First-class effort: how justice was done in the Post Office Scandal

One cold winter morning in 2015, Freeths partner James Hartley began his day like any other. He got into his BMW, turned on BBC Radio Four’s Today programme and set off for work. Immediately, Hartley heard a name that would soon change his life forever: Alan Bates.

Bates was a former sub-postmaster who ran the Post Office’s branch in Craig-y-Don, Llandudno. He and his wife bought the north Wales base in 1998. Two years later, problems began. The Post Office had just rolled out a new computing system, called Horizon. Provided by Japanese company Fujitsu, the system was designed for tasks such as transactions, accounting and stocktaking. But just months after Horizon was installed in Craig-y-Don, Bates discovered an unexplained variance of more than £6,000.

Only after perusing transaction data printed off on an incredibly long and thin strip of receipt paper did Bates identify what he thought was the answer. An overnight software update caused a duplication of some Giro deposits. But that made up for only £5,000 of the shortfall – there was still £1,000 unaccounted for.

Under the standard sub-postmaster contract, Bates was responsible for any losses caused through his own “negligence, carelessness or error”. Any shortfalls had to be “made good without delay”. But he couldn’t explain the missing money. It wasn’t for lack of trying either: the Post Office had ignored his pleas for greater access to his own branch’s accounting data. 

They were at a stand-off. The Post Office wanted Bates to accept liability for losses, and the sub-postmaster refused. In 2003, the Post Office terminated his contract. 

Despite what the Post Office wanted him to believe, Bates suspected he wasn’t alone in his troubles. He was right, eventually learning he was one of an untold number of sub-postmasters and sub-postmistresses who had their contracts terminated after being wrongly blamed for unexplained shortfalls that would appear on the Horizon system. 

In 2009, he formed the Justice For Subpostmasters Alliance (JFSA), a campaign group driven to expose the Post Office’s cover-up. This group would go on to become the beating heart of a bitterly contested litigation that uncovered what has been called the biggest miscarriage of justice in British history. 

All it took was a call

When he was named on Hartley’s radio that morning, Bates was still a man with a seemingly impossible mission. Surrounded by the fields not far from his house, Hartley already had plenty on his mind. At the time, he and Imogen Randall, then a commercial litigation senior associate at Freeths, had just wrapped up an international arbitration in Serbia and were now in the throes of a big shareholder dispute opposite Mishcon de Reya. The pair were also preoccupied with finding new talent for Freeths’ office in Leeds, which had opened a year earlier.

But something was off about what he had heard on the radio. “I thought, contractually it can’t be as simple as that,” Hartley recalls.

Hartley mulled it over for what was left of his commute. After all, always being on the lookout for new litigation opportunities is part and parcel of being a disputes partner. Once he had pulled into Freeths’ car park, Hartley quickly searched Google for Bates’s number and called him as he walked into the office. After a brief introduction, Hartley arranged a time for a proper chat and to offer Freeths’ legal support.

At the early stage, we didn’t know how long the Post Office would fight for, but we’d assume they would fight for a long time.”

James Hartley, Freeths

It turned out that Freeths wasn’t the first firm to get involved. When Hartley called, the sub-postmasters were already onto their second law firm, Edwin Coe. Before this, Shoosmiths (Access Legal) picked up JFSA’s case, but later dropped it after failing to secure after the event (ATE) insurance. Without it, the claimants wouldn’t be able to pay for the Post Office’s legal costs if their claim was unsuccessful.

Several months after their first discussion, Bates had had enough. Edwin Coe, for whatever reason, was struggling to make headway with their case. It was time to give Hartley a call. 

The two subsequently met for the first time at what Hartley describes as a “not particularly nice” Mercure hotel just off the dual carriageway in Chester. Over afternoon coffee, Bates shared his concerns. For years they had tried and failed to launch legal action against the Post Office, which, they say, stonewalled them at every turn. 

To Hartley, the solution to Bates’s stuttering campaign was a no-brainer. “The only way they will listen is if you will force them to listen, and the only way you’ll be able to do that is through group action,” he recalls telling Bates. A battle like this, however, was going to be hugely expensive, and Bates knew it too. “When I saw James, quite honestly I said to him: ‘Look, we’ve got no money’,” he recalls.

Hartley knew from the outset that to make it work, they would need to find funding. This and ATE are key ingredients to a successful mass attack, which the previously attached firms had struggled to secure for two reasons.

First, the group size. This was long before Freeths stormed the courts with an army of 555 claimants. At the time, Bates had only amassed around 100 sub-postmasters, which wasn’t enough to attract funders. To justify fronting the hefty costs of war and resist being financially burnt by the opponents, the funders needed a lot more Davids to take down this Goliath.

