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23 April 2019
THE POST OFFICE GROUP LITIGATION
BOARD LITIGATION SUB-COMMITTEE: 24 APRIL 2019
This paper is supplemental to the Board paper prepared by the Post Office legal team (Post Office
legal, Womble Bond Dickinson and Counsel). In this brief paper, we set out where we agree and
disagree with the advice of the Post Office legal team, focusing on the specific points of difference
and decisions that need to be made imminently.
QUESTIONS
1. Should the Common Issues judgment be appealed?
2 On what grounds should the Common Issues judgment be appealed?
3: Should the Common Issues appeal be conjoined with the Recusal appeal?
4. At what point should the Post Office seek to settle the litigation?
RECOMMENDATIONS
1. Should the Common Issues judgment be appealed?
11 We agree with the Post Office legal team that the Common Issues judgment should be
appealed. We agree that there are good prospects of successfully appealing parts of the
Common Issues judgment. Fundamentally we agree that an appeal improves the Post
Office's position in any discussions to try to settle the litigation.
2. On what grounds should the common issues judgment be appealed?
2.1 At present we agree with the Post Office legal team's view on the aspects of the Common
Issues judgment that should be appealed. This is a preliminary view, as we are not yet able
to express definitive views on the Common Issues appeal and therefore must defer to the
legal team's better knowledge of the issues in dispute. However, we will have an opportunity
to provide input and seek to refine the appeal in due course.
2.2 In particular we agree with the legal team's view that the appeal must be legally coherent and
those findings which are impracticable operationally going forward will need to be addressed.
2.3. Wealso agree that the Post Office should present an appeal which will most likely be granted
permission and therefore appealing findings on relatively untested areas of law (i.e. the
relational contract point) will be important.
3. Should the Common Issues appeal be conjoined with the recusal appeal?
3.1 This comprises two interrelated sub-questions:
3.1.1 Should the Post Office bypass an application to Fraser J and submit an application
for leave to appeal the Common Issues as soon as possible so that it is considered
by the same judge (Coulson J) alongside the application for leave to appeal the
Recusal?
3.1.2 I Assuming permission is granted in both applications what is the Post Office's position
on having both appeals conjoined so that they are heard by the same panel of Court
of Appeal judges?
3.2 The questions are interrelated as it is likely that if the response to 3.1.1 is "yes" then the Court
of Appeal will inevitably conjoin the two appeals and have them heard together. If the answer
to 3.1.1. is "no" and we follow the present timetable, the Court of Appeal will likely already
have made the decision on whether or not to grant permission in the Recusal appeal before
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the application for leave to appeal the Common Issues judgment is filed on 6 June 2019
(assuming Fraser J refuses leave). The Court of Appeal may still decide have both appeals
heard together in this scenario under its case management powers (and there is little the Post
Office can do about this) but it is less likely.
3.3. While it is a matter of judgment, on balance we disagree with the Post Office legal team's
view that the Post Office should submit its application for leave to appeal the Common Issues
now so that the Court of Appeal hears both appeal applications together. We also disagree
that it is advantageous to have both appeals heard at the same time by the same panel of
Court of Appeal judges. At Annex 7 is a table summarising our views on the positives and
negatives of having both applications for permission to appeal considered together and the
substantive appeals conjoined.
3.4 Our primary concerns with the legal team's proposed approach are as follows:
3.4.1. The Post Office's primary focus should be to succeed in the Common Issues appeal.
It is therefore important that the grounds for the Common Issues appeal are not
rushed and completed in the next two weeks. Instead adequate time needs to be
given to presenting the best appeal case possible.
3.4.2 _ It is in the Post Office's interests to slow down the court process to allow time for
settlement. A fast-tracked Common Issues appeal may impact the settlement
process, in particular on the Claimants' side, if the parties are too heavily engaged in
preparing for an appeal to focus on settlement discussions.
3.4.3 Wedo not agree that the Common Issues appeal will be of great help to the Recusal
appeal and we think that there must be a risk that the Court of Appeal will refuse
permission in the recusal application if it is in a position to deal with the substance of
the matter in the Common Issues appeal at the same time. In addition, there is a risk
that the Recusal appeal taints the Common Issues appeal.
3.4.4 We do not think that the Post Office should discount the reaction of the Managing
Judge, who at present will remain in place for Trials 3 and 4, if the Post Office is
seeks leave to appeal directly from the Court of Appeal. In addition, it is difficult to
see the Managing Judge using the appeal application to bolster his Trial 1 findings.
3.5 At Annex 2 is an indicative timeline showing the various timescales should the appeals be
heard separately or conjoined.
4. At what point should the Post Office seek to settle the litigation?
41 We agree with the commercial objective of bringing the litigation to a close as quickly and
cost effectively as possible.
4.2 In particular we agree with the legal team's Option B: appeal the Common Issues judgment
and look to commence settlement discussions once permission is granted but before the
appeal is heard. An outstanding Common Issues appeal before the Court of Appeal will likely
cause the Claimants concern that their position will be weakened by the Court of Appeal —
possibly resulting in them becoming more amenable to settlement.
4.3 We note that the timing of any eventual settlement will need to be considered, as the Post
Office may well wish to have the Court of Appeal's judgment on the Common Issues appeal
prior to any global settlement to avoid letting Fraser J's unhelpful judgment stand.
