Category Archives: Department for Business

How is Post Office paying for increasing costs of Horizon IT litigation – MP asks questions

The Post Office has lost all four High Court rulings  (so far) in a series of hearings over its Horizon IT system. There are still three trials to go. With appeals, the number of hearings and judgements, and  the duration of the case, are indeterminate.

How is the publicly-funded Post Office paying for litigation that is, in essence, its defence of the Horizon system?

By Tony Collins

Labour MP Kevan Jones has this week asked a series of pertinent questions about costs and the Post Office’s dispute with former sub-postmasters over the Horizon branch accounting system.

His Parliamentary questions are likely to draw the attention of business secretary Greg Clark to the increasing costs of a High Court trial in which more than 550 former sub-postmasters seek compensation and damages from the Post Office. They say they were made to pay for unexplained shortfalls shown on Horizon that could have been caused by bugs or other system weaknesses.

The Post Office says Horizon is robust and the shortfalls were the result of dishonesty or mistakes by sub-postmasters or their staff. The Post Office has pursued sub-postmasters for “debts” shown on the Horizon system of millions of pounds in total.

Kevin Jones’ questions follow a judgement last month in which a High Court judge, Mr Justice Peter Fraser, referred to the Post Office’s approach to the costs of the litigation.

“The Post Office has appeared determined to make this litigation, and therefore resolution of this intractable dispute, as difficult and expensive as it can,” said the judge.

Since that judgement, costs have risen further because the Post Office has decided to appeal last month’s judgement. The Post Office has also applied for the judge to remove himself from three remaining trials over the Horizon system. which caused the second trial to be suspended.

This week it has emerged that costs, which could run into tens millions of pounds, are set to rise again. Although the judge has refused permission for the Post Office to appeal his refusal to remove – “recuse”  himself, the Post Office can ask the Court of Appeal to grant that permission.  BBC legal commentator Joshua Rozenberg has tweeted,

 

 

Kevan Jones has asked the business secretary Greg Clark:

  • what steps he is taking to ensure the Government is held accountable for the decisions and actions of Post Office Limited in the handling of postmasters’ problems with Horizon.
  • whether public money has been used to pay costs involved in the ongoing dispute with postmasters since 2000.
  • whether the Lord Chancellor will determine the extent of any conflict of interest on the part of Tim Parker by reason of his dual roles of (a) the Chairman of Post Office Limited; and (b) the Independent Chair of the HM Courts and Tribunal Service Board.
  • what the anticipated increased cost implications are for Post Office Limited in its dealing with serving Subpostmasters following the High Court decision handed down on 15 March 2019.
  • whether the Post Office has ever taken into profit from its suspense accounts any unreconciled sums recovered from Subpostmasters.

Former sub-postmaster Alan Bates, founder of Justice for Subpostmasters Alliance and lead claimant in the case, told Computer Weekly, 

“This move by Post Office Ltd to have the judge recused was just another act by an organisation abusing the use of public money to litigate a valid case into the ground in order to protect the reputations of just a few individuals and a dysfunctional business.”

The Post Office said, “We will be seeking to appeal the judgment on the recusal application and to continue to vigorously defend this litigation. We believe the overall litigation remains the best opportunity to resolve long-standing issues in order to ensure a stable and sustainable Post Office network for the benefit of the communities who rely on our services every single day.”

Freeths, solicitors for the sub-postmasters,  has submitted an application for the Post Office to pay the legal costs in the first trial, likely to be for several million pounds.

Comment:

Kevan Jones is right to ask questions about the publicly-funded Post Office and costs. The Post Office appears to have no cap on how much it is prepared to spend on the litigation; and it has shown little or no concern about how many years the case will continue.

Institutions, particularly public ones,  have a duty to spend money wisely. Not cutting your losses when you are losing a series of High Court hearings is poor judgement.

The Post Office has a choice: continue to pour money into a case that looks, on the basis of evidence so far, to be unwinnable.  Or pay the millions it is giving lawyers to its former sub-postmasters instead.

It’s a decision the Post Office will not make on its own – in which case Kevan Jones and his Parliamentary colleagues must continue their campaign for justice.

Thank you to sub-postmaster “Mrs Goggins”  and former sub-postmaster Jo Hamilton whose tweets alerted me to Kevan Jones’ questions.

Computer Weekly’s coverage

Journalist Nick Wallis’ coverage

Former sub-postmaster and campaigner Tim McCormack’s blog

 

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Will more campaigners die as they await justice in extended Post Office IT dispute?

