Post Office pays £250 million to law firms over Horizon IT scandal
Amount paid to 15 firms and two barristers chambers since 2014 is almost equal to payouts for victims
The Post Office has paid out a quarter of a billion pounds in legal fees in relation to the Horizon IT scandal – almost equal to the amount that has been given so far to victims, some of whom were imprisoned and made bankrupt.
The state-owned body paid out £256.9m to 15 law firms and two barristers chambers between September 2014 and March 2024, according to a freedom of information (FoI) request submitted by the Lawyer magazine.
The figure for legal fees is almost the same as the £261m of financial redress that has been paid out to victims of the scandal as of the end of last month.
UK government figures show that the £261m has been paid so far to 2,800 claimants across three separate schemes. These include £54m for people who have had their criminal convictions overturned, as well as £126m for post office operators who had financial shortfalls in their branches, and £80m for claimants in the high court lawsuit brought by the campaigner Sir Alan Bates and 554 branch owner-operators against the Post Office.
The FoI request covers a period between September 2014 and 26 March 2024. It details legal fees including the high court group litigation, the subsequent establishment of the compensation schemes and legal representation at the Post Office Horizon IT inquiry. It does not cover the cost of the Post Office’s in-house lawyers’ work on these issues.
More than 900 post office operators were wrongly convicted in the courts using IT evidence from the Horizon computer system, including 700 convictions secured by the Post Office between 1999 and 2015. New legislation quashing hundreds of convictions of branch owner-operators was passed before the general election in July.
The Post Office said it was “focused on paying redress to those affected as quickly as possible and supporting the inquiry to establish the truth”. A spokesperson added: “The Post Office and the government have so far paid £260m to 2,800 postmasters.
“We are truly sorry for the suffering caused by the Post Office’s past actions and the amount of money spent with legal firms reflects the huge scale of the scandal … Fees are in relation to the group litigation, the subsequent establishment of the compensation schemes, legal advice relating to compliance with the Horizon Issues judgment and Post Office representation at the Horizon IT Inquiry.”
The largest amount shown in the FoI was £163.6m paid to the law firm Herbert Smith Freehills, which said its work had been “complex and wide-ranging, involving hundreds of our staff over a number of years, and working with millions of documents in relation to the inquiry”.
A spokesperson said: “As a firm, we have immense sympathy for the postmasters affected by the Horizon IT system, and what they and their families have endured. As one of several advisers on the compensation schemes, we will continue to support the Post Office in its efforts to deliver fair compensation as swiftly as possible.”
Herbert Smith Freehills had no role in prosecuting post office operators and its work for the Post Office in relation to Horizon began long after the state-owned body stopped the prosecutions. Its work has included helping the Post Office settle the high court lawsuit in December 2019 and supporting the financial redress to victims.
A public inquiry into the Post Office is looking into what was known by its executives about problems in the IT system after it was rolled out to branches. The inquiry is due to start its seventh phase later this year and will look at practice and procedure within the Post Office and recommendations for the future.
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