The Sunday Mirror published a story yesterday (at the top of page 4) on a threatened boycott of the public inquiry into the Post Office IT scandal.
The piece was by the paper’s consumer correspondent Stephen Hayward, who has written a number of stories on the scandal. It says victims of the scandal are angry the inquiry will not look at compensation or the Government’s role. It quotes Alan Bates, founder of the Justice for Sub-postmasters Alliance.
“As things stand, it’s unlikely we will engage with the inquiry.”
Last Friday, Bates sent an email to Alliance members saying that financial redress for the group is still excluded from the inquiry’s terms of reference and “with that exclusion in place there is absolutely no benefit to the group in taking part”.
The inquiry’s terms of reference specifically rule out any consideration of the £58m the group received in settlement of its High Court litigation which exposed the scandal. The settlement left those in the 555-strong group with an average of only £20,000 each after costs were paid. Many members of the group lost hundreds of thousands of pounds after the Post Office wrongly held them liable for supposed losses shown on the Post Office and Fujitsu’s Horizon system.
The business department BEIS, which funds and oversees the Post Office, set the inquiry’s terms of reference which raises the question of whether it has a conflict of interest.
BEIS’s critics say the Department could have stopped the scandal long before it devastated hundreds of lives. The Department’s mandate required that it intervene at the Post Office in certain circumstances but it failed to step in. The scandal led to more than 700 sub-postmasters being convicted on the basis of questionable Horizon “evidence”. The inquiry’s terms of reference are focused on Horizon IT and not on failings within government, Whitehall or the criminal justice system.
The Bates 555 have filed a complaint against BEIS with the Parliamentary Ombudsman. The group accuses the department of maladministration
List of issues
Although the inquiry’s terms of reference are currently fixed and represent a “boundary”, Wyn WIlliams, the government-appointed chairman of the inquiry, is to publish a “list of issues” to be investigated. These are expected to be published in September. It is unclear how this list could include any earnest consideration of compensation when the terms of reference specifically rule out discussion of the settlement deal.
Bates’ email to Alliance members says that until the list of issues is finalised in September “we still won’t have a final position about the Inquiry”.
He says it is “really important for as many people as possible to sign up for Core Participant status and we will wait to see the finalised list of issues”. He adds, “However should they fail to take on board our key requirement that matters pertaining to financial redress be part of the Inquiry, then we’ll be providing a form we can each send to Sir Wyn to withdraw from being a Core Participant. And be assured that if we do that, there are others and organisations from outside the group who have made it clear to me that they too would act similarly.”
Bates is right to be sceptical. The government and Whitehall officials have given the inquiry narrow terms of reference in which the focus is on the failings of a computer system, not compensation to victims or human failings within successive governments or the business department.
Government ministers have given the impression that if they could explain the Post Office IT scandal by sending a computer system to prison and thus avoid any human culpabilities, they would. One of the inquiry’s main objectives is to establish a clear account of “the implementation and failings of Horizon over its lifecycle”. The inquiry’s latest statement appears to have an emphasis on identifying poor “decision-making processes” rather than the humans who made decisions that ruined sub-postmasters’ lives.
Wyn Williams, the inquiry’s chairman, is a respected retired judge. But he may struggle to change perceptions that the government and Whitehall have set up the inquiry to be of little value other than demonstrate a dutiful response to the scandal. There is also scepticism among some sub-postmasters about whether the inquiry is completely independent of government.
The government set up inquiry, is paying for it and has restricted its terms of reference. It appointed the chairman and assessors and is providing the secretariat. The inquiry is based at the HQ of BEIS, which is the government department most heavily implicated in the scandal. Government ministers have powers to limit what information is given to the inquiry.
Perhaps the inquiry will end up criticising the Post Office’s former CEO Paula Vennells and Horizon’s supplier Fujitsu. But Vennells and Fujitsu seem to be the only names on the government’s unofficial list of acceptable candidates for criticism.
Any sign that the inquiry is likely to make any real difference to anyone or anything has yet to emerge.
Smith also reports on Anjana and Baljit Sethi who are among 2,000 other sub-postmasters who are still waiting for compensation under the scheme.
The Post Office said 2000 claims are “progressing” and added, “We are committed to fairly resolving claims, with assessment by an independent panel, and are keeping people updated on their cases.”
The Sethis have been struggling from the fall-out of the Post Office IT scandal for nearly 20 years. They are now into their 70s. They lost their business, their jobs and were forced into bankruptcy. They could not afford to pay an unexplained shortfall of £17,000 shown on the Post Office’s centrally-run Horizon system. Fujitsu built the system. The Post Office decided to close the Sethis’ store in which the couple had invested £120,000.
Post Office IT scandal
The Post Office required that sub-postmasters make good from their own pockets unexplained shortfalls shown on an untrustworthy accounting system Horizon. It also wrongly prosecuted more than 700 sub-postmasters and sub-postmistresses for theft, false accounting and fraud on the basis of Horizon evidence. It’s the biggest miscarriage of justice in British legal history and no democracy anywhere in the world has wrongly convicting hundreds of people on the basis of defective technology.
Many victims of the scandal lost hundreds of thousands of pounds each. In total, the Post Office wrongly held more than 3,400 sub-postmasters and sub-postmistresses responsible for unexplained shortfalls shown on the Horizon system.
A group of 555 sub-postmasters and sub-mistresses led by Alan Bates exposed the scandal. But the government has decided not to include the group’s members in publicly-funded compensation deals for victims of the scandal.
Bates, with help, raised the money to sue the Post Office in the High Court. The case proved that the Post Office was wrong to claim that Horizon was robust. The judge, Mr Justice Fraser, found that Horizon was not remotely robust. He also found that the Post Office was wrong to hold sub-postmasters liable for unexplained shortfalls. But the group ran out of litigation funding and had to settle the case prematurely. The Post Office’s £57.75m settlement left the Bates 555 with huge losses because £46m of the money went in costs. Most of those in the group have not received back money they were made to give the Post Office to cover shortfalls shown on Horizon.
They see this injustice that as being compounded by the government’s willingness to pay fair compensation to sub-postmasters who did not sue the Post Office. Those victims of the scandal who did not take part in the litigation have been eligible to join the Post Office’s Historical Shortfall Scheme which is not open to the Bates 555.
About 2,400 people who joined the scheme are due to receive about £63,000 each on average, the Post Office having said in its annual accounts that £153m has been set aside for compensation claims. The postal affairs minister Paul Scully has announced that government will help the Post Office to pay the claims.
In contrast, Scully has made no commitment to pay fair compensation to those who sued the Post Office. This means the litigants have received, after group costs, an average of only £20,000 each – a third of the average being paid to non-litigants.
Critics say this unfairness has been further compounded by the government’s decision to set up a public inquiry into the scandal that specifically rules out any consideration of the litigation settlement deal. The Bates 555 is threatening to boycott the inquiry unless compensation becomes part of its formal remit.
The Post Office has confirmed the 400 payments. Its spokesperson said,
“We set up the Historical Shortfall Scheme to provide redress for those who may have experienced shortfalls related to previous versions of the computer system Horizon. Around 400 compensation payments have been made through the scheme and other claims are progressing. We are committed to fairly resolving claims, with assessment by an independent panel, and are keeping people updated on their cases.”
Asked whether there is any openness and transparency related to the payments and whether any of the payments were contingent on recipients signing so-called gagging clauses, the Post Office spokesperson said scheme applicants are “not asked to sign confidentiality agreements as a condition of accepting compensation offers”.
“As matters stand, it is unlikely the JFSA [Justice for Subpostmasters Alliance] will engage with the Inquiry,” says Alan Bates who founded the Alliance.
Last Friday [11 June 2021) Wyn Williams, the respected retired judge who chairs a government inquiry into the post office Horizon system, made a new and earnest appeal.
Sir Wyn wants – and “expects” – many more sub-postmasters to participate now that the non-statutory inquiry set up in September last year is on a statutory footing. He said in a statement,
“I hope and expect that many more current and former sub-postmasters will be willing to participate in the work of the Inquiry following its conversion.
But he may still struggle to convince some sub-postmasters that there is any point in their participating, given the inquiry’s narrow terms of reference as set by the Post Office’s funding department, BEIS.
The terms do not mention consideration of compensating 555 sub-postmasters who defeated the Post Office in a group litigation that exposed the Post Office IT scandal.
It means the group has no clear reason to take part in the inquiry. Its members have not had returned to them the many tens, and sometimes hundreds of thousands of pounds, that they lost when the publicly-owned Post Office made them pay for unexplained shortfalls shown on its unreliable Horizon system. Horizon was built by Fujitsu at a cost, mostly funded by taxpayers, of about £1bn.
The Post Office IT scandal
Over 14 years, the courts convicted more than 700 sub-postmasters of financial crimes based on data derived from an unreliable branch accounts system, Horizon, whose material faults the Post Office and Fujitsu kept hidden. The Post Office continued to use data from Horizon as evidence to demand money from sub-postmasters. The scandal has affected more than 3,000 sub-postmasters across Britain.
When the Post Office ceased prosecutions based on Horizon in 2014, postal affairs ministers and government officials continued to hold that Horizon system was reliable. It took a High Court legal action by Alan Bates and 555 sub-postmasters to prove in 2019 that the system was not remotely robust.
Although Bates and his legal team won their case to establish that the Post Office was wrong to blame sub-postmasters for Horizon’s faults, their private legal funding ran out and Bates had to accept a government-approved settlement that left the 555 sub-postmasters with huge losses. Postal affairs minister Paul Scully has repeatedly refused to commit the government to giving back the money sub-postmasters lost in the scandal. He maintains that the litigation settlement was “full and final”.
Bates’ group boycotted the previous non-statutory which he saw as a potential whitewash. Although the inquiry is now on a statutory footing, the boycott may continue.
Bates said, “I see no signs yet of the JFSA’s concerns that the financial reparations will be included in the Inquiry. In fact they still seem to be specifically excluded. As matters stand, it is unlikely the JFSA will engage with the Inquiry.”
If the Alliance boycotts the inquiry, will the chairman force sub-postmasters to participate under powers he has under the Inquiries Act 2005?
But any forced participation of the scandal’s victims could convince critics of the inquiry that it was set up to serve the interests of government and its business department BEIS more than the public interest.
The inquiry exists as the government’s response to the biggest miscarriage of justice in British legal history. But the scandal’s significance may go wider still. It may be the first time any democratic nation worldwide has given criminal convictions in error to hundreds of innocent people on the basis of evidence derived from faulty technology.
The scandal- which campaigning peer Lord Arbuthnot describes as a national outrage – happened, in part, because of systemic flaws in the criminal justice system, systemic flaws in Whitehall’s scrutiny and oversight of public institutions and the Post Office’s unrestrained freedom to operate in the commercial world as Britain’s largest retail network without any effective shareholders and without, it seems, any institutional sense of right and wrong, only a mindset that what was right for the business was right for the country and employees.
But the Horizon enquiry’s terms of reference do not allow for an investigation into systemic failings in the criminal justice system or Whitehall’s systemic failings of oversight and scrutiny. Instead, Whitehall officials and the business department BEIS in particular have set up the inquiry to focus on failings at the Post Office alone and on faults in Horizon although these two areas have already been covered extensively in the group litigation. The judge in that litigation, Mr Justice Fraser, wrote more than 1,000 pages on failings at the Post Office in relation to Horizon and on the system’s technical faults. What then is the purpose of the Horizon enquiry other than to demonstrate a government response to the scandal?
One government source told journalist Nick Wallis in June last year that the civil service opposed any government review of Horizon. Wallis quoted the senior government source as saying, “the officials weren’t happy… They didn’t want a review, they didn’t want an inquiry or anything. They wanted it all to go away’.”
Implications of a JFSA boycott of the inquiry?
The scandal has been exposed only as a result of the work of Alan Bates and his JFSA members. Without their participation, the government inquiry may have little or no credibility. It is unlikely the Alliance’s forced participation would lend any credibility to the inquiry.
If the inquiry remains focused on the Post Office and Horizon alone rather than on compensation and systemic Whitehall failings, it could be seen by the government’s critics that it has responded ineffectually and without humanity to the scandal.
Are statutory inquiries independent of government?
When ministers, with their officials, set or change a statutory inquiry’s terms of reference, they need only discuss and consult with the chair but do not need his consent. It’s the same with the government’s appointment of an inquiry’s assessors and counsel.
