Parties in the mammoth Bates v Post Office litigation have already run up legal bills of more than £35m, prompting a warning that some costs appear ‘excessive’.

In a cost management hearing in the High Court, both parties in the group litigation appeared before Mr Justice Fraser to negotiate future spending.

For the claimants, Henry Warwick of Henderson Chambers argued that the Post Office has spent more than the 555 claimants, citing a figure of £19.5m (including VAT) compared with £16.828m.

Warwick referred to the fact that the Post Office has employed two law firms – Herbert Smith Freehills and Womble Bond Dickinson – and is instructing ‘21 different fee earner grades across both firms’.

For the defendant, Owain Draper of 1 Essex Court said that the litigation was ‘not a David and Goliath case’, stating ‘while it is true to say the Post Office’s costs are higher…it is not chalk and cheese’. 

Fraser J said it is ‘unusual’ that the Post Office has employed two sets of solicitors, stating that the set-up ‘gave rise to a concern about duplication’. The defendant declined the chance to provide material showing there was no overlap between the firms’ work.

The judge recorded a comment on the Post Office's costs, stating: ‘The total time costs appear to be excessive based on the fact that individual particulars of claim in four cases have not yet been served.’

He added that the defendant’s incurred costs also appear to be ‘extremely high’. He said costs could have been driven up by the number of claimants, the time the proceedings have taken and the fact two firms are being instructed. 

For the claimants, Fraser J made a cost management order of £2.814m to be spent on the third trial as well as alternative dispute resolution, mediation, settlement discussions. He also allocated £900,000 for the Post Office to spend on alternative dispute resolution.

The proceedings concern hundreds of former subpostmasters and mistresses who claim the Post Office wrongly blamed them for alleged shortfalls in branch accounts since the roll out of a computer system called Horizon.

A third trial – labelled the ‘further issues trial’ – is yet to take place. Fraser J said the judgment for the second trial – the Horizons issue trial – is likely to be published in early November.

The claimants are represented by commercial firm Freeths, backed by litigation funder Therium Capital.