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PAUL MARSHALL.
2-3 GRAY’S INN SQUARE,
GRaAY’s INN
LONDON
WCIR JH
[GRO]; _ GRO
Cieiksr 0207 212 W800
23" March 2023
Dear Minister Hollinrake,
Re: The Post Office and Compensation Arrangements
After careful reflection, I am writing to you in connection with the compensation arrangements for
victims of the Post Office. I suspect that you, perhaps more than almost any member of the
government, understand, as does Sir Ross Cranston, the intractable problems that result from flawed
and unfair compensation schemes.
This letter is long, it is nonetheless important. It is necessary for me to refer to some (limited)
law. While I am conscious that you are not a lawyer, the law referred to is only to support a more
general proposition. IT am conscious that you are ably assisted by the lawyers of your department.
T have the privilege to represent several of the Post Office’s victims, including Tracy Felstead,
Janet Skinner and Seema Misra, all of whom, on prosecution by the Post Office, were falsely convicted
of offences of dishonesty. Tracy Felstead was wrongly convicted of theft more than 20 years’ ago. I also
have the privilege of representing Lee Castleton, the victim of a false civil claim in the High Court of
Justice in 2006 in which judgment was given against him on false and misleading evidence in 2007. The
Post Offfice recovered a costs order for £321,000 against Mr Castleton on a claim for £26,000. ‘That
precipitated his bankruptcy, from which he has only very recently been discharged. The ci
judgment
against him remains to be set aside. As a result of the Post Office’s actions, for several years he was
compelled to earn his living working where he could in the country, living out of his car. He rarely sa
his family; his daughter nearly died as the consequence of her illness caused by the blighting of her
family’s life, the destruction of her father’s livelihood and his reputation in his community, and the loss
of his life savings. In 2006 the solicitor for the Post Office promised Mr Castleton that should he defend
the (false) claim against him, the Post Office would ruin him. It did so. The solicitor was then of the
firm Bond Pearce LLP, the firm that lateras Bond Dickinson advised the Post Office in 2013 in
connection with the Post Office’s notification of its insurers of risk in connection with Mr Gareth
Jenkins’s evidence. Later still, then known as Womble Bond Dickinson, the firm acted for the Post
Office in the Bates GLO litigation. (Mr Castleton the first of the GLO clain
May 2020, the settlement deed under which the litigation against the Post Office was settled in
ts to receive, only in
My clients are separately represented in the Williams’ Inquiry by other counsel and Hodge Jones & Allen.
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December 2019. Until then it had been withheld from claimants in the litigation on grounds of its
confidentiality.)
The reason for my now writing to you is because the Department of Business and Trade
(hereafter DBT), as the government department responsible for the Post Office and to which it reports,
is best placed to engage with and address the issues to which I shall refer.
ngements are unfair to the
ingly cl
Post Office’s many victims, including those represented by me. I believe that the p'
Ttis be ur that the existing compensation arr:
pming incr
sition will shortly be
reached where the present arrangements will be recognised as no longer tenable/sustainable. My second
reason for writing to you is that I am anxious that, even as the existing compensation arrangements, such
iage of justice
as they are, are being put into effect, there is a second serious and widespread misca
unfolding, that to date has received virtually no attention. This might matter less, were it not for the fact
injured by the Post Office as long as two decades’ ago. Some
that victims include those grievously
victims, as Sir Wyn Williams recently has publicly recorded, have died, uncompensated for the injury
inflicted upon them by the Post Office. The government owns the Post Office.
ind
of regret by the Post Offi
approach to the payment of compensation. Its approach and conduct, through
1n public avow
As I shall show, there is a plain disparity betw
its present conduct in its
its solicitors Herbert Smith Freehills LLP, remains strikingly similar to the studied injustice that it
perpetrated over many years. It remains aggressively acquisitive, including on legal grounds that do not
withstand scrutiny. That should cause concern, loudly resonating as it does with, for example, the false
vears (that included reversing the burden of
legal arguments relied upon by the Post Office over many
proof - which resulted in the ruination of Lee Castleton) but that were eventually rejected by Mr Justice
fi judgment in 2019: Bates and ors. v Post Office Ltd (No. 3) [2019]
EWHC 606. As I shall explain, this extends to the Post Office (wrongly
victims it is compensating, credit for damages paid to others of its victims under the 2019 settlement of
er in his “Common Issu:
in law) now claiming, against
the GLO litigation. As they say, ‘you couldn’t write it. This should be a matter of public concern. It
goes without saying that the position now adopted by the Post Office on matters of law, that are plainly
wrong, but that intended to secure an improper (unlawful) benefit and advantage for the Post Office,
does nothing to inspire confidence in its publicly avowed commitment to properly and fairly compensate
its victims, quite the reverse.
With my learned junior, Ms Flora Page, and my instructing solicitors Aria Grace Law, in
November 2020 I was alone in identify
ing, from material late disclosed by the Post Office in the criminal
appeals, that the key events in this tragedy occurred in 2013. These included my eliciting evidence
beyond that then available to the CCRC, that the Post Office had engaged in ‘second category’ abuse of
of the court. That separate ground of appeal, in the teeth of sustained opposition from
That
the proc
others, was eventually upheld by the Court of Appeal in April 2021 in 39 of the 42 appe:
finding by the court was likely to have been a central consideration in the government's decision from
May 2021 to elevate the inquiry chaired by Sir Wyn Williams to a full statutory inquiry. Contrary to Mr
v Post
aser’s perception of the Post Office’s position, described in his judgment Bates and or
Yo. 6) Rev 1 2019 EWHC 3408 as having been in 2013 one of “dreadful
complacency”, in truth the Post Office’s energetic evaluation of multiple problems, and of its own
Justice Fi
Office Horizon Issues (
knowledge, resulted in late 2013/early 2014 in a decisive shift in strategic approach. That change was
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not only to its prosecution of its postmaster and employees’ but also, critically, in the light of its
knowledge in 2013, in its treatment of those whom in the past it had prosecuted and others against
whom it had taken enforcement action (further, Part II below). Mr Justice Fraser did not have the
advantage of full, or, indeed, proper, disclosure of documents from the Post Office (below). This is of
continuing importance for reasons I shall explain. In other important respects, Fraser J. was misled,
including as to the reason for the absence of Mr Gareth Jenkins at the Horizon Issues trial as a witness
for the Post Office. (So far as is known, the false and misleading explanation given by the Post Office to
the court for his absence has never been corrected.)
