Post Office and Fujitsu accused of delaying £4m damages claim

The High Court heard the Post Office and Fujitsu were accused of racking up legal costs and delaying a former deputy postmaster suing them for £4m damages over the Horizon IT scandal.

Lee Castleton OBE was pursued by the Post Office in 2007 to recover £25,000 in cash allegedly lost at its branch in Bridlington, East Yorkshire. After a two-year legal battle and legal costs of £321,000, he was declared bankrupt.

At the first hearing of his claim on Friday, the court was told that Fujitsu, the company responsible for the faulty software, had already paid more than £700,000 in legal costs.

Mr Castleton was the first to take legal action against both organisations.

Friday’s preliminary hearing was about how the case should proceed.

The court heard “obstacles” were placed in Mr Castleton’s way to make his claim “as difficult, time-consuming and expensive as possible”.

His legal team claims the Post Office’s decision to pursue civil proceedings against him in 2007 was an “abuse of the court process” and that the final decision was obtained through fraud.

They all also allege that the state-run agency conspired with Fujitsu to pervert the course of justice by “deliberately and dishonestly” hiding evidence.

Mr Castleton was one of 555 deputy postmasters who took the Post Office to court in an epic legal battle led by Sir Alan Bates.

They won the case and reached a settlement in 2019, but they never received proper compensation because the money they received was largely consumed by the huge expenses incurred to fund their case.

Mr Castleton wants this agreement annulled, claiming it was obtained fraudulently as a result of “sharp practice” by the Post Office.

Both the Post Office and Fujitsu have not yet filed a defense against Mr Castleton’s claims but have called for his case to be split into two trials.

They want a court to decide whether the settlement agreement prevents the former deputy postmaster from pursuing his personal claim, and if so, it would provide “total elimination of litigation.” They argued that doing it this way would save time and money.

But in written submissions made on Mr Castleton’s behalf, the court heard the opposite would be true and his claim was “extremely simple”.

His lawyer, Paul Marshall KC, rejected the need for a separate hearing.

However, at the end of the hearing, Judge Trower and Judge Francesca Kaye ordered the hearings to be divided into two, saying they would explain the reasons for their decision at a later date.

The court said the government-owned Post Office had made every effort to contact Mr Castleton to overturn his legal decision and was more than willing to do so, but did not accept that his current claim “was a good one and its shareholders had a duty to defend it”.

Mr Castleton wants a judge to be “proven vindicated” to decide how much he is owed and that the decision against him that “blighted” his and his family’s life for 20 years was made dishonestly by the Post Office.

Speaking outside court, Mr Castleton told the BBC: “We know what we have to do and we are very happy with where we are.

“We will get a defense, and that’s what we’ve been waiting for. The facts won’t change. All that matters is money.”

Welcoming the court’s decision, the Post Office said it believed holding separate cases would resolve legal issues quickly and keep costs low.

“Our priority is the fair resolution and closure of Mr Castleton and all affected postmasters and we remain hopeful that this matter can be resolved through the existing Horizon compensation scheme,” a spokesman added.