Branches are advised that a 5 day hearing is being held from 22nd March for the main
group of 42 appellants (former Postmasters and victims of the Horizon scandal) asking for
their convictions to be overturned. There are 2 limbs to the appeal when it comes to
wrongful convictions based on an abuse of process:

  • Limb 1 is the lack of disclosure of vital evidence. The Post Office have conceded
    they are guilty of Limb 1 in the majority of the cases before the Court of Appeal.
  • Limb 2 is the prosecutions were an affront to the public conscience. This is much
    more serious as it means the Post Office knew they should not be bringing the
    prosecutions but chose to do so anyway. The Post Office is resisting Limb 2 in all
    but 4 of the 42 convictions before the Court.

Also it should be noted that 6 former Postmasters have already had their convictions
overturned last December at Southwark Crown Court. These cases had been referred by
the CCRC and were heard at the Crown Court rather than the Court of Appeal as the 6
Postmasters were originally convicted at magistrates Courts. Crucially the Post Office did
not contest any of the appeals. LTB 594/20 dated 14th December 2020 refers.
The Court of Appeal’s deliberations has already featured highly across mainstream
broadcasting and wider media (indeed there was a feature on yesterday’s Radio 4 Today
programme). Clearly the Post Office is under immense scrutiny once again over this
appalling scandal.

A number of journalists yesterday picked up on a damning quote from Sam Stein, QC for
some of those appealing, who said in court: “The Post Office has turned itself into the
nation’s most untrustworthy brand.”

Below are a number of relevant media links:

Government to Provide Funding for Historic Horizon Shortfall Scheme

Paul Scully, BEIS Minister announced last Thursday 18th March that the Government
would be providing funding for the historic shortfall scheme in relation to problems with
the Horizon system which over 2400 Postmasters have applied for. The Minister stated
“…the cost of the Scheme is beyond what the business can afford”. Below is the
full statement from Government:

Problems with the Post Office’s Horizon IT System have affected the lives and
livelihoods of many postmasters.

Over the years, the Horizon accounting system recorded shortfalls in cash in
branches. The Post Office at the time thought that some of these were caused by
postmasters, and this led to dismissals, recovery of losses by POL and, in some
instances, criminal prosecutions.

A group of 555 of these postmasters, led by former postmaster Alan Bates, brought
a group litigation claim against the Post Office in 2016. It is clear from the findings
of Mr Justice Fraser, just how wrong Post Office was in its relationship with
postmasters and that there were clear failings with the Horizon system.

The Government pays tribute to those postmasters and colleagues across the House
who continue to shine a spotlight on such an important issue.

The Post Office reached a full and final settlement with claimants in the group
litigation in December 2019 and apologised for its past failings. That settlement was
an important step towards addressing the wrongs of the past, but it was only the
start of a long journey for the Post Office to repair and strengthen the relationship
with postmasters.

As part of the settlement the Post Office agreed to set up the Historical Shortfall
Scheme. The Scheme was open to current and former postmasters who did not
participate in the group litigation claim against Post Office and did not have a criminal
conviction, but who may have experienced and repaid Horizon shortfalls. It is
therefore an important step in making sure that all those who were affected have the
opportunity to seek resolution.

The Scheme closed in August 2020 and received over 2,400 applications. This
number was higher than the Post Office had anticipated when the Scheme was
established. All of these applications of course need to be properly assessed.

The Post Office is committed to the successful delivery and timely completion of the
Historical Shortfall Scheme. However, the cost of the Scheme is beyond what the
business can afford.

The Government will therefore provide sufficient financial support to Post Office to
ensure that the Scheme can proceed, based on current expectations of the likely
cost. The BEIS Secretary of State for Business, Energy and Industrial Strategy is
providing this support in his capacity as sole shareholder in the Post Office.

There are two reasons this is being done.

First, we must ensure that those postmasters who have applied to this scheme are
able to seek redress. By supporting the Scheme, we will make it possible for these
postmasters to be fairly compensated.

Second, we must protect the post office network. As we have seen through the
pandemic, it provides essential services to citizens across the country.

Without this support the Post Office would be unable to deliver fully the Historical
Shortfall Scheme and it would be unable to continue to operate its network as we
know it today. This is a critical intervention that benefits current and former
postmasters and the millions of customers that rely on their local post office branch.

The final cost of delivering the Historical Shortfall Scheme will be determined over
the coming months, including through the work of an Independent Panel. This
support will ensure that postmasters are appropriately compensated, however we
will not spend more of taxpayer’s money than is necessary to ensure the Scheme
meets its objectives.

The Post Office is rightly contributing what it can from its own resources to the
delivery of the Scheme.

While it is important that the Scheme remains independent of Government it is also
important that this shareholder support delivers Value for Money. The Government
is confident that the controls in place in the design of the Historical Shortfall Scheme
will make sure this is the case.

The Post Office will make the first offers to applicants shortly. However, given the
number of applications it will take time to work through all the claims that Post Office
has received. The Government would therefore like to thank postmasters in advance
for their patience and reassure them that their claims will be properly handled.

The Horizon dispute has affected the lives of too many people and supporting the
Scheme operated by Post Office will help them right the wrongs of the past.
We must also ensure that a situation like this can never be allowed to occur again.
That is why this Government has asked Sir Wyn Williams to lead the Post Office
Horizon IT Inquiry.

Sir Wyn’s Inquiry will work to fully understand what happened, gather available
evidence and ensure lessons have been learnt so that this cannot occur again. It will
also look specifically at whether the Historical Shortfall Scheme is being properly
delivered. The Government looks forward to receiving Sir Wyn’s report in the

This announcement also attracted media attention on the day such as the following stories
in Computer Weekly and the Daily Mail:

In conclusion, it is clear that the scale of this scandal is huge and, if the Post Office was a
private company, it would to all intents and purposes be bankrupt and calling in the
receivers. This is why the Government has had to step in and underwrite reparations for
the historical shortfall scheme. We can only assume that the overall compensation linked
to this scheme is enormous bearing in mind that the Post Office reached an out of court
settlement with the Justice for SubPostmasters Alliance (JFSA) of c.£58m in December
2019. It should also be noted that the Post Office has yet to publish its Annual Report &
Accounts for 2019/20 and will need to do so by the end of this month. Clearly it was
unable to do this previously, until the Government committed to the bail-out. We will of
course be scrutinising the Report & Accounts very carefully as the £58m doesn’t include
the Post Office’s legal costs.

Further developments will be reported.

Yours sincerely

Andy Furey
Assistant Secretary

LTB 116/21 – Post Office – Postmasters – Horizon Inquiry – Court of Appeal and Government Bail-Out for Historical Shortfall Scheme

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