Bates v Post Office Ltd (No 3)

Last updated

Bates v Post Office Ltd (No 3)
Corsham Post Office.JPG
Post Office in Corsham
Court High Court of Justice
Full case nameBates & Others v Post Office Ltd (Judgment (No.3) "Common Issues")
Decided15 March 2019
Citation(s)[2019] EWHC QB 606
Court membership
Judge(s) sitting The Honourable Mr Justice Fraser
Keywords
Good faith

Bates v Post Office Ltd (No 3) is a part judgment [1] (the third of six), made in the group litigation order case of Bates & Others v Post Office Ltd , an English contract law case, concerning the term of good faith and various "common issues" in the British Post Office scandal.

Contents

Case

Five hundred and fifty subpostmasters (SPMs) and others were claimants against the Post Office Limited in group litigation. The claimants argued that the Post Office's Horizon software system for sales and accounting was defective and produced false accounting shortfalls for which the Post Office then wrongly held the claimants accountable. They argued this was a breach of contract, and good faith. The Post Office argued that the claimants were responsible for the shortfalls, claiming that this represented actual money missing, and brought many prosecutions, culminating in the British Post Office scandal.

Judgment

In the High Court, Lord Justice Fraser held there was a relational contract with a duty of good faith, fair dealing and transparency in the terms on liability, payment, termination and suspension in the contract. Some provisions were too unusual and onerous to be incorporated without being drawn specifically to the other party's attention. Twenty-nine bugs, errors and defects were identified and analysed in the Horizon software.

During the case, six separate judgments were handed down: [2]

Judgment No 1 Applications to alter timetable – November 2017

Referring to costs and delay, the judge said, "Fitting hearings around their availability has all the disadvantages of doing an intricate jigsaw puzzle, with none of the fun associated with that activity." [3]

Judgment No 2 Application to strike out evidence – October 2018

This decision followed a case management hearing and dismissed an application to strike out roughly one-quarter of the lead claimants' evidence – more than 160 paragraphs. Justice Fraser said:

"The application by the defendant to strike out this evidence appears to be an attempt to hollow out the Lead Claimants' case to the very barest of bones (to mix metaphors), if not beyond, and to keep evidence with which the defendant does not agree from being aired at all. [4]

The judge commented that adverse publicity for Post Office was not a matter of concern for the court if the evidence was relevant and admissible. He also warned against the aggressive conduct of litigation, particularly in a group action of this nature. The application was dismissed. [5]

Judgment No 3 Common Issues – March 2019

The subpostmasters and the Post Office had identified 23 issues relating to the contractual relationship between them and about which they disagreed. The judge made findings on each so that obligations under all iterations of the contracts would be settled, both retrospectively and prospectively. [6] Of the 23 issues, 16 were decided in the subpostmasters' favour. The parties agreed that broadly the claimants were more successful. [7] : 33–34  Issue 1, concerning whether the contracts were relational contracts, was described by the judge as one of the most important issues. [2] : 31  He found subpostmasters' contracts are relational contracts: "This means that the Post Office is not entitled to act in a way that would be considered commercially unacceptable by reasonable and honest people". [2] : 711 

In court, Fraser criticised testimony given by Post Office witnesses. The judge said Angela van den Bogerd (Head of Partnerships, Post Office) "did not give me frank evidence, and sought to obfuscate matters, and mislead me." [8]

Of the evidence of one Post Office witness, the judge said, "The Post Office appears, at least at times, to conduct itself as though it is answerable only to itself. The statement that it is prepared to preserve documents – as though that were a concession – and the obdurate[sic] to accept the relevance of plainly important documents, and to refuse to produce them, is extremely worrying." [2] : 523 

When the judgment was delivered, the Post Office said it would appeal. On 23 May, the judge refused the Post Office permission to appeal and set out his reasons on 17 June. [9] The Post Office applied for permission to appeal that refusal. Lord Justice Coulson refused permission to appeal judgment No 3 and handed down his written reasons on 22 November. [10]

