The Post Office has replaced Herbert Smith Freehills as its advisers for the ongoing Horizon IT inquiry it emerged today – a week after it was revealed that the firm was referred to the Solicitors Regulation Authority over victim compensation letters.

In a statement today, the Post Office said it had appointed international firms Burges Salmon and Fieldfisher to advise in relation to the inquiry. The organisation said its board decided in January that a new law firm should be appointed and carried out a competitive tender exercise.

It said: ‘The Post Office is committed to providing full assistance to the inquiry and the Post Office board decision was taken in consideration of costs, given the inquiry is now due to run significantly longer than anticipated.

‘It also addresses any future potential risk of Herbert Smith Freehills being unable to assist on aspects of phase five relating to matters in which it has been involved.’

The Post Office said Burges Salmon and Fieldfisher had between them worked on most major public inquiries over the past 20 years. They are now working with HSF to ensure a smooth transition ahead of the next phase of witness evidence starting next month.

HSF will continue to assist on other matters, including the administration of the historical shortfall scheme.

Last week, the former City lawyer and campaigner Dan Neidle revealed he had referred both Post Office and HSF to the SRA for allegedly misleading unrepresented parties over their rights to discuss compensation offers.

It was stated by Neidle that letters received by victims eligible for the historical shortfall scheme said that details were ‘without prejudice’, potentially preventing them from discussing their offers. Post Office said that letters marked ‘without prejudice’ did not prohibit recipients from seeking legal advice and that this was clearly explained.

In April, the inquiry was told that the continuing involvement of HSF in compensation schemes was a ‘hopeless conflict’ given the firm’s previous work with the Post Office.

Edward Henry KC, representing some of the 700-plus postmasters wrongly convicted of theft and fraud, said HSF had ‘aided, advised, assisted, dare I say abetted’ the Post Office in creating and managing compensation schemes. This was after HSF had also advised on the ultimately unsuccessful attempt by the Post Office to have Mr Justice Fraser recuse himself during litigation in 2019 which exposed the scandal.

Henry said the compensation scheme as currently supervised by HSF ‘just will not do’ because the firm’s involvement with the recusal application was a ‘massively aggravating feature’.

At the same hearing, Kate Gallafent KC, representing the Post Office, set out the factual timeline in relation to its instruction of HSF and stated that it was not the firm who advised on making the recusal application.

HSF has been approached for comment.

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