Bates & Ors v Post Office Ltd ((No.3) "Common Issues")

Bates & Ors v Post Office Ltd ((No.3) "Common Issues")

The contracts between the Post Office and Subpostmasters are relational contracts, implying a duty of good faith. The SPMC imposes fault-based liability for losses; the NTC's strict liability clause is unreasonable and unenforceable under UCTA. Onerous and unusual terms not adequately notified are not incorporated. Branch Trading Statements are not settled accounts where disputes were raised. Suspension and termination powers must be exercised in good faith and for legitimate interests. The Post Office's standard terms are subject to UCTA and fail the reasonableness test in key respects.

Parties
Claimant: Alan Bates and Others; Defendant: Post Office Limited
Jurisdiction
England and Wales
Judgment Date
15 March 2019
Procedural Posture
Group Litigation Order (glo) Civil / Judgment on Common Issues (substantive Merits)
Outcome
Judgment for Claimants on Common Issues (Substantive Merits)
Legal Topics
Relational Contracts, Implied Terms, Good Faith, Unfair Contract Terms, Onerous and Unusual Terms, Supply of Goods and Services Act, Agency and Accounting, Suspension and Termination, Burden of Proof, Standard Form Contracts
Contract Law Agency Law Employment Law (quasi Employment) Commercial Law Consumer Protection Relational Contracts Implied Terms Good Faith +7 more

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Parties

Alan Bates and Others

Claimant

Post Office Limited

Defendant

Procedural Posture

Group Litigation Order (glo) Civil / Judgment on Common Issues (substantive Merits)

Legal Issues

  1. 1 Are the contracts between Post Office and Subpostmasters relational contracts?
  2. 2 What implied terms arise, including good faith, co-operation, and fitness for purpose?
  3. 3 Are certain terms onerous/unusual and unenforceable without adequate notice?

Ratio Decidendi

The contracts between the Post Office and Subpostmasters are relational contracts, implying a duty of good faith. The SPMC imposes fault-based liability for losses; the NTC's strict liability clause is unreasonable and unenforceable under UCTA. Onerous and unusual terms not adequately notified are not incorporated. Branch Trading Statements are not settled accounts where disputes were raised. Suspension and termination powers must be exercised in good faith and for legitimate interests. The Post Office's standard terms are subject to UCTA and fail the reasonableness test in key respects.

Court Disposition

Judgment for Claimants on Common Issues (Substantive Merits)

Orders

  • Declaration that contracts are relational and include an implied duty of good faith.
  • Declaration that SPMC imposes fault-based liability for losses; NTC strict liability clause is unenforceable under UCTA.