Around £4m has been paid out so far to current and former subpostmasters as part of a scheme to redress losses related to non-Horizon processes, products and policies.
As applications to the scheme shut at 11.59pm tonight (September 30), the Post Office said the figure will rise over the coming months as all applications made before the deadline are processed.
The scheme, known as the Post Office Process Review (PPR), was set up following a High Court judgment in 2019 as part of the Bates & Others versus the Post Office group litigation.
It wasn’t just unexplained account shortfalls caused by computer errors that left subpostmasters out of pocket, but also the Post Office’s policy to make them cover any unexplained shortfall, which it turned out had numerous causes.
After what was known as the Common Issues judgment, where then High Court Judge Peter Fraser ruled that the Post Office showed “oppressive behaviour” in response to subpostmasters with accounting shortfalls.
Regarding the Post Office’s policy to force subpostmaster to cover unexplained accounting losses, he wrote in his judgment: “There can be no excuse, in my judgment, for an entity such as the Post Office to mis-state, in such clearly expressed terms, in letters that threaten legal action, the extent of the contractual obligation upon a [subpostmaster] for losses. The only reason for doing so, in my judgment, must have been to lead the recipients to believe that they had absolutely no option but to pay the sums demanded. It is oppressive behaviour.”
After the damning judgment, the Post Office introduced schemed to redress losses to subpostmasters related to errors in the Horizon system and, through PPR, began identifying “products, policies or processes that may have caused financial loss to postmasters because of inadequacies in the way they were designed or delivered in view of the Common Issues Judgment”.
Many of the products, policies or processes identified through PPR had been problematic for many years, more than 30 in a few cases, potentially causing unexplained account losses at branches throughout that time.
For example, the issue with the highest number of claims was ATM reconciliation, which had potential problems between April 1991 and December 2022.
A Post Office spokesperson said: “We are grateful that people took the opportunity to submit their Post Office Process Review requests ahead of the deadline. We are committed to processing requests as swiftly as possible and our support team remains available to answer questions on redress via phone or email.”
The Post Office said it has written letters to 36,000 current and former postmasters, with more than 60,000 letters sent as reminder letters when the closing date was announced in April. It said it has provided regular reminders in the weekly subpostmaster email, on the website, and as press through press releases.
Last week, former subpostmaster Denis O’Donnell demanded an extension to the PPR scheme to enable more claims related to a hidden “operational defect” he unearthed in 2019.
In October last year, O’Donnell alerted Computer Weekly to a Horizon system problem that causes losses, which – through expertise from forensic investigator Ron Warmington – Computer Weekly was able to make public.
O’Donnell had originally informed the Post Office about the problem in 2019, but said he was “fobbed off”. After pressure from Computer Weekly and Warmington, the Post Office finally investigated the issue last year and acknowledged it could cause unexplained losses. The issue, branded the “part payments” defect, was likely to have seen some customers, for decades, receive extra cash from subpostmasters without realising.
A Horizon screen icon which had two opposite uses, allowing the subpostmaster to both take money and pay money, was at the centre of the issue. When multiple transactions, including in and out payments, are held at the same time in what is known as a “stack”, Horizon could make a payment to the customer but record it as a payment to the branch, therefore creating an instant discrepancy.
But the Post Office refused to extend the deadline, adding that people who experienced the “part payments” defect, without understanding it, may have been compensated through the £75,000 fixed sum in the Horizon Shortfall Scheme (HSS)
The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to Horizon accounting software, which led to the most widespread miscarriage of justice in British history (see below timeline of Computer Weekly articles about the scandal since 2009).