The SRA was going to prosecute the Post Office’s lawyers. Then it stopped.

The Post Office told wrongly-accused postmasters their compensation offers were secret, and couldn’t be shown to anyone but a lawyer. That wasn’t true. They could have shown the offers to friends, other postmasters and the media – but the Post Office gagged them. The Solicitors Regulation Authority spent three years investigating, and was going to prosecute – then it dropped the case. It won’t say why.

We published our report in May 2023. The Solicitors Regulation Authority started to investigate almost immediately. In February 2025, the SRA served a formal notice on the Post Office’s law firm, Herbert Smith Freehills¹, alleging breaches of its Principles 2 and 5 (upholding public trust in the profession, and acting with integrity) and recommending that the firm be referred to the Solicitors Disciplinary Tribunal.²

Last month, the SRA dropped the whole thing.

The SRA’s conclusion: the firm “exercised proper professional judgment”. The SRA refused to provide any explanation.

How the lawyers gagged the postmasters

Between 2000 and 2013, the Post Office falsely accused thousands of postmasters of theft. Some went to prison. Many had their assets seized and their reputations shredded. Marriages and livelihoods were destroyed, and thirteen suicides are linked to the scandal.

In 2020, the Post Office finally agreed to pay compensation to its victims under the “Horizon Shortfall Scheme” (HSS)³– about 2,500 postmasters.⁴

For many it was too late. At least 61 postmasters died, never receiving an apology or recompense.

The HSS scheme had numerous features which minimised the compensation postmasters received. Most importantly, postmasters were asked to complete a complex application form for which they were given no legal assistance.

Then, when they received a response from the Post Office, making or denying a settlement offer, it contained this paragraph:

The postmasters we spoke to believed this meant they couldn’t tell anyone the terms of the offer (except a lawyer, and they had no lawyer). We think this is the natural interpretation.

It is, however, untrue:

• Settlement offers are often made “without prejudice”. This means that the correspondence cannot generally⁵ be shown to a court if the dispute is later litigated. But labelling an offer “without prejudice” does not magically make the offer confidential. The “This means that” sentence was, therefore, false.⁶
• Was the offer confidential on general principles? That’s clearly what the Post Office wanted – they later said that “allowing postmasters to compare offers could have some unwanted consequences”. But one party’s desire for secrecy does not create a duty of confidentiality – the duty will arise if “confidential information comes to the knowledge of a person… in circumstances where he has notice, or is held to have agreed, that the information is confidential”.⁷ And the Post Office later said that “there are no confidentiality provisions in the settlements and postmasters are free to discuss their settlements in full with anyone they choose to, once they have been agreed”.⁸
• A settlement offer may well have contained confidential information regarding the postmaster, such as their private financial information. When the Post Office was pressed on the confidentiality point by the Advisory Board, its answer was that postmasters “value their privacy” and that letting them compare offers “could have some unwanted consequences”. But this is a confidentiality that existed for the benefit of the postmaster – it did not bind them. And the Post Office’s response is damning: when given the opportunity to defend its position, the Post Office failed to identify any proper legal or factual basis for having asserted that postmasters had a duty of confidence.

The claim that the letter was confidential, and the postmaster couldn’t show it to anyone (other than their lawyer) was, therefore, false.

In some cases, the claim that the letter was “without prejudice” was also false, because the letter said the Post Office would pay nothing. A letter that makes no offer and concedes nothing is not a negotiation, and is not “without prejudice”.⁹ The Post Office has conceded this. In a note to the Horizon Compensation Advisory Board on 22 February 2024 it referred to “the labelling of nil offers which we accept was inappropriate”.¹⁰

The impact of the false confidentiality claim

The Post Office paid postmasters’ legal fees in only 198 of the first 1,924 HSS settlements. So the Post Office knew that 90% of recipients had no lawyer.¹¹ Most were elderly; many were vulnerable. They needed to speak to family, friends and other postmasters – but the Post Office told them they couldn’t.

The SRA’s response

We referred the matter to the SRA. The Times covered the story here. The Horizon Compensation Advisory Board took the point up at the end of that year.

