Former subpostmaster to sue Post Office and Fujitsu for judgment ‘obtained by fraud’

Abuse of process

The application to the court will say that the Post Office – conspiring with others – withheld evidence about the unreliability of the Horizon system. “What we’re effectively going to be saying is that the claim against him was an abuse of process. It was never about recovery of the missing money – it was to make an example of Mr Castleton,” said Goldberg. “We also believe that the judgment against him was obtained by fraud, in that the Post Office and Fujitsu knew perfectly well that Horizon system wasn’t working properly at the time.” 

At the time Castleton challenged the Post Office in the High Court, a Horizon system flaw, known as the Calendar Square bug, was not revealed to him.

During the Post Office scandal public inquiry hearing in 2023, an email, dating back to 2006, from a Post Office executive to an executive at Fujitsu, revealed that evidence was kept from Castleton. Marked “Calendar Square: URGENT”, the email read: “Our legal team at the court will be doing their best to persuade the court not to allow [Lee] Castleton to call this evidence because it is filed late and does not relate to the problems at his branch.”

More damning revelations were uncovered during the Post Office scandal public inquiry when Mandy Talbot, former Post Office legal case manager, appeared. She was involved in Castleton’s case in 2006 after she worked on an earlier case regarding Cleveleys Post Office in Lancashire.

In 2001, the Post Office was suing subpostmaster Julie Wolstenholme for the return of equipment used in the Cleveleys branch after her contract was terminated, but she said her employment was terminated unlawfully in a counterclaim that raised questions about the reliability of the Horizon computer system used in branches.

A report jointly commissioned by both parties in the run-up to the court hearing raised significant questions about the Horizon system. This dispute, which saw another subpostmaster challenge the reliability of Horizon, ended in an out-of-court settlement and the subpostmaster signing a confidentiality agreement, but this evidence of Horizon problems was not disclosed to Castleton during his court battle.

During another public inquiry hearing, barrister Flora Page, representing former subpostmasters, said there was a clear intent on the part of the Post Office, with legal advice to defeat Castleton in court and claim heavy costs, “not to make a net financial recovery, but to defend the Horizon system and hopefully send a clear message to other subpostmasters that the Post Office will take a firm line and to deter others from raising similar allegations”.

Page told the inquiry: “That was the purpose. It was not ever envisaged that the Post Office would actually get that costs order back – that was a loss leader, if you like. But the purpose was to send a clear message to deter others.”

In another public inquiry hearing, featuring former Fujitsu IT expert Anne Chambers, who gave evidence in the battle against Castleton, more evidence of the Post Office’s tactic to defend Horizon at all costs emerged.

The Post Office’s primary consideration was to “defend the integrity of its [IT] system” when taking subpostmasters to court over unexplained accounting shortfalls, and not the subpostmasters’ welfare, according to a Fujitsu memo written by Chambers in the aftermath of the court battle with Castleton.

In the memo, Chambers wrote that the Post Office was not concerned about getting to the bottom of reported problems with the Horizon computer system because it wanted to protect its reputation. Chambers’ memo was sent to her manager, but nothing was done to address her concerns. She agreed with public inquiry barrister Jason Beer’s view that her managers basically said: “Well done, we are just filing this.”

Earlier in the same hearing, Chambers confirmed that known Horizon errors were not disclosed to the court.

A Post Office spokesperson said: “We recognise that many victims of the Horizon IT Scandal continue to be impacted by their experience. Post Office today is committed to doing all we can to help those affected get closure. We cannot comment on ongoing legal proceedings but once we receive the claim, we will engage fully in the process”

Computer Weekly first exposed the scandal in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to Horizon accounting software, which led to the most widespread miscarriage of justice in British history (see below timeline of Computer Weekly articles about the scandal since 2009).