A further weakness in the independence of statutory inquiries is that ministers can decide to restrict what information is published in the inquiry’s final report and can decide what documents or emails may be exempt from disclosure on the grounds of, say, the administration of justice.
The business department BEIS, although implicated in the Post Office IT scandal, has been able to control whether or not its failings of scrutiny and oversight are investigated by the Horizon inquiry – and it has chosen not to include its own failings in the terms of reference.
Organisations called to give evidence in statutory public inquiries can decline requests for information if they argue successfully that the information is not available or the request is unreasonable because of cost, time or difficulty in obtaining it. Their lawyers may also argue that they are not compelled to provide information covered by legal professional privilege.
Terms of reference
The House of Lords committee that investigated public inquiries recommended that victims of scandals ought to have a say in setting an inquiry’s terms of reference. The committee said,
“We recommend that interested parties, particularly victims and victims’ families, should be given an opportunity to make representations about the final terms of reference.”
But there has been no consultation with victims of the Post Office IT scandal over the Horizon inquiry’s terms of reference.
In any statutory inquiry, the terms of reference have a legal footing and usually cannot be circumvented. Indeed the Department for BEIS says the Horizon inquiry’s terms of reference form a “boundary”. This may mean that if compensation is discussed as an issue in the inquiry when there is no mention of it in the terms of reference, it would be unclear whether any such discussion could be of any practical consequence.
Government officials could decide to change Horizon inquiry’s terms of reference, in consultation with the chairman, to include consideration of compensation. But the government and Whitehall departments have no obligation to act on any public inquiry’s recommendations. Ministers can accept a recommendation but not act on it.
The National Audit Office investigated a wide range of public inquiries in 2018 and found it difficult in some cases to establish whether the chair’s recommendations had been acted on. The NAO also found that ministers have no duty to tell MPs whether they are going to act or not on a public inquiry’s recommendations.
Settlement “full and final”
Postal affairs minister Paul Scully has made no apology for failings in government and Whitehall’s oversight of the Post Office. He and the prime minister Boris Johnson have sought to distance government from the litigation and settlement.
Scully has said the government was not party to the settlement. He has also said the settlement was “full and final”. Similarly, Boris Johnson told Conservative MP Jonathan Lord last month that the government was “not party to the initial litigation nor the settlement that was agreed”.
But documents obtained by researcher Eleanor Shaikh under the Freedom of Information Act established that the government and business department BEIS were briefed on developments in the group litigation and chose not to intervene. The documents also show that the government and BEIS agreed the settlement.
Critics may wonder, therefore, whether Scully and Johnson are deepening the Horizon cover-up by incorrectly distancing government from key decisions that are being portrayed as having been made by the Post Office alone.
Not for the first time, government has set up a public inquiry that leads its critics to wonder whether it can serve any useful purpose other than demonstrate a dutiful response by ministers to public concerns.
In 2009 the then government set up a non-statutory inquiry into unexpectedly high deaths at Stafford Hospital. As with the Horizon inquiry, the government’s investigation into Mid Staffordshire NHS Foundation Trust covered old ground. Ministers wanted the Mid-staffs inquiry to report on deaths at the hospital and the lessons learned. But the Healthcare Commission had already investigated the trust’s failings – as Mr Justice Fraser has already reported on failings at the Post Office. What was the point of the Mid-staff inquiry investigating deaths again when the real cause of the scandal had been failings of scrutiny and oversight by regulatory agencies?
Campaigners for justice in the case of Mid-staffs, as in the Post Office IT scandal, worked hard for a statutory inquiry that was able to investigate systemic failings in scrutiny and oversight. In the case of Mid-Staffs, campaigners succeeded. The incoming coalition government in 2010 set up a new inquiry – this time a statutory one – whose specific purpose was to look at systemic failings. The then Heath Secretary Andrew Lansley said,
“So why another inquiry? We know only too well every harrowing detail of what happened at Mid Staffordshire and the failings of the trust, but we are still little closer to understanding how that was allowed to happen by the wider system.
“The families of those patients who suffered so dreadfully deserve to know, and so too does every NHS patient in this country. This was a failure of the trust first and foremost, but it was also a national failure of the regulatory and supervisory system …Why did it have to take a determined group of families to expose those failings and campaign tirelessly for answers?”
Lansley set up a full statutory inquiry into the failures of regulatory authorities. The inquiry did not have contrived and narrow terms of reference. In contrast, the Horizon inquiry has narrow terms of reference that do not include any investigation of systemic failings of oversight and scrutiny.
At the very least the inquiry into the Post Office IT scandal ought to be looking at how to compensate those who have lost hundreds of thousands of pounds at the hands of a state institution. These victims are the very people who exposed the scandal – and they had to sacrifice £46m of the settlement money in paying their costs. Of what benefit is it to them to have an inquiry that covers old ground by re-investigating failings at the Post Office and in the Horizon system?
When Johnson and Scully seek to distance government from the Horizon scandal, they make matters worse. All this does is remind victims that ministers and officials failed to act despite warnings time and again from MPs and sub-postmasters that an apparently unaccountable state institution was ruining the lives of people of integrity. Lord Arbuthnot has worked tirelessly since 2010 to make ministers aware of the extent of the scandal. He is joined by a strong Parliamentary contingent of MPs who are campaigning for justice alongside the JFSA.
Perhaps Scully and Johnson ought to be embarrassed to admit that government ministers and Whitehall officials let the Post Office conduct itself as it did. If they are embarrassed, it doesn’t show in the inquiry’s terms of reference.
It’s possible that Wyn Williams may do what Robert Francis QC, chairman of the Mid-Staffs inquiry did: recommend a new inquiry into failings of oversight and scrutiny. That would be welcome.
But as things stand, a scandal that is a world first merits something more than a self-serving government inquiry that protects Whitehall and ministers and leaves the Bates 555 with nothing.
Bates led a group of 555 sub-postmasters who sued and defeated the Post Office in a High Court group litigation that ran from 2017 to a settlement in December 2019. The settlement left the “Bates 555” with an average of £20,000 each, a fraction of their losses. In contrast, the government is helping to fund what it calls “fair” compensation payments to a separate group of 2,400 other sub-postmasters who played no part in the litigation. These non-litigants are expected to receive an average of £60,000 each – three times as much as those who exposed the scandal.
Bates said of officials at the Department for Business, Energy and Industrial Strategy [BEIS] which funds and is supposed to oversee the government-owned Post Office,
“They have done everything possible to insult the 555 in the claimant group as punishment for daring to raise and parade HMG’s incompetence over the years which destroyed so many lives.”
Paul Scully, the postal affairs minister who represents the Department for BEIS, says the money already paid to the Bates group to end the litigation represents a “full an final settlement”. In the Commons last week, he sounded a little more conciliatory than in the past but gave no firm promise of government help for the Bates 555.
That Scully and his officials at BEIS seem content to leave the Bates group with huge personal losses – in some cases more than £500,000 – raises a question of whether there are resentments in Whitehall that the litigation exposed a scandal that senior officials and ministers had denied.
Bates had repeatedly suggested that ministers and officials settle the case in early 2019 – but they rejected his every suggestion. In the end, Whitehall officials have had to deal with the ignominious defeat in the High Court of a public institution, the Post Office, that was held in high regard by the public.
The Bates case proved that Whitehall, ministers and the Post Office were repeatedly wrong, over a period of nearly 20 years, in their claims that the Post Office and Fujitsu’s Horizon accounting system was robust. The judge in the case, Mr Justice Fraser, found that Horizon was not remotely robust. He also found that the system caused numerous shortfalls in branch post office accounts for which sub-postmasters were wrongly blamed. Some of the sub-postmasters went to jail and some made bankrupt. More than 730 sub-postmasters were convicted on the basis of “evidence” from the flawed Horizon system. A further 2,400 sub-postmasters have joined the Post Office’s Historical Shortfall Scheme which was set up as part of the Bates litigation settlement. The scheme compensates those who had to use their own money to pay for supposed shortfalls shown on the flawed Horizon system. But the scheme is not open to the Bates 555.
Reasons for Whitehall’s apparent resentments?
The high profile of the Bates’ litigation and the subsequent overturning of 47 convictions has put the media and Parliamentary spotlight on failings in Whitehall that let the scandal happen and on a justice system that wrongly convicted hundreds of upstanding business people who ran branch post offices.
The litigation has also given grounds for potential civil claims that could cost hundreds of millions of pounds, making the Post Office technically insolvent without government financial help.
Whitehall resentments against the Bates 555 might also have been fuelled by having to deal with the fall-out from the scandal, including drafting ministerial replies and speeches, setting up and staffing an inquiry into Horizon and responding in detail to Bates’ crowd-funded complaint to the Parliamentary Ombudsman of BEIS maladministration.
The scandal has damaged the Post Office brand and the reputation of the UK civil service as one of the most efficient and trusted of its kind anywhere in the world.
In the House of Commons last Wednesday, postal affairs minister Paul Scully made no apology for the failure of his officials to intervene and stop the Post Office IT scandal.
Scully’s Department for Business, Energy and Industrial Strategy is supposed to intervene in the affairs of government-owned “Arm’s Length Bodies” such as the Post Office if it believes something major is awry.
During a debate on the scandal, shadow minister Seema Malhotra asked Scully to apologise. She criticised the “Government’s failure of oversight and due diligence with regard to public money” and asked Scully to “apologise to the victims and their families today”. At the end of her speech Malhotra asked Scully again. She urged him to apologise and “own the Government’s mistakes”.
But Scully made no apology. He suggested that government officials had nothing to do with the scandal.
He said, “The Post Office consistently maintained that Horizon was robust and was misguided in its approach to the issue, leading to the decision to prosecute these postmasters. We pressed management on issues regarding complaints brought by postmasters about Horizon and received repeated assurances that the system was reliable.”
Scully also said that an inquiry set up last September into the scandal is to be put on a statutory footing from June, a move generally welcomed by MPs.
But Scully appears to be doing his best to distance his department’s officials from the scandal. He said in the debate that the Post Office works “operationally independently” of the government. He also said the government had no part in the group litigation.
But are Scully’s briefings accurate?
Heavily-redacted documents released last week under the Freedom of Information [FOI] Act seem to contradict the impression given by Scully that his officials at BEIS were at a distance from Horizon-related events.
Cover-up of the cover-up?
The documents were obtained by special needs teacher Eleanor Shaikh who supports Chirag Sidhpura and other former sub-postmasters in their campaign for justice. She has put many questions to various parts of Whitehall to find out how much officials knew of the flaws in Horizon, the unfolding scandal and the group litigation.
The Department for BEIS has refused to answer most of her questions, as has UK Government Investments which is represented on the Post Office board. Their refusals may heighten concerns that Whitehall is concealing its involvement in the Post Office’s cover up of the scandal.
The latest BEIS documents obtained by Eleanor Shaikh are too heavily redacted to reveal the full extent of Whitehall’s knowledge of, or involvement in, the scandal, but the few sentences not blacked out show that various parts of Whitehall were aware of politically-sensitive Horizon developments.
Although Scully said last week that “Government did not have a part in the litigation”, those within government who were briefed on the litigation included senior Whitehall officials, special advisers, communications staff, HM Treasury, UK Government Investments, the Department for BEIS and various ministers.
Scully has also distanced government from the £57.75m settlement agreement in December 2019 which ended the litigation and left the Bates 555 with an average of only £20,000 each after costs. But the FOI documents show that various parts of government scrutinised the settlement package before it was signed.
One FOI document from December 2019, the month in which the litigation ended with a £57.75m settlement, says,
“The Court of Appeal has refused permission on all grounds to appeal the Common Issues judgment. Judgment on the 2nd trial [Horizon faults] is also expected imminently. Mediation started on the 27th of November  and will end on the 28th of November. Ministers have approved a settlement figure. There is a possibility of reputational damage to BEIS. Mitigation: UKGI and BEIS have been working collaboratively to ensure that Ministers are well briefed on the issues as they arise. Recently UKGI [UK Government Investments], HMT [HM Treasury] and BEIS scrutinised a settlement package which has now been approved by ministers.”
Although Scully said the inquiry, which is being led by former judge Sir Wyn Williams, is being put on a statutory footing because of the outcome of the recent Court of Appeal hearings (which ended with 39 sub-postmasters having their convictions quashed), the FOI documents reveal that BEIS has known for more than three years of a risk that the Court of Appeal could find that the Post Office had behaved unlawfully in its actions against sub-postmasters.
