Exclusive: Post Office fails in compensation clawback attempt

Publicly, the government has said it is determined to compensate Subpostmasters affected by the Post Office scandal “as soon as possible”. Behind the scenes it seems determined to drag things out to a ridiculous degree.

Earlier this year both the Post Office and the government decided that money gifted to Subpostmasters with criminal convictions, by other Subpostmasters, should count against any compensation they receive from the government when/if those convictions are quashed.

Four years ago today the Post Office settled with 555 Subpostmasters who had taken it to the High Court as part of the Bates v Post Office class action (known in this country as a Group Litigation Order – or GLO). Sixty-one of the claimants had criminal convictions. Under the terms of the settlement (which the claimants’ lawyers, Freeths, initially told its clients it couldn’t see on grounds of confidentiality) those 61 were expressly given nothing by the Post Office. Clause 7.1.3 of the settlement agreement states:

“as part of the settlement set out in this Deed, the defendant has not made, or agreed to make, any payment to, or for the benefit of any Convicted Claimant.”

In 2019, the GLO claimant steering committee, comprising former Subpostmaster Alan Bates and his advisor Kay Linnell, secretly decided to share out the circa £11.5m they ended up with (once funders’ and legal fees had been deducted from the £57.75m settlement) between the entire claimant group, rather than leave the convicted claimants with nothing.

The cash that the 61 convicted Subpostmasters received was therefore effectively a gift from the non-convicted claimants. This was, according to Freeths (in a letter sent to convicted claimants in July 2020) in order to be “fair and consistent across the group”.

Whatever the rights and wrongs of this (and I happen to think it was right), there was (or at least there should have been once the settlement agreement became public in 2020), no doubt as to the status of these payments.

It’s yer money I’m after, baby

Fast forward to 2023 and for some inexplicable reason, the Post Office and government decided that if applicants to the Overturned Conviction compensation scheme were members of the GLO claimant group, the payments they received from their fellow claimants should count as compensation made by the Post Office, and therefore be debited from their compensation pot.

The government seemed to think this was the “fairest available” way of dealing with the issue. The fact it would end up saving them money was, of course, the furthest thing from their minds. In fact, argued the government (in one position paper I have seen), if they accepted the settlement cash was a gift, it:

“would mean that each convicted claimant would receive the amount of their agreed losses plus a gift. However each not-convicted claimant would receive the amount of their agreed losses minus a settlement payment, which is not compensated.”

The government felt this “would be wholly unfair to that group”.

Lawyers for claimants on the Overturned Conviction scheme did not agree with the government’s view.

Dyson’s decision

Former judge Lord Dyson, who has already been working on various other compensation issues between the Post Office and some of the claimants, was asked to make a decision in what’s known as an Early Neutral Evaluation (ENE). This is usually non-binding, but parties can agree to be bound by any decision before starting the process. After receiving submissions, Dyson did his ENE and came down in favour of the convicted claimants, stating:

“the assessment of the Convicted Claimants’ damages should be made on the basis of the facts as between the Convicted Claimants and POL [Post Office Ltd] and without regard to the position of any third parties, including the Not Convicted Claimants.”


“I consider that the Convicted Claimants are not required to give credit for the sums they have received from the Not Convicted Claimants… payments that were made to Convicted Claimants out of the Cash Settlement Sum:
are not to be taken into account in assessing damages payable”

The barrister Paul Marshall made submissions to the ENE on behalf of claimant Subpostmasters. I asked him what he made of all this. He replied:

“the Post Office’s position on what may be called “clawback” of sums received as compensation by those convicted on prosecution by the Post Office whose prosecutions were (subsequent to the Group Litigation) quashed on appeal, a position that to my surprise was shared by the government, was to my mind misconceived as a matter of legal principle from the outset – for reasons I explained in some detail to Minister Hollinrake in March 2023.