“At the early stage, we didn’t know how long the Post Office would fight for, but we’d assume they would fight for a long time. So, the more funding we needed, the more claimants we needed,” says Hartley. Rallying the troops, however, was a time-intensive task that former firms were either unwilling or unable to invest the time and resources in.

I truly believed for all the legal team involved with this, it wasn’t just a job to them – they knew an awful lot of wrong that had gone on and needed to be exposed and corrected”

Alan Bates 

Another reason was the fact many sub-postmasters had criminal records, and some imprisoned, having been convicted for theft, fraud and false accounting after shortfalls sums reached tens of thousands of pounds. It was a turn-off, particularly for insurers.

Then there were the odds. They were up against the Post Office, a Government-owned entity with deep pockets and a trusted public institution. Hartley knew first-hand the fight ahead of him. Before joining Freeths in 2012, he had been a litigation partner at CMS’s Sheffield office and had advised on an enormous group litigation brought by coal miners against the Government. Having represented the state, Hartley knew that on something significant like this, the Treasury would keep making money available for defence.

Another thing that Hartley needed was Bates’s trust. “He needed convincing that we could pull it off,” the partner recalls. Though they had no other alternative, the credibility of the sub-postmasters’ claim was at stake. “He couldn’t afford for a third law firm to try to take it on and fail,” says Hartley.

With Bates on board, Hartley got to work. By his side was a solid group of dispute lawyers, which over time included Randall, partner John May, then associate Chloe Oram, as well as former legal assistants Nicola Heslop and Angelique Richardson, and then trainee Megan Atack.

Rallying the troops

First off, Hartley had to assemble a core team of counsel to review the merits. He turned to Henderson Chambers to assemble a team that was willing to fight hard and initially for free.

According to The Lawyer’s Litigation Tracker, Freeths has steered clear of having chambers favourites, with Henderson one of several sets to have been instructed by the firm on four cases that have reached judgment since 2015. Three of those are related to the Post Office saga, while another saw junior James Williams act for T-Systems in the Employment Appeal Tribunal in 2015. 

The barristers needed to have faith, and look beyond the claimants’ criminal convictions, which for some could create doubt. “We needed them to believe in these people and genuinely believe in the case,” says Randall. “We needed everybody on the team to never ever, ever doubt a single word – to know that it was all true.”

The set suggested a counsel squad who met with Freeths at its Temple-based chambers. Making the final cut was Kathleen Donnelly, Henry Warwick (who has since taken silk), Ognjen Miletic and Reanne MacKenzie. 

Commanding the team was Patrick Green QC who, according to Hartley, turned out to be the “perfect silk” who could craft creative legal arguments, had a strong cross-counsel team ethic and boasted a successful track record.  

Green is the third most active barrister at Henderson Chambers who, along with chambers colleagues Rhodri Williams QC and James Williams, has been instructed on 12 cases to have reached judgment since 2015. 

These included acting for a group of interveners – Birnie and others – in Gina Miller’s landmark Brexit case in 2016, as well as the Micula brothers in 2017, as they took on Romania over the enforcement of an arbitration award.

The Post Office case was complex. While all the sub-postmasters had been harmed by the Horizon system, they were nonetheless a legally disparate group of people, each holding unique contracts with the organisation. Then there was the lawsuit limitation period, which differed for each claimant, and could only be extended if they could show that fraud and concealment had occurred.

But what they did have was encouraging. First, they had reports produced by forensic accountant, Second Sight, which was appointed in 2012 by the Post Office following increasing complaints and mounting MP pressure. Although its interim review found no evidence of systemic problems with the Horizon software, it did discover “bugs”.

In response, the Post Office later established the Initial Complaint Review and Mediation Scheme, allowing sub-postmasters to raise and resolve their concerns. It was a disaster, with the Post Office accused of rejecting 90 per cent of applications for mediation. “We could tell they were disingenuous about it for quite a while; they were playing lip-service almost to it. There were huge delays and there were huge failures in disclosing information,” says Bates.

In 2015, the Post Office scrapped the Second Sight investigation just one day before its damaging Horizon report was due to be published, ordering them to hand over or destroy all material gathered during its two-and-a-half-year study. It then without notice cancelled the sub-postmaster mediation scheme.

The Second Sight report was damning, finding that the Post Office failed to even identify the causes of shortfalls before launching court proceedings against sub-postmasters. The subject was uncooperative, refusing to handover key documents required for the investigation. The Post Office denied the conclusions and instead published its own 187-page report into Horizon, clearing itself of any wrong-doing.

The legal team also had a DVD copy of the 2015 BBC Panorama documentary, ‘Trouble at the Post Office’. The expose, which was then no longer available online, saw Fujitsu whistle-blower Richard Roll, a computer technician who maintained Horizon, reveal that the system was rife with glitches and errors.

Together this small bundle of evidence was what the lawyers had to go from. But it was enough. “I just thought it was a shocker – we ought to try and help them,” says Green.