The FOI documents – BEIS Performance and Risks Committee reports in 2018, 2019 and 2020 – show that senior civil servants at BEIS were aware of the risks posed by the group litigation in February 2018, nearly two years before the case had built up costs for both sides of £89m. Indeed, the Treasury was considering in 2018 a possible settlement of the case during a “window” in January 2019 – 11 months before the actual settlement.
Did Whitehall gamble on winning the litigation?
This long delay in settling the High Court case raises questions of whether government officials and ministers, particularly senior civil servants at BEIS, backed the Post Office to win the litigation. Had they defeated the Bates 555, their win could have avoided the risks as set out in the Performance and Risks Committee reports.
Indeed the FOI documents make clear that an “adverse” outcome to the litigation was one in which the sub-postmasters won and the Post Office lost. There is no hint in the reports of any sympathy for sub-postmasters, only a concern about the financial and reputational implications for Whitehall if the Post Office lost the case.
These are some excerpts from the BEIS Performance and Risk Committee reports in 2018 to 2020:
Risks: Civil litigation and/or Court of Appeal processes judge that POL [Post Office Limited] acted inappropriately or illegally. Even in the absence of such a finding there is an ongoing risk that they are perceived to have acted in that way. Potential for significant compensation claims if civil or criminal courts rule against POL. More likely, however, and certainly in the short term, is that this continues to be a significant distraction (and cost) to the business as they defend their actions.
Mitigation: POL have external legal advisors employed on the civil litigation including a QC. They continue to update UKGI [UK Government Investments] through the board and directly on key stages but this is a legal matter and distinct from government. UKGI have briefed Minister (Andrew Griffiths) and will keep Ministers and SpAds [Special Advisers – temporary civil servants who advise and assist ministers] updated at key points. BEIS legal are also up to speed and contributing any advice to Ministers. Maintaining a position that Government will not comment on an ongoing legal issue.
POL have employed external legal advisors in preparation for the hearing in November (2018). UKGI has alerted Kelly Tolhurst [Postal Affairs minister], Perm Sec [Permanent Secretary – civil service head of BEIS], BEIS Legal and Spads. POL’s legal counsel to provide a briefing to the Minister and Perm Sec on POL’s contingency planning to deal with business implication of adverse rulings.
POL faces civil litigation in relation to its Horizon IT system – adverse judgement would pose reputational risks for UKGI. Judgement in first trial due jan 19, second trial begins March  UKGI is keeping the Minister, SpAds and Perm Sec updated and POL briefed ministers on 17 Oct. BEIS Legal and comms [communications personnel] are also up to speed and contributing any advice to Ministers. Discussions started with HMT [HM Treasury] to prepare for a possible settlement window in January 
POL faces civil litigation in relation to its Horizon IT system… Extension granted on referrals by CCRC [Criminal Cases review Commission] until 2 October 2020 and this continues to pose a material financial and operational risk to POL.
Punishing the Bates 555?
In 2021, the Post Office’s annual accounts said that £153m has been set aside for expected payments to former sub-postmasters who joined the Historical Shortfall Scheme. Separately, Scully has announced that around 2,400 people have applied to the scheme. If all 2,400 are deemed eligible to join the scheme, average payments to each would be about £60,000. If some applicants are rejected, the average amounts to the remaining claimants could be higher.
In contrast, the Bates 555 received £57.75m in the group litigation settlement of December 2019 but about £46m of this went in costs, mostly to the litigation funders Therium. The remaining amount left the 555 claimants in the case with an average of £20,000 each.
Bates had no choice but to accept the £57.75m because his team’s money had run out. Indeed the judge in the case had commented on how the Post Office seemed to have run up costs unnecessarily. “It does appear to me that the Post Office in particular has resisted timely resolution of this Group Litigation whenever it can,” said the judge.
A conflict of interest
It is bold, perhaps defiantly bold, for Downing Street to leave the job of setting up an inquiry to the Whitehall department that has the most to lose from its findings: the FOI documents show that BEIS was concerned, two years before the inquiry, about the risks of reputational damage from an adverse outcome of the litigation and Court of Appeal judgments.
It is, perhaps, no surprise, then, that BEIS set such narrow terms of reference for the Horizon inquiry that its main purpose is to identify failings at the Post Office alone – not Whitehall. Even as a statutory inquiry, its terms of reference keep the focus on the Post Office, not BEIS. And the Treasury is beyond the scope of the inquiry. The Treasury funded a £1bn Horizon system that was known to be flawed. Downing Street’s role in shaping the much-criticised political response to the scandal is also excluded from the inquiry.
Scully confirmed last week that the government “is not part of the inquiry”.
Government officials have also stopped the inquiry from investigating whether the settlement was unfair and punitive.
Scully said last week,
“On the group litigation settlement … That is not within the scope of the inquiry …”
It is indeed unclear how much the inquiry can investigate the biggest miscarriage of justice in British legal history.
Horizon to blame for ruining lives, not humans?
In their briefings to ministers, officials seem to suggest that the focus of any blame for the scandal ought to fall to the computer system rather than any individuals, as if Horizon, rather than any human, prosecuted people who had committed no crime.
Last week in the Commons Scully said,
“The life-altering implications of these accounting errors cannot be overstated… Clearly, with this being a computer software issue over two decades, Sir Wyn [the inquiry’s chairman)] is getting the technical advice that he needs, and he will always have that support from us”.
Where any human was involved in the scandal, one emphasis in the inquiry, it seems, may be on what Scully calls the “decision-making process” (rather than on the actual decisions and those who made them).
Conceal and deny?
In the Watergate scandal, President Nixon resigned over the cover-up of the cover-up rather than because of a break-in at democratic headquarters, of which he might have known nothing. Are we seeing a cover-up of the cover-up at BEIS and UK Government Investments with their refusal to answer FOI requests – or answering them with heavy redactions?
Why have they not published all their board minutes and Horizon-related reports?
Officials would cite commercial confidentiality as the reason and would say IT companies would not want to deal with government if it was careless with commercial secrets. But Whitehall officials have been known to hide behind commercial confidentiality to shield their department from reputational embarrassment and likely accusations of incompetence. The Information Commissioner has overruled Whitehall’s arguments many times on its supposed need for confidentiality over IT-related information.
The Bates 555 and Horizon inquiry
Bates is right to be cautious about whether to engage with the inquiry. He says in a letter to members of the Justice for Sub-postmasters Alliance,
“They say the devil is in the detail and that’s what we need to see now we’ve learnt the hard way that you don’t take the word of POL or BEIS but can usually rely on the judiciary.”
Bates is due to meet Sir Wyn this week. Before engaging with the inquiry it is likely Bates will need to be confident that the terms of reference go wide enough. At present, the inquiry seems to have no useful purpose.
Five phases of the scandal?
To date, the Post Office IT scandal seems to have five distinct phases. First, the groupthink, potentially malicious prosecutions and hounding of businessmen and women on the basis of data from a flawed computer system – what barrister Paul Marshall refers to as “mendacity on an epic scale“. Second, the groundless confidence of judges and magistrates across the UK in the accuracy of incomplete computer evidence before their courts. Third, a group litigation in which the Post Office used its deep pockets to make continuing the legal fight unaffordable for sub-postmasters. Fourth, Whitehall’s cover-up of the Post Office’s cover-up; and now the government’s apparent punishment of the Bates 555 who exposed the scandal.
Failings not historical
Government ministers, Whitehall and the Post Office describe failings as “historical”. After the Court of Appeal quashed 39 criminal convictions based on Horizon, the Post Office’s chairman Tim Parker apologised for “historical failings” and Nick Read, the Post Office CEO, referred to “past failures”.
But journalist Nick Wallis has reported on the ruined life of sub-postmaster Chirag Sidphura whose dispute with the Post Office continued through 2018 and 2019. In 2020, the Post Office raised complaints of contempt of court against two barristers, Paul Marshall and Flora Page, who then stood down from representing three wrongly-convicted appellants, Seema Misra, Janet Skinner and Tracy Feltead. And this year the Post Office tried to persuade the Court of Appeal that its prosecutions of 35 sub-postmasters were not an affront to the public conscience. If the three appeal judges had accepted the Post Office’s arguments, the 35 appellants would still have had their convictions quashed but they would not have been fully exonerated.
None of these controversial events in 2018 to 2021 were historical in the generally-understood sense of the word.
Scully’s silence when Seema Malhotra twice asked him last week to apologise on behalf of his officials and goverment spoke volumes.
Clearly, Scully’s business department BEIS, as a largely unaccountable administration, has not welcomed being proved wrong, especially by a group of outsiders. Indeed, by their actions, letters and briefings to ministers, Whitehall officials, appear to resent Bates’ exposé of the scandal.
For nearly 20 years after January 2000, when Horizon was formally accepted and the Treasury funded payments to the supplier Fujitsu, the official position was that the £1bn system, whatever its flaws, was to be considered robust. Even in 2020, the Post Office told MPs there was no evidence that Horizon had caused the shortfalls in question during the litigation.
But Whitehall knew in 2017 the reputational and financial risks of trying to prove in a courtroom that Horizon was robust. Still it took its deep pockets into the Bates litigation. It had every reason to take the gamble: no individuals in Whitehall could be held accountable for taking the risks if the litigation went wrong. From a Whitehall viewpoint, it made sense to use every legal means to avoid admitting it was institutionally wrong about Horizon from the start.
And this is what happened.
Under the gaze of mandarins and ministers and by hiring some of the country’s most formidable lawyers, the Post Office did all it could to prove it had not been wrong about Horizon.
First it tried to stop the courts granting approval for a group litigation. Then it tried to stop much of the other side’s evidence being heard. Then it didn’t disclose all it knew about Horizon to the courts. Then not all its witnesses told the whole truth to the judge about the system.
And when it became clear in early 2019 it was still losing the case, the Post Office spent £500,000 trying to remove the judge for apparent bias. But Mr Justice Fraser happened to be one of the most competent judges in the judiciary. The Court of Appeal confirmed his judgments and swept away the Post Office’s case against him.
Still the Post Office, with Whitehall in tow, fought on. Money seemed no object. The Post Office’s legal team included four QCs and two firms of solicitors.
When the lavish spending on lawyers and the denigration of sub-postmasters during cross examination seemed destined to end in more excoriating judgments, the Post Office, HM Treasury, government ministers and BEIS officials scrutinised a settlement deal that would see the sub-postmasters continue to suffer harm.
Indeed, when dozens of MPs and peers called for justice and proper compensation for the Bates 555, Whitehall officials set up an inquiry into Horizon that seemed to focus on everything about the scandal that didn’t matter and excluded in its terms of reference all that did, including the settlement amount and the conduct of Post Office prosecutors.
In debates in the Commons, ministers, based on their civil service briefings, played word games to distance Whitehall from any wrongdoing: the failings are said to have been “historical”, government was “not part of the litigation”, and the Post Office’s £57.75m settlement was “full and final”.
Indeed, ministers’ language about the scandal since the litigation can be characterised by what the US political writer William Schneider called the past exonerative tense. In this vein, the much-praised book “Mistakes were made but not by me”may be said to guide Whitehall’s advice to ministers on how to apologise when there’s no choice.
The book also explains how entrenched institutional beliefs that are incorrect may become more entrenched and just as incorrect the more leaders come under pressure to accept them as wrong. Anyone who cannot understand how the Post Office and Whitehall accepted events in the unfolding Horizon scandal, despite the clear harm to people who were obviously innocent, may find some statements in the book useful …
“People become more certain they are right about something … if they can’t undo it.”
“Justifying the first hurtful act sets the stage for more aggression … Aggression begets self justification which begets more aggression.”
“How do you get an honest man to lose his ethical compass. You get him to take one step at a time and self-justification will do the rest.”
“Most people when confronted by evidence they are wrong do not change their point of view or plan of action but justify it even more tenaciously.
Jeb Magruder, a central figure in the Watergate scandal, was said in the “Mistakes were made” book to have been a decent man until he joined Nixon’s White House team. “One step at a time he went along with dishonest actions, justifying each one as he did,” said the book.
For the Bates 555 to receive just amounts of compensation, the payments may need to fit in with Whitehall conventions. This means that, for sub-postmasters to receive at least the money the state took from them and the £46m they sacrificed to expose the biggest scandal of its kind in British legal history, there has to be a fix that exonerates mandarins and ministers and funnels all the blame onto a computer system and on long-extinct Post Office administrations: a sort of mass self-exoneration.
