-

SUEEN'S BENCH DTVISIOI{

EET'WEEN:

ALAN BATES & OTHERS

elaimants
- an<i -
[,OST OFFICE IIMITET'

Defendants

,.1&1-g bIQ fl D-GENERIC PARTICULARS OF CLAIM

t. The purpose of these Generic Particulars of Claim is

to set out allegations common to
each of the Claimants or grouPs of them, and to identify
indicative breaches of duty
}:y the Defendant.

1 The Claimants will each serve a Scheclule of lnformation

containing details specific to
their indivic{ual claims, including identifying the causes of
action and indicative
i:reaches on '"irhich thev rely. Standard form contracts
are served herewith marked
Appendix A to D' xt is anticipated that inciividuals selected as Lead
Claimants will
il-rrther provide individual parficulars of Clairn.

'1
'firese particulars are provided
_),
subject to the information likely to be nbtained
,n
iliscltlsure anci the obtaining (and exchan*e) of expert evictence,
and in the cnntext of
ihe siark clsvlrllrl€trv of inforrnation betlveen the Claimants
and the Defendant, the
Dt:fendant's refusal io allolv the Claimants to discuss
its Letter r:f Response i,vith
'lecond Sieht (without their soiicitors enterinq into a contract ,.vith the Defendant),
mti t}:e lact thai ihe Defenrlant has n*f crovl<ied ciilcum*nts ;"er:uested bv fl-le
':in.lrrfs.
I
L

{NT&Q_DUCTICIN & KEY FACTS

A.X '{he ParUeE

llefend*ttt

1'!re Detenclant operates and exercises

ccntrol over a netw'ork of around 11'600 Post
+.
'Ihe Defendant q:ifers products and serVices to
tiffice branches throughout the UK.
postal services' iinancial services'
tire public via this network of branches incLuding
and foreign currency exchange'
i:ranch banking, bill payments, National Lottery,

the products and services t'vhich

}, In each branch it is the Defendant which determines
has increased the number and
must be made available. over time, the Defendant
which it has required to be provided through
complexity of the products and services

its branch network.

types oi Branch
are known as subpostoffices' {n these
The vast majoriiy of Post office branches
to run the branch on behalf of the
branches the Defenciant appoints a subpostmaster

|}efendant.

in a similar wav but subiect to franchise

ihere are some branches which are operated
and a iimited comPany (usually set up by
an
i.greements between the De{endant
with ihe Defendant)' There are ;riso
inrlividual ior the express purpose of contracting
managed by the
.: smaii *urnber of branches {around 315) which are iirectil'
individuals r'vorking in these branches are
Defendant as cror,vn office branches, and

enrpioyedbytheDefendantsutrjecitoexpresscontractsofemployment'

'i *bp os tmast er Cl *imsnts nnd C ontv scts

l-he vast inajoritrr of {-iairnants are

or were $ui:postrnasters'

n si;indarcl i{"}rm f olltrae[s r.vl:ich,

""ir-rirpos
im;rs rers {--r

*r:i ro 'r-:e iq:ntracts uf rmplcvment' |'{l!*rl'e ill ttle

L.i iscr*ricn lnti till-rlr*["

i0. As to the Defendant's standarcl forrn conkacts with subpcsfmasters:

i0"1. trhe majoritv of Clairrant Sribpostm;rslers wer€ engager{ by ihe Defelriant c1

$ubpostmaster contracts ("sP&dcs") datecl igg4, ar"rci as subsequentlv
;rmenctecl (a copv of r.vhicl"r is serverl herewith, marked Appenelix A).

iA"'2. A smali number of elaimants were engageci an Temporary $ubpcshnaster

ilontracts ("Temporary sFMCs"), which lvfls cl shorter, mociified form of the
IPMC {a copy of ,.vhich is serveri herewith, marked Appendix $). This
purported to require these Claimants to comply lvith almost alt of the same
rli:ligations as a permanent Subpostmaster.

i0.3. In pre-action correspondence the Defendant has claimed that a small number
of Claimant Subpostmasters were engaged on a further modifieei version of
ihe SPlvIC, called the Community Subpostmaster Agreement, rvhich is
rlescribed by ihe Defendant as being simiiar to the SPMC but offered to
postmasters of part-tirne rural Post OfIice branches, and providing for a
hieher proportion of fixed remuneration than in the SPMC, as opposed tcr
.;ariabie remuneration, to account for the lower
footfall. The Claimants do
:tot have a copy of a eontract entitled Community ,$ubpostmaster Agreement

.:nd the Defendant has not provided a copy" Pencli-ng elisclosure, the
t'jlairnants proceer{ t:n the basis that if any Claimant .,rras in fact enqageci on

'inv llommunitv $ubpos!.master Agreement tire terrns r,vere in ail materiai

i*spects the same as those of the SPMC.

i,1.''1. i\ccording lo the Defendant's pre-acfion correspondence, since 20i0 the

i]*fendant has introduced l{etwork Transfor:rnaiion e rynkacts (herein,

. "ld'rcs"), as a replacement fcr the spMC, in respect of ,,vhich ihere are twr-r
.:rench modeis: the "1L,{ain branch" inodel iwith a riedicated Frlst *ffice
:l:unter) and the "L.*ci:i branch" :"noiiei {',vhere P*si Office sei:viE.:es r:an [:e
r'-*"isacb*rt fr*m ihe rstaii rtollnter!. Iteierences in fi-rese ir;rticr"ilars *f i-i.rim in
,-ii.i:.i*S iif irte i'l i'{] ;:r'e ii; i'!auses r,;r iirg i:;l;1! $y;1i1ai1 l:.tr-rrlet i,. i'i. t-l r,.rDV i}l
 branch model NTC anil the Defendant has not provided
a
a copy CIf any rnain
the basis that if any
CoPy. Pending disclosure, the Claimants proceed *n
nreidel NTC, the terms
Claimant lvas in firct engap;eel on any main branch
.,vere in ail maierial respects the same as the local branclr
model NJTC.

the Defendant on any other

10.5. Any Claimants who may have been engageci by
af subposlmaster contract will itLentify the same in his' or
irer
rariation
Schedule of Infoimation'

{}ther Claimants
!l
tt A smalr number of claimants were engaged
in one of the following ways:

employees: These Claimants were employees

in Crown office
11.1. Crown office
branches,subjecttoanexpresscontractofemploymentbetweentheClaimant
have a copy of a Crolvn office
;rnd the Defendant. The Claimants do not

crnpioymentcontract,andtheDefendanthasnotprovidedaCopy;

or .A'ssistants: These Ciaimants lvere managers

or assistants clf
i1.2. Vlanagers

Subpostmasters,i.e.eneaged.byaSubpostmasterioworkwithinoneofthe
Dr:iendant's branches; or

were eiirectors or guarantcrs oi

11.3. Directors and Guarantorsi lhese Claimants
the Defendant as tranenisees' unt{er
lirniteel companies which ccnrracied with
(a s0py ot
: slandard form Franchi.se .rtgreement, as subseq.uently arnencied
marked Appendix D)'
',ri-rich is served herervith,

,Hsrlzsfl
system introduced by the
i2. I{orizon is an eiecrronrc pornt uf saie ;lncl acct-runting
.jeiendantini,ostofficebranclresinorarounwqglzsaO,ancithereaiteramerrcted
an anr-enrlment in 2ti10 known as i{onzon
iinline'
Ii:i.rl1l nme t(] flme' i;rciudinq

.'ji;.-]*ltr:ani31'V{jrti-l;erStilli.'1,5ial1izcft''"]v$t*-]rn.
 14" As particularised further beiow, the introEiuction and
imposition of Horizon in
t99el20a0:

14j' significantly changecl how Claimants were required

and able to work in their
branches from the position previously ancl, in
particular, the position which
prevailed at the date the terms r:f the 1994 spMC
were introcruced;

'.r: 'tl'Lry]-!!-u!*{ tsr:rji-rutijqi!:r-1.!-i:{r!Li.ji:;:elirr-si: L;'q--qr"t .p{ing-L!lsll}tl*hel.,lu,l

74'2' limited Claimants' abilitv to access, identi{y, obtain

and reconcile kansaction
records; and

14'3' limited Claimants' ability to investigate apparent

shortfalls, particularly as to
the underlying cause thereof.

i5. Further or aiternatively, subsequent changes to it andlor changes to products and

services which the Defendant required to be offered
had the aforesaid effects on the
Claimants.

16. L{errizon comprised computer system hardware

ancl softwarer communications
equipment in branch, and centrai data centres where records
of kansactions made in
i:ranch were processed, recorded and retained. (For the
purposes of these parficulars
r:f Clairn the term "Hatizon" is not used io include
kaining, here keated distinctly
-
although that is how the term has previously been used
e.g. by sec*nd sisht, which
':arried out a review of "Horizon" by reference to this wicler meaning.)

1n i{orizon operated such that transactions entered bv Claimants

or others onto
i*rminais in branches were transmitted to the Defendant's
central data centre where
ihey \,vere prr:cessed, recor<ied, reconciled and retained. Ctraimants
lvere
'i*bseqr'lently able to access lransaction riata,
as recnrrled on lhe system, for a limited
r:erioci i42, anci atter the intiaducfion *f F{orizon t-}niine.
{:0 e{avsl anci in limitecl
-':':::*rt icrm hv requestinq r*o0rts t'r-: hi: r1*neraterd i:"-r !{{-1,:ii-1{-}n" l-!:ese ierr-nrir rrci.*l
.r-:nrr;rl.ed fli;rn iransactifin rs{r:rris ireiii i;,r the i:::r:t-r;:l :.ifii:a i;,:l1ii.o.
t8. From the daia generateci by Horizon, the Defenclant required Clairnants to accept
changes ir recorels *f braneh transacfions, {"trttnsaction L:orrectlotzs" issrlee{ by ihe

{}*fendant), ur"lless the Claimant ,,r.as effectively ai:le tc prove that the transaction

it{xrecfion rvas not correct. The Deiendant sometimes issuerl transactir:n cortections

,:fter the end oi the braneh tracting period in r,vhich the transaction had taken piace,

,rnd/or aiter the 42 I 60 day periorl during which Claimants could generate (limitecl)

reports using Horizon.

.

;t) Ihe imporiance of the accuracy of Horizon lvas accentuated by the foliowing.

tg.l. Sranch Trading Statement: The Defendant required Claimants to 'bnlance

and asrnplete a Brnnch Trnding Stntement' at the end of each branch trading

period (as stated in the Operations Manual at $9.3). Initially this w'as

recluired on a weekly basis, but the Defendant subsequentiy changed this to a

-l or 5 n,eekly cycle (as notified to individual branches by the Defendant).

Completion of branch trading statements required balancing of physical cash

and stock in hand with a triai balance produced by Horizon. Claimants were

i:equireci to check and confirm that the cash and stock shown in the accounts
:"i:atched the cash and stock held in ihe branch in order for the branch to enter
r new trading perioci and to confinue traciing ihe foilowing clay'

i).2. F,{aking good: i,Vhen there ',vere riiscrepancies between tria{ balances

generatecl by Horizon and the physicai cash and stock in hand wirich
acpeared to show iess cash or stock in hand ihan sirolvn on Horizon {"an
.;pparerrt shortfall" Dr an "alleged shortfall") the Defendant requrred
ijiirimanis to rnake good the amount at the time of baianclng, uniess 'other
:*.rsn\cnrcftts *re sgreed'. The Defenclant required the Ctraimanis to rnake the

.'rrnouni good, either:

,ri;ecilV ibV eiidrr1q c;rsir *r;r cireque ilcrn his i;r irer personai rrulds
i,ii:r:tiv lo ri"ie i;ranch acccunt), {lr
 -

b" cenkaliy, ('to settre tke rmnunt centraily,), by agreeing

the amount as a
debt to the Defendant repavabre either as a singre
payrnent or by r,vay of
ctreductions from mr:nthly remuneration from
the Defendant.

19'3' Disputing'shortfalls': claimants seeking to clispute apparent shortfalls clid

not have an option within Horizon to do so, anc{
were required to contact the
F{elpline to seek assistance (see paragraph 29
below). claimants who
eontacted the. Helpline were in any event required
to settle any disputed
amounts centraliy, albeit collection was in some
cases suspended, apparently
pending an investigation by the Defendant. Claimants
were themselves
unable to carry out effective investigations into
disputed amounts because o[
the limitations on their ability to access, identify and
reconcile transactions
recorded on Horizon and the lack of any or adequate
report_writing features
in Horizon (as repeatedly raised bv Nrtr Bates). There
were no provisions, nor
was there any or sufficient guidance in the operations Manual as to the
procedure or process for disputing discrepancies or apparent or aileged
shortfails. The Defendant failed to carry out any, or any fair
or adequate
investigations into disputed amounts.

,4..3 Fuiitsq

t,. 'Ihe Dei'endant entered into

a conlract with Fujitsu Service Lirnited on Zg '1g99
]uly for
lhe provision cf iT services relatirie to Florizon. The Claimants
are unabie to
particularise detaiis of rhe arrangement between the Defendant
and Fujitsu in
i:ircumstances w'here the oniv versinn of the conkact
lvhich has been disciosed t. ihe
flaimanis is partial, redacted, e{oes not inclurle other agreements incorporated by
reference, ancl is in anv event oniy the current version
as in force since 31 hlarch 20i6.
.ihe
Defenciani has deciined to disclose any other detaiis of its
conkact r,vith Fujitsu.