“The Post Office’s willingness to incur substantial expense in contesting an issue on grounds that to my mind, as a matter of law, were plainly without merit, is disappointing. The Post Office’s approach is, however, entirely consistent with the Post Office’s approach to claims against it by its victims since the time at which Second Sight was instructed in 2012 – and with which many will be wearily familiar. It does not sit easily with the Post Office’s (or the government’s) publicly avowed intention to pay full and fair compensation to the Post Office’s victims. It also illustrates the substantial difficulty encountered by Post Office victims in securing proper compensation.”

Post Office minister Kevin Hollinrake this morning told me:

“It’s really not about ‘reducing Subpostmaster compensation’ and I think it’s wrong to imply that it is. The total amount of compensation being paid has never been a consideration in any of the conversations I’ve had on this matter, the only factors have been parity, fairness and doing whatever we can to increase the pace of resolution.”

I have asked the Post Office for comment.

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23 responses to “Exclusive: Post Office fails in compensation clawback attempt”

  1. Peter Ramsay Aikman avatar
    Peter Ramsay Aikman

    Are Fujitso and the P.O. bosses just incompetent, or is one or other or both crooked ? If crooked then whoever they are should face massive clawback fines and prison. An even if just incompetent then the government should step in with immediate effect and hugely compensate those affected – in advance of interminable enquiries. And congratulations to George Arbuthnott for stepping in add his weight to the campaign.

  2. The amazing fact, for me and am sure many others:
    The Managers at the Post office and the Horizon system supplier, both knew that they were charging and prosecuting innocence people and by such actions destroying their lives, but they continued to protect their organizations at any cost.

    These Managers are people, not some unidentified groups hidden deep in their prospective organizations, they are Individuals, and surely they MUST be brought to book, for this immoral and criminal behaviour,


  3. The thing that is most unacceptable to me is the £s the legal profession is making out of all this incompetence and delay. This is tax-payers money. In the meanwhile compensation is not being paid to those who need it

  4. Previous post…..should read Subpostmasters NOT SAMSUNG !!!!!! Predictive text!!!!….computers!!!!! CAN’T TRUST THEM!!

  5. Now time for ALL SPM and POL employee convictions 1999-2015 to be quashed and the promised compensations paid out in days/ weeks….and no talk of ‘fInal’ either! ….also time POL forfeited it’s historic private prosecution privileges ….time for some professional detective work on the Horizon discrepancies…could organized crime have been involved….did the Horizon system fail to collect real account surpluses whilst inventing branch shortfalls…though I’m in lined to think SAMSUNG were the sort of honest folk who would declare mysterious surpluses to the Helplines

  6. Justin Williams avatar

    It’s appalling the 600k compensation when you understand many lost their annual salaries from 20 years or
    more ago when they were convicted or sacked. The 600k is swallowed on just those salary losses never mind their businesses, homes, health issues et al. I’m sure many have to pay professional services (solicitors etc) will take their percentages as well. Gov. / PO have really taken a cheap compensation really.

  7. I am not convinced that the computer orators changed the subpostmasters accounts for no reason. Money was illegally taken and we are told ended up boosting post office profits. Were they told to do this or did it go somewhere else. Whatever the reason it was of course criminal theft. Someone or many people should therefore be prosecuted with all the normal consequences.

  8. Lorraine Marson avatar

    I could barely watch the first 20 minutes of the tv series, it’s absolutely harrowing viewing. The bullying of big v little was so obvious and those poor post office owners were treated like criminals.

  9. “Earlier this year both the Post Office and the government decided that money gifted to Subpostmasters with criminal convictions, by other Subpostmasters, should count against any compensation they receive from the government when/if those convictions are quashed.”

    I don’t understand what this means. Subpostmasters are gifting money to other subpostmasters with criminal convictions that are not related to the fit-up by the Post Office management?

    1. The non-convicted postmasters shared their bit of compensation/costs money with the convicted ones who would otherwise have got nothing. The PO and the Govt decided to view this as a gift from one group to the other.

