By Tony Collins
It’s a familiar story.
A small businessman, this time in the village of Alveston, which is 10 miles north of Bristol, is being threatened with a life-changing debt because of a shortfall shown on the Post Office’s Horizon system.
The local post office has closed and its owner is being pursued for £41,000.
It’s happening against the backdrop of a High Court class action by 522 former owners of small post offices. The High Court has granted them a Group Litigation Order against the Post Office.
Many of the 522 have had to give the Post Office money they say they didn’t owe, because of deficits shown on Horizon. Some were jailed or made bankrupt. Many lost their livelihoods while being left with huge debts.
The Alveston case involved, initially, £36,000. The discrepancy came as a surprise to Hari Jayanthan, who ran the Alveston post office branch out of his shop.
The Gazette reported that the problems for Jayanthan began last December when the software he uses to balance the books showed a shortfall.
He asked the Post Office repeatedly for help but says he had no meaningful response and was left unsure what to do.
“I thought it had to be a mistake,” he said. “They said they would have a look and they kept saying they could not find anything.
“I was asking if I had done something wrong, pushed the wrong button or something, and if someone could come and help me, but nobody turned up for six months.”
In May 2017 officials from the Post Office arrived on his doorstep, telling him that they were now owed £41,000.
This was nearly three times what his village post office business made in a year.
“I keep getting letters and phone calls asking how I plan to repay them, and I don’t know what to do.
“This is the only business I have and I don’t have that kind of money to repay them. It’s all I have got. What can I do? We took no money from them and I could find no fault on my side.”
In a corporate move, the Post Office closed the Alveston branch in May, without notice to local villagers. It said the closure was for “operational reasons”.
Today, the Alveston post office and stores is shown on Google as “permanently closed”.
Local parish councillors have expressed concern, particularly at the suddenness of the closure. For Alveston residents, the nearest post office is more than 1.5 miles away.
The Post Office said it does not comment on individual cases. It welcomes the High Court case as the “best opportunity for the matters in dispute to be heard and resolved”.
It added that it has confidence in the Horizon system which is “robust, reliable and used across 11,600 branches by postmasters, agents and their many thousands of staff, to process six million transactions successfully every day, including on behalf of the UK’s high street banks”.
High Court case
One of the most important parts of the preliminary hearings so far – perhaps the single most important exchange – has involved the Horizon system’s “known errors log”. So far the log has remained confidential.
Justice for Subpostmasters Alliance, which is behind the class action being handled by Freeths solicitors, has asked for disclosure of the log.
TV reporter Nick Wallis, who has covered the Horizon controversy for many years, in particular for BBC’s The One Show, went to the High Court last month and tweeted on some of the exchanges.
The judge Sir Peter Fraser, who has practiced in the Technology and Construction Court from 1990, asked the Post Office to list reasons why the known errors log should not be disclosed.
The Post Office’s legal representative said that the demand for the log was a red herring. The Post Office has no control over it. It is controlled by Fujitsu which built Horizon and maintains it.
The legal representative for the Justice for Subpostmasters Alliance argued that the data in the log could be exported.
The judge said he wanted e-disclosure preliminaries to be sorted by 10 November. If there was still disagreement, a disclosure management hearing will be set up.
The judge also extended the cut-off date for new claims. Freeths is accepting new applications from any subpostmasters including assistants, managers, crown office employees and temporary subpostmasters until the end of 10 November 2017.
Another 70 or so are expected to join, bringing the total number of claimants to about 590.
Nobody outside an inner circle of Post Office head office executives and their advisers believes that hundreds of owners of local post offices – who took pride in serving their local communities – decided to defraud the taxpayer.
It’s not even clear that the Post Office believes it. For it has not sought to establish that any of the subpostmasters involved in the High Court class action benefitted from a lavish lifestyle financed by (alleged) shortfalls shown on the Horizon system.
But still the Post Office’s corporate position against the subpostmasters seems immovable. Which raises the question of whether the Post Office is placing more importance on the integrity of a computer system than the integrity of hundreds of subpostmasters.
Forensic accountants Second Sight, whom the Post Office commissioned to investigate Horizon complaints, raised many concerns about the system. The Post Office terminated Second Sight’s contract.
Computer Weekly reports that Andy Clark, visiting professor in information security at Royal Holloway University of London and director at information security and expert witness company Primary Key Associates, was called as a witness for the defence in a case brought by the Post Office against a sub-postmaster.
After seeing the Post Office Horizon accounting system in action, he said it was quickly apparent there were questions to ask about its integrity. After asking the Post Office these questions, the Post Office dropped the case, he said.
Today the Post Office’s position in the class action is that subpostmasters have signed a contract that, in essence, made them responsible for shortfalls shown on the Horizon system.
But is it as simple as that?
Some of the questions that will be raised at next November’s High Court trial include:
- Did Post Office Limited owe to subpostmasters a duty of good faith, fair dealing, transparency, co-operation, trust and confidence?
