Thursday 8 November 2018


On my way up to court and just idly thinking about something drawn to my attention a couple of days ago by a reader of this blog.

The Post Office is wholly owned by the government. The government exercises its authority over Post Office Ltd as the Special Shareholder of the company, as stated in the Post Office's Articles of Association, section 10:

"The Special Share may only be issued to the Secretary of State and may be transferred to and held by the Treasury, another Minister of the Crown or any other duly authorised person (including, without limitation, any nominee) acting on behalf of the Crown."

Section 11.1 of the articles reads thus:

Matters requiring consent

"Each of the following shall be deemed to be a variation of the rights attaching to the Special Share and accordingly shall occur and be effective only with the prior written consent of the Special Shareholder:"

Section  11.1 (O) states:

"the entry into or implementation of a relevant transaction by any member of the group which involves or is likely to involve (either individually or when taken together with all other related relevant transactions (other than any related relevant transaction previously approved under this article 11.1(O) entered into or implemented in the previous 12 months)) the incurrence of a commitment or liability, or the payment of a sum, by any member of the group which is an amount in excess of £50,000,000;"

We know the Post Office has already spent around £5m on legal fees (and in its 2017/8 annual report it says it expects to spend significantly more this year and next). I was also told by someone who knows what they are talking about that if the Post Office loses this class action it can expect to pay out tens of millions of pounds in damages (The Daily Mail put it at £1bn three days ago).

I wonder if we are getting to the point where it is worth asking the Minister for Postal Affairs, Kelly Tolhurst, whether or not she or her predecessors have had any communication with the Post Office about this legal action, and whether she, as the Special Shareholder, supports the Post Office's defence, because on the basis of costs alone, it is conceivable she might have to sanction the Post Office's continuing involvement in this case.

If your MP has an interest in this story - it might be worth asking them what they think about this.