Post Office Horizon IT and last night’s Panorama

By Tony Collins

Below are excerpts from last night’s Panorama documentary [17 August 2015] on the Post Office Horizon system and complaints by about 150 subpostmasters.

Reporter John Sweeney met postmasters who said they should not have gone to jail. He also interviewed a former Fujitsu technician who said the system might have had something to do with it.

The programme asked whether innocents have gone to jail.

Sweeney: “There’s been a bit of a crime wave sweeping middle England. But have no fear. The Post Office is on the case.” He said it has caught dozens of postmasters with their hands in the till, including Jo Hamilton who stole £36,000. Or so the Post Office said. “She is no longer a postmistress. She cares for her elderly parents. Career options are limited for convicted criminals.”

Sweeney asked Hamilton: have you got a long history of committing crime?

Hamilton (a postmistress between 2003 and 2006). No. I haven’t even had a parking ticket.

Sweeney: Have you ever done anything?

Hamilton: No.

Shoplifter?

“No.”

Sweeney met Hampshire villagers who, in the grounds of Hamilton’s local church, spoke about their respect for her. The vicar said: “She is a good hard-working honest woman. She is a woman of integrity.”

Another villager: “Jo Hamilton is an honest shopkeeper. Not a very good business person – far too kind to people.” A third: “She is one of the kindest people I know.”

When Hamilton was taken to court, the village came too. Her family and 74 people from the village filled the public gallery. “The judge, I don’t think, quite believed what he was seeing,” said Hamilton.

She found herself in the dock when an audit discovered a £36,000 shortfall. The Post Office charged her with theft and false accounting. But, said Sweeney, there was no direct evidence of theft. “The case against her relied on the Post Office’s computer system Horizon.”

Introduced in 1999 Horizon handled 6 million transactions a day, from selling dollars to issuing a fishing licence.

Sweeney interviewed Charles McLachlan, a computer expert who said that the Post Office has many more branches than any UK bank.

McLachlan: “Any computer system can go wrong. What’s important is the way that you deal with things when they do go wrong.”

Sometimes Horizon transactions go astray, said Sweeney. “And that can make it look as if there is cash missing. The postmaster using the computer can make mistakes too. Usually errors like these are spotted and corrected. But Jo Hamilton found Horizon difficult to operate. When she reckoned up, the computer kept saying that cash was missing.”

Said Hamilton: “I rang the helpdesk and said ‘I am £2,000 down’ and she said: ‘You can do this, this and this. I did exactly what she said, and it doubled what I’d rung her up about, so then I was £4,000 down. “

Under her contract, Hamilton had to pay back any shortfalls. But the losses continued. She stopped putting in her own cash and signed off the official accounts anyway, without declaring the missing money.

Sweeney: Why on earth did you do that?

“Because I didn’t know how to get out of the situation I was in. It was such a big amount of money that I knew it would finish the shop off. And I always thought one day, naively, that it would sort itself out. You press a button and ‘bing’ – there it will be.”

She pleaded guilty to false accounting and agreed to pay the Post Office the missing £36,000. In return the theft charge was dropped. The deal kept her out of jail. But what if the computer was part of the problem?

James Arbuthnot, a campaigning MP who stood down at the last election, told Sweeney: “ I don’t think it is a criminal act which she [Hamilton] committed. I think it’s much more likely to have been a fault in the computer itself. The fact that she was pressurised into admitting a criminal act doesn’t mean this miscarriage of justice should stand. It needs to be overturned.”

Hamilton said the Post Office told her that she was the only postmaster having problems with Horizon.

Sweeney: That wasn’t true. 150 postmasters formally complained about the problems they were having with Horizon.

Institutional blindness?

The Post Office commissioned forensic accountants Second Sight to investigate the complaints about Horizon. A Second Sight investigator Ian Henderson, in his first interview, told Sweeney:

“Horizon works reasonably well if not very well most of the time. In any large IT system it is inevitable that problems will occur. What seems to have gone wrong within the Post Office is a failure to investigate properly and in detail cases where those problems occurred. It’s almost like institutional blindness.”

The Post Office has its own investigators and it brings its own prosecutions. It doesn’t have to go through the police or the Crown Prosecution Service.

Professor Mark Button, criminal justice expert said, “The Police’s work is checked by an independent organisation, the Crown Prosecution Service. In the Post Office’s situation you have the prosecutors and the investigators all working for the same organisation. It becomes much more difficult to truly separate those functions. With the Post Office that creates potential risks of miscarriages of justice.”

The Post Office said it complies with all legal requirements and has a duty to protect public money. It said it only prosecutes where there is a realistic prospect of conviction and never for the making of innocent mistakes. It said its exhaustive investigations have provided overwhelming evidence that Horizon was not responsible for missing money.

