Post Office asks Court of Appeal for permission to appeal judgment in first Horizon trial

The Post Office has gone to the Court of Appeal to seek permission to appeal the judgment in the first trial in its multimillion-pound legal battle with subpostmasters who are suing for damages for suffering caused by alleged faults in the Horizon IT system they use to run branches.

In May, Judge Fraser, who is managing the group litigation order (GLO), refused the Post Office permission to appeal his judgment in first trial. The Post Office has now sought permission from the Court of Appeal.

“We’re seeking permission from the Court of Appeal to appeal some of the legal findings from the Common Issues judgment,” said a Post Office spokesperson.

The judgment the Post Office is seeking to appeal is from the first trial, known as the common issues trial, where the contractual relationship between Post Office and subpostmasters was put under the microscope.

The plight of some subpostmasters, which run Post Office branches, was first reported in 2009, when Computer Weekly revealed that the lives of some subpostmasters had been turned upside-down after being fined, sacked, made bankrupt or even imprisoned because of unexplained accounting shortfalls. They blamed the Horizon accounting and retail system for the problems, but the Post Office has refuted this (see timeline below).

The legal battle is currently in its second trial, which has looked in detail at the Horizon computer system. This trial is due to resume and end in early July with closing arguments.

The judgment from the first trial said the Post Office demonstrated “oppressive behaviour” when demanding sums of money that could not be accounted for by subpostmasters.  

Judge Fraser also found there was a culture of secrecy and confidentiality generally in the Post Office, but particularly around the Horizon accounting and retail system subpostmasters use to run the branches.

“There can be no excuse, in my judgment, for an entity such as the Post Office to mis-state, in such clearly expressed terms, in letters that threaten legal action, the extent of the contractual obligation upon a [subpostmaster] for losses,” he said in the ruling.

“The only reason for doing so, in my judgment, must have been to lead the recipients to believe that they had absolutely no option but to pay the sums demanded. It is oppressive behaviour.”

This is not the first time the Post Office has asked the Court of Appeal for permission to appeal a decision in this case. In May, the Court of Appeal rejected the Post Office legal team’s appeal against Fraser’s decision not to remove himself from the case.

The Post Office had made an application for Fraser to recuse himself, alleging the judge showed bias. When the Post Office made the application to appeal Fraser’s rejection of the recusal application, Lord Justice Coulson, in the Court of Appeal, said: “The recusal application never had any substance and was rightly rejected by the judge.”

Costs are ramping up in this huge litigation. The Post Office was recently ordered to pay 90% of the costs for the claimants incurred in the first trial, which was around £5.5m. 

When discussing the high costs of the case, Judge Fraser said the last time he was updated on the costs to the Post Office itself, including spending for the second trial, the figure was more than £12m.

Alan Bates, lead claimant and leader of the Justice for Subpostmasters Alliance, said the appeal was predictable given the “Post Office’s access to public funds”.