Guidance

Horizon Shortfall Scheme Appeals (HSSA): tariff of reasonable legal costs

Published 28 April 2025

Introduction

The government has agreed to pay the reasonable legal costs of postmasters in the Horizon Shortfall Scheme Appeals (HSSA), announced in September 2024. This guidance sets out the tariff by which those costs will be calculated. It has been agreed through a mediated discussion between the Department for Business and Trade (DBT) and the legal advisers listed in Annex B.

The government welcomes the commitment of these legal advisers not to seek fees from their clients in addition to its support for reasonable costs.

It strongly advises postmasters not to engage any lawyer who asks for payment, either during the claims process or when compensation is paid. This may mean that eventual compensation would be reduced by legal costs which the postmaster would not be able to recover.

All figures in this guidance exclude VAT.

Structure of allowances

For each case a ‘basic’ costs allowance will be payable reflecting the legal adviser’s own likely costs plus any need to seek advice from counsel, as in table 1. Additional allowances will be paid for cases in certain categories, as in table 2.

Table 1: basic costs allowance

Basic costs allowance	Tariff per case (£)
Band 1: agreed settlement is below £2.5 million	25,000
Band 2: agreed settlement is at or above £2.5 million	40,000

Table 2: additional allowance where relevant

Additional allowance where relevant	Tariff per case (£)
Cases involving bankruptcy or Individual Voluntary Arrangement (IVA)	4,000
Commissioning of expert evidence (costs per one expert report)	5,200
Cases taken to exceptional review	6,600

To account for work previously conducted, legal advisers who are entitled to, or have claimed costs, under the Post Office Dispute Resolution Process (DRP) where the matter has not yet reached the mediation stage in accordance with the scheme’s eligibility criteria will have the basic allowance reduced as follows:

• where the solicitor has acted for the postmaster up to and including the good faith meeting the basic allowance shall be reduced by 10%

• where the solicitor has acted for the postmaster up to but excluding agreeing date of mediation meeting the basic allowance shall be reduced by 35%

Where more than one expert report is required, an additional allowance in the same sum of £5,200 would be payable in respect of the agreed commissioning of each and any additional expert report.

Postmasters’ legal advisers will be authorised to commit costs of up to:

• £14,000 for advice from a forensic accountant
• £4,500 for advice from a medical expert

If in the light of initial advice from an expert, the postmaster’s legal adviser concludes that further costs will be necessary to provide relevant evidence, DBT will consider applications for specific amounts of further costs. DBT will also consider applications for support for the costs of any other types of expert evidence. See Annex A for the process for support of costs for expert evidence.

Provision will be made for speedy resolution by a neutral third party, such as Leading Counsel (funded by DBT), of any disagreement as to either:

• the need for expert evidence in a case
• the level of fees to be incurred on expert evidence in a case

An additional allowance of £600 would be payable to legal advisers to support postmasters with their decision of whether to remain in the DRP or to transfer to HSSA.

Timing of payment

For claims other than those transferring from Post Office’s Dispute Resolution Process, basic allowances will be paid to postmasters’ legal advisers in 3 instalments, each triggered by the legal adviser’s actions as set out in table 3.

Table 3: trigger events (all other applicants)

Trigger event	Instalment payments per case (£)
Submission by legal adviser of registration form, confirmation of eligibility by DBT	6,250
Receipt by DBT of application form, and confirmation by DBT that application is substantially complete	6,250
Receipt by DBT of the postmaster’s agreement to an award (Band 1)	12,500
Receipt by DBT of the postmaster’s agreement to an award (Band 2)	27,500

For eligible claims that are currently in Post Office’s Dispute Resolution Process, basic allowances will be paid to postmasters’ legal advisers in 3 instalments, each triggered by the legal adviser’s actions as set out in table 4. Applicable reductions will be made, as outlined under the ‘Structure of allowances’ section, at each trigger event.

