In many ways, the situation of Bates v Post Office (2020), reflects all multi-national corporations including the banking sector.

While it’s a landmark case in the UK, has far-reaching implications for customer treatment by Banks worldwide. Henry Ford, Sr., said in substance,

“It is perhaps well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

While primarily concerning the employment rights of workers, Bates v Post Office applies to the banking sector and its ramifications on the treatment of bank customers.

Understanding Bates v Post Office:

Bates v Post Office, decided in 1995, fundamentally challenged the classification of workers as independent contractors rather than employees.

The case involved postmasters who were considered self-employed by the Post Office. However, the court ruled that their working conditions and contractual obligations were indicative of an employer-employee relationship.

In 2020, the Post Office agreed to a settlement of £57.75 million with over 550 sub postmasters who had been wrongfully accused of false accounting or theft.

This settlement marked a significant acknowledgment of the injustices faced by many sub postmasters and represented a step towards addressing the harm caused by the Post Office’s actions.

Don’t think for a moment that it’s any different with major banks around the world.

In the years following the litigation, it emerged that numerous sub postmasters had faced severe consequences. Penalties including imprisonment and bankruptcy, due to issues related to the Post Office’s accounting system, known as Horizon.

The Horizon system was responsible for managing financial transactions within post offices, including tracking revenues, balances, and discrepancies.

Several sub postmasters reported discrepancies in their accounts that they believed were due to faults in the Horizon system.

However, the Post Office, instead of investigating these discrepancies thoroughly, often held the sub postmasters accountable for the alleged shortfalls.

All the time the Post Office and Horizon making claims that it was a “once only” situation. “You’re the only sub-postmaster in this position!”

Banking on Unproven Debts

As a result, some sub postmasters were subjected to legal action, including prosecutions and debt collection measures, to recover what were considered unproven debts.

The exact number of sub postmasters who were jailed or bankrupted as a direct consequence of the Post Office’s actions is difficult to ascertain definitively.

However, it is well-documented that a significant number of sub postmasters faced serious financial hardship.

Some being wrongly convicted and imprisoned due to discrepancies in their accounts.

These were later found to be the result of errors or faults in the Horizon system.

Application to the Banking Sector:

Duty of Care and Customer Treatment:
Bates v Post Office established the principle of a duty of care owed by employers to their employees. Similarly, banks have a duty of care towards their customers.

This duty encompasses providing accurate information, safeguarding customer funds, and ensuring fair treatment in all financial transactions.

Transparency in Contracts:
The case highlighted the importance of clear and transparent contracts outlining the rights and responsibilities of both parties.

In the banking sector, this translates to ensuring that customer agreements are comprehensible and free from hidden terms or unfair clauses.

Fair Treatment and Accountability:
Just as the court held the Post Office accountable for its treatment of workers, banks are increasingly held to higher standards regarding the treatment of their customers.

Practices such as aggressive sales tactics, hidden fees, and discriminatory lending practices are scrutinized in light of Bates v Post Office principles.

Redress Mechanisms:
Bates v Post Office emphasized the need for effective mechanisms for resolving disputes between employers and employees.

In the banking sector, this underscores the importance of accessible avenues for customers to seek redress in cases of grievances, such as unfair charges, unauthorized transactions, or poor service.

Banking on Future Directions

Despite the precedent set by Bates v Post Office, challenges remain in ensuring equitable treatment of bank customers.

Complex financial products, technological advancements, and evolving regulatory landscapes pose ongoing challenges for both banks and consumers.

Moving forward, there is a need for continued vigilance in upholding the principles of fairness, transparency, and accountability in the banking sector.

Yet, it seems the banks still don’t care. Because, guess who’s calling the shots? It ain’t the government.

Bates v Post Office serves as a reminder of the importance of equitable treatment and protection of rights.

In the banking sector, its principles have profound implications for the treatment of bank customers. This emphases the need for transparency, fairness, and accountability, and addressing “Unconscionable conduct”.

By upholding these principles, banks can foster trust, strengthen customer relationships. Full disclosure would be a great start to developing a more resilient and ethical financial system.

When the people wake up there may well be a revolution in banking. Imagine if everyone stopped paying their home loans…