In January 2024 the SRA’s General Counsel wrote to the Advisory Board saying that a label could not unilaterally impose a duty of private or confidentiality. They asked (i.e. ordered) the Post Office and its solicitors to urgently change their practice:

The Post Office obeyed, and stopped using the wording shortly after.

The SRA investigation

The SRA’s investigation ran for over three years.

It seems the abuse of “without prejudice” went beyond the Horizon Shortfall Scheme, as the SRA’s investigation also covered the Overturned Convictions Scheme, the Suspension Remuneration Review and the Post Office Process Review.¹²

When we wrote our 2023 report, we assumed the letters had been written by the Post Office’s in-house lawyers; we said we didn’t know if the Post Office’s external lawyers, Herbert Smith Freehills, were involved – we rather assumed they were not. But they were – and the firm became the main subject of the SRA’s investigation.

Herbert Smith Freehills served detailed representations disputing the allegations. In August 2025 the SRA made a further evidential request specifically about the nil-offer letters. In December 2025 the SRA told us it had “completed our investigation” and expected to give us the outcome in January 2026.

But we didn’t receive notice of the outcome until 13 August 2026.

That’s the entire reasoning. The firm “exercised proper professional judgment when coming to a decision on the legal position”. There’s no indication of what the legal position is said to be, and no reference to the fact that the SRA had already stated that the Post Office’s approach was incorrect.

We asked for an explanation:

The SRA wasn’t willing to answer these questions:

Why the SRA changed its mind

What happened between the SRA’s January 2024 statement that “without prejudice” did not impose confidentiality, and the SRA’s August 2026 statement that Herbert Smith Freehills “exercised proper professional judgment”?

The Hurst case.

On 20 January 2026, the High Court handed down judgment in Hurst v Solicitors Regulation Authority. Ashley Hurst, a partner at Osborne Clarke, had acted for Nadhim Zahawi and sent tax lawyer (and Tax Policy Associates founder) Dan Neidle an email headed “Confidential & Without Prejudice” saying he was “not entitled to publish it or refer to it other than for the purposes of seeking legal advice”. He published it. The SRA prosecuted Hurst.¹³

In December 2024 the Solicitors Disciplinary Tribunal found misconduct, fined Hurst £50,000 and awarded £260,000 in costs.

Collins Rice J allowed Hurst’s appeal and set the Tribunal’s decision aside. She held that the Tribunal had misdirected itself on the law, had not properly analysed the email as a whole, and had not adequately explained its findings. Its reasoning was “condensed to the point of compromised intelligibility”, and its decision was “insufficiently analysed and reasoned, vitiated by misdirection and error of law, and unfair”.

The High Court did not decide that the email was definitely confidential, or that Hurst would have succeeded in a claim to prevent its publication. The question was whether the position advanced in the email was properly arguable, and whether advancing it could fairly be treated as professional misconduct.

The judge held that there was a legally recognisable basis for Hurst’s position. The email concerned an identifiable legal dispute, proposed retraction as an alternative to litigation, contained private family and financial information known to very few people, and stated that the information was being supplied for the limited purpose of resolving the dispute. That was enough to make the confidentiality and without prejudice arguments “properly arguable”. The Court stressed that the “properly arguable” threshold does not require an argument to be strong or even persuasive.

We understand that the Hurst decision is the sole reason for the SRA’s about-face.

Why this is not Hurst

There are very obvious and highly material differences between the Post Office case and Hurst.

First, Hurst was a decision about professional misconduct and arguability. The High Court did not establish a general rule that a solicitor may declare settlement correspondence confidential. It decided that, on the particular facts, Hurst had a properly arguable legal basis for what he wrote and that the Tribunal had not lawfully or fairly explained its finding of misconduct. The Post Office’s own response to the advisory board showed no properly arguable legal basis.¹⁴

Second, there was no confidential material belonging to the Post Office. The whole of Collins Rice J’s analysis turned on the fact that the Zahawi email actually contained something capable of being confidential: private family and financial information about Mr Zahawi and his father which “very few people” knew, supplied for a single stated purpose.¹⁵ We’re not aware of anything like that in an HSS offer letter. The information in it is the postmaster’s own, plus the sum the Post Office is prepared to pay them. There is no third party whose privacy is engaged. When the Post Office was pressed on this by the Advisory Board, its answer was that postmasters “value their privacy” and that letting them compare offers “could have some unwanted consequences”. Not even the Post Office attempted to claim that the letters contained material confidential to the Post Office.

