Friday 15 March 2019

The Verdict: Judge delivers devastating blow against Post Office in first trial.


The Bates v Post Office class action (more correctly known as Group Litigation Order or GLO) has now reached the end of the first stage. 

Former subpostmasters who have been sacked and/or charged and/or jailed for theft, fraud or improper accounting are claiming that the errors revealed by the Horizon computer system and audits were all due to errors within the system, and that there was no fraudulent activity.  The situation goes back at least as far as 2007.

The first trial, which started in November 2018, is known as the Common Issues Trial.  This centres around the relationship between Post Office Ltd and the individual SubpostmastersTo borrow from Nick Wallis's excellent reporting on postofficetrial,

In very broad brush strokes, the JFSA appears to be saying that the Post Office is responsible for putting Subpostmasters in a horribly disadvantaged situation, which was so unfair as to be unlawful.

The Post Office appears to be saying it followed its contract with its Subpostmasters to the letter and didn't do anything wrong. It is particularly keen to deny its contract with Subpostmasters is "relational" or in any way "tortious".

On the claim form, which summarises the case against the Post Office, the claimants (mainly Subpostmasters, but including some Post Office employees and Subpostmaster assistants) say they "have been subjected to unlawful treatment by the Defendant causing them significant financial losses (including loss of their business and property) bankruptcy, prosecutions, serving community or custodial sentences, distress and related ill-health, stigma and/or reputational damage."
And Mr Justice Fraser has delivered a devastating blow to Post Office Ltd.  Patrick Green QC for the claimant calls judgment an "incredible vindication" of the Subpostmasters and a very important legal decision in the findings against the Post Office.  One lawyer called this a "clean sweep" for the claimants. The lead solicitor called this a "huge judgment in more ways than one".

If you have a few hours to spare, the entire judgement is now on the official website here.

Meanwhile here are a few highlights:

"§1113.  "he Post Office is not entitled to act in a way that would be considered commercially unacceptable by reasonable and honest people.

"§1116. I find that the Post Office is not therefore entitled to rely upon the Branch Trading Statements, for any period in respect of which a SPM notified a dispute to the Helpline, as a settled account between agent and principal."

"§1117. Suspended SPMs were not paid for their period of suspension but in order to keep their branches open had to pay Temporary SPMs to run them. Even if reinstated, they had no right to be paid their remuneration for their period of suspension.  I find that the Claimants are correct and the Post Office was required to act in accordance with the implied duty of good faith in these contracts (as a result of their being relational ones) in exercising its power to terminate the contracts.

"§1119.  In [the new post-2011] contract the extent of contractual liability of a SPM was sought to be increased by the Post Office very substantially, and to entitle the Post Office to recover losses from SPMs regardless of any fault on their part.  I find that this clause fails the test of reasonableness in the Unfair Contract Terms Act 1977, which governs these contracts, and the Post Office is not entitled to rely upon it."

Second trial
The Horizon trial is the second trial in the Bates and others v Post Office group litigation at the High Court.  It is being held between 11 March 2019 and 4 April 2019 at the Rolls Building in London. Mr Justice Fraser is again presiding.

This trial includes witness statements from Sub-Postmasters, employees of Fujitsu (who provided the Horizon system to POLtd), and Second Sight, the company that was engaged by POLtd to carry out a review of the system to identify problems, and which was sacked by POLtd before the report could be made public, and directors of which gave evidence to a select committee of MPs, as did POLtd managers and their Chief Executive Office, Paula Vennells.

Ah yes, Paula Vennells: CEO of Post Office Ltd who, in January 2019 was awarded a CBE and in February was appointed as a non-executive board member to the Cabinet Office.  At the end of February she announced she was leaving POLtd to join Imperial College Healthcare NHS Trust as its Chair in April.  She leaves POLtd "fighting a class action which has the potential to sink it. Paula Vennells' award and the appointments have outraged dozens of former Subpostmasters who hold her ultimately responsible for what happened to them - variously sacked, criminalised and ruined." ( - Nick Wallis).

