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The Post Office and Fujitsu are facing accusations of inflating legal expenses and obstructing a former sub-postmaster’s £4 million damages claim related to the Horizon IT scandal, as revealed in High Court proceedings.
Lee Castleton OBE was pursued by the Post Office for £25,000, alleging a shortfall at his Bridlington, East Yorkshire branch in 2007. The ensuing two-year legal battle resulted in his bankruptcy, burdened by £321,000 in legal costs.
During the initial hearing of his claim on Friday, the court was informed that Fujitsu, the company behind the flawed software, had already incurred over £700,000 in legal costs.
Mr. Castleton is the first individual to initiate legal action against both organizations.
Friday’s preliminary hearing addressed the procedural aspects of the case.
The court heard allegations that “hurdles” were being placed before Mr. Castleton to make his claim as “difficult, time-consuming and expensive as possible”.
His legal team asserts that the Post Office’s decision to pursue the 2007 civil claim against him constituted an “abuse of process,” and that the subsequent judgment was obtained through fraud.
Furthermore, they allege that the state-run institution conspired with Fujitsu to obstruct justice by “deliberately and dishonestly” withholding crucial evidence.
Mr. Castleton was among the 555 sub-postmasters who took the Post Office to court in a landmark legal battle, spearheaded by Sir Alan Bates.
They prevailed in their case in 2019 and reached a settlement; however, they claim they did not receive adequate compensation, as the funds were largely consumed by the substantial costs of litigation.
Mr. Castleton seeks to have the settlement overturned, alleging it was fraudulently obtained through “sharp practice” by the Post Office.
While both the Post Office and Fujitsu have yet to file a defense to Mr. Castleton’s claims, they have advocated for a bifurcated trial process.
They propose that the court first determine whether the settlement agreement precludes the former sub-postmaster from pursuing his individual claim, arguing that an affirmative finding would “dispose of the proceedings in their entirety,” thus saving time and resources.
However, written arguments presented on behalf of Mr. Castleton contend that the opposite would be true, asserting that his claim is of the “utmost simplicity.”
His barrister, Paul Marshall KC, dismissed the necessity of a separate trial.
At the hearing’s conclusion, Mr. Justice Trower and Judge Francesca Kaye ordered the trials to be split in two, stating that they would provide their reasoning at a later date.
The Post Office, which is government-owned, stated that it has made every effort to engage with Mr. Castleton to overturn his civil judgment and remains willing to do so, but it does not believe his current claim is “a good one and it had a duty to its shareholders to defend it,” the court heard.
Mr. Castleton seeks “vindication” that the judgment against him, which has “blighted” his and his family’s life for 20 years, was obtained dishonestly by the Post Office, and for a judge to determine the compensation he is owed.
Speaking outside of court, Mr. Castleton told the BBC: “We know what we need to do and we’re very happy where we are.”
“We’ll get a defence and that’s what we’ve been waiting for. The facts aren’t going to change. It’s just the money.”
Welcoming the court’s decision, the Post Office stated its belief that separate trials would expedite the resolution of legal issues and minimize costs.
“Our priority remains that Mr Castleton and all other affected postmasters get fair resolution and closure, and we remain hopeful that this matter can be resolved via the existing Horizon redress scheme,” a spokesperson added.
Mr. Castleton’s case is a prominent example of the scandal in which hundreds of sub-postmasters were wrongly convicted due to faulty software that falsely indicated missing funds from their branch accounts.
While other victims have had their convictions overturned, Castleton’s civil judgment against him remains in effect.
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