Court of Appeal judge rejects Post Office request in Horizon IT case

The Court of Appeal has rejected the Post Office legal team’s appeal against a High Court judge’s decision not to remove himself from the Horizon IT system trial.

In April, Judge Fraser, who is presiding over the trial in which more than 550 subpostmasters are suing the Post Office over its Horizon IT system, refused an application made by the Post Office for him to recuse himself. The Post Office alleged the judge showed bias.

Lord Justice Coulson, in the Court of Appeal, said: “The recusal application never had any substance and was rightly rejected by the judge.”

The recusal application came days into the second of four planned trials in the case. The Post Office called for the judge to be removed from the case after questioning his impartiality.

Judge Fraser had six days earlier issued a ruling on the first trial of four planned in the litigation, which found in favour of the subpostmaster claimants and was highly critical of the Post Office. The first trial analysed whether the contractual relationship between Post Office and subpostmasters, who run branches, was fair.

Part of Fraser’s judgment said: “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. 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.”

Lord Grabiner, acting for the Post Office as part of its legal team, claimed the ruling of the first trial demonstrated that Fraser would be biased in his subsequent opinions towards the defendant. In such a situation, the presiding judge is required to decide whether he or she has acted in such a way as to require recusal, he said.

Judge Fraser refused to recuse himself. In his ruling, he said he found no apparent bias, and the Post Office said it would appeal the decision. Lord Justice Coulson agreed with Fraser.

In his ruling to reject the appeal, Coulson said: “I set out the reasons for the conclusion in greater detail than usual, only because of the volume and the nature of the criticisms that have been made, and the importance of the group litigation to both parties. I do not do so because of the merits of the application itself, which in my view is without substance.”

He was highly critical of the timing of the Post Office’s recusal application. “The judge learned of the recusal application by accident just before the afternoon session of the last day of factual evidence on the Horizon issues trial (trial 2). This was at best discourteous; at worst, it betrayed a singular lack of openness on the part of the Post Office and their advisors.”

Following the Court of Appeal ruling, Alan Bates – the former subpostmaster who has driven the legal action – said: “Yet again Post Office and its lawyers have been told in very clear terms, this time by the Court of Appeal, that their conduct won’t be tolerated. The claimants will continue to drive this case forward until justice is done.”

The plight of affected subpostmasters 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 and even imprisoned because of unexplained accounting shortfalls. Bates was one of the subpostmasters originally interviewed by Computer Weekly.

Former MP and now Conservative peer James Arbuthnot said: “While it is hard to believe that the Post Office’s behaviour could have got worse, the Court of Appeal’s judgment suggests that it has.”

Arbuthnot took the subpostmaters’ fight to the House of Commons and then to the Lords, when he became a peer after retiring as Conservative MP for Hampshire North East. He became involved when one of his constituents, Jo Hamilton, who was a subpostmaster being threatened with jail at the time, contacted him.

Hamilton was also interviewed by Computer Weekly in 2009 as one of the seven initial cases made public. Hamilton had a grocery store with a Post Office attached. Unable to explain accounting shortfalls and faced with the prospect of a prison sentence, Hamilton pleaded guilty to false accounting. Her house was remortgaged to pay the money, and the villagers in South Warnborough collected £9,000 between them to help.

Some claimants were sent to prison, including one while pregnant. They blamed the accounting and retail system they used, known as Horizon, for the problems. The Post Office denied this.

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

The second trial has so far heard evidence of serious flaws in the Horizon system that the Post Office not only failed to acknowledge flaws, but continuously stated the system was robust and played no part in losses suffered by some subpostmasters. It will be concluded in June.

A third trial, scheduled for October 2019, will focus on individual subpostmasters’ claims, and a fourth trial will probably be held in early 2020.