For convenience, the extant compensation (in its generic sense) schemes are (1) arrangements.
administered by the solicitors’ firm Herbert Smith Freehills LLP, solicitors for the Post Office, for
“Overturned Historic Convictions” (“OHC cases”); (2). the scheme shortly to be announced by the
Department for Business and Trade for those who were claimants in the Bates v Post Office Group
Litigation Order (GLO) civil litigation, that resulted in settlement of civil claims under a deed of
settlement of December 2019, but who were not convicted of offences (the “GLO scheme”); and (3)
claims for compensation for victims of the Post Office (by various enforcement action) who were (i) not
convicted on Post Office prosecutions and who additionally (ii) were not parties to the GLO litigation
settled in 2019 (the “HSS scheme” - a non-adversarial compensation scheme, also overseen by Herbert
Smith Freehills).
For the purposes of brevity, I shall confine myself to making two main points. The first has four
subsidiary points. The second main point is one that the government is powerless to address. It
nonetheless in my view should be a matter of considerable public concern.
PARTI
THERE IS A DISPARITY IN TREATMENT BETWE
OFFENCES ON POST OFFICE PROSECL
LITIGATION, COMPARE PH THOSE WHO WE!
WERE ALSO CLAIMAN’ 1E GLO LITIGATION.
WI
ID
It is incontestable, as I shall show, that those who were convicted on Post Office prosecutions, as present
arrangements stand, are being and are likely to continue to be disadvantaged. That position is incapable
of being justified and it offends against ordinary conceptions of justice and fairness. The disparity in
treatment, as I shall explain, is manifest both procedurally and substantively.
dd) Procedurally, vi
tims of malicious prosecution by the Post Office - continue to be engaged in
tims of Post Office prosecutions - victims of miscarriages of justice and ex
ial litigation ‘toe to toe’ with the Post Offi represented by Herbert Smith Freehills
LLP - the fact of which I have been recently reminded of by HSF. Litigation is a ‘zero sum.
game’ in which the Post Office’s solicitors are professionally duty bound to secure the best
Explained by Mrs Paula Vemnells C.B.E. to Mr Darren Jones M.P. Chair, BEIS Select Committee, in June
2020.
In the sense of not established by judgment; but the factual basis for malicious prosecution as arguable is the
premise of claims for damages and the Post Office paying these.
(2)
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outcome and to act in their client's best interests. Necessarily, those interests are the very
’s
opposite of those of the Post Offic ictims.
at victims of the Post Office should be locked in attritional adversarial litigation with the
wrongdoer, as represented by a leading international and national firm of solicitors, with
effectively unlimited resources through the public purse, offends against a sense of faimess.
This
which in public statements has been said to be intended to put participants in the scheme
in sharp contrast with the government's GLO scheme, administered through DBT,
(applicants for compensation - not litigants against DBT), so far as money can, in the position
that they would have been in, but for the wrong done to them by the Post Office. That
contrasts starkly with HSF’s professional duty to its client - namely, to secure the best
deal/settlement it can for the Post Office and the correlatively worst deal possible for its
victims. Tam allowed by Miss Tracy Felstead, who was imprisoned in 2002 on false evidence
and who has suffered life-changing permanent injury as a result, to tell you that she feels
“unable to go on”. Is that surprising? Her entire adult life for the past 22 years has been
blighted by the Post Office. How can this situation possibly be justified? It is unacceptable. As
I shall show, she is confronted by legal arguments for reducing compensation payable to her by
the Post Office that are simply wrong, I doubt she is alone.
‘That procedural disparity in treatment is not simply formal. It manifests itself substantively.
‘The most obvious way in which this disparity is to be seen is that, because claimants in the
GLO scheme were the recipients of compensation paid by the Post Office under the terms of
the 2019 deed of settlement for the GLO litigation (that settled those claimants claims), the
GLO scheme has been explained to Sir Wyn Williams, by counsel for the government, to be
an ex gratia scheme. This contrasts with the OHC scheme which is concerned with claims for
damages in law that are payable to OHC litigants. That is to say compensation under the
GLO scheme is not to be paid as of right, but as a matter of fairness (explicitly in recognition
that claimants in the HSS scheme will otherwise do much better than those who were
claimants in the litigation - that gave rise to the HSS scheme (it is a term, perhaps oddly, of the
2019 settlement)). That means that the 2019 settlement deed and its terms are necessarily
disregarded for the purposes of paying compensation under the DBT GLO scheme. What is
in issue, accordingly, is not the legal classification of the harm inflicted (which is of the utmost
importance in the OHC scheme) but the amount of damage inflicted and the appropriate
amount of money that should be paid in recognition of that harm and ‘to put them in the
position that otherwise they would have been in, but for that harm’.
‘The result is that compensation is available to an applicant under the DBT GLO scheme for a
loss suffered/injury inflicted, regardless, as a matter of strict law, that a particular head of loss
has been compromised/surrendered under the terms of the 2019 settlement. This is not a
formality. For those claiming compensation for malicious prosecution in the OHC scheme,
the Post Office’s stated position is that all heads of claim other than malicious prosecution
(which was the only head of claim preserved to convicted claimants who were parties to the
GLO litigation) were compromised in 2019 and are thus not available heads of claim/loss.
