Treasury announces compensation for 555 civil litigants
After all the hints, it's finally happened. On Tuesday 22 March 2022, a full two years and three months after the settlement of Bates v Post Office, the Chancellor of the Exchequer announced that all 555 claimants in that case will be properly compensated for their losses.
Two years and two months ago, Alan Bates invoiced the government for the sum of £46m - representing the figure taken from the £57.75m High Court settlement to cover legal fees and the litigation funders' success fee. He was told to go away.
He did not. Bates, along with his fellow litigants and their MPs continued to push the government - relentlessly - until the Treasury was forced to agree the funds.
Both the PM and Chancellor were quoted in Tuesday's press release. This is what Boris Johnson said:
"We’ll be introducing a new compensation scheme for those who led and won the landmark legal case over the failings, so they can receive their fair share... Whilst it cannot take away the years of distress, the postmasters who have suffered terribly over the Post Office Horizon scandal deserve to be fairly compensated."
And this was what Rishi Sunak came up with:
"Without the efforts of these postmasters, this terrible injustice may have never been uncovered so it is only right that they are compensated fully and fairly. That is why we have set up this new compensation scheme for those who played a crucial role bringing this scandal to light."
As the SNP MP Marion Fellowes said in the subsequent parliamentary debate:
"The Horizon scandal has spanned decades under Labour, Lib Dem and Tory Ministers. It is a stain on the Post Office and its single shareholder the Government. This response proves that the Government do the right thing in the end, once they have done everything else.” [my italics]
Speaking on BBC Breakfast, former Subpostmaster Lee Castleton, who is one of the 555 said of the compensation package: "I just hope that it encompasses everybody in the group.... it needs to be inclusive, it needs to be respectful and it needs to happen quite quickly. There are people in the group who are coming to the ends of their lives and they deserve to finish this."
The Business Minister, Paul Scully, took up his current post in February 2020. He spent a large part of his first year as a minister telling the 555 civil litigants that the compensation they received from the Post Office was "full and final", whilst sympathising with their plight.
In April 2021 there was a shift in his language. During an interview, when I challenged him on compensation for the 555, Scully told me:
"I can’t just pledge to step in at this moment in time. But I want to make sure that I can have good conversations with Alan Bates and the Postmasters within the 555, just as much as I want to have good conversations with other wronged Postmasters, because they need justice and they need fair compensation."
Since then, the minister has moved, glacially, towards where we are today. This was not without relentless pressure from backbenchers, peers and campaigners themselves.
One of the reasons Scully gave for the delay in announcing proper compensation for the 555 (once the government decided, possibly after the Court of Appeal ruling in April 2021 that it was something it wanted/had to do) was a concern that Therium, the litigation funders for the claimants in Bates v Post Office, would have a legal claim to a percentage of the compensation heading the Subpostmasters' way.
Therium did not take the full amount they were entitled to when the settlement was made. They might have asked to recover that, plus a percentage of any further compensation, based on the fact they funded the court case which led to it being announced. Scully told MPs that Therium have sensibly agreed to waive any future claim they might have, adding:
"I also thank Lord Arbuthnot, whom he mentioned, who has helped in the past couple of weeks to unlock the situation we have today.”
Lord (James) Arbuthnot used to be Jo Hamilton's MP and is very close to the Justice for Subpostmaster's Alliance. I understand he set up the line of communication between Alan Bates and Paul Scully which led to Bates getting confirmation from Therium that they would not raise any claim.
The dreaded consultation phase
Now the compensation has been announced, what any scheme will look like has yet to even be discussed, let alone decided. Scully said he was planning to have a meeting with "representatives of the JFSA" on 30 March and would be writing to them "to consult it about the scheme’s operations". The JFSA presumably means Alan Bates and his advisor Kay Linnell. Whether any legal representatives will be there, or indeed any other former Subpostmasters is not known.
Concerns any scheme could take as long as the Historical Shortfall Scheme to set in motion were not exactly put to bed by the minister, who said:
"The historical shortfall scheme started slowly, as it first worked through the cases and benchmarked those that would help inform future payments, so that we know so much more about the 555. Dovetailed with the HSS information that we have gained, I want to ensure that we can start delivering that compensation very quickly. I am still aiming for the end of the year for the HSS. We need to establish, once we know what the process is, an exact timescale agreed with the JFSA."
Another interesting snippet came out of yesterday's announcement - the prospect of the government going after Fujitsu to recover all or part of the compensation the taxpayer would otherwise have to stand. In parliament, Karl Turner asked:
"What are we doing to get some money back from Fujitsu? This will cost the taxpayer potentially hundreds of millions of pounds. How on earth are we going to allow Fujitsu to get away with it?"
Paul Scully replied: "The frank answer is that we will not—we will push as much as we can in any avenue to tackle compensation. Wherever it comes from, it should not be the UK taxpayer who is picking up the tab for other people’s problems."
The government vs Fujitsu could well be the next battlefront to be opened in this scandal, and it could get litigious very quickly.
If you would like to know more about this story, please consider buying my book, The Great Post Office Scandal. If you purchase a copy through Bath Publishing you will be invited to join a "secret" email list for free. This irregular newsletter provides updates on my work documenting the various twists and turns of this story. 10% of the book's proceeds goes to the Horizon Scandal Fund. Many thanks.