Alan Bates and Others v Post Office Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Fraser |
| Judgment Date | 17 October 2018 |
| Neutral Citation | [2018] EWHC 2698 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ16X01238 |
| Date | 17 October 2018 |
[2018] EWHC 2698 (QB)
THE HONOURABLE Mr Justice Fraser
Case No: HQ16X01238
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
THE POST OFFICE GROUP LITIGATION
Royal Courts of Justice
Strand, London, WC2A 2LL
Patrick Green QC, Henry WarwickandOgnjen Miletic (instructed by Freeths LLP) for the Claimants
Anthony De Garr Robinson QC and Owain Draper (instructed by Womble Bond Dickinson LLP) for the Defendant
Hearing date: 10 October 2018
Judgment (No.2)
These proceedings are being conducted pursuant to a Group Litigation Order (“GLO”) made on 22 March 2017 by Senior Master Fontaine. Further introduction concerning these group proceedings is included in my first written judgment in this matter, also on procedural rather than substantive issues, which is at [2017] EWHC 2844 (QB). This judgment is my ruling on an application by the defendant to strike out considerable passages of the evidence contained in the six witness statements lodged by the claimants. There are six Lead Claimants whose cases have been selected to be dealt with first, in the circumstances which I explain further below. Depending upon whether one counts the challenged evidence in pages, paragraphs or lines, the defendant seeks to strike out between about one quarter to one third of all of the evidence served by the claimants for the Common Issues trial due to start on 5 November 2018.
The broad outline of the litigation as a whole is as follows. There are now approximately 600 claimants, who were all for the most part sub-postmasters, although a small number were Crown Office employees and managers/assistants, whose contracts of employment with the defendant are different to the contracts of the sub-postmasters. The defendant, as is well known, operates the network of over 11,000 Post Office branches throughout the UK. The defendant has been independent of Royal Mail Group since 2012. All of the claimants (regardless of their precise individual status, and whether they were individually either sub-postmasters or Crown Office employees) at the material times were responsible for running Post Offices. “Material times” obviously means different periods for each claimant, as the dates upon which they became sub-postmasters or Crown Office employees differ between them, as do the dates upon which they ceased to have that status. The term sub-postmaster is one widely understood in society and is used to describe the person appointed by the defendant to run a particular branch. The range and type of services provided is not identical in all of the branches, and in particular those in rural areas are sometimes seen as the hub of small communities. The Crown Office employees perform similar functions to sub-postmasters, but do so at branches that are (or were) directly managed by the defendant. These are called Crown Office branches. This distinction is not currently material (but may become so on some of the substantive issues).
In about 1999/2000 the defendant introduced a system called Horizon, an electronic point of sale and accounting system, for all of its branches. It was a computerised system with both hardware and software, as well as comprising communications equipment in the branches and central data centres. This is explained further at [3] of my first judgment, which must now be called Bates v Post Office Ltd (No.1), the numbering being required in what promises to become a long-running series. All of the claimants were users of the Horizon system, and indeed they were required to use the Horizon system. The parties are somewhat apart in their view of what Horizon did, and how it in fact operated. The claimants' case is that the Horizon system contained, or must have contained, a large number of software coding errors, bugs and defects. Alleged shortfalls in the claimants' financial accounting with the defendant are said, on the claimants' case, to have been caused by these problems with the way the Horizon system operated. These shortfalls, it is said by the claimants, originated after Horizon started being used. Horizon was designed and installed by Fujitsu Ltd, another well-known company, which is not a party to these proceedings. The treatment of the claimants by the defendant when such shortfalls occurred is highly controversial, and this judgment contains no findings in this respect (nor could it, given no trial has yet taken place). The defendant, in many instances, pursued with some vigour the shortfalls with different claimants as accounting discrepancies for which those claimants were responsible. The claimants denied responsibility, but at the time had to deal with the consequences of the defendant's stance in this respect. Some claimants paid the relevant amounts to the defendant out of their own resources, even though they did not believe or accept that there was anything deficient in their accounting. Some claimants found accounting irregularities in their favour. Some were convicted in the criminal courts of false accounting, fraud, theft or other offences. Some had their contracts with the defendant terminated, sometimes very abruptly. The claimants also are of the view that the defendant, over time, came to know about these difficulties with the Horizon system, but did not address them and did not publicise these problems. There are claims for damages for financial loss, personal injury, deceit, duress, unconscionable dealing, harassment and unjust enrichment brought against the defendant. There is currently a Criminal Cases Review Commission (“CCRC”) review underway in respect of the convictions of a significant number of the claimants.
The defendant disputes the whole basis of the claimants' case, and maintains that Horizon worked perfectly adequately, that the claims against it are time-barred, and also mounts a range of what could be called contractual defences. These include the terms of settlements reached with individual claimants when many branches were closed as the defendant rationalised its branch network. The defendant also maintained, both at the relevant times and in this litigation, that the burden of showing that there was something wrong with the Horizon system (and what it was that caused the shortfalls) is upon the claimants. The claimants deny that they have this burden, and also deny that they have the ability to do this in any event. This may, in due course, potentially prove to be a modern version of probatio diabolica; but the use of Latin is discouraged. Because full legal argument has not yet been advanced by either party on any substantive issues, it is too early to express even preliminary views on this, and nothing in this judgment should be taken as my expressing any view on any substantive component or issue in this case in any respect.
Over the years, and prior to the issue of proceedings by the claimants (and the making of the GLO itself) there was an action group formed, called the Justice For Sub Postmasters Alliance (“JFSA”). Encouraged by some Members of Parliament, an independent inquiry was set up by the defendant using a specialist company called Second Sight Services Ltd (“Second Sight”) that ran from 2012 until 2015, when it was terminated in circumstances that are currently unclear. Evidence was given to a Parliamentary Select Committee by the Chief Executive of the defendant in February 2015. This was in relation to a Mediation Scheme that had run for a while jointly under the auspices of the defendant, Second Sight and JFSA. There have been various reports and documentaries in the media, including a BBC Panorama documentary entitled “Trouble at the Post Office” in August 2015. The subject matter of this group litigation is highly controversial.
It should also be recorded that the making of a GLO at all was opposed by the defendant. The parties first appeared before me on 19 October 2017, which was the first date possible after the making of the GLO Order. At that hearing, I made Directions Order No.1 and ordered the trial of certain issues to take place on 5 November 2018. That was the earliest date that the parties maintained could be achieved in terms of their being ready to try any of the issues. There are currently three trials due to take place in the next 12 months, all before me as the Managing Judge. The trial on 5 November 2018 is to resolve a number of issues of contractual construction, and is entitled the Common Issues trial. In February 2019, the issues relevant to the operation of the Horizon system itself are to be tried, including expert evidence from computer experts, and this is called the Horizon Issues trial. The parties have been put on notice that in the summer of 2019 the third trial is to occur. The issues or claims for that trial have not yet been formalised but are likely to be some of the Lead Claimants' individual cases.
This judgment relates to an application issued by the defendant on 5 September 2018. This seeks to strike out large parts of the factual evidence served by the six Lead Claimants for the trial on 5 November 2018. These statements were served on 24 August 2018, although they were available for exchange earlier on 10 August 2018. The defendant requested an extension of time to finalise its own statements, hence a two week extension was agreed. The total number of passages in the statements under attack is in excess of 160 paragraphs. The application is supported by the 9 th witness statement of Mr Parsons, of the defendant's solicitors.
When the application was issued on 5 September 2018, there was already a hearing before me listed for 19 September 2018, to deal with a number of case management matters and also an outstanding application by the defendant for security for costs. The claimants had in an earlier Consent Order consented to...
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