With Green and his team of junior barristers recruited and tasked with devising the sub-postmasters’ legal attack, Freeths embarked upon a cross-country roadshow to build its army. “We knew there were a lot of people out there who had been victims of the Post Office, and we needed to find them,” says Bates.

Group meetings between sub-postmasters were a good start, especially as they had already been arranged over the years by Bates and Kay Linnell, an accountant and JFSA adviser. In the following months, Hartley and Randall would meet up to 70 sub-postmasters at a time in hotels and townhalls, usually on Sundays as many still worked at the Post Office during the week. After briefing the crowd and answering questions about their battle plans, they would enlist attendees to their cause. 

These were long and harrowing days. At each meeting, Freeths would hear tragic stories from individuals left broken by the Post Office. “Many of their lives had been ruined,” says Hartley. From sub-postmasters who had lost everything after being bankrupted or imprisoned, some of whom were since unable to secure jobs or proper housing, to those who had lost husbands, wives and family members to stress-related illnesses and suicide. According to Bates, such stories left a number of Freeths’ lawyers visibly upset.

“It gave the lawyers first-hand experience meeting victims in all of this,” says Bates. “I truly believed for all the legal team involved with this, it wasn’t just a job to them – they knew an awful lot of wrong that had gone on and needed to be exposed and corrected.”

It was labour-intensive too. This wasn’t a group action where individuals could just quickly fill in a form and then make a claim. “Far from it,” says Hartley.

Everyone had a different Post Office story to tell, often spanning many years. For the Freeths team, this meant undertaking the massive project of building schedules of claimant information – detailed documents, almost like mini-witness statements. At the Post Office’s later request, half of those collected then had to be revisited, requiring further information about the sub-postmasters’ financial losses. “You’re not just pulling figures out of thin air – so there’s a lot of work to do there,” says Randall.

With PR agency Luther Pendragon, Freeths later launched a national advertising campaign that used radio, TV and Bates’ sub-postmaster mailing list to get the word out.

Getting backers onboard

At the same time, Hartley was working to secure ATE insurance. On his list was Gallagher, a global insurance broker. At their first meeting at Gallagher’s London office, Hartley interrogated Alan Pratten, the broker’s managing director of major risks, M&A and dispute resolution, enquiring particularly about the firm’s approach to policy wording and its relationship with insurers. 

He kept his cards close to his chest, not even revealing the case until much later. “James had a very clear agenda,” says Pratten.

What Hartley needed was a bespoke insurance policy that wouldn’t be violated by some of the claimants’ previous convictions for fraud and theft. Aware of the number of substantive sub-trials ahead of him, Hartley also needed a flexible arrangement that could adjust its maximum estimate for loss as they went along.

It meant scouring international markets for insurers comfortable to discuss the language in their policies. Without this, the litigation could not start. 

Unable to find a sole insurer that could carry the claim, Gallagher secured a syndicate of backers who could spread the cost. What followed was a drawn-out process, lasting nearly a month, that came down to Gallagher getting in a room with insurers, underwriters and claims persons to negotiate the terms. “We ended up changing the insurance policy in excess of 50 areas,” says Pratten.

For finance, they turned to global litigation funder Therium. Founded in 2009 by two former lawyers, the funder was one of the early players in what was then a nascent market. At the time, Therium had experience handling group commercial claims by individuals involved in failed investment schemes, and knew the counsel team having worked with Green before.

Freeths and Henderson, with the help of Hailsham Chambers’ Alexander Hutton QC approached Therium in an “entrepreneurial way”, says one insider, having devoted lots of time to creating an “investment thesis of legal theories” for the funder to consider.

It was a solid game plan relying on previous caselaw. But there was another side the funders needed to consider: the financial analysis. The claimants were seeking damages for financial loss, deceit and duress, among other things – signalling a hefty payday for the funders. But fronting the cash isn’t about playing the odds or having a punt, the numbers needed to work. Before Therium could take the case to its investment committee, it had to rigorously stress-test the claim and pre-empt questions and objections the panel may have.

“We needed everybody on the team to never ever, ever doubt
a single word – to know that it was all true”

Imogen Randall, Freeths (at time of case) 

As with all litigation funding, it was risky. “Cases are finely balanced – there is no such thing as certainty in litigation and definitely not in a funded case. It was plain the sub-postmasters had been poorly treated. On the information provided it was clear there was a case to answer,” says Therium investment officer Nicholas Moore.

That said, going up against the Post Office’s heavy purse wasn’t so much a concern. “A significant state-owned defendant can be viewed in a number of ways. It will fight the case and throw all it has at it, which it did in this case, but it should also be well-advised to achieve effective stakeholder outcomes,” says Moore. Plus, unlike some of its then fledging competitors, the funders were well capitalised, having just announced a £200m private fundraising.

