Post Office inquiry chair urges higher legal fees for compensation advice

Williams: Equality of arms

It is “essential” that sub-postmasters claiming on one of the compensation schemes following the Horizon scandal can recover their legal costs, the chair of the Post Office scandal enquiry said yesterday.

The historical shortfall scheme (HSS) was originally set up on the basis that claimants would not need to use a lawyer – and that, if they did, they would have to pay for one themselves – although the Post Office will pay towards the costs of a lawyer advising on an offer it has made to settle a claim.

Sir Wyn Williams said “appropriate legal assistance and advice in respect of most of the claims yet to be determined” in the HSS was “likely to be essential”.

The HSS aims to independently assess and resolve applications from current and former postmasters who believe they may have been affected by shortfalls in their takings caused by the faulty Horizon software.

The Post Office will pay £1,200 towards legal advice sought by a postmaster on an offer made under the HSS, which they have four weeks to decide whether to accept (or £400 if the offer is for the full amount claimed).

But on the two other schemes to compensate sub-postmasters, the Post Office has already agreed to pay claimants’ reasonable legal costs.

One provides payments for sub-postmasters whose convictions based on evidence generated by Horizon have been quashed, while the other is currently under development to provide further compensation for all the claimants in the earlier group litigation who were not eligible for the convictions scheme.

In a report examining the compensation schemes, Sir Wyn said he had become concerned earlier in the year that some of the features of the two current schemes “might be impacting adversely upon the twin goals of delivering full and fair compensation payments to all those entitled to such payments and also delivering them promptly”.

According to Post Office figures, it received 2,370 eligible claims under the HSS, which is now closed to new applicants. It has made 1,360 payments worth £23m, with a further 100 cases going through a dispute resolution process that kicks in after an offer is rejected. Offers of settlement have been made in another 269 cases.

Where a postmaster rejects the offer, the dispute resolution procedure provides for a good faith meeting, an escalation meeting and finally a mediation. If this does not succeed, then disputes for sums of up to £10,000 go to the small claims track in the county court, while disputes for larger amounts are determined by arbitration.

Sir Wyn said he understood why, at the outset, the government and the Post Office hoped that the HSS could function appropriately without the need for applicants to be represented.

Of those who have accepted offers of compensation, just two applicants obtained legal advice at the expense of the Post Office, as did 13 of those who have rejected their offers.

This very low take-up “is, in my view, a clear indicator that in the lower-value claims legal assistance was probably unnecessary given the experience of most applicants”, Sir Wyn said.

“However, it is clear to me that appropriate legal assistance and advice in respect of most of the claims yet to be determined is likely to be essential.”

He noted that the government has “readily conceded” in relation to the other two schemes that applicants were entitled to be paid the reasonable costs of engaging a lawyer to assist them with all aspects of their claims.

“In my view fairness to the remaining applicants within HSS demands that the fees allowed for advising on offers which are made henceforth should be increased to levels commensurate with the work reasonably carried out by an applicant’s lawyer.

“Further, if an applicant wishes to engage a lawyer, in all cases in which an offer is rejected the Post Office should fund the applicant’s reasonable cost of obtaining legal advice assistance and representation as the dispute resolution process unfolds.”

There was, Sir Wyn said, no reason why the remaining applicants in the HSS should be treated differently from those in the other schemes “who have similar issues to determine”.

He added that the Post Office would “no doubt” be represented by very experienced lawyers such as City giant Herbert Smith Freehills in the dispute resolution process.

“Reasonable equality of arms demands that the applicants for compensation are also represented by lawyers with appropriate experience and expertise and fairness demands that such lawyers are reasonably funded by [government]/the Post Office.”

Sir Wyn said that any injustices that have already occurred because claimants did not seek legal advice on their settlements would be considered at a later stage of the inquiry.

He also raised several other concerns in relation to the compensation schemes, most notably over the Post Office being the final arbiter for deciding whether a late application for the HSS should be accepted or rejected and of interim payments under the overturned convictions scheme.

    Readers Comments

  • T Jones says:

    It is hard to understand how the Post Office as the guilty party in instigating this scandal are allowed to continue to torment their victims by having any role in the compensation scheme.

  • Samina Sajjad says:

    I was one of them I lost everything

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