That leads to the remarkable result that the DBT ex gratia GLO scheme offers a prospect of
fuller and on the face of it ‘better’ compensation than is available to those whom the Post
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Office prosecuted, because GLO claims for compensation are not restricted and cut-down by
the terms of the 2019 settlement deed.
In Ma
the 2019 settlement deed, that convicted GLO claimants recei
y 2020, for the first time, it emerged that it had been explicitly agreed under the terms of
ed not one penny from the
Post Office under the settlement sum that it then (in 2020) paid. That, regardless of the fact
that under those terms they surrendered all their other claims against the Post Office (e.g. for
breach of contract etc.) - with the sole exception of the residual right to claim malicious
prosecution. Even then, only upon the contingency of an appeal court quashing their
conviction - a pre-condition for any claim for malicious prosecution.
Once again, this is no mere formality. Much of the injury and harm inflicted by the Post
Office upon its vietims was the result of the Post Office’s strategy of concealment and cover-up
- from not later than 2013 and arguably 2010 - that resulted in years of delay up to the
“Horizon Issues” trial in 2019 before Mr Justice Fraser, and the consequent appeals to the
Court of Appeal in March 2021. Lord Hughes in Attorney General’s Reference No 2 of 2001
[2003] UKHL 68 noted that delays in appeals take effect in that “...years of a defendant's life
are blighted. He cannot have them over again; they are gone forever”. It is arguable that that
strategy of concealment denying for years as it did to those the Post Office had wrongly
I that
convicted of offences, access to the courts by keeping from them disclosure of materie
cast reasonable doubt upon the safety of their convictions, is an actionable abuse of process.
entirely separate and discrete from their malicious prosecution. That intentional tort (legal
wrong) ordinarily would carry a right to claim both aggravated and exemplary damages. The
position of the Post Office for convicted claimants is formally stated to be that any such claim.
is precluded by the terms of the 2019 deed of settlement and is thus not available to a
convicted GLO claimant. That contention is offensive to an ordinary conception of justice
and fairness.
‘That position is indefensible. Mr Lee Castleton has a mirror image complaint in connection
with the fraudulent civil claim brought against him in 2006 and the Post Office’s concealment
and withholding from him, from not later than 2013 (and strongly arguably, long before then)
of information and material that would have enabled him to appeal the judgment against him.
He also has a claim for compensation for malicious prosecution (albeit his was a civil claim)
that was (perhaps surprisingly) formally compromised under the terms of the 2019 settlement
deed. Those claims are not constrained or precluded under the GLO scheme. That is
because under the DBT GLO scheme, in which Mr Castleton is a registered applicant for
compensation, the 2019 settlement deed and its terms are necessarily disregarded in ass
essing
and paying compensation. This position, and disparity in treatment of those seeking to be
compensated for the harm inflicted upon them, is incapable of rational justification.
‘The public would be very surprised, I imagine, to know that convicted postmasters, the victims
of miscarriages of justice and maliciot secution by the Post Office (for that is what founds:
s pr
their (residual) claims) are worse-off and stand to receive less by way of compensation than
those who were not prosecuted. But their position is in fact worse than that, as I shall explain.
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(3) A further illustration of how convicted postmasters, whose convictions were subsequently
quashed on appeal, are in a worse position and treated less favourably than those who were
pa
from the fact that claimants who were parties to the GLO litigation who had been convicted of
rties to the GLO litigation but who were not prosecuted and convicted, arises, once
offences, surrendered all their rights and claims against the Post Office for nothing (i.e. no
compensation at all) save a preserved, but contingent, right to claim against the Post Office for
malicious prosecution, should an appeal court in due course quash their conviction for being
(That is a right that was existing and preserved (i.e. the remnant of their other claims all
of which the
urrendered on settlement.) To that extent, convicted postmasters would have
been better-off had they not been parties to the GLO litigation.
I have a client to whom that applies, i.e. they were convicted and imprisoned and had their
conviction quashed on appeal - but they were not a party to the GLO litigation. Accordingly,
their claim for damages is more extensive than a client who was a party to the GLO litigation
and who had been convicted of an offence and who, as a result, got nothing out of that
litigation save a residual malicious prosecution claim. That is a result that cannot be justified as
a matter of logic, justice or fairness. I apprehend that this position may not be well known or
well understood. (Further, any additional claim for abuse of process (for example, the
deliberate obstruction of rights of access to the court) - a claim unavailable to OHC claimants
but that is available to others, whose convictions on Post Office prosecutions have been
quashed - doesn’t require determination of the prosecution/claim in a claimant's favour, which
malicious prosecution requires.)
(4) ‘The most startling, and wrong, disparity of treatment and unfairness, I shall now explain. In
claims for malicious prosecution now made against the Post Office, for GLO claimants who
were convicted, the (to my mind extraordinary) position is as follows:
(i) payments were received by convicted GLO claimants out of the global sum received
by the Steering Committee under the terms of the 2019 settlement (the settlement
sum).
ii) Those sums were paid to convicted GLO claimants out of sums that stood to the
account of GLO claimants who were not convicted. Under the auspices of the GLO
Steering Committee, the not-convicted GLO claimants paid ex gratia an increment
(i.e. a portion) out of the settlement sum (compen
ion) to which they were otherwise
entitled, as determined and directed by the GLO Steering Committee, to the GLO
convicted-claimants who are explicitly excluded from any compensation paid by the
Post Office under the 2019 settlement terms. (That result is expressly contemplated as
permissible under the deed.)
(ii) As will be apparent, Mr X, who was a convicted GLO claimant, received a modest
pa tia, from deductions made from all the non-convicted claimants’
yment, ex gra
damages, because the Steering Committee in the exercise of its discretion considered
that it would be unacceptable for convicted postmaster GLO claimants to receive no.
payment of compensation at all (except the chance of one day perhaps being able to
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bring a claim against the Post Office for malicious prosecution) out of the litigation in
which they were claimants and to which they were parties. That might be called
“benevolence” as exercised by the GLO Steering Committee. Certainly convicted
GLO claimants had no right to payment.
