Article written by Bimal Kotecha, Litigation Solicitor
The Court in the case of Secretary of State for Business and Trade v Abdulali & Anor [2024] EWHC 1722 (Ch) has confirmed that those bankrupted as a result of the Post Office Scandal will get to keep their compensation and will not have to pay it to their trustees in bankruptcy.
What is the Post Office scandal?
In what has been described as the UK’s most widespread miscarriage of justice, over 900 sub-postmasters were wrongly prosecuted for ‘stealing’ after faulty software (Horizon) detailing incorrect information relating to money going missing from their Post Office branch accounts.
The Post Office prosecuted 700 people between 1999 and 2015 and a further 283 cases were brought by other bodies including the Crown Prosecution Service. Many were imprisoned for false accounting and theft, leaving dozens financially ruined. Many faced bankruptcy or completely lost their livelihoods.
Legislation to clear the names of victims and pay them compensation was implemented in May 2024 and convictions will be automatically suppressed if they were prosecuted by the Post Office or CPS for theft, fraud and false accounting in connection with Post Office business between 1996 and 2018. Over 4,000 people are eligible for compensation.
The judgment
In the case of Secretary of State for Business and Trade v Abdulali & Anor [2024] EWHC 1722 (Ch), the Court had to grapple with the issue of whether or not compensation paid to victims of the Post Office Scandal could be considered “property” under sections 283 and 436 of the Insolvency Act 1986. If the compensation was found to be “property” within the provisions of the Insolvency Act then it would be payable to the trustee in bankruptcy, despite the victim in this case being discharged from bankruptcy.
Thankfully, the judgment of HHJ Cawson KC found that compensation payments to postmasters who had been made bankrupt were not a type that vested in their trustees in bankruptcy. The Judge found these payments were not “property” at the time that the postmasters were made bankrupt. Payments therefore did not need to be made to the trustees.
For more information, please email the Litigation team or contact us on 020 8308 3610.