How do the Post Office scandal compensation schemes work?

The UK Post Office "Horizon" IT scandal compensation scheme is undergoing a major adjustment. The government will take over responsibility for the "Overturned Convictions Scheme," which aims to compensate those whose convictions have been overturned, a responsibility previously held by the Post Office.

As early as January 2025, the UK Department for Business and Trade pointed out that the Post Office should not unilaterally decide how much compensation to pay to the victims of its own scandal. This move marks another step forward in the protracted Post Office scandal. Previously, the Conservative government passed a new law aimed at overturning the convictions of more than 900 people.

In total, more than 4,000 people have been informed that they are eligible for compensation. However, victims need to go through multiple schemes to receive compensation, and the processes are cumbersome and complex. Currently, there is no unified compensation scheme for victims to apply to, and individual eligibility depends on the specific circumstances. There are four main schemes, each targeting different groups of victims who experienced different aspects of the scandal.

The "Group Litigation Order (GLO) Scheme" aims to ensure that the 555 Post Office sub-postmasters, led by Alan Bates, receive additional compensation in the landmark lawsuit against the Post Office. This lawsuit gained wider public attention after the broadcast of the ITV drama. Although the group received a settlement of £42.5 million in 2019, high litigation costs meant that each claimant ultimately received a relatively small amount of compensation. As of January 2024, those eligible under the scheme "will receive an upfront payment of at least £75,000." The government estimates that about two-thirds of people will reject this offer and seek more compensation. In this case, the government will pay the Post Office sub-postmasters 80% of the initially proposed amount.

As of January 31, £128 million has been paid out under the scheme, including interim payments. Among the 555 members of the GLO group, 63 have criminal convictions and are therefore not eligible for the scheme, but they are eligible for other compensation – depending on how their convictions were overturned. If their convictions were overturned by a court, they can apply for the "Overturned Convictions Scheme." If their convictions are overturned under legislation (the Post Office (Horizon System) Offences Act 2024, which came into effect in May), they can apply for the newer "Horizon Conviction Compensation Scheme."

There have been 983 convictions linked to the flawed "Horizon" IT program, 700 of which were initiated privately by the Post Office. Those whose convictions have been overturned, whether or not they belong to the GLO group, can apply for the "Overturned Convictions Scheme." The government has taken over responsibility for this scheme from the Post Office. As of January 31, the convictions of 111 people had been overturned. However, when the government's promised law to overturn all scandal-related convictions becomes a reality, hundreds more people will be eligible for compensation. Those whose convictions are overturned can choose to accept a fast-track settlement of £600,000, or they can negotiate if they believe they are entitled to more compensation. All eligible individuals are entitled to an "interim" payment during the final settlement process. The government has provided funding to the Post Office for these payments.

For those whose convictions are overturned through the new law, they can register for the "Horizon Conviction Compensation Scheme." This will entitle them to an initial interim payment of £200,000. They can then decide to accept £600,000 or have a full review of their case. As of January 31, £65 million had been paid out under the scheme, including further interim payments. The latest figures show that of the 111 eligible claimants in the OCS scheme, 82 full and final settlement claims have been made, of which 66 have been paid. Offers have been made to another seven people. The remaining nine are awaiting offers from Post Office Limited.

The Post Office scandal goes far beyond the initial GLO lawsuit and those ultimately convicted of criminal offenses. Fearing prosecution, some Post Office sub-postmasters invested their own savings into the business to cover losses caused by miscalculations by the computer program. The Labour government has announced a new independent appeals process system called the "Horizon Shortfall Scheme," which aims to help Post Office sub-postmasters who were not convicted or involved in the GLO court case. This means that they can appeal if they believe their financial settlement does not reflect the true extent of their losses and emotional distress. The scheme is administered by the Post Office, but the independent appeals process will be overseen by the Department for Business. Post Office Minister Gareth Thomas has said he is still considering whether to transfer the scheme to the government as well.

According to the Department for Business and Trade, as of the end of January 2025, the scheme had received more than 4,665 eligible claims. As of the end of January 2025, approximately £315 million had been paid out to 2,090 of these claims. More than 4,000 people are eligible to participate in one of the three main schemes, and the government says new potential victims are still emerging. It is unclear how many of these people will ultimately receive payment, and the procedures (which have been criticized by activists for being too slow) can sometimes take years.

On January 10, 2024, then-Post Office Minister Kevin Hollinrake stated in the House of Commons that the families of the 60 people who died before receiving any compensation would be able to apply for compensation on their behalf. As of January 31, 2025, according to government data, approximately £663 million had been paid to more than 4,300 claimants through the four schemes, including interim payments to those whose cases have not yet been finalized. The specific breakdown is as follows: Horizon Shortfall Scheme - £315 million; Group Litigation Order Scheme - £128 million; Overturned Convictions Scheme - £65 million; Horizon Conviction Compensation Scheme - £156 million.

The amount received by individual Post Office sub-postmasters may vary depending on the specific circumstances of their case. Professor Chris Hodges, Chair of the Independent Horizon Compensation Advisory Board, told the BBC that the compensation paid to date ranges from £10,000 to "well over £1 million." The government has not provided an estimate of the total amount of compensation that will be paid, but it will inevitably add hundreds of millions of pounds to the amount already paid.