(iv) Astonishingly (I do not use the word lightly) the Post Office now is seeking to (and so
far as I know may already have) set-off, under the OHC scheme, sums paid ex gratia
by the not-convicted claimants to convicted claimants out of the global settlement sum,
paid by it in 2020, and from which convicted postmasters were explicitly excluded,
against the compensation now payable by the Post Office to convicted claimants. To
my mind that is an enormity. In practice, this means that if a convicted claimant
received £75,000 from other non-convicted claimants, the Post Office now requires to
be credited, in paying damages to a convicted GLO claimant in the OHC scheme, the
£75,000 received by them from other GLO claimants out of their compensation. The
Post Office, in effect, is seeking to recoup compensation that it has previously paid.
As I shall explain, apart from being offensive, that is wrong, both in principle (one might think
self-evidently) and also in law. T apprehend it is a widespread issue and not well understood.
To put the point more simply, the Post Office seeks to reduce its liability to those it falsely
convicted by malicious prosecution, by the amount paid, ex gratia by others of its victims. It is
seeking, in short, to reduce its liability by an amount of damages it has itself already paid.
‘Pulling oneself up by one’s own bootstraps’ is an expression apt to the circumstances. That is
to say, where A harms both B and C and A pays B but not C, and B then pays to C part of the
damages they recover, having sympathy for C’s plight, A (here the Post Office) asserts
inst
C, who has been uncompensated by A, that the payment by B to C thereby reduces/abates A’s
liability. That result is offensive to any sense of justice. It is also deeply offensive to the Post
Offfice’s victims.
Ostensibly, this is said to be in reliance on the principle that otherwise a prosecuted GLO
claimant would recover twice for the same loss (known in law as ‘double recovery’ - the law,
generally, sets its face against windfalls). This is also known as ‘avoided los:
As a matter of legal analysis, the short answer is that B’s payment to C (i.e. an ex gratia
payment to a convicted postmaster out of the recovery (compensation) made/received by non-
convicted GLO claimants) does not take effect in reducing the Post Office’s liability. First, an
ex gratia payment from not-convicted postmasters is not the “recovery” of damages or
compensation. Legally speaking, a thing done between others does not harm or benefit others.
First, to test it by an extreme analogy, if A in similar circumstances is liable to both B and C for
the same amount of £100 each, and pays B £100 but refus
's to pay C anything, if B then pays
to C out of the goodness of their heart (“benevolence” - q.v. below) £95, it would be
remarkable if A could thereby contend that their continuing liability to C is merely £5, thereby
reducing the overall liability for the ‘global’ wrong done to both A and B by £95 on the basis
that A had already received full compensation. Reduced to such simple terms, the fallacy
A proposition that when lawyers used to like to speak in Latin went by the tag res inter alios acta.
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becomes obvious and is shown to be little more than nonsense. The Post Office is crediting
itself - or claiming to be entitled to credit itself - with damages it has previously paid to its other
victims.
‘That result not only offends against any sense of rness, but on high authority it is
also, happily, wrong in law. It plainly gives the lie to the Post Office’s asserted concern to
make “fair” compensation “swiftly” available to those it wrongfully prosecuted.
In relation to other payments that may or may not be taken into account in assessing damages
payable to an injured party, in Lowick Rose LLP v Swynson Ltd and anr. [2017] UKSC 32 at
[98], Lord Neuberger, the President of the Supreme Court, referring to the earlier House of
Lords’ decision in Parry v Cleaver [1970] A.C.1," said that the considerations of justice,
reasonableness and publ
policy - the relevant criteria identified by Lord Reid in the House
of Lords in Parry - “should not be treated by judges as a green light for doing whatever seems
fair on the facts of the particular case...the types of payments to a claimant which are not to be
taken into account when assessing damages, are either those which are effectively paid out of
his own pocket (such as insurance which he has taken out, whether through his employer, an
insurance company or the government), or which are the result of benevolence (whether from
the government, a charity, or family and friends), all of which can be characterised _as
essentially collateral in nature.” (Underlining mine.) The words ‘co-claimants’ are readily
accommodated in the words in parentheses following “benevolence”.’ It is the intrinsic nature
of the payment that in law is the key consideration. The sums received by convicted claimants
were in the nature of gifts (ex gratia) from the benevolence of the other GLO claimants, albeit
a benevolence mediated by the Steering Committee. Thus, that such gifts should now stand to
the credit of the Post Office as wrongdoer not only offends against any sense of justice it is
wrong in law: see further, for example Dennis v LPTB [1948] I All ER 779 and Cunningham
In Parry v Cleaver [1970] A.C.1, in the House of Lords Lord Reid explained that, whether a plaintiff
vas bound to bring into account insur: ~ayments, charitable payments, pension payments and the
like, which were payable owing to the injury suffered as a result of the defendant's tort... the answer
should depend on “justice, reasonableness and public poli
A less obvious, but similar, result is seen in the recent commercial shipping decision Sevylor Shipping
and Trading Corp v Altfadul Company for Foods, Fruits and Livestock and anr., [2018] EWHC 629
[Comm] (The Baltic Straight). It was contended by the carrier of a cargo that had deteriorated, that a
credit given to the purchaser (Altfadul) by the seller/shipper/charterer (CoMaCo) under the sale
contract should result in the purchaser not being able to claim aga inst the shipowner/carrier the full.
value of the deteriorated cargo. Mr Justice Andrew Baker, an able judge, dismissed the appeal. He
found that the fact of an intermediate payment (credit) by another party to the pu er was nothing to
the point, and payment of the full value by the carrier would simply result in the partial compensation,
by way of credit by the seller to the purchaser, would consequently be held on trust for the seller by the
. ie. The credit by the seller of the goods didn’t diminish the carrier's liability.