You can read more about the progress of the second trial here and follow daily reports live from the court, from Nick Wallis. 

UPDATE 22nd March.   I can best relate yesterday's happenings by a verbatim copy from Nick Wallis's blog today:
What a week. A blistering judgment, revelation after revelation, and then this: the nuclear option......
Right now we're still reeling from the Post Office's attempt to have the judge recuse (sack) himself on grounds of apparent bias. It seemed to come as a surprise even to the Post Office's own QC, Anthony de Garr Robinson.
At 2.02pm, after the usual lunch break, the judge walked into court and said: "I have received an application,
 Mr De Garr Robinson.  Do you know about it?"

Mr de Garr Robinson replied: "My Lord, I know that there has been an
 application, that is almost all I know."

The judge explained: "It is
 an application for me to recuse myself as being the managing judge in these proceedings which means
 effectively.... for this trial to stop.
 Although the application says "adjourn the trial",
 I think it really means start it again with another

To say this is beyond extraordinary barely touches on it. The judge rose to give Mr de Garr Robinson a chance to try to work out what was going on. He returned ten minutes later to be told that Lord Grabiner, not Mr de Garr Robinson, would be acting for the Post Office in the application.

 Read Nick's Day 8 summary here, and today's write-up with comments from people affected here -

Horizon trial: Je recuse

I've been thinking about what it means going forwards, and this application does several things (even if it is unsuccessful), all of which favour the the Post Office.

First of all it buys them time to work out what their strategy is going to be in the face of the first judgment, which they clearly haven't got straight yet (which suggests the judgment was a big surprise).

It massively ramps up the cost for the claimants and, I think, most importantly it means that any eventual settlement in favour of the claimants will be less than it might have been before the recusal application was put in.

Now - since I tweeted something similar yesterday a few people have suggested I am wrong about this, but I had a lengthy conversation with a couple of legal types near the Rolls Building yesterday (chuck a brick round there and you're almost guaranteed to hit a lawyer - and sued), who helped me with my working out.

This is how I came to my conclusions: the claimants are funded by a group who, if successful will want a return on what their risky and very large investment.


  1. In good old time honoured traditions did Paula Vennells go or was she pushed, sorry helped to find alternative employment elsewhere at a higher pay band or at another pay band with enhanced benefits?

  2. And the Post Office response

  3. Does anyone know why these litigation proceedings are not being reported in the media?

    1. The judgement on the first case was widely reported in local media from the claimants' press release. Some local newspapers (Shropshire Star was one) also reported it in relation to a local SPM whose story had already been covered.

      It was also covered by the Computer Weekly (which has been covering it since 2005) FT, Mail, Sky, Channel 4, 5 & ITV. But not the BBC.

      But as Nick Willis said, it is very much a 'so what?' so far. IF there had been 500 claimants outside the Courts in the Strand on Monday, it would have had greater coverage, but most of them wouldn't or couldn't attend, either through ill-health or cost - bearing in mind they would have had to buy train tickets on the day because nobody knew when the judgement was coming.

      And of course Brexit (I did vow not to talk about that here!) hogs all the headlines. And of course when the judgement was delivered last Friday, there were much more important matters to cover from Christchurch.

      The legal press and websites have perked up following yesterday's application by the POst Office for the judge to recuse himself. I must add that to the blog post!

    2. BBC London covered it earlier this week.

  4. Meanwhile in other news... which doesn’t seem to have been widely reported

    1. So an income of £86,000 a year was somehow not enough?

  5. If at first you don’t succeed try again

    1. And while the Court of Appeal considers whether to allow an appeal against Justice Fraser’s refusal to recuse himself, it has already said that the show must go on, and the Horizon Issues part of the trial, which the recusal applies interrupted, should continue to the agreed timetable. Which suggests that POL probably asked for that to be delayed pending the result of the appeal.

  6. and another fault

  7. oh dear!

  8. Post Office settles IT ‘fraud’ case for £58m


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