Wy HERBERT
MITH
as
Zs FREEHILLS
Herbert Smith Freehills LLP
Strictly private and confidential Exchange House
Primrose Street
London EC2A 2EG
T +44 (0)20 7374 8000
Paul Marshall F +44 (0)20 7374 0888
Cornerstone Barristers E [GRO] @hsf.com
2-3 Gray's Inn Square, Gray's Inn www.herbertsmithfreehills.com
London Ourret
WC1R 5JH 31043483
Date
4 April 2023
By email to [GRO] @cornerstonebarristers.com
Dear Sir
Post Office overturned convictions claim
Your clients: [GRO]
Our client: Post Office Limited
1.
1.1
1.2
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2.2
INTRODUCTION
Thank you for your letter of 23 March 2023 in response to our letter of 2 March 2023. You
also shared with us a copy of your letter of the same date to Mr Hollinrake MP,
the Parliamentary Under-Secretary of State at the Department for Business and Trade
("DBT"), which raises some overlapping issues.
As a preliminary matter, we are bound to note that your correspondence (both to us and to
Mr Hollinrake MP) inaccurately represents Post Office's position in several respects. Doing
so does not advance the swift and fair resolution of issues relating to compensation.
Your correspondence also veers into the contents of discussions that are ongoing between
your clients and Post Office that are without prejudice. Although we are happy to correspond
with you on an open basis if that is your preference, given the policy considerations behind
the without prejudice rule, we do consider it important that all parties respect the status of
without prejudice communications.
Your letters of 23 March were written on an open basis and, as such, this response is likewise
written on an open basis.
ALLEGED DISPARITY IN COMPENSATION AVAILABLE TO GLO SETTLERS
The thrust of your complaint appears to be that Claimants with overturned convictions who
settled their claims in the GLO are worse off because their remaining claims are confined to
claims for malicious prosecution.
We have some difficulty with that suggestion. Putting to one side the fact that the exception
for malicious prosecution in the Settlement Deed was agreed, it is difficult to see how any
Herbert Smith Freehills LLP and its subsidiaries and Herbert Smith Freehills, an Australian Partnership, are separate member firms of the international legal practice
known as Herbert Smith Freehills
Herbert Smith Freehills LLP is a limited liability partnership registered in England and Wales with registered number 0C310989. It is authorised and regulated by the
Solicitors’ Regulation Authority of England and Wales. list of the members and their professional qualifications is open to inspection at the registered office,
Exchange House, Primrose Street, London EC2A 2EG. We use the word partner of Herbert Smith Freehills LLP to refer to a member of Herbert Smith Freehills LLP,
or an employee or consultant with equivalent standing and qualifications.
NW egserr 2p 2023
Letter to
ez SMITH
INS FREEHILLS Paul Marshall
24.
2.5.
3.2
3.3
alternative cause of action would give rise to damages over and above those already
recoverable for malicious prosecution.
In our letter of 2 March 2023, we expressly requested that you identify the head(s) of loss
which GLO settlers ought to be compensated for but which they are unable to recover as
damages for malicious prosecution. You have not done so. Although we have noted your
references to the tort of abuse of process, unlawful interference with the right of appeal and
breaches of the Human Rights Act, unless you say that claims based on those concepts
would sound in additional damages over and above those already available for the tort of
malicious prosecution, then your concerns are unwarranted.
If you do say those claims would result in additional damages, please could you set out the
additional damages said to be recoverable and explain the basis on which they would arise.
Post Office will then, of course, consider them and let you know its considered position on
each.
For its part, in making offers of compensation, Post Office does not propose treating GLO
settlers any differently to non-GLO settlers save to ask that GLO settlers give credit for sums
already received (as to which see below).
DEDUCTIONS OF PAYMENTS MADE IN RELATION TO THE GLO SETTLEMENT DEED
We note your assertion that Post Office is "seeking to claw back (by set-off) from convicted
claimants ...sums received by them from other non-convicted claimants who were
compensated under the terms of the December 2019 settlement deed. . .". Similarly, at page
7 of your letter to Mr Hollinrake, you have referred to Post Office "seeking to . . . set-off, under
the OHC scheme, sums paid" in relation to the December 2019 Settlement Deed (as
described in your letter of 10 February 2023).
