Post Office (Horizon System) Compensation Bill

The Post Office (Horizon System) Compensation Bill was introduced in Parliament on 29 November 2023. The Bill had its second reading and all Commons stages on 19 December 2023.

The Bill, together with its explanatory notes, are available on the Parliament website: Post Office (Horizon System) Compensation Bill.

The Government is introducing the Bill with the aim of ensuring “that the trailblazers who exposed the [Horizon] scandal do not miss out on compensation because of an arbitrary deadline”.

The Bill applies to England, Wales, Scotland and Northern Ireland.

The Post Office is a limited company owned entirely by the government. The government does not have day-to-day involvement in how it is run but provides some funding, monitors performance and oversees key decisions.

This briefing explains the background to the Bill and what the Bill would do, and was produced prior to the Bill being considered.

What would the Bill do?

The Bill contains two clauses:

• Clause 1 would provide the Secretary of State the power to spend in order to compensate those affected by the Post Office Horizon computer system and issues identified in related High Court judgments.
• Clause 2 gives the Bill’s short title.

The Bill would provide the Secretary of State for Business and Trade with the power to continue to make compensation payments to affected postmasters under the current Group Litigation Order (GLO) compensation scheme, after the current power to do so is no longer available.

The Bill also would allow the Secretary of State to make payments under other compensation schemes which relate to the Post Office Horizon system.

What was the Horizon affair?

The Post Office Horizon affair has been described as one of the UK’s most widespread miscarriages of justice. It has been a long, complicated and contested saga, involving a campaign for justice, various court cases, compensation schemes, and currently a public inquiry.

Beginning in 1999, a number of postmasters (who run individual post offices) experienced difficulties with the Horizon Post Office computer system. The system had faults which showed false shortfalls on the accounts of postmasters. Because of the shortfalls reported by Horizon, some postmasters were suspended or had their contracts terminated, and others were prosecuted, convicted, and imprisoned (for example, for false accounting and fraud).

In 2016, a group of postmasters used a group litigation order (GLO) to take legal action against the Post Office for damages relating to the consequences from the faulty Horizon system. Following rulings from the High Court in the Bates v Post Office High Court case, the Post Office settled. The GLO compensation scheme was later introduced to provide further compensation to those who had taken part in this group litigation action.

A number of other compensation schemes exist with the aim of redressing the various types of loss experienced by postmasters.

Why is the Bill being introduced?

The GLO compensation scheme is being funded by temporary powers, which can last at most two years.

While the Government has said that it intends to complete compensation payments before August 2024, when these temporary powers expire, it has introduced the Bill to allow it to make payments after this date. It says that “time needs to be taken to assess more complex claims, so postmasters receive full and fair compensation and are not unduly rushed into making a decision on their claims”.

This follows a recommendation by Sir Wyn Williams, chair of the Horizon IT inquiry.