Category Archives: Horizon system

Judge in Post Office Horizon case calls for a “change of attitude”

By Tony Collins

The Law Society Gazette reports that the High Court judge in the Post Office Horizon case has called for a “change of attitude”.

At a case management conference, the judge Sir Peter Fraser listed some of the problems already reported during the group litigation:

  • Failure to lodge required documents with the court
  • Refusing to disclose obviously relevant documents
  • Threatening ‘pointless’ interlocutory skirmishes.
  • Failure to respond to directions for two months
  • Failure to even consider e-disclosure questionnaires

The case involves a class action – called a Group Litigation Order – against the Post Office brought by more than 500 mostly sub-postmasters.

Justice for Subpostmasters Alliance seeks damages related to the introduction of the Horizon computer system about  17 years ago, which is alleged to have caused financial distress and in some cases bankruptcy.

According to the Law Society Gazette, the judge said the behaviour of legal advisers in the case “simply does not begin to qualify as either cost-effective, efficient, or being in accordance with the over-riding objective”. He added,

“A fundamental change of attitude by the legal advisers involved in this group litigation is required. A failure to heed this warning will result in draconian costs orders.”

The court has heard of problems trying to establish a timetable for the litigation. The claimants sought a substantive hearing for October 2018, while the Post Office argued the case could be managed for another entire year without any substantive hearing being fixed. Under this proposal, the hearing would not happen until at least 2019.

Fraser noted that to describe this approach as ‘leisurely, dilatory and unacceptable in the modern judicial system would be a considerable understatement’.

The day after a trial was ordered for November 2018, the Post Office asked for a change because its leading counsel already had a commitment at the Companies Court.

The judge suggested it was a ‘clear case of the tail wagging the dog’ if clerks were allowed to dictate hearing date. He said there was reasonable notice to arrange for a replacement counsel.

Fraser added: ‘Fixing hearings in this group litigation around the diaries of busy counsel, rather than their fixing their diaries around this case, is in my judgment fundamentally the wrong approach.’

Comment:

It appears that the judge did not single out the claimants or the Post Office as the main target for his irritation. He was impartial. But his no-nonsense approach might have surprised some at the Post Office.

The Post Office is familiar with control. When the Horizon system has shown a shortfall in the accounts of a local branch, the Post Office has required the sub-postmasters to pay whatever amount is shown, in order to return the balance to zero.

Even when paying the shown amount has led to bankruptcy and destruction of the family life of the sub-postmaster, the Post Office has pursued the case.

It has had control.

It supplied the contract that sub-postmasters signed; it supplied the Horizon branch accounting system; it required payment of what the system showed as a deficit; it investigated complaints by sub-postmasters that the shown deficits might have been incorrect;  it was able to decide what information to release or withhold – the “known errors” Horizon log being one piece of information not disclosed – and it was the prosecuting authority.

It has also been free to rebut public criticisms, as when BBC’s Panorama and forensic accountants Second Sight focused on the concerns of sub-postmasters.

Now it’s a High Court judge who is questioning, among other things, a failure to lodge required documents with the court and refusing a to disclose obviously relevant documents.

The judge’s comments are refreshing. Since 2009, when Computer Weekly first reported on the concerns of sub-postmasters, control has been one-sided.

Now at last it is on an even keel.

We hope the Post Office will reappraise whether it should be using public funds at all to fight the case.

If the case does drag on for years – postponing a judicial decision – who will benefit? Certainly not the sub-postmasters.

Law Society Gazette article

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Horizon IT controversy closes another village post office and threatens the future of its owner

By Tony Collins              

It’s a familiar story.

A small businessman, this time in the village of Alveston, which is 10 miles north of Bristol, is being threatened with a life-changing debt because of a shortfall shown on the Post Office’s Horizon system.

The local post office has closed and its owner is being pursued for £41,000.

It’s happening against the backdrop of a High Court class action by 522 former owners of small post offices. The High Court has granted them a Group Litigation Order against the Post Office.

Many of the 522 have had to give the Post Office money they say they didn’t owe, because of deficits shown on Horizon. Some were jailed or made bankrupt. Many lost their livelihoods while being left with huge debts.

The Alveston case involved, initially, £36,000. The discrepancy came as a surprise to Hari Jayanthan, who ran the Alveston post office branch out of his shop.

