Post Office bosses have spent £18 MILLION fighting legal battles against staff who are suing them after being falsely accused of stealing

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The Post Office has blown £18million fighting – and losing – legal battles against its own postmasters.

Campaigners said the money, squandered on legal fees, could have been better spent saving hundreds of local post offices threatened with closure.

Postal chiefs were yesterday accused of wasting the whopping sum – all of it taxpayers’ money – on a court case in which they are battling 557 former village postmasters.

They were pillars of their communities but now they are suing the company, claiming their lives were ruined after the Post Office falsely accused them of stealing from their branches – when in reality bugs in its Horizon computer terminals caused shortfalls in their accounts. Some were jailed or made bankrupt, and now want justice.

The Post Office has blown £18million fighting a legal battle with 577 former village postmasters after it accused them of stealing from their branches

They hope to clear their names and if the Post Office loses it could face a massive compensation bill.

The millions it is spending fighting them in the long-running court case contrasts sharply with the plight of small village post offices around the country, which are closing down because they cannot make enough money. 

For some troubled branches, an annual subsidy of just £12,000 could make the difference between staying open and being forced to shut, which would deprive rural communities of a vital service.

Up to 2,500 local branches could close or downsize within 12 months and it is feared the whole network is ‘close to collapse’.

Given the crisis, campaigners want Kelly Tolhurst, the minister in charge of the Post Office, to rein in the state-owned company’s ‘mad’ and ‘scandalous’ spending of public cash on the High Court case.

Campaigners said the money, squandered on legal fees, could have been better spent saving hundreds of local post offices threatened with closure. (Pictured) Paula Vennells, Church of England priest and former Post Office CEO, who was paid £720,000 last year

The judge in the case, Mr Justice Fraser, revealed that the Post Office was using up so much public money so quickly that he had been forced to change his procedures. ‘Originally they were supposed to notify me every time their costs went up by £250,000,’ he said. ‘Then they were writing so often that that was changed to half a million.’

He dealt Post Office Ltd another humiliating defeat by throwing out all of its latest attempts to hit back at the postmasters.

The Post Office has now lost a series of rulings, including a doomed bid to get the trial judge himself sacked – which cost taxpayers more than half a million pounds in legal fees. Andy Furey, of the communications union CWU, said: ‘This situation is indicative of everything the Post Office is involved in. The culture is totally toxic and rotten to the very core.’

Jo Hamilton, who was prosecuted after the computer in her village post office in South Warnborough, Hampshire, showed baffling losses of £36,000, said: ‘It is completely shocking to hear they have run up bills of £18million.

‘This is such a waste of public money when it is so badly needed for struggling sub-postmasters.’

The Daily Mail’s Save Our Local Post Offices campaign has been highlighting the dire situation for postmasters around the country. With the rise of the internet for mail, village post offices are increasingly struggling, yet as banks shut branches they remain a vitally important service for local people, especially the elderly.

The complex case involving the 557 former postmasters has been split into four trials.

In March, the postmasters won an emphatic victory in the first trial. In a damning ruling, Mr Justice Fraser said: ‘The Post Office describes itself on its own website as “the nation’s most trusted brand”… this might be thought to be wholly wishful thinking.’

The Post Office has mounted appeals to every adverse judgment, all of which have so far failed. The total legal bill for the case has risen to £18.3million of public money. The Post Office has been running three legal teams, all headed by top-flight QCs.

The Post Office said: ‘We are continuing to defend this complex litigation. We are not commenting in detail on live litigation outside of public court hearings.’

Money could have saved hundreds of branches... as village services are facing wipeout 

By Mario Ledwith

Villagers in Marlborough, Devon, started a petition demanding their post office is saved after it was threatened with closure. (Pictured) Owner Anne Rossiter

Faced with the prospect of losing their beloved post office, villagers in Malborough in Devon, started a petition demanding that it is saved from closure – and more than 700 have signed it.

The owner, Anne Rossiter, 60, said the branch serves as a vital hub for the largely elderly population of around 1,000. ‘Sometimes it is the only place where somebody will have a chat that day,’ she said.

Mrs Rossiter, who bought the branch 16 years ago, has been struggling to find a new owner for the past five years after she was encouraged to sign a ‘conditional resignation’ by the Post Office.

As part of the deal, the Post Office is supposed to find a new site for the branch. She said the Post Office’s miniscule pay package for running the business is deterring possible suitors. ‘If there is no new premises I don’t get any redundancy and I have to walk away and lock the door,’ she said.

Meanwhile, in Betchworth, Surrey, postmistress Debbie Parmenter decided earlier this year to sell her lease because of mounting financial pressure due to contractual changes by the Post Office.

The estate that owns the building bought the lease to ensure that the village will always have a post office.

Mrs Parmenter, 48, who has run the village post office for 15 years, will now remain in charge of it but with more freedom as an employee.

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