9b
POL00268479
POL00268479
Confidential and legally privileged advice
Do not disclose, forward, scan or copy WOMBLE
BOND
DICKINSON
Bates & others v Post Office Limited
Recusal Note
Introduction
Post Office is actively investigating its legal options for responding to the Common Issues trial judgment
(CIT Judgment). The orthodox response to an adverse judgment is an appeal on legal and / or
procedural grounds. It is recommend that Post Office pursues both these appeal routes.
A more immediate and potent option is to consider whether Mr Justice Fraser's findings are so unfair as
to warrant recusing him on grounds of bias. We set out below the grounds for, and effect of, a recusal.
Advice has also been sought from the Rt Hon Lord Neuberger, who was until 2017 the President of the
Supreme Court, being the most senior Judge in the UK. His advice is summarised below. We have
also instructed Lord Grabiner QC who would appear in any application for recusal, and he has reviewed
this paper and will be available to discuss the proposed recusal application with the Board on the call at
5.15 pm on Monday 18" March.
Basis_for Why would Post Office seeking a recusal?
The Post Office legal team (including Counsel) are concerned that Mr Justice Fraser's judgement
demonstrates bias against both Post Office and its witnesses such that there is a real risk that Post
Office will not receive a fair trial — particularly in the current Horizon trial, and possibly in the subsequent
3% and 4" trials to be held later this year and in early 2020.
Most critically, if the Judge is prejudiced against Post Office and remains the Judge presiding over the
proceedings then there is a real risk that Post Office will not get a fair hearing on the issues arising in
the trial process from now on.
The Judge has heavily criticised several of Post Office's witnesses in the CIT as being unreliable. He
has developed a theory that Post Office is secretive and only interested in wee al ition, which then.
drives the way its witnesses give evidence. These criticisms are, in our view, [I unfair. Itis a
major concern that the Judge will carry across this thinking into subsequent trials and no matter who
gives evidence for Post Office they will never [not?] get a fair chance. Of particular concern is that
Angela Van Den Bogerd is a key witness for Post Office. She was heavily (and in our view, unfairly)
criticised in the CIT and is giving evidence again in the Horizon Issues trial on Monday, 18 March 2019 —
which puts the presentation of our case on Horizon immediately on the back-foot.
There must be a real risk that unless this opportunity is taken to remove the Judge, he will continue, and
Post Office will be stuck in an unfair trial process. It can then expect adverse findings on key issues.
going forward in future trials including the ongoing trial about Horizon and the third and fourth trials
scheduled for Autumn 2019 and March 2020. Moreover, future trials will be focused on factual findings
father than legal findings. Pure factual findings are much more difficult to appeal, even if unfair and
plainly wrong, and rarely overturned by the Court of Appeal. _If Post Office does not seek to recuse the
Judge now, it is very unlikely to have the opportunity again and may not even be able to appeal later
adverse factual findings on orthodox appeal grounds.
‘AC_154825881_1 1
POL00268479
POL00268479
Page 1 Comments
JM1 This implies that we think some of them are fair?
Jane MacLeod, 16/03/2019 05:52 PM
POL00268479
POL00268479
10 I As we have already seen wth the Common Issues Judgment, adverse findings are likely to have a
profound, impact on Post Office.
rat « There may be findings that would (unnecessarily) severely constrain Post Office's ability to
operate and develop its business and / or cause Post Office to incur significant costs of.
operational change. For example, an adverse finding in relation to Horizon could make
recovering losses in branches very difficult and force Post Office into spending significant sums
fe-designing the system.
12 « Post Office could be exposed to significant compensation claims dating back 20 years which will
clearly be material. Before the CIT Judgment radically altered the landscape, we were content
that there were well-established legal principles that would have substantially limited
compensation claims to a lower level.
13 e The brand damage for Post Office could be severe and irreparable.
14b I In the words of Lord Neuberger, Post Office's concem is that "the Judge made findings of fact [...] in
such a way as to betray a prejudice against the PO which justify the PO objecting to his continuing to
15 I hear these proceedings.". Set out in Appendix [_], are examples of the statements and language which
ive to these concerns.
