Royal Mail in race to appeal GBP50m ruling
Royal Mail has three weeks to appeal against a High Court judgment which found it be in breach of its own compensation scheme, or it will be forced to pay more than #50m to disgruntled bulk mailers.
Industry watchdog Postwatch brought a judicial review against industry regulator Postcomm when Royal Mail withheld around #40m-worth of compensation from companies after failing all 15 of its minimum service targets in 2003 and 2004. Bulk mail customers should have automatically received compensation totalling #80m, but Royal Mail used late invoice payments as a reason to withhold 50 per cent of that.
Postwatch argued that Postcomm was duty bound to enforce the payments, but the regulator sided with Royal Mail, resulting in the case being pursued to court. A further #10m will be paid to customers for breaches in 2004 and 2005, if an appeal is not made by January 27. The case represents the first time a watchdog has been successful in a judicial review against an industry regulator.
A Royal Mail spokesman says: “We will be carefully studying the full written judgment. But we expect to ask for leave to appeal against the ruling. It is too early to say what impact the ruling will have on our business with bulk mail customers.
“The compensation scheme, which was written by Postcomm, is the best of its kind in the postal world, and was applied by Royal Mail fully and fairly, as agreed with the regulator.”
Postwatch North chairman Judith Donovan comments: “I am absolutely delighted. This is a significant victory for a consumer body fighting on behalf of customers.”