21. Tencling tuii disclosure. the Claimants unclerstanel that Fujitsu,s

role includeci:

''! 1
_.:,1. r:rovir"iing rire i.iaia iransfer :lervice i:.r rvi-lici"l *:ans;:chonai i;lle , ,.v.1!;

l.ta5trr',"r: r, I i't'tt'. r..n lf1:.1p1.1r4.; .r nrj ti re :... .i) r I- j I riirtr: crnlryq:

 a clata transfer service bet','veen ihe central clata
centres and clients
21.?" providing
Lottery), and
of the Defendant e.g. British Gas, Camelot (i.e. the National
managingiheinterfacebetweenHorizonandth0seothersystems;

7|,3'managmgcr:clingerrors/bugs,andfixessoastoprevent,manageorseekto
between the said
correct apparent d,iscrepancies in the data (incluc{ing
in a manner which woulcl potentially affect the reliability of
systems),
produced bv Horizon; and
.rccounting balances, statements or other reports

behalf of the Defendant (or

21.4. providing a telephone advice service, for and on
contact in relation to technical
by agreement with the Defendant) as a point of

problems with the Horizon system or equipment'

are unable to provide detailed

27. Prior to disclosure and expert evidence, the Claimants
were or may have been the Cause of any
particulars of bugs, errors or de{ects which
but will be
cliscrepancies or alleged shortfalls attributecl to them by the Defendant'

able to ptead further thereto foliowing disclosure

or the provision of information
has deciined to provide obviously
relating thereto by the Defendant. The De{endant

relevant disclosure in relation to these matters'

large number of software coding

lJ. i{owever, the Claimants aver that there lvere a
'ne developed and.implemented' 'Ihere
errors, bugsor clefects which requireri fixes to
rebuiid
.,vere aiso data or data packet errors. There lvas a frequent need fOr Fuiitsu to
rise to the further risk of error being
branch transaction daia from backups, giving
"fhe claimants understand that
introduced into the brancl'r transaction records'
relating to some or all of ihese issues which
Fujitsu maintained a'Known Error Log',
,,vas provldecl to the Defendant but which has
not been disclosed'

the following:
Further, the Claimants aver and rely upon

:,llii,i!rj,:lLi-i-ri-i.l!.. l.:itg!i!.fif-,:,+--rii:-t $li:"jill 1i:l''"+i ri!''- 'r :ii'=j'*t'.l-l-"jjl.liil}.

"-'-"'':'-'-"'': : j": t ""':'l
j. , ,:l':'. j '.:.ll:,,:l ' '"'
"J':,-:..
 -

f.11,iL- bugs andlor errors and/or tdefects in Horizon anci anv data
or data packet
errors had the potential to produce apparent shc;rtfalls
which did not
represent a reirlloss to the Defendant:

2il'2' Horizon is imperfect and has the potential fcr creating errors (as the
Defenriant has admitted in pre-action correspondence, in the Letter of
ii.esponse, dated 28 Julv 2016, atparagraph 1.3);

24'3' bugs and/or errors have on some occasions produced

discrepancies and/or
apparent shortfalls (as the Defendant has aclmitted
in pre-action
correspondence, in the Letter of Response, Schedule
6) and such shortfalls
may also have arisen from data or data packet errors;
and, further

24.4. the Defendant sought and/or recovered such alleged shortfalls from
Subpostmasters (as is presently uncierstood to be admitted
by the Defendant
in the Letter of Response, Schedule 6, paragraphs 4.1
to 4.5).

25. Further, the Defendant was, by itself and/or via its agent
Fujitsu, abie to alter branch
lransaction data directly and carrv out chanqes [o Horizon
mdlor transaction clata
which could affect branch accounts.

75' However, the Defendant has made public statements in the

foilowing terms:

:5'1' "Horizon does not haae fitnctionalitq that allows Past

O.ffice or Fttiitstt ta ettit tsr
i'elete the transactians as recorrled by branches"
{Defendant's published repiv to
Second Sight's Briefing Report Part Two, concerning
a review nf the Horizon
system); and

'26'2' "Transnctions ns tlzey rzre recorded by branches

ccnnot he edited,,iDefenciant,s
published reply to the BBC Panorama rlocumentarv in relation
to Horizon)"

l7 '.lhese slatements
were unrrue, as the Defendant nou,, admits.

_ a) -il:r:
ciailnants rviii reiv upr:n these previous i;nkue rJ*niais in glrr:nart cl
inlerenc*s
llai ii) tl"le **i'endanl l*r-rk t:.cr;ifj1-i..i1X {t;iie lts i:r-r li:e ir,-;ii: oi ':nrrlrle!-IiJIti]r1! ,r)
'] ,i:e
 accuracy andlor reliability of Horizon, (ii) that, in context, the Defendant made the

above statements recklessly as to their truth, and (iii) the Defenclant has not
approached the issue of the callse of apparent shortfails with an open mind, fairly or

wiih ariequate enquiry.

it.4 i{elpline

29. Ihe Defendant operated the FJetwork Business Support Helpline ("the Helpline")
',vhich it provided and recommended to Claimants as a primary source of advice and
assistance in relation to Horizon, transactions, errors and issues relating to their
trading statements and accounts.

?rl The Helpline failecl to provide the necessary assistance and support to Claimants and

in some cases it was positively unhelpfui, for some or all of the foilowing reasons:

30.1. the Helpline was often unavailable to Subpostmasters, either because of its
operating hours (e.g. from 8.15am to 6pm on weekdays and 8.30am to 4pm on

Saturday, for the greater part of the period covered by applications to the
h{ediation Scheme) or because it was difficult to get through or reach an
tlperator (the Defendant having admitted that " there hazse been yeriads where the

idBSC u)ns more dfficult to contact than in other yseriods " on page 30 of the Letter

of Response);

3A.2. lvhen Claimants did get through thev were often advised that they woulci
receive a callback, but did not;

.10.3. Helpline advisors adopted script based responses and faiied to give adequate

;upport or assistance rvhich was specific to the probiem at hand anc{ior did
not etfectivelv resolve the particuiar problem or enable the Claimants to do
: lili

;+.'1. l{elptir-re edvrsors sometimes gave acivice w,hich, -when iall'-:wed, resuitecl

-i-i1 rne rease in arpareni shortfalls;

: :, : i r"r i i i'': e,r: !-i i. i :it r:{ ;t 1 5a} l-;{-,i lTi {'i f t:liits :
 a
gave misleading information as to the possibility
of an error in Horizon
being the source of an apparent shortfall,

b. gave misleaciing information as to the extent to ivhich

other ir.ldivic{uals
lvere experiencing difficulties with Horizon andl.r experienced
unexplained apparent shortfalis;

c. advised claimants not to rvorry about discrepancies .r apparent

shortfalls and suggested that they would sort themselves
out; and/or

d. encouraged Claimants to sign-off cash branch trading statements

u,vithout resolving the source of a discrepancy and/or in circumstances
where the Claimants could not be satisfiec{ that the
trial balance or
branch statement produced was accurate.

30'6' Manv Subpostmasters who contacted the Helpline were expressly

told or
irnpliedly led to believe fhat they were the only experiencing such
'ne
difficulties;

34.7. The Defendant did not disclose the matters at paragraphs or 25, or the
21, 24,
lme position as to the experience of other users, to Claimants who
contacted
rhe Helpline or otherwise.

4"5 lnvestisations

fl
Jl. Further, in relation to investigations, audits or simiiar enquiry
by the Defendant in
respect of incorrect Branch Tracting Statements, discrepancies,
anci apparent or
alieged shortfalls:

)1.1. investigators were not insrructerl or rrntified as to each or any

<lf the errors
:rnd related matters in paragraphs 23 anel 24, abr:ve;

tl,t,L.,'r
f nvesfiqators tyere not insbuctecl that transactions, entries andl*r
underlving
ilta in the F{orizon svstern cci.rid he ri:moteiv *ltered fas at r:alaqraph 25 ar
,;.:{ii:
 31.3. Investigaiors were not instructed, notifiecl and/or informed as to the

experience of other users and/or provideel aceess to information about the

same;

:t.*" {nvestigators lvere not instructed to seek out the true cause thereof, and in

practice proceeded on the basis that Claimants were liable for any apparent

alleged shortfail, unless the Claimant could prove otherwise; and/or

'rr

31.5. Investigators were instructed to disregard possible problems with Horizon as

a possible cause of apparent or alleged shortfalls and/or it was the

organisational culture or practice to do so aiui&r ilggsliBlit*t io---:9"rrre--id

: !:g-rn: ri1-Jttd:i:iXi SS'

A.6 'Terminations

32. The Defendant suspended ancllor terminated the appointments of Claimants:

32.1. who clid not or could not "make good" apparent or alleged shortfalls;

32.2. who challenged whether apparent or alleged shortfalls actually represented

,rny true shortfall at all or real loss to the Defendant;

.J2.3. rryho raise<i the inadequacies of the Horizon system and the di{ficulties facing

Claimants in interrogating ihe underlying transactions and data; and/or

?,2.4. who, in ihe circurnstances set out below, completed or apProvetl Branch
'frading Statements (generated by Horizon) that were not, on their face,

consisteni with the siock and cash held bv the branch {'incorrect Branch

Trading Statements').

:, )- in each case in lvhich the Defendant reiies uPon anv odler teason, ilte ciaimants wiil
)ut the Detenciant to srrict proot'
L.7 Context & Effect on Claimants

31" {n "rll the circumstances, some Claimanis reasonably felt that

they had no effective
choice but to proceed, either:

' 3.{.1. by mdking good the apparent or alleged shortfall {if thev were
able to elo so);
l}r

34.2. by signing off incorrect Branch Trading Statements.

15. The said circumstances included that:

35' 1' the express terms of the standard form contracts were
replete with power and
riiscrefion in the hands of the Defendant, as particularised
below;

35'2' ihe Defendant's system required Claimants to sign off branch

accounts in
order to be permitted to enter a new trading period, the next
day;

35'3' Claimants were contractualiy required to offer the services

of the Defendant
using the Horizon sYstem, which required them to enter a new
trading period
cn that system;

35'4' Claimants faced aileged shortfails r.vhich thev couid not effectively
dispute,
investigate, or f,race the cause of, as set out in paragraph 19.3
above;

35'5' ihe Defendant's position was to require repayment as a condition

o{ their
continuing appoinrment and as set out at section A.5 above;

;5'6' many Claimants hoped (and/or were in some cases advisecl or

encouraged to
believe) that discrepancies may subsequently be resolveci, l:v pending
irarrsactions, hansaction corrections or otherwise;

35'7' 3lanv Claimants had only modest incornes and/or savings anri coulcl
not
iitord te rray (or k'eep paving) the Defenrlant ihe ;unounts of the apparent
.nslrtfails anej/or ancl lhe r:nly ,;ther alternative ."vas Lerminalion i;t iheir
r l]teornfrn€nt ra,! th c{in ser! rr *nt f r r": ancia I !*ssrs :
 35.8. there was an acute relational imbalance between the parties.

36. Furtheroraltemativelv,whenindividualClaimantst'tidsignoffincorrectRranch
'frading Statements, the Defendant's approach r'vas to presume dishonesty, an the

i;asis that the onlv reason an individual woulcl do so was to cover

up his/or her own

iheft. This is approach is admitted ancl averred by the Defendant at paragrapbS'79'2

,,f its Letter of Response: "if is a sound attd lcgicnl inference that one zoottlel
onll submit

&cconnts to coaer up their own theft". This presumption was unfair, flawed andlor
"ialse
terms and
irrarional in the circumstances set out above and in breach of the implied
iortious duties below.

37. ln the circumstances above, the claimants acted under unfair and/or iilegitimate
altemative but to act as
pressure from the Defendant and/or had no realistic practical
to (or in resPonse
they dirl. They therefore acted under economic duress andlor due
they so acted
io) unconscionable dealing by the Defendant. Further or alternatively,
to ihe
in circumstances in which the Defendant was in material breach of contract
to ihe Claimant, as
claimants and/or had wrongfuily failed to disclose material facts
set out herein.

,\"8 The Defendant's Suspenoe Accqunts

]a').
'Ihe Defendant operated one or more suspense accounts in which it held unattributed
After a period of 3 Vears'
surpluses inciuding those generated from branch accounts'
profits and reflected in
such unaltributed surpiuses were creditecl to the Defendant's

its profit and loss accounts.

:r9, The Defendant iherebv stood to Lrenefit and/or clid benefit

from apparent shortfalls

,,vrongiy to ihe claimants which did not represent real iosses

attributed
to the

{Jefendant.

':

r.uriih the Defendant ;ts oroperiv

-r i- 1he Clai:nants :,vill refer t,: their respective cunlracis
*etow'
i*r ti":tir ruil iernts ;n,-i irue ttiect, subiect i* the txatters set {'}LtI
":srylli:'.i
 s.1 Factual Matrix

t1
The Subposfmaster Conkact anci all variations
of it were standard form contacts
r-lrafted by the Defendant, the terms of
which were not open to negctiation by
individual Claimants"

.ln
There was an inequalitv oi bargaining position between individual Subposknaster
Claimants and the Defendant amounting to a serious relational
imbalance.

ta
:tJ. claimants taking up appointment as subpostmasters
were required to make long
term and expensive commitments in respect of their
relationship wiih the Defendant,
typically by:

43'1" purchasing the goodwill of the business from the previous

Subpostmaster;

:+3"2' entering into a contract to purchase

or lease premises from which to operate
the branch, with associated borrowing from banks
or other lenders;

43'3' taking uP residential accommoclation on those premises or in linked

premises;

43.4. *ntering into employrnent contracts with assistants;

13.5. investing in the training of those assistants;

,43.6. {at least as at 1998) being subiect to a 25"/. deduction by the Defendant from
their first year's remuneration; and/or

-1,3.7
' incurring refurbishment, fit out and/or decorating costs.

t+. The r:peration of ihe contractual relationship Lretween individual

subpostmaster
Claimants and the Defendant required a high degree of communication,
co-operation
rnd predictable performance, based on mufuai trust ancr confidence.

i"r- sithr:ugh the Subnostmaster C*ntract enci ail variations of it staterf

ihat ihe
:'rjbns:stm;rster is nct a.n ernplovee *f the Defenclant iSpMC Sectiein l, uarasraph l;
r-:,1llc$IilrY r,f
l,{{.j i.-tlftgrarh 1."\: :...j?{: i::.:Ll 2 :l::raBraph .,j,}. ri:i,l ii.t
1 ti.res*
 proceedings the Subpostmaster Claimants clo not claim
to have been employees/

rnany aspects of the written contractual terms reflect

a conkact of employment'

including:

Defendant (see section

45.1. the high degree of discretion, Power and control to the

ts.2, below);

.45.7. the SPMC included. exPress provision for holiday substittition ailowance
(sPMC 7); and
(SPMC, Section 4), and sick absence substitution ailowance

the SPMC required personal service in relation to the provision

and
45.3.
4, paragraph 8),
notification of any substitute (spMc Section 3, and section
10) and the
evidence of incapaciiy for work (SPMC Section 10, paragraph

recruitment of assistants (SPlvIC Section 15)'

46. The Claimants wiil rely on these and other aspects of the factual makix AS

of Claim and as may further be

particularised elsewhere in these Generic Particulars

established as relevant in individual cases'

D-L Written Terms

*ueraiezo
,,vith Subpostmasters purported to
"17. The rvritten terms of the Defendant's contracts
.eserve a high degree of d.iscretion, Power and
control to the Defendant' with very

ter,v express obligations on the Defendant'

terms of the
1Q "[he Defenrtant clid not provide ail the claimants with a copy of ihe rull
or thereafter and/or did not
relevant written contract at the elate of their aOpointment

,1raw iheir aitention to onerous or unusual terms

therein'

{'he flaimants w'iii contend that ihe written

ierms between the Defendant and
tg.

