Update On Compensation For Postmasters Subject To Bankruptcy Orders

13th May 2023

The Insolvency Service and Official Receiver are continuing to work with the Post Office and the Department for Business and Trade on the various compensation schemes.

The Post Office is now accepting eligible late applications from any post masters who believe they experienced shortfalls related to the Horizon system. You can find information about eligible late applications on the Scheme website

The latest update on the relevant Schemes are as follows:

Historical Shortfall Scheme
Under this scheme, compensation awarded for personal losses, for example, damage to reputation or distress, does not form part of the bankruptcy estate and will be paid by the Post Office to former postmasters.

However, elements of the compensation relating to financial losses, for example those due to loss of earnings, are an asset under insolvency law of the bankruptcy and legally must be realised for the benefit of creditors.

The Official Receiver, as trustee of the bankruptcy estates, must act in accordance with their statutory duties and distribute realised assets for the benefit of creditors. The Official Receiver is actively engaging with creditors to establish if they wish to pursue their claims in the postmaster bankruptcies and seek a distribution from the compensation awards.

If there is a surplus following the payment of any statutory costs of the bankruptcy and any claims from creditors that wish to receive a distribution from the compensation awards, the funds will be paid to the former bankrupts.

Group Litigation Order
In cases where former postmasters were previously subject to a bankruptcy order and are now discharged, neither the interim payment nor any future payments under the scheme are due to the bankruptcy estate. This means that any compensation will, therefore, be paid in full to the former postmasters.

We continue to work with the scheme administrators, the Department for Business and Trade, to ensure these payments are made as quickly as possible to the former postmasters.

Overturned Historical Convictions
The interim payment or any future payments under the scheme, are being paid in full to the former postmasters who were subject to a bankruptcy order and are now discharged. Neither the interim payment, nor any future payments under the scheme are due to the bankruptcy estate.

The Official Receiver has also signed waivers to help with payments being made to the former postmasters. We continue to work with the scheme administrators, and the Department for Business and Trade, to ensure these payments for former post masters and mistresses are made as quickly as possible.

Background information
The Post Office Horizon scandal, which began over 20 years ago, has had a devastating impact on the lives of many postmasters. Starting in the late 1990s, the Post Office began installing Horizon accounting software, but faults in the software led to shortfalls in branches' accounts. The Post Office demanded sub-postmasters cover the shortfalls, and in many cases wrongfully prosecuted them between 1999 and 2015 for false accounting or theft.

Post Office Scandal Reveals A Hidden World Of Outsourced Information Technology The Government Trusts But Does Not Understand

This is one of the biggest scandals ever in British criminal history. This scandal had more yet to unfold as many more postmasters were accused and lost their livelihoods, businesses and worse being made bankrupt and losing their home not to mention the ones that went to prison. They were innocent and many others from Post Office management and Fujitsu should be in the dock.

Read more details in the Private Eye report