Post Office scandal: Inquiry favours legislative change to deliver fair compensation

AN inquiry has called for a legislative change to deliver “full and fair” compensation to the victims of the Post Office scandal.

In the 1990s, the Post Office started installing the Horizon accounting system but the “bugs, errors and defects” in the software led to shortfalls in the accounts of its branches.

Wrong sums for sales given by the system made it look as if sub-postmasters had been stealing funds.

More than 700 branch managers were prosecuted between 1999 and 2015 and some of them were imprisoned in what is now known as “the most widespread miscarriage of justice in UK history”.

At least four victims of the scandal have ended their lives.

Some of the convictions were overturned and in 2019, the government and the Post Office apologised for their fault.

The Post Office and the government have so far paid out around £100 million to the affected people under three schemes - £80m under the historical shortfall and the overturned historic convictions scheme and £19m under the group litigation order scheme.

But in its interim report presented to Parliament on Monday (17), Post Office Horizon IT Inquiry said the compensation schemes were “a patchwork quilt” with “holes in it” and they were likely to miss the deadline of August 7 next year.

Inquiry chair Sir Wyn Williams also urged the government to come out with greater clarity on the tax treatment of compensation.

“My primary concern is that all recipients of compensation from each scheme are treated equally in terms of their exemption from tax,” Sir Wyn said.

One scheme would have been better than having three separate ones, he suggested but added "we are too far down the road" to abandon them completely.

“There are three schemes in existence by which compensation can be delivered to eligible applicants. They came into existence at different times, and are responses to very different sets of circumstances as they unfolded. What has emerged is a patchwork quilt of compensation schemes. And, unfortunately, it is a patchwork quilt with some holes in it.

“The evidence upon me hasn’t changed. It hasn’t lessened to a degree. Many hundreds of people suffered disastrous consequences by reason of the misuse of data from Horizon, and thousands more suffered very significantly.”