Perhaps the most pragmatic solution is for the Treasury, quietly, to give money to the Post Office to fund proper compensation for the Bates 555. This would distance Whitehall from the entire scandal and justice could be seen to be done. In terms of real justice, it’s a fudge but holding out for anything more than a fudge is pointless: if it has taken 21 years to hold the Post Office to account, how many more decades would it take to hold Whitehall properly to account?
As for fundamental flaws in the criminal justice system that encouraged the Post Office to prosecute hundreds of sub-postmasters on the flimsiest of computer “evidence”, there is a small chance of effective reform in the short term.
Of course, the best solution of all would be for Parliament, which is sovereign, to vote to pay compensation to the Bates 555, hold Whitehall to account and fix a “presumption” in the criminal justice system that let judges, juries and magistrates convict innocent people without knowing the truth. But most MPs seem too preoccupied to be troubled by the biggest miscarriage of justice in British legal history or flaws in the criminal justice system that could allow any number of mini Horizon-style scandals to happen in the hundreds of other arm’s length bodies and public sector bodies where what the institutional computer system says is king.
The authors of Mistakes were made but not by me end their book with an apt quote from poet Stephen Mitchell,
A great nation is like a great man:
When he makes a mistake, he realises it.
Having realised it, he admits it,
Having admitted it, he corrects it.
He considers those who point out his faults
as his most benelvolent teachers.
If Whitehall were to apply this sentiment to the Post Office IT scandal, the Bates 555 would receive full compensation with good grace and without further ado.
Thank you to Eleanor Shaikh for emailing links to her FOI responses and to FOI campaigner David Orr for links to various articles on the scandal and other IT-related matters.
The Court of Appeal has today quashed the convictions of 39 business people who ran or worked in branch post offices and became victims of miscarriages of justice on an unprecedented scale. Three appeal judges spoke of the “human cost and consequences” of the prosecutions.
The sub-postmasters and sub-mistresses were wrongly blamed for shortfalls shown on the Post Office’s defective Horizon system supplied by Fujitsu. Journalist Nick Wallis has reported the appeal hearings minute-by-minute on Twitter.
The three appeal judges said,
“Post Office Limited as prosecutor brought serious criminal charges against the sub-postmasters on the basis of Horizon data, and by failing to discharge its duties it prevented them from having a fair trial on the issue of whether that data was reliable…
“We refer to the human costs and consequences of the prosecutions in those cases.
“All of the sub-postmasters were persons of previous good character. Very sadly, three are now deceased. .We conclude that Post Office Ltd’s failures of investigation and disclosure were so egregious as to make the prosecution of any of the “Horizon cases” an affront to the conscience of the court. By representing Horizon as reliable, and refusing to countenance any suggestion to the contrary, Post Office Ltd effectively sought to reverse the burden of proof: it treated what was no more than a shortfall shown by an unreliable accounting system as an incontrovertible loss, and proceeded as if it were for the accused to prove that no such loss had occurred.
“Denied any disclosure of material capable of undermining the prosecution case, defendants were inevitably unable to discharge that improper burden. As each prosecution proceeded to its successful conclusion the asserted reliability of Horizon was, on the face of it, reinforced. Defendants were prosecuted, convicted and sentenced on the basis that the Horizon data must be correct, and cash must therefore be missing, when in fact there could be no confidence as to that foundation.
“Post Office Ltd as prosecutor knew that the consequences of conviction for a sub-postmaster would be, and were, severe… it is important here to state that many of these appellants went to prison; those that did not suffered other penalties imposed by the courts; all would have experienced the anxiety associated with what they went through; all suffered financial losses, in some cases resulting in bankruptcy; some suffered breakdowns in family relationships; some were unable to find or retain work as a result of their convictions –causing further financial and emotional burdens; some suffered breakdowns in health; all suffered the shame and humiliation of being reduced from a respected local figure to a convicted criminal; and three –all “Horizon cases”–have gone to their graves carrying that burden.
” Inevitably, the families of the sub-postmasters have also suffered. In each of the “Horizon cases” it is now rightly conceded that those human costs and consequences were suffered after the denial by Post Office of a fair trial.
“… Post Office Ltd’s failings of investigation and disclosure ‘directly implicate the courts’.
“If the full picture had been disclosed, as it should have been, none of these prosecutions would have taken the course it did before the Crown Court. No judge would have been placed in the unhappy position of learning – as some judges (or retired judges) will do if they read this judgment –that they unwittingly sentenced a person who had been prevented by the prosecutor from having a fair trial.”
Congratulations to all who have campaigned for justice but particularly Alan Bates whose perseverance and efforts to raise enough money to sue the Post Office built a path to the quashing of the convictions today.
But the IT scandal continues. It is a “national outrage” – as Lord Arbuthnot puts it – that the government’s Horizon IT inquiry is barred from questioning the mass of wrongful convictions. It’s like barring a government Windrush inquiry from questioning unjustified deporations.
Today’s comments by the judges tacitly indict a criminal justice system that allowed such human suffering and on such a scale. The suspicion now is that Whitehall is too deeply involved in the scandal to be objective. Government officials have set up an inquiry that, as Alan Bates puts it, is intended to be a “whitewash”.
Today’s verdict is a reminder that Whitehall ought not to promising open government while perpetuating a cover-up.
What is the point of appeal judges criticising the Post Office’s lack of proper investigations and disclosure over the Horizon system when government and its officials are unashamedly avoiding any open investigation, disclosure of documents or accountability over, potentially, hundreds of wrongful convictions?
The Post Office’s chief executive Nick Read has signalled a profound change of approach over what he now concedes is a scandal.
For the first time, he is calling for compensation for the 555 sub-postmasters who, led by Alan Bates, sued and defeated the Post Office in a group litigation in 2019. The Bates 555 proved in the High Court in 2019 that the Post Office’s Horizon system had defects that caused shortfalls in branch accounts for which sub-postmasters were wrongly blamed.
Read also says for the first time that the Post Office must confront its “recent past”. Before his speech, the Post Office and its ministers consigned events in the scandal to the “historical past” which seemed an attempt to distance the government and the Post Office from relatively recent events such as misleading statements given in evidence to the High Court, an attempt to remove the judge and the running up of high legal costs – £89m on both sides – which forced the 555 into settling a case they were clearly winning.
Now Read says the Post Office needs to,
“confront, and face up, to its recent past”.
Journalist Nick Wallis has reported Read’s speech in full. The timing of Read’s comments appears to anticipate a rash of negative headlines next week when the Court of Appeal is expected to overturn around 40 convictions linked to the Post Office’s Horizon system.
Such a mass quashing of convictions in one go has never happened before and reflects fundamental weaknesses in the criminal justice system and Whitehall’s oversight of the Post Office. Many more convictions are expected to be overturned in future.
More than 3,500 post office branch franchise holders – sub-postmasters and sub-postmistresses – forcibly took the blame for money shown on Horizon as missing. Horizon was designed and supplied by Japanese-owned Fujitsu.
Hundreds were wrongly convicted, some imprisoned and many others given community service and afterwards were unable to find work because of their criminal records. Some went bankrupt. Some died prematurely. Many have waited 16 years or more for justice.
All the signs now are that government officials will continue to try and confine fall-out from the scandal to the Post Office, thus limiting the consequences for Whitehall. Indeed Read said the government is “keen that the Post Office should be seen to be fixing its own mess”.
But he said the Post Office cannot afford to pay compensation arising from wrongful convictions. He took the highly unusual step of making an appeal directly to government. He said,
“I completely understand that Government is keen that Post Office should be seen to be fixing its own mess. And through the work being undertaken across the business every day to place the needs and interests of postmasters first, we are doing just that. But financial compensation commensurate with wrongful conviction is a different matter.
“I am urging Government to work with us to find a way of ensuring that the funding needed for such compensation, along with the means to get it to those to whom it may become owed, is arranged as quickly and efficiently as possible.”
Such an appeal directly to government is unusual because the Post Office is understood to have an executive team which briefs government business ministers. This helps to ensure a close relationship between the Post Office and its “sponsor”, the Department for Business, Energy and Industrial Strategy.
But compensation pay-outs are categorised as out-of-the-ordinary spending and may need the approval of Treasury officials. It is possible that the Treasury is refusing to approve any compensation beyond the government’s agreed contribution to the historical shortfall scheme. The scheme excludes the Bates 555.
Read says he has realised that the litigation settlement left the 555 claimants with an average only £20,000 each after costs – a fraction of their losses which he accepted in many cases run into six figures. Some of those who went to prison received less than £20,000. This compares with £60,000 which has been set aside as the average pay-out on the historical shortfall scheme.
The big disparity in likely average pay-outs to the group of 2,400 in the historical scheme and the group of 555 who sued the Post Office, will look as though Whitehall is punishing the Bates 555 for its litigation that made the Horizon scandal undeniable.
A change of approach
Read’s speech marked a major change in the Post Office’s approach to the Bates 555. Before Read’s speech, he had given no hint he wanted the government to supplement the litigation settlement of nearly £58m, about £46m of which went in costs.
The government’s junior business minister Paul Scully has many times refused to pay anything to the Bates 555. He said the litigation settlement was “full and final”.
Now Read acknowledges the injustice of the litigation settlement. He said,
“… although the parties entered into a full and final settlement of the Group Litigation in good faith, it has only become apparent through various news reports since quite how much of the total appears to have been apportioned to the claimants’ lawyers and funders.
“Should those reports be accurate, it is at least understandable that the claimants in those proceedings should continue to feel a sense of injustice, even in circumstances where they also agreed the settlement in good faith. What if, anything, can be done on these two issues is not for the Post Office to determine or even within its gift.”
He also said,
“We must ensure that all Postmasters affected by this scandal are compensated and compensated quickly.” He added, “The Post Office simply does not have the financial resources to provide meaningful compensation.”
It is to Read’s credit that he, at last, acknowledges the injustices of the litigation settlement. At this stage it’s only words but he is clearly putting the onus on ministers and Whitehall to step in and pay fair compensation to everyone affected by the scandal. It is right that the onus falls to Whitehall because government officials are deeply involved in the scandal.
The Department for Business, Energy and Industrial Strategy and its predecessor departments were supposed to oversee the Post Office. The Treasury has a rule book on the duties of government officials towards “arm’s length bodies” such as the Post Office to ensure public money is being spent properly. But to judge from Paul Scully’s statements, government officials seem to have left everything of importance to the Post Office. All Scully has said on the scandal seems to distance government and his department from the Post Office. Where then was Whitehall’s proper oversight?
The Home Office could not with credibility say it had nothing to do with wrong deportations in the Windrush scandal because that was a mess created by the immigration department.
Whitehall let the Post Office IT scandal happen. The Post Office was allowed to run up huge costs on a litigation that ought not to have been fought. Whitehall was supposed to oversee major decisions of the Post Office to ensure value for money. Indeed, government officials could have intervened years ago to stop the Horizon IT scandal reaching the costly present stage.
They didn’t intervene because they put too much trust in what the Post Office was telling them. It seems the last thing government officials wanted to do was concede the possibility that a much-trusted state institution, rather than own up to computer problems, was content to let innocent people to go to prison.
Read says the government is “keen that the Post Office should be seen to be fixing its own mess”. But this scandal is very much Whitehall’s mess as well.
Indeed the Bates litigation exposed not only Horizon’s defects and the poor treatment of sub-postmasters but also fundamental weaknesses in government administration that allowed material problems with a public institution’s strategic computer system to be covered up for 20 years and for Parliament to have been misled almost routinely. Ministers in successive governments gave MPs and peers assurances on Horizon’s integrity.
The least Whitehall, the Department for BEIS and government ministers including Scully can do now is try and make amends properly for the “mess”. Continuing to punish the Bates 555 by promising fair compensation to those who didn’t sue the Post Office serves only to make Whitehall’s resentments of the Bates 555 plain.
Read’s comments ought to mark a milestone in the campaign for justice for all those affected by the scandal. But if Whitehall continues to distance itself, Read’s comments will merely mark a new chapter in what Lord Arbuthnot has called a “national outrage”.
Journalist Nick Wallis reported yesterday on the death of Dawn O’Connell, a Post Office manager in Northolt whom the Post Office prosecuted for theft and false accounting after an unexplained deficit shown on the institution’s Fujitsu-designed Horizon branch accounting system.