Judgment No 4 Application for recusal – April 2019

The Post Office brought in legal-heavyweight Lord Grabiner to make an application to Fraser that he recuse himself. [11] Grabiner was asked to explain the delay in making the application. He replied:

"It was made at board level within the client and it also involved the need for me to be got up to speed from a standing start. And I am not the only judicial figure or barrister that has looked at this with a view to reaching that conclusion." [12] : 279 

The recusal application was opposed by the subpostmasters and dismissed by the judge. [12] : 24, 289  Lord Justice Coulson refused the Post Office permission to appeal the refusal to recuse. The Law Society Gazette wrote:

"In a scathing 17-page judgment, the Court of Appeal has thrown out an attempt by the Post Office to appeal a judge's refusal to recuse himself from group litigation on the grounds of bias. Ruling in Post Office Limited v Alan Bates & Ors, the Rt. Hon. Lord Justice Coulson said that the recusal application 'never had any substance and was rightly rejected by the judge'. He also expressed sympathy with the suspicion raised by the other party in the case, a group of sub-postmasters and mistresses, that the recusal application had been made in the hope that a sub-trial would collapse. 'Although I can reach no concluded view on the matter, I can at least understand why the [sub-postmasters and mistresses] submitted that was its purpose', Coulson LJ said." [13]

Of the submission by Grabiner, that he was not the only judicial figure or barrister who had looked at the decision to seek recusal, Coulson said: "Such a comment, presumably made in terrorem , should not have been made at least without proper explanation of its relevance." [14] The Law Society Gazette wrote:

"The judge confirmed that the Post Office has already agreed to pay £300,000 in respect of the costs of a failed application earlier this year to have him recused. The Post Office's own costs of the recusal application were over £212,000, which included £34,165 for solicitors and £174,815 for counsel." [15]

Judgment No 5 Common Issues costs – June 2019

In an article in the Law Society Gazette John Hyde wrote:

"The Common Issues trial, as the court referred to it, sought to resolve 23 matters relating to different contracts. It was tried over a month at the end of 2018, and the Post Office has asked the court to reserve the cost of that trial. An order now, rather than at the very end of litigation, ‘would demonstrate a pre-determination as to the overall outcome’, the Post Office submitted. But the judge was concerned this submission was a 'veiled or implied threat', mirroring the Post Office's approach to its recusal application – namely, claiming that any interim decision would suggest the overall outcome had already been decided. Fraser J said it was 'entirely conventional' for costs orders to be made where litigation is dealt with in stages. He added: 'I make it clear (once again) that I have no such pre-determined view on any matters yet to be fully tried.' He continued: 'The claimants would not be on an equal footing with the Post Office, a publicly funded body, if I reserved the costs of the Common Issues trial until the very end of the litigation.' Noting that the Post Office succeeded on seven of the 23 common issues on trial, he awarded the claimants, who are backed by Therium Capital, their costs subject to a 10% reduction." [15]

Judgment No 6 Horizon issues – December 2019

This judgment concerns the operation and functionality of the Horizon system itself. The hearings took place in March, April, June and July 2019. The hearings were interrupted by the Post Office's application for the judge to recuse himself, to appeal his refusal to recuse himself, and his judgment No 3. The judgment was published in December 2019. Twenty-nine bugs, errors and defects were identified and analysed. [16] Witnesses for the subpostmasters and for the Post Office submitted statements and gave oral evidence. Documents that had been submitted, and further documents, the submission of which had been resisted were, after argument and rulings, submitted. These included the 'Known Error Logs' and the 'PEAKs', a browser-based software incident and problem management system used by Fujitsu for the Post Office account. Permission was given for two IT experts to be called, one for the claimants (Jason Coyne) and one for the Post Office (Robert Worden). [17] : 6 

The important judgment was about whether the Horizon computer system worked and was "robust", which the Post Office said it was. Again, the judge found overwhelmingly in favour of the subpostmasters and that the original version of Horizon was "not robust" and, as to the later version, "its robustness was questionable, and did not justify the confidence placed in it by the Post Office in terms of its accuracy." [18]

