The Compensation Catch

Deirdre Connolly outside the High Court’s Rolls Building during Bates v Post Office in 2018

Last week Alan Bates stunned a small, but significant number of members of the Justice for Subpostmasters’ Alliance with a circular sent out on 12 September. The members concerned are a sub-group of the 555 claimants in Bates v Post Office who have what the government are terming ‘complex’ situations. There are about 100 of them. Some became mentally incapacitated before arranging lasting power of attorney (LPA), some are sadly dead, and the probate on their estate has not been sorted. Others are insolvent or bankrupt.

Bates told this latter group ‘the stumbling block then, as it is now, is presently there is no money being made available by Government to sort out each of the complex claims like yours.’

Bates acknowledged this was serious:

‘I know most of you are in dire financial straits and desperately need your interim payment soonest.… But as work has stopped on most of these cases it is not possible for anyone to say if, or when, you will receive anything… despite our best efforts, we cannot find out anything further.’

Earlier this year the government did a u-turn on providing full compensation for the 555 claimaints who blew open the scandal by defeating the government at the High Court.

For all of 2020 and a large chunk of 2021, it had told claimants that the Post Office’s settlement of £57.75m was ‘full and final’ despite around £46m being taken from that settlement in legal and funder’s success fees.

In March 2022, the then Postal Affairs minister Paul Scully said the government had had a change of heart and proper compensation would be handed out to members of the 555. At the same time he announced that £19.5m would be made available immediately as interim compensation for the 555. Despite the immediacy of that announcement, there are still dozens of Subpostmasters who have yet to see a bean.

It appears the apparent issue with a small number of claimants, including Deirdre Connolly (pictured above), is whether or not the trustees of any bankruptcy would have a claim on the interim payments.

Totally devastated

Deirdre is a former Subpostmaster from Northern Ireland. She ran the Killeter branch between 2006 and 2010. During the human impact hearings to the Post Office inquiry earlier this year she described her experience at the hands of the Post Office. When a £15,000 hole appeared in her accounts in 2010, a Post Office investigator asked if she was working with the paramilitaries. Deirdre and her family were devastated. After being suspended and then sacked, Deirdre became very isolated. She was bankrupted. Bailiffs repossessed her shop and she was branded a thief by the local community. The only reason the family kept the house was because they were in negative equity. Deirdre had a breakdown and considered taking her own life. She developed epilepsy. The strain of being a claimant in the group litigation caused a relapse. The money she received from the 2019 settlement was swallowed up by credit card bills.

Deirdre and her family have been waiting years to receive fair compensation for what the Post Office did to them, but because of her bankruptcy, Deirdre is one of the ‘complex’ cases. Last week Deirdre told me:

“I feel totally devastated. I thought it was coming to an end. I could finally start rebuilding my life but now I have been let down again. It’s so disheartening. Especially when I was told this payment was coming.”

Freeths, the law firm who have been working with the JFSA and the government to share out the £19.5m, have set up a specialist team to advise on the issue of insolvencies and bankruptcies, but told claimants:

“The Government will not yet sign off on the expense of this stage of work and they have decided that their Insolvency Service and internal legal team should review the position first.”

A government source informed me this was correct, but that they were ‘surprised’ by Bates’ reaction to this decision, suggesting he might have ‘got the wrong end of the stick’.

BEIS believe their decision to work with the Insolvency Service in the first instance is justified on the basis it will be ‘quicker and cheaper’. My source added: ‘if we need Freeths to do more work on this, we will take steps to extend our contract with them. We’ll do everything we can to get these payments out, one way or another.’

David Enright from Howe and Co was fuming at being blindsided by the delay, writing on behalf of his clients to the chair of the inquiry Sir Wyn Williams to complain. In his letter, dated 12 September, he said he’d held a meeting with BEIS in late August where ‘the serious funding issue in relation to ‘complex’ cases was not mentioned.’

Earlier this week Deirdre received a reply from the government (dated 15 September) to a personal enquiry she made asking what was going to happen to her. She was told:

“We have been working with colleagues in the Insolvency Service to resolve the issues arising from your bankruptcy which have been preventing Freeths from making your interim payment.

“That work is delivering valuable progress. We have cleared 20 cases for payment this week, and we expect shortly to resolve the issues for at least a further 6.

“Unfortunately, it will take some more time as we work through the complexities of your bankruptcy.”

Compensation consultation

In the meantime, Deirdre, like all of the 555 claimaints, has been asked by the government to join in a consultation on how she and her fellow Bates v Post Office Subpostmasters should receive their final full and fair compensation. I hope whatever scheme the government settles on, it is not as disastrous as the Historical Shortfall Scheme.

I think I am still right in saying no one who has had their conviction quashed, no one from the original 555 and no one with a significant claim (ie over £100,000) in the Historical Shortfall Scheme has received anything like the final amount they are looking for from the Post Office or government.

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