She died in September last year, aged 57. Her son Matthew and brother Mark were in the Court of Appeal yesterday. An appeal against her criminal conviction is being advanced or continued in Matthew’s name.
Ben Gordon QC told the three judges who are hearing the Horizon-related appeals,
“My Lord, in the years following her conviction in 2008, and the serving of her suspended sentence, Ms O’Connell’s health, both physical and mental, declined dramatically. According to her family and loved ones, her personality also changed, irrevocably. She became increasingly isolated, ultimately reclusive, as described by her family, and struggled desperately to deal with the stigma of her conviction.
“She suffered, my Lord, with severe bouts of depression. She did receive treatment, medication and counselling, but she sunk inexorably into alcoholism. In her latter and final years, my Lord, I understand that Ms O’Connell made repeated attempts upon her own life. In September of last year, her body succumbed to the damage caused by her sustained abuse of alcohol and she died tragically at the age of 57.
“My Lord, on behalf of her son, her brother, and all her surviving family members and friends, I feel compelled to tender to the court their sincere regret and deep anguish that Dawn is not here today to hear her case being argued.”
There are other deaths in the shadow of the Post Office IT scandal.
The widow of a sub-postmaster Martin Griffiths has written to the government inquiry into the Horizon system. She said that in 2013, after unexplained shortages shown on Horizon, she and Martin had to pay the Post Office £102,000. The couple used savings and borrowed money. Martin’s parents contributed £62,000. At the time of the trauma of trying to find the money, there was an armed robbery at the branch post office where Martin was attacked with a crow bar. The robbers made off with more than £10,000. “Martin was treated horrendously by the Post Office after suffering this ordeal and was told he was to pay back the money stolen in the robbery,” said his widow’s statement. A few months later Martin was dead. He walked deliberately into the path of an oncoming bus. “He was a proud, strong, clever man, a very able sportsman in his time, a loving husband and a fantastic father to his two children. The Post Office took all this away from us.”
With a friend, Fiona Cowan ran a local post office that her businessman husband Phil had bought in Edinburgh. After unexplained deficits of more than £30,000 appeared in 2004, the post office was closed and Fiona was asked how soon she could repay the money.
Phil asked if there could be a glitch in the Horizon system. He says he was told that, if so, it would be the only sub post office in the country to have such a problem.
Fiona was charged with false accounting. With no post office, the retail side of their post office business dwindled and Phil sold up at a substantial loss. The Post Office took £30,000 out of a redundancy offer.
Fiona, who suffered from on and off bouts of depression, died of an accidental overdose. She was 47. Phil subsequently joined Justice for Sub-postmasters Alliance and was among about 550 former sub-postmasters and sub-postmistresses who sued the Post Office. They won their case in 2019 but the Post Office’s £57.75m settlement, after £46m legal costs, was not nearly enough to cover the litigants’ Horizon-related losses.
Phil said of events at their post office that they “had a huge contribution to her passing away. It had a massive effect on her.”
Nick Wallis interviewed Julian Wilson in December 2014 alongside his wife Karen in a village hall in Fenny Compton, Warwickshire, where the Justice for Sub-postmasters Alliance met for the first time in 2009. Julian was a founder member of the Alliance. Wallis reported on his blog,
“Karen stood there with tears streaming down her face as Julian explained in his measured, Hampshire burr how problems with the computer system at their Post Office in Astwood Bank had caused their lives to fall apart.”
Wallis said there was never a trace of bitterness about Julian. “He accepted things with great patience even though he was still in danger of losing his house because of the Post Office’s pursuit of him.”
Julian found out he had terminal cancer towards the end of 2015. “This summer he deteriorated rapidly,” says Wallis in 2016.
One of the comments on Wallis’s blog says of Julian,
“He carried on campaigning against the Post Office until he had no strength left to fight and I made him a promise – in the last few days of his life – that I would keep going along with the JFSA [Justice for Subpostmasters Alliance] until we got our long-overdue justice.
No sympathy, no regrets
The Department for Business, Energy and Industrial Strategy [BEIS] which funds the Post Office, has agreed to pay compensation to some former sub-postmasters and not others.
Yesterday in the House of Commons MP Kate Osborne referred to “two tiers of justice”. She asked BEIS junior minister Paul Scully, who is MP for Sutton and Cheam in Surrey, if he agrees that, if justice is to be served, every victim of the Post Office IT scandal must have their claim validated under the same terms.
In reply, Scully gave no apology and expressed no sympathy for sub-postmasters affected by the scandal. He repeated his position that the settlement in 2019 was “full and final”.
None of the above stories of family tragedies seem to have any effect on government ministers, Whitehall or Post Office executives. This week in the Court of Appeal, the Post Office is involved in esoteric legal arguments over whether the prosecutions of sub-postmasters were an affront to the public conscience. The Post Office’s QC spent much of yesterday arguing that its prosecutions in most cases were not such an affront.
The Post Office appears to be following the same legal strategy as it adopted several years ago when it opposed the group litigation. It argued then that sub-postmaster cases ought not to be looked at in a generalised way. It made a similar argument yesterday.
But the Post Office has never described its actions against sub-postmasters as a scandal. Indeed, as former sub-postmistress Jo Hamilton said of the Post Office on BBC R4’s Today programme on Monday, “Going forward, their attitude still hasn’t changed. They are still fighting people.”
Scully and his officials at the Department for BEIS can find money to compensate some sub-postmasters but not others. Are they punishing the 550 litigants because they dared to sue the Post Office, thus exposing the Horizon IT scandal, creating extra work for the Department for BEIS, embarrassing civil servants who were supposed to oversee the public-owned institution and adding to the risk of having to pay just amounts of compensation?
Repentance? There is little sign of it yet.
How many more victims will die while the scandal continues? It would be shocking if ministers and officials had an unconscious or knowing strategy of stretching out a resolution to make it less likely contingencies for compensating the 550 litigants will materialise.
On BBC Radio 4’s flagship news programme, Today, the co-presenter Justin Webb made a comment that seemed to sum up the protracted fight by 550 sub-postmasters to achieve justice after they were wrongly blamed for financial shortfalls shown on the institution’s Horizon IT system.
He made the comment when interviewing former sub-postmistress Jo Hamilton for the programme yesterday. Hamilton’s life has been blighted for 13 years by a wrongful criminal conviction for false accounting in 2008. Hamilton’s appeal against her conviction is being heard in the Court of Appeal this week, alongside 41 other cases.
Webb told the Today programme’s 7.1 million listeners yesterday morning,
“What does it tell you about the way this country is run because it seems such a fundamental wrong that was done to so many of you and yet it had taken such a lot of effort – well your effort – to put it right.”
Jo Hamilton’s Today interview
Ministers have told Parliament that the Post Office is reforming to prevent any repeat of the Post Office IT scandal but Hamilton told the Today programme that the institution is still fighting sub-postmasters.
“Going forward, their attitude still hasn’t changed. They are still fighting people. It is just not right,” she told Webb.
Last year, junior business minister Paul Scully, who is the government’s spokesman on the Post Office and is Conservative MP for Sutton and Cheam in Surrey, told MPs,
“If we are going to get the future relationship with postmasters right, we have to tackle the injustices that have happened in the past, but we also have to rebuild, with the new management in the Post Office, trust and training and respect for the sub-postmasters of the future.”
In a similar vein, Webb yesterday read from a statement the BBC had received from the Post Office. Webb said,
“… they [the Post Office] sincerely apologise for historical failings and have taken determined action to address the past to ensure redress for those affected and prevent such events happening again.” Webb then asked Hamilton,
“Have they in your view done enough?”
Hamilton’s reply referred to High Court litigation which last year determined that the Post Office’s Horizon system contained material bugs and errors that caused shortfalls in branch accounts for which local sub-postmasters were wrongly blamed. Hamilton had to make good £37,000 deficits shown on the Horizon system. She ended up at Winchester Crown Court where more than 70 local villagers turned up to support her, including the local vicar who spoke to the judge in support of her. She pleaded guilty to false accounting after the Post Office offered her a plea bargain: plead guilty to false accounting or be charged with theft which could lead to imprisonment. Her criminal conviction has made it difficult to get a get job or even car insurance.
The Post Office is not opposing most of the cases in the Royal Courts of Justice this week where former sub-postmasters are appealing their convictions. It means that dozens of convictions, including Hamilton’s, are likely to be quashed. But the Post Office, in most cases, denies that it was wrong to have prosecuted in the first place which suggests it is not fully exonerating sub-postmasters of wrongdoing.
Hamilton told the Today programme that the Post Office ought to have addressed injustices years ago.
“… it now clear from what came out in court that they knew exactly what was happening and they fought us every way in the High Court.”
She also referred to the government’s recent decision to bail out the Post Office by funding claims that are granted under the Post Office’s Historical Shortfall Scheme. Nearly 2,500 former sub-postmasters and sub-postmistresses have applied to the scheme for compensation. Ministers, including Scully, have, up until now, told Parliament repeatedly that the government is not involved in the Post Office’s operations.
Hamilton told the Today programme,
“… it remains clear that they knew; and the government has a ministerial [representative] on the [Post Office] board and now they are bailing out the Historical Shortfall Scheme, they keep denying they are linked and that it is an arm’s length business but they are clearly joined at the hip. So everyone will have known.”
But the government’s bail out of the Historical Shortfall Scheme does not include any government compensation for 550 former sub-postmasters who took part in the High Court litigation. The 550 are excluded from the Historical Shortfall Scheme. Scully has said in the past that the Post Office paid £57.75m in full and final settlement of the litigation. He has refused to pay any further money. But much of the settlement went in legal costs. Hamilton told Today,
“If you have got enough money and power you can squash people. It has cost virtually all of the compensation we got … they say they paid £58m … but the claimants, the litigants, only got £11m of that. Between us, that doesn’t even recover what we’ve given them.”
Hamilton said that the Post Office’s used its “bottomless purse” to the point where sub-postmasters in the litigation could not afford to continue the case and had to settle. She said,
“The Post Office had a bottomless purse, basically, to fight us, so they knew at some point it would tip the scales and we couldn’t fight them any further.”
It means Hamilton is likely to have her conviction quashed but will not be paid any government compensation. Webb asked Hamilton,
Have you any idea when you are going to get compensation?
“No,” said replied. “That is another battle to come. They have appointed lawyers to limit the damage. But yes, it is another struggle.”
Webb referred listeners who want to know more about the scandal to Nick Wallis’ 10-part series “The Great Post Office Trial” which is on BBC Sounds.
The full transcript of Justin Webb’s interview of Jo Hamilton is below:
Webb: “What can you do when your employer, hugely powerful, a household name, accuses you of fiddling the books. Th answer in the case of hundreds of postmasters and postmistresses is not very much. Over 15 years, they were prosecuted by the Post Office. They were blamed for unexpected accounting shortfalls which were actually caused by errors in the new computer system that they used in the branches. As well as being prosecuted they were forced to pay the money back, often with catastrophic impacts on their lives. Jo Hamilton was sub-postmistress at a village shop in Hampshire. She is one of those hoping to get her conviction for false accounting overturned at the Court of Appeal in a hearing that starts today. I asked her what the best outcome of it all would be:
Jo Hamilton: “Eventually I hope to get my conviction quashed and then some kind of compensation. I don’t know if it is a done deal today. We have everything there for them to quash the conviction but yes – what a journey! It has been a long, long time.
Webb: How long, for you?
“Well my Post Office started going wrong in 2003 and I was 45 and I am now 63. That gives you some idea of how long this battle has been.”
What has the impact been on you?
“Financially – every time there was a deficit I had to make it good and then ultimately I ended up in Winchester Crown Court, pleaded guilty to false accounting because I had no choice and had to repay £37,000.”
When you say you had no choice, why was that?
“Well because originally they only charged me with theft and I pleaded not guilty to theft because I had not stolen anything but then at the very last minute they offered a plea bargain. They said if you plead guilty to false accounting (a lesser charge than theft) and repay the money we will drop the theft. I pleaded guilty to false accounting and repaid the money.”
You had extraordinary support didn’t you from your neighbours and customers?
“Customers yes, and the vicar. It was a proper Vicar from Dibley moment. The vicar stood up in court and spoke on my behalf and said I was the heart of the community and, if he was going to jail me, please don’t jail me for a long time because they needed me. There were 74 people in court. At the time I was terrified because I thought I was going to prison but now I can look back and laugh. It was quite bizarre. What the judge thought, I don’t know. He kept shaking his head and looking at me and said, ‘Why are you in my court?'”
