PO Scandal Inquiry Compensation Issues Hearing 2: a little parcelling up and passing of blame...
BEIS sought to blame Post Office I thought and revealed problems with its grip on difficulties posed by the various compensation issues. Meanwhile time drags on for uncompensated victims.
Let me use this post to provide a few brief notes on the second hearing day on matters related to compensation in the Post Office Horizon Scandal Inquiry. Blogs by Nick Wallis and Rebecca Thomson (here and Rebecca’s substack here provide a fuller view of the hearings as a whole and also the crucial human impact the compensation scheme is supposed to be addressing.)
My overall impression of this hearing was of BEIS claiming some, not entirely clear, oversight of PO (they seemed to know of certain things rather late insofar as they understood them at all). Whether because matters are failing between the Government and the PO or because PO are not competently advancing matters (BEIS made some slightly backhanded apologies for failing to exercise more testing oversight, I thought) a number of issues have not been addressed which the Chair of the Inquiry, Sir Wyn Williams rather judicially underlined. Several issues seem to remain unresolved, or are being resolved very slowly, and there is an outstanding question of interim payments for three victims in particular where PO and BEIS may be digging in their heels to the detriment of their claim to be resolving the sins of the past. Whether delay on the other issues is justified or indicates a lack of grip by Post Office or BEIS is I think a central theme emerging on Wednesday. Here are my more detailed, although not comprehensive observations…
There was a conciliatory set of submissions by counsel for BEIS (the Department that oversees the Post Office, given the Secretary of State is sole shareholder). There was a bit of taking responsibility for past failings, but also (and mainly) shifting, responsibility back to the Post Office for failing to deal with the compensation issues adequately so far. The Post Office was blamed for failing to properly estimate the size of the HSS scheme (one of three streams of compensation under discussion in the hearings).
The department admitted it has strategic but not operational oversight of the Post Office, including in relation to compensation. This includes agreeing decisions in relation to settlement strategy and monitoring progress towards reaching final settlements. Interestingly too, assessment principles appear to have been approved by BEIS steering committee (as well as the scheme’s own advisory panel). At bottom, government control of the purse strings adds an extra stage in the making of key decisions which is part of the reasons for slow progress. The level of strategic oversight also suggests there should be quite a strong and clear view of how the scheme is actually operating, although some submissions by BEIS suggested otherwise.
A question of some import in these hearings has been how the first compensation scheme (the HSS scheme which has had over 2,000 claims on it) deals with claims the consequential loss. Keen observers of matters to date and many lawyers will already have a sense of how complicated consequential loss can be evidentially and legally. It is dealt with on the application form by one rather general question generally about other losses, rather than (for instance) specifying the kinds of consequential losses that could be claimed. BEIS stuck to the line that the scheme and its application forms were designed to be simple and clear and not, as some of the victim core participant lawyers claimed, to exclude or minimise claims for consequential loss.
It has been argued in defence of the BEIS/PO line that guidance was available to applicants on consequential losses. This was deflated by one perhaps telling intervention from the chair; Sir Wyn Williams pointed out that this guidance on consequential loss was not available to claimants who applied to the HSS before August 2020. The original closure date for the scheme was mid-August but extended to November, so potentially large numbers of claims were submitted pre-guidance. This closing of the stable door after some, if not all, the horses have bolted does not help Post Office or BEIS establish that the scheme is a carefully established and fair one. As with the operation of the justice principle in my last blog, there is a danger that what has been done here is the retrofitting of an appearance of justice rather than the creation of a fair and balanced scheme. There is now a live suggestion that the Inquiry should review (presumably a sample) of claims handled under the scheme.
Given the Department’s claimed supervisory and strategic oversight over the PO; two issues of interest came up which might indicate strains or weaknesses. How to deal with late claims to the HSS scheme (there are about 170) and how to deal with legal representation costs for HSS claimants are issues that have been raised for some time. As the Chair indicated with some emphasis, one issue had been “hanging around for a long time”. BEIS response was a rather lame indication that there had been discussions and it was awaiting proposals from the Post Office over how to deal with the issues. Interestingly too given the Department’s claim to be an engaged supervisor, is that they said they were, “only recently aware of problems of timely disclosure to applicants of documents.” They also seemed to ask for issues associated with bankruptcy or insolvency to be brought to their attention, conveying the impression they were not fully on top of those.
The impression given is not of an adequately functioning supervisory relationship or of strategic oversight. To my mind, BEIS wanted to convey the impression this was Post Office’s fault, but given the way the interim payments for GLO claimants was announced (by Governemnt) and immediately gave rise to questions from some of the victims’ lawyers (which look like they have now been addressed, so I will refrain from going in to details) I wonder if BEIS is, itself, effectively engaging with that which it purports to supervise.
Another issue of some import is three acquitted victims the Post Office has declined to provide an interim payment for. Other acquitted victims of the scandal have applied for and been granted substantial (£100k) interim payments. Counsel for BEIS said the three convictions here were quashed on public interest (not safety) grounds. Again, interestingly, the Chair intervened, this time to correct this assertion. Sir Wyn Williams indicated the convictions were quashed by the court and that quashing was not opposed by PO on public interest grounds but that does not mean they were quashed solely on public interest grounds.
The Department persisted with the line that these cases were different. The basis seems to be that presented with (the probably flawed) evidence of Horizon shortfalls these victims ‘confessed’ and so they may not be able to say they were maliciously prosecuted because there is confession evidence over and above the flawed Horizon evidence). Putting aside the merits of this argument for now, the position is not obviously consistent with an organisation (as both BEIS and POL seek to present themselves) keen to be righting the wrongs of the past. This is how counsel for one set of core participant victims put the problem with the Post Office’s position in these terms:
The Post Office decided to offer no evidence in their cases, in the interests of justice and, as a result, sir, not guilty verdicts were entered. They were all found not guilty and the matters to be resolved as identified by the CCRC were not resolved. Now, the Claimants had no say in that process, nor indeed did the court, but the Post Office now refuses to pay compensation to them. In effect, they say "Sue us in the Civil courts".
In other words, their case is that the PO did not contest the appeals and should not be play hardball about the significance of the quashed convictions now. Sir Wynn’s intervention is, at least up to a point, consistent with that view and he also intervened to point out that there needed to be some consideration of whether money gained through confiscation orders from these acquitted defendants needed to be paid back (it has not been and the judge pointed out there is likely no legal basis for the orders now). I should emphasise however he did not indicate a view on whether interim payments ought to be made, keen as he is to not stray into matters beyond his remit).
One final point of note: although not giving a firm view on timetable, we might hear from the judge by or around early September on what he actually thinks about the issue raised in these hearings– sooner perhaps if he does not feel it necessary to deliver a formal interim report. This would be just in time for a new PM and perhaps another, different minister in charge at BEIS. We might see a flurry of activity by the PO and BEIS to try and correct some of the problems raised in the meantime to draw some of the sting from any adverse comment.