16 I A recusal application is also consistent with, and lends support to, any wider appeal that Post Office may
wish to make. In considering whether to appeal the judgement (which wil be the subject of the a
separate Board discussion at the scheduled Board meeting on Monday 25 March 2019), Post Office will
need to consider:
17 « Whether the Judge has correctly applied the law in relation to contractual interpretation when
considering the meaning of the Postmaster contracts; and
18 e Whether in his conduct of the trial there has been an "procedural unfairness". The CIT
Judgment was meant to be about contractual interpretation. In law, what occurs after a contract
is formed cannot be relevant to an enquiry as to what the contract means. Yet Mr Justice
Fraser makes wide findings of fact on post-contractual matters which then influence is findings
as to the meaning and effect of the contract.
19 I If Post Office is to forcefully assert procedural unfairness, it would be inconsistent to not apply for
recusal too as the prejudicial findings of fact and adverse comments of the Judge are evidence (Post
Office says) of both bias and procedural unfairness. To make one application without the other would be
inconsistent and weakens each position.
20 I What is the test for recusal?
The test for recusal is ‘whether the fair-minded and informed observer, having considered the facts,
would conclude there is a real possibility that the [Judge] was biased’.
21 I While applications for recusal are not frequent, they more usually turn on conflicts of interest such as a
judge or a member of his family have a financial interest (such as shares) in one of the parties. In
[describe British Airways case .....eq the judge was asked to recuse himself as British Airways had
recently lost his luggage on a flight and in Court he persisted in asking Counsel acting for British Airways
what had happened to his bags etc and that was held by the Court of Appeal to be sufficient to conclude
that there was a real possibility that he was biased against British Airways and should be recused.....]
22 I [what else should we say?’
14a
23
AC_154825881_1 2
POL00268479
POL00268479
Effect of recusal
24, 25 I If successful, and depending on timing, the application for recusal would remove Mr Justice Fraser from
hearing the remainder of Horizon trial, as Managing Judge in charge of the GLO proceedings, and from
26 I hearing the third and fourth trials. aad-Hhe would be replaced with a new Judge who had overall conduct
of the Post Office Group Litigation.
If the application for recusal is successful it is likely (although not certain) that parts (at least) of the
findings Made in the CIT Judgment would be struck down. We anticipate that the CIT Judgment would
remain binding until considered by the Court of Appeal, who should be able to make their own
determination on the issues. A further plausible outcome of the recusal application (if successful)
together with an appeal of CIT Judgment could be a full re-trial of the CIT, effectively starting again
before a new Judge. We consider this unlikely as what the Court should have done at the CIT is to
determine issues of law (i.e. interpretation of the contracts and determining any terms to be implied)
and the Court of Appeal is in as good a position as the trial judge to do this.
Depending on when the recusal application is heard, it may also cause the ongoing Horizon Issues trial
to be suspended and / or re-tried by a new Judge.
Prospects of success
Post Office was represented at the CIT by David Cavender QC who has been engaged for over a year.
Mr Cavender's view is that it is difficult to see how the litigation can be proceeded to a sensible (and fair)
conclusion before this Judge. He has behaved (and is apparently continuing to behave in the current
Horizon Issues trial) — evidence ? in a manner which can only fairly be described as biased against Post
Office. [ as opposed to being a neutral
tribunal oversee
N
a
an adversarial process:
Given the seriousness of a recusal application, Post Office has sought a further opinion from an
independent lawyer, Lord Neuberger. His Lordship is well placed to advise on these matters having
been President of the aSupreme Court Judge[-and—during-thattimehaving-gi ber ot r
30, 31
32
Having been briefed by Mr Cavender and read the CIT Judgment, Lord Neuberger's view is that:
33, 34 I "[For-allthe-reasons-set out above] I consider that there are reasonable grounds for PO to bring
an application to recuse the Judge in these proceedings."
In his advice, he also offered a cursory and impressionistic view of the wider matters that could be
appealed and commented that:
“at least some of them raise quite significant points on which the PO has a reasonable case, and
at least on the face of it, some points on which the PO has a pretty strong case.”
