The Post Office and Fujitsu have been accused of driving up legal costs and delays in suing a former sub-postmaster for £4 million damages in the Horizon IT scandal, the High Court heard.
Lee Castleton OBE was accused by the Post Office of missing £25,000 in cash from its branch in Bridlington, East Yorkshire in 2007. Following his two-year legal battle with legal costs of £321,000 he was declared bankrupt.
At the first hearing of their claim on Friday, the court was told that Fujitsu, the company responsible for the faulty software, has already racked up more than £700,000 in legal costs.
Mr Castleton is the first person to take legal action against both organisations.
Friday’s preliminary hearing was about how the case should proceed.
The court heard that “obstacles” were being placed in front of Mr Castleton to make his claim “difficult, time-consuming and expensive as possible”.
His legal team alleges that the Post Office’s decision to pursue a 2007 civil claim against him was an “abuse of the court process”, and that the final judgment was obtained fraudulently.
They all also claim that the state-run institute conspired with Fujitsu to pervert the course of justice by “deliberately and dishonestly” concealing evidence.
Mr Castleton was one of 555 sub-postmasters who took the Post Office to court in a landmark legal battle led by Sir Alan Bates.
He won his case in 2019 and agreed to a settlement, but he never received proper compensation because the money he received was largely eaten up by the huge costs of funding his case.
Mr Castleton wants that agreement rescinded, alleging it was obtained fraudulently through “strict practices” by the Post Office.
Both the Post Office and Fujitsu have not yet filed a defense to Mr Castleton’s claims, but have called for his case to be split into two trials.
They want the court to decide whether the settlement agreement prevents the former sub-postmaster from proceeding with his individual claim and that if it does, it would “dispose of the proceedings in their entirety”. He argued that doing it this way would save time and money.
But in written submissions on Mr Castleton’s behalf, the court heard the reverse would be true and his claim was “extremely simplistic”.
His barrister Paul Marshall Casey rejected the need for a separate trial.
But at the conclusion of the hearing, Mr Justice Trower and Judge Francesca Kaye ordered the trials to be divided into two parts, and said they would give reasons for their decision at a later date.
The Post Office, which is owned by the government, said it had made every effort to engage with Mr Castleton to overturn his civil judgment and remained prepared to do so, but did not accept that his current claim “was a good one and that it had a duty to its shareholders to defend it”, the court heard.
Mr Castleton wants “confirmation” that the judgment against him, which has “blighted” him and his family’s life for 20 years, was obtained dishonestly by the Post Office and for a judge to decide what he is owed.
Speaking outside court, Mr Castleton told the BBC: “We know what we need to do and we are very happy where we are.
“We will get a defense and that’s what we’re waiting for. The facts won’t change. It’s just money.”
Welcoming the court’s decision, the post office said it believed holding separate trials would resolve legal issues quickly and reduce costs.
A spokesperson said, “Our priority is that Mr. Castleton and all other affected postmasters receive fair resolution and closure, and we are hopeful that this matter can be resolved through the existing Horizon redress scheme.”