,-lairnanis faii.to be conslrued:

;is a lvhole ancl in the facfuai maLrix at B'1

ebcve;
,'). 1.
 49'2' contrfi proferentem, against the Defendan!
whose standard terms they rvere;

49'3' as a relational contract and/or ur the context of the implied terms, as

pleacled
in section 8.3 berow, or such other impried terrns
as the court may fincr;

49"4' subiect to the unenforceability of those terms not

brought fairly and
reasonably to the Ciaimant's attention, as set
out in Section 8.4 below; ancJ/*r

19'5' subiect to the provisions of the terrns of Ljnfair

Contract'Ierms Act l9TZ, as
set out in Section 8.5 below.

50, Further or in the alternative, the express written

terms did not represent the 1,"ue
aqreement between the parties, in that the terms
as to termination without cause did
not represent the true agreement between the parties
as set out in Section 8.6 below:
,\*toclenz u Belcher t20111 UKSC 41 .

Rwles, Instntctions nnd Standards

51. The written terms of the Defendant's contracts with

Subpostmasters purported to
require Subpostmasters and their Assistants to comply
with an extensive and pooriy
defined list of changeable rules, instructions and standarcls,
with performance judged
according to the discrerionarv satlsfaction of the Defendant;

5l . l. [n the SPMC:

e. section 1, paraqrap:h ri: "slCruol/s i.-23 cr;ntain the .generar ternts oi a

subaostmsster's ttytpointment.
[The Defencrantl issue s ilrc sLfupostmaster
toith r*les nnd Postal Instructions zuhich deal zuiih
the uarious classes of past
*.{ice Bubiness to be transncted nt his sttb-office.,,

:,). $ection l, paragraph 5: "...Retentian sf the npuaintment ss St*nast*t*ster is

l*7-tende*.t on the su.b-office beinq zuelr ruann,qed nnd ilrc wark otrformed
';;ro7t*iry to the sltisiaction oi lthe Defendani!.,,

i*ctrr:n i, raraqraph L4: "'{kt rules trsrrti;ideri *:s, rht ir.strt*:iion ri.t!{1 \:ltt{tdnce
 nnd npplied No brench o! tlte rules will be excused on the grounds of

ignorttr cc."

ti. section 1, paragraph 18: "Cltsnges in cttntlitions of seraice and operilional

includtng those whiclt are agreed iuith the. National Fedetntion of
instrrrctiotts,

lub-Postmasters, zoill awetff from time ta time in Counter News ar by

arc deemed.ta form
$mentlment to the Contract. Such changes ttnd instructions

y*rt oi the Subpostmnster's contract'"

Seclion t, paragraph 19: "Att instructions receiued yom the Regional

General

fuTanager should be carried ortt as promptly as possible'"

51.2. In the TemPorarY SPMC:

Clause 2,7:,,We Temporary Subpastmaster ,,. is required

... to accept ittll
responsibilityfortheproperrunningoftheBranchnndthefficientperJormance
Defendantl
of the seraices in accordance znith any standards required by lthe

ttnd notified to him from time ta time'"

b. Clause5.6:"TheTemporarySubpostmastermustcomplywithsny
without
it:stntctions issuecl bt1 lthe Defendar.tl fr\m time to time, including
re.qard to the
iimitation those contained in the Counter Aperations msnual with

rLtrtriing ai the Branch, the perfbrmaflce of the Seraices'

etc'"

51.3. In the NTC:

aSvees ta oyterate the Brsnch on behnlf af

Part 1, paragraph 7.1 "Tke oyerntor

Ilhe Defenciant] lir sccortlnnce ruith the exllress terms of tlu Agreement

iinch.$linc lor the auoidance oi daubt the Mnrutnl)", and the

deiinition of

hlanual at Part 5 paragraph 1'1 as follows:

'f1u ihe ntonunls, :{uitlelines nmd instntctions uhich

.{ttllozuinq list inclt.ttles
|it{r*ul'tt et}me t*tclev t'ne de{inition o.i "}'lnnua|":

.:. ;;i il*5t uikce Cversiians iv-lstttlttl

 - Horizon online ndministrntion *nd equipment operations manttfil

- Nstionnl lottery operrttiotrs msnual (zuhere branch

ffirs this ptrocytct)
- Ord-ering stock nnrl ttperntions runnual (zohere branch ffirs this uroduct)

Post office outreach serzsices aperntions rnanuar (zuhere npplicable)

- Seutritt1 oyerations manual

- f-Ioyizon x\stem user guide (online)

- lTorizon online heLp (anline)

- Brnnch Focus

- Fost O.ffice branch standards

- Post Affice Ltd's Accessibility GtLide

- Branch Conformance Standards

- Post Office cash and secure stock remittnnce seraices manual (online)

- FOS project operations manual

- FOS project training wcrkbook (x2)

- Nlailwark specification (zohere applicable)

- Any other instrttctions to operators or updntes to such instructions

issued b1t lthe Defendantl fram time to time"

b. Part 5. paragraph 1.3: "[the Defendantl maq aruend the tist af dacuments set

r.tr.tt in this Part 5 and may amend the contents o"f anu marutal or tlouunents oyt

ihst list by gizting written natificatian {ushiclt maq be by electronic means) to

ilte aperator. In the Agreement, unless otherwise suecifierl, n reference to the

]v{.cnual is a re.ference ta it ns nmended, consolidaterl or ixtenrted bu fthe

Defendantl from time ta tiffLe."

i?art 5, paragraph 7.5: "trn ndCitiotr ta the Mnnual, [ihe Defendant) ruay
jssue to the i)perntar instructions r.tshich de*l with usriats
cl$sses of Froducts

tnd *leruices ta be transncted nt tk.e Brnnch tznd tlrc design *nd oTterafion.nl

:;i*rtdsrcls required to nm tke Brnnch."

i);rt .1. raraqranh -[ "n: " .,\!l :;:tt:h i":tslrtttions rytu:;t ?r: r.,:tllt,;itr:d i,uii'rt
':;::.t:!t.iiii::itt r rr,'lias {'l;1!'t?r:i:;i: t:rrii::::t! i::1 iii.-,,n ri*f*nr_i;.ir:f i\ ,;1t;i ;::,y;! !:i: l;:.t:!
 LLp t0 {late by incorparation of updates issuerl &y [the Defendant]. T'hey must

be cnreftilty stttdiecl by the Operator, its lv4.anager and Assistants. No brench of

instructions will be excused on the grounds of ignorance"'

e. Yart7, paragraph 3.2.1,3.2.2: "The operatar shall..." "ruttintrtin thehighest

stnndards in all rnatters connected utith the Brnnch and Branch Premises,
including implementing antl mnintaining the standnrds specified in the

Mnnual" anel " comply with oll irustructions giuen to it by [the Defendantl
ir:ith regnrd to standards and quality in the operntion of the Branclt";

Classes of Business

The written terms of the Defendant's contracts with Subpostmasters purported

to
52.
of
provide a discretion for the Defendant to unilaterally change the required classes
business to be undertaken at the branch, with no or minimal notice
to the
Subpostmaster:

52.1. In the SPMC:

a. Section 1, paragraph 6: "The Subpostmaster is informed at the time of his

;ppointment o"i the ciasses of business he is required to prouide. tle must also

unclertake, if catled upon to da so later, any other class of business

not required

{tt ihe time of his appointment but rnhich [the Defendantl maq subsequently
not require
ttnd rensonably reqtire him to do, except that [the Defendant] mat|
to do
him to ttnrtertgke Mailwork where the Snbpostruaster rlid not *ndertake
so

its pnrt oJ'the terms ol his appointment'";

Section 1, ParagraPh 7: "If {tLie Defenc{antl nlters the seruices to be

yroaidecl
)"
t_-

tr a seraice the Subpostmaster has no claim to compensatian.ior any

u,ithdrnzos

which may result Jrom the chanqe."

"lisnypointment

':7.2. in the TemPorarv Si']MC:

-l,illse 2.3: "...i'T'he Defendantl shnil

in tts *bsolute iiis cr et io n rticide zt'hich

' ':tr. i'rt:4!tt.r:; ;irtri r"i:r'L:ites lit;tt:ct ;i':*z"s* {tr€ i:"1 i')t' t.t!tLlt :'1tn!l,Utle ;'tt :,t,:
 Temparary Subptstmaster
frtrm tinrc to time at the Branch antl will notify tlte
Tempornnr Subpostmnster accordingly LhrotLgh the
conJiguration of tlte
Horizon terminal ut tlrc Brgnch.,,

ir' Clause 3.2: "If it is rfuemecl rrccessary *t nnytime to nlter the Seraices, to
tt'ithdraw nrnl part of the bustness conclucted nt the Brnnch,
ar to introtluce an
ttlternatiue ruethod oJ pcyrnent, the Temporary Subpostmaster
hns rn cktim to
.-:amaeftsation.for antl disn:ypointrnent thnt
maq result frorn the chnnge.,,

52.3. In the NTC:

a. Part 2, paragraph 1.2: "fThe Defendantl.hns the right

to enter into cantracts
0r $rrangernents with clients for the handling af praducts or the supphl
of
Seruices by the Network (incbtdinc the Branch) on strch
terms ns fthe
Defendantl considers fif. [The Defendant) retains the discretion as to where
ruithin the Network particurar products and seraices are offered',

Agency

53. The written terms of the Defendanfs contracts with Subpostmasters

purported to
appoint Subpostmasters as agents of the Defendant, as follows:

53.1. In the SPMC: Section l, paragraph 1 '"The contract is a cantract far seruices and
consequently the SLtbpostmnster is fin {rqent and not fin emplotlee of fihe
Defendantl."

i3"2. {n the Temporary SFMC: Clause 2.1; ,,Wis Contract is n temporary contrnct
{or
-;eraices hetzueen [the Defendantl nnct the Temvoranl Sttbpostmaster ancl
*)nse$uenth1, the Temparanl Subpostmnster is nn aqent and ttot
flfi emplatlee ol lthe
Defenriantl".

:i:]'3' [n the hITC: Fart 2, paragraph 1.2: "71'te Agrcement is o cor*ract ior ser.tsices nnri

titt {hterator is Ltn {r:-,\ent ilnd not 0n en*'tiarTee oJ' [the Defendantl. The {}rerntar
itknozoledq.es th*t yro .icltttiansltip of ,:nt7tia1;sy anri *mitiottre p.rists hstut,je4t {?.lze
.',:ienci;nil ctd !j't-e {.'i::erstor. r:r !,.rizt;r*z lijr* De f*:nri anfl r:rttr.i x ntt l,s.;i::rr:.rlt. ,
 Accounts snd LisbilitY for Loss
included terms
54. The written ierms of the Defendant's contracts with Subpostmasters

r,vhich the Defenciant (r,vrongly) applied and operated so

as to hold Subposlmasters
and w'ith wide
liabte for.ali cash ancl slock and apparent or alleged shortfalls,
.strictly
ianging responsibility for lcsses:

5.1.1. tn the SPMC:

o-f all
a. Section 12, paragraph 4: "71te Stfupostmaster must ensure that accaunts

stack ancl cnsh entrusterl to him by [the Defen dantl are krpt in the t'orm

prescribed by [the Defendant] .. ' "

nll losses
b. Section 12, patagraph 12: "The subpostmaster is responsible for
cnused through his own negligence, carelessness or errorr
snd nlso fot losses of

by his Assistants. Deficiencies clue to such losses must be made

Ltll kinds csused

goad withottt delaY'

financial tesponsibility of the

subpostmaster
c. section 12, paragraph 13: "The

not cease when he relinquishes his appointment and he will be

required to
iloes

xmke ,gaod any losses incurred during his term af office zohich may subsequenthl

clme to light."

