Postmasters with Overturned Convictions: Settlement Funds

Baroness Randerson Excerpts

Wednesday 15th December 2021 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, I thank the Minister for the advance sight of today’s Statement delivered earlier in the Commons. I know from previous questions and debate in your Lordships’ House—and he has said it again tonight—that he agrees in no uncertain terms that the sub-postmasters’ and postmistresses’ scandal is an absolute disgrace. It is an absolute disgrace on so many levels: financially, judicially, on a human level, on a systems failures level and, most worryingly, on a government oversight level.

We all know the details, but it is worth repeating a few of them. Hundreds of sub-postmasters were sacked or prosecuted in the space of 16 years and wrongfully labelled as thieves and fraudsters by the Post Office and our judicial system. Their lives were made hell, and all because of an IT glitch in the Post Office system that was known about.

What makes this even more shameful is the lengths the Post Office went to to hide it. The fact that the Post Office spent £32 million denying these claims and bullying those wrongly accused into false guilty pleas is bad enough, but what makes the story even worse is that we finally got to the truth of the case only when it made it to one of the highest courts of this land. Tens of millions of pounds of public money were spent trying to stop the case going forward. This meant, in effect, that nearly £100 million of taxpayers’ money was spent defending the indefensible and covering it up.

But even though all postmasters’ and postmistresses’ convictions—or, the question is: is it all of them?—have now been quashed, or are in the process of being quashed, and we are working through compensation, this has come too late for many: many postmasters and mistresses who were wrongly convicted and imprisoned, and some who have, sadly, passed away. So far, many postmasters and postmistresses have received only a fraction of their costs and expenses, as we have heard. This simply is not good enough, especially as there are cases of postmasters who have had to remortgage their houses and borrow money from family and friends to cover their legal costs.

I listened to the words of the Minister, and we do appreciate them, but the Government should do more. They should do all they can to make sure that all—I repeat, all—of those wrongly accused postmasters and postmistresses receive the compensation they are entitled to as soon as possible. So, as much as I welcome the Minister signing off on a compensation scheme, it is disappointing that it has taken to this point to get a scheme in place. I hope that today marks the start of the Government ramping up their efforts to get the postmasters and postmistresses the compensation they rightly deserve.

For me, one of the most alarming and shameful aspects of the whole scandal is the failure of our courts and judicial system. In all the cases where postmasters were wrongly found guilty, the system believed the computers. We knew that there was a possibility of glitches within those computers. There were 640 cases; how did this not raise alarm bells inside the Post Office or on the board? I hope that the inquiry—I apologise for not going through the terms; the Minister said that they have been set—will look at the legal failures that only compounded and exacerbated the problem. The idea that a machine was believed in so many cases is extremely worrying.

We all agree that lessons must be learned from this. The Horizon system contained bugs, errors and defects, according to the High Court. We should not use evidence based on faulty technical systems as evidence in court, especially when the evidence provided by the Horizon systems could not be backed up by any personal human evidence.

In conclusion, I welcome the Government’s new scheme to ensure that postmasters and mistresses rightly receive compensation. The Government are the owners of the Post Office and—as we have heard in the other place and in your Lordships’ House today—they are accepting responsibility for that and taking action to make things right. The truth is that, for too long, the Government sat on the sidelines and made little or no attempt to stop this scandal, which was ruining hundreds of people’s lives.

May I press the Minister on some key facts? Can he confirm that compensation is for everyone? Those involved in both civil and criminal prosecution processes against them should receive justice. The Minister used the word “quashed”, but there are many other cases outside out of that remit where individuals have been affected.

Secondly, can the Minister also confirm that any settlement will not affect the Post Office’s core funding? The Post Office has a job to do, and we would not like to see its core funding affected.

Thirdly—the Minister has dealt with this in the past and I appreciate his involvement and engagement on this—those involved in the initial mishandling and subsequent failures, as well as the cover-up, need to take responsibility for their actions and their fair share of the blame. Questions have been asked about previous chief executives and board members in your Lordships’ House, but can the Minister say whether any of those involved at board level or senior executive level have been rewarded? That in itself would be a slap in the face for many of those involved.

Finally, I cannot finish a speech on this scandal without putting on record our thanks to the noble Lord, Lord Arbuthnot, and other Members across your Lordships’ House and in the other place, for their continued and unstinting drive for justice.

[Baroness Randerson (LD)]

My Lords, until 2011, I was an elected Member of the Welsh Assembly. I dealt at that time with the cases of a number of sub-postmasters from Cardiff and the surrounding area. It struck me immediately when they got in touch with me as a group, that it was highly unlikely that so many sub-postmasters were crooks. Here were a group of people who were upright, respected citizens at the hub of their communities. It seemed ludicrous from the start, and it is a scandal that this has been allowed to go on so long in the face of mounting evidence of a problem with the whole thing.