But taking on the complex case while the group action was relatively small was a gamble – one that other traditional funders would then typically avoid. It required Therium to use its imagination, seeing beyond the original group to the size they could eventually become. In 2016, the cash was secured from Therium, with Freeths budgeting around £6m — which it soon found out was nowhere near enough. 

What followed was a year-long mission to lay the groundwork needed to apply for a Group Litigation Order (GLO), which would allow the case to continue through the court as a group action. 

Right away, the lawyers experienced pushback. In response to the sub-postmasters’ 50-page letter of claim, their opponents fired back with a 99-page response. Pulling the trigger was Womble Bond Dickinson on the instructions of Jane MacLeod, then the Post Office’s general counsel. 

The document expressed “indignant and outraged denial” towards matters that subsequent judgments have found to be true. “It’s the longest letter I’d ever seen that denies every single thing that was alleged,” says Hartley.

The exchange began what Hartley describes as a “phenomenal” volume of correspondence, with “thousands and thousands” of letters being sent between Freeths and Womble Bond Dickinson, which also represented the Post Office in 2007. The firm refused to comment on this article.

Communication was just one of the standard court procedures that Womble Bond used against the claimants. But the more the Post Office pushed back, the more that Freeths was determined to dig deeper. “As litigators, that drives us to get to the bottom of it,” says Hartley.

Although it disputed the claims, the Post Office eventually agreed to the making of the group action in principle. In March 2017, Senior Master Fontaine made the GLO. The war had begun.

No-nonsense approach

In Post Office’s corner was a staggering army of lawyers. Manning the fort was Womble Bond Dickinson’s disputes partner Andrew Parsons, backed up by numerous managing associates and associates. Holding the front line was One Essex Court Chambers’ Anthony de Garr Robinson QC and David Cavender QC, and according to Randall, “countless juniors”, including Owain Draper and Gideon Cohen, and 4 Pump Court’s Simon Henderson and Rebecca Keating.

They acted on orders dished out by the Post Office’s in-house legal team, including Rodric Williams, now head of legal dispute resolution and brand, and later Ben Foat, who replaced MacLeod as general counsel in May 2019. According to one source, Bates had previously crossed paths with Williams and was met with a “very adversarial” tone. 

As the conflict continued, reinforcements were called in, with Womble Bond ceding later on to Herbert Smith Freehills’ disputes partner and co-head of class actions, Alan Watts.

As a last resort, the Post Office even summoned two of the country’s most senior silks: One Essex Court chief Lord Grabiner QC and joint-head of Brick Court Chambers Helen Davies.

By the end, the Post Office had four silks on hand. The sub-postmasters had Green.  

Refereeing the group litigation was Mr Justice Fraser – a tall, extremely fit, and according to one of the lawyers, “quite scary” ex-Royal Marines officer who still runs triathlons. He previously practised in the technology and construction court as a barrister.

From the get-go, the managing judge advocated a no-nonsense approach. Following the first management conference (CMC) held in October 2017, Fraser J criticised parties for initially trying to arrange hearings “around the diaries of busy counsel” rather than the litigation – which he described as being a “clear case of the tail wagging the dog”.

He particularly disagreed with the Post Office’s initial idea to drag out procedural hearings for another two years before arranging a substantive showdown. “To describe this approach as leisurely, dilatory and unacceptable in the modern judicial system would be a considerable understatement,” he said.

Delays add to costs, which Fraser J clearly wanted to avoid. He blasted both sides, demanding “a fundamental change of attitude” among the lawyers. “A failure to heed this warning will result in draconian costs orders,” he ruled. 

The managing judge set the dates for two major trials: one in November 2018 to determine the common issues, and another for March 2019 to establish the Horizon issues. “I simply will not tolerate any approach to the litigation that does anything other than seek to resolve these many issues as promptly as possible,” he said.

The pre-trial punch-up

And yet, despite this tight timetable, Fraser J later found the Post Office and its lawyers at WBD “resisted timely resolution” of the GLO wherever possible. 

He pointed to the Post Office’s application to strike out 160 paragraphs of the witness statements – around a quarter of the lead claimants’ evidence. Issued when Fraser J was already preoccupied with the defendant’s contentious security for costs request, it was heard just weeks before the big common issues trial.

The application was seen by the claimants as an attempt to fix the upcoming fight. “We were desperately preparing ourselves for the trial. And then we learn that Ogi and I have to step out and do this hearing, which could change everything,” recalls Green. 

According to Green, he “just kept getting duffed up by the other side all the time, but sort of superficially” over supposedly irrelevant evidence, even before they were actually served. Despite Fraser J’s threats of “swingeing costs consequences” and some dissenting voices within the team, Green persisted. “It was a big, big call,” says Miletic. 

