Post Office's £250m Legal Bill Nearly Matches Victims' Compensation

The Post Office has allocated more than £250 million to legal expenses associated with the Horizon IT scandal, a sum nearly equivalent to the compensation distributed to the victims. This revelation, obtained through a Freedom of Information Act request, has ignited controversy and criticism from those affected by the scandal.

According to the data, the Post Office disbursed £256.9 million to law firms and barristers' chambers over the past decade specifically for matters related to the Horizon scandal. In contrast, as of July 2024, the total compensation paid to victims amounted to £261 million, based on government statistics.

The legal expenses cover various aspects of the scandal, including:

• Defending against the group litigation brought by 555 subpostmasters at the High Court
• Launching a compensation scheme
• Obtaining legal advice on compliance with the High Court's ruling
• Representing the Post Office at the ongoing public inquiry

The Horizon IT system, introduced by the Post Office in 1999, has been at the center of one of the largest miscarriages of justice in British legal history. Between 2000 and 2014, over 700 subpostmasters were prosecuted based on evidence from the faulty system, leading to severe consequences including financial losses, bankruptcy, and even imprisonment for some.

Keith Macaldowie, a participant in the civil group action, described the disclosure of the substantial legal bill as "disgusting." Similarly, Tracey Merritt, one of the original group of subpostmasters still awaiting compensation, expressed her lack of surprise at the figure, stating, "It just shows where their priorities are."

The legal fees were distributed among 15 law firms and two barristers' chambers between September 2014 and March 2024. The majority of the fees, £163.5 million, was paid to City law firm Herbert Smith Freehills (HSF). HSF was initially hired by the Post Office in 2019 to assist in reaching a settlement with subpostmasters and has since advised on compensation schemes and the statutory inquiry.

A spokesperson for HSF emphasized the complexity and scale of their work, involving hundreds of staff and millions of documents. They expressed sympathy for the affected postmasters and their families, stating their commitment to supporting the Post Office in delivering fair compensation swiftly.

"Today's Post Office is focused on paying redress to those affected as quickly as possible and supporting the inquiry to establish the truth. We are truly sorry for the suffering caused by the Post Office's past actions and the amount of money spent with legal firms reflects the huge scale of the scandal."

The Post Office and the government have paid over £260 million to 2,800 postmasters as of August 2024. The ongoing public inquiry, which began in February 2022, continues to shed light on the scale of the Post Office's past failings and their devastating consequences.

As the scandal unfolds, it has led to significant developments in the British legal system. The Court of Appeal quashed 39 convictions in April 2021, marking a turning point in the case. As of 2024, over 100 convictions have been overturned, with more expected to follow. The UK government announced a new compensation scheme for victims in March 2022, aiming to address the injustices suffered by affected subpostmasters.

The Horizon IT scandal has not only exposed the flaws in the Post Office's systems but has also sparked calls for reform of its governance and oversight. As the public inquiry continues and more victims receive compensation, the full extent of this technological and legal disaster continues to unfold, leaving a lasting impact on British postal history and the lives of hundreds of subpostmasters.