A High Court dispute over the Post Office Horizon IT system is expected to cost tens of millions of pounds. But what is the human cost of delaying the outcome?

Tomorrow a High Court judge will consider an application by the Post Office to recuse – remove – himself from a series of trials that relate to the Post Office’s Horizon IT system. The Post Office accuses him of bias.

The Post Office’s application means that the second of four trials is currently suspended. A final outcome of the various hearings, after appeals,  could be years away.

Will any delayed final outcome have an effect on the 600 or so sub-postmasters who are part of the litigation?

It is a concern expressed by the judge in the case, Sir Peter Fraser, QC who is head of the High Court’s Technology and Construction Court. In his 1,100-paragraph judgement delivered last month after the first trial, he said,

“Even on that intended timetable, some Claimants [sub-postmasters] may be waiting far longer than is ideal to have their claims fully resolved either in their favour, or against them.

“Some of the Claimants are retired; some are elderly; some have  criminal convictions under review by the Criminal Cases Review Commission.

“Nobody involved in this litigation is getting any younger as time passes. The Post Office itself is under a cloud in respect of these unresolved allegations and I consider it to be an obvious point that resolution of this litigation as soon as possible is in the interests of all the parties – all the Claimants and the Post Office – in the interests of justice and the wider public interest.”

Is the Post Office trying its best to expedite an outcome? Mr Justice Fraser suggested the opposite. His judgement said,

“The Post Office has appeared determined to make this litigation, and therefore resolution of this intractable dispute, as difficult and expensive as it can.” [Par 544].

Separately, the judge said,

“It does appear to me that the Post Office in particular has resisted timely resolution of this Group Litigation whenever it can, and certainly throughout 2017 and well into 2018.” [Par 14]

The judgement referred to the Post Office’s “attritional approach of the Post Office to this litigation”. [Par 569]

If the judge is right and if the Post Office board is determined to make the litigation as difficult and expensive as it can, what of the human cost of any delays taking into account the age of some of those involved and the hopes of those with criminal convictions whose cases are under review?

Traumatised

Journalist Nick Wallis who is covering the High Court trials reports that he has been told that some sub-postmasters remain “traumatised” by their experience of losses shown on the Horizon system that they were required to make good.

Some of the sub-postmasters, says Wallis,  “are having to work long past retirement age” with all their life savings taken to pay for losses that are now in dispute as part of the sub-postmasters versus Post Office litigation.

The Post Office contends that Horizon is robust and that it was justified in holding sub-postmasters responsible for discrepancies and shortfalls shown on the system. The sub-postmasters claim damages saying the Post Office unjustly required payments for losses shown on an imperfect Horizon system. They argue the losses were not real shortfalls.

For one justice campaigner, Julian Wilson, a former sub-postmaster from Redditch in Worcestershire,  time ran out in 2016. Nick Wallis knew Wilson as a gentle, generous and good humoured man. The Post Office prosecuted Wilson for false accounting after unexplained shortfalls on the Horizon system.

The Criminal Cases Review Commission was reviewing his conviction when he died.

Wilson had been sentenced to 200 hours of community service and had to pay the Post Office £27,500 plus £3,000 costs. He told the Daily Telegraph in 2013,

“Initially, when there were discrepancies [on the Horizon system], my wife and I were putting the money in. As the discrepancies got larger and larger, we were no longer able to afford it.

“I told my line managers on several occasions that I was concerned about this, and the comment I got back from them was: ‘Don’t worry, the system will put itself right.’

“But it never did, so I was taken to court. I hadn’t taken a penny. Everything we’ve got has gone. In the last few weeks, we’ve been doing car boot sales to try to get some money to put some food on the table. My wife even had to sell her engagement ring.”

Comment

It is by no means certain that all of the 600 or so former sub-postmasters who are fighting for justice will live to know the final outcome of the trials.

If sympathetic to its former sub-postmasters, the Post Office could settle the litigation or seek expedited judgements. On the other hand, the Post Office could, given its deep pockets as a public institution,  seek to replace trial judges and appeal judgements. If so, a final outcome could be delayed with no end date in sight,

Business minister Kelly Tolhurst MP has responsibility for postal affairs. In deciding whether or not to intervene, will she weigh up the cost in human terms of a dispute that began more than 10 years before the start of the High Court Horizon trials?

MPs called the Post Office Horizon dispute a national scandal but to the family of Julian Wilson it is a tragedy. They live with the knowledge that he went to his grave a near-bankrupt convicted criminal whose wife ended up selling her engagement ring  because of events that followed losses shown on a branch accounting system.