Some 736 sub-postmasters and postmistresses—an average of one a week—were prosecuted. There was really bad faith on the part of the Post Office, in that it pretended to the individuals that they were alone. It hid from them the fact that there were hundreds of others. It took a long time for many of them to discover that they were in the company of a very large number of colleagues. Some of them went to prison, following convictions for false accounting and theft. Many were financially ruined and were shunned by their communities. Some went bankrupt as they tried to make up the shortfall in order to avoid prosecution. Some committed suicide, and many have died since, some of them worn out by the fight that they had to undertake.

It is quite clear that the original process for postmasters to gain recompense was flawed. Some 555 of them who joined in a group action were forced to settle because they ran out of money to continue with their action. They were paid far less in compensation than they had paid to the Post Office to balance their accounts. Does this Statement here today mean that those people will now have their cases reviewed and receive proper fairness in their compensation?

Can the Minister give us a timeframe for when those affected by the scandal will have their cases dealt with? Will it be 2022 when we see the end of this terrible process, or is it, in his estimation, going to take longer? Will the Government undertake to compensate victims for consequential loss as well as financial loss as part of the commitment today? Many of them suffered emotionally so badly, and their families suffered too.

There is a doubt about the extent of what the Government are promising. The Statement refers to postmasters with convictions. Many were accused and were not convicted but nevertheless suffered. Many of them personally made up the moneys supposedly owed by them to the Post Office, and they have evidence of that. Will those people receive just compensation?

[Lord Callanan (Con)]

I thank the noble Lord, Lord McNicol, and the noble Baroness, Lady Randerson, for their points. Almost uniquely in my time on the Front Bench, I agree with virtually everything that both noble Lords have said. The noble Lord, Lord McNicol, said the situation was an absolute disgrace; the noble Baroness, Lady Randerson, referred to it as a scandal. If anything, these are almost understatements when one considers the extent of the total travesty that has occurred. There is no party-political difference in these matters. This is not a recent scandal: it has gone on for decades under previous Labour Governments, the coalition Government and this Government. Obviously, we cannot go back and right the wrong of the clear, manifest injustice of the past, but we can provide adequate levels of compensation, and we are doing that.

I also want to join the noble Lord, Lord McNicol, in paying tribute to the parliamentarians on all sides who drew attention to this scandal. Hopefully, my noble friend Lord Arbuthnot will intervene shortly; he played a crucial role both in the other place and in here, as did a number of MPs on both sides, along with—to be fair—some campaigning journalists. Nick Wallis from the BBC played a major role in bringing it to account. Of course, there is a full inquiry going on now with statutory powers, which will hopefully get to the bottom of exactly what went wrong and who is responsible. My friend in the other place, Paul Scully, said that if there are any allegations against Ministers—either serving or previous—we will hold our hands up and acknowledge that mistakes have been made, which is only correct.

On the question of compensation, the funding we announced yesterday is for compensation for postmasters with convictions that have been quashed due to Horizon evidence being essential to their prosecution. There is a separate scheme—the historical shortfall scheme—that more than 2,500 people applied to for compensation, and the Post Office is working through those applications. The Government are ensuring that it is being pushed forward as quickly as possible. On the 555 who took the first court cases about Horizon against the Post Office, the settlement reached in 2019 was full and final. However, as the Minister for Postal Affairs said this afternoon in another place, it is important to acknowledge the work they have done in bringing the facts to light. The Minister for Postal Affairs has committed to continue to work with them to see what we can do.

On the question asked by the noble Lord, Lord McNicol, on whether the compensation will affect the Post Office’s core funding, the core funding to support its network is a totally separate matter from the funding for compensation that we are discussing today. That will proceed separately.

There is a limit to what I can say on the noble Lord’s point about whether those involved have been rewarded with senior jobs elsewhere, given that the inquiry is ongoing. However, he can refer to past comments I have made on that in this House. I certainly stand by my views on that point.

The noble Baroness, Lady Randerson, asked about timescales for delivery of compensation. The Post Office proposes to follow a process of alternative dispute resolution to reach full and final settlements with postmasters. The details of that approach will need to be discussed and agreed between Post Office Ltd and individual postmasters and their representatives. There is therefore a limit to what I can say about that because I simply do not know the answer to that question. However, the need to get swift payments is why we have agreed the interim settlements, and we are going down the ADR process to try to get settlements as quickly as possible. I think those were the questions that I was asked.