Post Office’s £5m legal bill in fight with sub-postmasters
… and it faces paying £1bn compensation if the 500 claimants win
THE Post Office has spent an estimated £5million of public money waging a legal battle against its own sub-postmasters.
This can be revealed as more than 500 men and women who used to run small branches start a landmark High Court case on Wednesday claiming a giant miscarriage of justice.
They are suing the Post Office, claiming they were wrongly accused of theft and false accounting after money went ‘missing’ from their village branches. Scores were driven to ruin over the alleged glitches in the Horizon computer system they used. The Post Office denies the system was faulty but could face a compensation bill of up to £1billion if it loses.
Sub-postmasters and mistresses run small branches and are not employees of the Post Office but private business people.
They often take on the role in semi-retirement to operate muchvalued local services from village stores or similar locations. But after alleged glitches in the Horizon system reported shortfalls of tens of thousands of pounds, dozens were prosecuted. Some were jailed, scores went bankrupt and at least one suicide was blamed on the accusations.
Lead claimant Alan Bates, who kept a branch in Llandudno, North Wales, from 1998 to 2003, said: ‘I’m pleased the trial is finally starting and very much hope it will bring resolution for the claimants, all of whom have waited many years for this day to come.’
Unlike Royal Mail, the Post Office is not a private company and its legal costs are met by taxpayers. In a pre-trial hearing, Mr Justice Fraser revealed the costs for lawyers so far were £10million.
If both sides have been spending at the same rate, it suggests the Post Office has spent £5million on lawyers before the trial in London has even started. Legal fees for the sub-postmasters are being met by private ‘litigation funding’ firm Therium Capital Management, which will take a cut of any damages or shoulder any costs.
The judge also rejected a bid by the Post Office to strike out sections of the sub-postmasters’ witness statements for what he called ‘public relations reasons’. He said the evidence was ‘properly admissible’ and added: ‘The principle of open justice is an important one.’
The Post Office made no comment on the costs but vowed to defend itself ‘robustly’ in court.
A spokesman said: ‘We have worked hard over a number of years to address the issues raised. We have conducted thorough investigations and sought to resolve some of the claims through mediation.
‘The claimants represent a very small proportion (0.01 per cent) of users of our Horizon computer system users since 2000.
‘The system is operated successfully by thousands of employees, postmasters and their staff to process 47 million transactions every week, including on behalf of high street banks.’