Postmaster claimants urged to avoid no win, no fee lawyers

Former postmasters seeking compensation through a new government scheme have been urged to avoid law firms offering to work on a contingency basis.

The Department for Business & Trade (DBT) revealed today how the scheme would operate for the hundreds of individuals who helped to expose the Horizon IT scandal.

This group was part of the Bates litigation which secured a settlement with Post Office Ltd in 2019. But the majority of the compensation secured was taken up by the costs of funding the case, so while others who pursued their case later secured bigger amounts, members of the Bates group each received around £20,000 to compensate for losses caused by false accusations of theft and fraud.

The government confirmed the establishment of the new scheme a year ago and in December said it would cover ‘reasonable costs’ of obtaining legal advice.

It said today that three firms – Freeths, Howe & Co and Hudgells Solicitors – have agreed not to make any charges to claimants for work on this scheme. They will be paid by the government at pre-agreed rates.

The DBT said other firms can access the same rates but it warned claimants to ‘not engage any firm which asks you for money now or later, or which offers a “no-win, no-fee”, conditional fee or litigation funding agreement’.

A tariff of fees splits cases between straightforward, moderate and complex, with a basic allowance of £5,796, £9,198 and £18,060 for each category. Lawyers can claim an extra £4,284 for moderate and complex cases requiring expert evidence, and an extra £3,360 where cases involve a claimant’s bankruptcy. Additional costs, ranging from £1,260 to £5,124, are allowed where cases are taken to exceptional review.

The government advises that claimants are not obliged to have legal representation but it would ‘strongly recommend’ that they seek a lawyer to help with their application.

The scheme will be run by DBT, and an independent advisory board whose members include Lord Arbuthnot and Kevan Jones MP who have long championed the cause of postmasters, will advise ministers on how best to manage it. The board is chaired by Professor Chris Hodges, an expert in alternative dispute resolution, and includes Professor Richard Moorhead, who has written extensively about the Post Office scandal.

The government pledged today to put postmasters back into the position they would have been had it not been for Horizon. Most cases should be resolved before the end of this year, and all payments will be made by August 2024. Journalist Nick Wallis, who wrote The Great Post Office Scandal, tweeted today that 27 claimants who would have qualified for the group litigation scheme have died waiting for compensation.

The government also said today that the Post Office has issued offers to 98% of claimants eligible for the separate historical shortfall scheme, totalling £90.2m. The Post Office has paid £17.6m in compensation to those with overturned historical convictions.

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