During this trial, the Post Office issued an application that the judge recuse himself. Just as the judge returned to court for the final afternoon of evidence, solicitor and journalist Joshua Rozenberg reported, "he was told that the Post Office had served an application for his recusal ... Counsel representing Post Office on the Horizon issues had apparently not seen it. He made no mention of it that morning". [11] The application led to Fraser's Judgment No. 4, and then to an application for permission to appeal that judgment. The applications and the appeal failed but caused considerable delay. [17] : 5–7 

Fraser commented on the evidence given by Stephen Parker, Head of Post Office Application Support, Fujitsu:

"I do not consider that Mr Parker was interested in accuracy in any of his evidential exercises. ... I do not consider his evidence in his witness statements to have been remotely accurate, even though he stoutly maintained that it was." [17] : 495–498 

Fraser said:

"[T]he possibility of future (as opposed to current) criminal prosecutions, or the potentially criminal impact upon individual subpostmasters, did more than hover in the background to the Horizon Issues trial. Some claimants who gave evidence in this trial were expressly accused by the Post Office of criminal offences in cross-examination in this trial, something which had also occurred in the Common Issues trial." [17] : 64(2) 

See also

Related Research Articles

In English civil litigation, costs are the lawyers' fees and disbursements of the parties.

A stay of proceedings is a ruling by the court in civil and criminal procedure that halts further legal process in a trial or other legal proceeding. The court can subsequently lift the stay and resume proceedings based on events taking place after the stay is ordered. However, a stay is sometimes used as a device to postpone proceedings indefinitely.

Judicial disqualification, also referred to as recusal, is the act of abstaining from participation in an official action such as a legal proceeding due to a conflict of interest of the presiding court official or administrative officer. Applicable statutes or canons of ethics may provide standards for recusal in a given proceeding or matter. Providing that the judge or presiding officer must be free from disabling conflicts of interest makes the fairness of the proceedings less likely to be questioned.

Sir Peter Winston Smith, abbreviated to Peter Smith J in judgements, is a former High Court judge who sat in the Chancery Division of the High Court of Justice in England and Wales from 5 April 2002 to 27 October 2017. He was the subject of comment and investigation in relation to his judicial behaviour in various circumstances. He retired on 28 October 2017.

In law, intervention is a procedure to allow a nonparty, called intervenor to join ongoing litigation, either as a matter of right or at the discretion of the court, without the permission of the original litigants. The basic rationale for intervention is that a judgment in a particular case may affect the rights of nonparties, who ideally should have the right to be heard.

The National Federation of SubPostmasters (NFSP) is a membership organisation, which represents subpostmasters in the United Kingdom. Subpostmasters are self-employed business operators, approved by Post Office Ltd to act as their agents in running Post Office branches (outlets). In Jan 2023, the NFSP had 6727 members who operated approximately 9,300 post office branches. Post Office Ltd is contractually obliged to consult the NFSP on behalf of subpostmasters.

<i>Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd</i>

Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1987] EWCA Civ 6 is an English contract law case on onerous clauses and the rule of common law that reasonable notice of them must be given to a contracting party in order that they be effective. It also addressed, but did not decide, the position of onerous clauses as disguised penalties.

Bristows is a full-service commercial, law firm, particularly known for its technology and intellectual property work.

In United Kingdom election law, an election court is a special court convened to hear a petition against the result of a local government or parliamentary election. The court is created to hear the individual case, and ceases to exist when it has made its decision.

<i>Wrotham Park Estate Co Ltd v Parkside Homes Ltd</i>

Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 is an English land law and English contract law case, concerning the measure and availability of damages for breach of negative covenant in circumstances where the court has confirmed that a covenant is legally enforceable and refused, as unconscionable, to issue an order for specific performance or an injunction.

<i>FHR European Ventures LLP v Cedar Capital Partners LLC</i> UK legal case

FHR European Ventures LLP v Cedar Capital Partners LLC[2014] UKSC 45 is a landmark decision of the United Kingdom Supreme Court which holds that a bribe or secret commission accepted by an agent is held on trust for his principal. In so ruling, the Court partially overruled Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd in favour of The Attorney General for Hong Kong v Reid (UKPC), a ruling from the Judicial Committee of the Privy Council on appeal from New Zealand.