Webb: Well, on that subject the Post Office has now issued a statement. They are not opposing most of these appeals – the appeal that you are involved with. They have informed the court, the appellants, of this. They said they did it at the earliest opportunity. They also say they sincerely apologise for historical failings and have taken determined action to address the past to ensure redress for those affected and prevent such events happening again. Have they in your view done enough?
Hamilton: “Well, they should have done it years ago because it now clear from what came out in court that they knew exactly what was happening and they fought us every way in the High Court. Going forward, their attitude still hasn’t changed. They are still fighting people. It is just not right.”
You say they knew that they had made, well to put it mildly, a mistake.
“Yes. They did. Documents came out in court, they came out in the High Court trial. Lots of it is redacted but it remains clear that they knew; and the government has a ministerial [representative] on the [Post Office] board and now they are bailing out the Historical Shortfall Scheme, they keep denying they are linked and that it is an arm’s length business but they are clearly joined at the hip. So everyone will have known.”
Have you any idea when you are going to get compensation?
“No. That is another battle to come. They have appointed lawyers to limit the damage. But yes, it is another struggle.”
Webb: What does it tell you about the way this country is run because it seems such a fundamental wrong that was done to so many of you and yet it had taken such a lot of effort – well your effort – to put it right.
Hamilton: “If you have got enough money and power you can squash people. It has cost virtually all of the compensation we got … they say they paid £58m … but the claimants, the litigants, only got £11m of that. Between us, that doesn’t even recover what we’ve given them. The Post Office had a bottomless purse, basically, to fight us, so they knew at some point it would tip the scales and we couldn’t fight them any further.”
Thank you very much for talking to us this morning.
Webb: I should say if you want to know more about the background to all of that, there was a Radio 4 series, it was called The Great Post Office Trial, and it is still available on BBC Sounds. Do go to it if you want to know more.”
Mishal Husain [Today co-presenter): “Very good series it is too.”
After 20 years of making contentious claims about its Horizon computer system, the Post Office is well into the third decade of disputes relating to the system – and is now involved a fresh legal controversy as poignant as hundreds of others since it introduced the Fujitsu-designed Horizon IT system in 1999 and 2000.
Some in the media have suggested that the so-called Post Office IT scandal is nearing a conclusion now that the publicly-owned institution accepts computer problems caused shortfalls in accounts for which it blamed sub-postmasters.
But the reality is not as black and white. Next week, the Court of Appeal will hear 41 appeals of sub-postmasters who were convicted of theft, fraud or false accounting where data from the defective Horizon system was at the heart of the prosecution case. In nearly all the cases, the Post Office is not contesting the appeals because it accepts that evidence in the original private prosecution was incomplete and that the Horizon system’s faults were not disclosed to judges and juries. But the Post Office has denied, in most cases, that it was wrong to have prosecuted in the first place, which means it is far from clear today that the Post Office fully exonerates most of the appellants from wrongdoing.
Indeed, it is by no means clear whether the Post Office now accepts that Horizon was to blame for the particular shortfalls in question in more than 2,000 cases.
Controversies continue. Until November last year, the disputes relating to Horizon had been between the Post Office and those who ran branch post offices – sub-postmasters and sub-postmistresses – or their employees. Some of the disputes led to imprisonment, bankruptcy and, in two cases, suicide. The Post Office successfully prosecuted an estimated 900 sub-postmasters on charges arising out of shortfalls shown on a flawed Horizon system. Local and regional papers carried the stories, such as the premature death of former sub-postmaster, Julian Wilson, whose widow Karen said he was a broken man after trying to cope with an increasing number of unexplained shortfalls on Horizon.
The Post Office’s action against Julian led to his having to dig graves as part of 300 hours of community service. Karen sold her engagement ring to help pay money the Post Office claimed was owed. Julian joined the Justice for Sub-postmasters Alliance but died before achieving justice. His family are continuing his campaign.
From the Post Office’s viewpoint, the unexplained shortfalls shown on its Horizon system were usually caused by criminality or incompetence on the part of sub-postmasters or their employees. Indeed, the Post Office expressly accused some sub-postmasters of criminal offences when they were being cross examined in a High Court group litigation brought by 550 former sub-postmasters against the Post Office between 2017 and 2019.
In the litigation, the Post Office told the High Court that it accepted Horizon was not a perfect system but argued that it was robust because of the manual and automated “countermeasures” in place to identify bugs or errors, fix them and correct their consequences if any. The judge disagreed. He found that Horizon was “not remotely robust”.
Before Fujitsu rolled out Horizon in about 18,000 post offices in 1999 and 2000, paper-based accounts meant that identifying the cause of discrepancies was usually straightforward. But when the centrally-operated Horizon went live, sub-postmasters found it difficult and frequently impossible to identify the cause of shortfalls. Disputes became almost inevitable when sub-postmasters were presented with large balance discrepancies they were unable to explain.
The Post Office usually won its disputes. It terminated the contracts of sub-postmasters and launched hundreds of private prosecutions and civil claims. In most of the disputes, the courts accepted, at face value, a statement from the Post Office or Fujitsu that confirmed Horizon was reliable at the time in question. Sub-postmasters and their lawyers were unable to prove otherwise because they were refused access to the system’s back-office data or Fujitsu’s “Known Error Log” that recorded when the Horizon system failed to work as intended. The Post Office and Fujitsu did not disclose the log at any criminal court hearings and judges refused defence requests for Horizon fault data to be disclosed. Judges worked to a Law Commission “presumption” that a corporate computer system was much like a mechanical clock: anyone looking at it could see if it was faulty or not. After obtaining criminal convictions, the Post Office made “Proceeds of Crime” applications for orders by the court that confiscated the property and belongings of sub-postmasters, including their home.
The disputed shortfalls usually amounted to tens, and sometimes hundreds, of thousands of pounds. When former sub-postmaster Lee Castleton disputed unexplained Horizon shortfalls of about £26,000, the civil courts dismissed his defence that Horizon was to blame and ordered him to pay what the Post Office said were its costs, £321,000, which was nearly 12 times the amount of the shortfalls. He went bankrupt in 2007 and became an electrician, working around 100 hours a week to support his wife and two children.
In 2019, in the High Court litigation brought by former sub-postmaster Alan Bates and his legal team against the Post Office, the judge managing the case, Mr Justice Fraser, ruled that Horizon had bugs, errors and defects that caused numerous shortfalls for which the Post Office wrongly blamed sub-postmasters or their employees.
But today, the judge’s rulings are not interpreted in the same way by former sub-postmasters and the Post Office. The Post Office says the ruling was that Horizon had the “potential” to cause shortfalls. Sub-postmasters say the judgment found that Horizon’s bugs, defects and errors had actually caused shortfalls.
In 2020, the Post Office’s CEO told MPs of the Business, Energy and Industrial Strategy committee that the High Court judgment on Horizon “did not determine whether bugs, errors or defects did in fact cause shortfalls in the individual claimants’ accounts but it found that they had the potential to create apparent discrepancies in postmasters’ branch accounts”.
After 20 years of disputes involving Horizon, the two sides are, therefore, still far from agreeing that Horizon has caused the particular shortfalls in question. Indeed, when the Post Office and sub-postmasters settled the group litigation in December 2019 with the Post Office’s payment of nearly £58m, it was far from clear that the Post Office accepted any of the sub-postmasters’ claims about Horizon.
The confidential “Settlement Deed”, included an agreed form of words for the Post Office’s public apology which was unspecific and vague. It implied that its wrongs were in the past. It said …
Past imperfect, present perfect?
Government ministers have stated repeatedly that the Post Office has apologised. But the apology is nearly always in line with the vague wording in the deed, which leaves sub-postmasters wondering what the Post Office is apologising for. Post Office chairman Tim Parker has said, “We accept that, in the past, we got things wrong in our dealings with a number of postmasters…” Post Office CEO Nick Read told MPs in June last year, “We accept that we got some things wrong in the past. We all need to recognise this and focus on finding the best way forward.” Business minister Paul Scully, who has the Post Office in his remit, told campaigning MP Kevan Jones, “The Post Office has accepted – on the Horizon Accounting System – that it got things wrong in the past in its dealings with a number of postmasters.” [emphasis added]
The Post Office is currently contesting some of the appeals referred to the Court of Appeal by the statutory body, the Criminal Cases Review Commission [CCRC], which has spent several years investigating possible miscarriages of justice linked to Horizon. The CCRC referred to the appeal court the cases of 47 people who were convicted of Horizon-related offences. In December last year, Southwark Crown Court [the relevant appeal court for those convicted in a magistrates court) overturned the convictions of six appellants. The other 41 cases are due to be heard next week in the Court of Appeal, Criminal Division, at the Royal Courts of Justice [which is the relevant appeal court for those convicted in a crown court) with 38 of the cases unopposed. But, in most of the appeals, the Post Office disputes the CCRC’s claim that the Post Office was wrong to have prosecuted in the first place. The CCRC expresses the view that it was an “affront to the public conscience” for criminal proceedings to have been brought at all.
The Post Office accepts in all but three of the 47 cases that its prosecution evidence relating to Horizon was incomplete – which implies it made mistakes. But the CCRC says in a paper to the government inquiry into Horizon that it is concerned the Post Office “consciously deprived” the courts and sub-postmasters of a full understanding of Horizon’s reliability.
The CCRC said in its paper,
“The CCRC is concerned by this evidence that POL [Post Office Limited], which was victim, investigator and prosecutor in the cases in question, consciously deprived defendants and the courts of a full and accurate understanding of the reliability of the Horizon system; and that it behaved oppressively to SPMs [sub-postmasters] by overstating their contractual obligations [to make good shortfalls].
“… In all of the circumstances, the CCRC remains of the view that the High Court’s findings give rise to a cogent argument that individual Post Office prosecutions in which the reliability of Horizon data was essential to the prosecution case … were an affront to the public conscience and should not have been brought.”
If the prosecution consciously deprived the courts and juries of critical evidence about Horizon, this could be said to bring the criminal justice system into disrepute and raises questions of why no prosecutors will be held to account. But government ministers and civil servants have set up an inquiry into Horizon that is precluded from investigating the Post Office’s conduct as prosecutor. Alan Bates said of the Horizon inquiry, “This is a pointless exercise, it’s utterly futile, another whitewash. We certainly will not engage in this inquiry.”
Another continuing controversy – the absence of fair compensation
Although the Post Office paid £57.75m to settle the group litigation, the net proceeds after costs covered only a small percentage of direct losses suffered by most of the 550 litigants. No compensation has been paid for the enforced loss of their livelihood when the Post Office suspended sub-postmasters or deducted Horizon shortfalls from their remuneration. The loss of livelihoods affected more than jobs. Sub-postmasters typically invested £80,000 to £120,000 into buying a branch post office and adjoining retail shop. When the Post Office suspended them, sometimes locking sub-postmasters out of their own premises, an enforced sale of the business meant that sub-postmasters received knock-down prices for the premises, business, fixtures, fittings, improvements made and stock relating to the linked retail shop and residential premises. No compensation has been paid for the Post Office’s lack of adequate notice when terminating contracts or the loss of earnings following suspensions and contract terminations. No compensation has been paid to sub-postmasters for the loss of their reputation, including their children being spat at in the street or the prejudice to their future employment and business prospects. They have received no compensation for the loss of credit, the consequences of bankruptcy or other insolvency and for their personal sufferings, such as trauma, mental and physical health problems, anxiety, distress and disappointed expectations; and in most cases sub-postmasters have not had returned to them the full amount of shortfalls they made good from their own pockets.
Junior minister Scully appears to support the position of the current Post Office board in all contemporaneous disputes. He has made clear repeatedly that the government will not pay any compensation because he says it was not a party to the final settlement (although the government owns 100% of the Post Office through UK Government Investments that has a seat on the board). He says that “compensation was settled in a full and final settlement that was agreed with the Post Office”. Scully has also made clear that if there have been a mass of wrongful convictions, these are, again, not a matter for government or its inquiry. Scully told MPs that “if people have been wrongly convicted, there will be procedures in place for them to claim compensation”.
Perhaps one reason the publicly-funded Post Office has been such a formidable protagonist in disputes is that, since Horizon went live, government ministers and civil servants at the Department for Business, Energy and Industrial Strategy and its predecessor departments, have consistently looked the other way, or supported the Post Office’s board, when it took a controversial position in disputes.