  10. Well done Nick. Thanks for keeping us updated. I would like to make a further donation, could you please advise on the funding page. Regards Francis.

  11. The Govt (as POL’s sole shareholder) needs to get a grip on what is happening in this dysfunctional organisation, stop spending vast amounts on external lawyers to fight/“manage” this and pay decent levels of compensation QUICKLY.

  12. Those who have had their convictions quashed are no longer “Convicted Claimants”, so the caveat in the settlement agreement doesn’t apply. Therefore what they received was their due and not a gift.

  13. Amanda Fairclough avatar

    The amount of money involved in this ludicrous “clawback” calculation is tiny compared to the sums involved in bankruptcies, legal costs and immeasurable personal costs over more than two decades. After all that’s gone on, the govt and the PO are willing to quibble over 61/555ths of 11.5million? Thank you, Nick, for continuing to expose this petty-fogging penny-pinching on top of overwhelming bad faith. Surely both the Govt and the PO Board must now realise they have to relinquish all control of the compensation system to independent administration, and limit their own input to signing the cheques.

    1. I agree, no compensation calculations should be done by the Government or PO. An independent body should deal with it. The same problem arrises for compensation to others who unjustly spend time in prison.

  14. Well spotted Nick. Keep up the good work. Also well done, Lord Dyson, kicking the suggestion into th dustbin – err, is that the right metaphor?

  15. How completely ridiculous of POL to say the gifts were its money. Nothing that comes out of Planet PO surprises me any more. They are morally bankrupt.

  16. The Post Office (and the Government) appear hell-bent on paying out the minimum amount to its victims, the PO scandal is ongoing despite all that’s been said and done.

    Its criminal the way the victims have been treated from day one. At some point, head’s need to roll for this, its long overdue.

    Thank you for bringing this to our attention Nick. Bombard us all you want, given what these sub-postmasters, their family and also friends have been through and continue to go through, it’s important to flag up anything that the PO do in an attempt to weasel out of providing fair and appropriate compensation to every single victim!

  17. Perhaps a total boycott of the post office company should/could happen…?

    This government’s MPs are beyond the pale. As bad as the Post Office “mafia”. This latest change of direction to cut back compensation by The Post Office, is despicable and must be challenged.

    1. Ruth Kirby-Smith avatar

      The trouble is that the Post Office also treat their staff badly – there is a lot of bad feeling towards management and for good reason. To boycott the PO would result in punishment for the already badly treated staff and maybe job losses.

    2. Mary, whilst a boycott sounds attractive there are many reasons why it is not.

      For a start, it would punish all the current sup-postmasters by removing business (and therefore income) from them.

      Even avoiding what POL now prefer as core functions, ie selling financial products and holiday money, brings some income to those SPMs who undertake to sell these products.

      Secondly, with Royal Mail being the only service provider for social correspondence, and (still) the preferred provider of premium services (despite their appalling service of late), there are only two options. Put letters in a postbox, or post them inside a post office. Only with the latter can you get a receipt, and services which pay compensation for delay or non-delivery. No other company could provide the same service at anything like the same price.

      We’re stuck with them, and at local level they are still the heart and soul of the community.

    3. A boycott would mostly affect the existing subpostmasters who need our support to keep their post offices open.

      1. Nothing ever surprises me with the Post Office, having worked for them, I have seem them agree a deal over Xmas working with our Union reps on Saturday morning, then Monday morning deny any agreement was ever put in place.

        I very much doubt the current government or a future Labour government will change anything, seeing as Peter Mandelson signed off on Horizon.

        One thing the Post Office really hate is their shenanigans being exposed publicly, so again great work Nick, exposing the PO’s incredulous behaviour.

        I wouldn’t boycott PO, there are many innocent and current subpostmasters who do amazing work and public service.

        Exposure of the PO’s dirty deeds is what will stop them.

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