SA: The litigators always face more scrutiny than other lawyers around the cost anyway, but here you’ve got a litigation funder, and you’ve got a government body. So, your scrutiny for you to get this right was absolutely key.
JH: Absolutely was. And coupled with that, we also knew, or we were pretty sure, that our opponent would attempt to outgun us in terms of numbers of lawyers, the scale of resources, and availability of money That’s exactly what they did try to do. So, during the course of the case, they instructed four silks, four QCs; we had one, they had two international law firms, Herbert Smith, and Womble Bond Dickenson, et cetera.. But the beauty of the approach that we were able to adopt was that our use of technology meant that, for example, it wasn’t possible for the opponents to swamp us with data or documents. Gone are the days when that is a useful litigation tactic because the use of AI and technology means we can cut through hundreds of thousands of documents without having teams of paralegals wading through them.
Although having said that, there are times in cases like that where there is a need for increasing the number of lawyers or junior staff on the case. And that comes back to outsourcing. So, if we, for a period of two weeks, needed 10 or 15 lawyers, or 10 or 15 junior people to do a particular task -which we did at one point – then bringing that resource in externally.We did to a point on this case, but in other cases, we will need to do a lot more.So that ability to use technology in particular, as I say, means that gone are the days where smaller teams with less resources are at a significant disadvantage. That is why I feel that we and other firms who’ve got the expertise should be and can be ambitious in terms of the sort of work that we look to handle.
SA: You used an analogy; it’s like David and Goliath, where technology and process became your slingshot, and you’re able to compete. I want to talk about how this has led Freeths to rethink how it does litigation, and it probably changed your ambitions to a large extent. But before I do, I suspect some of the people listening just want to know the outcome of the case.
JH: At the beginning of the case, after many, many, many hours – hundreds of hours of analysis by counsel and us with Patrick Green QC and the other council members who are brilliant – after many hours, we decided on our legal strategy because it wasn’t obvious that we were dealing with. This was a contractual claim against Post Office, in essence, and we were dealing with an antiquated contract that didn’t deal with the issues that were involved. So incredibly, unusually, and I think creatively, we decided that we needed to plead. I think it was 13 implied terms, one of which involved trying to establish that the contract included an implied term as to good faith. Now, looking at that and looking at that case theory, one could be forgiven for thinking, “Well, you must be mad, guys. To get one term implied into an expression in the contract is hard enough. To get 13, you’ve got to be joking.” So, you can imagine the sort of discussions we had with funders and others in terms of that. But we had a one-month trial before His Honour Judge Fraser, who at the time was head of the TCC in London.
And then we received a very long judgement from him on which we won on virtually every poise – I think it was a 350, 400-page judgement. So, we established the duty of good faith owed by the Post Office. So that was a major victory, a MAJOR victory. And frankly, that could have gone either way, and that was a trial about the human story because if it had been as simple as that, then we would naturally always win hands down. These were legal arguments that Post Office was deploying. And then there was a subsequent trial, quite a lot later, on technical issues around Horizon. Again, we won on that one. And between those two trials, there were all sorts of battles going off from a legal perspective, such as the Post Office applied to recuse and remove the judge for apparent bias. That, in itself, was quite an extraordinary move. And at the time, I can recall sitting in the Rolls Building Court in London and suddenly, an email came into my inbox from the opponent. I looked across at the opponent; they were just looking straight at the judge. On that email was the application to recuse the judge completely out of the blue. Judge didn’t know it was coming. We didn’t. So, then they failed on that. Then that was appealed at the Court of Appeal, and they also appealed the first judgment. So, there were all sorts of battles going on. But the turning point was the first judgment on the common issues, the contractual judgement.
SA: So, you’ve flexed up, you have an ambition and a strategy which you were able to execute because you thought about delivering differently. And then you delivered on that, won this case.You got, as I said, the best headline I’ve ever seen in a legal publication, and I’m sure that will be on t-shirts, et cetera, or mountains around the Freeths office. In terms of what this now means for Freeths, in terms of your appetite to work differently, your appetite to go after different cases, how has this changed the mindset of your fellow partners in terms of ambition, et cetera?