Sweeney interviewed Noel Thomas, who was an Anglesey postmaster between 1994-2005. Said Thomas, “I felt I had been a loyal servant as a postmaster and a postman before that. I started in 1965. Happy memories. “

The Post Office had a problem at the branch in 1996. “I was running another Post Office at the time in the middle of the island. I was called back and they said there was money missing from the office.”

Sweeney: “£11,000 had gone. A member of staff was sacked and Noel agreed to pay back the cash. All was well until Horizon arrived. It kept saying money was missing so Noel phoned the helpline.”

Thomas: “I said I am positive there is something wrong with the computer system because this money is disappearing. “

Sweeney: So you said to the Post Office, ‘Is there a problem with the Horizon system?’ What was their answer?

Thomas: “They said ‘none’ – that I was the only person who had a problem.”

Thomas signed off his branch accounts without declaring the missing money. When the Post Office came for an audit, he was £50,000 short. “They don’t know where the money is. I don’t know where the money is and still they haven’t found the money. I haven’t got it.”

Sweeney: Did you steal it?

No.

Can you prove you didn’t steal it?

“My style of living. I had a secondhand Saab. If I had pinched that kind of money I would have had a better car than that, believe you me. I lived a decent life. I worked hard. My wife worked hard.”

Thomas was charged with theft and false accounting. Like Jo Hamilton he said he reached a deal before going to court. He pleaded guilty to false accounting and the theft charge was dropped.

Thomas: “My barrister said you have got to plead guilty to false accounting.”

He hoped the deal would keep him out of jail when he was sentenced. “The judge came in and he said ‘nine months’ and I waited for a suspended sentence and he said ‘take him down’. I spent my 60^th birthday in prison.”

But should he have been charged with theft in the first place?

Sweeney: “In paperwork was have obtained, the Post Office now says that although theft by Noel – or somebody else – can’t be ruled out, it accepts that the missing money was probably caused by ‘operational errors’.

The Post Office told Panorama it could not comment on individual cases because of confidentiality. It said Horizon is effective and robust, and is independently audited. It has been used by nearly 500,000 people and the overwhelming majority haven’t complained.

Arbuthnot believes the Post Office has unfairly prosecuted postmasters. “It’s certainly an abuse of power. It’s a big organisation bullying individuals with no ability to cope, in ways which sometimes see them sent to prison, made bankrupt, or lose their livelihood. We own this organisation. That it is behaving in this way is disgusting.”

The Post Office said it is not a bullying organisation and it has seen no evidence of miscarriages of justice. But something seems to have changed, said Sweeney. “In the 5 years up to 2014, the Post Office prosecuted an average of 33 postmasters a year. Last year it was 2.

“These prosecutions often rely heavily on the computer being right. So Horizon has to work properly. But if it doesn’t fire on all cylinders it might not be a reliable witness. Second Sight reported that bugs in the computer system had created cash shortfalls.

Henderson: “The Post Office disclosed to us 2 software bugs that had quite a significant impact on a number of branches and it took in one case over 12 months for those bugs to be detected and for the consequences to be appreciated.”

Former Fujitsu insider

Horizon is run by computer giant Fujitsu.

Sweeney: “It won’t talk about the system about it doesn’t comment on the specifics of customer contracts. But now for the first time a former insider has agreed to speak out. He says that errors on Horizon were far more widespread than has ever been reported. “

Richard Roll, a Fujitsu computer technician between 2001-2004, told Panorama, “The office is located in Bracknell. We were on the 6^th floor … there was a large team employed there… we were all full time. We were all pretty busy … a lot of errors, a lot of glitches coming through.

Sweeney: There were errors in the system?

Roll: “There were errors with the system.”

Sweeney: Some people have been ruined financially. People have gone to prison. Is it possible that suffering could have been caused because there are problems in the Horizon system?

“Yes, it is possible.”

A team of computer technicians was dealing with Horizon errors, some of which, according to Roll, could create false losses. He said that financial records were sometimes changed remotely, without the postmaster’s knowing, which the Post office has always said cannot happen.

Roll said it was possible to go “in through the back door” and make changes. He added: “Sometimes you’d be putting several lines of code in at a time. If we hadn’t done that then the counters would have stopped working.”

Sweeney: So what the Post Office are saying is untrue?

“From my perspective, yes.”

Sweeney said Roll’s evidence could call into question the reliability of the computer records. If financial data could be changed, without the knowledge of the postmaster, is it safe to rely upon the computer’s evidence?

The Post Office said it cannot edit transactions as recorded by branches and that any corrections would be shown transparently in the records. It said there was overwhelming evidence that losses were caused by user actions, including deliberate dishonest conduct.

But Horizon seems to escape scrutiny, said Sweeney. Thomas’s computers were removed and tested. But the results have now been lost. Thomas: “The Post Office said in a letter to me that they had sent them to Fujitsu for testing, and they had lost, or couldn’t find, the correspondence.”