54.2. In the iemPorarv SPMC:

respansible f'or the saie

r). Clause 6.7: "The Temporary Subpostmaster is strictlq

;ttstody of atl lthe Defendant'sl property, including fuut

not limited td cssit'

:ttock of ntl kincls nrttl papers and documents, whether

held by lLimself or by l'tis

.lssisiants. He is expressiy forbidcten tts make use oi the cash bnlnnce rlue to ltbe
the seruices and he
Defend.antl fur arnl purpose other than the requirements af

tytust t\t no nccat*i t-t7tph1 to his own priuate use, ,tttr howez'er shart n period'

,tn! i'arlion of tLrc oificial "funds entntsted to him'"

',). rllause 6.2: "Dettciencies rbe to nru1 iosses o7 cas'ttor stockmustbe mane u'aud

t "
,,
! ii s {' r-:i vttt L-} rs rU 5 t *} a a s t *t tt's t e ri'u t th a u tt el rtU'
 c' Ciause 6.s: "we resyonsib,itv of the Temltorary subposhnaster
for cssh and
stack uill continirc after termination of this Contrnct in respect
of losses, ,g*ins,
err,rs/ ncts or omissi,ns accurring d,ring his appointrnent.,,

i4.3. [n the hl?C:

Part 2. paragraph 3.6.6:,,The Operntor shrill: account

for anrl rentit fo [the
Defenc{ant] a/l monies cofiected
from customers in connec,tion utith
Trnnsnctions in nccordance with the Mnntral. Any cash zohiclt [the
Defendantl ptoaides to the operator or which the operator
collects as a result
of Transactions does not belong to the aperator and shall be ltelcl by the
cperator (st the operator's risk) on behalf of, and in trust
for, [the Defendant]
and the Clients. Any such cash shail not.form part of
the nssets of the operator.
'[he operator acknozuledges
that it is expressly forbidden Jrom making use of
anrl such amount dwe to [the Defen dant!
for any purp*se other thnn the
ttperation of the Branch and it must on no account apply to its awn priaate use,

for howeaer short a periad, nny portion of ftmcrs beronging fo [the Defendant]
entrusted to it. Antl
of this clause 3.6.6 and/or ann mistrse of breach
[the
Defendant's) cash bt1 the operatar or its personnel sltall
be deemed ta be a
naterial breach of the Agreement which cannot be remerlied and mart
rencler the
affencler linble to prosecution."

r). ?art 2, paragraph 1.r: "The olteratar shsil be

fuilu riable far aru. loss of or
t.iamnge to, ilny Post A-f;fice Cssh and Stock (howeaer this occLtrs nnd whether it
r]ccufs as a resttlt o_f aru1 negligence by the operntrtr, its personnel or otherwise,
ttl ils a result of an4 breach of the Agreement by the Operator) except far losses
rising .iram the criminal act of a thirr) party (other than persannel.)
uthich tl-Le

'}oer*tor could not kaue preuented or mitigated by folloruing $he Defendant,s]

s*urih1 Frocethrres or by taking reasonable care. Any deficiencies in stocks of
?rr;rlucts nn-rllor n.ru1 resulting sfu.trt.fall in the money pnlnble to [the
'1,:fendantl must be made ttaori bty tlse cperator z*i.thtsut ttreln1 so tit*t, in tite
js{ {}.r inlt i:;k0rt.{all, lthe L}etendantl i:; pitid. tlte t:tr.il avll,Juttt rL;ken ilne in

t: !):' t 1 {i' t i, t : t;i. i k t ll t i\i!1 {t. $ :t i":

 ?art 7, paragraph 4.2: "The L)perntor's respansibility for :;uch ite*rs shnll

bt1 the
brgin from tlte tirue'0t which the Post affice c$sh and Stock ttre receiued

osterator nnd slrall end z.uhen the Post o.ffice Cash and stock nre giuen
to

Crrstafrrcrs in the flroper corrduct oJ the Brfinclr 0?' fire retrLrwed tc [the

Deien.lantl or, in tlrc cose o.f cttslt or.ftnsncial instrumetrts nre cttllectedby n

:nsh in trartsit praaicler or nre prtid into a bank" lwilst the Past affice cnsh
,tnd Stock ,$e in llrc operator's possessirtn, it shall keep them in n plnce oi
iecurittl ."

,1
rl- part 2, paragraph 4,3: "The operator shall retain t'tnancial responsibility (in
,roith the Aqreement) foltawing the terminntion of the Agreement,
ttccordnnce

it zuill lte required ta make goocl aru1 lasses (includinq losses nrising from
,tncl
oyeration oJ the
Trnnsnction corrections and stock losses) Lncurred during its

Brnnch which rnay subseqtrcntly come to light'"

,,T\rc
Part 2, paragraph |3'1: aperator shnll reimburse [the Defendant] l,?

all losses, clairns, tlemnncls, proceedings, liqbilities, costs and

ittil on demand for

rxpenses (includins reasonable leqal costs nnd expenses)

incurred &r7 fthe
A*reement
Defendantl as a result of: fi3.1:D anq r-egligence {tr btenck of the

bt1 the aperntor $ rts Fersonnel; (13.1.2) anq wrisuse or in"fringement of nny

lntellectttal Property of' nny thirrl pnrty by the Operntcr or its Persannei; undlot

13.1.9 arry claim brought unrier the EA anrilar its regtLlatittns

in respect ol the
i
Jrsnch".

12, paragraph i2 of
:_lf . ilor lhe avoidance o{ cloubt, on a proper constluctlon of section
lhe Subpostmaster is not
:he SPMC (and simitar ciauses saici to impose such liability),

-.o srrictlv iiabie anci is only

liable for actual iosses caused b,v the neeiigen-ce'

careiessness or error of the Subpostmaster, or

his assistant, as to which the
,-ilntraclual burclen <-rf oroof was $n the r-iefenclant' fhus' ior example' ri-re

-1r:bpr:stmaster lv;i,iicl n*i be iiable for an apparent shoritali in branch acc*unls:

,.,irir:h riiri n*i represerlt a reai i*ss tc iire ileienu{ant;

 55'2' lvhich was not established by the Defendant, after due enquiry,
to be such a
reai Ioss;

55.3. in circumstances where the loss was caused or conkibuted to bv the

Defendant's own breach of cluty;

35.4. where it rvas not estabiished to be clue to the Subpostmaster's own

negligence, carelessness or error or that of his Assistants.

,lssistsnts

36. The written terms of the Defendant's contracts with Subpostmasters

purported to
make the Subpostmaster liabie for the acts of his or her Assistants,
but provided no,
or mlnimal obligations on the Defendant in relation to training of Assistants:

56.1. In the SPMC (1994to 2006):-

: section 15, paragraph2: "A.ssistants are employees of the subpostmaster.

A
subpostmaster zpill be held whoily respansible
for any failure, on the part of his
.lssistants, to applq Past office rules, or to proaid.e a proper standard of seraice

to the public. He will also be required to make good anq deficiency, af cash
or
stock, zuhich may result fram his assistants, aetions.,,

D. in section 7 of the operations Manual (incorporated by reference):

"Training of operators and assistants. A trainer post office Nntional
.from the
'iraining team pill ccmplete
initiat training oi the operator or the first
fulnnager and a certain number of Assistants. 'This
uill inclurle trnnsactional
training lbr key yroducts *nd seraices, FSA snd. Mails compliance and anu

Eqttipment used on a ilaily basis."

express provision for Post office to provide training in relaiion Lo

l;{ailwork, as set out at paraeraph 65.1 krelow.
56.2. In the SPMC as ar:rene.led in July 2006:-

Secticn i5, paragraph 2: ", sslstnttts ate ernplaryees af the Subpostrnaster, and

iite ;gh-atsstnlnster zuill consequently be hetd ruholly responsihle t'or antl failure

.tt.L t.irc nart af lis Assistnnts to: (2.i) *yplq Post clfice@ rules or instructiot'ts

tts rr:tlrdrecl &ry [the Defendantl; {2.2) complete antl trnininl4 flecessa{Ll in ttrrier

i:,:t ytroyerltr yrouide Past affice @ Seraices; wtd (2.3) complq with the

,1y;ligntians set otrt below. The subpostmnster will also be required to make good

,;nt1 tte.ficbrt*1 oi cttsh or stock zuhich maV resuli ftom his Assistants' ttctions ar

innctiorts""

b. Section 15, paragraphs 7.1: "[The Defendantl will: (7.1.1) prrruide the
Stfupostmaster with releaant training materinls and yrocesses to carry out the

requtrerl trnining of his Assistfints an the Post Office @ Pradttcts and Seraices;

i7.1.U inform the subpastmaster tls soan as possible ruhere tteu) 0r reaised

trnininq will be necessary as s result of changes in either the lazo or Prsst O.ffice

tO Proclucts snd Seraices; snd (7.1.3) wheve appropriate ... tryclate the training

(or processeil to the

;nnterinis (or processes) or prouide neu) training materials

Srbpostmaster" Liaweaer, it is the Subpostmaster's responsibility to ensure the

foyer rleploVment within his Past O,ffice (D braruch o! an11 msierisls *nd

itrgcr:ssecl Oroaitled by [the Defendant.l arutl to ensure thst his Assistunts

:.eceizse sll t'ke trainin| zohich is necessarq in ordev to be ttble to properLy ptouide

:lte Pttst O.ifice @ Prochtcts nnd Seraices nnd to per"f'orm antl other tttsks
required

ir connection with the operation o-f the Posi Office(@ branch'"

3c-:ction i5, paragraph'7.2: "Wlrcre [the Defentlant] fuas obligations io third

pr5; l1iftce tD Products anri Seratces (inciuditq'

:.inrti{s in relation to cert&in
,ttt rrot liruited to, ,finnnct*i trnnsnctians (such tts bureatr tle ch*nge, anri snies ai
:i?.:\rratLCe) :t,ilr] Cot'tr.*urntcsttons products, *nri prttvision rs.f maii s:eraices)' tite

.,::
::i;aost?nssitr tiuileltnkes ta ust: itis t:est tndeavours t0 €?!sttt't: titat il:'''

t.;.:i.strint.q rutil ngt rause l.Lhe Deienri;rntl, tt bt in brnch ci sttcit i:bliqstians"'

 it. secfion'15, paragraphT.3: "[The Defenciant]mary reqtestfronL
time ta tinte
that ztlrcre it lris oblilntions as describecl aborse fLre
Subpostmaster sl.Lould
cortd'ttct specific ttaining (zuhether throtryh zoritten/distance
learnilg tltnt ntrtry
require confirmntion of cornpktion ar uis presentations)
irL relatiort to certnin
ilost affice @ Seraices (such cs, but not limited to, ttonetl
lnttnrlerin;1). Fnilure
Ln1 the Subpastmaster to arrnnge
.for such trainirtg to be proTterlry ayptied zuill be
ileemed to be n breach o_f this Cantract bt1 liltt.,,

e. Section 15, paragraph 7.4: "(7.4.1) The Stfupostmaster rnttst

ftsrmulate a
ttnining policy far ntl his Assistants, in orcler to
fitlfil his obligations tn relation
to the safekeeping of any Postal Packets. (7.4.D This training polictl shottld
inchtde the follozuing elements: the leuels of training
required to fitlfil the
obligations referred to nboae at 7"4.1; the leaels of training
requirerl accortling to
the dffiring responsibilities of, nnd zoork tmderttken bt1, the Assistants,
tn
relation to Postal packets; details of the minimum leael of training
require;; an
explnnntion of ltozo the training is proaitled; the.frequency
with which trnining
is proaided; snd details of how training is giaen, recorded and
manitored.
{7 '4'3) The Poliq must also ensure compliance with nll ather regtilatonl and
legislatiue requirements. (7.4.4) Tlte Subpastmaster must
regulniltl maniior the
implementation tsf and cornpliance usith the training polictl in his post Office @
hranch""

55.3. In the Temporarv SptvIC:-

Clause 5'1l' "Tlrc TemporanJ Sttbyostmnster mttst arauirle nnd train

st ltis ozun
:xpense, suitable sssistnnts needed to prouiae the Seraices gn6
must camayt
ii;ith nll statntonl obligntilns ylaced on an emttlot{ey.,,

clause 5.2: "The Teruaorary *tb?tastmaster rutst corupltl with the y;rouisions
:tf Appentlix I to this Cttntrnct in reiation to nssistr;ytts nttd orospectiae
.;:;ststants.. ", ;'nd al Appendix l, Eeclion 2: ,,,.lssistattts *re etnssi.otlees tti
':r.i: :itibnt;st*taster, r"ncl rlte -au.ltuttstin.*str:r tt:!ll conseqix:ntltt bt !i,:!tJ i-t,h*!it1
''::;t:i''l:;t.b!r: irr tt.ut iiziiure. ,i;i :l!.{ :.;tit"t r:l'lriq ..iq,r;EI.-*i:;. iil: it:i ,::T}lis !}.ri
 Office<g rules or instructions as required by [the DefendantT; b) complete any

training necessary'in orrler to properly proaide Past Offic@ Seraices; nnd (c)

carnply zoith the obligations set aut below. The Subposttnaster zt'ill slso be

reqrtired to ynake gootl any deficiency of cash or stock zuhich may resttlt fram his

Asiistants' nctions ar inactions'"

c. fhere lvas no express obligation on ihe Defendant to provide training or

iraining materials to Subpostmasters under the Temporary SPMC.

35.4. In the NTC:-

a. Part2, paragraph 2.3: "lNhere [the Defend antl considers it necessary, it shall

initialtrl train the first Manager nnd such numbet of Assistants as fthe
Defendantl shalt determine, in tlrc operatian of the system at the Branch."

h part 2, paragraph 2.4: "we aperator shnll ensure that the first Manager

L:{$cades the training to all other Assistants and to any replacement Manager in

order to €nsure that all subsequent Nlanagers and all other Assistants
receiae

sufficient initiat training from propetly trained Managers"'

partZ,paragraph 2.5: "[the Defendant l may require ihe Manager andlor the

and time
Assistants to undertake furthet training at anrl rensonable location

ilttring the Term if [the Defendant1Q.5.1) reasonabltl cansiders zuch training

tobeessential;arQ.s.Uwishestotrnintlrcminnewandimproaedtechniques
in
uhich hnue been tleaised and which the Operator zuill be requireA to use
, jPerfittng the Srystem."

ri. l)art 2, paragraph 2.6: "T!'rc OPerator slmil efisln'e thnt Mangets ttvtd

]'3
.lssistants attencl tlte trsining proaided brr lthe Defendantl wnder clmses

md2.5."

llart'2, fara*raph '2.7'. ",a,ntl juilure by the Cyerator ta cornltltl r'utt'n its

;,biiqattons p!,trsuani to titis cisuse "2 slrrtil be deemed to be n rnatertal brmch af

; !': A': re€?ilerlt'..'''

 f' Part 2, paragtaph 2.8: "The Operator shall be responsible
for the costs of the
Manager nndlo'r'Assistants nttending the trnirtittg re{erred
to itt clsgses 2.3 arurl
2'5 (inctuelins, as rtppropriate, salartl, trsael nccommodatioyr artd. subsistence),

lttt the cost af deriaering *rc traininc shail be met by

[the Defenciant].,,

{Ielpline

)7. lhe NTC included an obtigation on the post o{fice, at paragraph 1.6.1,
as foll*lvs:

"[The Defendant] shalt prouide a helpline to ennble

the Oyerator to cottsult with
fthe Defen dant] about running the Branch (detsits of the helpline are contained
tuithin the ManuaD".

58. The SPMC and Temporarv SPMC did not inciurie any similar
express provision.

Access to Branch Accounts and Recarcls

59. The written terms of the Defendant's contracts with Subpostmasters

provided the
Defendant with the express power to access branch accounts
and records:

59.1. In the SPMC:

Section 1-2, paragraph 4: "'The suLtpostmaster ... ruust immediatery

procruce
lhese nccaunts, nnd the zulzole af his sub-office cash and stock
"{or inspection
u:heneaer so requested by a person duh| authorised by the Regional ceneral
Nlanager."

