levels of compensation do not even come close to the levels they should be at.”

A spokesperson for the Department for Business and Trade said: “We are determined to ensure that the postmasters receive fair settlements as swiftly as possible. The compensation scheme has been designed so that a lack of supporting evidence will not be a barrier to entry, and will put postmasters back into the position they would have been in had it not been for Horizon.”