Whistl claims £600m+ in damages from Royal Mail

Whistl UK is seeking over £600m in damages from Royal Mail Group and its parent company International Distributions Services (IDS) due to Royal Mail’s anti-competitive behaviour towards Whistl.

In 2018 a £50m fine was imposed on Royal Mail by postal regulator Ofcom for breaching competition law when Whistl (then TNT Post) attempted to become its first end-to-end competitor in wholesale mail delivery.

Royal Mail made three attempts to challenge the outcome before paying the fine. The decision from Ofcom concluded that the company abused its dominant market position in 2014 with price changes that specifically targeted competition from Whistl. 

The saga began in 2012 when Whistl started a final-mile delivery trial in London, in response to this Royal Mail notified the market of its intention to introduce differential pricing and changes to zonal tilt which led to LDC withdrawing funding for Whistl’s investment.

Following the £50m fine Whistl filed a damages claim for the significant financial impact on its business as a result of Royal Mail’s actions. 

Nick Wells, executive chairman at Whistl, comments: “Royal Mail’s behaviour is symptomatic of a historical culture within the organisation which has been prepared to deliberately abuse its dominant position and then brazenly deny any wrongdoing, regardless of the impact on its stakeholders including mail users, staff, and shareholders.

“We are determined to pursue Royal Mail for fair compensation for the damage it has caused, and we hope that by doing so we may encourage Royal Mail to abandon its long-term culture of non-compliance and denial.”

Whistl says that it seems increasingly likely that a court will need to determine the award even though the company remains prepared to reach a settlement with Royal Mail, which is one of its largest trading partners.

The value of the claim is based on business planning documents which were stress tested by multiple due diligence experts in 2013 and further substantiated by actual market developments in the time since.

Whistl adds that failure to agree to a settlement will result in a lengthy and costly trial which throws into question the validity of Royal Mail and the information it shares with shareholders.

“We are very confident as to the merits of our claim against Royal Mail following its anti-competitive behaviour and the level of damages we expect, now in excess of £600m and accruing interest at £50m per year,” adds Wells.

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