New body for Horizon redress would take months and cost millions

The Business and Trade Committee called for the Post Office to be removed from compensation schemes (Lewis Stickley/PA)

The Government has said setting up a new body to deal with financial redress for Horizon victims would “take months and cost millions”.

The Business and Trade Committee previously issued a report which said an independent intermediary should be established to help victims “through every stage of their compensation claims” – describing the current redress process as an “abject failure”.

In response to the report, the Department for Business and Trade (DBT) said: “Setting up a new body to replace these arrangements would take months and cost millions which should instead be spent on redress for postmasters.”

The committee also called for the Post Office to be removed from compensation schemes – describing the company as “not fit for purpose to administer any of the schemes of redress”.

Despite the Post Office saying it would have no objection in relinquishing its role in delivering redress to victims, DBT said: “If the Post Office were ‘immediately’ removed from the process, no postmaster would receive redress for months. That is not acceptable.”

The Government also said: “Decisions on redress cases in all three schemes are already independent of the Post Office.”

DBT told the committee that introducing financial penalties for a failure to meet a legally-binding timeframe would have “no positive effect” on the pace of the redress schemes.

The Government said in its response to the committee’s report: “Claimants already receive compensation for the time taken to deal with claims, in that interest is paid on most aspects of claims in accordance with standard legal principles: the amount payable therefore increases over time.”

Their response added: “The threat of penalties might unjustly penalise solicitors for issues out of their control.”

The Post Office has come under fire following the ITV drama Mr Bates vs The Post Office, which put the Horizon IT scandal under the spotlight.

More than 700 subpostmasters were prosecuted by the Post Office and handed criminal convictions between 1999 and 2015 as Fujitsu’s faulty Horizon system made it appear as though money was missing at their branches.

Hundreds of subpostmasters are still awaiting full compensation despite the Government announcing those who have had convictions quashed are eligible for £600,000 payouts.