Ministers agreed with stepping up High Court fight against Horizon IT victims, which added millions to their costs.

By Tony Collins

Millions of pounds that could have been offered to victims of the Post Office Horizon IT scandal to help towards their costs of unearthing the truth, went instead on stepping up a fight against them in the High Court, with the full agreement of ministers and officials, it has emerged.

Business minister Paul Scully last month distanced government from the litigation between sub-postmasters and the Post Office over its Horizon IT system. He said that government cannot pay compensation because it was not a party to the litigation.  On 22 June 2020, Scully wrote to former sub-postmaster Alan Bates, who led the litigation. In the letter, which is likely to have been drafted by his officials at the Department for Business, Energy and Industrial Strategy, Scully said,

“Unfortunately, as stated in our previous correspondence, Government cannot accept any requests for payment as it was not party to the litigation, which has now been settled.”

But it has emerged that ministers last year were advised on the litigation and supported continuing it despite a “Commons Issues” judgment in March 2019 that showed the Post Office was losing the case.

Non-intervention

Ministers could have intervened at that stage because, under Treasury guidelines, Whitehall can step in when arm’s length bodies such as the Post Office “fall into disrepute”.

The March judgment could hardly have been more disparaging and wide ranging in its criticisms of a public institution. The judge, Mr Peter Fraser, found that the most senior Post Office witness had tried to mislead him. He also criticised the truthfulness of other Post Office witnesses.  He said some Post Office evidence in the litigation seemed to have its origin in a parallel world.

Despite the March 2019 judgment, the Post Office – with the support of officials and ministers – stepped up the legal action, changed its litigation strategy, replaced its lawyers (see notes below), tried to have the judge removed and launched three appeals which delayed hearings and added millions of pounds to the costs of both sides. In taking the further actions, the Post Office attracted more strident criticism from the High Court.

Litigation must run its course, says minister

Ministers at the time were advised of the litigation strategy and change of lawyers, according to a Parliamentary reply to campaigning peer Lord Arbuthnot.  It has further emerged that ministers and civil servants at the time refused Bates’ advice to commission their own independent check on what the Post Office was telling them.

One minister with responsibility for the Post Office, Kelly Tolhurst,  wrote to Bates at the time of the Horizon trial last year. Her letter, which is likely to have been drafted by officials at the Department for BEIS, said,

“lt is important that the court process be allowed to run its course in order to finally resolve those issues.”

Tolhurst also said in the same letter,

When the case eventually settled in December 2019 –  eight months after the Commons Issues judgment – the total costs for both sides were £89m. Sub-postmasters had little choice but to accept the settlement because, unlike the Post Office, their future funding was uncertain. But the settlement left many of the litigation’s 550 sub-postmasters with losses of tens or hundreds of thousands of pounds.

The government approved the settlement.

Maladministration?

Had the case settled at the time of the Common Issues judgment, sub-postmasters could have saved millions on their own legal, funding and insurance costs and the Post Office, for its part,  could have offered them the millions of pounds it was  expecting to spend on continuing the litigation.

But intensifying the legal fight despite a judgment showing the Post Office was clearly losing the case as a whole, may add fuel to a proposed complaint of maladministration against the Department for Business, Energy and Industrial Strategy.  Bates has raised more than £103,600 for a QC’s complaint to be made against the Department for BEIS.

Critics may also say that the government’s support for the Post Office’s stepping up litigation against the sub-postmasters after the March judgment implicates the Department for BEIS in the Horizon IT scandal and highlights a clear conflict in the Department’s involvement in rejecting a judge-led inquiry, choosing a “review” instead and then writing its terms of reference and choosing the person to chair it.

Comment

A particularly grievous part of the Horizon scandal is the Post Office’s having at its disposal seemingly unlimited tens of millions of pounds for its own legal costs but, when it came to a settlement figure, the Post Office could not find the money to cover the sub-postmasters’ losses and costs, let alone pay them any compensation.

In 2010 the Justice for Sub-postmasters Alliance, founded by Alan Bates, accused the Post Office of a “vindictive” attitude towards sub-postmasters who had challenged Horizon’s reliability. Has much changed in the following 10 years?

The amount sub-postmasters had to agree in the settlement was barely enough to cover their legal and funding costs: it was only because the sub-postmasters’ lawyers, funders and legal insurers reduced their fees in sympathy that the victims received £11m between them – which still left each of them with huge losses.

The unfortunate non-intervention by ministers and civil servants after the judgment in March 2019 and indeed their support for continuing the wasteful and costly litigation is compounded by Scully’s statement this year that government could not pay compensation because it was not a party to the litigation.

Conflict of interest

All this shows, if nothing else, the clear conflict of interest in Scully, as a BEIS minister, choosing a “review” over a judge-led inquiry and the involvement in the Department for Business, Energy and Industrial Strategy in choosing the review’s chair and terms of reference.  Those conflicts of interest are obvious enough to be described as flagrant.