- Were legally binding terms implied in the contracts but not expressly stated? For example, what contractual obligations did Post Office Limited have in relation to investigating and determining the causes of alleged shortfalls.
- Did contracts include unusual, onerous or unfair terms?
- In what circumstances did subpostmasters have a liability to Post Office Limited for shortfalls and losses?
- Did the contracts allow Post Office Limited to suspend or terminate in the manner in which they did.
The Post Office refers repeatedly to the robustness of Horizon. It doesn’t accept that the system could have caused the losses in question.
This is one reason the known errors log is in contention. It could reveal that there were no known Horizon faults relevant to the shortfalls in question.
Or it could reveal the opposite.
What is extraordinary is that the log hasn’t been disclosed in years of legal cases against the subpostmasters.
This is a little like aircraft manufacturer Boeing implicating pilots in major incidents while not disclosing the plane’s fault history.
In the US, investigators have a statutory right to inspect the plane’s full fault history. Let us hope that the High Court requires Horizon’s full records to be produced.
One accused former subpostmistress Jo Hamilton has tweeted that “justice is coming”. We hope she’s right and that it comes long before the scheduled end of the High Court trials in March 2019.
For every day that passes without a settlement of the case is a day in which corporate hubris and irrationality prevails.
It’s to be expected that the Post Office’s directors will want to express confidence in a computer system on which their business depends.
But do they really believe it’s worth continuing to sacrifice small businesses and ruin the lives of their owners to repeatedly establish the integrity of a computer system?
Court dates set for trial – Computer Weekly
Nick Wallis High Court Horizon tweets
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Thank you for this update, Tony.
That they are still pursuing a likely innocent is disappointing but, not surprising.
As with so many silly decisions by the bureaucratic-minded within our institutions, it is reminiscent of the Titanic saga. It seems that, once declared unsinkable, free reign can be given to sail forth at speed ignoring icebergs or any other obstacles – however dangerous to both the vehicle and the passengers.
As I’ve bored you with before – good organizations know that nothing is perfect, they admit to their mistakes and take remedial action to compensate victims and ensure that any future difficulties are minimized. Bad organizations proclaim their infallibility, blame their victims instead of compensating them and allow mistakes to continue in perpetuity.
The jaw-dropping fact in this legal saga is the number of post office owners – approaching 600, entangled (and harmed) in this mess.
These are, what my American friends term, mom and pop enterprises. These people are part of their community, serve that community and will be trusted by their customers.
But suddenly, as in all horror-science fiction stories, aliens have infected a large percentage of Post Office owners with a deadly virus that turns them into embezzlers overnight. Not very good ones, as the latest victim kept contacting HQ with requests for help, thus drawing even more attention to himself.
It is also to be noted that the aliens don’t appear to have picked on any other small business enterprises – only the P.O. and its Horizon system. Lost Horizon springs to mind. But that wasn’t a horror story – but it was delusional.
I imagine the judge must be chortling to himself.
Of course, those responsible for this calumny will be hanging on for their pensions with no sign of a conscience nor of shame. Nor of humanity – probably because they must be some form of alien.
Thank you Zara. Points well made, particularly the ones about these village post offices being “mom and pop enterprises” and the “jaw-dropping fact” that the number of accused is in the hundreds.
When Computer Weekly first reported in 2009 on what became known as the Horizon controversy, each subpostmaster facing Post Office allegations was told that he or she was the only one complaining about Horizon glitches.
At that time there was little or no communication between subpostmasters. None knew of the Post Office’s accusations against others.
Now that Justice for Subpostmasters Alliance and solicitors Freeths are coordinating complaints, we know that the number of accused is around 600.
James Arbuthnot, the campaigning Conservative MP and now peer, summed up the injustice in a debate in the House of Commons in 2014. He said,
“What allowance has been made by the Post Office for the fact that historically its support was so poor? So far as I can tell, none.
“What allowance has been made for the contract term that provides that the weakest links in the Post Office— the sub-postmasters — have to be found guilty unless they prove their innocence? So far as I can tell, none.
“This is not the way that our criminal law should work. What has happened to the money that the Post Office got from people such as (former subpostmaster) Jo Hamilton via the South Warnborough village? Did it get taken into Post Office profits? This is, essentially, an issue of Post Office culture—the protection of assets at the expense of people.”
It’s hard to believe that the Post Office’s directors will allow this injustice to continue. Now that the case is before a judge who understands technological matters, his questions will surely help the Post Office to realise a need to settle this matter. Prolonging it means spending more public money on legal fees – merely to try and vindicate the Post Office’s questionable decisions?
Update: Today [1 November 2017] a government-commissioned report on the Hillsborough disaster by the Right Reverend James Jones is entitled: “The patronising disposition of unaccountable power”.
Does this title ring any bells?