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Bankruptcy and its impact on the Horizon IT redress schemes is complex, therefore, the Official Receiver is contacting the affected former postmasters to help work through their options. The Government adds that it has been working closely with the Post Office and the Department for Business and Trade in relation to the claims for redress.

Under the historical shortfall scheme, redress 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 redress 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 redress offers 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. It is actively engaging with creditors to establish if they wish to pursue their claims in the postmaster bankruptcies and seek a distribution from redress 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 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 here.

With regards to any fixed sum awards, on 13 March 2024, the Government announced that all eligible claimants would be entitled to a voluntary fixed sum award of £75,000 as an alternative to the full assessment process.

Due to the nature of the award, personal losses and financial losses have not been separated. Therefore, when fixed sum awards 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 how the £75,000 will be split between personal losses which do not form part of the bankruptcy estate, and financial losses which do form part of the bankruptcy estate.

In cases where former postmasters were previously subject to a bankruptcy order and are now discharged, neither the interim payment, nor any future payment for malicious prosecution are due to the bankruptcy estate, and will be paid in full to the former postmasters.

Finally, in regard to the suspension renumeration review, under this scheme redress that relates to financial losses, for example due to loss of earnings plus interest, is an asset of the bankruptcy and legally must be realised for the benefit of creditors.

In the event an award is made for personal losses, for example, damage to reputation or distress, this element of the award does not form part of the bankruptcy estate and will be paid by the Post Office to former postmasters.

You can find further information about the Suspension Remuneration Review on the Post Office’s dedicated page.

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