High Court Horizon IT case has cost £10m – and the trial has yet to start

bBy Tony Collins

“vague threats” , “undoubtedly aggressive”, “dismissive”

These are words a judge has used in his pre-trial ruling on a High Court case between hundreds of subpostmasters and the Post Office over its Horizon IT system.

Judge Fraser used the words when referring to the Post Office.

Freelance journalist Nick Wallis, who has received crowdfunding to cover the trial, has written an excellent blog post on the ruling.

The trial of 600 subpostmasters and Crown Office employees versus the Post Office starts next month. Subpostmasters say the Horizon accounting system was defective at times and the shortfalls they were held responsible for did not really exist. The Post Office stands by the integrity of its Horizon system. It has persisted with recovering the shortfalls, which has left some subpostmasters bankrupt. The FT reported that attempts to recover the shortfalls could have contributed to one premature death and an attempted suicide.

The judge’s latest ruling on 10 October 2018 said the litigation is on a subject of “obvious public interest”.

The ruling reveals that both sides have together spent £10m on legal costs so far.

The costs of lawyers for the subpostmasters are being met by private funding.  On the other side, the Post Office has no private money at risk. The Post Office is owned by the government’s Department for Department for Business, Energy and Industrial Strategy.

If each side has spent about the same on legal fees, it means the case has so far cost the Post Office more in legal fees than the whole organisation received in increased trading turnover (£4m) during 2017/18.

The subpostmasters say the Post Office unjustly pursued them for accounting shortfalls that were the result of software coding errors, bugs and defects and the way the Horizon accounting system operated.

The Post Office pursued the shortfalls “with vigour”, said Judge Fraser. He went further: he said the Post Office’s treatment of the subpostmasters was “highly controversial”.

He said some subpostmasters covered the shortfalls out of their own resources even though they did not accept that there was anything deficient in their accounting. Others found accounting irregularities in their favour. A few were convicted in the criminal courts of false accounting, fraud, theft or other offences. Some had their contracts with the Post Office terminated, “sometimes very abruptly”.

The judge said the subpostmasters are of the view that the Post Office, over time, came to know about difficulties with the Horizon system, but did not address them and did not publicise these problems.

The subpostmasters claim damages for financial loss and personal injury. They allege deceit, duress, unconscionable dealing, harassment and unjust enrichment.

The Criminal Cases Review Commission is reviewing the convictions of a “significant number” of the subpostmasters, said the judge.

The Post Office denies the subpostmasters’ claims and has produced many pages of legal evidence in defence of the Horizon system and the Post Office’s actions against the subpostmasters.

Post Office’s “supernatural” foresight?

The judge’s ruling contains some unflattering words about the Post Office pre-trial legal attempts to strike out some of the subpostmasters’ written factual evidence.

He urges the two sides’ legal teams to save time and money but says a  “counter-productive approach”  lurks in the background to the Post Office’s application to strike out “large parts of the factual evidence” served by the subpostmasters.

He said the Post Office had first raised concerns about the scope of the subpostmasters’ evidence in October 2017 – many months before the subpostmasters actually submitted their evidence.

“Given the [subpostmasters’] statements themselves were only served in August 2018, that shows considerable, if not almost supernatural, foresight on the part of the defendant [Post Office],” said the judge.

He added,

“There have been various proxy wars about the claimants’ witness statements in the period from October 2017 onwards, even though no such statements were in existence.

“Indeed, notwithstanding the high number of interlocutory appearances before me, it was a rare hearing when the subject was not mentioned.

“Given there were no witness statements available to be considered on the majority of these occasions (and indeed not at all prior to the short notice hearing on 11 September 2018), this was a highly unusual situation. All it did identify was that there was a major interlocutory battle looming. And so it has proved.”

He went on to say that the attempts by each side to outmanoeuvre one another in the litigation has led to constant interlocutory strife.

“This is an extraordinarily narrow-minded approach to such litigation,” said the judge.

The judge rejected the Post Office’s application to strike out parts of the subpostmasters’ statements. The judge said,

“The application by the [Post Office] to strike out this evidence appears to be an attempt to hollow out the Lead Claimants’ [subpostmasters’] case to the very barest of bones (to mix metaphors), if not beyond, and to keep evidence with which the defendant [the Post Office] does not agree from being aired at all.”

The judge suggested that, in the background to the Post Office’s application to strike out parts of the subpostmasters’ evidence, the Post Office was “simply attempting to restrict evidence for public relations reasons”.

Nick Wallis’ article has more on the judge’s  warnings about the “tenor of this litigation generally”.

All credit to Wallis [@nickwallis] for covering the case and obtaining crowdfunding to do so. He is reporting on the case at www.postofficetrial.com.

Computer Weekly was the first publication to report on the Horizon scandal (in 2009). It has a timeline of events.

Comment:

The Post Office’s decision to pay its lawyers millions of pounds to fight the subpostmasters rather than use that money to compensate the same subpostmasters, shows where the Post Office’s priorities are.

Public institutions in general care about managing their reputations and justifying their decisions. The Post Office’s directors could have chosen to be different. They could have chosen to care in the way institutions usually  do not.  How astonishing it would be if the directors now decided to say to their lawyers,

“Until now our legal teams have dealt with the subpostmaster cases. Now the Board is taking over responsibility. These cases are about the lives of the people who used to work for us and their families. The cases are no longer about proving the correctness of esoteric legal arguments.

“The subpostmasters have suffered enough. We are a large institution. We can afford to give them the benefit of the doubt. No computer system is infallible.

“We believed we were contractually entitled to take the actions we did but that did not make our actions right. Home Office officials said the Windrush deportations were legally justified but that didn’t make the deportations right.

As the barrister Sir Robert Morton said in “The Winslow Boy “, Terence Rattigan’s play about injustice, “Let right be done”.

Nick Wallis’ Post Office Trial blog