Almost three years after a High Court judge ruled against the Post Office and stated that computer errors had caused the unexplained losses for which subpostmasters were blamed, many of those affected have still not received any compensation.

Former judge Wyn Williams, who is chair of the public inquiry set up to investigate the scandal, has criticised the lack of progress in paying interim compensation to a large group of victims of the scandal.

“I am disappointed with the apparent lack of substantial progress to date,” he said in a statement. “I am aware from correspondence with me that discussions are taking place. However, I am also aware that there are individuals who remain dissatisfied with the pace of progress.”

Williams said he will hold a hearing in the next few months to get an update on progress. “If, at the hearing, it becomes apparent to me that sufficient progress has not been made, I will then, as stated in the conclusion of my progress update, deliver an interim report containing specific recommendations under s24(3) of the Inquiries Act 2005,” he said.

This is a significant announcement because it would see Williams exercise his statutory powers – this would be laid before Parliament and the government would be forced to respond.

Many of the victims of the scandal lost everything after being wrongly blamed for unexplained shortfalls in their accounts, which were caused by errors in the Post Office computer system used for branch accounting.

They lost businesses, homes, many were prosecuted and sent to prison, and there are suicides linked to the scandal. In 2009, Computer Weekly told the stories of seven subpostmasters affected by the problems (see timeline of Computer Weekly articles below).

It has been nearly three years since a High Court group litigation order (GLO) ended, in which a group of former subpostmasters proved that computer errors were to blame and not themselves. The Post Office was forced to set up compensation schemes for all former subpostmasters affected.

A group of over 500 subpostmasters – members of the Justice for Subpostmasters Alliance (JFSA), who took the Post Office to court and proved that unexplained losses were due to computer errors – were excluded from compensation schemes.

The government said the £57m the subpostmasters were awarded after defeating the Post Office in court was full and final, despite all but £11m of the sum being swallowed up by legal costs.

But they kept fighting for fair compensation, just as they had fought for justice for over a decade, and in June the government was forced to agree to pay them fair compensation.

Many are today suffering severe financial hardship as a direct consequence of the scandal and some are being made to wait for interim compensation payments due to the complexities of their cases, including their bankrupt status and the fact that they were prosecuted by the Post Office but were found not guilty in court.

The government, through the Department for Business, Energy and Industrial Strategy (BEIS), promised subpostmasters that interim payments would be made to them within weeks of receiving applications from the claimants, but some have now been waiting for about two months for payments to be made.

Computer Weekly understands that a significant number of JFSA members look no closer to receiving their interim payments.

More than 400 of the group have received interim payments and others need to provide more information, while about 60 are in limbo because they went bankrupt as a result of Horizon errors.

Earlier this month, solicitors Howe+Co, representing scandal victims, wrote to Williams about their concerns over the progress of interim payments.

Following Williams’ announcement, David Enright, partner at Howe+Co, said: “The chair’s statement demonstrates his focus on fair compensation and his determination to continue to monitor its progress until subpostmasters are put back in the position that was taken from them.”

Former Essex subpostmaster Sue Palmer is one of the JFSA group who won the GLO, and is yet to receive an interim payment. She was prosecuted by the Post Office in 2004 for financial crimes following unexplained losses, but was found not guilty. People like her, who were prosecuted but found not guilty, still lost businesses, homes, thousands of pounds and had their lives turned upside down.

The government agreed to pay interim compensation of up to £100,000 to all those who were wrongly convicted, but because Palmer was acquitted, she did not qualify.

She qualifies for an interim compensation payment as a member of the JFSA, but there are delays because she was made bankrupt, with complications related to that.

A letter from Palmer’s legal firm Freeths, which is dealing with compensation claims, said: “Further to our recent correspondence regarding your bankruptcy, the Insolvency Service’s preliminary view is that the compensation should not form part of your bankruptcy. However, we need your trustees to agree this – as you know, they have a duty to act in the best interest of your creditors.

“We are in the process of liaising with your trustees, and the government is setting out its legal advice in writing for your trustees to consider their respective positions. This is a positive step, however there is still some way to go to ensure everyone is in agreement. We’ll continue to keep you updated.”

Palmer said she survives on benefits and recently borrowed money from her elderly parents in the belief that she would be able to pay them back quickly.

“I showed them all the letters stating that I would get the compensation quickly, but I still haven’t got it,” she said. Her father is in his nineties and on end-of-life care. She is devastated that she can’t repay the loan.

“The first thing I do every morning is check my bank account to see if I have the interim payment,” she added.

Palmer believes that if she had pleaded guilty to false accounting instead of fighting the case, which she won, she would now be better off.

BEIS was not available for comment at the time of writing.