MPs demand penalties for delays in Post Office scandal payouts

MPs have called for financial penalties against the government if it fails to speed up compensation for victims of the Post Office Horizon scandal. The business and trade select committee has criticised the slow pace of payments, urging the government to implement binding timeframes and impose penalties for delays.

The committee's report, released one year after the ITV drama Mr Bates vs The Post Office drew public attention to the scandal, highlighted that only £499 million of the £1.8 billion set aside for compensation has been paid out so far. Of the claims made by sub-postmasters, 14 per cent of those who applied before the 2020 deadline are still waiting for resolution.

Liam Byrne MP, committee chairman, expressed frustration at the process. “The fault lies with the Post Office, but ultimately, the government, as the shareholder, must act,” he said. Byrne also criticised the legal fees being paid out to administer the compensation schemes, noting that £136m had gone to legal costs, a significant portion of the compensation budget.

“The legal bill appears to be racking up all the time, and the whole thing is just, frankly, out of control," Byrne continued. He added that for every £4 spent on compensation, £1 is going to legal fees, raising concerns that lawyers, not victims, are benefiting from the process.

The committee has recommended that the Post Office be removed from overseeing the compensation schemes due to concerns about its role in the scandal and the slow pace of redress. "We believe the Post Office has lost its grip on the process," Byrne said.

He stressed that many victims, some of whom have died without receiving justice, were still waiting for compensation.

Seema Misra, one of the victims, was wrongfully imprisoned due to the flawed Horizon IT system, which falsely showed financial discrepancies.

She was released after serving part of her sentence while pregnant. Misra, who was honoured with an OBE in the King’s New Year list, commented on the injustice, saying the award acknowledged the “scale of the injustice and scandal.”

The committee’s report also calls for more transparency in the handling of legal fees and suggests that upfront legal advice be provided to victims to help streamline the claims process. Additionally, the MPs are pushing for strict deadlines for the approval of claims, with financial penalties if they are missed.

The Post Office has acknowledged the committee’s concerns, stating that it is committed to paying redress swiftly. A spokesperson for the organisation added that the government was considering taking over the administration of the compensation schemes, a suggestion supported by the committee.

A spokesperson for the government said, “We are settling claims at a faster rate than ever before, with almost £500 million paid to over 3,300 claimants by the end of November.”

Despite these claims, MPs remain sceptical, with Byrne adding that the system needs a "reboot." He stressed that, while some progress had been made, the pace of compensation was still "not fast enough" and that victims were continuing to suffer as a result.