44 If Option B fails, we agree with Option A: complete the Common Issues appeal and use that
as a platform to settle.
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4.5 If the Post Office is unsuccessful in the Common Issues appeal, settlement as a negotiated
exit is still likely to be more favourable than a Trial 4 judgment. The precise strategy in this
scenario will need to be discussed but will depend on factors such as: the outcome of the
Horizon Trial, the outcome of Trial 3, whether the Common Issues are appealed in the
Supreme Court, the pressure that can be put on the Claimants to evidence actual causation
and loss for each SPM.
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ANNEX 1
Legally Privileged and Confidential
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Is it in the Post Office's best interests to apply to the Court of Appeal at the same time for permission to appeal in both (i) the recusal of Mr
Justice Fraser and (ii) the Common Issues trial; and, assuming permission is granted, to have both appeals heard concurrently? In other words
should the appeal in the Common Issues trial be fast-tracked to catch up with the recusal appeal?
Issue Yes
No
Success on I There is a risk of Fraser J refusing permission to appeal
Common Issues the Common Issues and in doing so making further
unhelpful comments which bolster his Trial 1 judgment.
In general, a party loses nothing from seeking permission to
appeal from the lower court and losing that application. It is
difficult to see how the Judge can substantively bolster his
Trial 1 judgment.
The Court of Appeal may exact particular scrutiny on
Fraser's findings in the Common Issues trial if aware of
the nature and detail of the recusal application.
The Common Issues are central to all claims in the litigation.
Adequate time is required to prepare fully thought through
Grounds of Appeal. The recusal application is secondary to
the Common Issues. A more well thought through Grounds
of Appeal will have a stronger chance of success.
The Court of Appeal may see the Post Office fighting every
point at every turn if it is considering recusal and Common
Issues together; leading to a view that the Post Office is
oppressive.
Recusal is a high threshold — there is a risk of the Court of
Appeal being in that mind-set when considering the Common
Issues appeal — and possibly being defensive of Fraser J.
Having only one panel of judges involved means that there is
added pressure on the constitution of that panel. If the panel
is not pro-Post Office the risk of negative findings on both
appeals is enhanced. Two appeals and two panels gives the
Post Office two bites of the cherry.
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Success
recusal
on
The application for permission to appeal the recusal
decision may be enhanced by the same Lord Justice
seeing the Common Issues Grounds of Appeal. The
number of errors of law reinforce that the recusal appeal
is substantial — and justified.
An application for judicial recusal is exceptional and there
must be a significant risk of the Court of Appeal agreeing with
Fraser J in this case. Also, if the appeals are conjoined, it is
perhaps more likely that the Court of Appeal will deny the
recusal appeal on the basis that any relief for the Post Office
is best provided via the Common Issues appeal.
The Court of Appeal may dismiss the recusal application
but seeing the issues in the judgment in the context of
the Common Issues appeal which, while not evidence of
bias, are evidence of a somewhat compromised judge,
may be persuaded that a different judge should hear the
remaining cases.
If the Post Office loses the recusal appeal, the Court of
Appeal may still (of its own motion) direct as part of its
Common Issues appeal judgment that a different judge hear
the remaining trials.
Success in later
trials
Bypassing Fraser J when a consequential hearing has been
fixed may result in further animosity from the judge in Trials 2,
3 and 4.
Future operations
A swift resolution of the Common Issues will mean that
the Post Office has certainty in its SPM contractual
obligations and can implement any required changes
quickly to stem the flow of future claimants.
If the Post Office's objective is to reach a compromise
position with both Claimant and non-Claimant SPMs, keeping
the appeals separate will slow the Court process and allow
further time for a resolution to be reached.
Settlement
If the Common Issues appeal goes well it will put the
Post Office in a stronger negotiating position more
quickly.
An outstanding appeal also gives the Post Office a strong
negotiating position as it will cause the Claimants to consider
if their position will be weakened by the Court of Appeal —
possibly resulting in them becoming more amenable to
settlement. If the Post Office fast-tracks its appeal and loses
on certain key issues, it will not be in as strong a negotiating
position.
A negative Court of Appeal decision on recusal will
strengthen the Claimants' and the Judge's resolve, which
will be unhelpful going into any settlement discussions. It
Slowing down the timetable is in the Post Office's interests.
Any steps that can be taken to put a pause on Trial 4 in
particular should be carefully considered. An outstanding
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will also result in a further costs order. If the Court of
Appeal needs to list the recusal appeal and Common
Issues appeal together it will likely take longer than it
would otherwise to obtain a recusal judgment.
appeal in the Court of Appeal on the Common Issues is a
basis to adjourn Trial 4.
Expense
publicity
and
There is little chance of Fraser J giving permission on
some (if not all) of the grounds of appeal — bypassing
that argument reduces costs and minimises adverse
publicity.
There is likely to be adverse comment from the Judge at the
May hearing if he is bypassed, potentially leading to negative
publicity for the Post Office.
Lower expenditure to have the recusal and Common
Issues appeals heard together
Given the potential claim value the cost of having two
separate Court of Appeal hearings should not be
determinative.
Having both appeals heard together may result in the
separate counsel team on recusal sitting in the Court of
Appeal for the full duration of the Common Issues appeal
doubling up on costs.
It may happen in any event given the cross-over of
issues. The Court of Appeal may not want to consider
the same points twice.
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