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A group of MPs says compensation is not being paid quickly enough for the victims of the Post Office scandal and is calling for the government to face financial penalties if the process doesn’t speed up.
The Business and Trade Select Committee said binding timeframes were needed, with any money arising from missed deadlines going to the claimants if they weren’t met.
The committee also called for the Post Office to be removed from its role in the compensation schemes, and asked for more transparency over how much it was paying for lawyers.
The government said it was “working tirelessly” to settle claims “at a faster rate than ever before”.
Committee chairman Liam Byrne MP said: “The fault lies with the Post Office, but ultimately government is the shareholder in the Post Office and acts on our behalf”.
The government is already looking at the Post Office’s role in the compensation schemes.
Between 1999 and 2015 hundreds of sub-postmasters were prosecuted and convicted based on information from a faulty accounting system, Horizon, which made it look like money was missing.
Some sub-postmasters wrongfully went to prison, many were financially ruined, and some have since died.
One of those accused, Seema Misra, was eight weeks pregnant when she was wrongfully imprisoned.
Speaking to the BBC after she was made an OBE in the King’s New Year list for her role in campaigning for justice, she said it was an acknowledgement of the “scale of the injustice and scandal”.
Seema Misra was wrongfully sentenced to 15 months in prison due to faults in the Horizon IT system which the Post Office used
The scandal “still hasn’t been sorted out”, she said, recalling the “really, really difficult time” she had had since her legal battle with the Post Offices started in 2008, three years after she had bought the Post Office in West Byfleet in Surrey.
She served four-and-a-half months in Bronzefield prison and gave birth to her second son wearing an electronic tag.
‘Poorly designed’
A public inquiry in to the scandal heard final submissions in December, where it took evidence from lawyers representing the Post Office, Horizon’s creators Fujitsu, and the Department for Business, as well as victims and former Post Office bosses.
The select committee’s report, which comes a year after an ITV drama about the scandal catapulted the issue to the public’s attention, said the redress schemes were still “poorly designed” and payments were still “not fast enough”.
It found the application process was akin to a second trial for the victims, adding that lawyers administering the schemes were making millions whilst the vast majority of the money set aside for redress had still to be paid out.
The committee’s recommendations include providing upfront legal advice for victims and hard deadlines for administrators to approve claims – with financial penalties if they take too long.
Only around £499m of the budgeted £1.8bn has been paid out so far, to more than 3,000 claimants. The committee said that meant 72% of the budget had still not paid.
Many of those with the most complicated claims have still to be fully settled.
“This is quite simply, wrong, wrong, wrong”, Byrne said.
Liam Byrne MP said the Post Office compensation system needed a “reboot”
“There are still thousands of victims who have not had the redress to which they are entitled.
“This is the biggest miscarriage of justice in British legal history,” he said, adding that there are “eye-watering legal costs which are, frankly, going through the roof.”
Talking to the BBC, he said that “for every £4 that the taxpayer is paying out in redress payments, £1 is going to the lawyers”.
Byrne added that hard deadlines and fines would help the government and the Post Office to “get a grip”.
A Post Office spokesperson said the firm was “focused on paying redress as swiftly as possible”, adding that its spending on external law firms was kept “under constant review”.
“Our chair said at the Public Inquiry in October that redress schemes administered by us should be transferred to the government, and we will support the Department for Business and Trade on any decisions they may take regarding this matter,” the spokesperson added.
There are four compensation schemes for victims and two are overseen by the Post Office.
The government’s Post Office minister Gareth Thomas said in December that the Labour government was considering taking over responsibility for the schemes from the company.
The Post Office told the select committee in December that legal fees had made up £136m of the cost of administering the Post Office-led schemes since 2020, which is around 27% of the compensation paid out.
Some of the committee’s recommendations for improvement were previously rejected by the former Tory government.
Hard deadlines attached to financial penalties were dismissed as having “no positive effect” on speeding up claims and “might unjustly penalise solicitors for issues out of their control”, the former government said in May.
Meanwhile, Hudgell Solicitors, which represents hundreds of former sub-postmasters, has welcomed the committee’s recommendations, saying they would simplify and speed up the compensation schemes by removing “unnecessary obstacles to justice” which it said it had seen repeated over hundreds of cases.
