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May 4th 2020

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Post Office Horizon Shortfall Scheme lacking clarity over key issues for claimants

Dr Neil Hudgell

Dr Neil Hudgell

Executive Chairman

Post Office Horizon Shortfall Scheme lacking clarity over key issues for claimants

Given our work supporting former and current postmasters affected by the Post Office’s point of sale accounting system, Horizon, I’ve been casting my eye over the recently launched Historical Shortfall Scheme.

Given our work supporting former and current postmasters affected by the Post Office’s point of sale accounting system, Horizon, I’ve been casting my eye over the recently launched Historical Shortfall Scheme.

The Historical Shortfall Scheme can be viewed here.

The Post Office says the scheme has been established to offer redress for those ‘who may have experienced shortfalls related to previous versions of Horizon’ that ‘had the potential to affect branch accounting’.

The scheme website claims ‘we are resolving past events fairly where we got things wrong’, yet excludes people compensated under the group litigation settled in December 2019 (who have walked away with minimal amounts) and anyone with a criminal conviction (curiously it does not exclude a “caution”)

Applications, which have to be submitted electronically, must be received no later than 14th August 2020, yet there are still many unquestioned answers and concerns.

Independent Advisory Committee still to be selected

The Terms of Reference and supporting documents repeatedly emphasise the impartiality and independence of the scheme.

It asserts that the scope and principles of the scheme have been endorsed by the legal representatives of the Claimants’ steering group, yet from my experience I know all too well that what happens in practice can be polar opposite to principles and a history of peoples’ dealings with the Post Office demonstrates this.

Reference is made to ‘information sharing’ with the Justice For Subpostmasters Alliance (JFSA), something which appears not quite to be the case following a conversation with campaign group founder Alan Bates, who possessed no more detail than you or I.

It goes on to say that ‘the Post Office is financing the scheme and will play a role in its overall governance as well as administration’.

Applicants are presently being asked to sign up to a scheme which will be policed by an ‘independent advisory committee’ which is yet to be selected by Post Office.

One can therefore reasonably assume a high level of cynicism from all support groups, commentators and ultimately potential applicants

Lack of clarity over loss calculation makes scheme ‘deficient’

The application form itself is relatively simple to complete.  There are though some very general catch-all questions.

The difficulty with those is in understanding how the information being captured will be used in assessing compensation.

The scheme talks about losses being calculated in accordance with ‘recognised legal principles’ and it is easy to see how a postmaster may seek to claim for direct financial losses occasioned because of the IT system.

Incidentally, it seems the emphasis remains on the applicant to prove loss, but how high will the burden of proof be in establishing those losses? What about the inevitable lack of documentation in some instances?

The ability to recover other losses arising from such as loss of employment, home, reputation and much more is also not at all clear. In that respect the scheme is deficient.

If you take the Criminal Injuries Compensation Authority (CICA) scheme as a comparator, that identifies prescriptively various heads of claim that can be quantified and pursued.

This scheme leaves open to interpretation considerable argument over a variety heads of claim beyond direct financial loss.

Applicants must know what legal representation they can have – and at what cost

The scheme acknowledges applicants having the choice of legal representation, though they do not cover those costs. Nor does the scheme spell out what input lawyers can have in the process.

To what extent can legal advisors make relevant arguments for applicants? It seems the scheme is primarily to be administered on line or via telephone.

It is set up to buy off any future rights of action – in other words the applicant has no further recourse to court proceedings.

With that in mind all applicants therefore needs to be satisfied as to the true impartiality of the scheme and the likely measure of compensation. They need to have trust in the scheme, which is a huge ask.

Here is a very important point.

The scheme says that an applicant can withdraw at any time, but it then goes on to detail a variety of steps from initial assessment to final and formal binding mediation.

Does that mean that the applicant can withdraw at any point up to the point of initial determination or at any point before final mediation?  That needs absolute clarity. I am writing to seek that clarity.

Rather cynically in low value claims (under £10,000) the final arbiter seems to be the civil courts, so whilst on the one hand the Post Office are advocating an all-encompassing ‘in house’ scheme, they appear quite happy to push applicants towards the courts where there may be no hope of recovery of legal costs or effective legal representation.

Given all the above (and more besides,) and the previous history of dealings with Post Office, I would certainly advocate caution in completing the form without some form of legal assistance or at the very least some early clarification on key points.

I will be writing to the scheme administrators to establish the position on a “standstill agreement” for those currently awaiting determination of their appeal against criminal conviction.

It seems hugely unfair that they are excluded from the scheme. Those people continue to be stigmatised in the eyes of the Post Office it seems to me.

Watch this space! More to come…

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