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Wednesday, December 5, 2018

Day 14 write-up: What the Post Office did next

Claimant Gita Lawrence, who couldn't help laughing out loud in court
when the Post Office QC mentioned the negotiating skills of the NFSP. 
I was dreading today. I thought it was going to be like the first day of the JFSA QC's closing argument (see Day 12 and the JFSA closing written submission) which was full of opaque exchanges about the meaning of certain sentences and words within the context of complex case law.

Today, by comparison, was much more straightforward. Even the case law references were pretty easy to follow. The Post Office's position can be summarised thus:

1. The JFSA case is a badly constructed attempt to claim many different things in the hope they'll get some through the gate.

2. Evidence with regard to Horizon or the Lead Claimants' circumstances should not even be commented on by the judge, let alone be the subject of any ruling - they will be dealt with at future trials.

3.  The claimants' suggestion that there are 21 implied terms in the Subpostmaster contract that need to be inserted does not pass the bar of sufficient necessity.

4. The Authorities (case law) on which the judge should rely are very high level. Apply the law to the claimants' case and it evaporates.

You can read the Post Office's written closing submission here. Mr Cavender was cogent. He sought to undermine the JFSA's case by saying it amounted to "an attack on freedom of contract and of certainty of law."

He also pointed out that this case was very unusual, and suggested it was less like a trial and more "akin to a public inquiry into the Subpostmaster contract", which in his mind presents "a real risk of this court being led inadvertently into error."

Because this isn't about claimants airing grievances or Post Office staff revealing themselves as the sort of people you wouldn't want anywhere near your business, it's about the law, and contract law, as Mr Cavender would have it, is very clear.

The Subpostmaster is an agent. They submit accounts to the principal. They can dispute what they want if they disagree with sections of their account, and the Post Office has a duty of necessary co-operation to find out what might be wrong (diminished if false accounting has taken place).

He was dismissive of the JFSA's attempts to paint the relationship as some strange quasi-employment relationship.

He was dismissive of the JFSA attempts to appeal to "commercial common sense" and cites the case law which Mr Cavender says is the leading Authority on this - Arnold v Britton:

"commercial common sense is not to be invoked retrospectively. The mere fact that a contractual arrangement, if interpreted according to its natural language, has worked out badly, or even disastrously, for one of the parties is not a reason for departing from the natural language. Commercial common sense is only relevant to the extent of how matters would or could have been perceived by the parties, or by reasonable people in the position of the parties, as at the date that the contract was made.”

It led Mr Cavender to make a statement which passed without comment. If it had been said anywhere outside a courtroom it would have caused uproar:
"my learned friend's case
 appears to be: "The approach of the court should start and finish
 with common sense."
 Clearly that is not the right approach, and
 of course it is not the approach your Lordship will
 doubtless take."
Clearly! Who needs common sense when you have the law?

Mr Cavender was dismissive of any claims about the lack of awareness that prospective Subpostmasters might have had about the nature of the contract they entered into and the risks to them it entailed, again citing Arnold:

"The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case , that meaning is most obviously to be gleaned from the language of the provision. Unlike commercial common sense and the surrounding circumstances, the parties have control over the language they use in a contract. And, again save perhaps in a very unusual case, the parties must have been specifically focussing on the issue covered by the provision when agreeing the wording of that provision.”

Mr Cavender made the point that the Arnold judgment was about ordinary people leasing holiday chalets,  and it went against them. He suggested that Subpostmasters were in a better position than the lessees in Arnold because their "they do have a trade union-type organisation negotiating for them".

This reference to the NFSP caused what I would describe as an involuntary explosion of sardonic exhalation from two claimants (Gita and Preeth) who had come along to watch today's proceedings. They clearly couldn't quite believe Mr Cavender had the nerve to suggest the NFSP was either competent or had the interests of Subpostmasters as its primary concern.

But Mr Cavender was unbowed. He said that aside from the 560-odd claimants, there were 11,500 people or businesses who were operating under the terms of the Subpostmaster contract (in its various iterations) who found it worked perfectly well for them.

He was especially scathing about the JFSA attempt to insert 21 implied terms into the contract without identifying the necessity for doing so.

He also said that even if the contract was in some respects "relational", it was not a good faith contract.

The argument was simple. This is business, baby. And the law is the law.