A fresh dispute and the “Clarke Advice”
The Clarke Advice, arguably, is the single most important Post Office document to emerge in the 21 years of the Horizon IT scandal. It is yet to be made public but some of its contents were read out at the Court of Appeal in November last year. The Clarke Advice was written for the Post Office in 2013 by a barrister called Simon Clarke. It contains information that a senior Fujitsu engineer failed to disclose Horizon IT errors during prosecutions of sub-postmasters. The Court of Appeal heard that the engineer was aware that Horizon contained bugs, including the “receipts and payments mismatch bug”. It was revealed in the High Court litigation that the receipts and payments bug had a potential and actual impact on the branch accounts of sub-postmasters.
The Clarke Advice’s partial disclosure at the Court of Appeal last November raises several questions. The first is whether the Post Office kept the Clarke Advice secret for seven years – and it is still largely secret today – because its disclosure when it was written in 2013 could have undermined an £89m High Court litigation and the prosecution of hundreds of sub-postmasters between 1999 and 2013.
At the heart of the High Court litigation was the question: did Horizon have bugs and other deficiencies? The Clarke Advice gave the answer: it did. Had the Advice been known about in 2013, therefore, it could have exposed the Post Office’s decision to defend Horizon in the High Court group litigation in 2017 as irrational and a waste of money.
Also, if the Advice had been known about in 2013, many of the convictions that today blight the lives of sub-postmasters might have been quashed years ago. There have been up to 900 prosecutions based on evidence from the Post Office or Fujitsu that Horizon was robust.
Disclosure of the Clarke Advice in 2013 could also have made it difficult for the Post Office to keep hold of the money it demanded from sub-postmasters on the basis that shortfalls shown on Horizon were correct. The sums involved, in total, amount to millions of pounds.
The Post Office’s QC at the Court of Appeal hearing last November named the Fujitsu expert referred to in the Clarke Advice. Why did the Post Office go through two years of High Court litigation, between 2017 and 2019, when it defended Horizon as trustworthy while knowing secretly that Fujitsu’s lead engineer on the contract was aware of bugs and errors in it?
The expert’s name is mentioned 88 times in the High Court judgment of December 2019 and the judge devoted several pages of his ruling to questioning why the Post Office had decided not to call the expert to give evidence, although the judge acknowledged that it was the Post Office’s right to choose whomever it wanted to call as an expert witness. The judge said it was a controversial matter between the parties that he had not been called as a witness.
The existence of the Clarke Advice in 2013 also raises questions about how much government and Whitehall, namely the predecessor of the Department for Business, Energy and Industrial Strategy, knew of the document, given that the civil service has a representative on the board of the Post Office. Why did government ministers write letters to the Justice for Sub-postmasters Alliance defending continuance of the litigation when the secret Clarke advice, had it been disclosed, would have undermined the Post Office’s High Court defence of Horizon? Were government, Whitehall and the Department for BEIS complicit in covering up the Clarke Advice because its disclosure would have confirmed the existence of the Horizon IT scandal in 2013 – the countless wrongful prosecutions and unjustified demands for money – at a time when existence of any scandal was being officially denied. Indeed, the Post Office told MPs in 2015 that the “Post Office is under an absolute duty to disclose any evidence that might undermine a prosecution case or support the case of a defendant… To date, no such evidence has been provided.”
But Lord Arbuthnot, who has campaigned for sub-postmasters since 2010, said the Clarke Advice “establishes that the Post Office lied to, and was in contempt of, Parliament”.
The Court of Appeal last year refused to order the disclosure of the Clarke Advice. This could be because the three judges were simply deferring to a national institution, the Post Office, which had argued the Clarke advice was privileged information. Or were the judges innately cautious about ordering the disclosure of a document that exposes a giant hole in the criminal justice system? Courts are supposed to convict the guilty and acquit the innocent after hearing both sides of the argument. In fact courts across the country accepted the flawed evidence of the corporate Post Office and Fujitsu and gave little weight – and indeed rejected – the Horizon complaints of hundreds of individual sub-postmasters of integrity.
As a result, dozens of appeals against wrongful convictions based on flawed Horizon evidence are before the Court of Appeal next week. Some sub-postmasters have lived with wrongful convictions for more than a decade. Many more appeals are pending. Is this large hole in the criminal justice system a good reason for appeal judges to want, perhaps subconsciously, the Clarke advice to remain a secret?
Post Office’s complaint over the Clarke Advice
In the Court of Appeal in November last year, the Post Office made a complaint that may lead to court proceedings against two barristers who now face a possibility of Contempt of Court charges which could lead to a fine, imprisonment or both. There is usually no guarantee of a jury trial in contempt proceedings.
The barristers were working on a mainly pro bon basis – free of charge in the public interest – in the aid of Tracy Felstead, a former Post Office branch employee, and two former postmistresses, Janet Skinner and Seema Misra, who were imprisoned for theft or false accounting after being unable to explain Horizon shortfalls.
Tracy Felstead has lived her entire adult life with an unsafe criminal conviction. She was 19 when charged with theft in 2002 on the basis of Horizon data. She went to Holloway prison. Janet Skinner was charged with theft in 2006 and Seema Misra in 2008. The two barristers, Paul Marshall and Flora Page, were due to represent them in appeal hearings next week.
But, because of the Court of Appeal’s threat of contempt proceedings, Marshall and Page, have decided to step down from representing the three appellants.
Marshall is a renowned expert on Horizon miscarriages of justices and has written papers on the subject. He has also made submissions to House of Commons select committees. Marshall and Page were the only barristers in the current appeal cases who were seeking to persuade the Court of Appeal that it should hear arguments on whether the Post Office prosecutions amounted to a “second category abuse of process of the court”.
There are two categories of “abuse of process” on which convictions can be quashed. Only the first category need be proved for convictions to be overturned but Marshall and Page wanted the second category to be considered as well. The Post Office has accepted the first category in most of the cases but not the second. The Post Office’s acceptance of the first category suggests it recognises that sub-postmasters in question did not receive a fair trial because of a failure to disclose details of Horizon’s faults.
The second category of abuse is an argument that the prosecutions ought not to have been brought and that bringing them was an affront to the public conscience. An argument in this category is that the prosecutions undermine public confidence in the criminal justice system and bring it into disrepute.
Proving the second category may strengthen the arguments of sub-postmasters who want to make claims against the Post Office for malicious prosecution. Such claims are expressly preserved for convicted sub-postmasters in the litigation Deed of Settlement.
In December 2020, the Court of Appeal formally agreed to hear the second category arguments as part of next week’s appeals. The Court agreed this after hearing from Lisa Busch QC who, by then, had taken over from Marshall and adopted his arguments. .
On stepping down from representing the appellants, Marshall wrote on Linkedin,
“After four years of struggles with metastatic cancer I have had my first third set of clear tests; a journey of sorts and a miracle. Strange to owe your life to the extraordinary skill of others. Less welcome news has been to be made subject of a threat by the Court of Appeal (Holroyde LJ, Picken, Farbey JJ) to initiate contempt of court proceedings against me. The ostensible basis is that in the course of appeals by Tracy Felstead, Janet Skinner and Seema Misra against their convictions on prosecutions by the Post Office, I gave to the Metropolitan Police a document – ‘the Clarke Advice’ – because of what it revealed. The legal basis for the threat and the procedure in making it remain mysterious. It has caused me to cease representing my clients and deprived them of many hundreds of hours of work (most pro bono) devoted to preparing their appeals.”
Marshall’s resignation and the Clarke Advice
When the Court of Appeal met in November last year for an initial “Directions Hearing” on the 41 appeal cases, the three judges spent much of the available time on a question of whether the Clarke Advice had been improperly disclosed. Marshall who was then acting for Seema Misra, Tracy Felstead and Janet Skinner, provided a copy of the Clarke Advice to the Metropolitan Police, which is investigating whether Fujitsu employees, as prosecution witnesses, committed perjury when giving evidence about Horizon in criminal court proceedings.
His junior, Flora Page, had provided a copy to her brother, a journalist, who wanted to refer to it in an article he proposed to publish after the Court of Appeal hearing.
The Post Office and the Court of Appeal judges were unhappy about the disclosures. The Post Office said the Clarke Advice was a privileged document released to lawyers for the purposes of the appeal.
Page told the court that she was aware her brother would not publish anything on the Clarke Advice unless the document was “fully enunciated in court”.
Marshall told the Court of Appeal that it appeared the Criminal Cases Review Commission had not been provided with the Clarke Advice and that the document would have a significant impact on how his clients put their appeals.
After raising the matter of the Clarke Advice near the start of the Court of Appeal Directions Hearing in November, the Post Office’s QC told the three judges, “it is open to the court, we submit, to treat the matter as a civil contempt. It is not, in our submission, at least superficially, a criminal contempt but a civil contempt”.
Civil or criminal, contempt of court can be punished by imprisonment. The Post Office’s QC told the court why the Post Office had made a complaint.
“We have brought this issue to the attention of the court because we regard it as our professional duty to do so. We also make it clear that the complaint is about the alleged acts of a lawyer or lawyers acting for three of the appellants, not the appellants themselves.” The Post Office says it supplied the Clarke Advice to lawyers representing appellants for the purposes only of their appeals.
Marshall has written to the Court of Appeal to say why he is standing down as legal representative in the three appeal cases. “I consider that I am inhibited from continuing fearlessly to represent my clients before this court. I am consequently disabled from discharging my professional duty to my clients,” he said in his letter.
Lord Arbuthnot, a former Conservative defence minister, says the Clarke Advice ought to have been in the public domain years ago. In a letter to a junior business minister Lord Callanan about the Clarke Advice, Lord Arbuthnot said, “We should have been told about this document, but I have not yet seen it. Please will you immediately send me a copy, and place it in the library of both Houses?” But it hasn’t been placed in either library.
Journalist Nick Wallis has reported on the “hugely important” Clarke Advice. Wallis points out that if the prosecution’s expert witness, who was named in the Clarke Advice, was wrong, “it could have massive implications for the safety of those prosecutions”.
Lord Falconer, a former Labour Lord Chancellor, has joined those calling for the Clarke Advice to be put in the public domain. He refers to the document as a “smoking gun”. He told Wallis,
“It is blindingly obvious that the Clarke advice should be in the public domain so that everyone can see it and read it and make judgments about the Post Office’s conduct.”
Wallis made a formal submission to the Court of Appeal asking for the Clarke Advice to be released. The Court of Appeal has so far refused. On this, Dinah Rose QC, who is president of Magdalen College, Oxford, tweeted that she “cannot see any good reason to withhold the Clarke Advice”.
The Criminal Cases Review Commission has written to the Post Office requiring that it provide a copy of the Clarke Advice. In requiring the Post Office to provide the document, the CCRC cited its powers under section 17 of the Criminal Appeal Act 1995. The obligations under section 17 are “absolute and override public interest immunity, legal professional privilege and any other rule or obligation of confidentiality which would otherwise be attached to this material”.
In November 2020, the CCRC also wrote to the Court of Appeal on the Clarke Advice. Wallis has published the CCRC’s letter. It’s written by Sally Berlin, Director of Casework Operations, at the CCRC. It says the Clarke Advice is of “potential relevance to Post Office cases which have already been referred to the Court of Appeal”.
The CCRC suggests that consideration be given to passing the Clarke Advice to the Metropolitan Police which Marshall has already passed to the police. The CCRC’s letter said,
“… as the Court will be aware, the Metropolitan Police Service is currently conducting a criminal investigation into allegations of perjury and perverting the course of justice in respect of particular expert witnesses, one of whom is the subject of the Clarke advice. We understand that the parties may wish to consider whether the Clarke advice – either in whole or in part – ought to be disclosed to the MPS [Metropolitan Police Service] investigation team. You may already have that in hand.”
Contentious Post Office assertions that can never be put right
The sister of a sub-postmaster Martin Griffiths has written a dignified and moving account of her late brother’s experience of Horizon losses.
She says in a letter to the government’s Horizon inquiry that her brother fought to make sense of losses that were shown on Horizon.