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yHa
deductible).
ison ([1973] QB 942 (ex gratia payments made by a sympathetic employer were not
1am fortified in the foregoing anal y an earlier statement of Neuberger J, then a High
Court judge, in Hamilton-Jones v David & Snape [2004] 1 WLR 924:
“the principle can be said to be based on the proposition that the gratuitous
payment of mone imant is res inter alios a
by third parties to the
a, as
between the claimants and the defendants” and
“There is no reason why payments made to the claimant by third parties,
particularly when those payments are made out of natural love or affection for
the claimant, should be credited to the benefit of the person whose negligence
has harmed the claimant, and to the disadvantage of the claimant. Indeed it
would seem almost absurd if that were the law.” [My underlining.I
The Post Offic
had prosecuted and convicted and in many cases had imprisoned on false and misleading
's asserted right to be entitled to set-off, against its present liability to those it
evidence, sums previously paid by it under the terms of the 2019 settlement of the civil
litigation, is plainly much worse and more objectionable and serious than the “absurdity”
identified by Neuberger J. in Hamilton-Jones.
My concern in this regard is that it seems likely that many of the Post Office’s victims may accept,
and may have accepted, compensation from the Post Office, nted by Herbert Smith Freehills,
repres
ably less than that to which in law they may be properly entitled, as the result of a
‘standing of the law on ‘double recovery’/avoided los
It doesn’t encourage confidence, where points such as this are being taken against vulnerable, and
ainst the Post
in many instances profoundly damaged, claimants in adversarial attritional litigation a
Office, as represented by one of the largest and most prominent law firms in the country. As I
mentioned at the start of this letter, Tracy Felstead, whose life and health have been blighted by the Post
Office, feels that she just “cannot go on”, She should not have to be dealing with this kind of thing. 1
fear that others may already have been seriously disadvantaged - and have thereby suffered further
wrong at the hands of the Post Office.
T have explained the position, as I see it, to Herbert Smith Freehills, in separate correspondence.
On 10 February 2023 I requested from HSF an explanation of the legal basis for the asserted right to
set-off ex gratia payments made by not-convicted claimants against the Post Office’s liability to pay
damages to convicted postmasters, including any propostion of law relied upon in support. My detailed
and careful request has elicted no substantive response, still less justification for the Post Office’s
sserted right to set-off.
PARTI
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A FALSE DICHOTOMY? - PROSECUTIONS WHERE THE RELIABILITY OF HORIZON DATA WAS
LAL.
The following discussion is provided principally for your information and for the purpose of
adverting to the fact that, as a result of the Court of Appeal’s judgment in Hamilton and or
> TO TH
OVERSIMPLIFICATION
WHERE If WAS
Post
Nor. AD
Office Ltd [2021] EWCA Crim 577, it is likely that there is widespread continuing injustice suffered by
victims of the Post Office.
I shall make some preliminary observations.
a)
(2)
(3)
There are grounds for the view that virtually no judgment given against a
defendant, civil or criminal, on a claim or prosecution by the Post Office can
es where
be treated, without more, as safe. There may be a tiny handful of ca:
there has been compelling evidence of wrongdoing, independent of Horizon
or other Post Office systems, the Post Office, Fujitsu, the actions of their
employees or third parties and of the actions/conduct of the Post Office’s own
. Those will necess
lawyers ly be a tiny fraction.
The fundamental fact, that is a consistent theme from 1999 onwards, is that
the Post Office was unable to distinguish between fraud and dishonesty, on
the one hand, and system and technical errors, whether caused by known bugs.
in Horizon or other, unknown, bugs, or by other system or data
handling/reconciliation failures or errors (whether or not Horizon), on the
other. The Post Office’s default position, until 2014, was to attribute the
consequences of all identified error to postmaster/employee dishonesty and
liability (a point made by both Second Sight and Detica (below). That
position was recognised as untenable and no longer sustainable after 2013
(including, after Second Sight’s and Detica’s reports), but the implications of
that recognition were deliberately suppressed by the Post Office, adding to
and augmenting the grievous injury previously inflicted by it upon its many
victims and obstructing and interfering with their right of access to justice.
It was not Horizon that prosecuted and brought other legal and enforcement
action against postmasters and other Post Office employees, such as Tracy
Felstead (then aged 19). It was individual Post Office officers and its
employees, assisted and supported by other individuals. These included
employees of Fujitsu and the Post Officer’s own lawyers. Those individuals
are now known, over a long period of time, to have suppressed and concealed
material evidence and to have withheld their knowledge of the true facts, both
from the Post Office’s victims and from the courts. (Mr Altman Q.C. referred
to a “cultural problem” in the Post Office with the shredding of documents by
the Post Office, as referred to in a written advice dated 2 August 2013 (his.
10
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“General Review” of 15 October 2018, at paragraph 112’) It is wrong,
therefore, to overly stress the by now very well documented unreliability of the
Horizon accounting system as the cause of what happened to the Post Office’s
victims. Doing so is apt to downplay the issue of the integrity of the Post
Office at board and prosecutorial level and in other respects (e.g. Castleton).
What happened was the consequence of actions taken and decisions made by
individuals for their own and the Post Office’s purposes.
(4) Rhetorically, one can reflect upon what an ordinary juror might make of a
prosecution by the Post Office where (non-exhaustively - and to say nothing
of individual conduct):
a. The scale and effect of the presence of known bugs in Horizon over
time was to be disclosed and properly explained. (Ignoring, for this
purpose, the possible effects of unknown/undocumented bugs.)
b. The fi
accounts and terminals = (‘supe
and scale of ‘remote access’ h
y Fujitsu to Horizon branch
r’ rights) from roll-out in 1999
was disclosed, and properly explained, and that for mar sno
record was kept, either of the fact of access or what was done in
exercising those rights of access - including the impersonation of
postr by adopting their ID.
c The existence of substantial (some would say colossal) sums in
unallocated Post Office suspense accounts and that such funds
were
credited to the Post Office's P&L account when it could not with any
confidence be said that the sums in question were owned by the Post
Office. (On this, it is worth noting that no statement to date has been
made by the Post Office as to whether any investigations were
undertaken into the scale of suspense account balances nor, if they
were, what these revealed.)
