The Solicitors Regulation Authority has been asked to investigate in-house and external lawyers working for Post Office in connection with allegations that victims of the Horizon scandal were gagged over their compensation awards.
City lawyer and investigative journalist Dan Neidle today confirmed he has referred both Post Office and international firm Herbert Smith Freehills to the regulator for allegedly misleading unrepresented parties about their rights to discuss compensation offers.
Neidle, who has published details of his complaint to the SRA on his website, alleges that victims receiving awards through the Historical Shortfall Scheme – the biggest compensation scheme in operation – were told in their settlement offers that the details were ‘without prejudice’.
Recipients were told that the terms and details of the offer were confidential and could not be shown to third parties. Neidle alleges that this detail prevented victims – many of whom were unhappy with the compensation they were offered – from speaking to others in the same position with similar concerns.
Neidle alleges the paragraph in question was a breach of SRA principles because it was false and misleading. ‘It stopped postmasters discussing the matter with friends and family, who might have prompted them to obtain legal advice', said Neidle. ‘It also shielded the Post Office from public criticism, by preventing postmasters going public with the poor terms that they were being offered.’
Neidle contends that the letters to postmasters differed from a non-disclosure agreement as there was only an offer at that stage and not a settlement, so Post Office was purporting to impose confidentiality on unrepresented claimants. He added: ‘The attempt by the Post Office to intimidate postmasters into silence was shameful. It’s also a breach of professional ethics by the lawyers involved.’
The HSS scheme was implemented following the collapse of prosecutions brought by the Post Office against postmasters accused of theft and fraud, which were based on the now-discredited Horizon IT software. More than 700 people were falsely accused, with many going to prison and losing their homes, families and livelihoods. It is estimated that 59 people have died without receiving an apology or compensation.
Around 90% of the postmasters who have entered HSS compensation agreements are thought to have been unrepresented.
Neidle has asked the SRA to investigate who was responsible for sending the ‘without prejudice’ letters to unrepresented claimants. There are 36 solicitors working for the Post Office and the organisation was also advised on the HSS scheme by Herbert Smith Freehills.
Post Office said today its sole aim is for full, fair and final compensation to be provided as swiftly as possible, and that around £100m has been offered to 2,400 postmasters through the HSS scheme, following assessments by its independent advisory panel of experts. The majority of offers are agreed and paid.
A spokesperson added: ‘Offer letters strongly encourage postmasters to take legal advice, which is reimbursed. Any postmaster who is unhappy with an offer is rightly given the option of disputing it, with an interim payment of up to 80% of the proposed settlement if they wish to do so.’
Post Office has said that letters marked ‘without prejudice’ do not prohibit recipients from seeking legal advice and that this is clearly explained. Each postmaster has the option to dispute their offer if they are unhappy with it and Post Office will cover the costs of lawyers for the dispute process (which includes independent mediation).
The Gazette has approached HSF for comment.
Meanwhile, Post Office has apologised after it emerged over the weekend that black workers being investigated over the Horizon issues were categorised using a racist term.
An internal document dated from 2008 to 2011, published following a freedom of information request, revealed that identification codes for groups of postmasters included references to ‘negroid types’ along with ‘Chinese/Japanese types’ and ‘dark skinned European types’.
In a statement, a spokesperson said: ‘Post Office does not tolerate racism in any shape or form. The language used in this historic document is completely abhorrent and condemned by today’s Post Office.
‘We fully support investigations into Post Office’s past wrong doings and believe the Horizon IT Inquiry will help ensure today’s Post Office has the confidence of its postmasters and the communities it supports.’