“He continually tried to speak to the Help Line, but was told it must be his fault and he would have to make good the losses as the Horizon system was functioning perfectly well. Initially he did not want to worry his family with these debts, so used his personal savings to make good the losses, but this meant he could not afford the usual family holiday. My elderly parents became very concerned as the losses started to increase into thousands of pounds. The stress began to take its toll. As Martin fought to make sense of the losses he could not explain, his personality and state of mind started to deteriorate. He had been outgoing and sociable, but during this period he began to change. He became very depressed and withdrawn and felt he was the only one in this dire situation and so it must be all his fault.
“In 2011, I hated to see the toll this was taking on my brother and my parents, so I began to search the internet to see if other Sub-postmasters had similar problems with their Horizon system. I then to my shock, unearthed such a can of worms. I discovered Alan Bates who established the JFSA [Justice for Sub-postmasters Alliance], and also watched a very alarming documentary made by Nick Wallis for “Inside Out” where he revealed that hundreds of Sub-postmasters were experiencing unexplained losses. This could not be just a coincidence – these employees were not hardened criminals. I felt so angry and frustrated. I tried to show all my research to my brother, to prove he was not “the only one” in this mess, but he was too depressed to fight. Later in 2011 Martin was audited and the Post Office suspended him. A temporary Sub-postmaster was installed. This was another blow to Martin’s self-esteem. After three months, Martin got his job back, but the losses continued to escalate, and Martin seemed unable to stop them. The deteriorating financial situation affected his marriage and he reluctantly asked my parents for money. Between 2012 and 2013, my parents’ life savings were swallowed up by the Post Office, as they continued to demand the “missing” money be settled. The situation was desperate… He was repeatedly told to make good the losses or face the termination of his contract. In July 2013 he received a letter informing him that due to his failure to manage the discrepancies at his branch and his failure to settle them in good time he was being sacked. He still owed thousands of pounds to the Post Office and his contract would be terminated at Hope Farm Road on 3rd October 2013. The ongoing debt to the Post Office and the thousands of pounds he owed our parents, together with the thought of telling the staff that his contract was soon to terminate, all became too much. He could see no way out. Early on the morning of 23 September he made his usual journey to work, pulled over in a layby on the A41, got out of his car and deliberately stepped into the path of an oncoming bus. He was rushed to Aintree hospital which specialises in head injuries, where he lay in an induced coma. For an agonising three weeks my brother was on life support which had to be switched off on 11 October 2013. Every time I read or hear a news item about the Horizon scandal, it brings back all the pain and the anger. My brother tragically lost his life due to a faulty computer system. The Post Office repeatedly denied computer error was the cause of losses amounting to millions. Instead, they arrogantly blamed my brother and thousands of other innocent Sub-postmasters, by wrongly accusing them of theft or false accounting.”
The letter asks three questions: why did the Post Office not investigate Fujitsu to find out what was causing the glitch, why did it not provide support for very worried employees and why did it halt an investigation by forensic accountants Second Sight which was raising difficult questions.
The letter concludes,
“Justice must prevail. Until then my family cannot move on from our tragedy.”
Some contentious Post Office assertions between 2009 and 2020
In 2009, Computer Weekly’s Rebecca Thomson gave the first account of the Post Office’s actions against sub-postmasters over unexplained losses shown on Horizon. Ten years later, in the group litigation settlement deed, the Post Office set out the measures it is taking to reform itself. But critics question whether the institution’s adversarial culture is too ingrained to be reversed.
Below are some of the Post Office’s contentious statements or attacks on critics in relation to Horizon. Its detailed criticisms have been directed at sub-postmasters, forensic accountants Second Sight, BBC Panorama, and some of the findings of a High Court judge whom it tried to remove.
Forensic accountancy Second Sight was hired to investigate sub-postmasters’ complaints about Horizon amid concerns about the system among MPs, particularly James Arbuthnot. The Post Office ended its relationship with Second Sight when the accountancy firm raised concerns about Horizon, the treatment of sub-postmasters’ complaints and asked to be able to review the prosecution files. By this time Second Sight’s accountants, who are highly experienced in fraud investigations, had already raised concerns about the conduct of some prosecutors.
The Post Office’s consistent criticisms of sub-postmasters and its contentious statements relating to Horizon lasted 20 years under different boards, CEOs and senior executives. The statements show, perhaps, how hard it will be for the corporate Post Office now to make the attitudinal switch to becoming compassionate, contrite, non-confrontational and fully understanding of the effects its accusations have had on countless families.
These are some of the Post Office’s contentious statements and criticisms between 2009 and 2020 (not in date order) …
“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 [BBC Panorama] 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.”
“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.”
“The Post Office has always taken its duty to act fairly, proportionately and with the public interest in mind extremely seriously.”
“Prosecutions are brought to determine whether there was criminal conduct in a branch, not for the Post Office’s financial considerations.”
“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.”
“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.”
“The Post Office is concerned that the report by Second Sight … repeats complaints made by a very small number of former postmasters, as well as a number of assertions and opinions…”
“A tiny fraction of the overall 500,000 people who have used Horizon since it was introduced more than a decade ago have put forward complaints. That does not constitute evidence that the IT system is flawed or unfit for purpose; indeed, if anything, it demonstrates that the system is highly reliable.”
“Post Office as a prosecutor has a continuing duty to disclose immediately any information that subsequently comes to light which might undermine its prosecution case or support the case of the defendant.”
“In the ten years since Post Office Limited started using Horizon the integrity of the system has also been tested in both the criminal and civil courts and has not been found to be wanting. I am satisfied that there is no evidence to doubt the integrity of the Horizon system and that it is robust and fit for purpose.” (Post Office statement to MP in 2009.)
“Any subpostmaster who is unhappy to accept a loss has the opportunity to provide evidence why they believe that they are not responsible for it. We do take the concerns of our subpostmasters extremely seriously and we do thoroughly investigate matters when they are raised with us but there has never been any evidence found that shows that the Horizon system has caused accounting errors.” (Post Office statement to MP in 2009.)
“There has, regrettably, been a large amount of inaccurate and misleading information reported in the media and Parliament about the claims of a small number of (mainly former) postmasters that they have been wrongly held liable for losses of money caused by faults in the Post Office computer system, Horizon. Each of these claims has been investigated by both the Post Office and by a firm of independent forensic accountants but no evidence has been presented or uncovered to suggest the system, which processes six million transactions for customers every working day, does not work as it should.”
“There is, in fact, overwhelming evidence that the losses complained of were caused by user errors, and, in some cases, deliberate dishonest conduct…”
“I am of course sorry if the people who have put forward grievances feel they have not been treated fairly and responsibly in addressing their complaints. Indeed, I would argue that we have gone much further than many commercial organisations might have done in analogous circumstances.” (Post Office letter to MP.)
“… risible”, “meaningless”, “nonsensical”, “weak” – some of the terms the Post Office used to describe the evidence in the group litigation of former sub-postmaster Alan Bates. The judge used different terms of Bates’ evidence: “careful”, “honest”, “thorough”, reliable” (High Court, 2018, 2019).
“…the passages to which I now refer, taken together with the matters that I have already dealt with, reinforce our concern that your Lordship’s mind is closed against Post Office. That concern, we submit, would be shared by a reasonable observer possessed of the facts.” [Post Office applies in 2019 to recuse – remove – Mr Justice Fraser, who was managing the High Court group litigation.)
“The judgment [in the case Bates v Post Office] did not determine whether bugs, errors or defects did in fact cause shortfalls in the individual claimants’ accounts but it found that they had the potential to create apparent discrepancies in postmasters’ branch accounts.” [Post Office CEO to MPs, 2020]
Nick Wallis, in one of several excellent articles on the Clarke Advice, points out that the Post Office says it is now a reformed operation, “yet you could argue it appears to be doing two of the things which got it into this mess in the first place:
a) trying to keep important information from the public gaze (see Fraser J’s second judgment in Bates v Post Office),
b) using its vast resources and legal firepower to set in motion events which may end up crushing peoples’ livelihoods.”
Indeed, after two decades of disputes that led to the shame and ruin of countless families – and the deaths of Martin Griffiths, Julian Wilson and Fiona Cowan – is it really necessary for the Post Office to go through 2021 with another controversy?
The Post Office wants to convince people it is genuine about reforming its culture and attitudes. It can argue that it has set up a Historical Shortfall Scheme to compensate sub-postmasters who can establish they made good discrepancies that were not their fault. The scheme has had nearly 2,500 applicants. But it is shrouded in secrecy and sub-postmasters cannot air their grievances in an open courtroom if their claims are over £10,000 and they are dissatisfied with the scheme’s outcome.
The Post Office could also argue that it is listening to sub-postmasters: it is appointing two sub-postmasters to its board. But if the appointees are barred from speaking out if they find their concerns are ignored or side-lined, are the appointments pointless, a public relations exercise?
Mr Justice Fraser remarked on the Post Office’s culture of secrecy. He said in his judgment of March 2019, “There seems to be a culture of secrecy and excessive confidentiality generally within the Post Office, but particularly focused on Horizon.” Has much changed since 2019?
Indeed, the Post Office’s complaint to the Court of Appeal about the two barristers, its opposition to parts of the Criminal Cases Review Commission’s case for the convictions of sub-postmasters to be quashed and its less-than-full exoneration of sub-postmasters who are going through appeals, may indicate that confrontation is etched into the Post Office’s corporate psyche.
Given that disputes related to Horizon are now well into their third decade, under different CEOs and boards, it’s hard to conclude that the Post Office will ever, however much it tries, wean itself off a need for excessive secrecy and confrontation.
A Court of Appeal hearing tomorrow (17 December) may help to determine whether the Post Office IT scandal goes deeper than is generally supposed.
The hearing relates to 47 appeals of sub-postmasters who were convicted on the basis of evidence derived from a faulty computer system Horizon which is installed in about 11,500 post offices. Horizon was built by Fujitsu.
Last week Southwark Crown Court quashed the convictions of six former sub-postmasters who had been prosecuted on the basis of Horizon data. Hundreds of other similar convictions may end up being quashed. Fujitsu and the Post Office had given the impression to courts and juries that Horizon was “robust”. But the High Court last year ruled that Horizon was “not remotely robust” and showed numerous cash shortfalls for which sub-postmasters were wrongly blamed.
The High Court ruling came after former sub-postmaster Alan Bates led a group of 550 former sub-postmasters who sued the Post Office to prove that the institution was wrong to insist that Horizon was robust. The appeal cases follow his successful litigation.
In referring 47 potentially unsafe convictions of sub-postmasters to the Court of Appeal, the Criminal Cases Review Commission gave two sets of reasons. Journalist Nick Wallis reported on the Commission’s arguments on his Post Office Trial website.
In the first set of reasons, the Commission said convictions were unsafe because Horizon evidence used by the Post Office was potentially unreliable. The Commission also argued the Post Office failed to disclose to postmasters what it knew about Horizon’s reliability and did not investigate shortfalls properly before jumping to the conclusion that postmasters had stolen money.
The Post Office does not dispute this first set of the Commission’s reasons. Indeed, the Post Office is not opposing 44 of the 47 appeals.
But the Post Office is likely to oppose the Commission’s second set of reasons. Here, the Commission argues that the Post Office knew it was not possible for sub-postmasters to have a fair trial when evidence about the reliability of Horizon was not presented to court. The Commission also argues that the Post Office knew it was not possible for Subpostmasters to have a fair trial but proceeded anyway.
In this second set of reasons, the Commission says the whole approach to prosecuting subpostmasters was an “affront to the public conscience“.
Tomorrow’s hearing is expected to determine whether the Court of Appeal considers the Commission’s “affront to public conscience” arguments to be relevant in the 47 appeal cases which are due to heard in March next year.
If the Court of Appeal accepts the Commission’s “affront” argument as relevant tomorrow, it may make it harder for Whitehall to manage a deepening scandal. Nick Wallis has reported that Whitehall wanted the whole scandal to “go away”. The “affront” argument also draws attention to systemic defects in the criminal justice system that allowed hundreds of sub-postmasters to be convicted of crimes on the basis of data from a flawed computer system. If accepted by the Court of Appeal, the affront argument may strengthen the hand of sub-postmasters whose lawyers are considering cases of possible malicious prosecution.
If the Court of Appeal rejects the relevance of the affront argument, it may make it easier for ministers and civil servants to argue that injustices happened largely because of a technicality: that sub-postmasters were prosecuted on the basis of incomplete computer evidence. The implication here is that the Post Office and prosecutors had reason to believe crimes had been committed but it has since become clear there were inadequacies in the prosecution’s evidence.
Nick Wallis sets out the Commission’s arguments in an excellent article here.