Court raises concerns over handling of key issues in Horizon compensation dispute
The Court of Appeal has delivered a significant ruling in the ongoing legal battle brought by former sub-postmaster Lee Castleton against Post Office Limited and Fujitsu Services Limited over the Horizon scandal. In a judgment handed down on 12 May 2026, senior judges ruled that part of an earlier High Court case management order could not stand because it created “too many practical difficulties to be workable”.
Castleton, one of the best-known victims of the Horizon scandal, is pursuing claims alleging that a 2007 judgment against him was obtained through fraud and unlawful conspiracy linked to the faulty Horizon accounting system. The appeal centred on how preliminary issues in the case should be handled before a full trial takes place.
Lord Justice Zacaroli, giving the lead judgment alongside Lord Justice Peter Jackson and Lord Justice Popplewell, examined an earlier order made by Mr Justice Trower and Master Kaye in January 2026. That order directed that certain preliminary issues be decided separately, including whether a 2019 settlement agreement from the group litigation against the Post Office prevented Castleton from bringing his latest claims.
The judges had proposed determining part of the “unconscionability” issue on the assumption that the Post Office knew viable claims existed at the time of the settlement agreement, while other factual issues would still need to be decided. However, the Court of Appeal found that this “hybrid approach” risked serious procedural complications.
The judgment highlighted concerns about overlapping evidence, uncertainty over disclosure obligations and the potential for inconsistent findings if some facts were assumed while others remained contested. Lord Justice Zacaroli said there was “scope for significant overlap” between factual issues that would still require investigation and those supposedly covered by the assumptions.
The court also noted confusion between the parties over whether the assumptions would permanently bind the Post Office or allow it to later challenge those same issues at a further trial. Castleton originally operated the Marine Drive post office branch in Bridlington between 2003 and 2004. The Post Office sued him over alleged accounting shortfalls generated by Horizon, resulting in a judgment exceeding £300,000, including costs, which later led to his bankruptcy.
His current claim seeks damages exceeding £2 million, declarations that the earlier judgment was obtained by fraud and annulment of the bankruptcy order. The case will now return to the lower court for further consideration of how the preliminary issues should proceed.