The chair of the inquiry into the Horizon computer system scandal has said a delay in determining whether to process late compensation applications has been “wholly unacceptable”.

Sir Wyn Williams said the delay in making the decision “remains largely unexplained”. The Post Office can accept the applications but is still “actively considering” how to deal with them, according to an inquiry update on Monday.

Sir Wyn said: “I know of no proper explanation for the delays in determining whether those applications which were made after November 27 2020 should be rejected or accepted into the Scheme. The delay in determining many if not all of these applications is wholly unacceptable, and, in my view, it remains largely unexplained.”

“I am also very concerned that under the Scheme it is the Post Office which makes the definitive and final determination as to whether a late application is accepted or rejected. In my view, any applicant whose claim is rejected by reason of it having been made after 27 November 2020 should have the right to have that decision reviewed by the Independent Advisory Panel and the Scheme should be amended to make that clear.”

It is vital that these discussions and negotiations are undertaken within weeks and should not stretch over many months

Hundreds of sub-postmasters (SPMs) were ordered to cover shortfalls in their branches’ accounts created by faults in Horizon accounting software between 1999 and 2015, and in many cases were wrongfully prosecuted for false accounting or theft.

In 2019, a group of 555 SPMs successfully challenged the Post Office over the Horizon system in the High Court. Since then a series of schemes have been created to compensate them and others caught up in the scandal, while dozens have had their convictions quashed.

The Historical Shortfall scheme (HSS), set up for all those not included in the initial group litigation or those who had been convicted of criminal offences related to their time with the Post Office, was created with an application deadline of November 2020 27 which was not specifically mentioned on the application form.

Sir Wyn called for the payment of legal fees in the remainder of all cases where HSS offers are rejected, and said: “the Post Office will, no doubt, be represented by very experienced lawyers” and that there should be “reasonable equality of arms”.

On the more recently announced Group Litigation Scheme, set up to provide further compensation for claimants part of the initial High Court action who were not eligible under the HSS, Sir Wyn stressed the need for sift discussions and negotiations, noting the announcement of further compensation payments for the Group Litigation claimants came nearly five months ago.

He said: “It is vital that these discussions and negotiations are undertaken within weeks and should not stretch over many months.”

The update also called for the HSS to be amended to make provisions for interim payments to be made in some cases or when portions of the total amount have been agreed.

Sir Wyn strongly disagreed with the Post Office’s role as final arbiter for interim payments under the Overturned Historic Convictions Scheme – for those who have had convictions quashed – and said that an independent body should determine such claims, as well as any disputes around final payments.