The Post Office is finally paying compensation to the thousands of postmasters who it falsely accused of theft in the 2000s. 90% of these postmasters don’t have legal representation, and many believe they were pushed into accepting settlement offers that were insultingly low.
We can reveal today that the Post Office falsely asserted that its settlement offers were confidential. They weren’t. But that falsehood intimidated postmasters into not comparing offers with each other, not speaking to friends and family, and not going public. 90% never even spoke to a lawyer.
The background
Between 2000 and 2013, the Post Office falsely accused thousands of postmasters of theft. Some went to prison. Many had their assets seized and their reputations shredded. Marriages and livelihoods were destroyed, and at least 61 have now died, never receiving an apology or recompense.
The Post Office is finally paying compensation to its victims. Under the “Historic Shortfall Scheme” (HSS) it’s paying compensation to about 2,500 postmasters.1The HSS scheme doesn’t cover the postmasters who were wrongly convicted, or the 555 postmasters who claimed under the group litigation order (GLO) – these two groups overlap, but there are likely others who haven’t claimed under any scheme. So the total number of affected postmasters is unknown, but certainly over 3,000
The intimidation
90% of postmasters receiving HSS payments weren’t legally represented.2As of 4 April, 1,924 settlements had been entered into. The Post Office agrees to cover limited legal fees for postmasters receiving offers, but as of that date the Post Office had covered legal fees of only 198 (see our FOIA correspondence, linked here). Given the age and limited resources of most of the postmasters, it is reasonable to take from these figures that around 90% of the postmasters had no legal representation. Many were unhappy with the compensation they were offered. I couldn’t understand how this had happened – why didn’t more postmasters obtain legal advice? Why weren’t there more press stories about the derisory compensation they were receiving?
The shocking answer is that each postmaster receiving an HSS offer was warned by the Post Office not to mention the compensation terms to anyone. This had consequences. They weren’t able to compare compensation terms with each other. They weren’t able to speak to family or friends (who might have suggested they speak to a lawyer). And they weren’t able to go public about the way they were being treated.
This was the key paragraph in each of the offers:
The assertion of confidentiality is false and misleading as a matter of law. “Without prejudice” is a common law doctrine that prevents statements made in settlement discussions from being adduced as evidence in court. It’s a form of legal privilege, and not a rule of confidentiality.3This is somewhat reminiscent of my experience of receiving threats of dire consequences if I published “without prejudice” correspondence. In my case the correspondence wasn’t even properly “without prejudice”; in this case, it is. But what both cases have in common is an abuse of the “without prejudice doctrine” in order to silence somebody.
It’s very unusual for a defendant to a claim of this kind to attempt to unilaterally impose confidentiality on claimants. Settlement offers aren’t usually stated to be confidential at all. Final settlements, on the other hand, often are confidential4sometimes improperly, but that is typically achieved by a separately negotiated confidentiality agreement, not just an assertion by one party. There would usually be a list of people to whom disclosure could be made (such as family members, lawyers and insurers). Two experienced defendant tort barristers have told they would personally be uncomfortable negotiating a confidentiality agreement if the claimant was unrepresented. So the behaviour of the Post Office is as unusual as it is troubling.
In reality, there was never anything to stop recipients of the HSS offers from sharing them with other postmasters, friends, or journalists, and nothing to stop the journalists then publishing the terms (although it would be advisable to redact identifying details, to prevent any future court from seeing publication as an attempt to circumvent the “without prejudice” rule). The Post Office’s lawyers should have known this.
The attempt by the Post Office to intimidate postmasters into silence was shameful. It’s also a breach of professional ethics by the lawyers involved – the in-house lawyers at the Post Office, and also their external lawyers, Herbert Smith, if they were involved (it’s not clear if they were). That breach is all the more serious given that the lawyers knew that the vast majority of the recipients of these letters would be unrepresented.
The Post Office’s response
I put the above to the Post Office and received this response:
“Whilst we do not agree with your conclusions, we do not believe it’s appropriate to enter into legal argument exchanges in responses for an article.”
I am not sure what this means. I pressed the Post Office to specifically confirm if they still thought the offer letters had been confidential, and that they had acted appropriately. I wasn’t able to obtain an answer.
I also wrote to Herbert Smith; they acknowledged my email but have not responded.
What happens next?