The procedural punch-up culminated in an embarrassing defeat for Womble Bond and its client. Scoring a strike-out requires discharging a heavy legal burden and Fraser J wasn’t convinced. “He did not like that, at all. And he didn’t like having been encouraged to believe their criticisms of us,” says Green.

By strategically tying every contested point back to the common issues and the defendant’s own pleaded case, the claimants managed to pre-empt the Post Office’s “extraordinarily narrow approach to relevance” whereby unfavourable evidence was deemed irrelevant.

Fraser J condemned the Post Office’s costly and counter-productive application as “an attempt to hollow out the Lead Claimants’ case to the very barest of bones” and to keep damaging evidence “from being aired at all”.

He also went on to admonish Wombles’ instructing partner, who in his witness statement expressed concerns that allegations of misconduct would intentionally “generate adverse publicity for the Post Office”. The managing judge retorted that “the court is not a marketing or PR department for any litigant”.

For the underdog claimants, it was a huge tactical win. Upon reflection, Green describes it as the perfect example of “picking your battles really carefully and ideally winning them before you fight them”.  

“Up until that stage, we’d had a bunch of hearings in front of the judge. But they were short, mainly procedural, and everyone is trying to get a feel for the case and the dynamics of different teams. It’s different to being in a long trial when you are essentially living with the case, and everyone in it, day in and day out. To get a win on the first substantive issue, with everything that was at stake, it felt like a real turning point,” Miletic adds.

This and the £100,000 costs order awarded to the claimants was, as Warwick simply puts it, “beautiful”. But warm-up was over. It was now time for the first round: the common issues trial.

The first big fight

The common issues trial centred around 23 contractual and agency issues relating to the relationship between the Post Office and its sub-postmasters, which both sides agreed needed sorting out. Only once these were settled could the court determine where breaches, if any, had occurred.

Providing evidence of how these contracts were enforced in practice, 14 Post Office witnesses were called, and six lead claimants were picked from the 555 – three by the Post Office, three by the claimants. 

The mega-fight was held in one of the largest rooms in the Rolls Building on Fetter Lane. In the ringside seats was an audience of Post Office in-house counsel, journalists, and claimants, including Bates. In the ring: the lawyers. 

From the beginning it was clear how differently the legal teams operated. According to Green, the defence’s approach was akin to “tag-team wrestling”. Having led the charge in the strike-out application, de Garr Robinson was swapped out for Cavender. As he and One Essex Court’s Draper and Cohen fought in the trenches, de Garr Robinson was back in chambers with 4 Pump’s Henderson and Keating strategising for the second round.

The claimants, however, just had one brigade that fought each and every battle. They couldn’t rely on reinforcements. “We all just lived the case. It nearly killed us,” says Green. 

Every day the Henderson squad would eat breakfast together and arrive at court as a group. The exception was Warwick, who would typically arrive by himself early each morning to “get boots on the ground” and to gather the “soft data” about the atmosphere in court that day – the “landscape which you’re going to fight that battle on”. 

When they weren’t in court, the Henderson counsel would gather in what MacKenzie describes as a “war room” – a conference room in chambers “full of Deliveroo” that the barristers took over. “It was disgustingly vile,” she says, with Green adding: “We basically occupied Wall Street in this conference room”.

Within those four walls, Green encouraged his juniors to test out their ideas and feel “completely free to say someone was talking absolute rubbish”. It was a place where hierarchies were broken down and mistakes made weren’t held against you. “We just talked about the evidence, the case, the witnesses. We really lived the documents – we just knew that case inside and out,” says Donnelly, the first junior.

Such camaraderie certainly made the slog easier. Adrenalin could only get you so far over such a prolonged period. The counsel got into a rhythm. Monday to Thursday was spent in court, Fridays and Sundays back in chambers. Late nights were a given. One time during closing submissions, Donnelly left chambers for home at 5am and was back in court two hours later. On another occasion, Green fainted in the war room right before a big cross-examination. But it was worth it. “If you know the judge is going to pick up every tiny point you make, it’s worth carrying on,” says Green.

It was a similar story for the Freeths team, who spent weekends sorting through hundreds and thousands of disclosed documents. They also had to find time for other client work, outside of the Post Office. But the sub-postmasters kept them going. “There are people who have been through far worse – we need to just make sure we do something good for them,” says Randall.

Over four weeks, Green and Cavender fought head-to-head. Like the judge, they were both ex-Royal Marines. According to one insider, the claimant team were killing the cross-examination, with “witnesses going down like ashes on their chairs”.

By early December 2019, it was all over. Three months later, Fraser J handed down his judgment. It was an outstanding victory for the claimants. In his 320-page ruling, Fraser J found, among many other things, that the contracts between both parties were relational, meaning there was an implied duty of good faith in the agreement. Above all, it meant the Post Office could no longer behave in a way considered “commercially unacceptable by reasonable and honest people”.

