What’s really going on with the Subpostmaster compensation schemes pt. 3

Paul Marshall

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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10 responses to “What’s really going on with the Subpostmaster compensation schemes pt. 3”

  1. PCOJ Investigator avatar
    PCOJ Investigator

    EMBEZZLEMENT on a grand scale.

  2. ” 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)”
    Is POL also working under the same DBT tariffs? I would think not even considering they are working with many claims with some similar or common facts.

    The whole sorry case has made me convinced that now in the British legal system, we used to be so proud of, the party with the deepest pockets stands to win. This places the ordinary person at a huge disadvantage and MUST change.

    POL decided to pursue their civil action against Lee Castelton in the High Court. The knew that they could out spend him and win. He was forced to defend himself, I believe his legal insurance funding had run dry. The £321,000 costs he had to pay forced him into bankruptcy.

    This situation in itself is a denial of justice. I don’t know how to address it but I believe it should be addressed. Perhaps both parties should be limited to spend only what the other party can afford and if one party decides to spend more they hand the same sum to the other party to support their legal fees whether they win or not.

    When POL tried to halt the group litigation they engaged with Lord Neuberger and used his advice to try to persuade the judge to recuse himself. Did the fee for Lord Neuberger’s advice fall within the DBT tariffs? Also I would dearly love to hear his evidence to the enquiry as he tries to explain why a former President of the UK’s Supreme Court would want to derail an action which was attempting to correct so many miscarriages of justice.

  3. Institutions that uphold justice and equal rights for all citizens are crucial. If we as a society are to fend off the two authoritarian threats to the “fairly free” world from Russia and China, then we must be fair, free and just. Everyone involved in law could fight for free access to legal aid for all. Better still fight to adapt our adversarial judicial system into an investigative system. The old-fashioned notion of victory in court would be replaced by truth in court. Truth is the source of justice. If truth was the only objective of court action, people would be gradually be less afraid of speaking it. If truth was the only objective, cross examination would be less aggressive. If investigation of truth had been the primary function of our courts, I believe this scandal would never have happened.

  4. Why call it the Horizon scandal? This is as much about the illegal activities of Post Office workers & the lawyers they engaged. The moral corruption of people prepared to knowingly destroy innocent peoples lives by hiding evidence & failing to disclose is breathtaking. I hope there are prosecutions of everyone involved, after witnessing the coached liars showing a complete lack of remorse for the people & families they ruined during the inquiry. Justice must be served.

  5. it’s disappointing to me that this is less of a political issue than it should be. I’m sure that’s because the main political parties know that they’re all partly to blame so there’s a conspiracy of silence on it

  6. In Mclibel case (MacDonald’s v Steel and Morris)

    The European Court of Human Rights ruled in the defendants favor

    Steel and Morris claimed their lack of access to legal aid and the heavy burden of proof that lay with them was a breach of their rights to a fair trial

    Therefore the unreasonable curtailment of costs, subsequently lack of proper representation must be an infringement of their human rights .

    The Court also went on to state that both sides should be equal

  7. Nicholas Canfield avatar
    Nicholas Canfield

    What exactly is the purpose of the Horizon Compensation Advisory Board? Surely they should be advising (clue in their title). Have Hollinrake and DBT sidelined them much as Second Sight were by POL. What advice did, will HCAB give DBT on solicitors fees?

    1. It’s purely advisory. Their terms of reference etc are here.

      Richard Moorhead is on the board and writes on Substack.

      The board chairman has written to the solicitors regulators about the aggressive behaviour of the PO lawyers dealing with compensation claims.

  8. Wonderful work …. it is perfectly clear that obfuscation and worse persists. I can only keep all fingers crossed that this does reach a suitable conclusion

  9. why not one single prosecution for the deliberate lies and theft of money from subs

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