In Jo Hamilton’s case, as well as paying back the missing money, she also had to agree not to blame Horizon. Knowing what you know now, would you have done what you did, asked Sweeney.

Hamilton: “No.I would have pleaded not guilty to theft and carried it all the way and said,’well you prove it then’. That’s what you do. You force them into court and make them produce evidence.”

Is Horizon ever on trial?

But even if a theft case goes to trial, is Horizon fully investigated?

The Post Office prosecuted Seema Misra who was a postmistress between 2005-2008 for theft and false accounting. She and her husband had invested £200,000 in their shop and post office. She struggled to get to grips with Horizon.

“When things went wrong we were told it is just you,” she said.

The Post Office gave extra training but she and her staff made dozens of calls to the Horizon helpline. The system kept showing cash shortfalls. To cut the losses she put in £20,000 of her family’s money.

Eventually, like Jo Hamilton and Noel Thomas, she signed off her accounts saying there was more cash in the till than was really there. When the Post Office audited her branch, £75,000 was missing.

She pleaded guilty to false accounting and not guilty to theft. This time the Post Office pressed ahead with the theft charges.

Sweeney: You didn’t steal a penny?

No.

So you say.

No. That is why I pleaded not guilty – so I can get justice. I haven’t taken any money. That is why I went to a trial.”

Again there was no direct evidence of theft, said Sweeney. Misra said initially that the missing money must have been lost or stolen by staff. Then, just before the trial, she heard about problems with Horizon. It became part of her defence but it didn’t convince the jury.

In tears she told Sweeney: “There is no evidence that I have taken any money and then the jury came back with the verdict guilty.”

What was your sentence?

15 months.

What was prison like?

Terrible. Terrible. It was like a nightmare. At one point I was thinking I am not going to get out of here alive.

Sweeney said that Seema Misra was jailed as a thief. “But was the star witness for the prosecution – the computer – ever properly cross examined? The expert witness for the defence doesn’t think so.”

Charles McLachlan, expert witness for Misra’s defence, said. “When I spoke to one of the Post Office investigators in relation to Seema Misra, they said that as a matter of policy, they would never consider an IT error, a computer error, as a source of discrepancy.”

Post Office and Fujitsu meeting

Misra’s jury heard about one bug in Horizon but there was no mention of any others, said Sweeney.

“Now we have details of a meeting between the Post Office and Fujitsu, held before Seema’s trial. The minutes warn of another computer bug that could cause loss of confidence in the Horizon system if widely known. The bug made money disappear. This minute goes on to say that this bug could ‘impact on ongoing legal cases where branches are disputing the integrity of Horizon data.’

“The bug did not affect Seema’s branch but it is evidence that Horizon can go wrong. So why didn’t it come out at Seema’s trial? The defence expert asked to see the technical logs of Horizon problems but they were not disclosed to him.

McLachlan: “It’s difficult for me to see how a jury could properly take a view about Seema’s guilt or innocence if they didn’t have access to an understanding of other the faults in the system.”

The jury convicted Misra unanimously but did she get a fair trial?

Sweeney: The Post Office still maintains Seema is a thief. It says it always discloses relevant documents even after a prosecution has concluded. The Post Office says that Second Sight has not identified any transaction that has been caused by a technical fault which resulted in a postmaster wrongly being held responsible for a loss.

Vindicated?

Second Sight sent its final case report to postmasters who had complained about Horizon. In the report Hamilton read notes from the original Post Office prosecution file against her, dated 17 May 2006.

Hamilton: “It says that having analysed the Horizon printout and accounting documentation, I was unable to find any evidence of theft.”

So the Post Office’s criminal investigator had found no evidence of theft. Pointing to the investigator’s notes Hamilton said, “That says there is no evidence of theft and yet they charged me with it.”

Sweeney: What does this document do for you?

“Well it vindicates everything we have been saying all the years. It means we can take the fight to them.”

Sweeney also had Post Office paperwork that suggested a theft charge made it easier to recover money.

The Post Office denied bringing prosecutions for financial reasons and said that losses and false accounting together are often sufficient evidence for a theft charge. It said false accounting can contribute towards branch losses by making it impossible to spot discrepancies. The Post Office wholly rejects the extremely serious but unsubstantiated allegations.

A new investigation

The Criminal Cases Review Commission is now investigating the convictions of 20 postmasters to see whether miscarriages of justice have occurred, among them the three cases in the Panorama programme. The sense of injustice is growing and the postmasters are determined to clear their name.

Hamilton: “We are not going to stop until they actually address what they have done and be held to account for what they have done.”

Sweeney’s concluding point: “The question now being asked is not who stole the money, but, in the first place, was there was a crime?”

