The Post Office has replaced City giant Herbert Smith Freehills (HSF) as its solicitors for the ongoing Horizon IT Inquiry, it announced yesterday.
Bristol firm Burges Salmon and fellow City practice Fieldfisher are jointly taking over the job.
Observers have suggested the move was overdue, with a barrister who played a key role in exposing what happened behind the scenes at the Post Office saying it had been “a source of considerable surprise” that HSF had continued to act.
In a statement issued yesterday, the Post Office said: “Following careful consideration that began last year, culminating in a decision by the Post Office board in January 2023 that a new law firm should be appointed, a competitive tender exercise was carried out via the Crown Commercial Service’s framework.
“Burges Salmon, working in an integrated team with Fieldfisher, have significant expertise, having between them worked on most major public inquiries over the past 20 years.”
The Post Office said the decision was taken “in consideration of costs, given the inquiry is now due to run significantly longer than anticipated”, and also addressed “any future potential risk of Herbert Smith Freehills being unable to assist on aspects of phase 5 relating to matters in which it has been involved”.
The fifth phase of the inquiry headed by former High Court judge Sir Wyn Williams, currently scheduled for the autumn, will cover redress, including access to justice, conduct of the group litigation and compensation schemes.
HSF was brought in by the Post Office in 2019 to help with the group litigation brought by sub-postmasters and helped settle it that December. As well as acting for it on the inquiry, it also administers the historical shortfall scheme, one of the main compensation schemes for affected sub-postmasters.
HSF would continue to “assist” the Post Office on other matters, including the scheme, the statement said.
There has been concern about the ongoing role of HSF for some time. In 2020, Conservative MP Kevin Hollinrake highlighted his worry about law firms – and in particular HSF – in helping client companies accused of wrongdoing set up compensation schemes.
Mr Hollinrake is now a business minister who continues to take a very close interest in the Horizon scandal.
In April, Edward Henry KC, a barrister representing some of the sub-postmasters at the inquiry, accused HSF of being in an “untenable” conflict of interest with its continued role with compensation.
Then last week, the Post Office’s lawyers were referred to the Solicitors Regulation Authority over ‘without prejudice’ letters sent to sub-postmasters with claims on the historic shortfalls scheme, with a request that the regulator check if HSF was involved in them too.
Barrister Paul Marshall of Cornerstone Chambers, who has also warned about the appearance of bias in HSF’s work administering the scheme, told Legal Futures yesterday that “the apparent and actual conflicts of interest that criss-cross the scandal” was one of its “more extraordinary aspects”.
Acting pro bono for three of the wrongly convicted sub-postmasters, Mr Marshall played a crucial role in revealing that the Post Office was first alerted to problems with the convictions in 2013.
He said: “It has always puzzled me that it was not apparent to the Post Office, or to the government as its owner, or to Herbert Smith Freehills themselves, that that firm, having been engaged on behalf of the Post Office over the period of the most bitterly contested bit of the group litigation in the spring of 2019… should have a continuing role in either the Williams inquiry or in the arrangement for any compensation scheme – where an overriding requirement is for independence and objectivity.
“One of the issues with conflicts of interest is that these may be apparent rather than actual. I have always held the view that the requirement for independence and objectivity, in the present context, necessarily responds to/must correlate with the vigour with which the Post Office conducted the litigation and the way it unjustifiably – on what is now known – contested its victims’ claims.
“It has always been a source of considerable surprise to me that Herbert Smith Freehills, after December 2019, continued to play such a prominent role in representing the Post Office’s interests in so many areas – the inference is that the Post Office took the view that HSF hitherto had represented its interests very effectively.”
Meanwhile, Professor Richard Moorhead, the legal ethics expert who heads the Post Office scandal project being run by the Evidence-based Justice Lab at Exeter University, tweeted: “The decision to appoint HSF was likely a bad one from the off but by the time the Inquiry went statutory, and particularly once it had widened the issues and had privilege waived, it was a car crash waiting to happen.”
We have approached HSF for comment.