Tuesday 11 December 2018

A former Subpostmaster writes: "The Post Office has lost already"

As the first Post Office Trial (round one: common issues) was drawing to a close earlier this month, I asked people with a professional interest to get in touch with a view to publishing their thoughts and/or stories.*
Tim McCormack
The following guest post is from Tim McCormack, who ran two different Post Offices over 12 years between 2004 and 2016 in Loch Ness and then Duns in the Scottish Borders. I think it is fair to call him a trenchant critic of the Post Office.

Before becoming a Subpostmaster, Tim was a computer programmer who became a Senior Business Analyst in the City of London, advising investment banks on credit risk technology. He finished his City career working for Citibank where he was in charge of credit risk technology for 22 countries in Central and Eastern Europe, Middle East and Africa. 

He currently owns a small newsagents in the Borders town of Coldstream and runs a blog called Problems with POL. This is what Tim has to say on the conclusion of the common issues trial:

"The closing submissions have been put to the court and in January,  Mr Justice Fraser will issue his decision on the claims put before him in this the Common Issues trial.

There are three possible outcomes:

a) Mr Green QC for the claimants wins all his points.
b) Mr Cavender QC for the defendants scores a complete victory.
c) Both parties have some of their claims decided in their favour.

Perhaps the most likely outcome is the latter and no-one but the judge has any idea of which points will be settled in whose favour.  We will know soon enough, and on decision day conclusions can be drawn. 

In the meantime though, it is my opinion, that one of the major consequences of this trial, regardless of Mr Justice Fraser’s decision, can be highlighted.

Much of this trial has revolved around the contract that binds the subpostmaster to the Post Office.  The claimants propose that there are multiple inferred clauses in this contract - ie. they are not specifically written into the contract but they can be inferred from the wording and in some respects the type of relationship that is thought to exist between Post Office Ltd [POL] and the Subpostmaster. 

The Post Office in reply, rejects these claims in total, saying that the contract as it stands is correct and not open to the interpretation of the claimants.

As a layman, I first became interested in contract law in the late 70s early 80s as a result of a TV Series known as The Paper Chase which followed the fortunes of a young contract law student at Harvard University.  It is an intriguing subject and covers many different areas but the most widely known and discussed are contractual disputes that end up in court, riveting courtroom drama backdrops for multiple movies and TV Series such as Suits.   

Interpretation and inference of the written word (and sometimes spoken) is the name of the game as two parties disagree fundamentally over what was implied at the time of signing.

No contract is perfect.  No matter how detailed, it can never possibly cover all eventualities and the law accepts this to be the case.

A contract is a written agreement which encompasses the oral and written negotiations and agreements of the parties. Provided that the necessary factors, such as offer and acceptance, consideration and intention to be contractually bound, are all present, a contract will be formed.

Whilst the words, whether written or spoken, which the parties use in formulating the agreement are the express terms of the contract, it is important to bear in mind that these may not constitute the whole agreement. The parties to a contract cannot possibly contemplate every contingency and eventuality that may arise over the course of a contractual relationship. 

The result is that gaps are inevitably left in the express contractual terms. For this reason, the Courts are prepared to imply terms into a contract, either as a matter of custom, by statute or by common law.  Read more about that here.


The decision of the judge, after all the trials are over, will of course have consequences for both sides.  I could not speculate on those consequences should the judge decide partly in favour of both parties involved.  However the consequence of the claimants winning all their points has already been noted by Mr Cavender QC representing Post Office Ltd.

He said in his opening submission:
“If Cs [the claimants] were right in the broad thrust of their case, this would represent an existential threat to Post Office’s ability to continue to carry on its business throughout the UK in the way it presently does.”
That conclusion, while probably correct, has no bearing on the decision making process of the court.
What Cavender QC perhaps does not appreciate, nor Post Office Ltd for that matter, is the consequences of their case being completely successful. I would submit for the reasons below, that outcome also represents an existential threat to Post Office’s ability to continue to carry on its business throughout the UK in the way it presently does.