Not only would there be room for ‘reasonable’ doubt, there would be the
gravest possible doubt.
(5) To date no consideration appears to have been given to, still less has there
been any evaluation of, the vulnerability of the Post Office to fraud carried out
by third parties who knew of the Post Office’s systems’ vulnerability, both to
system error and failure (bugs etc.) but also to undocumented rights of access
to postmaster branch terminals and accounts.
While what follows i:
real - with present effects. As a concrete example, it has recently arisen in connection with one of my
provided for your information, the issue to my mind is both important and
7 hitps://www.postoflicehorizoninquiry.org.uk/sites/default/files/2023 -01/POL00006581920-
%WReview%2of%20PO%20prosecutions% 20by% 20Brian%20A leman%20KC%2015 10201 3.pdF
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clients, Mrs Nichola Arch (who has given me permission to refer to this), who was prosecuted by the
Post Office but, most unusually (it may be said ‘exceptionally’) in Post Office prosecutions, in April
2002 she v
forbidden by the Post Office from speaking to potential witnesses for her = that is abusive conduct.)
s acquitted of any offence. (Mrs Arch’s prosecution is notable not least for her having been
The Post Office apparently no longer holds records of her case. The issue recently arose (which I have
addressed elsewhere) as to whether the reliability of Horizon data may not have been (and, in the
absence of available documents, cannot with confidence be said to have been) “essential to her
prosecution”.
Itis likely that that issue is productive of continuing serious injustice. It is the product of the
Court of Appeal Criminal Division, in its judgment in Hamilton and ors. v Post Office Ltd [2021]
EWCA Crim 577, having done nothing more than by law it was required to do in discharge of its
primary statutory function in determining the outcome of the appeals referred by the CCRG, that is to
say, the (narrow) determination of whether or not convictions were safe within the meaning of the
Criminal Appeal Act 1968. That role of the court by
or jurisdiction.
‘onvention is described as its “reviewing” function
‘There is, however, another important function of the Court of Appeal, namely its “supervisory”
function. That is to say, its role in supervising and providing guidance for the inferior courts.
The 42 Hamilton appeals exposed, if not the most, one of the most extensive miscarriages of
justice in English legal history. Through a very narrow focus, at the heart of the miscarriages lay the Post
Office’s institutional failure, over decades, to give proper disclosure of material that would have assisted
defendants to its prosecutions. It thereby failed in its duty as prosecutor. A similarly constricted focus
also reveals that the many known bugs errors and failures in the Hoi tem had a known
on computer
and documented propensity to cause precisely the kind of problems of which defendants to Post Office
prosecutions and civil claims explained, in evidence to courts up and down the country, that they had
experienced. It is now accepted that the Post Office withheld from disclosure those facts and that
knowledge. Eloquent testimony of the difficulties with the Horizon system experienced by postmasters
is to be found in, for example, the criminal trial of Mrs Seema Misra, a full transcript of which is public
available’ (the trial judge repeatedly wrongly held Mrs Misra’s trial to be fair, when it was not), and in the
civil judgment given by Judge Richard Havery Q.C. against Lee Castleton in the High Court January
2007: Post Office Ltd v C
tleton [2007] EWHC 5 (QB).
Many may think that the Court of Appeal ought not to have confined itself to its narrow reviewing
function but that it ought, in the public interest, to have gone on, in the exercise of its supervisory
jurisdiction, to consider 0 many manifestly similar instances, innocent people had been wrongly
convicted of serious offences of dishonesty on seriously incomplete and unsatisfactory evidence and as a
Th
result became victims of the miscarriage of justice on a scale hitherto unknown in this country?
to say, why had the courts of England and Wales so frequently failed to operate as intended and as they
should? Why the court determined not to address such obviously important questions admits of no
or obvious answer. (It is no answer that Sir Wyn Williams is conducting an inquiry; his remit does
not extend to considering reasons for the failure of the legal system.) It is possible that the Court of
hetps://journals.sas.ac.uk/deeshr/article/ view.
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Appeal, like the Post Office, was
before the court might have been seen to be not without risk of the proceedings spiralling out of control,
astute to maintain ‘confidence in the brand’ and broadening the is
ues
with the consequence that the appeals were determined, in effect, solely by reference to the explicitly
and necessarily very narrow’ findings of fact by Fraser J in Bates and ors. v Post Office Ltd Horizon
Issues (No. 6) [2019] EWHC 3408.
It might be said that, confronted as the Court of Appeal was by a ‘can of worms’, it was content to
puncture the lid, but not to lift it.
Were an airline to fail repeatedly in a similar w:
y, with devastating consequences for those using
it, aircraft would be grounded and the cause would be rigorously investigated.
The failure, if that is what it can properly be called, by the Court of Appeal to extend its view
beyond, in the particular case, its consideration of whether evidence undisclosed by the Post Office of its
knowledge of bugs and errors in the Horizon system meant that a given conviction was unsafe or not,
has resulted in the dichotomisation by the court (Holroyde LJ, Picken and Farbey DBE JJ) of those
appeals in which it considered that “the reliability of Horizon data” was “essential” to the prosecution
e, on the one hand, and those where in its judgment it was not, on the other. Whether such a simple
a proper tool for (and the determination references to the Court of Appeal by the
CCRC and of appeals) is seriously questionable.