This is an improper reference to the contents of without prejudice communications regarding
compensation payments which we assume was included in open correspondence in error.
However, putting that to one side, had you asked Post Office to set out its position in relation
to the deduction of GLO receipts on an open basis, Post Office would indeed confirm that it
considers that sums paid to convicted Claimants out of the global settlement paid by Post
Office to settle the GLO proceedings do fall to be deducted from the compensation now being
offered. If that were not the case, those Claimants would be compensated twice in respect
of the same claims. We are surprised by your objection to this both as a matter of principle
and of law.
As a matter of principle, making the relevant deductions will ensure that GLO settlers are
fully restored to the position that they would have been in had they not been wrongfully
prosecuted. Further:
3.3.1 If compensation for overturned convictions did not take into account the sums
already received by GLO settlers, that would create its own disparity in that GLO
settlers would receive more than their non-GLO counterparts leading to inequality
(a point which, in other contexts, you appear to agree with).
3.3.2 Non-convicted GLO settlers are in no way disadvantaged: they will still be
compensated in full under the DBT ex gratia scheme. The net financial effect is
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the same as if the convicted GLO settlers had returned their GLO receipts to the
Steering Committee for redistribution across the non-convicted Claimant Group.
Collectively, Post Office and DBT are not in any way financially better off: what
they "save" by making deductions will simply be spent paying additional
compensation to the non-convicted GLO settlers in the DBT scheme.
3.4 As a matter of law:
3.4.1
3.4.2
3.4.3
3.4.4
3.4.5
The fundamental principle governing damages is that a claimant is entitled to
recover their actual loss and that financial gains accruing to the claimant that they
would not otherwise have received must be taken into account.’ This is an
axiomatic principle in the assessment of damages and exceptions are construed
narrowly.?
We acknowledge that there are some exceptions to this principle, including the
"benevolence exception"? to which you refer. The benevolence exception applies
where a claimant has received a gratuitous payment from a third party source (i.e.
not the tortfeaser himself) as a mark of sympathy and assistance. Typical examples
include financial support received from a charity or a family member.
We do not consider that this exception applies in this case. Here, the payments in
question were made by Post Office itself and came from the global cash settlement
made by Post Office under clause 2.1 of the GLO Settlement Deed.
The GLO Settlement Deed did not make any provision as to how the GLO
Settlement Sum would be apportioned between GLO settlers. While it was noted
that no cash payment was being made to or for the benefit of any "Convicted
Claimant" under clause 7.1, it was equally acknowledged that it was open to the
GLO settlers to agree between themselves how such sums would be apportioned
and that Post Office had no control over that agreement.
Post Office is not privy to the terms agreed between the GLO settlers and those
managing the litigation on their behalf as to how the GLO cash settlement would
be apportioned between them. We would, however, be surprised if there was no
contractual mechanism in place governing that apportionment or if the application
of that agreed mechanism resulted in zero sums being allocated to the convicted
claimants. If you contend otherwise, please can you explain the mechanism
pursuant to which the settlement sum was apportioned, who in fact decided what
share your clients received and confirm whether the non-convicted claimants were
ever asked whether they were willing to make a gratuitous payment to the
convicted claimants. The latter seems unlikely in circumstances where you have
1 Gaca v Pirelli General plc and others [2004] 1 WLR 2683 CA, paras 10 and 16.
2 Hodgson v Trapp [1989] AC 807, 819
3 See, for example,
paras 13- 40.
the discussion of this exception in Pirelli General Plc v Jan Gaca [2004] EWCA Civ 373,
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4.3
stated elsewhere that the terms of the Settlement Deed were positively withheld
from claimants like your client Mr Castleton on confidentiality grounds.
3.4.6 Please also provide copies of all relevant documentation evidencing the above
including but not limited to:
(A) all contractual documentation relevant to the apportionment mechanism
agreed;
(B) all documentation held by your client evidencing how the actual
apportionment was carried out; and
(C) all correspondence from the GLO Steering Committee to your clients
relevant to the apportionment.
3.4.7 In any event, we do not consider that this situation is akin to the authorities involving
the benevolence exception that you have relied upon. For example, the case of
Redpath v Belfast and County Down Railway [1947] NI 167 (referred to in several
of the judgments you have cited), involved monies paid to a victim of a railway
disaster from a charity fund created by members of the public. The Court
commented that part of the rationale for the exception was that, if such funds were
deductible, then "the inevitable consequence in the case of future disasters of a
similar character would be that the springs of private charity would be found to be
largely if not entirely dried up.” It is unclear how such a rationale would apply in
this case given that the source of payment was the Post Office.
