Bankruptcy and its impact on the Horizon IT compensation schemes is complex, therefore, the Official Receiver is contacting the affected former postmasters to help work through their options.
Details of the compensation schemes and the impact of bankruptcy are set out below.
Historical Shortfall Scheme
We have been working closely with the Post Office and the Department for Business and Trade in relation to the claims for compensation from the Post Office, submitted by former bankrupts to the Historical Shortfall Scheme.
Under this scheme, compensation awarded for personal losses, for example, damage to reputation or distress, do not form part of the bankruptcy estate and will be paid by the Post Office to former postmasters.
However, elements of the compensation that relate to financial losses, for example those due to loss of earnings, under insolvency law are an asset of the bankruptcy and legally must be realised for the benefit of creditors.
Therefore, when offers of compensation are made by the Post Office, the Official Receiver's office has been contacting the former postmasters to discuss the implications of bankruptcy and explain the available options. This includes exploring how to apply for the annulment (cancellation) of the bankruptcy order and access to independent legal advice.
The Official Receiver, as trustee of the bankruptcy estates, must act in accordance with their statutory duties and distribute realised assets for the benefit of creditors. The Official Receiver is actively engaging with creditors to establish if they wish to pursue their claims in the postmaster bankruptcies and seek a distribution from the compensation awards.
In the event there is a surplus following the payment of any statutory costs of the bankruptcy and any claims from creditors that wish to receive a distribution from the compensation awards, the funds will be paid to the former bankrupts.
For those former postmasters who believe they experienced shortfalls related to the Horizon system but have not yet submitted a claim, the Post Office is now accepting eligible late applications into the Scheme. You can find information about eligible late applications on the Scheme website.
Group Litigation Order
In cases where former postmasters were previously subject to a bankruptcy order and are now discharged, neither the interim payment nor any future payments under the scheme are due to the bankruptcy estate. Any compensation will therefore be paid in full to the former postmasters.
We continue to work with the scheme administers, the Department for Business and Trade, to ensure these payments are made in a timely manner to the former postmasters.
Overturned Historical Conviction
In cases where former postmasters were previously subject to a bankruptcy order and are now discharged, neither the interim payment, nor any future payments under the scheme are due to the bankruptcy estate. Any compensation will therefore be paid in full to the former postmasters.
We continue to work with the scheme administers, Department for Business and Trade, to ensure these payments are made in a timely manner to the former postmasters.
