Horizon IT Scandal – Post Office Has Paid out £250m to 15 Law Firms Since 2014

Amount paid to 15 firms and two barristers chambers since 2014 is almost equal to payouts for victims.

The Post Office has paid out £250m in legal fees over the Horizon IT scandal, almost as much as it paid out to victims, some of whom have been jailed and bankrupted.

The government agency paid out £256.9m to 15 law firms and two law societies between September 2014 and March 2024, according to a Freedom of Information (FoI) request from The Lawyer magazine.

The legal fees amount is almost as much as the £261m in financial compensation paid out to victims of the scandal as of July 31.

UK government figures show £261m has been paid out to 2,800 claimants so far through three separate schemes. These include £54m to people whose criminal convictions have been overturned, £126m to post office operators whose branches are in financial difficulty, and £80m to plaintiffs in a lawsuit brought by campaigner Sir Alan Bates against 554 branch owners.

The FoI request covers the period from September 2014 to March 26, 2024. It details legal costs, including the High Court class action, the compensation arrangements subsequently set up, and legal representation in the Post Office Horizon IT investigation. It does not include the cost of work by the Post Office’s in-house lawyers dealing with these matters.

More than 900 postal workers have been wrongly convicted in court using IT evidence from the Horizon computer system. This includes the Post Office, which made 700 convictions between 1999 and 2015. A new law was passed ahead of the July general election, overturning the convictions of hundreds of shop owners.

The Post said its “focus is on providing redress as quickly as possible to those affected and supporting the investigation to establish the truth.” A spokesman added: “The Post Office and the government have so far paid £260m to 2,800 postmasters.

“We deeply regret the pain caused by The Post’s past conduct and the costs to the law firm reflect the enormous scale of the scandal…

“These costs relate to class action litigation, the compensation arrangements subsequently drawn up, legal advice on complying with the judgment in the Horizon case and representing the Post Office in the Horizon IT investigation.”

The highest amount reported in the FoI is £163.6m paid to Herbert Smith Freehills law firm. She said her work was “complex and extensive, involving hundreds of our employees over many years and processing millions of documents related to the investigation.”

“As a company, we have deep sympathy for the postmasters affected by the Horizon IT system and the suffering they and their families have endured,” a spokesperson said. “As one of several consultants on the compensation plan, we will continue to support the Postal Service’s efforts to achieve fair compensation as quickly as possible.”

Herbert Smith Freehills was not involved in prosecuting postal workers, and her work with the Horizon Postal Service began long after the state agency stopped prosecuting postal workers. Her work included helping The Washington Post resolve its Supreme Court lawsuit in December 2019 and supporting financial compensation for victims.

A public investigation into the Post Office is looking into what executives knew about problems that arose after the IT system was rolled out in branches. The investigation will enter its seventh phase later this year and will look at practices and procedures within the Post Office and recommendations for the future.