Post Office has also briefed a further senior silk, Lord Grabiner QC. Post Office has taken such a step
as Lord Grabiner can appear as an advocate for Post Office at any appeal / recusal application whereas
35 I Lord Neuberger, being an ex-Judge, cannot._[Lord Grabiner has reviewed the relevant papers and will
be able to discuss the proposal and his view of it at the Board]
AC_154825881_1 3
POL00268479
POL00268479
Page 3 Comments
JM2 Can we reword this paragraph? We are making a couple of different points:
* Ts the effect of recusal that those sections of the judgment that demonstrate
bias would be struck out, or is this a consequence of the (wider) appeal?
* Tf we think a full re-hearing is unlikely, then lets phrase it that way
* Depending on timing, Horizon trial would be suspended. Is there any other
option to a re-hearing — if not, then this becomes automatic?
Jane MacLeod, 16/03/2019 05:04 PM
JM3 Can we re-position this along the line that: the Judge’s role is to oversee an adversarial
process where each party is required to (a) make their own case, and (b) challenge the
case of the other party, against a framework of agreed facts and issues. The judge has
adopted a much more inquisitorial style and is allowing and, in some cases, directing
evidence on matters outside this agreed scope, and is then making findings of fact and
drawing conclusions without having allowed Post Office to put its case on these issues.
Jane MacLeod, 16/03/2019 05:22 PM
JM4 Are these recusal issues or appeal points?
Jane MacLeod, 16/03/2019 03:56 PM
POL00268479
POL00268479
g -
IThe brand-d Post.O! Id-b ss
Impact on appeal strate,
Importantly, part of any appeal of the CIT Judgment would be for "procedural unfairness". The CIT
Judgment was meant to be about contractual interpretation. In law, what occurs after a contract is
formed cannot be relevant to an enquiry as to what the contract means. Yet Mr Justice Fraser makes
wide findings of fact on post-contractual matters and this seems a fundamental flaw in his judgment. If
Post Office is to forcefully assert procedural unfairness, it would be inconsistent to not apply for recusal
too as the prejudicial findings of fact and adverse comments of the Judge are evidence (Post Office
says) of both bias and procedural unfairness. To make one application without the other being made is
inconsistent and weakens each position.
Lord Neuberger also notes in his advice that if Post Office wishes to rely on the ground of procedural
unfairness at an appeal with the hope that the Court of Appeal might direct a different Judge to conduct
future trials, then "PO has little option but to seek to get the Judge to recuse himself at this stage”.
Aside from the above legal points, we would also note that several of Post Office's witnesses, many of
whom are long serving employees, were good enough to give evidence in Court for Post Office and
37 I have now had their reputations tarnished.
Risks of a recusal application
38 I There are legal and reputational risks with making a recusal application.
39 I The principal legal risk is that the recusal application is unsuccessful (at first request and in the Court of
Appeal) and then Mr Justice Fraser becomes emboldened and openly hostile to Post Office. This
increases the risk of further adverse findings.
It should however be noted that even making the recusal application may have the opposite effect — it
40 I may make the Judge more cautious and receptive to Post Office's arguments, because he will be under
gan ae and this is nate to be the case whatever the outcome of rier aton-
AC_154825881_1 4
POL00268479
POL00268479
Page 4 Comments
JM5 We will need more than the few throw away lines that I’m aware of, to demonstrate
that this is a real risk ...
Jane MacLeod, 16/03/2019 06:01 PM
POL00268479
POL00268479
If the recusal application is unsuccessful, any consequential costs incurred by the Claimants would need
to be paid by Post Office. These could be significant if the Horizon Issues trial is delayed i
up to £2m). However, the more likely scenario is that the
As we note above, a re-
trial of the CIT is an unlikely outcome and not one that is necessary. In the event that the Judge is
recused a re-trial of such parts of the Horizon Issues trial that have taken place is likely, but the wasted
costs will likely be costs in the action generally.
41 I Outside of Court, making a recusal application is likely to attract significant media attention and is likely
42 I to be portrayed asmayreinforcinge the Judge's comments that Post Office is "arrogant". We would
note however that there is no guarantee that staying quiet now will protect Post Office's brand from
repeat attacks in later judgments.
Process & timing
An application for recusal needs to be made to Mr Justice Fraser himself. He may hear the application
or ask another Judge to hear it — the latter is unlikely. It is highly unlikely the Judge will recuse himself
on the first application, so Post Office should not proceed with this course of action unless it is prepared
to appeal the refusal to the Court of Appeal immediately.
