Wednesday 16 October 2019

Claimant Subpostmasters consider mediation talks with Post Office

Claimant Subpostmasters suing the Post Office for hundreds of millions of pounds are now looking at mediation as a means to resolve this long-running and eye-wateringly expensive* litigation.

More than a year ago, the managing judge, Sir Peter Fraser, ordered that the parties should “consider" mediation. It has been bumbling around in the background as a possibility ever since.

This week, Freeths, the Subpostmasters' solicitors, issued claimants a circular stating:
"an independent and neutral expert is being appointed who has experience in helping to resolve very significant disputes. There will be a mediation meeting with the Mediator in November and we are obviously working very closely with your Steering Committee to plan for that and to decide whether it could offer you, the Claimants, a final resolution that would be in your best interests."
Many claimants will be wary of mediation. The Post Office set up a complaint and mediation scheme in 2013, but within eighteen month it collapsed in acrimony. James (now Lord) Arbuthnot described the scheme in parliament as a "sham", a sentiment echoed by the Justice for Subpostmasters' Alliance (JFSA).

As recently as August this year, Alan Bates, who is founder of the JFSA, member of Freeths' litigation steering committee and lead claimant, wrote to his members revealing the Post Office was pushing for mediation. At the time he wasn't convinced, stating:
"There could well be an optimum time when attending mediation might be in the Group’s best interests. But it certainly isn’t before the Horizon judgment is released... To start with, POL [Post Office Ltd] still refuses to accept it has done anything wrong, otherwise it wouldn’t have applied to the Court of Appeal to overturn the findings by the Court of the Common Issues judgment. To go to mediation immediately would mean we could find ourselves in the same position we were in at the end of the Initial Complaint Review and Mediation Scheme where, as a number of you will recall, POL turned up at mediation meetings, stated it had done nothing wrong and stated it was ‘all your fault’."
Mr Bates also noted:
"There would be substantial costs involved with attending mediation, so POL would need to demonstrate that it is serious about going into it in good faith and that it is not just a ploy to waste time and deplete our funding.  They would need to show they have the funding available to deliver financial redress to the Group and is prepared to redress the wrongs it has done to so many. And this case is not just a matter of money, many Claimants still want an apology for the grief that POL has visited upon them and their families."
Despite these misgivings, he recognised mediation might work:
"I am told that mediation (when done properly, unlike the ‘Mediation Scheme’) is a tried and tested method of resolving major disputes and it does have a good success rate in other cases. One advantage that mediation does have over the Court process, is that formal apologies, along with other requests, cannot be ordered by the Court, but they can be required by us as part of the mediation process.  Nevertheless, the current actions of POL in the court do not show it has any regrets yet over anything it has done, because it still refuses to see the error of its way despite the court clearly recognising the numerous failings by POL."
It seems that since then, Mr Bates may have been persuaded to think about giving it a go. By the time Freeths meet with their "Mediator" in November, the Horizon trial judgment should have been handed down, and there should be a decision from Lord Justice Coulson as to what (if anything) he will allow of the first trial judgment to be appealed. I suspect both these decisions will weigh heavily on how or if mediation might proceed.

In terms of where we stand right now, Freeths have pretty much the same red lines as Alan Bates, telling claimants:
"Progress will be made only if the Post Office demonstrate a significant change in mind set and approach. If mediation gives the Claimants an opportunity to achieve final closure on acceptable financial terms, then that is to be welcomed – if that does not happen, then the litigation obviously continues. Either way, we will not allow the litigation to be held up while mediation happens."
I'm not a massive fan of mediation, but that's because I'm a nosy journalist, not a claimant, and mediation is held in private. Also, big corporations often attempt to make any settlement conditional on all parties signing Non-Disclosure Agreements (NDAs), which means key parts of a story get smothered and no one is really held to account, a massive problem in this case already.

There is also one major fly in the ointment as Alan Bates himself noted back in August. What would mediation mean for those claimants whose situations are being considered by the Criminal Cases Review Commission?

During the last mediation process the Post Office did an extraordinary volte face. They first accepted people with criminal convictions onto the complaint scheme then refused to meet any who were recommended for mediation, without explanation or apology. You can imagine how crushing that must have been.

Presumably the issue of claimants with criminal convictions will be discussed and negotiated as part of the preliminaries to any formal mediation. They have to be better treated than last time.

Two months ago, Alan Bates wrote:
"Realistically, how can POL entertain any mediation whilst it still has an application in at the Court of Appeal denying there is any case for it to answer? Even it must see the nonsense of such a situation, why is it raising mediation now, is it just to pay out even more of the public purse to keep lawyers employed?  Hopefully POL is not misleading others with assurances that mediation might work, without having genuinely accepted that it has seriously wronged the Claimants and that the Court proceedings must come to an end."
I suspect his position hasn't changed much. The Post Office tell me mediation is an expected part of the litigation process and won't be commenting further.

* Close to £44m by my guess. The Post Office has admitted spending £23m on legal fees to end March 2019 (including paying out £6m worth of costs to the claimants). Assuming costs on both sides are roughly the same and guesstimating that both parties have spent another £5m each already this financial year (reasonable), that's c. £22m spent by the Post Office and c. £22m spent by the claimants, rebalanced because of the costs award to c. £28m spent by the Post Office and c. £16m spent by the claimants  = c. £44m.

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