Progress update on redress for postmasters subject to bankruptcy orders - 21 March 2025
Source: gov.uk (2025-03-21)

An update on progress for redress for postmasters subject to bankruptcy orders who are due redress for losses suffered as a consequence of the Post Office’s Horizon IT system

Bankruptcy and its impact on the Horizon IT redress schemes is complex, therefore, the Official Receiver is contacting the affected former postmasters to help work through their options. We have been working closely with the Post Office and the Department for Business and Trade in relation to the claims for redress.

Details of the redress schemes and the impact of bankruptcy are set out below.

Historical Shortfall Scheme

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

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

Therefore, when redress offers are made by the Post Office, the Official Receiver’s office has been contacting the former postmasters to discuss the implications of bankruptcy and explain the available options. This includes exploring how to apply for the annulment (cancellation) of the bankruptcy order and access to independent legal advice.

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 redress awards.

In the event 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 awards, the funds will be paid to the former bankrupts.

For those former postmasters who believe they experienced shortfalls related to the Horizon system but have not yet submitted a claim, the Post Office is now accepting eligible late applications into the Scheme. You can find information about eligible late applications on the Scheme website (https://www.onepostoffice.co.uk/scheme).

Historical Shortfall Scheme - Fixed Sum Award

On 13 March 2024, the government announced that all eligible claimants would be entitled to a voluntary fixed sum award of £75,000 as an alternative to the full assessment process.

Due to the nature of the fixed sum award, personal losses and financial losses have not been separated. Therefore, when fixed sum awards are made by the Post Office, the Official Receiver’s office has been contacting the former postmasters to discuss the implications of bankruptcy and explain how the £75,000 will be split between personal losses which do not form part of the bankruptcy estate, and financial losses which do form part of the bankruptcy estate.

The bankruptcy matters will continue to be progressed as detailed under the Historical Shortfall Scheme.

Group Litigation Order Scheme

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. Any redress will therefore be paid in full to the former postmasters. This position is supported by the court’s decision in Secretary of State for Business and Trade v Mustafa Hassanali Abdulali & Anor (https://caselaw.nationalarchives.gov.uk/ewhc/ch/2024/1722?query=suzanne+lesley+palmer)).

We continue to work with the scheme administrators, the Department for Business and Trade, to ensure these payments are made in a timely manner to the former postmasters.

Horizon Convictions Redress Scheme and Overturned Historical Conviction Scheme

In cases where former postmasters were previously subject to a bankruptcy order and are now discharged, neither the interim payment, nor any future payment for malicious prosecution are due to the bankruptcy estate, and will be paid in full to the former postmasters.

We continue to work with the schemes’ administrators, the Department for Business and Trade, to ensure these payments are made in a timely manner to the former postmasters.

Suspension Remuneration Review

Under this scheme, redress that relates to financial losses, for example due to loss of earnings plus interest, is an asset of the bankruptcy and legally must be realised for the benefit of creditors.

In the event an award is made for personal losses, for example, damage to reputation or distress, this element of the award does not form part of the bankruptcy estate and will be paid by the Post Office to former postmasters.

You can find further information about the Suspension Remuneration Review on the Post Office’s website (https://corporate.postoffice.co.uk/en/suspension-renumeration-review/changes-to-operational-processes-and-policies/).