Lawyers for sub-postmasters have accused the Post Office of leading a litigation strategy designed to leave their clients ‘overpowered and utterly defeated’.

The inquiry into the scandal of hundreds of Post Office staff being wrongly accused heard yesterday from Mandy Talbot, the former in-house solicitor who was de facto leader of the organisation’s civil litigation team.

Talbot sent an email to 10 managers following the successful claim against Bridlington sub-postmaster Lee Castleton saying that ‘he appeared to be stunned by the result’ and that ‘there were journalists at court and it is possible that this will be picked up by the media’.

Cross-examining Talbot, Flora Page, representing Castleton and dozens of sub-postmasters, said the way the email was written suggested that the Post Office would be pleased to hear he was ‘stunned’ by his defeat in court.

Talbot said she was just relaying information from a report by the Post Office’s external lawyers Bond Pearce.

Page said: ‘You reported that he was overpowered, utterly defeated, and that that was what POL wanted, wasn’t it?’ Talbot responded: ‘No, that was not POL’s objective.’

Page continued: ‘Those who stood up to the institution must be utterly overcome and defeated… your task was effectively, metaphorically, to put Mr Castleton’s head on a spike.’

Talbot replied: ‘Absolutely not’. She acknowledged however that Castleton had become a ‘test case’ for the reliability of the Horizon IT system which appeared to show losses at so many branches.

The inquiry heard that Talbot was involved in pursuing Castleton to recoup some of the estimated £300,000 costs the Post Office had incurred trying to secure a claim for £25,000 losses.

In a 2007 email, Talbot discussed the prospect of Castleton having to sell his home. She wrote: ‘He had made himself bankrupt which was expected and we are still awaiting the details of the valuation. After a year if he has not sold the property the rights of his kids to have a house over their heads becomes an irrelevance.’

Asked by inquiry counsel Julian Blake whether it was fair to bankrupt Castleton in pursuit of the wider goal of supporting Horizon, Talbot said: ‘Mr Castleton chose to bankrupt himself but it was legitimate on the part of Post Office Limited as the major creditor to seek to recover what costs it could.’

The inquiry has previously heard that the Post Office had discussed whether to ‘ambush’ Castleton by serving 15 witness statements on him, and that he would be ‘knocked reeling a bit’. An internal email from a Post Office employee stated that ‘Mandy appreciates the tactics of this’.

Asked if she was happy with the general approach taken in the case, Talbot said: ‘Yes I was.’

During the first part of her oral evidence, Talbot insisted there had been no strategy to silence Castleton. The inquiry later heard that Talbot had prepared a short statement during negotiations with Castleton that he could sign as part of any settlement.

This declaration had included Castleton stating that the debt in his branch arose due to human error rather than any issue with Horizon. Talbot had further suggested that Castleton declare: ‘The Horizon system did not contribute to the errors in any way and [I] formally withdraw all statements I made to the contrary.’

Castleton never signed the declaration. Talbot conceded that if he had done so then he would not have been able to comment further on the Horizon system.

The hearing continues.

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