‘The dichotomy appears in the CCRC in referrals under s. 9 of the Criminal Appeal Act 1995. It
appears, almost like a mantra, in forms of words adopted by the CCRC: “the reliability of Horizon data
was [variously] central/essential to the prosecution...” at paragraphs 7(1), 110, 120, 124, 180, 146, 149,
152, 155, 175(1)-(23) inclusive, and at paragraph 181 (1)-(8) inclusive (and possibly elsewhere) of the
CCRC June 2020
statement of grounds for appeal. It was
ferral document under s. 9 of the Criminal Appeal Act - that is to say, the CCRC’s
1 central consideration and evaluative tool for the CCRC.
More particularly, and importantly for present purposes, the dichotomy is articulated by the Court
of Appeal in the judgment of the court in Hamilton at paragraphs [77], [182], [185], [137] and at [138].
Applying that dichotomy/taxonomy, the appeals of Wendy Cousins, Stanley Fell and Neelam Hussain
were dismissed. In effect, the default position appears to be, that so far as the reliability of Horizon data
was not considered to be essential to the Post Office’s prosecution, such that there was other material,
the prosecution has been treated as unimpeachable, Post Office evidence treated as reliable, and the
resulting conviction consequently not ‘unsafe’ - the ‘litmus test’ for a succes
ful appeal.
‘That essential distinction, that appears to have commended itself to the Court of Appeal, was not
one on which there was it appears to have been much, if any, argument before the court. It is noted that
Mr Brian Altman Q.C. represented the Post Office on the unsuccessful appeals by Wendy Cousins,
Stanley Fell and Neelam Hussain. Mr Altman had deep knowledge of the events and circumstances of
the Post Office in 2013.
° ‘The Horizon Issues trial, though it gave rise to a monumental judgment, was only on explicitly “preliminary
issues”.
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It is not without irony that there was other available important evidence that was not considered
by the Court of Appeal (and other evidence is now emerging in the Williams’ Inquiry). As a result, if a
person was convicted on the basis of evidence of (typically) an unexplained balancing error in their
Horizon account, on the basis of evidence from Horizon, then the appeal against conviction has been
allowed (because the reliability of Horizon data was treated as “essential” to the prosecution), but if that
was not the sole/only basis for their prosecution and other data/evidence was adduced by the Post Office
as prosecutor, appeals have failed, as happened with Cousins, Fell and Hussain. So far as I understand
it, it appears to be the case (perhaps remarkably) that appeals have only been allowed by appeal courts
where the Post Office has accepted that there were disclosure failures in connection with Horizon; that is
to say, ‘first category’ abuse of process, as a ground of appeal, has not been contested and the appeal not
resisted (on that ground) by the Post Office.
With respect to the Court of Appeal, for reasons that I shall explain in outline, it is likely that the
Court of Appeal’s dichotomising, and the CCRC’s (over) emphasis on the centrality of the reliability of
Hori
simplistic. The reason for this is that the Court of Appeal’s approach (and the CCRC’s before it) was
well be overly
‘on data to any particular Post Office prosecution, are similarly flawed and may
informed by very limited and constricted evidence - essentially confined to Fraser J’s (limited) findings
of fact in his Horizon Issues judgment.
The burden of the evidence for the CCRC refer
from the judgment of Mr Justice Fraser in Bates v Post Office Horizon Issues (No. 6) [2019] EWHC
3408." That judgment itself, with respect to the learned judge, while a masterly account, was limited by
‘als was, as the CCRC explained, itself derived
what now appears to have been constricted disclosure by the Post Office. That is to say, even on the
Hori:
been disclosed would likely have had a significant impact on the course of the litigation. For example, it
on Issues tri
, the Post Office failed to give important and highly relevant disclosure that had it
appears:
© That the Ismay report was not disclosed - q.v. Hamilton judgment at paragraph
[24]. In 2010 Mr Ism:
that contemplated an independent review of Horizon and its integrity: “It is also
1 written in nt document,
widely circulated impor
one were commissioned -
important to be al clear about any review
investigation would need to be disclosed in court. Although we would be doing
the review to comfort others, any perception that POL doubts its own systems
would mean that all criminal prosecutions would have to be stayed. Itwould also
beg a question for the Court of Appeal over past prosecutions and
imprisonments.” [My underlining.] No review was commissioned.
. ‘That the Post Office’s board’s notification to its insurers of risk in about August
2018, as then advised by its solicitors Bond Dickinson, was not disclosed in the
Bates litigation, as it should have been. Such notification was nt event
an import
and suggests recognition of significant financial risk to the Post Office, connected
‘The CCRC explained that it ceased to pursue its own inquiries and waited for Fraser J’s judgment before
deciding whether to refer cases to the Court of Appeal pursuant to the Criminal Appeal Act 1
which had been subject to consideration by the CCRC from as long ago as 2014. (That does not begin to.
justify the delay for the purposes of Art. 6 ECHR (want of resources do not justify delay).)
- some of
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with evidence given to the court by Mr Gareth Jenkins, and perhaps other known
failures (such as disclosure). (A financial risk that has all too obviously now
eventuated.)
. That Detica’s October 2013 report Fraud and non-conformance in the Post
Office; Challenges and Recommendations G-199 Fraud Analysis" (below) was
not disclosed. That it was not, given its subject matter and importance, is
extraordinary.
Each of these constitutes a serious and material disclosure failure by the Post Office in the Bates
GLO litigation - a failure that is entirely separate from the issues that were considered by the Court of
for
Appeal in its Hamilton judgment. ‘The reasons for such extensive and serious disclosure failur
present purposes is not relevant (though it will certainly have had an impact on the GLO litigation).