Disclosure dat closure

There was an interesting exchange between the judge and Mr Cavender on disclosure. Lawyers and investigators have long complained that the Post Office have consistently refused to disclose the information they need to build a picture of what really happened in any given instance where there is a grievance, dispute or allegation of a crime. Mr Cavender sought to make the Post Office's lack of disclosure a good reason for the judge to ignore what it had disclosed. He suggested that any evidence on the effectiveness or otherwise of the Post Office helpline or training should be completely disregarded.

The judge seemed interested in this argument:

MR CAVENDER: Your Lordship will recall the court also had a view
 giving early disclosure would properly be required
 anyway in relation to Horizon and Post Office does not
 resist that.  Such approach was entirely for good reason just by way of background.  But the overwhelming focus
 was on the documents that might be relevant to the
 Common Issues. 
So to give two examples at the hearing
 on 22 February the court rightly rejected a request for
 broader disclosure in relation to Helpline on the basis
 of the operation of the Helpline "does not arise in the Common Issues at all" and that is referring to paragraph 61 of the defence.
At the same hearing the court ordered only limited
 disclosure in relation to certain policy and process
 documents relating to shortfalls, pointing out the requests seemed to be aimed at fundamentally Horizon
 issues, see.
  So the upshot of the approach taken to disclosure is the Post Office has not conducted searches for documents
 that would enable the parties and the court to properly explore all the irrelevant post-contractual material and
 breach that the claimants want to put in issue at this
 trial nor has Post Office extracted documents from custodians other than the 62 that were largely chosen by
 the claimants.
So to give concrete examples, we do have records of TCs that were issued to these six branches.  We do not
 have the underlying documents as to how that TC was
 decided upon, the evidence underlying it, the transaction data, internal communications relating to
  the decision-making process; the kind of thing that
 would go to whether the TC was rightly made, mistaken or how the mistake came about.
We have no disclosure or evidence from the Helpline operators; nothing with which to meet the suggestion
 a particular operator said something wrong on
 a particular date in 2002 or 2010.
We have no disclosure showing how enquiries and disputes were then escalated and addressed by the
       Helpline.  Your Lordship will recall a reference to
 classification of calls as "low priority".  No evidence as to what that means because it doesn't fall within the Common Issues, and the relevant documents would not be
 caught by the disclosure that was ordered.
MR JUSTICE FRASER:  When you say "we have no disclosure",
 what you really mean is the claimants have no
 disclosure.  Because they are all your documents, aren't they?
MR CAVENDER:  My Lord, yes, "there has been no disclosure"
 is probably the correct way of putting it.  By "we" I mean the court and the parties really.  We have --
MR JUSTICE FRASER:  The court and the claimants, because
 Post Office has got it.  Because it is all Post Office
MR CAVENDER:  We haven't searched for it --
MR JUSTICE FRASER:  I am just being precise about it.
MR CAVENDER:  Yes, my Lord, you are right.  We have not
 given disclosure covering investigations into
 shortfalls, emails and other documents from within the
 FSC for example, we heard something about.   
 documents of that kind that are in the bundles have been caught incidentally through disclosure orders aimed at
 something else by luck or because one of the selected
 disclosure (inaudible) happened to have it within the
 exchanges; potluck and not a proper approach on which to examine what happened.
Your Lordship will recall my efforts to piece
 together from a few documents here and there what investigations had in fact been done into Mrs Stubbs'
 problems, and you will recall there was quite a lot done. 
She said: well, I thought you were doing nothing
 and I put to her a whole slew of documents that happened to be in the bundles by accident or mistake that showed
 in fact we were going back to Fujitsu, we were asking
If you are going to form a view, my Lord, on
 any of that, you need the full documentary record, you
 need evidence led on it and tested, not it be done in
 this sort of casual half-hearted way.
MR JUSTICE FRASER:  If the documents you were putting to Mrs Stubbs were only there by accident or mistake, there
 was nothing to stop you producing a document, was there, which showed the conclusion or upshot of the
 investigation which she had been promised?  If such
 a document existed.
MR CAVENDER:  My Lord, that is true in relation to all of
 the six, in relation to every TC and every dispute.
MR JUSTICE FRASER:  No, no, I am asking a focused question
 on the investigation in relation to Mrs Stubbs.
MR CAVENDER:  My Lord, yes.  But that hasn't been done.
 That is not our understanding of what this trial was
 about or the disclosure sought or the issues to be
 determined.  I am giving that example for saying where
 I thought I ought to correct that impression with that
 witness.  I was able to by luck with a number of documents.   
But it is not the full documentary record at
 all, clearly not, and we didn't have evidence from the
 people that were doing the investigations, et cetera, so
 your Lordship could then opine and see whether it was
 good, bad or indifferent. 
You are asked to do so on a very casual basis on a partial -- not partial, without the full documentary record at all. And it would be
 wrong to do so, in my submission.