Post Office should make the decision on recusal urgently - preferably not later than Monday with a view
43 I to setting the wheels in motion with both the Court and the Claimants’ solicitors early in the to-mid-next
week. The urgency is driven by the unfortunate trial sequencing ordered by the Judge and the fact he
44 I handed down the draft CIT Judgment on the Friday before the Horizon Issues trial commenced on the
Monday. A delay in making the application could undermine its prospects of success, because it would
be inconsistent to continue with the Horizon Issues trial if Post Office believes the Judge to be acting
unfairly.
9a
Once the application is made, the actual steps in any recusal process are harder to predict as it depends
how the Judge decides to deal with the matter and, indeed, how the Court of Appeal decides to
approach the issue too.
A recusal application might however encourage the Court of Appeal to move quicker on the main
appeal. These issues are all interconnected and the Court of Appeal is unlikely to want to leave a
recusal application hanging over the litigation for an extended period. This is not certain, as the Court of
Appeal may choose to run the recusal and orthodox appeal separately. An expedited appeal would
have many advantages, including that it would help limit the amount of operational change Post Office
needs to implement in the short term to comply with the CIT Judgement, which may be wasted cost if
the judgment is overturned on appeal.
Recommendation
Although a recusal application is difficult and comes with substantial risks, for the reasons stated above,
both Mr Cavender and Womble Bond Dickinson recommend that the application is made as soon as
possible.
AC_154825881_1 5
POL00268479
POL00268479
Page 5 Comments
JM6 This doesn’t make sense — why wouldn’t it be delayed?
Jane MacLeod, 16/03/2019 06:02 PM
POL00268479
POL00268479
WOMBLE BOND DICKINSON
[16 March 2019]
‘AC_154825881_1 6
Track Changes
4
© MN DH RW ND
ow wow MNYNNYNNHNNNN B= Basa an aan aw a a
N32 606 0N O89 GK ON FOC GO ®FNODAKR OR AGT
Insert
Change
Delete
Insert
Insert
Insert
Insert
Insert
Move
Insert
Insert
Insert
Insert
Move
Insert
Insert
Insert
Insert
Insert
Insert
Insert
Insert
Delete
Insert
Change
Change
Insert
Insert
Insert
Change
Change
Insert
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
16/03/2019 04:40 PM
16/03/2019 04:47 PM
16/03/2019 04:47 PM
16/03/2019 04:47 PM
16/03/2019 04:44 PM
16/03/2019 05:51 PM
16/03/2019 05:51 PM
16/03/2019 05:51 PM
16/03/2019 06:07 PM
16/03/2019 05:51 PM
16/03/2019 05:51 PM
16/03/2019 05:51 PM
16/03/2019 05:51 PM
16/03/2019 04:47 PM
16/03/2019 04:44 PM
16/03/2019 04:50 PM
16/03/2019 04:51 PM
16/03/2019 04:52 PM
16/03/2019 04:50 PM
16/03/2019 04:47 PM
16/03/2019 04:56 PM
16/03/2019 05:56 PM
16/03/2019 04:47 PM
16/03/2019 04:59 PM
16/03/2019 05:00 PM
16/03/2019 05:00 PM
16/03/2019 03:50 PM
16/03/2019 05:22 PM
16/03/2019 05:22 PM
16/03/2019 03:51 PM
16/03/2019 05:46 PM
16/03/2019 05:47 PM
POL00268479
POL00268479
Track Changes (Continued)
33
34
35
36
37
38
39
40
4
42
43
44
Change
Insert
Insert
Change
Delete
Insert
Insert
Insert
Change
Change
Change
Insert
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
Jane MacLeod,
16/03/2019 03:51 PM
16/03/2019 03:51 PM
16/03/2019 05:48 PM
16/03/2019 05:50 PM
16/03/2019 05:59 PM
16/03/2019 06:00 PM
16/03/2019 06:00 PM
16/03/2019 06:01 PM
16/03/2019 06:03 PM
16/03/2019 06:04 PM
16/03/2019 06:04 PM
16/03/2019 06:05 PM
POL00268479
POL00268479