39"2. In the Temporary SFMC:

Clause 4.5: "The Temporary Subpostmnster rnust allow representatiaes

o.f {the
Iefendantl nccess to the Brorcch at ;tll times, on productittn of correct
identific*tion."
 59.3. In the NTC:

a. Part 2, paragraph ?.1.: " ... but this shnll not restrict fitty ficcess &r7 [the

Defenclantl nnillor its autharised representatiues to the Branch nnd lthe

Defendant' sf infor*mtio n sv ste ms. "

Suspension

ir(1. The written terms of .the Defendant's contracts with Subposbmasters (but not
temporary Subpostmasters) includ.ed a purported right to suspend the
$ubpostmaster on bases inciuding any " irtegularities" as follows:

50.1. In the SPMC:

1 Section L9, paragraph 4: "A Subpostmaster mny be suspended from office at

nny time if that course is considered desirsble in the interests o/ [the

Defendantl in consequence of his: (a) being arrested, (b) haaing ciuil or

*iminal proceedin*s brought against him, (c) where inegularities or

misconduct at the office(s) ztshere he holds nppointment(s) haae been established

to the satist'action of [the DefendafitT, or are admitted, or flre suspected and are

it e.ing inu estignt ed. "

h. section 19, paragraphs 5 and 6: "where a subpostmaster is suspended his

remtmeration in respect ai any period of suspension u:ill be Luithheld so long as

,uch snspension continues"; "On ilu termination of the petiod a.f suspension

u:hether by terminntian o.f contract ar reinstatement, the Subpostmaster's

remuneratian in respect of the period mny, aJter cansideration o! the zuhole cf tke

drcumsrances of the case, be forfeiterl whally or in yart"'" '

6A.7. 'Ihere was no contractual right to suspend in the Temporary SPMC;

ri{;.3. In lhe INTC:

?art.2, paragraph 15.i: "['Ihe l]efendanti may stl;PerLri the iiper*tor irorn
Te':luire the i}aerntor ta
,:!]ery.firLq tite ilranch {sndlor, {'Lcttfiq ressonsbitl,

, ,::j;i:!i{t t;ii tir :tittl i;r ;;s ."l..lSjSirntS enqnqtd ttt Lke :}rrtvt'ch iravn ZvOrkttttt i'tt r:tt:
 Branch), uthere [the Defendant] considers this to
be necessary in the interests
ol [the Defendant] as a result of: (15.1.1) the Cperntot, gndlor
aru1 Assistartt
being arrested, chargerr or inuestigated by the porice
or [rhe Defendant] in
corrnection with any o.ffence or alleged tffince; (15.L.D
ciail proceedirrys being
brauqht ngainst the Operator and/or antl Assistant;
or ft5.L.3) there being
:iroLtnrls to suspect that the operntor is insolaent, to sttspect that the operator

hes committed any rnateriar ar persistent breacn

of the Agreement, or ttt stupect
inv irregularities or misconduct in tl"te operation af the Branch, the Basic
Bttsiness ar flny post offic& branches zuith which the operator andrar
any
Assistant is connected (includ.ing any
linancial irregrtlarities or miscanduct).,,

h Part 2, paragraph 15.2: "During the period of arry suspension,

zohether under
clattse 15.1 or otherwise, [the Defendant] may: (15.2.L)
suspend payment of
sll sums due to the Operatar rmrler the Agreement; (15.2.2)
with the agreement
af the operator nppaint a temporary substitute
for the operator to aperate the
Brnnch from the Branch premises, in which c($e any Fees in relati,n to
Transactions carried out at the Branch zniil be paid by
[the Defencl ant] direct
to such temporary substitute; nnd (75.2.3) to the extent
sttch costs haae been
Ltgreed witlt the operator, deduct its casts incurred in nppointing a temportffv
substitute toqether with other costs nnd expenses incurreil by
{the Defendant]
i1s a result of the suspensiort
.from atLv p(lvments dtte to tlte ayerator under the
,'\lqreement. [The Defendantl shall initially meet the cost
a.i nppointing #.re

iemporary substitute bu.t shail be entitled to recouyt some or nll af such cost frorn
tke operatar in accovclance with crnuse I"s.2.3 ar otherwise.
Folytwin*, tlte end
aJ the period suspension, [the Defen dant] ruay, in its disiretion taking into
rltCoilnt the releaant cira.unstances, fi*ree to pgy the Aperator
all or part af such
;tffis &s haue been suspended in sccordance with clnuse 15.2.1.,

Part 2, paragraph 1s.J: "Falktzuing the {)perntor,s sttspension,

ruhether unrler
-irnrce 15.1 ar r;therusise, the tlyterator shsll nt its rnutt cast snd €xoense
'rrtmottv trzke all ressonshle s&,rs lo ennble- ithe Defendantl io ,ii1atfitiltn r?ccrss
::i i-::t:iiamers duri;tq l.fue perit.ttl i;i ::?$uens!srt tr..t !3tsrj-u.cts rinti ,,ir:ry::*:s...
 Terminntion - Notice

The r,vritten terms of the Defendant's contracts rvith Subpostmasters purported

to
61.

permit the Defendant to terminate without notice, for a variety of reasons:

'ili.1.
In the SPMC:

;)" Section L, ParagraPh L0: " {he Agreement may be deterrnined by lthe

Defenclanti. af anll titne in case af Breach ,f Condition by lthe

Subpostmasterl, or non-perfonnflnce o"f his obligation or non-proaision of Past

o"ffice seraices, but otherwise may be determined by lthe Defendantf on

not

less than three months notice"'

61.2. In the TemPorarY SPMC:

;1. clause 2.4: "This Contract will coftLmence on [date] and utill continue

thereaiter until the expiry of nat less than 7 days' written notice to terminate,

which may be giaen by either party to the other at any time, subject fo [the

Defendant'sl rights of summary termination as set out in clause 2'5 below'"

Clause 2.5: "[The Defendantl ma!/ terminate this Contract immediately

on
b.

giaing the Temporary subpostmaster toritten notice in the eaent that the
Temporary Subpostmaster cammits any breach of this contact
or commits nn

nct o-f bankruptcy or in the euent that, as a result o"f any security checks cartied

t}ttt bq [the Defendantl, or any refetences taken up br7 [the Defendantl' ii ls

tequired of
not satisfied that the Temporary Subpostmaster meets the standards

subpostlll[$ter."
'1

51.3. ln the NTC:

i. Part 2, paragraph L6.1: "Faltawing the ccmmencement Date the Agreement

uill continue tmtil: 1:5J1) either Pnrty qiues ta the other nat less than 6

in' ruritinq)'
tranths' wrttten notlce (Lmiess otherwise rtgreeri be|ween ihe Farties
the statt
:-;iicfu cgnflot be truen s0 ns r0 c:rpire beiare tk.e iitst anniuersarv o.r

,-,-rtte: t.;r t"1'c."1.2i it is ternrtnrttecl nt *n',1 ilrne itt {tccordfitrce witlt iis tetms"'
 b. Part 2, paragraph 16.2: "[n additiort to nny other rigrrts
of termin*ti,tt
cantained in oirrer parfs,
[the Defendant 1 ma.y terntittste the Agreement
iffi-rnsdlrs.1u on giuing zuritten notit:e to the
i)yterntor if ilrc operatc;r:

. i6"2.1 carnmits antl rnateriar hrench o.f ilrc proaisians of rrhe Agreement or
tnv {tther contract ar nrrangement betweevr ihe pnrties nnd
fails to remedtl
fif capable af remedy) within 14 days of a zuritten notice.frrm
i!'te breach
[the
Defen4antl specifiling the breach and requiring the same
to be remedierl.
Any reJbrences in these standard Conditions to a breach of a
particurar
oblisation by the Operator being d.eemed to be material
and/or irremediable
L1t0 ,ot intended to be exhaustiae snd shail nat preuent
[the Defendantl
from exercising its rights und.er this crause in respect
of any ather brench of
the Agreement which is material and/or irremeclinble;

16'2'2 fails to proaid.e the Products or Seraices ta the standards required

by
[the Defendant] as set out in lvlanuat and fails to remedy
iailure (if
tl're the

*yable of remedy) within 14 daqs of n zuritten notice

fram [the Defendant]
specifuing the -failure and requiring the satne to be remediecr; . ..

16.2.16 fails to pay any sum due to

[the Defendant] urder the Agreement
by the due ilate".

Tennirufiion * Campensation
for loss of affiae

52. The lvritten terms of the Defendant's contracts with Claimants

purported fo provide
lhat Subposfmasters had no right to any compensation for
loss of office, irrespective
of whether loss of office and clamaqe suffered therebv was due to
breach or other
unlawtul act bv the Defendant:

,':2"L. {n the $Plv{c: section 1, paraqraph B: ,,The

terms of the nppointment of
:i*bpostmaster rio not entitie the horder to be pnid ... coftlpens{ttion
for ross of o{fice.,,

"'i'2' in the 'Iemporarv SlrfutC: i-lar:se 2.6: "Tlte 'f'r:mooro,rrl brtbpostmnstcr is titst
.tt'titlul to rinil oi the tqi!awin,l
it.ozn !the llefenel amtl: aamaerusntianlbr lirss ;tt rtfi.ss;
62.3. In the NTC: ?art 2, paragraph 17 'L'l: "The Aperator acknozuledges that he shall

nat be er*itled to receiae (tnLl cofttpefisstion ttr other sruns in the euent of the

termituttit'tn or suspension of the Agreeruent'"

T erminati on - Sub se quent npp o intments

purported to
62.4. 'Ihe written terms of the De{endant's contracts lvith Claimanis
reservetotheDefendantanabsoluteandunfettereddiscretionastothe
appointmer-rt of' prospective purchasers of the Claimants',
businesses as

Subpostmasters:

62.5. In.the sPMC: Section 1, paragraphg: "lf an resignntion of his nppointment the

Sthpostmaster disposes of his priaate bt,rsiness nndlor premises in which the sub-

andlor the premises or

,t{fice is sitttated, the person acquiring the priunte business
the ptiaate business andlor
exchanging contracts in cannection with tlte purchase of

ytremises wilt not be entitled to preferential consideration t'or appointment as

SubPostmaster."

,,ln the euent tlf termination of tltis Contract:

62.6. In the Temporary SPMC: Section 9:
to the
i7) nny successor to the priaate business andlor Premises will haae no claim

prtst of xtbPostmnster " '";

62.7. In the NTC: Part 2, paragraph 19:

"..'on termination of the Agreement' the
lpyointmentofantlNewOperntorshallbeentirelyatthediscretionol[tlre
trt, consider *nt1
Defendantl. [The Defendantl may,but shntl not be abliged
a Post affice branch nt the Branch Premises maele by n
$aplication far the opetation o-f

:ie?tuitrc prospectiue purchaser

of the Basic Business nncl the property interest at the
nat be giuen preierential
Sranclt Premises, but aru1 sr.tch prospectiue purchaser shall

lrentrnent in the applicstion or nypainfment Process"'

 8.3

Ilelstianal Contrnct

53' By reason of matters aforesaid, in particular the matters

pleadeci at 43 ancl 44 ab,ve,
' the relationship between Claimants and the Defendant
was properiy characterisec{ as
a "relational contrnct" (per Leggatt I in

i20t3l EWHC 111), and as such, the Defendant was subject to a dutv of good faith,
and obligations of fair dealing, transparency, co-operation,
and frust and conJidence,
goveming the Defendant's exercise of all powers and discretions
under the contract
and relating to the relationship arising thereby between the
parties.

ImpliedTerms

l''":L- lt*rhs*i-Qur,{e- sr*rla}"L:s:Iegs},-ttrg*lislenrlr]sl-bupgisli-gerylEe$*:a_llr€_llar,,tfltts

''i:rtpr5$q iij i*rrjasg;;rs at paragr4ph- I ir*.tbtyu(iii the l{eipiine_ar.uuesL}pb
?gj
,l:-riiJ1li-$iUllti.&.l::1&1!f rnaie.tiAls prr:r,,ii{_gri in reia.lir;g t<.r itre
toregcing.*irr.irsuani to
I
t-l-U Ppilr ::r*-Lu-Qr i->

i,lereda&eip-at_{
salry qut the "s_:urt}_reassnabie.g;1re -and ski

64' Further or altemafively, in the context of the factual makix and the
proper operation
of the contraets, there were implied duties arising (i) bv reason of
the confract being a
relational contract, and/or (ii) by reason of business necessity and/or
obviousness,
requiring the Defendant:

64.1. to provide adequate training and support (particularly if and when the
ilefendant irnposed new working practices or systems or required
the
provision of new services);

, i,.1.,:: .ii.r .i.:rl-11:1t

i,L=:.L1f8il:-:.i*:qr1-_i'ii:i.t_9_a.qil.t2:&ly._{:I_i.i.x._puJp_tl-t,$xluriirg--.il,il=v-t
,r,-i.irL: r'r'rrit ,'.,1rrjt!i';r-1,_i,ljr ,r., 1\il.},
._i I -f l.:,rJi-.,,1-p-ll*; i.{

i:1.2. prr"rperlv and accuratell, to effect, record, maintain

ancl keep recor6s of all
:r;nsacLions eifected usinq Horizon;
*4.3" properiy and accurately to produce all relevant records andlor to explain all

relevant transactions and/or any allegecl or apparent shortfalis atkibuted to

Clairnants;

;:4.:1. to eo-cperate in seeking to identiiy the possible or likely causes of anv

;pparent or alleged shortfalls anrt/or whether r:r not there was indeerl anv
at ali;
';hortfall

a-1,5. to seek to identify such eauses itself, in any event;

ii4.6. to disclose possible eauses of appareni or alleged shortfalls (and the cause
ihereof) to Claimants candidly, fully and frankly;

647. to make reasonabie enquiry, undertake reasonable analysis and even-handed

investigaiion, and give fair consideration to the facts and information

available as to ihe possible causes of the appearance of alleged or apparent

shortfalls (and the cause thereof);

{}4.8. to comrnunicate, a"tternatively, not to conceal knor,vn problems, bugs or errors

in or generated by Horizon that might have financial (and other resulting)
implications for Clairnants;