What's he building in there?

Mr Cavender then moved onto construction, particularly the construction of Section 12:12 of the Subpostmaster contract.

Here he set out the Post Office case. Section 12:12 of the contract states:

"The Subpostmaster is responsible for all losses caused through his own negligence, carelessness or error, and also for losses of all kinds caused by his Assistants. Deficiencies due to such losses must be made good without delay."

He argued that deficiencies refer to discrepancies between the stated accounts (on the Horizon screen) and therefore can only happen in branch, so they can only be the responsibility of the Subpostmaster. He also noted that according to 12:12, the Subpostmaster is responsible for ALL losses caused by his assistants, and argued that the initial burden of proof lies with Subpostmaster first to prove that the loss - the deficiency - was not caused by an assistant, and next that it wasn't by his own negligence, carelessness or error.

This meant, he said, that Section 12:12 did not apply to Horizon errors (should they exist), because they were nothing to do with what happened in branch.

He said through the process of necessary co-operation, if a Subpostmaster were to dispute a Horizon version of accounts, then the "burden" would be on the Post Office to investigate. However, said Mr Cavender, the Post Office is entitled to ignore any possible Horizon error, because the system is generally reliable. The burden of proof then returns to the Subpostmaster to prove that Horizon is the cause of the error.

This might sound like a nonsense, but it might also be legally tight. I doubt Mr Cavender would express the Post Office's position in these terms had he not thought he was on safe territory. Unless the Horizon trial proves the system cannot be seen as generally reliable, he may well, legally, have a case.


It's the last day of the Common Issues trial tomorrow, but it won't be the last activity you see of this blog. I have been sent a large number of documents and I still haven't uploaded those I do have. I need to index everything I've written, and I am hoping to publish a number of guest posts over the next few weeks whilst we are waiting for a judgment.

I have repeatedly asked the Post Office to give their perspective on this trial, either via interview or blog post, but so far they have declined. The NFSP declined to respond to my comment piece.

But if you are interested in the trial and you want to give me your hot take, I would be most grateful if you would get in touch. I am looking for claimants, Subpostmasters, Post Office employees, lawyers, fraud investigators, NFSP officials, union officials, academics, forensic accountants, politicians, IT experts - anyone who might be willing to write a 500 - 1000 word blog post, ideally on the record.

If you want to remain anonymous, that's fine, but I will need to be satisfied you are who you say you are and your reasons for remaining anonymous (eg you don't want to get sacked!)


  1. Have followed your tweets throughout this trial. I was a sub-postmaster for over twenty years and as a NFSP Branch Secretary & Branch President spanning some 17 years. Many interesting points have been raised. In hindsight, the NFSP did not represent sub-postmasters well. It was an organisation which sat between POL and the SPM and acted as a buffer to stop any "militant" behaviour, whilst reporting to be union (which was later proved to be incorrect). I can tell you how sub-postmasters were treated in a POID interview, how difficult it was to get information from POL. I can also tell you that training was, at best, minimal. When Horizon was installed we were NEVER shown how to look for discrepancies. If we received a TC we had to accept it before rolling over the account. The helpline was not a good option - often giving wrong information in fact in my office the staff were told never to use it! As for the contract. I signed a three page document, at the counter, the day I took over the office, but it was not unusual to receive a letter from POL stating that a change in contract had been agreed with NFSP and if we opened the office the next day we were deemed to have accepted it (no choice there then!) I could go on, but if you want further information I could email you.

  2. An example how Horizon deceives.Mr X walks into a PO branch to top up his Smart Gas Card.£100. By debit card. After pressing relevant buttons, the screen goes to settle page. The debit card payment is done, but unfortunately the snart card fails to load.HORIZON THEN PROMPTS TO RETURN ANY AMOUNT TO THE CUSTOMER.Customer says his debit card was charged.( True as the card was charged first).So Post Office branch reimburses the customer£100 in cash. And immediately after declares cash to find £100 shortage. Helpline called but they put the blame on the counter clerk, and when requested that can the customer be informed through his bank. They refuse. So the branch bears the loss. Inspite of being misled by the system to return any money to customer. This actually happened to me. It was a lesson that we SPM s are dealing with a company run by crooks.