Post Office response to Panorama

The Post Office wholly rejects extremely serious allegations repeated in BBC’s Panorama programme of 17 August 2015. The allegations are based on partial, selective and misleading information.

The Post Office does not prosecute people for making innocent mistakes and never has.

There is no evidence that faults with the computer system caused money to go missing at these Post Office branches .

There is evidence that user actions, including dishonest conduct, were responsible for missing money.

We are sorry if a small number of people feel they have not been treated fairly in the past but we have gone to enormous lengths to re-investigate their cases, doing everything and more than we committed to do.

All of the allegations presented in the programme have been exhaustively investigated and tested by the Post Office and various specialists over the past three years or more.   The unsubstantiated claims and theories that continue to be levelled against the Post Office are at odds with the facts and are constructed from highly partial, selective and inaccurate information.

This is about individual cases and the Post Office will not discuss those in public for very good reason.  The Criminal Cases Review Commission (CCRC) is reviewing a small number of cases involving criminal convictions. It will be provided with all available information including confidential legal material not available to others and we believe the CCRC should be allowed to complete its reviews without external comment.  We also gave a commitment of confidentiality to people who put forward cases to us for re-investigation.

The Horizon computer system is robust and effective in dealing with the six million transactions put through the system every day by our postmasters and employees at 11,500 Post Office branches. It is independently audited and meets or exceeds industry accreditations.

Background facts

Prosecutions

The Post Office has always taken its duty to act fairly, proportionately and with the public interest in mind extremely seriously.  The Prosecutions it brings are scrutinised by defence lawyers before they advise their clients and are, ultimately, ruled upon by the courts.

If money is missing from a Post Office branch and the fact that cash is missing has been dishonestly disguised by falsifying figures in the branch accounts, the Post Office is entitled to take action and does so based on the facts and circumstances of that specific case. Though rare, where there is evidence of criminal conduct, a decision may be made to prosecute.

Prosecutions are brought to determine whether there was criminal conduct in a branch, not for the Post Office’s financial considerations.

Post Office prosecutors are all experienced criminal lawyers, many of whom have significant experience in prosecuting for both Post Office and the Crown Prosecution Service.   In the rare instances that prosecutions are undertaken, the Post Office follows the Code for Crown Prosecutors (the same code as the Crown Prosecution Service).  The Code requires a prosecution to have sufficient evidence and be in the public interest, both of which are kept under review right up to and including any trial.   It means there must be sufficient evidence foreach charge – if a theft charge is brought, there must be sufficient evidence for a realistic prospect of a conviction for theft.

A charge upon which there is no evidence will inevitably fail. It is the duty of the defence lawyers to identify to the court where there is insufficient evidence to sustain a charge.  If the court agrees then the Judge must dismiss that charge.

The Post Office takes extremely seriously any allegation that there may have been a miscarriage of justice. We have seen no evidence to support this allegation.   The Post Office has a continuing duty after a prosecution has concluded to disclose any information that subsequently comes to light which might undermine its prosecution  or support the case of the defendant and continues to act in compliance with that duty.

The Horizon Computer System

Horizon is robust and effective in dealing with the six million transactions put through the system every day by our postmasters and employees at 11,500 Post Office branches. It is independently audited and meets or exceeds industry accreditations.   There have been 500,000 users of the system since it was introduced.

Nevertheless, rigorous re-investigations were undertaken into claims made by 136 mainly former postmasters that the system caused losses in their branches.

There is overwhelming evidence that the losses complained of were caused by user actions, including in some cases deliberate dishonest conduct. The investigations have not identified any transaction caused by a technical fault in Horizon which resulted in a postmaster wrongly being held responsible for a loss of money.

There is also no evidence of transactions recorded by branches being altered through ‘remote access’ to the system.  Transactions as they are recorded by branches cannot be edited and the Panorama programme did not show anything that contradicts this.

Resolution of cases

The Post Office was approached in 2012 by a small number of largely former Postmasters and MPs with the concern that faults in the Horizon computer system had caused losses at their Post Office branches.

In response the Post Office set up an independent inquiry and, when that found nothing wrong with the system, established a scheme to enable people to put forward individual complaints, providing financial support to those making claims so that they could obtain independent professional advice.

There were 150 cases put forward, 43 of which involved criminal convictions.

A number of the cases are now resolved, through mediation or otherwise, and the remainder of cases where the courts have not previously ruled have been put forward for mediation.

Mediation is overseen by the Centre for Effective Dispute Resolution (CEDR), an established leading and entirely independent organisation.   Those who have been offered mediation can still exercise their available rights if mediation is not successful – mediation itself doesn’t stop that.

Mediation cannot overturn a previous court ruling – only the courts can do so.

Trouble at the Post Office – Panorama

Operational errors could have caused loss at Post Office – BBC