In the light of yesterday’s PO Inquiry hearings on compensation, I looked back at something I wrote in July, on my Post Office devoted substack, and thought the analysis there pretty much stands the test of time. The Post Office and Government have adopted an adversarial approach, containing a conflict of interest. When one side is well-resourced, and the other is not, this delivers, often, normally, injustice. It is a conventional unfairness; a feature, not a bug.
As Sam Stein KC put it in yesterday’s hearing there is an extra dimension here,
“Unsurprisingly, we say, there may have been very few, if any, compensation schemes where the perpetrators call the shots and control the process.”
That central conflict is underlined by Post Office using lawyers that came with prior involvement in the Post Office case. That prior involvement raises questions about perceived or actual conflicts and a lack of the necessary independence for the firm. As has already been noted, the same firm designed a scheme for HBOS that also, ahem, deconstructed under scrutiny.
Even if concerns about Herbert Smith Freehill’s prior involvement turn out to be over-egged (which I think unlikely), the Post Office showed a lack of wisdom in using a firm that had anything at all to do with the Post Office Scandal before 2021 in the compensation scheme. Potential problems multiply, I think, if HSF continues to represent the Post Office at the Inquiry. The odds must be better than even that HSF will need to give evidence on their role in Bates and their handling of the compensation scheme. Not sure how one can independently advise and represent if your own involvement is a significant part of the story.
If instructing them is not a lack of wisdom then it speaks to the good faith of their client. The Post Office claims to want to wipe the slate clean. Whether a lack of wisdom or insincerity, it colours any view of why, by design or incompetence (and I suspect there is a bit of both), the system delivers up compensation slowly, and it emerged yesterday likely inadequately. Some compensation offers made by Post Office were out by tens of thousands of pounds on matters which counsel for some of the victims claimed, plausibly, were obvious (and predicted).
Whatever the cause, the result is that everything the Post Office, and BEIS, does, appears drizzled in incompetence, and makes room for perceptions of bad faith. I imagine that the Treasury makes things difficult for them but words unmatched by actions make finely phrased public apologies look like conceits. The slate is not wiped clean if the same folks are holding that slate or brandishing the sponge.
Yesterday’s compensation scheme hearing has moved things on a bit. Like the defence of Horizon itself (it works most of the time, look!) Counsel for the Inquiry presented high percentages of compensation offers made and offers accepted as signals of success. So more people have had some money, but the crude indicators failed to pay proper attention to the lesson that it is the ones they have missed or failed to deal with which are really going to count. The cases not yet dealt with are serious cases; it includes those prosecuted; those wrongly imprisoned; and, those bankrupted. One can see why such cases might take longer but some of the particular problems with these cases involve policy or legal issues which were apparent and well defined, it seemed, in July, and are still not resolved in December. I thought BEIS’s counsel was seeking to drop PO in it for being a bit slow.
Beyond those failures, Moloney, Stein, and Henry KCs had the easy job of showing up a scheme that was manifestly flawed from the outset, designed with the conventional unfairness to the powerless, resourced to the nines for the powerful; as careful with corporate (or taxpayer) funds as it can be when it comes to paying compensation or lawyers fees for the vulnerable, less chary when it comes to legal fees for the government or the corporates. The conventional injustice of bureaucracy.
There is in a new scheme announced this week a glimmer of hope. An independent advisory panel with some powerful critics of the Post Office in their ranks (Lord Arbuthnot, Kevan Jones). Maybe this final grafting into the process of some independence and mettle will make the difference belatedly. Whether it does or not, the corporate fix developed by Post Office and their legal advisers has failed if the attempt was genuinely to wipe the slate clean and deliver fair compensation expeditiously. It has succeeded in keeping the Post Office failures in the public eye, highlighted the lack of grip or competence in Government, and stoked impressions of bad faith and injustice. I’m guessing that was not part of PO lawyers’ instructions.
When the scheme gets a proper forensic look (Phase 5 of the Inquiry if I understand it right; we are on phase 2) a question that will be asked is: who really designed the scheme? and what were you thinking? Were you thinking? Or is this kind of attritional, bureaucratic ping pong the conventional injustice meted out to the victims of injustice whilst big organisations protect their rights and posture about doing the right thing. Maybe Nick Read, Post Office, will just try and blame the lawyers. They told us to do it this way. Or BEIS will. There is a flavour of that already in evidence given to a Select Committee earlier in the year. Nick Read’s evidence is worth reading but I pick out this quote from Paul Scully, minister a the time when asked if the Post Office Scheme was fit for purpose:
Herbert Smith Freehills is a significant player in this area. It knows how to structure a scheme; it knows how not to structure a scheme, having learned the lessons, I am sure, from that HBOS scheme. The principles of this scheme were agreed with the steering group from the claimants of the original litigation, and it has been built on from there in full consultation with us and with as many stakeholders as possible.
To which I am now tempted to laugh darkly and ask , are you still sure they know what they are doing? It was a bad answer then; it’s a poorer answer now. Pointing the fingers at the lawyers and the steering group (is that the JFS he means? interesting political strategy!) Question is, who’s going to take responsibility for it?