Post Office makes “policy decision” to stop using ‘without prejudice’

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Post Office: Legal advice was to keep using ‘without prejudice’

The Post Office has made a “policy decision” to remove the label ‘without prejudice’ (WP) from its Horizon Shortfall Scheme compensation letters.

Correspondence newly released by the Department for Business and Trade reveals that the Post Office took advice on the issue from external lawyers who, apart from where the amount of compensation was zero, advised it to “keep the labelling”.

The move follows a complaint to the Solicitors Regulation Authority (SRA) last May by campaigning lawyer Dan Neidle.

Mr Neidle, a former partner at Clifford Chance and founder of not-for-profit Tax Policy Associates, argued that by using the label in settlement offer letters, the Post Office was attempting to “unilaterally impose confidentiality on unrepresented claimants”.

The Horizon Shortfall Scheme is the largest of the Post Office compensation schemes and is overseen by the Horizon Compensation Advisory Board (HCAB), whose members are chair Christopher Hodges, professor of justice systems at Oxford University, Lord Arbuthnot, Kevan Jones MP and Richard Moorhead, professor of law and professional ethics at Exeter University.

In December, HCAB raised the WP issue with the Post Office, referring to Mr Neidle’s complaint and his concerns that the Post Office’s “approach to such correspondence might drive fear and a reluctance to get advice and support”.

It cited one case where a letter declining compensation was marked WP.

Responding a week later, the Post Office said it made offers WP “to allow the kind of commercial settlement negotiations that we undertake on the [scheme]”.

It added: “None of our claimant firms have challenged the point as they understand the benefit to both parties and the fact that there is no disadvantage to their clients.

“We have had feedback from postmasters that they value their privacy in these matters and had concerns about others in the community discovering the level of compensation that they had received.”

Professor Hodges reiterated the HCAB’s concerns about the “inappropriate” use of WP in a letter to Nick Read, chief executive of the Post Office, which he also copied to SRA chair Anna Bradley.

Ms Bradley responded to express concern that the Post Office was using the fact that the SRA had not concluded its investigation into Mr Neidle’s complaint in part to justify not changing its use of WP – only for Mr Read to do exactly that again a few days later.

A follow-up letter to the HCAB from SRA general counsel and deputy chief executive Juliet Oliver said: “I can confirm that we have written to the Post Office and their lawyers to confirm that, whilst the particular facts and circumstances relating to matters that are under investigation remain to be determined, this does not override the obligation to ensure that all labels are used correctly and are not misleading.”

She said she had reminded the Post Office of the SRA’s 2022 warning notice, which made it clear that “particular care” should be taken where people were unrepresented and the use of WP should only be attached to an offer to negotiate.

The SRA’s warning notice, she pointed out, said there should ordinarily be no need to apply the WP label “to correspondence which does not offer any concessions and only argues your case and seeks concessions from the other side”.

Responding last month, the Post Office said it had reviewed the template offer letters with advice from external counsel.

“Following that review, discussion in our governance committees, and after careful consideration of the feedback we have received, we have taken the decision to remove ‘without prejudice’ wording from our HSS offer letters.

“Aside from the labelling of nil offers which we accept was inappropriate, and without waiving privilege in their advice, our legal advisers confirmed that the ‘without prejudice’ label on offers of financial compensation was entirely correct and proper as a matter of law and recommended that we keep the labelling on such offers.

“You have said that we are perceived as hiding behind legal rhetoric and using it against unrepresented applicants.

“While this has never been our intention, ultimately the feedback on this issue is far more important to us than maintaining the legal position, and we have acted accordingly.”

In a letter to the Department of Business and Trade this month, the Post Office described the move as a “policy decision” as it sought to “ensure that everything we send is compliant and that we make improvements wherever we can”.

It said it had removed the WP label from the latest batch of letters to sub-postmasters and explained why, and was writing to claimant law firms as well.