This short series of blog posts reveals the contents of a letter sent by the barrister Paul Marshall to the Post Office Horizon Inquiry. The letter shares Marshall’s concerns at the Post Office/Government compensation schemes and the way they are being run. It was written on 9 January 2024.

Part 1 deals with the section of the letter which addressed the problems being suffered by Subpostmaster claimants in the Bates v Post Office High Court litigation with overturned criminal convictions.

Part 2 deals with what Marshall calls the “complete absence of any principled approach to interim payments”.

This final part is concerned with the Post Office and government’s role as gatekeepers in the Subpostmasters’ access to expertise and therefore justice. You could read it as a moan by a lawyer about lawyers not being given enough money, but closer inspection may tell you something about the implications.

Mr Marshall writes:

“It is trite that economic barriers to a market (including ex hypothesi a market for legal services) may be low cost as much as (more commonly) high cost.

I represent only a small number of claimant victims of the Post Office, but I am almost overwhelmed with work on Post Office cases. While I have been able to enlist the expert and valuable assistance of a colleague with specialist experience of personal injury work, somewhat to my surprise, the compensation process is materially indistinguishable from litigation. As a result I have been driven, from last summer, to seeking the assistance of a full service law firm.

In many respects, the circumstances of my clients are markedly different from ordinary litigation. The statutory limitation period operates to provide a temporal (usually 6-year) boundary for documentation. In these cases the claims go back more than 10 years and sometimes more than 20 years. There is a serious paucity of documentation (which is nonetheless routinely demanded by the Post Office/DBT [Department for Business and Trade] and their lawyers – in many cases, such as Mrs Arch’s, the Post Office retained all her documents when she was excluded and suspended from her branch) and the work of reconstruction of events is over a commensurately long timeframe. That presents unusual evidential challenges.

Furthermore, the Post Office’s victims are typically deeply traumatised individuals. Client care that is required is greater than in the ordinary run of commercial litigation. I think almost all those whom I represent are diagnosed as suffering from long-term PTSD, mostly severe. It is necessary for clients to obtain expert evidence, not only medical evidence, but accountancy evidence, and latterly other expert assistance also.

The so-called “tariff” agreed by some solicitors’ firms for fees in the GLO compensation scheme is at paragraph 5 of a document entitled “Post Office Horizon Scandal: GLO Compensation Scheme Tariff of Reasonable Legal Costs”.

The introduction provides that: “The Government has agreed to meet the reasonable legal costs of members of the GLO claiming for additional compensation under the scheme announced on 7 December 2022. This note sets out the tariff by which those costs will be calculated. It has been agreed through a mediated discussion between DBT and legal advisors known to represent eligible claimants – ie Freeths, Howe & Co and Hudgell Solicitors.”

It provides that fees payable by the Department of Business and Trade for “Complex” cases, per case, will be £18,060. Being neither a solicitor nor a solicitors’ firm, I was party neither to the discussions/negotiations nor to the agreement of those rates. I suppose that they might possibly make commercial sense if one is handling a very substantial volume of closely similar cases.

You will see that the government strongly advises claimants not to engage any lawyer who asks for payment, either during the claims process or when compensation is paid. Similarly, the GLO Compensation Scheme Guidance and Principles at 1.1.3 states “You should not engage any firm which asks you for money now or later, or which offers a No-Win, No-Fee conditional fee or litigation funding agreement.” 

If my clients adhered to/heeded that advice none of them would be represented by me.

The government’s advice to victims of the Post Office, I suspect, tends to have a chilling effect on solicitors willing to act and will tend to cause the only port of call available to potential claimants for compensation to be Hudgells, Freeths or Howe & Co. I strongly doubt whether that is desirable, whether or not it is intended by DBT.

The damages/compensation claims of individuals such as Tracy Felstead and of Nichola Arch are self-evidently complex, both as personal injury claims and also as loss of employment and loss of future earnings claims. I have repeatedly been referred by Addleshaw Goddard, solicitors acting on behalf of the Department of Business and Trade, to their agreed “tariff” fee arrangements. At present, my perception is that attempted adherence to those rates, at least in respect of the claims of those on whose behalf I am instructed, fails to have regard to the true complexity of individual cases and is wholly unrealistic and also unreasonable.

More concerningly, solicitors with whom I have been having discussions, for the purpose of securing additional assistance with the object of expediting the evaluation and submission of claims, who are in principle willing to assist, are hesitant to do so (understandably) in the absence of assurances that it is commercially viable for them to do so. Accordingly, the stated tariff rates for legal costs operate, or may operate, as an economic barrier to entry for those firms of solicitors who would be willing to act for claimants for compensation. As a result this will tend to divert claimants and potential claimants to those firms who have agreed to work for the stated government (in my view unrealistically and uneconomic) low charging rates. That is unsatisfactory and concerning.

Without making too much of it, it is notable that the Post Office itself has engaged one of the largest and most expensive law firms in the country (in fact in Europe) and the government has retained both Dentons and Addleshaw Goddard.

It is obvious, at least to me, that the government, like the Post Office, should pay the reasonable costs of legal representation. That is to say, the same level of costs as assessed costs on the standard basis in ordinary High Court litigation.

To pretend that claims in the GLO compensation scheme are somehow ‘simple’ and straightforward, is both an absurdity and, at least in my experience, the very opposite of the reality. If the point requires elaboration, there are claims, such as Mrs Arch’s claim, that while in the GLO scheme are on true analysis claims for malicious prosecution. There should not be a dramatically different costs regime under the DBT GLO scheme from that that applies to the Overturned Convictions scheme, where the legal nature of the claims to compensation are the same. No principled basis for such a distinction is capable of being identified.”

Marshall contends that the failure to make adequate allowance for the fees incurred by claimaints and potential claimants acts as a “denial of/obstruction to justice”. Taken with the two other concerns Mr Marshall raised in his letter (published in Part 1 and Part 2 of this series), it seems we still have a serious problem with the existing compensation arrangements for victims of the Post Office scandal. This is nearly four years after the Post Office and government announced they would be setting up and running two of them (the HSS and OC compensation schemes), and two years after the announcement of the GLO compensation scheme.

As many people have asked – why are the perpetrators of this scandal in charge of compensating their victims? The Postal Affairs minister Paul Scully – who was in charge when all these schemes were set up – has already conceded that was a mistake. Postmasters could be forgiven for thinking it was deliberate.

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