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THE POST OFFICE HORIZON IT INQUIRY
On behalf of Core Participants
NICHOLA ARCH
LEE CASTLETON
TRACY FELSTEAD
SEEMA MISRA
VIJAY PAREKH
JANET SKINNER
Further Submissions on Compensation following the Chair’s Statement of Issues
Relating to Compensation, dated 9 January 2023, and
1) Paul Marshall’s submissions on the tort of abuse of process &
2) Further information regarding the role of Herbert Smith Freehills (HSF)
ABUSE OF PROCESS & COMPENSATION
1. We acknowledge receipt of and thank the Chair for the Chair’s Statement on
Issues relating to Compensation, and for deciding to keep a close watch on
developments, including scheduling a further compensation issues hearing in
April 2023 (paragraphs 6, 11, and 44.) We further acknowledge the Chair's
observations at paragraph 31, which refer to Mr Henry KC’s oral submissions
and Mr Marshall’s written submissions on compensation for the intentional
denial of information that would allow judgments and convictions to be
challenged. Ahead of Phases 4 and 5, when the facts behind that argument will
be investigated, these submissions are to endorse Mr Marshall's refinement of
his argument, as set out in his Supplemental Submissions dated 6 January 2023,
and to give advance notice of what must be addressed at the next hearing.
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2. This is a matter that will be returned to in April, but we set down a marker:
claimants who were pursued through the courts by the Post Office should not
only be able to claim compensation for malicious prosecution, but also — in
principle — for the tort of abuse of process, to reflect an apparent malicious
obstruction of their right of appeal. We also alert the Inquiry to the relatively
recent case of Total Extraction Ltd V Aircentric Ltd.' It is a decision of the first
instance but does not appear to have been appealed. Commentary on this case
further supports the contention that the tort of abuse of process is recognised
as being discrete from malicious prosecution.
We agree that the various compensation processes underway are suffering
from a failure to articulate transparent principles explaining what the claimants
are being compensated for, and that this will become an important issue in
Phase 5. We share the Chair’s concern as to the continuing lack of transparency
attending the OHCS (paragraph 27) which affects four of the core participants
we represent.
THE ROLE OF HSF
4. On8" December 2022, a worrying development emerged when it was revealed
that derisory sums had been agreed with unrepresented victims by HSF, sums
that were plainly inadequate, and subject to errors and omissions. That this had
been sanctioned on the Post Office’s behalf gives rise to legitimate concerns that
very little has been learnt from this tragedy: the dynamics of power and
inequality persist, whether consciously exploited or not by the Post Office and
its advisers.
This is in addition to the fact that the Post Office, assisted by HSF, is seeking to
agree binding settlements before the true and fullest extent of its wrongdoing
2 [2021] EW Misc 21 (CC) (30 September 2021) https://www. bailli.org/ew/cases/Misc/2021/21.html
2 https://www.civillitigationbrief.com/2021/12/06/wrongfullyentering-judgment-gives-rise-to-a-cause-of-
action-for-a-defendant-the-tort-of-abuse-of-process,
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has been arrived at through the process of this Inquiry. It is also set against the
context which we raised in paragraphs 15 to 17 of our first Submissions on
compensation, dated 22 June 2022: “We note that HSF negotiated the Settlement
Deed, and acted with uncompromising determination on their client’s instructions, such
that the Deed they fashioned on behalf of their client has left the group litigants
inadequately compensated... Were it not for the delay that would inevitably ensue, we
would be advocating in the strongest terms for the removal of HSF and the appointment
of a suitable independent third party who would be responsible for the vital task of
awarding and administering claims. However, such a course (desirable as it is) would bring
with it further delay, disrupting a process already dogged by the Post Office’s inordinate
obstruction over a number of years. We submit, therefore, that the appropriate course
is to allow HSF to continue acting for the Post Office in this matter, but to stipulate
that such acquiescence is dependent upon the publication of clear principles, or
criteria that shall govern the process of compensation, and the redress of these grave
wrongs.”
. There has been no such publication of clear principles or criteria, and we now learn
of the derisory awards described by Tim Moloney KC on behalf of those
represented by Hudgells. These have not, so far as we can discern, been
referred to within the Chair’s statement. We submit, despite that, that it
appears increasingly likely that settled compensation awards will become
another instance of abusive inequality of arms, like the Settlement Deed itself,
which required the intervention of BEIS to prevent further abuses being
inflicted on the vulnerable.
. Yet more troubling, disclosure of the unredacted minutes of the Postmaster
Litigation Subcommittee has revealed HSF’s role in advising the Post Office on the
conduct of the GLO before advising on settlement. It transpires that Alan Watts
of HSF advised POL on the highly controversial decision to seek Mr Justice
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Fraser's recusal.’ Section D of the List of Issues, headed Conduct of the Group
Litigation, makes it clear that decisions around the recusal application will be
a very important issue in Phase 4 of the Inquiry.
8. We do not see how HSF can be seen to be impartial in acting for POL in the
Inquiry while the conduct of its own lawyers will be under examination by the
Inquiry, in relation to an issue of arguable bad faith, or catastrophic
misjudgement. Meanwhile, HSF (Cerberus like) will continue to wear a third
hat investigating and settling compensation claims from those brave litigants
who brought the action, which led to the recusal application which the Inquiry
will be investigating, which HSF advised upon.
9. We fully endorse Paul Marshall’s submissions regarding the appearance of
bias: a reasonable observer could not but be concerned at this situation. All the
more so in the absence of any published, coherent principles for the payment
of compensation. If HSF is to remain onboard these principles must be stated
and published, and privilege should be waived in respect of its instructions. It
remains unclear how a Global Law Firm of such reputation settled cases (to
which Mr Moloney KC averted) that omitted to consider obvious heads of
damages. These are matters which we flag for April.
10. Given the professed desire of the Post Office to provide full and proper
compensation, and the towering reputation of its advisers, the errors and
oversights which led to these meagre (arguably voidable) settlements are
difficult to understand.
CONCLUSION
11. We remain concerned (as orally submitted on 8" December 2022) that by the
time Phase 4 of the Inquiry has exposed the Post Office’s conduct over the years
2013 to 2019, and the earlier unprincipled approach to compensation has been
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examined in Phase 5, further, perhaps irrevocable, damage will have been
inflicted. We therefore ask that the April compensation hearing addresses two
important and related issues: apparent bias in HSF’s role as administrators of
compensation, and the lack of published compensation principles.
12. It remains our view that HSF should never have been instructed to administer
any compensation scheme, but out of necessity, with great misgiving, HSF
having been foisted upon the aggrieved SPMs their position was tolerated for
pragmatic reasons. This is, we submit, another matter for the Inquiry to review,
because there is sufficient evidence to suggest that the errors of the past have
not been taken on board and may even have been compounded by them
remaining in place.
13. The structural flaw presented by HSF’s involvement, and the Post Office’s past
of exercising oppressive sway over the vulnerable requires the closest scrutiny,
and so the Chair’s intention to monitor the process is both welcome, and a
necessity.
Edward Henry KC, Mountford Chambers
Flora Page, 23ES Chambers
Hodge Jones & Allen
9 January 2023