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Memo
If you have any questions concerning this
memo please telephone the number below
To: Stephen Dilley cc: Laura Peto
From: Denise Gammack Ref: DEG1\SIR2\348035.134
Date: 29 September 2005
Claim against Mr Lee Castleton
I know that we have already had a brief discussion about this matter, and I have passed you
the files already. I did say I would also let you have a memo outlining the background
issues, which I set out below.
If you need any more general information about these sorts of claims that CMS are dealing
with I am sure that Laura will be able to help you. You may also be able to get some
assistance from your relatives!
I set out the main issues below:
Background
CMS have been passed bulk instructions from Royal Mail (via Stephen Lister) to prosecute
sub-postmasters/mistresses for losses that Royal Mail say occurred during the course of their
employment. Indeed, the losses normally lead to their dismissal.
Traditionally, Royal Mail’s approach to this has been to prosecute the former employee for
theft and to get them convicted, to make a public showing of the fact that these losses will
not be tolerated. However, the focus now is very much on recovering the money rather than
obtaining a conviction.
The contracts that these employees sign have a clause in them which effectively states that
after their employment has ended, the former employee is liable to repay Royal Mail any
losses found to have arisen at the sub-post office. In the first instance Royal Mail tries to
recover these from the former employee direct and when that correspondence fails, the
matter comes to us to issue proceedings.
That is what has happened in relation to Mr Castleton.
Mr Castleton’s Case
Mr Castleton was dismissed from his position at the Marine Drive sub-post office in
Bridlington, Yorkshire when it was found that his sub-post office had suffered losses in excess
of £25,000. Initially Mr Castleton considered employment tribunal proceedings for unfair
dismissal but decided against it.
Initially, Royal Mail did try to recover this loss from him direct but, as you will see from the
correspondence, he has always denied that any loss exists at all. Mr Castleton’s position is
that the “loss” has been created by errors within the computer system that the sub-
postmasters/mistresses use to operate the sub-post office.
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This computer system is called Horizon. Royal Mail are in the process of removing this
system so that a new, more streamlined one, can be installed instead. However, for the
purposes of this case Horizon is the relevant system.
Mr Castleton insists that if he can be provided with copies of records showing the daily
transactions made on the Horizon system while he was at the sub-post office, he will be able
to use them to show that the “loss” is a fiction created by errors in the system. Mr
Castleton’s solicitor claims that his client currently has only one week’s worth of such print
outs, and has already sent them to an expert.
The expert has been instructed to prepare a report to confirm Mr Castleton’s case. We are
going to be sent this on a without prejudice basis once it is finalised and 1 expect it to arrive
shortly.
Our client is aware that the temporary sub-post office staff that replaced Mr Castleton
suffered no problems at all with the Horizon computer in question.
Disclosure
Clearly, disclosure of the computer records maintained while he was at the sub-post office
and an examination of the system itself are crucial in this case. However, disclosure has also
been a particular problem in this matter. Mr Castleton has repeatedly requested copies of
documents that were taken away after an investigation at the sub-post office was completed
and insists that these will include the daily records he needs. We have asked Royal Mail
repeatedly to disclose everything that they can find but this turns out to be more difficult
than one might anticipate.
When Royal Mail investigate sub-postmasters/mistresses for losses, they have an
investigation team which comprises various people in several different offices. This means
that paperwork gets spread out between them, and sometimes gets lost, and even
sometimes gets destroyed. In addition Royal Mail put a lot of documents into a storage
system and to get items out of it they have to pay the storage facility to do that. Royal Mail
do not like doing this, at all, and tries to avoid it.
This issue was raised at a training day that I recently attended where we emphasised to
Royal Mail the importance of disclosure and they acknowledge that they need to get
themselves re-organised in this respect. You may wish to have a look at a case called Post
Office v Mehida which does deal specifically with this issue.
The most recent correspondence that I have had from Cheryl Woodward at our client gives
me the impression that they may well want to pull out of these proceedings. They say that
they cannot locate anymore relevant documents and they want to see the other side’s expert
report. I have told them that we will send it when it arrives and that in the meantime we
need to deal with the ongoing Court proceedings.
The Court Proceedings
Proceedings were commenced in the Scarborough County Court. Mr Castleton subsequently
filed a Defence and Counterclaim for losses incurred as a result of losing his employment
which should not have happened because there is no loss. This Counterclaim is not
quantified but is limited to £250,000. As a result of this the claim has now been transferred
by the Court to the Queens Bench Division in London.
The matter has been allocated to a Master Fontaine, as yet no further directions have been
received. Royal Mail prefer to use particular barristers in relation to these matters and for
this one I have lined up David Craig at Devereux Chambers. He was recommended to me by
Mandy Talbot (who I know you have already met) and his clerk confirms his general
availability although I have not yet sent him any papers. David Craig was involved in the
Mehida case above and so is well aware of the problems relating to disclosure.
Contacts
Our main client contact in this matter is a debt recovery investigator at the Chesterfield office
named Cheryl Woodward. I normally contact her by e-mail on
Cheryl.woodward@, 7
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Mandy Talbot is aware that this matter has been transferred to London and has requested
that she be copied in to all further e-mails. In addition she needs to be sent a scanned copy
of the expert report, when that comes in.
Mandy tells me that in previous cases where Defendants have alleged problems with the
computer system, reference has been made to the amount of telephone calls recording
complaints made to the service desk and where there have been none such defences have
failed. I know that in this case we have such records on the file from Fujitsu, who used to
operate the Horizon system for the client.
Mandy has also given me the contact details for a Keith Baines at Fujitsu who may need to be
called on to provide a witness statement. Mandy has indicated that as Fujitsu no longer
operate the Horizon system he may not be as co-operative as we would like, nevertheless I
do have his contact details, which are:
Keith Baines
Post Office Limited
Second Floor
Calthorpe House
15-20 Phoenix Place
London
WC1X 0DG
Next Steps
I should be grateful if you would assume conduct of this matter and continue to progress it
further. I am sure that Laura will be able to assist you where necessary with preparation of
documents, etc. I will let Cheryl know that I am leaving and I will give her your contact
details instead.
If you have any further queries before I leave please let me know.
While I have been assisting CMS with this matter they have continued to prepare the bills for
me, on a monthly basis. I will leave it to you to decide whether or not that can continue!
Regards.
Denise Gammack
Solicitor
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