Post Office settles IT ‘fraud’ case for £58m

Image copyright
Getty Images

The Post Office is to pay almost £58m to settle a long-running dispute with sub-postmasters and postmistresses.

It brings an end to a mammoth series of court cases over the Horizon IT system used to manage local post office finances since 1999.

A group of postmasters said faults in the system led to them wrongly being accused of fraud and false accounting.

The Post Office said it accepted it had “got things wrong in our dealings with a number of postmasters” in the past.

Sub-postmasters run Post Office franchises across the UK, which typically provide some but not all of the services of a main post office.

The group of 550 claimants joined a civil action to win compensation last year, but their complaint goes back much further.

They alleged that the Horizon IT system – which was installed between 1999 and 2000 – contained a large number of defects.

Some said their lives had been ruined when they were pursued for funds which managers claimed were missing. Some even went to jail after being convicted of fraud.

This is a major climb down by the Post Office which has made multiple appeals to try to see off the court case.

But legal costs were stretching into the tens of millions, so the price of losing at the end of this mammoth legal process could have been a great deal higher.

It’s not clear yet how much individual postmasters and mistresses will receive.

Lawyers’ fees have to be taken off, along with a charge from the litigation backer, Therium.

But just looking at the £58m suggests payouts could be in the tens of thousands and even higher for the worst affected.

They were half way through a series of four trials when the Post Office sought mediation.

It could take several weeks for individual compensation payments to be worked out.

‘Important lessons’

The Post Office apologised to the claimants, saying it was grateful to them “for holding us to account in circumstances where, in the past, we have fallen short.”

Mr Read said: “I am very pleased we have been able to find a resolution to this longstanding dispute.

“Our business needs to take on board some important lessons about the way we work with postmasters, and I am determined that it will do so. We are committed to a reset in our relationship with postmasters, placing them alongside our customers at the centre of our business.”

Alan Bates, one of the lead claimants, said: “[We] would like to thank Nick Read, the new chief executive of Post Office, for his leadership, engagement and determination in helping to reach a settlement of this long-running dispute.

“It would seem that from the positive discussions [we have had] there is a genuine desire to move on from these legacy issues and learn lessons from the past.”