The Gazette reported that the problems for Jayanthan began last December when the software he uses to balance the books showed a shortfall.

He asked the Post Office repeatedly for help but says he had no meaningful response and was left unsure what to do.

“I thought it had to be a mistake,” he said. “They said they would have a look and they kept saying they could not find anything.

“I was asking if I had done something wrong, pushed the wrong button or something, and if someone could come and help me, but nobody turned up for six months.”

In May 2017 officials from the Post Office arrived on his doorstep, telling him that they were now owed £41,000.

This was nearly three times what his village post office business made in a year.

“I keep getting letters and phone calls asking how I plan to repay them, and I don’t know what to do.

“This is the only business I have and I don’t have that kind of money to repay them. It’s all I have got. What can I do? We took no money from them and I could find no fault on my side.”

In a corporate move, the Post Office closed the Alveston branch in May, without notice to local villagers. It said the closure was for “operational reasons”.

Today, the Alveston post office and stores is shown on Google as  “permanently closed”.

Local parish councillors have expressed concern, particularly at the suddenness of the closure. For Alveston residents, the nearest post office is more than 1.5 miles away.

The Post Office said it does not comment on individual cases. It welcomes the High Court case as the “best opportunity for the matters in dispute to be heard and resolved”.

It added that it has confidence in the Horizon system which is “robust, reliable and used across 11,600 branches by postmasters, agents and their many thousands of staff, to process six million transactions successfully every day, including on behalf of the UK’s high street banks”.

High Court case

One of the most important parts of the preliminary hearings so far – perhaps the single most important exchange – has involved the Horizon system’s “known errors log”.  So far the log has remained confidential.

Justice for Subpostmasters Alliance, which is behind the class action being handled by Freeths solicitors, has asked for disclosure of the log.

TV reporter Nick Wallis, who has covered the Horizon controversy for many years, in particular for BBC’s The One Show, went to the High Court last month and tweeted on some of the exchanges.

The judge Sir Peter Fraser, who has practiced in the Technology and Construction Court from 1990, asked the Post Office to list reasons why the known errors log should not be disclosed.

The Post Office’s legal representative said that the demand for the log was a red herring. The Post Office has no control over it. It is controlled by Fujitsu which built Horizon and maintains it.

The legal representative for the Justice for Subpostmasters Alliance argued that the data in the log could be exported.

The judge said he wanted e-disclosure preliminaries to be sorted by 10 November. If there was still disagreement, a disclosure management hearing will be set up.

The judge also extended the cut-off date for new claims. Freeths is accepting new applications from any subpostmasters including assistants, managers, crown office employees and temporary subpostmasters until the end of 10 November 2017.

Another 70 or so are expected to join, bringing the total number of claimants to about 590.

Comment:

Nobody outside an inner circle of Post Office head office executives and their advisers believes that hundreds of owners of local post offices – who took pride in serving their local communities – decided to defraud the taxpayer.

It’s not even clear that the Post Office believes it. For it has not sought to establish that any of the subpostmasters involved in the High Court class action benefitted from a lavish lifestyle financed by (alleged) shortfalls shown on the Horizon system.

But still the Post Office’s corporate position against the subpostmasters seems immovable. Which raises the question of whether the Post Office is placing more importance on the integrity of a computer system than the integrity of hundreds of subpostmasters.

Forensic accountants Second Sight, whom the Post Office commissioned to investigate Horizon complaints, raised many concerns about the system. The Post Office terminated Second Sight’s contract.

Computer Weekly reports that Andy Clark, visiting professor in information security at Royal Holloway University of London and director at information security and expert witness company Primary Key Associates, was called as a witness for the defence in a case brought by the Post Office against a sub-postmaster.

After seeing the Post Office Horizon accounting system in action, he said it was quickly apparent there were questions to ask about its integrity. After asking the Post Office these questions, the Post Office dropped the case, he said.

Today the Post Office’s position in the class action is that subpostmasters have signed a contract that, in essence, made them responsible for shortfalls shown on the Horizon system.

But is it as simple as that?