JH: Yes, it’s a good question because it has undoubtedly changed our ambition in terms of not just the size and complexity of cases that we know we can handle, although that is a factor. I think the main area that is continuing to shape our thinking is how we, as a firm, can continue to create more sophisticated approaches for our clients to analyse litigation risk, look at cost benefits, look at modelling cases. Not just enormous cases but also modest commercial cases as well. So, we spend a lot of time looking at those areas to look at how we can develop those areas because a case such as Post Office with such high financial stakes, such a large project, multiple layers to the case in terms of strategy, cost and risk and potential outcome, that is an extreme case. But equally, it made us realise that there is so much scope, as I say, to apply some more structured principles to analysing cases from day one, particularly for corporate clients. They will then be much better informed as to decision-making on whether to settle a case, when to settle the case, what to invest in a case. And there we feel is a real opportunity for lawyers and in-house counsel as well.
SA: Yes, that’s great. If you were going to give either of those in-house counsels or lawyers who are perhaps at firms that don’t have seemingly unlimited resources – if you want to give them a piece of advice based on what you’ve learned, what would it be?
JH: I think it would be too far from being ambitious, which we talked about. We feel, and I feel, that the key is to evolve. And that sounds obvious, but the key is to evolve. There’s a lot of change in the legal market, a lot of change in the litigation world, whether that’s group actions, class actions, more regulation, litigation funders…a lot of change. But probably even more importantly, there’s a lot of change in terms of what clients, particularly corporate clients, need. They’re in an increasingly complex regulatory and risk world; they know that. They are also in a world where risk is becoming more and more embedded into their strategic thinking. So, if there were one thing I would say to other lawyers from our experience is focus on the solutions that are going to meet those needs, rather than focusing on what we’ve already always done in the way we’ve always done it, following processes we’ve always followed. And I think that if one proceeds from that direction, in terms of the client’s end of the spectrum, then there’s a much better chance of actually shaping the sorts of services we can provide in the litigation context.
So, ye, and I think it’s coupled with that or is part of that. The modern new world of professional services in industry resolution involves much more than legal advice. And it involves so much more than lawyers gathered to provide a service. What we’ve learned is building the elite teams, which one needs, involves knowing, first of all, what skills and what technologies and what people are needed in the elite teams, and then bringing them in. And usually, that will be bringing in skills from externally. Most law firms cannot be elite and excellent at everything.
Also, Stephen, being the best lawyer one can be, and deepening expertise in one field is creating value. And that is what corperate clients, commercial clients, want to pay us for. They don’t want to pay us for the process. A lot of us have known that for many, many years, but now is the time when it is happening. So, the likes of your business, Steven, are evidence that things are changing. And it’s the nature of the service provision. It is changing, so we’ve all got to evolve.
SA: Yes. Letting the lawyers be the lawyers and be the best lawyer they can be, right? So, they’re not worrying about some of the other stuff.
JH: There may be a piece around lessons learned for corporates as well. We’ve done, ‘what can lawyers take from this,’ but of course, Post Office have learned a hell of a lot. And there are other corporates that can take a lot from that.
SA: James, I suspect this was a bit of a wake-up call for the Post Office, too, because they will have perhaps thought that they could have outgunned and because the contract was ambiguous, it would probably fall in their favour. What lessons do you think they and, by extension, other corporates or organisations could learn from this case?
JH: There’s an enormous amount that Post Office and others can learn from this case. And amongst the biggest lessons, I think, are the need for corporates, for senior management within corporates to take an active interest and ensure they understand some of the more serious risks that may be developing at any level in the business. And to address them, grasp the nettle, and seek to manage or resolve them because Post Office did.And I think it’s probably public knowledge, so we can all talk about it, but what Post Office did when the problem began to emerge many, many years ago was turn ‘a blind eye’ and hope that it would go away when, of course, it didn’t. But then to compound the problem when it didn’t go away and when the noise started to increase in terms of the complaints made to them, including lawyers, well, we got involved.
What they didn’t do at that point was to think to themselves, “Right, okay. We needed to have done things differently. We didn’t do things differently. We now need to sort it out.” What they did was throw enormous resources at trying to kill the problem off, which compounded the problem, of course, and increased the stakes. Because the harder they fought, the more the perception was that there were things to cover up. So, grasping the nettle, not turning ‘a blind eye’ to risk and problems, is absolutely the biggest lesson, I think, that corporates can take away from this.
SA: So, James, that was fantastic. Obviously, we’ve spoken before. It’s lovely to get you on the podcast and particularly lovely to hear about how, from listening to somebody in an interview on a radio station, to bringing to its knees a government body that was mistreating so many people, is fascinating. So, I just wanted to say thank you so much for this.
JH: Thank you, Stephen. It’s been a pleasure talking to you.