Post Office scandal: Lawyers paid millions as MPs call for transparency on legal costs
Even though many victims of the Post Office scandal are still waiting for compensation, City law firms have booked millions in fees for their work dealing with the fallout.
The scale of the bill was laid out in the Business and Trade Committee’s ‘unfinished business’ report. The report looked at the process of financial redress for victims, which falls under the Horizon Shortfall Scheme (HSS).
The report noted the high fees paid out to the lawyers working for the Post Office.
Committee chairman Liam Byrne MP stated that “payments are so slow that people are dying before they get justice. But the lawyers are walking away with millions,” he added “this is quite simply, wrong, wrong, wrong.”
The Post Office has spent £136m on legal fees relating to the redress schemes, including £82m for just one firm, Herbert Smith Freehills.
The most recent data published by the government shows that just £499m out of the £1.8bn set aside for redress has been paid out to claimants.
This means 72 per cent of the total budget for redress has still not been paid, yet the overall legal bill is equivalent to 27 per cent of redress paid to date.
The MPs stated that this legal cost “may help explain claimants’ experience” as “they have described the design of the HSS to us as not ‘user-friendly’ and ‘very legal’ in design and execution”.
Post Office redress scheme
The current system makes the victims calculate and justify the basis of their calculation for various types of losses, including loss of property, opportunity and personal injury or harassment.
The MPs stated that these requirements create unavoidable legal complexity for claimants, noting the value for money administering the scheme is being damaged.
“The gold-plated legalistic process of the Horizon Shortfall Scheme is not best value for the public purse,” the MPs added that “more flexible and direct instruction to Post Office and Herbert Smith Freehills would cut these costs”.
In addition to the legal fees, the report outlined five key recommendations to the government, including removing the Post Office from administering any redress schemes and appointing an independent adjudicator.
Published on 1 January, the UK government has two months to respond to the Committee.
Commenting on the report, the lawyers for victims, Neil Hudgell of Hudgell Solicitors, said: “We welcome any recommendations to speed up redress, and many of these seek to remove unnecessary obstacles to justice we have seen over the past few years, repeated across hundreds of cases.”
This is not the first time the legal fees related to the Post Office scandal have come into the spotlight.
In November 2023, it was revealed that the Post Office spent nearly £24m over that year on external legal advice for disclosure when the Horizon Inquiry was held up with problems.
While last January, the legal regulator, Solicitors Regulation Authority (SRA), warned law firms and lawyers who worked for the Post Office would face ‘action’ if they were found to have ‘fallen short’ of the standards.