The Post Office has settled its major High Court litigation battle with hundreds of former sub-postmasters, agreeing to pay out almost £60m in compensation.
More than 550 sub-postmasters sued the Post Office after they were blamed, and in some cases criminalised, for shortfalls in accounts at their branches following the introduction of the Horizon IT system in 1999.
In the Bates v Post Office case, which has dragged on for three years, the claimants alleged that the computer system contained software defects that caused the discrepancies at the branches. Many sub-postmasters were accused of stealing money by the government-owned Post Office.
The mammoth litigation has been split into four trials, with a landmark ruling in favour of the sub-postmasters coming in March during the first trial.
Today, it was revealed the Post Office has settled the dispute with the sub-postmasters after several days locked in mediation.
The amount of compensation was not revealed in the official statement from the Post Office, but The Grocer understands the company will pay out £57.75m in compensation. It was estimated in media reports that compensation would exceed £100m.
The Post Office has also forked out about £25m on its legal costs over the course of the trials.
The Post Office expressed its gratitude to claimants in a statement for “holding us to account in circumstances where, in the past, we have fallen short”.
It added that it was committed to applying the lessons it had learned and new CEO Nick Read, the former Nisa boss who joined in September, was undertaking “an ambitious and sustained programme of changes” in its relationship with postmasters.
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“I am very pleased we have been able to find a resolution to this long-standing dispute,” Read said. “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.”
Post Office chairman Tim Parker added: “We accept that, in the past, we got things wrong in our dealings with a number of postmasters and we look forward to moving ahead now, with our new CEO currently leading a major overhaul of our engagement and relationship with postmasters.”
Alan Bates, one of the lead claimants and also a representative of the Justice for Subpostmasters Alliance, thanked Read for his “leadership, engagement and determination” in helping to reach a settlement.
“During the mediation, it became clear that he intends to reset the relationship between the Post Office and its sub-postmasters and put in place new processes and support for them, as part of a wider programme of improvements,” he said.
“It would seem from the positive discussions with Read that there is a genuine desire to move on from these legacy issues and learn lessons from the past.”
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