High Court rejects RM appeal against Postcomm’s £9M penal

[NEWS]

The High Court has today upheld the £9.62 million financial penalty Postcomm levied on Royal Mail for failing to protect adequately the mail in its care, following an appeal of the penalty by Royal Mail. The judgement reinforces Postcomm’s position that the fine is proportionate and reflective of the loss suffered by customers.

Royal Mail did not dispute Postcomm’s finding that it breached its licence requirements to keep mail safe and secure, nor that this breach was serious; it appealed only against the level of the financial penalty.

On 24 August 2006, Postcomm imposed a financial penalty of £9.62 million on Royal Mail for breaching its licence by failing to properly protect the mail in its care. The penalty followed a review of Royal Mail's mail integrity procedures, during which Postcomm found that some important features of Royal Mail's procedures were not being applied across the business.

The most significant weakness found was the poor management of the recruitment and training process for non-contract (agency) staff. In addition, the framework and information systems that Royal Mail had put in place to prevent the loss, theft or damage of mail were not operating effectively. These weaknesses significantly reduced the company's ability to protect customers' mail.

Postcomm Chief Executive Sarah Chambers said:

“Postcomm has a duty to protect the interests of customers who are entitled to expect that their mail will reach its destination. Our review uncovered serious shortcomings in Royal Mail's application of its procedures for properly protecting the mail during 2004/05, and Royal Mail did not dispute these findings.

“We believe the £9.62 million fine is a proportionate penalty for these failings, and we are pleased that the High Court has upheld the penalty and awarded costs to Postcomm. During 2004/05, Royal Mail estimated that around 14.6 million letters, packets and parcels in its care were lost, stolen, damaged or interfered with.â€