The UK government should consider suing ex-Postmaster chiefs over scandal, says Alan Bates

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Former post office directors could be sued for alleged breach of duty, according to former deputy postmaster general Sir Alan Bates, who is calling on the government to consider litigation over the Horizon IT scandal.

The activist is asking the government, the sole shareholder of Correus, to consider legal action. He is joined by the lawyer who represented him in the landmark High Court case which concluded that a number of “mistakes, errors and defects” meant there was a significant risk Horizon was to blame for the faulty data used to prosecute deputy directors of mails

More than 900 post office managers were convicted between 1999 and 2015, including 700 prosecuted by the Post Office, in a scandal considered the biggest miscarriage of justice in modern British history.

Bates told the Financial Times: “(The former post office directors) failed in their duties year after year. They spent more time and effort covering up than trying to solve the problems.”

He said he personally believed it was a matter of “when” and not “if” the government would take legal action.

James Hartley, who acted for 555 deputy postmasters in the High Court proceedings which ended in 2019 and is currently working on one of the compensation schemes for victims, said: “It should be borne in mind seriously consider, if not already, the government to bring claims by Post Office Limited against all former senior managers who can be shown to have breached their duties to act competently.”

Hartley, who is the national head of dispute resolution at law firm Freeths, added that “the claims would be for damages, possibly (worth) hundreds of millions of pounds, all of which would ultimately put the taxpayers’ money spent defending and rectifying this enormous scandal.”

Hartley said any claim would be complex due in part to the statute of limitations.

However, evidence revealed in the public inquiry showed that the company had raised with its insurers the risk of potential claims, including against its directors, in 2013.

At a council meeting in July 2013, the Post Office’s former chief financial officer, Christopher Day, was asked to ensure that Royal Mail and Post Office insurers were notified of the initial findings of Second Sight, the forensic accountants commissioned by Horizon to review.

In an email later that month, Day said: “The subtlety here is that we need to inform existing insurers of a potential new risk (at hand) without ‘spooking the horses’ into immediately raising future costs “.

Day described the term as an “unfortunate phrase” during his oral evidence, saying there was “a concern that if you don’t inform the broker . . . as soon as you become aware” of a potential liability, that “it can you may not be covered” and “could suffer much higher premiums in the future”. Could not be reached for comment.

Andrew Parsons, who worked as an outside lawyer for the Post Office, also warned in an email in July 2013 that “it would be bad” if it “ever became public knowledge” that the company had notified its insurer Chartis , part of AIG. To reduce this risk, he recommended notifying the insurer verbally, “so as not to leave a paper trail”.

Insurers were later notified in writing, he told the inquiry.

The Post Office had up to £60m in directors and officers (D&O) cover, according to evidence revealed at the 2013 public inquiry – a type of insurance which is usually spread between several insurers and can cover legal agreements, defense. costs and other related expenses.

Germany’s Allianz also has some exposure, having joined as a D&O insurer years later, according to a person familiar with the matter. AIG and Allianz declined to comment.

The Department for Business and Trade said it recognized “the immeasurable suffering postmasters have endured” and was “working tirelessly to bring them some relief”. He added: “Those who caused this scandal must be held accountable for their actions. It is right to wait for the Post Office investigation report to be published before further action can be taken.”

The Post Office said: “We apologize unreservedly for the harm and suffering caused to the victims of the Horizon IT scandal and their loved ones,” adding that it was “closely following the research and learning from all the evidence that emerges, it would be.” It is not appropriate to comment on this process while it is still ongoing.”

In his witness statement to the inquest, Parsons said he and his company “made some mistakes” while acting for the Post Office. He said they were “genuine mistakes and at all times I believe that my company and I acted properly”. He added: “I apologized to them at the time and I apologize to them now.”

Parsons was contacted for comment.