{4.9. to communicate, alternativelv, not io conceai the extent to which other

3ubpostmasters were experiencing reiating io Florizon and the generation of

riiscrepancies and alleged shortfails;

ii4. i0. not to conceal from Claimants the L)efendant's abilitv to alter remoteiv data or

imnsactions Lrpon which the calcuiation of ihe branch accounts (ar.d anv
,-liscrepancv, or alleged shorifails) depended;

:-!.i1. prcperly, fully and fairly to investigaie anv aileged rrr appareni shoritalis;

: i. 12. n*t to seek r€coverv irom Clairnants ur:less anri untli:

i. ine il,efen<iani lraei compiied rvitir its ,;luties ai:ov* i*r sorne *r tirer,l;
 b. the Defendant has estabrished that the alleged
shortfafl representec{ a
genuine ioss to ihe Defenc{ant; and

C. ihe Defendant had carried out a reasonabre and

fair investigation as to
the cause and reason for the arieged shortfalr and
it rvas
whether
properlv attributed to the claimant under the terrns of the
Subpostmaster contract (construed as aforesaid);

64.13. not to suspend Claimants:

a. arbitrarily, irrationallyorcapriciously;

b. without reasonable and proper cause; mdlor

in circumstances where the Defendant was itself in material

breach of
dug;

64."14. not to terminate Claimants, contracts:

arbitrarily, irrationally or capriciously;

b. without reasonable and proper cause; and/or

C. in circumstances r.vhere the Defenclant was itself in material breaeh of

iiut,v;

64.15" not to iake steps which wouid undermine the relationship of trust
and
confidence between Claimants and the Defendant;

{t4.16. to exercise any cr:nkactual, or other power, honestly

and in sood faith for the
purpCIse for which it was conferred;

;:4.17" not to exercise anv discretion arbitrarilv, capriciousiv

or unreasonablv;

'14"18. to exercise anv such discrefion in accordance r,vith thE r:bligaticns

cf gocc"l

. :ith. fair ciea lin_q, transparencv.

co-c:lt:eration, anci tmst ancl c,lnfirlence:
 64.19. to t.rke reasonable care in performing its furnctions andior exercising its
affect ihe
f,;nctions lvithin the relationship, particularlv ihose r'vhich ceruid
clccounts (ancl therefore liability to alleged shortfalls), business, health- anr{
rePu tation of Claimants'

of the business necessity

ilf . l'he Claimants r,vill rely on the foiiolving facts as indicative
to provide adequate t'raining
,rnci/or obviousness of terms required for the Defendant
their roie:
;ncl support to Subpostmasters in essential elements of

i55.1. fhe SPMC included the following exPress terms in respect of training and
paragraph 5:
support to Subpostmasters in respect of Mailwork, at section24,

ri. [The Defendant) for its part will prouide -for:

S.f irnining in nll aspects o.f Mailwork to inchtrle not onhl new entrant

training [but] also on-gaing training'

to ailozo
5.3 St{ficient leaels of operatianal and administrntiue swpport
tlre corutract'
ilrc S*byostmaster to futftl his obligatians under the terms of

set cut at eiauses 4

b3.2. The Franehise Agreement aiso included the express terms
and 77 below'
ancl5 E:f the Franchise Agreement, pleaded at paragraphs 75

3.it i:nerPusandl-lqu$ua
section B'2 above' lvith the
ii6. Further or alternativelv, each of the terms set out at
Access to iJranch and Records'
ixception of ihase concerning Agency, i-{elpiine anci
",vere onerous or unusual terms and r'vere unenforceabie by ihe Defendant'
uniess the

i}efendantcanshowthaithosetermswerebroughtfairiyandreasonabivtothe
rllaimant's attention {{Efer tto Visunl Fro*r
to ""vhich the Detenclant is put io strici Lrroof' The
Lit",iterl itqSgl QB 433), as
Defendant
,-l,ilrnarts.,'r,iil piead iurther, in' respon:le to anv Lerms reiied upt;n bv ri''e

i] ris L.)Jlellce, lll li':c t-i.iimlnts t{eplv'

 NE
@
,)/, where terms are relied cn by the Defenr{ant as pLrporiediy
entitling the Defenclant
iii io render a contraetual performance substantially iiifferent trom ihal
rvirich l'as
ieasonabl-y expected of it, in respect of the whole
or anv part of its l<-inlraclual
'-rblisaiions' or (ii) to renrler no performance at all, the saic{ terms are unenforceable
r:xcept in so far as each such term satisiies ihe
requirement of reasonableness (lJnfair
{.lc.intract 'Ierms Act 1gZ7 s3(2) and j
s 7).

r;8" 'rhe claimant will contend that

the prr:visions identifiecl as onerous ancl unusual
labove) are such terms. The claimants will plead rurther, !-n response
to any terms
;:eiied upon by the Defencrant in its Defence, in the
Claimants, Repry.

The True Agreement

.t9. 'rhere was

an acute imbalance in the relative bargaining power
of the Defen6ant ancl
lhe Claimants, and the written terms of the SPMC (and variations
of it) dicl not
represent in truth what was agreed (applving the dicta
of Lord Clark sCJ in A,tocleng
? Belcher [201U UKSC 41. ar paragraph 3S).

;0' In realitv, and in the circumstances set r:ut at paragraph 43 above,

neither narty
intended ttrrat Nhe Claimants, investments in qoodwili or otherwise
in the business
:;hould or would be forfeited on 3 monihs, notice:

7u'1' rryithout substantial cause or reason, esrabtisherl after a fair

investigaiion and
'_rnsicieration;

:4.2. if the Defendant r,vas itself in material breach of contract;

10.3. r,-inclictiveiv, capriciouslv or arbitrarilv; or

,1{-J.4" i;r response to {easonable correspancience aboui {i) any apparent breach bv
,.i-r,.: Ili:fenc{ani, or (iii ailegeil
:;hortfalis ;:nd iire difficulties iaced bv
:Lrbpostmast.ers in invr:stigatinq aiieqeri slr*rtfalls lsuch as
ii: ihe c*se *l Alan
 Bates and his ietters dated 19 December 2000, i8 iuly 2A01",7 January 2442,

and l3 FebruarY 2002)'

71. In ihe premises, the true agreement was that:

the Defendant r,vould not terminate as set out in paragraph 70 above;

and/or
77.1.

the Defendant wouid not so terminate without givrng such notice. as

fhe
71.2.
court may hold to be reasonabie (which the Claimants will contend was, on
;nv viervv, never to be less than 12 months)'

c.1 Crown Office Employees

{mpliedTerms

72. All Claimants who were Crown office employees contracted directly
with the

Defendant, and the following were implied terms of those contracts

V2.1. a mutual duty of lrust and confidence;

and in gr:oci faith

72.2. a duty on the Defendant to exercise any discretion honestly
or
ior the purpose for which it was conferred, and not arbifrarily, capriciousiy
unreasonabiY'

These implied contractual duties encompassed the provision

of training in relation to
73.
Horizon, the provision of support in relation to F{orizon, identifying
and

of aileged
investigating aileged shortfalls, any decision to suspend, the investigation
to prosecute her (iI
shortfalls, any decision to terminate and any decision to proceed

decided uPon during the empioyment relationshio)'

''i
-.'v*5--'l;i-.j i:!:r-J:.J'"ll'r'rr;'i:- '111 '!":=-:- i'-I
.i..i :"j lijlli.i itt :'. .,t..'r..'-,':.t.-ir. :l-r'.!: !l-!L'.

: -.'ilj-i;L
 r1 Managers and Assistants

Rights *f Thirtl Psrties

,/ +. claimants r,vho were managers or assistants (in that thev were employed
by a
Subpostmaster to ivork within one of the Defenclant's branches) rely
on s1(b) oI the
Contracts (Itights of Third Parties) Act 1999, in respect of the following
terms in the
relevant Subpostmaster contracts (as may be applicable), purporting
to confer a
benefit upon them in reiation to training:

Subpostmaster section 15, paragraphT.r, as set out at paragraph

s6.z.b
above;

b. NTC Part 2, paragraphs 2.3 and 2.5, as set out at paragraphs 56.4.a and
56.4.c above; and/or

the implied terms (including those arising under a relational contract)

pleaded herein;

d. any turther simiiar or other terms as may apply in their individual case.

c.3 Franchise AereementE

75. The Defendant required individuals to estabiish comnanies for the purposes of
entering into Franchise Agreements, and required indivicluals to guarantee the

':bligations nf those companies. Otherwise in material respects, the factual

circumstances (including ihe financial investments made) were the same
as, or
similar to, those set out at paragraphs 41 to 44 above, in respect of Subpostmasters.

llxuress Obligations of the Defenclant

-A The Franchise Agreement included express initial *bligations on the De{endant,

iiaciudine at clause 4E: "Consultation (inclurLiny cr;nsultntion zuith the designated. officers

3nfi generni mfiltfigeffient a-f tlte Franchisar) anei aduise zoith. n aieus io ermbling the Fynnchisee

::r-) i:*t\tvvtefice the Snid 8u:tinet;s inciu.dinq sdaice tu.rd <:ttn.sultfitiofi ?t)ttlt rc\!fird tti,t
.. ;t'te
 bookkeeping,
selection, trnining nnd superaisian of rtaff, cflsh handling, security, accounting,

adaertising and the day ta tlay operati\n of the said Business."

77. Further, at all times during the subsistence o{ the Agreement the Defendant r'vas

subject to express continuing obligations including:

77.1. Ciause SB: "Proaide the Franchisee with reasonable facilities.for consultation with

tlrc designated officers a! the Frsnchisar in relation to the conrluct of the Said

Btrsiness with n uiezu to assisting nnd ensbling the Franchisee to maintnin the

aperation oi the SYstem;"

7y.2. Clause 5C: "Prouide the Franchisee with adaice, know-how and guidance in such

flreas t$ management, cash handling, security, finance, promotion nnd methods of

operation to be employed in or about the conduct of the said Business;"

to the
77 ,3. Clause 5D: " Proaide the Franchisee with a continuing seruice which, subject
proaision by the Franchisee to the Franchisor of such information ns the Franchisor

mny rcasanably require, will enable the Franchisar to monitor the performance of the
by
Said Business and to offer guidance to assist in the achievement and maintenance

the Franchisee of stnndards af operation, seraice and product;"

llelational Co*trscts
characterised
./ i]i. The relationship between the Defendant and Franchisees was properly

,ss a "relational contracf" (per Leggatt I n Ya

[20131 EWHC 111,), and as such, the Defendant was subject to a duty of good faith'
and confidence'
;rnd obiigations of fair dealing, ffansparency, co-operation, and trust

,4oveming ihe Defendant's exercise

of ail powers and discretions under the conkact

and relating to the relationship arising thereby between the parties.

{mplied'I'erms

: i -: '!'ii .
79' Further or alternatively, in the context ot the true
factual matrix anci the proper
operation of the Franchise Agreement, the ciuties
arsing by reason of the conhact
being a relaHonal contract and/or by reason r:f business
necessity an<l/or obviousness,

. the terrns set out at rraragraph 0 above lvere impiied terms of the Franchise
' i\greement (save io the extent such terms were aireadv
expressiy provic{ed).

i)- ONCURRENT PUTY IN TORT

'qurther or altematively, by reason of the facts and matters set out above, the
30.

Defendant assumed a responsibility towards each

of the Claimants giving rise to
lortious duties as follows:

80.1. subpostmaster Claimants: the tortious duties owec{

by the Defenclant to
lhese Claimants tvere concurrent with its contrachral
duties, as particularised
,rbove at section B.

i30.2. crown office Employees: the torfious duties owed by the Defenclant
to these
Claimanis were concurrent with its contracfual duties, as
particularised above
;rt section C.1.

'30'3' Managers and Assistants: despite the absence of a written contract betr,veen
the Defendant and these Claimants, the Defendant in any
e./ent owed a clirect
dutv of care to them in tort. to exercise reasonabie care and skill
in the
provision of rraining and/or training materials and/or guidance
in relation to
i.he use of Horizon and/or in relation to any acts
imposing or seeking to
impose actual or potential iiabilitv for apparent or aiieeed
shortfalls upon
ihem, or exposing them to the risk of the sarne.

-fhese
80"4. Ciaimants and the Defendant r,vere in a proximate relationship
and the
tefendant was aware thai the failure to provide adequate training
anii/or
iraining materials and/or guidance in relaLion ro the use i:f Horiznn
rvas liable
l; e'xpr)se iirese Ctraimants to the risk of suspensri:n and/q:)r
iermination anci7,*r
' r':in"ls irlr rivii reroverv aricl/or prosecution. -1'I:is calegorv *i r:ersons r-r,as

. i-1:ii{l ,:nd i,ir:littiiarit: .rn* :,\.-ac itl ihe iJ..:fr:*riafii'.i iiil.er:t;:*niem$l;ltl*:l r;a
 pcrsons likely to be so ciosely and directly affecieri by the Defendant's acts

.inrl r:rnissions that the Dsfendant coulcl reasonably foresee thai ihese

{laimants rvere likeiy to be injure<i by the Defenclant's acts or ornissions" [n

,,iil oi the circumstances, rt is tair just and reasonabie that the iaw shoul-i

rmpose such a duty of such scope upon rire Defendant tor the beneiit of these

ijiaimants.

jg.S. Directors or Guarantors of Franchise Companies: despite the absence oi a

iirect contractual duty between ihe Defendant and these Claimants, the
lJefenciant ovyed a direct duty oi care to them in tort, to exercise reasonable

and skili in the provision of lraining and/or training materiais andlor

'are
,Juidance in relation to the use of Horizon andlor fur relaiion to any acts

:mposing or seeking to impose actual or potenlial liability for apparent or

alleged shortfalls upon them, or exposing them to the risk of the same' Ttrese

Claimants and the Defendant rvere in a proximate relationship and the

Defendant was aware that the failure to provide adequate training and/or

trainins materials and/or guidance in relation to the use of Horizon was liable
to expose these Claimants to financial liabiiities for or on behal{ of the
i;ranchisee ancilor olher financial losses and/or claims tor civil recovery

;rnci/or prosecution. Ihis category oI persons was closed and identifiable ;rnd
,,vas in the Defendant's direct contempiation of persons likeiy to Lre so closelv

,:nd rlirectlV affected by the Defendant's acts and omissions that the

Sefenrrant could reasonably foresee that ti"lese Claimants w'ere likelv to be

injured tr_v the Defenclant's acts or omissions. In aii of the circurnstances, it is

;,air ]ust and reasr:nable that the law shouid impose such a duty of sucir scope

iilrr:n the iiefendant ior the benefit of these Claimants'

LT]EF{CY

,'he lJeienciant:

]J
rl.1 ':l&:cir:cl. rea{}i'{l{}C :rnri inan;rqecl ihe rect}nerilaLit:n tli lransaetr0ns erieciec! bv
. ''= I -i.itl:l;ili'ir:,,:
 81'2' possessed and/or conkolled the underlying hansaction
c{ata in relation to
)uch trans.tctions;

81'3' required Claimants to comply with conkactual obligations

in relation to the
keeping and production of branch accounts;

'q/.A' had the power to seek recovery from Ciaimants for losses relating
to branch
;cccunts (as particularised at paragraphs 52.1 above); and/or

s1.5. in fact sought recovery from the Claimants for apparent shortfalls.