The British Post Office scandal, also called the Horizon IT scandal, involved Post Office Limited pursuing thousands of innocent subpostmasters for shortfalls in their accounts, which had in fact been caused by faults in Horizon, accounting software developed by Fujitsu. Between 1999 and 2015, more than 900 subpostmasters were convicted of theft, fraud and false accounting based on faulty Horizon data, with about 700 of these prosecutions carried out by the Post Office. Other subpostmasters were prosecuted but not convicted, forced to cover Horizon shortfalls with their own money, or had their contracts terminated. The court cases, criminal convictions, imprisonments, loss of livelihoods and homes, debts and bankruptcies, took a heavy toll on the victims and their families, leading to stress, illness, family breakdown, and at least four suicides. In 2024, Prime Minister Rishi Sunak described the scandal as one of the greatest miscarriages of justice in British history.

<i>Erlam v Rahman</i>

Erlam and others v Rahman and another [2015] EWHC 1215 (QB) is an English election court case challenging the 2014 election of Lutfur Rahman as the Mayor of the London Borough of Tower Hamlets. On 23 April 2015, Election Commissioner Richard Mawrey voided Rahman's election under the Representation of the People Act 1983 on the grounds of corrupt and illegal practices by him and his agents, and general corruption so extensively prevailing so to reasonably supposed to have affected the election. Rahman's official election agent Alibor Choudhury was ordered to vacate his own office of councillor in the ward of Stepney Green for being guilty of corrupt and illegal practices.

<i>Evangelou v McNicol</i> English legal case

Christine Evangelou and others v Iain McNicol (Labour Party) [2016] EWCA Civ 817 is an English contract law case brought by five members of the Labour Party of the United Kingdom against its General Secretary, Iain McNicol on behalf of the whole party, concerning the eligibility of members to vote in the party's leadership election of 2016. The claimants came to court to challenge the decision of the party's National Executive Committee to bar members from voting in the election if they joined the party after 12 January 2016 (i.e. less than six months before the start of voting). This was due to affect approximately 130,000 new members (around one quarter of the party's total membership). The judge at first instance sided with the claimants, although this decision was overturned on appeal. On 14 August, it was announced that the claimants would not be challenging this decision in the Supreme Court.

<i>Lungowe v Vedanta Resources plc</i> Legal case heard by the UK Supreme Court

Lungowe v. Vedanta Resources plc [2019] UKSC 20 is a UK company law and English tort law case, concerning business liability for human rights violations, environmental damage and the duty of care owed by a parent company.

<span class="mw-page-title-main">Paula Vennells</span> British businesswoman and priest (born 1959)

Paula Anne Vennells is a British businesswoman who was the chief executive officer of Post Office Limited from 2012 to 2019. She is also an Anglican priest.

<span class="mw-page-title-main">Peter Fraser (judge)</span> British judge

Sir Peter Donald Fraser, styled The Honourable Lord Justice Fraser, is a Judge of the Court of Appeal of England and Wales.

<i>CN v Secretary of State for Health and Social Care</i> Judicial review permission appeal challenging non-inclusion of hepatitis B

CN v Secretary of State for Health and Social Care [2022] EWCA Civ 86 was an appeal against the refusal of permission to apply for judicial review to challenge the infected blood support scheme administered by the NHS Business Services Authority (NHSBSA) for non-inclusion of those infected with chronic Hepatitis B virus. The appeal was based on the grounds that the exclusion of those infected with HBV from the England Infected Blood Support Scheme (EIBSS) was unreasonable and discriminatory, contrary to article 14 when read in conjunction with article 8 and article 1 protocol 1 (A1P1) of the ECHR. The appellant also claimed that there was different treatment and that the failure to include those infected with HBV was unreasonable, and that the original application for review should not have been deemed out of time.

