Lawyers working for the Post Office are collecting millions for working on compensation schemes that are still not fit for purpose, a committee of MPs has said.

The House of Commons Business and Trade Committee reported this week that the Post Office has spent £136m on legal fees relating to various redress schemes. These schemes were set up to compensate victims of the Post Office scandal who were wrongly accused and in some cases convicted based on the faulty Horizon IT system. The figure includes £82m paid to just one firm, Herbert Smith Freehills, for legal advice to the Post Office.

But 72% of the £1.8m set aside for financial redress has not yet been paid out as applicants for the scheme are bogged down by legal obstacles and in some cases a lack of representation.

Committee chair Liam Byrne MP said: ‘Years on from the biggest miscarriage of justice in British legal history, thousands of Post Office Horizon victims still don’t have the redress to which they’re entitled for the shatter and ruin of their lives.

'Ours is a nation that believes in fair play and the rule of law. Yet victims told us that seeking the redress to which they’re entitled is akin to a second trial. Payments are so slow that people are dying before they get justice. But the lawyers are walking away with millions.’

It is now a year since the ITV drama Mr Bates v The Post Office brought the Horizon scandal to wider attention, but many victims have still been unable to secure compensation. Various schemes have been set up for people depending on whether they were part of the group litigation or not, but there has been consistent criticism that the Post Office and its lawyers designed and administer these schemes.

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Solicitor Neil Hudgell, who represents some of those trying to secure redress, told the committee there were ‘fundamental’ concerns with the Horizon Shortfall Scheme (HSS) in particular.

The committee repeated its call for the Post Office to be removed from running the HSS scheme and demanded an ‘explicit over-riding instruction’ to lawyers to assess claims quickly and give applicants the benefit of the doubt in terms of evidence of losses provided. This instruction should also come with a binding timeframe for responding to claimants and deciding on the outcome of each claim.

The report said that claimants are required to calculate and justify the basis of their calculation for various types of losses, including loss of property, opportunity and personal injury or harassment.

The committee added: ‘Whether intentional or not, these requirements create unavoidable legal complexity for claimants, putting undue burden on them to satisfy Post Office Ltd’s requirements. The value for money administering the scheme is being damaged by these additional evidential burdens. More flexible and direct instruction to Post Office Ltd and Herbert Smith Freehills would cut these costs.’

HSS claimants currently receive no legal advice to help complete the questionnaire that acts as the gateway to the scheme. MPs said this acts against them receiving the full redress they are due. The committee recommended that HSS claimants be given access to no-cost legal advice to support their entry into the scheme.

The £82m figure paid to Herbert Smith Freehills includes almost five years spent on the HSS and 370,000 hours of work. The firm explained to the committee in November that 80% of those hours of work run out of its low-cost centre in Belfast meaning the costs average £137 an hour.

In a statement, HSF said: 'As a firm, we have immense sympathy for the postmasters affected by the Horizon IT system, and what they and their families have endured. Herbert Smith Freehills’ work has been complex and wide-ranging, involving hundreds of our staff over several years. We are confident that our fee levels are in line with norms for highly complex matters such as this.'

 

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