Post Office agrees £57.8m pay-out for retail nightmare

post office 2The Post Office has finally settled a 20-year dispute over a faulty retail system – which led to some subpostmasters being sacked, made bankrupt and even jailed – by agreeing a £57.75m settlement with more than 500 subpostmasters.

Issues with the Horizon accounting and retail system first emerged in the early 2000s, when Alan Bates, a former subpostmaster, contacted Computer Weekly magazine to air his concerns that the system was to blame for a number of unexplained accounting errors in Post Office branches.

Dozens of postmasters were charged for accounting shortfalls; others were forced to make up cash discrepancies following prosecutions. Some Post Offices were even forced to close.

In 2003, Bates launched a campaign to find subpostmasters with similar problems. Despite a rash of complaints, the Post Office consistently stated that there was no fault with the Fujitsu-developed system.

In October 2011, 85 sub-postmasters sought legal support in claims against the Post Office computer system under the Justice for Subpostmasters Alliance. Within six months the organisation launched an external review which concluded that the Horizon system should be investigated. However, years of wrangling ensued, including investigations by Parliamentary committees and the House of Lords.

In 2013, one former subpostmaster told BBC News: “I got to the end of one week and I was £2,000 short so I rang the helpdesk and they told me to do various things and then it said I was £4,000 short.

“They then said I had to pay them the £4,000 because that’s what my contract says – that I would make good any losses. Then while I was repaying that it jumped up to £9,000.” Eventually the figure reached £36,000.

It was not until January 2017 that the High Court gave the green light to a group action being brought against the Post Office.

Earlier this year, the High Court ruled in favour of the subpostmasters. This was then challenged in the Court of Appeal but thrown out, leading to days of mediation between the two sides.

Post Office chief executive Nick Read, said: “I am very pleased we have been able to find a resolution to this longstanding dispute. Our business needs to take on board some important lessons about the way we work with postmasters, and I am determined that it will do so.

“We are committed to a reset in our relationship with postmasters, placing them alongside our customers at the centre of our business. As we agree to close this difficult chapter, we look forward to continuing the hard work ahead of us in shaping a modern and dynamic Post Office, serving customers in a genuine commercial partnership with postmasters, for the benefit of communities across the UK.”

Alan Bates said: “The steering committee would like to thank Nick Read, the new CEO of the Post Office, for his leadership, engagement and determination in helping to reach a settlement of this long running dispute.

“During the mediation, it became clear that he intends to reset the relationship between the Post Office and its subpostmasters and put in place new processes and support for them, as part of a wider programme of improvements. It would seem that from the positive discussions with Nick Read that there is a genuine desire to move on from these legacy issues and learn lessons from the past.”

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