As for the lead claimants, which included Bates, Fraser J accepted all their evidence. “When you read the Common Issues judgment, I defy you to know who picked who. They tried to pick three people who they thought were dishonest, to try to show that the claimants were all dishonest – but they were all believed,” says Green.

When it came to the Post Office itself, the judge did not pull his punches. 

He targeted the Post Office’s then people services director and its most senior witness, Angela van den Bogerd. The judge described her as a “stark example of how a witness had to force their evidence of fact to fit with a pre-ordained thesis”, noting she remained convinced that no common issues existed between the group rather every case was factually different. 

He then went onto lambast her for deliberately trying to mislead the court. When cross-examined about a document relating to losses the lead claimants had suffered, van den Bogerd sought to come across as unprepared and had “come to the matter cold”. 

In fact, as MacKenzie had skilfully spotted, she had signed a very detailed witness statement a few days before in preparation for the upcoming Horizon Issues trial which dealt with those very issues. It was an example of, as Donnelly describes, “just proper good lawyering” made possible by having the same team on top of the documents across all trials.

Also criticised was Helen Dickinson, the Post Office’s security team leader and fraud investigator who claimed to have never heard of the Enron scandal – one of the biggest frauds of all time. The judge described it as “simply inconceivable”. The fraud expert also appeared incurious about what was behind the shortfalls, claiming to have limited knowledge of Horizon. Hartley was gobsmacked. “That was quite striking because you’re sitting there and thinking, ‘hang on a minute, people’s lives have been wrecked because of this,’” he says.

The judge even called out the National Federation of Subpostmasters (NFSP), a union-like organisation meant to look out for its members’ best interests, which opposed the group action. And yet it transpired that the NFSP was in the Post Office’s pocket, relying on funding subject to ‘claw back’ conditions meaning it was effectively under the defendant’s control. 

Ultimately, Fraser J found there was a “culture of secrecy and excessive confidentiality generally within the Post Office, but particularly around Horizon”. He criticised the Post Office’s “oppressive behaviour” in making sub-postmasters pay-up for losses and found that shortfalls cannot automatically be treated as debt.

The draft judgment was handed to parties in March 2019, three days before the second trial began. It was a much-needed “adrenaline shot” says one lawyer, as immediately it arrived, the Henderson barristers took their laptops and raced down to the war room, where they skimmed through the findings, shouting out their favourite paragraphs as they went along. 

“We were absolutely hysterical,” says Donnelly. “We got in a lot trouble in chambers because there were other conferences going on in neighbouring rooms – and we were just whooping.”

“It was phenomenal,” says Hartley. “It was probably the biggest watershed moment in the history of this whole case.” 

Though the judgment didn’t contain any findings as to breach, causation or loss, it was the first substantive step in resolving the litigation. Still, celebrations were short. “We were in the throes of preparing for the next trial – there wasn’t really time to take a breath,” says Hartley.

Fighting below the belt: the recusal

The second trial’s focus was on the computer issues relating to the operation, functionality and reliability of the Horizon system. Compared to the first round, this fight was more technical and relied heavily on expert evidence.

The Post Office’s position was clear: Horizon wasn’t the problem. Any shortfalls the system showed on the sub-postmasters’ branch accounts, they said, were explicable by their carelessness, fault or criminality.

The judge’s common issues judgment put the claimants in good stead, having decided that the Post Office is the one responsible to investigate and prove unexplained shortfalls – shifting the burden away from the sub-postmasters. But if Horizon was found to be robust, establishing breach would be an uphill battle.

“It was all riding on the Horizon trial,” says Donnelly.

Just two weeks into the trial, however, everything ground to a halt. The Post Office wanted Fraser J out. 

“I remember sitting there in court and seeing in my inbox an email arriving from Womble Bond Dickinson, and attached was an application by the defendant to recuse the managing judge for apparent bias,” says Hartley. “It was completely out the blue.”

Hartley recalls glancing over at Parsons, who was “completely looking ahead, looking at the judge as if nothing had happened. It was just bizarre”.

The Henderson team, too, was in a state of shock, not least because they couldn’t tell Green – he was midway through cross-examination. During the morning break for court typewriters, the lawyers reconvened.

“We were all absolutely astonished at what had happened. We didn’t think it would succeed, but it was a very aggressive move, because if it does succeed, it could completely destroy the foundations of the claimants’ positions,” says Hartley.

As the morning break ended, the team geared up for Fraser J’s response. To their surprise, the judge appeared unfazed. That was because he didn’t know yet – both Fraser J and his clerk were in court all morning. It wasn’t until during lunch adjournment, just before the afternoon session kicked off that he accidentally discovered an application waiting for him.

As Lord Justice Coulson later said of the move: “This was at best discourteous; at worst, it betrayed a singular lack of openness of the PO and their advisors”.