The Department of BEIS’s ministers and its officials have, by their non-intervention, cost victims of the Horizon scandal millions and possibly tens of millions of pounds.

They and the Post Office have left the victims of a computer system’s untrustworthy output living in near poverty instead of in comfort, with solid businesses, finances, homes, pensions and reputations.

Today’s business ministers and officials ought to reflect when in their jobs and when going home at night, on the sub-postmasters who tried to go to sleep wondering what would happen to their children if they went to prison for crimes they did not commit.

Junior ministers and civil servants are the last people to be deciding, against countless objections by MPs, peers and sub-postmasters, on holding a mere review.

Is it not enough that victims of Horizon have had an arm of state ruining their lives without having another part of the state denying them fair compensation, refusing a judge-led inquiry and rubbing their noses in its power to indulge in clear conflicts of interest?

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Nick Wallis’ remarkable series on the Horizon IT scandal – The Great Post Office Trial – BBC Radio 4

Notes:

Two ministers’ letters – two accounts

Below is an excerpt from a letter by business minister Paul Scully, whose remit includes the Post Office,  to Alan Bates in June 2020. It distances government from the Bates v Post Office litigation …

Below is an excerpt from Scully’s predecessor Kelly Tolhurst in June 2019, during the Bates v Post Office litigation. It expresses support for continuing the litigation (which ended up adding unnecessary millions of pounds to costs for both sides).

Ministers not a party to the litigation?

Below is a Parliamentary reply on 6 July 2019 to campaigning peer Lord Arbuthnot. POL is Post Office Limited …

Was even the judge, Mr Justice Fraser, surprised the case wasn’t settled after his March 2019 judgment?

Before the “Horizon” trial started last year, the judge Mr Justice Fraser had already found, in his “Common Issues” judgment, that “a number of people within the Post Office” realised that there were “difficulties with the Horizon system”. But he also noted that the Post Office had an “entrenched” view, formed over years, that there was nothing wrong with Horizon – a view ministers and civil servants seemed to have accepted by allowing the litigation to continue.

How much, if at all, has the PO’s atttitude changed since 2015?

In 2015, Conservative MP Andrew Bridgen said the Post Office had an attitude towards sub-postmasters that made the organisation unfit to hold an inquiry.

He quoted a Post Office spokesman as describing what had happened to sub-postmasters as “lifestyle changes”.  Bridgen said,

“When we hear a Post Office spokesperson stating, ‘I am really sorry if people have faced lifestyle problems as a result of their having been working in Post Office branches’, we have to wonder whether the organisation is even aware of the misery it has caused. The fact that Post Office Ltd believes that honest, decent, hard-working people losing their homes, their businesses, their savings, their reputation and, worst of all, in some cases their liberty can be quantified as a ‘lifestyle change’ only serves to show that the organisation is not fit to conduct an inquiry into the matter.

“The Post Office mediation scheme has proven to be a sham, Second Sight [forensic accountants] has proven to be far too independent for the Post Office to stand, and the disdain that has been shown to members of this House and to sub-postmasters is a disgrace.”

One of Horizon’s victims was sub-postmaster Julian Wilson. His wife was convalescing from a tumour and her father had been diagnosed with terminal cancer. After Horizon showed shortfalls that were not of his making, the Post Office took legal action. He not want to put his family under strain and  pleaded guilty to false accounting to avoid the accusation of theft.

He was diagnosed with cancer and died prematurely.  Time ran out before he was able to clear his name.  Would the description “lifestyle problems” have been adequate to cover his conviction for a crime he didn’t commit?

It may be supposed that the Post Office would want today, after the High Court’s extensive criticism of its conduct and lack of truthfulness, to do all it could to make amends, at least financially, for its destruction of lives such as Julian Wilson’s. But, in fact, the Post Office regards the litigation judgments as having cleared none of the 550 litigants. This means that Julian Wilson, a founding member of Justice for Sub-postmasters Alliance who would have been a litigant had be lived, would, in the eyes of the Post Office, still be a convicted criminal.

How much has changed since the Post Office described the misery caused by Horizon as “lifestyle problems”?

2015 to 2020 – ministers are still siding with the Post Office

In 2015, in the House of Commons, a minister in what is now the Department of Business, Energy and Industrial Strategy rejected MPs’ calls for a judge-led inquiry into the Horizon scandal. The minister at the time, George Freeman ,said,

“… it remains the case that there is no evidence that the Horizon system is flawed. If any individual feels that their conviction is unsafe, they can pursue the legal avenues available to them. I do not see any reason for the Government to intervene in this matter by instigating a full judicial inquiry.”

Conservative MP Andrew Bridgen said at the time,

“It appears to me that it is indeed now sunset for the Horizon system.. the matter must now be taken away from the Post Office and a judicial inquiry set up. The Post Office has abused its privileged position and sought to cover up its failings by way of a wholly non-transparent approach to the mediation process.”

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After 20 years of the Horizon IT system claiming victims that now are thought to number more than 1,000 former sub-postmasters, not one of them has yet had his or her name publicly cleared.