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Post Office could face huge costs bill for first Horizon trial

Subpostmaster claimants’ legal team makes application for the Post Office to pay millions of pounds of costs associated with trial

The legal team representing the claimants in the IT-related Post Office versus subpostmasters group litigation order (GLO), has submitted a bill, likely to be for several million pounds, for the legal costs in the first trial in the case, in which the judgment came out heavily in favour of the claimants.

Freeths, the solicitors acting for the subpostmasters, submitted the claim on 29 March, which is normal for the successful party to do at the conclusion of a trial.

The first trial was part of a GLO through which more than 550 subpostmasters are suing the Post Office for damages caused by their treatment after experiencing unexplained losses that they blame on the computer system. They have also criticised the Post Office’s failure to investigate unexplained account shortfalls. The Post Office denies the accusations.

The claimants’ case is being funded by Therium through third-party litigation funding, which involves a number of funders investing in litigation, paying fees and other costs. If the case succeeds, they make a profit, but their investment is at risk if the case is lost.

The first trial, one of four planned, focused on the contractual relationship between the Post Office and subpostmasters.

In his ruling on 15 March 2019, Judge Fraser found there was a general culture of secrecy and confidentiality in the Post Office, particularly around the Horizon accounting and retail system used by subpostmasters to run their branches.

Fraser issued significant judgments on the nature of the relational contract between subpostmasters and the Post Office. Criticisms of the Post Office included “oppressive behaviour” when demanding sums of money that could not be accounted for by subpostmasters.

During the second trial, which is focused on the Horizon computer system, the solicitors acting for the Post Office made an application for the judge to recuse himself for alleged bias, following his judgment at the first trial.

The second trial is currently suspended. A hearing about the application for the judge to recuse himself will be heard in court tomorrow (3 April).

The second trial has seen Torstein Olav Godeseth, chief architect at Fujitsu, questioned about know errors in the Horizon software. The court heard how errors were known about but not always relayed to subpostmasters, who had suffered losses as a result.

These included the error known as the Dalmellington bug, which Computer Weekly revealed in 2015. This involved an incident in which thousands of pounds’ worth of payments were duplicated for one subpostmaster. If undetected, this would have appeared as a loss when the accounts were completed, which would be the responsibility of the subpostmaster.

The court heard that the error had been known about for a few years before the Dalmellington revelation, but was not revealed to subpostmasters until it was made public by Computer Weekly and the Communications Workers Union (CWU).

Two more trials are planned after the currently suspended second trial is concluded.

The plight of some subpostmasters was first reported in 2009, when Computer Weekly revealed that the lives of some of them had been turned upside down after being fined, sacked, made bankrupt and even imprisoned because of unexplained accounting shortfalls. Some claimants were sent to prison, one while pregnant. They blamed Horizon for the problems, but the Post Office denies this.

Horizon, which was introduced by the Post Office in 1999/2000, is used by about 12,000 branches, and subpostmasters are held liable for any unexplained losses (see timeline below).

For live tweeting from court, see the Twitter account of broadcast journalist Nick Wallis. Also read his Post Office Trial blog.

The case continues.

Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009

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