Error-prone Horizon systems were used to process accounting, cash, and transaction data across Post Office branches, leading to unexplained shortfalls being recorded against individual sub-postmasters in the subpostmasters scandal. Hundreds of sub-postmasters were then wrongfully accused of theft, fraud, or false accounting based on discrepancies generated by the Horizon system. Image Source: Postal Museum

Castleton, a former sub-postmaster, has won a major Court of Appeal fight against the Post Office and Fujitsu, reviving a battle many assumed had already been buried by the blockbuster Bates settlement years ago.

Castleton’s latest claim is exposing an uncomfortable reality for the litigation finance industry: giant settlements may not actually settle much at all.

Backed by litigation funder Therium, hundreds of sub-postmasters joined forces to take on the Post Office over the catastrophic Horizon IT scandal, eventually securing explosive High Court findings on Horizon’s reliability, operational unfairness, and misconduct inside the Post Office itself. The legal victory culminated in a £57.75 million settlement in 2019.

“Castleton’s latest claim is exposing an uncomfortable reality for the litigation finance industry: giant settlements may not actually settle much at all.”

But for many of the victims, justice quickly turned sour.

After legal fees, insurance costs, and litigation funding deductions were carved out, the 555 sub-postmasters were reportedly left with only around £12 million between them—roughly £20,000 each on average despite bankruptcies and years of personal devastation.

Even more remarkably, reports later suggested Therium itself barely managed to profit from the case despite taking a substantial cut of the settlement proceeds that left sub-postmasters with so little.

This is significant also for Therium’s backing of the Sulu arbitration, an attempt to seize nearly $15 billion from Malaysia in a case widely decried as fraudulent. Observers have speculated that the failure to profit from the sub-postmasters contributed to greater risk taking in questionable cases in hopes of a financial windfall—even cases lodged by designated terrorists. In fact, Fuad Kiram, the lead claimant of the Sulu arbitration, is alleged to have played a part in a 2013 militant attack on Malaysia’s Sabah region.

The headline defeat of the arbitration in December 2025 spelled Therium’s latest financial disaster. In anticipation of the total loss, Therium had fired droves of employees and announced it no longer intends to directly fund cases. Yet is that the case’s end?

Castleton’s case proceeding despite his role in the earlier Therium-funded lawsuit shows that “finality” in funded litigation may be an illusion. Even as the Sulu arbitration wound down towards its final dismissal last year, the Sulu claimants launched another high-profile suit against the Spanish Crown, claiming Spain had interfered with their ability to seize the $15 billion award. Astonishingly, they demanded an even greater $18 billion in compensation from Spain itself. The court predictably dismissed the claim. Yet the case underscores a broader risk: litigation funders can bankroll not just one lawsuit, but cascading rounds of opportunistic follow-on claims.

“Litigation funders can bankroll not just one lawsuit, but cascading rounds of opportunistic follow-on claims.”

What’s more, Castleton’s own story remains one of the most devastating examples from the Horizon disaster. The Post Office sued him for roughly £25,000 before securing legal costs exceeding £300,000, leaving him bankrupt. Such losses were scarcely covered by the Therium-backed suit against the Post Office.

That leaves a deeply awkward question hanging over the entire litigation funding model. If claimants suffer catastrophic losses yet emerge from headline-grabbing group actions with comparatively modest payouts after funders take their cut, is it any surprise that follow-up suits started appearing almost immediately afterward?

“The 555 sub-postmasters were reportedly left with only around £12 million between them—roughly £20,000 each on average despite bankruptcies and years of personal devastation.”

And if post-settlement claims become the norm, what exactly are litigation funders incentivized to maximize—claimant compensation or the long-term pipeline of future legal disputes?

Indeed, Castleton’s latest case may sit at the center of that debate and challenge the idea that the Bates settlement should bar further legal action. If courts become more willing to reopen supposedly settled disputes through allegations of fraud, concealment, or tainted proceedings, funders may be encouraged to rethink and revisit mass settlements as a dispute generator.

The Court of Appeal did not rule on whether Castleton’s fraud allegations were true, focusing instead on how the litigation should proceed. Judges rejected an earlier attempt by the Post Office and Fujitsu to split the case into separate trials, warning that delaying scrutiny of what the Post Office knew about Horizon’s defects risked overlapping evidence and an unfair assessment of the wider case.

Funders are almost certainly watching. Could they ultimately benefit from settlements that leave claimants hungry for further litigation, or profit from “pro-rating” the underlying wrongs of a scandal across multiple waves of litigation and future funding opportunities?

“Could they ultimately benefit from settlements that leave claimants hungry for further litigation, or profit from ‘pro-rating’ the underlying wrongs of a scandal?”

Observers should therefore wonder what tricks and arguments remain from the Sulu arbitration. From what has taken place so far, including a flailing $18 billion suit against the Spanish government and indignant media statements, there does not appear to be much steam left. But the world should watch closely and govern carefully those who would spin lawsuits from exhausted claims for profit.

REFERENCES

Hyde, J. (2026, May 14). Post Office scandal victim wins appeal over £2m trial split. The Law Society Gazette. https://www.lawgazette.co.uk

Hyde, J. (2026, May 15). Litigation funder: Law firms should “be honest about claims.” Law Society Gazette. https://www.lawgazette.co.uk

Know-Sulu. (2024, December 16). Subpostmaster calls for investigation into legal fees paid by £58m Horizon fund. https://know-sulu.ph

Know-Sulu. (2025, November 12). Sulu Claimants’ desperate $18 Billion Claim against Spain Thrown Out. https://know-sulu.ph

Therium. (n.d.). Therium Capital Advisors. Therium. https://www.therium.com

Therium. (2025, October 6). Therium Capital Advisors launched to provide litigation finance advisory services. Therium (News, Insights & Events).

https://www.therium.com

U.S. Chamber of Commerce Institute for Legal Reform. (2022, November). ILR Briefly: A new threat: The national security risk of third-party litigation funding. Retrieved from https://instituteforlegalreform.com