Campaigning lawyer Dan Neidle has referred the Post Office’s legal team to the Solicitors Regulation Authority (SRA) over ‘without prejudice’ letters sent to victims of the flawed Horizon computer system.
Mr Neidle, a former partner at Clifford Chance and founder of not-for-profit Tax Policy Associates, said the Post Office was attempting through the letters to “unilaterally impose confidentiality on unrepresented claimants”, causing them “considerable harm”.
However, a spokeswoman for the Post Office said the offer letters “strongly encouraged” postmasters to take legal advice, which was reimbursed, along with the legal costs of any disputes over offers.
Mr Neidle told the SRA that the historical shortfall scheme (HSS) was the largest compensation scheme for victims of the Post Office scandal, making awards to 1,924 postmasters by the beginning of April this year but paying the legal fees of only 198.
“I am aware that there are many postmasters who were unhappy with the compensation offers they received, but were told the offers are confidential and could not be mentioned to anyone.
“Given the history of the postmasters’ legal dealings with the Post Office, you will understand that their response was to be frightened of the consequences of breaching confidentiality.”
He said that all the settlement letters contained the same paragraph, in which the Post Office noted that the letters were marked ‘without prejudice’.
The letters said: “This means that the terms and details of the offer are confidential and, unless we both agree, cannot be shown to a court or to others unless for a legitimate reason and on confidential terms – for example, you can take advice from a solicitor about this offer and we can share it with our associates.”
Mr Neidle said he was “very troubled” by the paragraph, which he was said was misleading – ‘without prejudice was a form of legal privilege, not a rule of confidentiality – and a breach of SRA Principles.
He went on: “There is nothing to stop recipients of these offers from sharing them with other postmasters, friends, or journalists, and nothing to stop the journalists then publishing the terms (although it would be advisable to redact identifying details, to prevent any future court from seeing publication as an attempt to circumvent the ‘without prejudice’ rule).”
Describing the alleged breach of SRA rules as “particularly serious” because the Post Office knew that most recipients of the letter were unrepresented, Mr Neidle went on: “It limited unrepresented postmasters’ ability to compare offers with each other, and therefore improve their position.
“It stopped postmasters discussing the matter with friends and family, who might have prompted them to obtain legal advice.
“It also shielded the Post Office from public criticism, by preventing postmasters going public with the poor terms they were being offered.”
Mr Neidle said the situation could not be compared to lawyers negotiating a non-disclosure agreement. “Here there is no settlement, merely an offer, and the Post Office is purporting to unilaterally impose confidentiality on unrepresented claimants.”
He urged the SRA also to investigate whether the Post Office’s external lawyers, Herbert Smith Freehills, were involved in drafting the paragraph, as it was a matter of public record that the firm advised on the scheme.
A spokeswoman for the Post Office said: “Our sole aim is for full, fair and final compensation to be provided as swiftly as possible.
“Compensation offers totalling around £100m have been made to 2,400 postmasters through the historical shortfall scheme, following assessments by its independent advisory panel of experts. The majority of offers are agreed and paid.
“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.”
She said offer letters were marked ‘without prejudice,’ but that did not “in any way prohibit postmasters from seeking independent advice on their offer and this is clearly explained in the letter”.
The SRA said last year that solicitors should only use the term ‘without prejudice’ where there was a legal reason to do so.