3.4.8 Similarly the dicta of Mr Justice Neuberger (as he then was) in Hamilton-Jones v
David & Snape [2004] 1 WLR 924, which you have quoted, have limited application
to the current situation. That case concerned the question of whether travel costs
incurred by the claimant were recoverable in circumstances where those costs had
been paid for by the claimant's mother “out of natural love and affection". Here,
however, the source of funds was Post Office, and we expect those funds were
apportioned in a fashion that was not simply gratuitous.
3.4.9 The case of Dennis v LPTB [1948] 1 All ER 779 in fact illustrates the
inconsistencies in your position. In that case, the Court's award, which did not
deduct the benefit received, was made conditional upon the claimant repaying the
benefit it had received to the third party.
ADVERSARIAL, ATTRITIONAL LITIGATION
You have also suggested to Mr Hollinrake MP that claimants are locked in "attritional
adversarial litigation". That is incorrect.
There are no litigation proceedings on foot. By contrast, Post Office has proactively made
available interim payments of £100,000 (later increased to £163,000 for those who had yet
to receive compensation in respect of their non-pecuniary damages). Further, since the
ENE, the majority of claims in respect of non-pecuniary damages have been settled, usually
within 28 days of being made. Finally, in the interests of transparency and to make it easier
to claim, Post Office has proactively shared with Claimants the principles it proposes applying
when making offers for pecuniary claims and invited Claimants' feedback.
Such a process cannot be fairly described as attritional, adversarial litigation or a zero-sum
game. While there may be some scope for disagreement regarding the application of the
4 [1947] NI 167 at 170.
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legal principles to the assessment of quantum, the underlying objective — to ensure that all
claimants are properly and fairly compensated for the injustice which occurred — is agreed.
Finally, we disagree with the suggestion that HSF has a professional duty to secure "the
worst deal possible" for victims. As has been made clear in its public statements, Post Office
considers that its interests are best served by in fact doing the right thing and making offers
of compensation which are full and fair. Without waiving privilege, it would plainly not be a
breach of professional duty for a solicitor to carry out an instruction to that effect.
LEE CASTLETON
Finally, we note that you have referred in your letter to Mr Hollinrake MP to the civil judgment
against Mr Castleton which has yet to be set aside.
Post Office has been offering since the conclusion of the GLO settlement to sign a consent
order setting aside Mr Castleton's civil judgment. Further, even though Mr Castleton's claim
in respect of the costs of his civil trial was technically settled under the GLO Settlement Deed,
DBT have confirmed that compensation in respect of that claim is available under the ex
gratia DBT Scheme for GLO settlers. If you wish to wait until that claim has been dealt with
by the DBT Scheme before proceeding with the set-aside of the judgment, that is a matter
for you and your client. However, in circumstances where Post Office has repeatedly offered
to take the steps necessary from its perspective to set the judgment aside, you cannot
complain that Post Office is dragging its feet.
We further note that you have complained that the GLO Settlement Deed was withheld from
Mr Castleton on grounds of its confidentiality until May 2020. We assume it is not being
suggested that Post Office was responsible for any withholding of the Deed from your client.
For the avoidance of doubt, Post Office was not and is not privy to the arrangements in place
between the claimants in the GLO proceedings and those who represented their interests in
connection with the settlement.
CONCLUSION
We hope the above helps to clarify Post Office's position and to correct any
misunderstandings.
If following your response to this letter there remain any issues or areas of disagreement
between Post Office and your clients as to the levels of compensation to which they are
entitled in respect of their non-pecuniary losses (we await receipt of your clients’ pecuniary
claims), Post Office is content to refer those matters back to Lord Dyson for a further Early
Neutral Evaluation if that would assist in resolving matters.
In the meantime, we will of course continue to engage with you in without prejudice
discussions on a collaborative basis so that progress can continue to be made towards fair
compensation payments to your clients as quickly as possible and we have written to you
separately in relation to that.
Yours faithfully
Nubut- Sch Freckle LLP
Herbert Smith Freehills LLP