Third, this was policy, not a hurried judgment call. The email in Hurst was written on a Saturday afternoon in July 2022, about ninety minutes after a phone exchange, in response to a tweet posted that morning, and it promised a fuller open letter on the Monday. The law can be more generous to a solicitor making a fast call under pressure than to a considered institutional position. The HSS paragraph absolutely was a considered institutional position – it was template wording, sent to at least the 1,924 postmasters who had settled by April 2023, over a period of years, with a documented decision behind it. It was sent in the context of a national scandal which was of the highest public interest.¹⁶ And it was still being defended, on its lawyers’ advice, as “entirely correct and proper as a matter of law” in February 2024, nine months after we first raised it.

Fourth, the recipients were not lawyers. Neidle was an experienced lawyer and was a senior partner at one of the world’s largest law firms. The postmasters were not in that position. They were mostly elderly. All of them had spent years being told by the Post Office that they were thieves; many were still traumatised by that. Only 10% had a lawyer. Telling someone in that position they couldn’t show a letter “to others” wasn’t legal shorthand between professionals. It was an instruction, from the institution that had spent years trying to destroy them.

Fifth, the SRA’s own guidance is written for exactly this case. The SRA’s SLAPP warning notice at the time told solicitors not to mislead recipients by labelling correspondence “without prejudice” where the conditions were not met. The section on “labelling” started by saying:

“We expect you to ensure that you do not mislead recipients of your correspondence, and to take particular care in this regard where that recipient may be vulnerable or unrepresented.

…

Such markings cannot unilaterally impose a duty of privacy or confidentiality where one does not already exist.”

On the information available to us, the SRA’s decision is inexplicable. And they’ve refused to explain it.

The consequences

Nearly two thousand postmasters received these letters and settled for an average of around £32,000, at a time when they believed they were forbidden from comparing notes with each other, from asking a friend whether the number looked right, or from going to the press. Some of them will have accepted less than they should have. We will never know how many, or how much.

The lawyers responsible will now never face any consequences.

That’s bad enough – but when the SRA make a decision that contradicts their own statements and guidance, you can expect unscrupulous lawyers to ignore those statements and guidance in the future.

We’ve asked the SRA if lawyers are now permitted to send unrepresented and vulnerable people a lowball settlement offer, and tell them it’s confidential and can’t be shown to anyone. We’ll publish their response.

Many thanks to B, P and T for their advice and analysis of the without prejudice and common law confidentiality position. Thanks to R and C for their general review.

Photograph “Mundesley post office and shop” by Pauline E, via Geograph Britain and Ireland and Wikimedia Commons, used under the Creative Commons Attribution-ShareAlike 2.0 Generic licence. I should add for completeness that there is no suggestion that this branch, or anyone connected with it, was involved in any of the matters described above.

Further reading

How the Post Office gagged postmasters with false confidentiality claims

The Post Office is finally paying compensation to the thousands of postmasters who it falsely accused of theft in the 2000s. Most of these…

New evidence: the Post Office deliberately designed its compensation scheme to deter postmasters from applying

A document disclosed to the Post Office Inquiry, and published yesterday, shows that the Post Office considered requiring that postmasters pay a fee before…

The Post Office – pushing postmasters to accept £75,000 compensation without legal advice

Postmasters previously offered derisory compensation by the Post Office are being given a new opportunity to claim under an independent appeals process. The Post…

The Post Office – reckless with postmasters’ personal data; abusing data privacy to protect itself

The Post Office recklessly published the names and addresses of 550 wrongfully convicted postmasters. But it takes a very different attitude to its own…

The Post Office’s top priority is covering-up its mistakes

The Post Office’s incompetent compensation process left thousands of postmasters with large tax liabilities. When we revealed this, the Government forced the Post Office…

The Post Office has finally stopped intimidating postmasters into silence; but it’s too late

Aside from the labelling of nil offers which we accept was inappropriate, and without waiving privilege in their advice, our legal advisers confirmed that…