The Post Office should immediately write to everyone who’s received an offer in these terms, correcting their false statement, and making clear that postmasters are free to disclose the terms of the offer and, where they’ve reached one, their settlement.
Given that the false statement disadvantaged the postmasters, all HSS settlements should be reopened.
In the meantime, I’ve written to the Solicitors Regulation Authority asking them to investigate the Post Office’s in-house legal team, and look into whether its external lawyers, Herbert Smith, were involved. My letter is here.
Many thanks to Christopher Head and the other postmasters who’ve spoken to me, and shared details of their experiences. Thanks also to B and K for their assistance on the law of confidence and the nature of “without prejudice”, and C and X for their comments on the usual approach to confidentiality in settlements of this kind. And thanks to Tom Witherow at The Times.
Photo by Kristina Flour on Unsplash
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1The HSS scheme doesn’t cover the postmasters who were wrongly convicted, or the 555 postmasters who claimed under the group litigation order (GLO) – these two groups overlap, but there are likely others who haven’t claimed under any scheme. So the total number of affected postmasters is unknown, but certainly over 3,000
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2As of 4 April, 1,924 settlements had been entered into. The Post Office agrees to cover limited legal fees for postmasters receiving offers, but as of that date the Post Office had covered legal fees of only 198 (see our FOIA correspondence, linked here). Given the age and limited resources of most of the postmasters, it is reasonable to take from these figures that around 90% of the postmasters had no legal representation.
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3This is somewhat reminiscent of my experience of receiving threats of dire consequences if I published “without prejudice” correspondence. In my case the correspondence wasn’t even properly “without prejudice”; in this case, it is. But what both cases have in common is an abuse of the “without prejudice doctrine” in order to silence somebody.
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4sometimes improperly
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13 responses to “How the Post Office gagged postmasters with false confidentiality claims”
Whilst claims are made about compensation, There appears to be no figures for how much in total was paid by postmasters to post office profits and to solicitors in pursing claims.
Until such details are released it is possible that payments to the Post Office and solicitors greatly erode or exceed compensation.
Government & Post Office costs defending it faulty systems should also be published with all costs charged to the Post Office and its contractors whi should now be excluded from all public contracts.
the following judgment puts it nicely
Davis v Nyland (1975) 10 SASR 76 at 89:
“[I]n some quarters of the community there is a belief, amounting almost a superstitious obsession, that the expression ‘without prejudice’ is possessed of virtually magical qualities, and that anything done or said under it supposed aegis is everlasting hidden from the prying eyes of a court”.
(SASR = South Australian State Reports)
You’ll notice that the judge doesn’t even suggest any belief that what is so labelled is confidential
Updated Kumu graph link here – https://embed.kumu.io/d55bad20ee2808e74b66fd35b635d528
Hi Dan ,
with regard to the 36 POL lawyers mentioned in your letter, please take a look at the graph database I have created which shows info on various participants in the Horizon Inquiry. The graph is here – https://embed.kumu.io/bb5d6d2b72a3040ca2a906a00b23eeb3
That should take you to the initial screen which has a summary overview then you can zoom in on the nodes (circles being persons or things) and see some of the connections (lines which represent various things such as reporting lines for corporate entities or lines of evidence in trials).
The graph is work in progress – basically my attempt to help me keep an overview of the different parts. I have stuff to add – most notably a breakdown of the 83 directors of POL since incorporation. On the witness evidence side, I am still filling in gaps,
All info is public source taken from the Inquiry site, companies house, SRA, Lawsoc, LinkedIn and the like. I also use info (mugshots usually) from other information seekers on Twitter and LinkedIN.
I hope you find this useful – when you look at the Post Office Team (still wip) you will see there are more than 36 lawyers. There are a lot of recent joiners. When going through their profiles it changed my overall perception – I think efforts have been made to improve what they have in lawyers.
I have tried to map out the practice area distribution of the lawyers based on their LawSoc info. I don’t have an org chart so I am working things out by job title and what people post on LinkedIn
One area yet to be included is a zone for ex PO lawyers who have featured in Inquiry evidence. That work is ongoing.
You can get me on my email or on LinkedIn https://www.linkedin.com/in/warren-simmons-a9149817/
Best regards Warren
I see the Post Office has been boasting of making offers worth £100 million to 2,400 former postmasters.
Given the catastrophic damage its faulty software and unethical investigations and prosecutions caused to lives and livelihoods over many years, an average of under £42,000 per claim seems rather small to me.
