UKGI00009076
UKGI00009076
UK Government Pig for
usiness, Energy
Investments & Industrial Strategy
Date: 1 March 2019
Director General: Mark Russell
Lead Official: Tom Aldred
Lead Official Telephone:_
Recipient To Note / Comment To Approve / Decide
Secretary of State x
Kelly Tolhurst xX
Special Advisors x
OFFICIAL SENSITIVE
JUDGMENT IN POST OFFICE COMMON ISSUES TRIAL
Summary
1. A judgment in the Post Office Common Issues trial will be sent to the parties next week
(w/c 4 March), under strict embargo, before being formally handed down in the following
week (w/c 11 March). This submission provides:
an overview of the case and the wider context of an ongoing legal process
advice on whether to ask that ministers get early sight of the judgment
UQ rebuttal (annex A) and draft answers to initial and follow up questions
(annex B)
Timing
2. We expect the judgment to be provided to the parties under strict embargo in wic 4
March.
Recommendation
3. We recommend that you
Agree not to seek permission from the judge to have early sight of the
judgment
Consider a verbal briefing once the judgment has been handed down
° Note the draft UQ rebuttal and answers (annex A and B)
Advice
4. The Post Office ‘Common Issues’ trial was held before Justice Fraser in November and
December 2018. A judgment will be sent to the parties next week (w/c 4 March), under
strict embargo before being formally handed down the following week (w/c 11 March).
5. The judgment must be kept strictly confidential during this period and as it stands will
not be made available to ministers. You have asked for advice on whether we should
seek permission from the judge for ministers to have advanced sight of the judgment
(paras 13-16)
6. The full judgment is likely to run to hundreds of pages and POL will provide a summary
as soon as the judgment has been formally handed down, which it has committed to
pass on immediately. Given the likely complexity of the judgment, we recommend that
UKGI00009076
UKGI00009076
UK Government Paaordilbgt for
Investments jusiness, Energy
& Industrial Strategy
you also have a verbal briefing as soon as possible, with
representatives from POL as well as officials.
7. This trial is only the first phase of an ongoing trial process. A second trial focusing on
the integrity of the Horizon IT system is due to begin on 11 March. A third trial is
scheduled in November to examine the 6 lead claimants’ cases, and a fourth trial in
March 2020 will address issues relevant to a wider group of Claimants. The final
outcome of the litigation will only be clear once the overall trial process is concluded.
The parties will consider possible mediation after judgement in the first two trials is
handed down.
8. The Common Issues trial is itself complex, concerning 23 Common Issues that relate to
the six uae claimants. The closing arguments focused on
The express terms of the postmaster contracts which deal with liability for
branch losses
Whether the postmaster contracts are “relational contracts” such that they
should have implied into them duties of good faith and fair dealing
Whether the postmaster contracts should have further terms implied into
them
9. There are a very wide range of possible outcomes, with 23 Common Issues at stake,
some of which are broad (e.g. one seeks the implication of 21 separate implied terms.
Given the wide range of possible outcomes (including that Post Office wins on all
counts), we will revisit the UQ answers once the judgment is available.
10. Regardless of the legal findings, Post Office expect the judge to continue to be critical
of some aspects of Post Office’s handling of the case and its treatment of claimants.
We expect these largely to relate to historic behaviour and do not believe that POL
currently has problems with is operational culture.
11. While Post Office Ltd is 100% owned by HMG, it operates as an independent,
commercial business. As such, the relationship with its sub-postmasters and the
management of its IT systems are operational matters for Post Office Ltd. The legal
defence and the costs involved are being handled by them.
Appeal
12. Either party can ask the Court for permission to appeal and permission is initially sought
from the trial judge when the judgment is handed down. If this is given, the appealing
party must make their formal application within 21 days of the judgment being handed
down. In the event of an adverse judgment relating to issues that POL believe would
have a significant impact on the business, we would anticipate that they will seek leave
to appeal. We have agreed with POL that there will be time for ministers to be informed
about the appeals before they are made. The litigants may also appeal. The judge has
so far indicated that appeals will not delay the start of the Horizon trial on 11 March.
Seeking permission for early sight of the judgment
13. In principle, the Secretary of State could make an application to the judge to ask for
permission for (named) individuals in BEIS, particularly ministers, to see the draft
judgment. This application would also be served on the claimants and POL. We would
argue that this would be on the basis that there will be strong public interest in the case
UKGI00009076
UKGI00009076
UK Government Paaordilbgt for
Investments jusiness, Energy
& Industrial Strategy
and, as sole shareholder of POL, the Secretary of State for BEIS is
accountable to Parliament for the Post Office. BEIS Ministers will be required to answer
questions in Parliament (or privately from MPs) on the outcome of this judgment,
therefore it would be important to have advance sight of the judgment so that they can
prepare.
14. BEIS legal and UKGI legal advisors have consulted relevant GLD litigation advisers and
advise that such an application is highly unlikely to be successful. The Secretary of
State as shareholder is in the same position as any other shareholder of a private
company, namely a separate legal entity. We have not been able to find any similar
precedents where shareholders of companies have successfully applied for advance
sight of a judgment involving the company of which they are shareholder. The need for
Ministers to be prepared to answer questions about the judgment would not be a
persuasive ground for applying for permission, particularly in a case which does not
raise any public law issues but a private law matter between POL and the claimants.
15. As well as being highly unlikely to receive permission, the application for permission
and the judge’s response will be made public. An application would run counter to the
position the Department has taken thus far regarding this litigation (including in
Parliamentary Questions), namely that it is an operational matter for POL.
16. Therefore, we advise that the Minister does not seek permission to have early sight of
the judgment. UKGI will work with BEIS communications and with POL to ensure that
appropriate responses are made ready as soon as the judgment is out.
Contributors
17. This advice is not considered to have financial considerations.
18. BEIS Legal (Gareth Evans) and UKGI Legal (Richard Watson) have been consulted
and agreed the content of this advice.
19. Communications considerations have been taken into account, and agreed with
Annabelle Miles.
20. Parliamentary handling has been taken into account, and agreed with Tom Aldred.
Annexes
A. UQ rebuttal
B. UQ draft answers