How much has the Post Office spent on legal fees as victims await compensation?

The Post Office scandal has affected the lives of more than 700 sub-postmasters who were wrongly prosecuted between 1999 and 2015, after Fujitsu’s faulty Horizon IT software made it appear as though money was missing from their branch accounts.

Under a new law, wrongly convicted sub-postmasters will be exonerated. The Government has also confirmed plans for “full and fair compensation” for those affected.

But new analysis reveals the Post Office has spent more on legal fees defending its position than it has on compensation for the victims.

Here is everything we know:

How much has the Post Office spent on legal fees defending the Horizon system?

The Post Office has spent twice as much on lawyers’ fees in response to the Horizon accounting scandal as it has paid in compensation to victims, according to analysis of the company’s annual accounts by The Times.

Between 2017 and March 2023, the taxpayer-owned and funded company spent £298m on fees for external lawyers, including on dealing with the Horizon system scandal in the High Court, the newspaper reported.

It has estimated that by the end of this month, the Post Office will have racked up £390m in legal costs. The amount is more than double the compensation that has paid out.

How much compensation has been paid out to victims?

As of 1 February, approximately £160m has been paid out to more than 2,700 victims of the Post Office scandal across three different schemes, Government data shows.

How much compensation are wrongly prosecuted victims entitled to?

More than 4,000 people affected by the scandal have been informed they are eligible for compensation.

There are three main compensation schemes for those affected by the scandal.

The Group Litigation Order (GLO) scheme – an ex gratia claims-based scheme for postmasters who were part of the action Alan Bates and Others v Post Office Ltd pursued under a GLO, and who do not have a Horizon-related conviction.

All eligible GLO claimants are offered the option to settle their claims on a full and final basis for a total fixed sum of £75,000 inclusive of interest, instead of making a claim for their individual losses.

The Overturned Convictions scheme – this route of compensation is for victims who have had their convictions quashed where the reliability of the Horizon IT system was key to their prosecution.

Interim payments of up to £450,000 have been introduced, up from £163,000, ahead of final compensation.

The Government has announced that every postmaster who has had their conviction overturned will be given the option of settling their claim for compensation for an up-front sum of £600,000, without the need to bring a formal claim.

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A landmark Court of Appeal ruling in 2021 overturned 39 criminal convictions for theft, fraud and false accounting. This also paved the way for more appeals. As of f 2 February 2024, the total number of people who have had their convictions quashed stood at 101.

The Horizon Shortfall Scheme – this route for compensation is designed for sub-postmasters who were not convicted or involved in the GLO court action.

The Post Office, which administers the scheme, says it was launched to independently assess applications from current and former Postmasters who believed they may have experienced shortfalls related to previous versions of the Horizon system.

Under the Horizon Shortfall Scheme, around £98m has been paid out in compensation.

How many people affected by the scandal are still awaiting compensation?

Final compensation payments have been paid out to half of the 4,300 victims of the scandal. However, around 2,000 are still waiting to be compensated.

Some of those affected died before their convictions were overturned and The Times reported that more than 250 postmasters died before they received a final settlement.

Families of those who died without receiving due compensation will be allowed to apply for it on their behalf, Post Office Minister Kevin Hollinrake told the Commons in January.

The Post Office said it had contacted the majority of the 700 convicted victims it has identified but has been unable to reach 25 people affected.