Nick Wallis’ Post Office trial coverage

Post Office lacked humanity in treatment of sub-postmasters, says peer – Computer Weekly’s coverage of the Post Office’s trial

Blog of campaigning former sub-postmaster Tim McCormack

Could MPs hold Post Office directors to account for Horizon IT trial costs – after they have left?

By Tony Collins

The Public Accounts Committee and the National Audit Office have been alerted to the costs of the High Court trials over the Post Office Horizon IT system.

Parliamentary committees have the power to hold people to account after they have left an organisation.

Could this happen in the case of the publicly-owned Post Office whose directors have decided to spend, potentially, tens of millions of pounds on an avoidable High Court litigation?

Nearly 600 sub-postmasters are suing the Post Office because they say their lives were ruined when the Post Office required them to make good non-existent shortfalls shown on an imperfect Horizon system. The Post Office says Horizon has always been robust and that they were entitled to hold the sub-postmasters liable for losses shown on Horizon.

The Post Office appears resolved not to settle the case despite campaigns for justice in Parliament and by the Justice for Sub-postmasters Alliance. One unanswered question is whether the Post Office board is hardening its position in the face of the campaigns.

Campaign4Change emailed the Public Accounts Committee about costs of the litigation. As a result, the National Audit Office, which works closely with the accounts committee, contacted UK Government Investments, which represents the Government’s interest as sole shareholder of Post Office Limited.

The Committee told us,

“The NAO has now completed its enquiries and reviewed supporting evidence.

“Post Office Limited is a government owned company which is primarily funded through income from it is operations and is not audited by the Comptroller and Auditor General.

“The NAO has therefore limited its enquiries to understanding the role of UKGI [UK Government Investments] given it has no remit to audit the actions of Post Office Limited.

“The NAO discussed the case with UKGI to understand the governance in place between Post Office Limited and UKGI and to confirm there was appropriate oversight of Post Office Limited’s decision to defend the litigation.”

Regarding the accountability of individual Post Office Limited’s directors, the National Audit Office said,  “Since Post Office Limited’s inception in 2012, UKGI has had a representative on the Board as a Non-Executive Director. The same government representative is also a member of the subcommittee of the Board which specifically considers this issue. These committees are involved in decision making around the litigation case and the representative regularly reports to ministers on these matters.

“From the work performed by the NAO, they have concluded that the involvement of UKGI in decision making appears appropriate and the level of oversight proportionate.”

The Committee said the National Audit Office has not  directly considered the actions taken by the Post Office Board but the case is being kept under review.

Following the NAO’s investigation, the Department for Business Energy and Industrial Strategy, which is responsible for the Post Office, sought an assurance from the Post Office’s CEO Paula Vennells that departmental funds meant for transformation and business investment will not be used on the Horizon litigation.

Also the BEIS department now requires regular written assurances that BEIS funding will be used for the intended purposes only.

Summons?

When a Parliamentary committee decides to summon a witness formally, the witness is summoned to attend the committee by an order signed by the chairman.

Failure to attend a committee when formally summoned is a contempt and if a witness fails to appear, when summoned in this manner, his or her conduct is reported to the House of Commons which can deal with the matter as an act of disobedience.

MPs and peers are expected to look more closely at the actions of the Post Office in the light of its decision to try and remove Sir Peter Fraser, the judge in the Horizon IT case. The Post Office’s application to remove the judge could greatly increase costs of the case which are already expected to run into tens of millions of pounds.

Following the Post Office’s application for the judge’s removal, the second of four High Court trials has been suspended and will not resume until 3 April.

Journalist Nick Wallis reports that the application for the judge’s removal coincided with evidence being given, in part, by the chief architect for the Horizon system at Fujitsu. He was being questioned on the system and possible errors.

Thank you to campaigner Tim McCormack whose Freedom of Information requests unearthed the letter dated January 2019 to the Post Office from the Department for Business, Energy and Industrial Strategy that seeks assurances on funding for the Horizon IT litigation.

Postofficetrial– Nick Wallis

Post Office Horizon IT trial suspended after Post Office accuses judge of bias – Computer Weekly

The power to summon witnesses

The process for formally summoning a witness is outlined in a House of Commons paper: 

“When a committee decides to summon a witness formally, the witness is summoned to attend the committee by an order signed by the chairman. Failure to attend a committee when formally summoned is a contempt and if a witness fails to appear, when summoned in this manner, his conduct is reported to the House… If he still neglects to appear, he will be dealt with as in other cases of disobedience.

“It is the House which will ultimately decide how a case of disobedience should be dealt with.”