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Post Office Scandal – Averting Group Actions

We’re a specialist team handling complex technology disputes. We handled one of the largest and most complex technology project disputes to enter the UK High Court in recent years, namely the litigation regarding the Fujitsu/Post Office Horizon Point of Sale System.

Post Office Horizon system

James Hartley, Partner and National Head of Dispute Resolution, is of no doubt that, had Post Office Limited considered the potential human impact of a flaw in its Horizon accounting system, and looked at the evidence holistically, it would have avoided the catastrophic human damage inflicted on thousands of its postmasters and averted the PR disaster that unfolded.

Instead, Post Office not only failed to avert the disaster, but when problems arose it compounded matters by taking a stance of “…defend, defend, defend; deny, deny, deny”, which led to a major defeat in the High Court, huge compensatory pay outs, irredeemable reputational damage and a scandal that has become known as the worst miscarriage of justice in British history.

James’ observations are derived from a long career in commercial dispute resolution and from more than six years working on the Post Office case, in which he and his team secured justice for 555 postmasters and exposed Post Office’s unlawful actions.

Post Office scandal

Over a 14-year period, Government-owned Post Office Limited prosecuted more than 700 postmasters for theft and false accounting. Its evidence came principally from data produced by the flawed Horizon computerised point of sale system. As a result, victims faced criminal convictions, were left financially ruined when debts were pursued by Post Office, and many were ostracised from their families and communities.

Post Office denied any wrongdoing for many years. Our legal team, led by James, successfully fought and won the legal battle on behalf of 555 claimant postmasters. Post Office eventually settled the case and issued a formal apology, paying £57.75m in compensation and agreeing to implement a compensation scheme for thousands of other affected postmasters. The historic case also led to a public inquiry and the quashing of hundreds of wrongful criminal convictions.

In 2022, the Government agreed to implement an additional compensation scheme to ensure that the 555 claimants are properly compensated for having to fight the legal case and incur litigation funding costs which unfairly depleted their recoveries in the High Court.

Complex litigation

In fighting this and other complex litigation cases, James’ team is now widely considered to be one of the foremost dispute resolution teams in the UK. The team is consistently within the top 10 law firms that handle the most High Court litigation in the UK.

Post Office lessons learned

  • Identifying problems early
    James said: “We encourage businesses to think about the measures that should be put in place to spot potentially high-impact scenarios very early.”
  • Litigating with purpose
    James continued: “When problems do occur, we encourage strategies that incorporate ‘People, Planet, Profit’ principles, which can help businesses resolve issues responsibly and efficiently, whilst also preserving or enhancing reputation.”
  • Prevention & containment
    Prevention and containment of issues, as mentioned above, is the primary risk-management goal. But if and when your business needs to defend itself against group litigation actions, you need a team that is strategic, so that litigation solutions align with your business objectives.
  • ARC system – assessing strategic options
    Using our unique ARC system , we devise winning strategies for clients’ wide-ranging disputes. The ARC system involves a systematic approach to assessing strategic options, risk/benefit outcome scenarios and action plans. This system has been successfully deployed in many cases, including the Post Office case.

Watch James Hartley's LinkedIn Live

In this LinkedIn Live session, Freeths Partner and Commercial Dispute Resolution expert James Hartley, shared his candid and unique experience taking on one of the most widespread miscarriages of justice in British legal history – the Post Office scandal:

"A first-class and extremely competent firm that came to the aid of a major victims' group when all else had failed to expose the truth and when justice had eluded the group for many years. Having failed to find legal support for so long, Freeths took the victims on board and helped to deliver outstanding success with judgments that have changed so many lives." 

Alan Bates

Advising corporates on group action defence

The team regularly advises its corporate clients on strategies to avoid group actions, or collective proceedings as they are often known in the UK.

As such, they are keen to share their experience and expertise, so that other large corporates learn from Post Office’s lessons. And while the Freeths team in that instance fought for the claimants, their primary focus is with corporates applying the deep insight gained in the case to reduce the risk of this type of litigation and to devise sophisticated resolution strategies when problems do occur.

The number of group actions against companies continues to increase, so there is more need than ever to manage the risks proactively.

James explained: “Post Office conducted criminal prosecutions over many years, without its board once stepping in to stop it happening. The warning signs were nevertheless there.”

Strategic tips for litigation risk management:

Your business should be conscious of the threat of group actions and other high-stakes litigation. The steps you can take to manage these risks include:

  • Monitoring early warning signs such as customer complaint trends and social media ‘noise’ relating to your business or your sector
  • Responding quickly and effectively to claims and disputes at the earliest opportunity and consider the wider risks of escalation and regulatory action when devising strategies
  • Incorporating ‘people, planet, profit’ principles into resolution strategies
  • Adopting a risk management approach and confronting & resolving issues as they arise, to minimise the risk of escalation
  • Identifying ‘low probability, high-impact risks’ and manage them proactively
  • Building forecasting into your strategic planning, including outcome scenario planning
  • Don’t ignore emerging disputes or claims – grasp the nettle!
  • Considering the impact on your company’s reputation of all actions taken
  • Assembling the right team to handle significant matters: combining professional insight with technology, a best-in-class multidisciplinary team and data-driven decisions for successful outcomes

Contact our dispute resolution team

Testimonials

  • PGQ

    This was David v Goliath litigation, on a large scale; from the outside, the difficulties which the claimants faced now seem masked by the scale of...

    Patrick Green QC

    Henderson Chambers

  • James Hartley and Freeths deserve huge credit for taking on this case. What is now recognised as the biggest miscarriage of justice in British his...

    Client testimonial

  • Their dedication and expertise was extraordinary and they deserve due recognition for the vital and central role they played in unmasking the injus...

    Client testimonial

  • KD|B|HC

    Imogen Randall was exceptional throughout: she was indefatigable in her efforts to find justice for the subpostmasters and expose the truth behind...

    Kathleen Donnelly | Barrister | Henderson Chambers, Barrister

    Henderson Chambers

  • KF

    In the face of ferocious denial of the claim by Post Office and its lawyers, and even when it looked like it could go either way on technical legal...

    Karl Flinders, Chief reporter

    Computer Weekly

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