32. Whereas the Claimants were agents of the Defendant for the
purposes of dealings
r'vith third parties, such as members of the public, ihe
Defendant was the Claimants,
agent for the purpose of rendering and making available accounts
and/or was under
an equitable duty to render accounts.

).)- Further or altematively, for the specific purpose of effecting, reconciling and
recording transacfions initiated by the Claimants, the Defendant
acted for itself and,
simultaneously, for the Claimants, as their agent.

84. The Defendant rvas thereb,iz required:

E4.7. properly and accuratelv to effect, execute, record, and/or maintain and keep
records of aii transactions which the Claimants initiated using Horizon
r:r for
'uvhich the Claimants were potenfially responsible;

'3{t'2' fo render and make available to ihe Claimant accounts (in accordance wiih
84.1);
=araeraph

34.3. iurther or aiternativelv, where the Defendant allesed shortfalls to be

'rttributed to lhe Claimants, to complv with the duiies averred at paraeraphs

i4.3 to 54.11 above.
F. TIDUCIARY DUTIES

behalf of
85. The Defenclant unelertook to provide and manage the accounting system on

Claimants, in circumstances giving rise to a relationship of trust and confidence'

Further or alternatively, ihe Defendant undertook to provide information

in respect
86"

of transactions initiated by the Claimants to the Claimants:

s6.1,. upon which the claimants relied or would foreseeably reiy;

g6.2. in r,vhich the Claimants, in ali the circumstances, rePosed confidence or had
no choice but to rePose confidence'

Further or alternatively, the Defendant was the Claimants' agent for the
a1 speci{ic

purposes set out in Section E above'

the Defendant
88. Further or altematively, the relationship between the Claimants and
was one in which the Defendant had discretion and/or power; the Defendant
r'vas

the claimants', legal

able unilaieraily to exercise that discretion and/or power to affect
exercise
or practical interests; and the Claimants were vulnerabie to the Defendant's
rf the same. The Claimants identifv as particular examples of such discretion and/or
power the wriiten terms set out at paragraph'1",52,54 and 62 above'

as set out
89. ln ali the circumstances, the Defendant owed the Claimants fiduciary duties
in paragraph 84, in good faith and candour.

G.

?{_'}" The Defendant breached its contractual ancilor tortious and/or

fiduciarv duties to the

Claimants.

which are common

The breaches of cluty Particularised below are indicative breaches

io ail or sr:me of the Claimants'

12. in ihai it:

i]:e Detenciant iaiieri ta provirle aciecllrate kaining to Claimants
 92.7. failed to provide arlequate training when Horizon
was introduced;

92'2' failed to provicle .dequate training when new nr clifferent services were
rn t-rotJ uced;

92'3' proviciecl training which was primarilv sales focused,

ancl failed to provide
.:dequate training specific fo:

,-1. baiancing acceiunts using Horizon;

b. resolving apparent shortfalls;

c. identifving the root causes of recurring problems; and/or

lt. transaction corrections;

9?'4' {ailed to provide adequate training in relation to the rletailed

content of
cperating Manuals (and/or updates to the same) issued by
the Defendanu
and/or

92'5' failed to provide adequate training materiais and resources

for Ciaimants to
provide adequate training to staff employed or engaged by
them.

c3' The Defendant failed to provide adequate support to claimants

for the reasons set
*ut at paragraph 30 above.

94' The Defendant failed to make avaiiable transactional informatinn

via Horizon or
otherwise for a period and/or in a format ,,vhich enabled
Ciaimants to detect and
resoive errors, inciuding understanding and chailenging
kansaction corrections
issueci by the Defendant in that:

?4'1" individual Lransacfion data rvas ncit available to the

Claimants for some
iransaction tvpes at anv fime {ineluding on the day of the transaction};

'),1"?. iransaciion data r,vhich rvas available to ihe

Clairnants ',vas nniv avariable in
-:1n(n Ior,t oerro,l *t t2 ri:vs {rr{) rlavs;rfer
tlre intrnc{uction nr F{..rri,tor.t
-
rli:irli:
 9,1.3. transaction clata outside the 42 (or 60) clay period was not routineiy provided'
even when requested or required in order to resPond to a kansaction
correction;

,i+.+. the Defenclant failed promptiy to make kansactional records availabie to

and/or
Ciaimants wirere a discrepancy or apparent shortfall was identified;

94.5. Claimants who were suspended were not able to access Horizon or ani
of the

held
*lectronic transaction clata andlor were denied access to personal records

:t their branch.

, rr ---i-i]g lleieltl It:

:aIL1a

to
95. By reason of bugs and/or errors or otherwise, the Defendant failed properly
initiated or effected
execute and reconcile all transactions which the Claimants
ancl/or to record and maintain accurate ffansactional records
in relation to such

transactions.

s6. Further in relation to the attribution of apparent or atleged shortfalls' the

Defendant:

and any
,6.1,. failed properiy to account for, record and explain all transactions
alleged shortfalls which were attributed to the Claimants;

or likeiy
*6.2. failed to co-operate with Clairnants in seeking to identi{y the possible

Lauses oi anv such shortfalls andlor whether or not there was any shortfall at
a11;

{i6"3. {ailed to disclose possible causes ol the aPpearance of alleged shortfalls (and

ihe cause thereoi) to the Claimants candidlv, ful1y and

frankly; and/or

iailed to rnake reasonabie investisatron ancl iair consideration

io rvhether tire
,6.4.
and ii so the cause
:rp$&rallt shortfalls representecl reai loss to the Defendant,
i*ss i:aci arieen'
';iii/*r rrason *uch
 {}7.
The Defendant further demanded payment in relation
to such apparent or alleged
,;hortfails before the Defendant had compliecl
with ihe duties above.

98. ?Ire Defendant faiied properly and fairly to investigate

aileged shortfaiis before
;ttributing them to the Claimants anc{/or seeking recovery irom
the Claimants mri/*r
sr-rspending or terminating the Claimant,q' engagement
fr:r a reascn relating to altreged
rhortfalis (including signed branch trading statements).

t..)9 'fhe Defendant suspended and/or

terminated and/or subjected the claimants to
pressure to resign in circumstances where:

99'7' ihe Defendant was itself in materiai breach of duty for

one or more of the
ieasons set out above;

99"2. before the e.xistence of a real ioss to the Defendant, and if

so the cause and
reason for such loss, had been established after
reasonable enquiry and
analysis or at ail;

?9.3. without investigating andlor giving reasonable consideration

io ihe
circumstances giving rise to ihe same;

'19.4. the Defendant's approach {wrongly) pui the burcien of proof upon the
Subpostmasters - a burden which thev were frequentrv unable to ciischarge
in ail the circumstances:

'j9'5' establishing causative fault by the Subpostmaster concerned

"vithout and/or
tJre Di:fendant's contractuai entitlement to recover
alleeed shortfalis; and/ar

)9"6' {)n the flawed and unreasonable basis that Claimants rvould
onlv submrt faise
;ccounis to cover up their own theft (paragraph A.7 above)
and/or rvithout
i;:king into account the matters set out in section 1{ be}ow,
praciical pressures
';nd difficr"rities generated bv tire Defenciant's own svstems anci re*uirements
.:ncilcr ihe nracticai
r:eaiiiies iaceci bv inciivirjuai Clairnanh; ioaraqraph
;iS"?
,*cye).
100. T'he Defendant pursued civil an#or criminal proceedings in relation to allegecl

sl:ortfalls in circumstances as set out at paragraph 99 above.

101. The Defendant impeded and/or unreasonably refused to consent to the subsequent

. ippointment o{.a new Subpostmasters or potential purchaser of branch premises'

j 02. The Defendant concealed from the Claimants the matters at paragraphs 23 to 25

irbove.

103. The Defend"ant (by its Helpline operators or otherwise) told or led individual
with
Claimants to believe that they were the only ones experiencing difficulties
the
Horizon and/or discrepancies or apparent shortfalls and/or otherwise concealed
extent to which others were in fact experiencing such difficulties'

104. By reason of matters aforesaid andlor otherwise by its acts or omissions the

Defendant:

i04.l.actedinbreachoftheimpliedclutyofgoodfaith;

fi4.2. exercised powers andlor discretion affecting the Claimants arbitrarily,

caPriciously rlr unreasonablY;

104.3. acted in breach of the implied dutv of trust and confidence;

104.4. failed to take reasonable care and skiil; and/or

i04.5. otherwise breached one c'r more of its specific duties in contract' tort
and/or

equitableorfiduciarydutiesasparticularisedabove.

(particularised
10s. Further or aiternativeiy, the misstatements and/or rnisrepresentations
Yam Seng duties set
in Section H, below) are relied upon free-sianding breaches of the
(as the
{-}ut above, the ciuty of co-operation and/or ihe dutv of trust and conficience

.ontext mav admit)'

H.

106" Some or all of the Claimants pursue ciaims against

the Defendant for cleceit negligent
misstatement, misrepresentation uircler section 2 of
the Misrepresentation Act 1957
. andlor deceit.

l*7' The representations, falsity and reliance pleaded below are indicative of the
representations and reliance which are common to all or some of the Claimants
pursuing such claims.

H.1 Representations

1il8' The Defendant, by its officers, Helpline operators, other employees, servants
agents, expressly or impliedly,by words and/or conduct, made representations:

108.1. that there were, in fac! shortfalls in the branch

accounts andlor that they
represented real losses to the Defendant (when there
were not anv such
shortfalls or anv shortfall that did exist was materiaily overstated);

108.2" that, in respect of those alleged shortfalls, the

Defendant had investigated,
anaivsed and/or properlv satisfied itself, altematively had reliably
*stablished:

a. that there were in fact such shortfalls; and

b. that they represented real losses to the Defenctant;

that thev r,vere attributable to the branch itr question

{rvhen the Defendant had not so investigated, analysecl, established and/or

properiv satisfied itself of the same);

i08'3' that, pursuant to the contractuai provisions between the parties,

it was tor
rllaimants io e{isprove that anv allesecl shortfail rvas riue
to Lheir own
r*tiigence, careiessness {:r crror, or lirat oi their lssistants {ivhi:n
.he
-cnrracruai burden of i:rr:c-)f in ract iav qn ihe Detr:nriant):
 10g.4. that indivirlual Claimants were, in each case, the oniy ones experiencing
(when
ciifficulties with Horizon and/or discrepancies or apparent shortfalls
or were
this was unkue, as aforesaid, and large numbers of people contacted

irYing to.contact the HelP1ine);

cause o{ apparent
108.5. that clefects, bugs or errors in Horizon were not a possible
shortfalls (when in fact they were, as now admitted by the
Defendant);.

of the Defendant
108.6. ihat investigaiions which were carried out by or on behalf
-uvere carried out fairly and properly, and/or had not excluded defects' bugs

or errors in Horizon as a possible cause of apparent shortfalls (when they

.uvere not so carried out and had excluded the said problems with Horizon);

and/or

108.7. that there was no ability remotely to alter transactions

in branch accounts

(whichtheDefendantnowacceptstohavebeenuntrue).

Trre Claimants reried on those representations, as set

out hereafter, as the Defendant
1i)9.
i<new or ought to have known they would'

Ll.Z flalsitY

For the reasons set out above in parentheses and,

further, above at paragraphs 23 to
110.
Z7,3Land/or55toabove,therepresentationswerefalse'

H.3 Lack qf due care

care, in making the said

111. The Defendant {ailed to take clue care, or arly or sufficient

representations. ln particuiar, the Defendant:

cails being macie to

i 11.1" failed to take any or any ploPer account of the volume of
anri the
iis l{eipline by Subpostmasters in relation to issues wii*r Horizon
ippearance of unexplained shortfalls;

take anY or anY proper accouni of the possibiiitv af

F{orizon einusmq
: 11.2. iailed ter

, rrilrs trnat ihe iJ*ient{ent no\J1 z(trnilsl;

 i1i.3. failed to take any or any proper account of
problerns and/or defects and/or
bugs previousry cleiected within F{orizon which
had caused the erroneous
appearance of shortfalls in post Of{ice branches;

111'4' failed. to inslruct its securitv 'ream investigators

to have regard to possibilities
nf bugs and/or problems with the Horizon svstem
as beinq a potential cause
r;f otherwise unexplained shortfalls;

i11"5' failed to instruct its auditors and/or conlracts managers

(or oihers) carrying
out investigations to have regard to possibilities c:f
bugs and/or probiems
with the Horizon system (including kaining deficiencies
and hardware errors
or flaws) as being a potential cause of unexplained
shortfalls;

777'6' approached andlor instructed its officers, investigators,

servants or agents to
approach unexplained shortfalls on the basis that
the Claimants had caused
them and/or were responsible for them, unless the
Claimants c,uid prove
otherwise; md/or

111'7 ' failed to exercise sufficient care and/or the necessary

standard of care, in all
the circumstances, in particular: the relationship between
the parties, their
proximity, the advantages of the Defendant in resources
and access to
information, the dependence cf the craimants upon the
cliscretionary exercise
r:f contrachral power by the Defendant (subject to
the matters pleaded above)
and the implications and potential seriousness of a finding
of an aileged
shortfall for the Subpostmaster concernecl.