As Fraser J recognised, the Post Office wanted to set aside previous rulings and start again from the beginning with a new managing judge. For the cash-strapped claimants, it would be a “financial disaster”, says Hartley. The application alone had delayed chances of a costs order being made in their favour.

One witness was still under oath, so was allowed to finish his evidence. After that, the trial was adjourned pending the outcome of the recusal application. 

We all just lived the case. It nearly killed us”

Patrick Green QC,
Henderson Chambers

The Post Office’s theory was supported by Parsons, who in his witness statement said Fraser J demonstrated the “clear impression” that the judge had already made his mind-up on matters yet to be tried. The partner complained that the common issues judgment contained “a great deal of invective directed at Post Office” and harsh criticisms of its witnesses.

And yet, the Post Office’s initial application failed to actually identify a single paragraph it took issue with. It was only after a court order and “a flurry of inter-solicitor correspondence” that Post Office cited no less than 109 paragraphs – taking issue with almost everything about how the previous fight had been conducted. 

The hearing was set for April 2019, at which Cavender gave way to One Essex’s Court Lord Grabiner. “They were trying to create this image of him being this wise, elder statesman barrister – which isn’t the thing you should do with someone like Judge Fraser, because he’s not intimidated by anything like that,” says Hartley.

Success depended on the Post Office’s counsel convincing the judge to sack himself for being biased. It was an attack on his professional integrity, and it didn’t go down well at all. 

Fraser J dismissed the application, reasserting his confidence that he could resolve all existing and future issues “in a wholly impartial manner”. In any event, the fact that the Post Office had waited almost two weeks after receiving the draft judgment and had proceeded with witness cross-examination in the Horizon Issues trial, meant it waived any right to make the application. 

“Recusal applications, particularly made in the middle of lengthy trials, are not entirely routine. They ought not to be kept up one’s sleeve,” he said. 

The Post Office didn’t take the loss lying down. Sent to confront the Court of Appeal was HSF, a global behemoth with expertise in big-ticket litigation that had long been lurking in the wings. It was the beginning of the end for Womble Bond, which soon after surrendered control of the case. 

“We took the view that [the Post Office] were either having to demonstrate to Government that they were bringing in another leading litigation firm that hadn’t been involved to give a second opinion on the whole thing and to try pull it around,” says Hartley. “Or the Government had the view that they needed to pull themselves out of it because they were in so deep. If they were completely happy about what Womble Bond Dickinson were doing, they wouldn’t have bothered.” HSF declined to comment on this. 

But even with extra back-up, the Post Office wasn’t getting anywhere. Following a hearing in May 2019, Coulson J denied permission to appeal, adding that the “recusal application never had any substance”. 

The costs ended up the way they did because of the defendant’s scorched-earth approach to the litigation”

Nicholas Moore,
Therium

The Court of Appeal judge also critiqued HSF and its client’s handling of the challenge, noting that the “scattergun way in which the original application was made, now mirrored in the way that this appeal has been pursued, can be seen in the changing nature of the PO’s arguments”, particularly pointing to the differences between the pre-trial skeleton argument and case actually presented before him.

By the end, the Post Office’s mission to expel the managing judge failed. “They thought it was something to scare us – but it was the ultimate sign of desperation,” says Green.

But for the claimants, victory was bittersweet. Delay was draining their cash reserves. “We were constantly running on fumes – we kept exhausting our litigation budget,” says Green. The Post Office “knew we didn’t have a bottomless pit of money”, says Hartley. “There’s absolutely no doubt in my mind whatsoever, they were trying to outspend the claimants,” he adds.

Document dumps and dirty tactics

After the recusal battle, the second trial could get going again. A key part of this was the Disclosure Pilot Scheme, which both sides voluntarily adopted. It meant parties were obligated to disclose known adverse documents, which for the defendants included those referring to Horizon defects. It didn’t, however, require parties to go and search for adverse documents unknown to them. So, whenever the claimants asked for documents that knew or suspected to exist, the Post Office declined. “Which is right, but it’s obstructive and not transparent,” says Randall.

One thing the claimants were sure of was the existence of a ‘Known Error Log’ (KEL); a central log maintained by Fujitsu and provided to the Post Office, tracking Horizon bugs, their impact on the sub-postmasters’ branch accounts and the fixes that were implemented. It was a key piece of the puzzle, highly relevant to the two IT experts called to provide evidence. 

Despite requests made in Freeths’ first letter of claim, Womble Bond balked at disclosure. In letters sent to the claimants, they first questioned the existence of KELs, before conceding but denying their relevance. Parsons then said the Fujitsu documents were beyond the defendant’s control, with de Garr Robinson describing KELs as a “complete red herring”. 

Such resistance continued for over a year before KELs were finally disclosed. A whopping 5,000 documents, far more than were available to the experts, were jettisoned in October 2019, months after the Horizon trial ended. 