Mr Cavender has already argued the point that commercially astute business men and women that seek to operate a Post Office would, in the normal course of events, scrutinise the contract offered and perhaps seek legal advice on whether or not to accept the terms and conditions it contains.  

The way the Post Office operates at present, incorporates the fact that every year subpostmasters come and go, selling on their business, retire or as is becoming more and more common just handing the keys back because they have had enough of dealing with Post Office Ltd.   

This is referred to as ‘Network Churn’ and about 800 offices change hands each year.  This means that 800 aspiring commercially astute business men and women are sought every year by Post Office Ltd to take on the contract at the centre of this trial. If they were so astute then I am sure they would also consider the arguments put forward by Mr Cavender on POL’s behalf during the course of this trial in order that win all the issues at hand.

The outcome of this trial is the decision made by the Judge and that becomes case law against which future similar cases may be compared.  If POL win the day then there is unlikely to be any similar cases brought against them given their chance of success would be limited.  

I would also add that changes to the way Post Office Ltd operate will certainly result from what has been said in court already.  Contracts will be delivered to aspiring subpostmasters BEFORE they take office and these will be signed and accepted.   

Not only that but POL representatives will have to draw the attention of all new subpostmasters to the relevant clauses regarding losses and they will have to distinguish between Horizon errors and Branch losses.   According to Mr Cavender they will also have to accept that the onus is on them to prove that the loss was not caused by themselves or their assistants before POL acknowledge that perhaps Horizon was to blame.  

Recommend a friend

Already we are seeing the impact of this trial.  A new team has been set up to investigate discrepancies where the subpostmaster refuses to accept responsibility but in saying that POL still revert to suspending the subpostmaster while these investigations are carried out.  In POL land you are guilty until proven innocent.  Hardly the way to encourage new subpostmasters to join the network and I would consider anybody providing advice and encouragement to these candidates to sign the contract to be well aware of the problems that they may face in the future.  Who would recommend a post office contract to a friend these days?

And therein lies the rub.  Win or lose, business as normal for Post Office Ltd will be a thing of the past.  Losing may in a way be the preferred option, as from the ashes rises the Phoenix that will be the new Post Office network that places a higher premium on the service of its subpostmasters that it does at present.  Win and Post Office Ltd would have to be extremely careful of accepting anybody who then applies to run a Post Office knowing what has been revealed in this trial.

Should POL win hands down, should they then be allowed to change all that is wrong in the way they do business at present without recognizing that this has only come about as a result of the trial and ultimately the rejection of the claims by the JFSA?  I think not. Any changes that are made must be a recognition of bad practice in the past and those responsible should be held accountable and certainly not left in charge to correct their own mistakes.

I contend that win or lose, Post Office Ltd has lost already.  The cost of fighting the claims of the JFSA group can no longer be expressed solely in financial terms. 

Finally, the possibility that POL will win all the points is implausible.  We will have to wait for the decision of the Judge to find out but it is worth pointing out that no matter his personal feelings about how Post Office Ltd operates with regard to the treatment of SPMRs his decision(s) are bound by the legal interpretation of the facts presented to him in court.  As a layman I cannot express any opinion on the outcome only hope that justice is on the side of the claimants."

If you want to read more of Tim's work, go to Problems with POL.

*Please note: These comment/opinion pieces are being sought to stimulate debate. The views articulated will not necessarily be held by me. They may express views I completely disagree with. Also, I cannot check every detail of every submission is true, though I will take reasonable steps to satisfy myself the words written represent the honestly held opinion of the contributor.

If you would like to make a contribution to this blog, just send me a message using the message form which is in the right hand nav bar of every page of this website. You don't need to run a blog (or a Post Office) in order to be considered. It could be the first time you have contacted a journalist. If you are worried about recriminations, you can remain anonymous.