H"4 Negligent misstatement

\'72' For the purpose of the claims for negligent misstaiement,

by reason of the naf,re and
proximity of the special relationship between the Defenclant
and the respective
'-ilaimants, the Defendant r:wed the Claimants a r-lutv of care, in making the
Itpresenfations at Section H'1, vet made ti-lem carelessiv anci
in breach *f that dutru,
''rit'-rci b't &e Defenelant lo !,he Clnimanis to lake reasrnat,{e i:are thar fhe
"':':rrlsen tattons Lyere
* L-ci.j ra ta .:i nrJ /c r i"rr-l e.
 have appreciated that
i 1.J. In ail the circumstances, it tvas reasonable for the Defendant to
iire Cl.rimarrts rtoulcl reiY:

.113.1.
r:pon the Defenclant's ability to make c;rrefui iflquiry cr t{pon its pariicuiar
were made;
linowledge oi the matters as to w"hich the said representations
nrid

i13.2. ,,rpon the said representations for the purposes of (i) agreeing to accept the
(ii)
,.ristence of (alleeed) shortfalls or responsibility for their having arisen'

*4reeing to pay or oiherwise satisfy the Defendant's demands

in respect of

the same, (iii) recording ihe state of account of the branch

and/or stating the

same to the Defendant, anrl/or agreeing the same; or (iv) entering into

compromise/settlement agreements with the Defendant

@
Act 1967'
For the purpose of the claims under section 2 of ttre Misrepresentation
Clairnanis entered into contracts constituted by
(i) to (iv) in paragraph 113'2 above,
Defendant and in reiiance
.rfter the said misrepresentations had been rnarle by the
to the Clairnants
rlpcn anci inciuced"by the same. Accordingiy, the Detendant is liable
the said
i*r losses suffered as a resuit thereof, as if the Defenclant had made
proves that it had reasonable
misrepresentations irauduientlv, ulless the Defendant
clid believe up to the tirne the confract rvas macie the iacts
Srounds to beiieve and
::epresented r.vere true, as to which the Ciaimants
put the Defenciant to strict proof'

The Claimants are entitled to zurd claim rescission and/or

damages pursuant to
the sarne'
rection 2 of the Misrepresentation Act 1967 and claim

Seceit

as to their truth or falsity'

Del.en4ant marie the saici representaiions: ii) recklessly
.fi-re
l15"
r'vere true or iaise andlor (iii) rviihout
.ii) i-laving rumed a biinci eYe io w'hether ihey
:j1 il{}nest beiiet in rherr lruth; aiLernanveiv' the D*fenciant ;aacie tire ;aid

ihat lhev 'uvere raise'

.
',ilres€fttaticirs knr:tvit-lq
 I}AI{TiCULARS OF KNOWLEDGE

x15'1' By reason of the Defendant's kncxvleclge of the

ftraws in fhe I-[orizon system
partier-rlarised hi:rein and tire ability remotery
t, alter iransactions (anriror
.etrated *nilerrying daia), the D*fendant knew o.vvas reckiess
as to r,yhether
spparent shortfalls w'ere (i) not shortfails, (ii) not
necessarily shortfals, {iii)
ivere not accuratelv *r reliabtrv recorcled i:r
their amount, (lv).i,r.,ere not
ilroperlv, ;rlternativelv reiiably, attributable to the branch accounts
ald/c;r (v)
rr"ere not trulv the responsibility of the Claimants;

I15'2' 'rhe Defendant knew or was reckless as to whether the extent to n,hich it had
1,:r l-rad not) investigated, anaiysed and/or oroperly satisfied itself
that there
ivere indeecl such shortfails and whether these represented
real losses to the
Defendant attributable to the branch in quesfion and
(where such the
iepresentations made as to this lvere faise, as aforesaid)
the Defendant was
lherebv reckless as to, or aware of, the same;

115'3' The Defendant knew of (or was reckless as to) the

terrns and effect 6f the
contracts wrrich it had imposed upon the craimants,
in standard terms
iwhich the Claimanfs had no opportunity to negotiate), which the
Claimants
rrrili invite the court to infer the Defendant carefuily considered,
anci the
Defendant icnew or shouid have known that the contractual
burden ,vas
upon the Defendant;

i1,5.4. The Defendant knew $r lvas reckless as

to rvhether indiv!dual Ciairnants
'iv€r€, in truth, the only ones experiencins difficulties
with F{orizon iof the
r-lr€€0fv (}r specific type beinir encountereci bv th,se
individual ClaimantsJ
andlor discrepancies or apparent shortfalls (when fhis
',vas untrue, as
.tfr:resaicii;

:15.5. 'ihe Defendant knew ihat, *r nas reckiess as to lvhether, rj.efects, bugs err
.lu:{}trs in *-[orizon lvErri il r_:ossrbip cause c.]t apnarent sirortfails (;ts ncl,v
., ;rnilte,l br: fhe [Jr:fend:;n l]:
 115.d. The Defendant knew that the said investigations were not carried out
even-

handedly, fairly and/or properly, ancllor the Defendant was reckless as to the

!ame:

'.i15.7. 'Ihe Defenclant knew that the Defendant and its investigators had effectively

exciuded defects, bugs or errors in Horizon as a possible cause of apparent

shortfalls andlor the Defend.ant was reckless as to the same; and/or

115.g. The Defendant knew that there lvas an abilify remotelv to aiter
kansactions

in branch accounts (inciuding the underlying data) and/or the Defendant rvas

reckless as to the same'

!1.7 Reliance

(and
116. The ciaimants reiied on the aforesaid misrepresentations and/or misstatements
(i) accepting transaction corrections; (ii) paying' or
were induced therebY) ln:
agreeing to ?ay, aileged shortfalls in circumstances; (ii, entering into
compromise/settlements with the Defendant and/or (iv) otherwise
taking action or

agreeing to take action to iheir detriment in respect of their engagement

with the

Defendantand/orinthecourseofdefendingcivilorcriminalproceedings.

T. T{ARRASSMENT

ciaims under section 3 of

117. Some or all of the Claimants further or altematively pursue

the Protection from Harassment Act 1997, on the grouncls that the Defendant
amounted to
pursued a Course of conduct, on more than one occasion, which
to harassment'
harassment and which it knew or ought to have known amounted

upon
118. 'Ihe matters particularised below as constituting the course oi conduct relied

rre in<iicative acts which are common to ali or some of the Ciairnants pursuing
a

,;iaim for harassment.

119. llhe Defendani's course of conduct consistecl ot:

] ]Q 1" :jemanqs fc;r n;ivment in reiaiion i(} ailege{i shorifaiis;

 t19"2. pressure to accept transaction corrections ancl/or to accept
responsibility {or
ailegecl shortfalls and/or to repay the same;

119'3' threatened or actual civil anc{/or criminal proceerlings in reiati6n

to such
aileged shortfalls; and/or

119.4. steps taken in the course of such civil and/or criminai proceedings
in relation
lo the same.

j"

i20. Some or all of the Claimants will (in the circumstances set out in Section A.7 above)
contend that they acted under economic duress and/or the Defendant deait
with
them unconscionablv.

121. For the avoidance of doubt, the Claimants wili contend that:

127'1. there was an acute imbalance in the reiationship between the Claimants
and
the Defendant;

1?7.2. the Defendant could primn facie rcly and did so rely, upon its standard
express terms of its contractual agreements which were replete with
provisions conferring power and discrefion upon the Defendant and
were so
operated bv the Defendant;

l?1.3' further, the Defendant's practice was to eonstrue the conkacts such that the
burden of prooi lvas on the Claimants, as aforesaid;

121.'+. lhe foregoing Put the Claimants at a serious or speciai situaiional

'-iisadvantaqe and s<;me of those who became increasingty etesperate were
:iso under a constilutional serious or special disadvantage;

i21.5. at all material Limes, the Clairnants w,ere in isnorance of the errors and bugs
-:l lhe i-{orizr:n $v$iem, ae tvell as nf lhe information (or snme ot it) fram
virrch the unrlerlvinq causes of ;rllegec{ shortfails criuld be irientifiesj:
 .12T$.inreality,theywerepressurecltoacceptandpaytotheDefendantsums

allegedtobeshortfallsandtoacceptrespclnsibllityforthesame;

of
acted unconscionably in taking advantage
121.7. in the premises, the Defendant

the sifuation as aforesaid;

found themselves in a Position of

i21.8. further or alternatively' ihe Claimants
Defendant took advantage'o{ the
serious need or diskess' in which the
i,Yeakness of their Position;

in the premises, the Claimants acted under economic duress and/or the
127,9.

Defendant dealt with them unconscionabiy'

rescission of the above transactions and/or

122. The Claimants are entitled to and claim
damages andlor restitution'

K.

brought civil andlor

L\g. Some or all of the Claimants against whom the Defendant
pursue claims against the Defendant in
criminai proceedings further or alternatively
malicious Prosecu tion'

of these claims pending the outcome of the

i24. The claimants do not plead' particulars
to
review which is currently ongoing in relation
Criminal Case Review C'rmmission
30 of the Claimants' The result thereof
wiil inform
tire convictions of (currently) over
r:f those claimants' as well as others in
a materiallv
the pleading of ciaims on behalf

simiiar Position'

I UNIUST ENRICHMENT

the Claimants rvho made payments

to ihe De{endant of alleged
:25. Some or ail of
claim for '-rniust enrichrnent against the
rhcrtfalis iurther or altemaiivelY Pursue a

leiendant.

lr. ,\s ic ilrese ulairz:ants:

 126'1' they mistakenrv believed they had an abligafion
to repay the aliegetr
shortfalls under the terms of their conkacts with the
Defendant;

!26.2. the Defendant made misrepresentations to the Claimants as to their

rontractuai obligation to repay and/or one or more of lhe representations
particuiarised above;

"126'3'
the Defendant had not estabiished their obligation to
repay as required by the
contract;

L?6.4. the Claimants acted under economic duress; and/or

126'5' the Defendant dealt with the Claimants unconscionablv

as aforesaid.

127 ' In the premises, it is unjust and/or unconscionable for the Defendant retain
sums
which it has obtained from the Claimants in these circumstances
and, in any event,
that is so where the Defendant cannot establish that the alleged
shortfall amounted to
a real loss to it.

I. IOSS AND DAMAGE

l28' Bv reason of the matters aforesaid the Claimants have suffered

loss and damage.

129' The following are indicative r:f the types of loss and damage
ciaimed. Further details
in each individual case wili be set out scheclules of Information.

tvt.l Sinancial losses

t30. The claimants have typically sustained financial losses arising

trom pavment to the
Defendant of alleged shortfalls from their own resources and
losses consequenfial
ihereon.

131. Claimants r,vhose appoinfinents were terminated have suffered loss

of their business
.i,"ivestrnents and consequenfial losses inciudinq reciuced profit
fo ilnked retarl
:rernises.
 lrave lost the
132. claimants who were suspended or were terminatecl without notice
or notice period'
income they rvould have received during the suspension

133. claimants who lived in residential premises which were linked to their branch
of their engagements'
. suf{erecl further losses consequent on termination

M.2

Claimants who have been accused of dishonesty

and/or excluded from their branch
134.
stigma andlor
or subject to similar treatment by the Defendant have suffered
reputational damage'

as dishonest or suspending
135. The Defendant,s conduct in characterising the Claimants

them or excluding them from the branch so as to create an impression of such

dishonesty,causedstigmaandforeseeablefinanciallossintheformoflossoftrade,
to future employment or
including to related retaii premises, and/or caused prejudice
business ProsPects'

M.3 Distress and related ill-health

iil-health as a result of the

1:,6. Manv Claimants suffered distress and some of them
conductoftheDefendant,withsomeattemptingtocommitsuicide.

kl.4 BankruPtcy

Claimants who were made banknrpt or entered

into iVAs on the basis oi or as a
L37.
loss such
alleged short{alls, were caused particular financial
as
result of
damage'
,lisadvantageous assets, trustee's costs, clistress and reputationai

&I.5 Prosecutions

losses, including withdrawal of

i3E. Llaimants who were prosecuted suffered" particular
capacity'
i:redit, legal costs and loss of empk:yment and earning

custociial sentences' many of which'are now

1,i9. 3*me also suffered community or
rurjeci lo ihe re vletri/ bv ihe CCRC as aloresaid'
&{.6,flses:p}esy_p&&egeg

i.lil" ir"lrti:*r and/r:r ;riler:raLi'r*ly tJ-re Defe6{ant has ;:rlefi in Lleliberate ;nd r.y*ical
i'{ isri:garri r:f the {.-i;rirn,rnfs' lighls ant{ th* Cl;lirn-:nts se*k exernplsry
r.i;:m;rges.

":'.{"7 {nf*rest

ilf iire Clairnants i:iaim inierest in accorr{ance wiih s.35i\ sif the Senior
Cor_rrts Aci 1,?g1
t-rn -{uci1 sttm in damaqes as Lhe Ccurt shall ;:warcl at sueh rate ar:cl fcr
such perioci as
ri shaiI see fit to alvard. 'Ihe Clairnants ciaim r:ompound interest
in respect r:f their
. iaim for uniust enrichment.
AND THE CLAI&,'IANTS CLAIM:

as to the terms andior nature of

the legal reiationship between the
{1) Declaratory relief

Clalmants and the Defendant'

Damages, including aggravated

or exemplary damages'

hact and received'

i -), Restitution andlor payment of money

on the taking of
i4) (Jrders for the taking
oi accounts and payment of sums found <-{ue

such accounts.

deciaratorY relief in relation to anY agreements to

(s) Rescission and/or damages and/or
entered
repay or other agreements relating
to shortfalls which any of the Claimants

into.

as the Court may think fit'

i5) Further or other relief

(7) Interest.

(8) Costs.

PATRTCK GREEN QC

KATHLEEN DONNELLY

CCNJEN MILETIC

are true'
in Lhese Generic Particulars of Claim
ihe Claimants beiieve that the facts stated

b*rH
\.,.,......",), /
;;
]',rmes i{arileY, Freeths LLP

i *rt*dt '.;-"i.:{ti'i-{i'i* i', .i:'li:: :t*J