Post Office victims offered ‘pathetic' payouts: 0.5% of their claims
Dozens of postmasters caught up in the Post Office Horizon scandal have been offered compensation of just a fraction of their original claims, according to a forensic accountant working on their cases.
Kay Linnell, a former chief investigating accountant at the Inland Revenue, now HM Revenue & Customs, described the offers made to victims as 'pathetic' and argued that the compensation schemes seemed 'designed to fail'.
She is aware of about 30 subpostmasters who have received offers of between half a per cent and 15 per cent of their original claim.
While many are reluctant to speak out while their claims are still being processed, The Sunday Times has been told of one former subpostmistress who has been offered just 0.56 per cent of what she believed she was entitled to.
Linnell, 70, has been fighting alongside Sir Alan Bates for 12 years to secure justice for hundreds of subpostmasters who were wrongly fired and prosecuted by the Post Office due to financial shortfalls in their branch accounts.
Those shortfalls were found to be the fault of the Horizon IT system — yet the Post Office continued to prosecute victims even after it was alerted to potential problems.
Linnell, who was appointed OBE in January for services to justice, worked with Bates's Justice For Subpostmasters Alliance (JFSA) free of charge and was one of the figures portrayed in the ITV drama series Mr Bates vs the Post Office.
She became involved through her business partner, Barbara Jeremiah, who got to know Jo Hamilton, one of the most high-profile victims, because she bought lunch at her Post Office in their small Hampshire village every day on her way to work.
More recently, Linnell has been helping with compensation claims for the 555 subpostmasters who secured a High Court ruling against the Post Office in 2019.
They are eligible for compensation via the group litigation order (GLO) scheme, which is one of four schemes being administered by the Department for Business and Trade.
Claimants can opt for a fixed sum of £75,000 or to seek an individual settlement of their losses, likely to require a higher payout. The claims are initially assessed by the business department but if there are disputes the cases can be referred to an independent panel for review and ultimately to the independent reviewer, who is a retired High Court judge.
As of March, 282 of the 446 claims made had been paid, although 155 of those settled accepted the £75,000 fixed payment.
However, growing numbers of subpostmasters believe the scheme is denying them the compensation they deserve.
Last month, Bates said the government had turned it into a 'quasi kangaroo court', and assurances that the scheme would be 'non-legalistic' had turned out to be 'worthless'. Officials have been demanding documents from claimants that many had lost years ago.
Bates also revealed he had been presented with a 'take it or leave it' offer amounting to less than half his original claim.
Linnell said she had been contacted by about 45 to 50 claimants whose offers appeared to be 'substantially undervalued'.
She added about 30 of those had received offers worth less than one sixth of their claim, adding these were the cases 'I get most upset about'.
Linnell said that 'when you boil down the patheticness of the offers', they were the result of the scheme administrators putting a much lower value on the loss of investments that subpostmasters suffered when they were forced to sell assets to cover their account shortfalls.
She added that a similar approach was being taken towards loss of future earnings — the amount subpostmasters should be compensated for losing their livelihoods.
Linnell cited the case of one subpostmistress who has been offered 0.56 per cent of her claim. While the woman wishes to remain anonymous, she became a victim of the Horizon scandal shortly after purchasing a small Post Office branch that had generated low profits under the previous owner.
She took out a substantial bank loan to add a café and shop. However, when the branch reopened after renovations, she was unable to pay suppliers because the Post Office had taken funds to recoup shortfall losses that were, in fact, the result of Horizon. This forced her to close the branch just six weeks later, at which point the bank demanded full repayment of her loan.
The former subpostmistress contacted Linnell when putting together her compensation claim.
'Her claim had gone through all the checks Alan and I agreed should be in place, before the department started moving the goalposts,' Linnell said. 'It came back with an offer that was so pathetic.'
Linnell said the dispute arose because the officials assessing her claim did 'not accept her trading and profit forecasts'.
Instead, they cited the previous owner's revenue streams, despite the fact that the investments made by the subpostmistress would have meant that the business probably would have generated higher returns in future.
'I've gone back to her lawyers and suggested they submit the business plan that the bank happily accepted when issuing the loan,' Linnell said.
Linnell, like Bates, believes the GLO scheme has become overly bureaucratic and legalistic, pointing out that three law firms are involved in the process. 'This is a pro bono scheme, it doesn't need to be following strict legal principles,' she said.
She also believes that despite promises made by ministers, the officials involved in the schemes are attempting to reduce the total amount paid out in compensation. Labour has set aside £1.8 billion to settle claims.
Linnell added: 'They are finding every legal loophole they can think of, under civil litigation rules, not to pay. It's designed to fail. What they are trying to do is to keep a handle on cashflow.'
The government disputes this characterisation.
A Department for Business and Trade spokesman said: 'We recognise the suffering that sub-postmasters have endured, which is why this government developed our compensation arrangement in discussion with Sir Alan Bates as well as Dr Kay Linnell and their lawyers, with £964 million having now been paid to over 6,800 claimants across all the Horizon schemes.
'Victims who are unhappy with their offer have access to legal support and an independent panel to review their claim.'
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