Arguably, the single most important document that appears not to have been disclosed in the
GLO litigation was a document submitted by the firm Detica Limited, that traded as BAE Systems
Detica and used the registered name Detica NetReveal (“Detic:
division of BAE S
extended to the detailec
Detica, in 2013, was a consulting
ystems ple. In October 2013 Detica, having undertaken a six month ‘pilot study’ that
is of Post Office’s sy
resilience to fraud, submitted to the Post Office an extensive report and made 39 recommendations.
naly ems, transactions and resilience, specifically
The report was circulated at the highest levels within the Post Office” and likely would have been
considered by its board. Detica concluded and advised the Post Office that its systems were “not fit for
purpose” in a modern retail environment. That conclusion was not narrowly concerned with the
Horizon computer system, Specifically, Detica concluded that the Post Office was unable reliably to
reconcile data from disparate sources.
It is not known whether Mr Altman Q.C. in 2013 was aware of Detica’s October 2013 report. If
properly instructed, he should have been. The report went through five drafts between August and
September 2013.
was in ATM
typically prone to reconciliation error.
One example of repeated systemic error identified by Detic
transactions/reconciliations.. These w Detica concluded that
endemic (my word) ATM error could not be accounted for by fraud alone. ‘That wasn’t a Horizon
issue.
ATM errors gave rise to enormous Post Office suspense account balances in the order of tens of
millions of pounds. Second Sight, in their 2015 Final Report, observed (paragraph 2.18):
“... In addition to the credits being taken to Post Office’s General Suspense
ar end substantial
Account we have been informed very recently that at each ye
" https:/Avww. jfsa.org.uk/uploads/5/ 4/3/1/5431292L/document_25_-
detica_netreveal_fraud_analvsis 011013 _Lpdf
R ‘The Report was commissioned by Post Office’s Head of Security, John Scott and Legal and Compliance
Director Susan Crichton. It was made available to the Post Office's General Counsel, its Chief Financial
its Chief Information Officer, its Chief Technical Officer, its People & Change Director and to.
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unreconciled balances existed on many of the individual suspense
accounts. These unreconciled balances for the 2014 financial vear were
approximately £96 million in respect of Bank of Ireland ATMs and
approximately £66 million in respect of Santander. These unmatched balances
represent transactions from individual branches that occurred in the preceding six
months”. [My underlining.}
It does not require great insight to recognise that ownership of the balances on those suspense
(i) the Post
or (iv)
accounts can only have vested (variously) in members of any one of four classes of person:
Offfice itself; or (ii) its clients, such as, for example, Royal Mail; or (iii) Post Office customer:
postmasters themselves. Even for a bank, such large unallocated balances would be surprising. The Post
Office’s ATM errors were separate from problems with, and bugs in, Horizon.
The October 2013 Detica report was most likely an important consideration in the Post Office’s
strategic decision, from 2014, to (effectively) cease prosecuting its postmasters and employees for
Horizon “shortfalls”.
The important point about the Detica report of 2018, is that it shows/evidences that Post Office
problems were not confined to the by then known serious problems with Horizon data and the effect of
bugs and errors in the system and their contingent impact upon postmaster accounts - the cent
narrow, issue in both Mr Justice Fraser’s Horizon Issues judgment and in the Court of Appea
judgment in Hamilton in 2021. What Detica showed and explained was that the Post Office had
widespread problems with handling and reconciling data from a variety of sources beyond Horizon and
that its “systems” were not fit for purpose. That necessarily raises questions - and doubts - about Post
Office evidence that extends beyond the narrow question of whether “the reliability of Horizon data ¥
essential to the prosecution case”.
It is a matter of regret that the Court of Appeal was unable to consider the 2013 Detica report.
Had it done so, it may well have been unable to draw the dichotomy that it did.
It appears that that dichotomy, unwarranted and unjustified as in my view it is, informs and
determines the approach of the CCRC, various appeal courts, and others. It is very possible that is
productive of continuing (possibly grievous) injustice.
I should say, that in November 2020, I was acutely concerned to know why, in 2014, the Post
Office radically changed its strategic approach to prosecuting its postmasters. Eliciting on 12 November
2020 the July 2013 “Cla
Court of Appeal, I sought to explain how developments in Post Office knowledge, including Detica,
ke Advice” provided part of the answer. In written submissions made to the
between 2010 and 2013 were of decisive importance. Unfortunately, after I was constrained in
December 2020 to withdraw from representing my clients in the face of a threat by the Court of Appeal
of proceedings against me for contempt of court (that it eventually withdrew at the end of April 2021),
my arguments, including those founded on the importance of the 2013 Detica report, were not pursued
before the Court of Appeal. I fear that a consequence may be continuing injustice. Hence my writing to
you now.
16
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Tam concerned that my clients, like others, were not only the victims of injustice, but further,
from 2018, and possibly before then, are likely to have been victims of an attempt to pervert the course
of justice, including by the deliberate obstruction of their right of access to the court and intentional
violation of their Article 6 rights under the ECHR, rights that are guaranteed by the state.
The Post Office is a public, state-owned, institution. As a private prosecutor it was bound to.
adhere to the highest standards of fairness, openness and integrity. It did not do so.
Tam copying this letter, for information, to Sir Wyn Williams, whom I know to be concerned
about the fairness of compensation arrangements, to Lord Arbuthnot of Edrom and to Professor
Richard Moorhead.
Tam conscious of the length of this letter, and also of the many demands on your time. I believe
the matters to which I refer are serious and important, accordingly, I make no apology for drawing them
to your attention.
As I suggest at the beginning of this letter, the present compensation arrangements are unfair.
What is to be done is for others. All I can do is point to the fact.
Yours faithfully,
[GRO
Kevin Hollinrake Esq., M.P.
Minister of State for Enterprise,
Markets and Small Business
Department for Business and Trade
1 Victoria Street
London
SWIH 0
Sir Wyn Williams, Chair, Post Office Horizon IT Inquiry
The Rt. Hon. The Lord Arbuthnot of Edrom
Professor Richard Moorhead, University of Exeter
Rob Brightwell, Deputy Director, Business Resilience, Department for Business and Trade
Herbert Smith Freehills LLP, FAO Alan Watts