<i>Thompson v Arnold</i> Legal case concerning damages already awarded where death ensued

Thompson & Ors v Arnold[2007] EWHC 1875 (QB), was a law on damages case where the existing case law reaffirmed that damages awarded for a claim for personal injury were deemed to have already been awarded, even if death ensued as a consequence of personal injury. Where a claimant had settled their damages claim, or pursued it to trial, their dependants would have no right of action under the Fatal Accidents Act 1976 if the injury later proved fatal. Langstaff J. held that Read v Great Eastern Railway had been correctly decided as a matter of statutory construction and neither Article 6 nor Article 8 of the ECHR had been infringed. The claim was dismissed.

References

  1. ↑ Bates & Ors v Post Office Ltd (Judgment (No.3) "Common Issues") England and Wales High Court (Queen's Bench Division) Decision. [2019] EWHC QB 606
  2. 1 2 3 4 Bates & Ors v Post Office Ltd (No.3 "Common Issues") [2019] EWHC 606(QB) (15 March 2019), High Court (England and Wales)
  3. ↑ Bates & Ors v Post Office Ltd [2017] EWHC 2844(QB) , [2017] 4 WLR 221(10 November 2017), High Court (England and Wales)
  4. ↑ Bates & Ors v Post Office Ltd (No 2) [2018] EWHC 2698(QB) (17 October 2018), High Court (England and Wales)
  5. ↑ Heppinstall, Adam (18 October 2018). "Strike out of parts of witness statements application dismissed in group litigation (Bates and others v Post Office)" (PDF). LexisNexis . Archived from the original (PDF) on 9 July 2021. Retrieved 1 July 2021.
  6. ↑ Wallis, Nick. "Common Issues trial judgment: cheat sheet". Post Office Trial. Retrieved 1 July 2021.
  7. ↑ Bates & Ors v Post Office Ltd (No. 5: Common Issues Costs) [2019] EWHC 1373(QB) (7 June 2019), High Court (England and Wales)
  8. ↑ Loader, Gwyn (3 December 2020). "FAW appoints Post Office director who 'misled court'". BBC. Retrieved 20 April 2021.
  9. ↑ Wallis, Nick. "High Court refusal to let the Post Office appeal first trial judgment". Post Office Trial. Retrieved 8 July 2021.
  10. ↑ Before dealing with the 26 grounds that formed the basis of the application the judge set out a number of reasons that he felt militated against granting the Post Office permission to appeal. "Judgment on PTA" (PDF). 22 November 2019. Retrieved 3 July 2021– via Justice For Subpostmasters Alliance.
  11. 1 2 Rozenberg, Joshua (15 April 2019). "Post Office plays hardball with ironman judge". Law Society Gazette. Retrieved 2 July 2021.
  12. 1 2 Bates & Ors v Post Office Ltd (No 4 Recusal Application) [2019] EWHC 871(QB) (9 April 2019), High Court (England and Wales)
  13. ↑ Cross, Michael (14 May 2019). "Appeal throws out Post Office bid to replace judge". Law Society Gazette.
  14. ↑ Wallis, Nick (11 February 2022). "Recusal Top Dog Revealed". Post Office Scandal.
  15. 1 2 Hyde, John (10 June 2019). "Bates v Post Office: Costs hit £25m as both parties warned about spending". Law Society Gazette.
  16. ↑ "Bates & Ors v the Post Office Ltd (No 6: Horizon Issues) [2019] EWHC 3408 (QB). Appendix 2.1 Summary of Bugs, Errors, Defects" (PDF). judiciary.uk. Archived from the original (PDF) on 11 July 2021. Retrieved 11 July 2021. That appendix referenced the full "Technical Appendix"
  17. 1 2 3 4 " Bates and Others v Post Office[2019] EWHC 3408 (QB). Judgment (No. 6) Horizon Issues" (PDF). judiciary.uk. Retrieved 10 July 2021.
  18. ↑ Bates & Ors v the Post Office Ltd (No 6: Horizon Issues) (Rev 1) [2019] EWHC 3408 (QB), 16 December 2019, retrieved 10 August 2023 (936)
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.