“The risk is that the Post Office would eat up all your trial preparation by just giving you loads of new documents as an enormous distraction,” says Donnelly. 

She recalls once “putting on a timer, saying you have to decide whether this is a relevant document or not within a very brief number of seconds. It was to quickly decide: in or out? Relevant or not?”

In the end, it was another crushing defeat for the Post Office. Fraser J found a material risk that shortfalls were caused by Horizon; meanwhile, the legacy version used between 2000-2010 was described as “not remotely robust”. 

He fired at the Post Office from all angles, and in one piercing attack said: “This approach by the Post Office has amounted, in reality, to bare assertions and denials that ignore what has actually occurred, at least so far as the witnesses called before me in the Horizon Issues trial are concerned. It amounts to the 21st century equivalent of maintaining that the Earth is flat.”

Prior to this, the Post Office had sought another appeal against the Common Issues judgment, reeling in HSF once more. However, the application crashed and burned, with Brick Court’s head honcho Davies unable to woo Lord Justice Coulson, who refused the appeal on all grounds. Poking at the Post Office’s self-appointed title as the “nation’s most trusted brand”, the judge instead compared the defendant’s treatment of sub-postmasters to that of “a mid-Victorian factory-owner”. 

That same month, the parties decided to parley. Alternative dispute resolution had been on the table since the beginning – it was included under the GLO terms. But the claimants knew that until they toppled Horizon, they would always be at a disadvantage. With the tables turned, the Post Office was finally keen to reach a resolution. 

The costs of war

Abandoning the Rolls Building battlefield for quarters in HSF’s swish City office, the parties agreed a ceasefire. Overseeing the peace treaty were Blackstone Chambers’ Charles Flint QC and Brick Court Chambers’ Stephen Ruttle QC.

“The atmosphere was very tense because there was so much history to it”, says Hartley.

Before breaking off into different groups, both sides met in a large room. Here, claimants were empowered to speak their truth to the Post Office’s new CEO Nick Read, who replaced former boss Paula Vennells that September. “It was quite powerful,” says Hartley.

Going into negotiations, the legal advice claimants received was sobering. “We knew and counsel knew that they needed to settle from a financial perspective,” says Hartley.

Understandably, some protested. It was an anticlimactic end to a war many had been fighting for decades. They had won two rounds of what could be a five-trial fight. It was inspiring, but realistically, they couldn’t afford to keep on sparring.

“At the end of the day, there was only one real option and we had to take it,” says Bates, having represented claimants on the sub-postmasters’ steering group.

The mediation lasted around 10 days, which Hartley says is “unheard of”. In December 2019, the Post Office announced it had settled the entire lawsuit with an apology and £57.75m in compensation. 

In this case, only £11m or so trickled down to the claimants with most of the money paying for the hefty costs. “Post Office had no control over individual payments made,” its spokesperson says.

“The costs ended up the way they did because of the defendant’s scorched-earth approach to the litigation. We stood behind our clients. The litigation did not need to get that expensive,” says Moore. 

Though the settlement’s financial terms remain confidential, there is one thing critics may overlook. According to Bates, the lawyers, insurers and funders all took a substantial so-called “haircut”.

“We made a material concession to our contractual entitlement within the confines of what our business model allows. We wanted the claimants to receive meaningful compensation as they moved forward to the next step of their overall strategy,” says Moore.

“Getting a return for the investors isn’t a nice to have, it’s an absolute necessity if we are to exist,” says Purslow. Without returns, funders wouldn’t be able to attract future cases, nor the cash needed to back them. “If we can’t deliver returns, we would be out of business tomorrow,” he adds.

If anything it, it highlights inevitable limitations to funding models. “Funding can suddenly give firepower to one side who didn’t have it previously, but one thing it can’t do is make litigation cheaper, or stop the other side from spending money and running up your costs as well,” says Purslow.

Though a paradigm case showcasing the impact of aggressive tactics, until there’s an established precedent allowing claimants to recover funding, defendants will always enjoy the advantage. “The incentive on the defendant to settle is not strong enough, because a well-resourced defendant can afford to sit, roll the dice, wait and try starve out the claimant,” says Purslow.

For certain sub-postmasters, the battle wages on. Though agreed by the claimants in good faith, many feel short-changed by the settlement, and are unsatisfied with the Post Office’s subsequent Historical Shortfall Scheme, which offers some compensation only to select sub-postmasters not involved in the litigation. For Bates and multiple others, they won’t stop until they recover every penny owed to them.

The Post Office saga is many things; a classic tale of David versus Goliath and the “depths some people will go to protect their own position”, says Randall. For the lawyers themselves, it’s a lesson in teamwork. Litigation veteran James Hartley now looks forward to resuming his pre-pandemic daily routine of driving to work. Who knows what he’ll hear on the radio – it may just be his next big case.