Table 4: trigger events (DRP transfers)

Trigger event	Instalment payments per case (£)
Submission by legal adviser of registration form, confirmation of eligibility by DBT	6,250
Receipt by DBT of any additional evidence submitted for the appeal, or confirmation of no further evidence to submit to their appeal	6,250
Receipt by DBT of the postmaster’s agreement to an award (Band 1)	12,500
Receipt by DBT of the postmaster’s agreement to an award (Band 2)	27,500

For claims to be considered eligible, both the following must apply:

• they must meet the deadlines set within the HSSA guidance and principles
• DBT must receive receipt of substantially complete additional evidence or confirmation of no further evidence to submit to their appeal

Payment of additional allowances will be triggered as set out in table 5.

Table 5: trigger events (additional allowances)

Trigger event	Allowance
Submission of Decision Claim Form[footnote 1]	Supporting postmasters with transfer decision
Receipt by DBT of postmaster’s agreement to an award that involves a successful appeal for bankruptcy or IVA	Cases involving bankruptcy or Individual Voluntary Arrangement (IVA)
DBT agreement that the advice should be commissioned, or independent review decision to that effect	Commissioning of expert evidence (costs falling directly to the legal adviser)
Receipt by DBT of copy of invoice from expert to legal adviser	Payments for expert evidence
Submission of a case for exceptional review	Cases taken to exceptional review

At the end of each month, each legal adviser will be invited to submit a schedule setting out the allowances triggered during that month. DBT will aim to make payments against these schedules within 28 days.

Further information

DBT recognises that postmasters may not have previously received legal support on their Horizon Shortfall Scheme (HSS) claims.

DBT will only pay costs relating to the appeal – Post Office is responsible for settling reasonable costs relating to the Dispute Resolution Process up to the point of transfer.

DBT will not pay legal costs for work relating to the following:

• the initial HSS application
• £75,000 fixed sum payment
• any costs relating to the original HSS claim

This tariff of reasonable legal costs does not cover any other systems or redress schemes.

DBT will not cover payment of legal costs relating to claims for third parties.

Annex A: process for support of costs for expert evidence

In cases where a postmaster’s legal representatives (or, if unrepresented, a postmaster themselves) wish to propose the use of expert evidence, they should send an email to hssappeals@businessandtrade.gov.uk setting out the following:

• case name and reference number
• a brief explanation of reasons as to why expert evidence is reasonably required
• a costs estimate for the proposed expert evidence and whether it is proportionate and justified by reference to the value of a relevant head of loss
• the field in which expert evidence is required
• issues which expert evidence will address
• where practicable, the name of the proposed expert and details of their qualifications

DBT will consider such proposals and respond to them within 15 working days.

DBT will also set out further information in template instructions and guidance regarding the preparation of expert reports, which will ensure that any report and documentation relevant to a claim provides the appropriate evidence to support your appeal.

Annex B: firms who have agreed our costs framework

Firm	Email	Contact
Bailoran Solicitors	jb@bailoransolicitors.com	John Bailes
Digby Brown LLP	gordon.dalyell@digbybrown.co.uk, kieran.mcgrath@digbybrown.co.uk	Gordon Dalyell and Kieran McGrath
Freeths LLP	hssappeals@freeths.co.uk	James Hartley and Michael Hoskins
Hodge Jones & Allen	cwong@hja.net, bmenezes@hja.net, bamani@hja.net, kkupczyk@hja.net	Chun Wong, Brenel Menezes, Bahareh Amani and Karolina Kupczyk
Howe + Co	help@howe.co.uk	David Enright
Hudgell Solicitors	nmh@hudgellsolicitors.co.uk	Neil Hudgell
Schofield Sweeney	stephenlewis@schofieldsweeney.co.uk	Stephen Lewis
Ward Hadaway LLP	neil.armitage@wardhadaway.com	Neil Armitage and Emma Digby

1. To request the Decision Claim Form the legal representative should email hssappeals@businessandtrade.gov.uk. The form will require a signature from both the postmaster and the legal representative. ↩