Sorry for ruining your lives, chaps: look, here’s a couple of coppers; now please just shut up and go away.
I’m not entirely sure that it’s right to say that the WP offer was not confidential: see, for example, the comment (in parenthesis) made by Arnold LJ in BGC Brokers Ltd v Tradition (UK) Ltd [2019] EWCA Civ 1937, at [31]. The point is surely that any express/implied obligation of confidentiality which might attach to a WP offer does not prevent the offeree from showing it to a lawyer, in order to obtain advice upon it. From a conduct point of view, the question is whether the correspondence was written in a way which amounted to taking (or trying to take) unfair advantage.
The SRA has had plenty to say about this in the past: see its guidance on “Balancing Duties in Litigation”.
A duty of confidence may be imputed to parties involved in ongoing without prejudice settlement negotiations. That is very different from one party sending a unilateral settlement offer to another. I (and the specialists I spoke to) are not aware of any authority suggesting that a duty of confidence would arise in such circumstances.
On the subject of authority, may I ask if you’ve identified any which specifically confirms that a without prejudice offer (assuming it’s correctly so described) is not confidential (other than in the sense that it can’t be disclosed to the court deciding the matter, unless one of the WP exceptions applies)?
Or is it more of an argument of principle, presumably along the lines that Saltman / Coco v Clark requirement one (‘nature of information’) or two (‘circumstances in which imparted’), or both, aren’t met by such offers?
p.s. I feel I should disclose that I used to be a partner at what is now HSF but that was quite a few years ago and I’ve never had any involvement in PO matters. I am quite interested in the topic of over-stated claims for confidentiality (following link illustrates this) but haven’t looked at this WP point specifically. https://www.lawgazette.co.uk/news/wrong-confusing-unbalanced-sra-told-to-improve-guidance/5114392.article
I suspect that there is a possibility that your article might have actually understated the problem and it may be worth you obtaining greater clarification from one of your legal advisors on the following issues about the nature of this particular scheme:
1. The letter references offers being made on a ‘without prejudice basis’ so that the Court will not be notified of the terms of the offer. The Court will not be involved as this scheme appears to be running as a standalone mediation process being run outside the Court system;
2. It is hard to find out full details of the scheme over the internet (as the Post Office site seems to redirect to Q&A screens rather than the text of the scheme) but it appears that if the offer is rejected then further informal mediation takes place between either the Post Office themselves or the panel (who know the terms of the offer having made it) and the recipient of the letter (victim). They would all already know the terms of the offer; and
3. If the informal mediation does not work, then the parties proceed to a formal mediation process run by ‘Wandsworth Mediation Service’. Mediation (trying to negotiate a settlement) is not arbitration (where someone decides the outcome) and the process would presumably start by the Post Office/ the Panel stating their offer and the reasons behind it, and the victim the reasons why they disagree with that offer. Rather than being kept confidential, it would be the starting point of the process.
With the above in mind, there is no reason to keep any offer from anyone, and references to ‘without prejudice’ and ‘the Court’ appear to have little correlation to what will actually happen as the terms of the offer would seemingly not be kept secret from anyone else in the process. It does then beg the question of why the clause would have been included in the letter at all.
I’m not sure that’s right. I appreciate that the Post Office makes a mediation process available, however it is (at least in theory) open to postmasters to bring a claim against the Post Office through the courts, and at that point it would be correct to treat the original settlement offer as “without prejudice”. This doesn’t negate my point that “without prejudice” is not a confidentiality rule.
I had the same thought when I was typing but it doesn’t work as they would be separate proceedings and there would be no rule to prevent the use of this letter in those proceedings.
The only exception in my analysis would be if there was a confidentiality clause in the scheme itself restricting its use outside of the mediation scheme, and I haven’t seen the text of the document.
Dan, this is brilliant stuff. Great job.
It is noteworthy that the National Federation of Subpostmasters was seemingly absent throughout. The Federation was a trade union until 2014. I cannot conceive that Mick Lynch would allow hundreds of RMT members to be prosecuted for theft, nor that any other trade union would fail to provide meaningful legal support to its members. Mr Justice Fraser was damning in his judgement in Bates v Post Office (https://www.judiciary.uk/wp-content/uploads/2019/03/bates-v-post-office-judgment-no3-15-mar-19.pdf).