Some of the questions that will be raised at next November’s High Court trial  include:

  • Did Post Office Limited owe to subpostmasters a duty of good faith, fair dealing, transparency, co-operation, trust and confidence?
  • Were legally binding terms implied in the contracts but not expressly stated? For example, what contractual obligations did Post Office Limited have in relation to investigating and determining the causes of alleged shortfalls.
  • Did contracts include unusual, onerous or unfair terms?
  • In what circumstances did subpostmasters have a liability to Post Office Limited for shortfalls and losses?
  • Did the contracts allow Post Office Limited to suspend or terminate in the manner in which they did.

Known errors

The Post Office refers repeatedly to the robustness of Horizon. It doesn’t accept that the system could have caused the losses in question.

This is one reason the known errors log is in contention. It could reveal that there were no known Horizon faults relevant to the shortfalls in question.

Or it could reveal the opposite.

What is extraordinary is that the log hasn’t been disclosed in years of legal cases against the subpostmasters.

This is a little like aircraft manufacturer Boeing implicating pilots in major incidents while not disclosing the plane’s fault history.

In the US, investigators have a statutory right to inspect the plane’s full fault history. Let us hope that the High Court requires Horizon’s full records to be produced.

One accused former subpostmistress Jo Hamilton has tweeted that “justice is coming”. We hope she’s right and that it comes long before the scheduled end of the High Court trials in March 2019.

For every day that passes without a settlement of the case is a day in which corporate hubris and irrationality prevails.

It’s to be expected that the Post Office’s directors will want to express confidence in a computer system on which their business depends.

But do they really believe it’s worth continuing to sacrifice small businesses and ruin the lives of their owners to repeatedly establish the integrity of a computer system?

Court dates set for trial – Computer Weekly

Nick Wallis High Court Horizon tweets

 

Shedding new light on the Post Office Horizon controversy?

By Tony Collins

Dozens of families gathered in the ballroom of a Hilton hotel to hear independent investigators announce the most likely cause of an air crash that killed 132 air passengers.

Some wondered whether official investigations into air crashes always ended up protecting powerful corporate interests. For several years the manufacturer Boeing had denied that a technical malfunction was the cause of the crash. It blamed the pilots.

This was the longest inquiry in the history of the National Transportation Safety Board, an investigative organisation funded by the US government. Congress has mandated the Board’s independence and objectivity.

At first, each Boeing 737 incident was treated as a single unique event.  In the absence of any clear evidence of a technical malfunction, suspicion fell on the pilots.

The 737 is, after all, the best-selling commercial jet airliner in history. It has an extraordinary safety record.

Then evidence began to mount that various 737 incidents might have been linked.

After thousands of tests over several years, air crash investigators made a discovery – that a particular technical malfunction could, after all, have caused the incidents.

It was an intermittent malfunction – and one that occurred in a rare set of circumstances. It left no trace. It might have caused a succession of seemingly-unique major incidents.

Now the final verdict on the likely cause of USAir Flight 427’s destruction was imminent. As families sat in silence at the Hilton Hotel, Springfield, Virginia, five board members of the National Transportation Safety Board voted – in public – on whether they accepted the findings of their staff investigators who’d pointed to the likely cause being a technical malfunction, not the pilots.

The vote was unanimous; and some relatives wept.  The probable cause was not the pilots. It was “most likely” to have been a technical malfunction.

Boeing accepted the final report into the crash of Flight 427. “We respect the Board’s opinion,” said Boeing after the vote. It made rudder-related design changes that eventually cost more than $100m.

Human or machine?

What do various incidents involving Boeing 737s have to do with a campaign for justice for 198 former sub-postmasters and their families?

At issue in both cases is whether human or machine was to blame for a plethora of incidents.

Former sub-postmasters, who used to run local post offices across the UK, say that technical malfunction, or a combination of human error and unusual, unexpected equipment behaviour, was the cause of their distress, misfortune, jailing or bankruptcy.

The Post Office blamed them for losses shown on its “Horizon” system and required that they pay the shortfall in question. This led to financial ruin for some of them. The Post Office insisted its equipment was not at fault. It pointed to the lack of evidence of any technical malfunction.

But investigations into rare crashes of 737s show that it’s possible for a major corporation to be mistaken when it clears its own equipment and blames the equipment’s human operators.

The 737 investigations found that “no evidence of a technical malfunction” did not necessarily mean “no technical malfunction”.

The UK government reached a similar conclusion at the end of a campaign by families to set aside an RAF finding of gross negligence against two pilots, Flight Lieutenants Jonathan Tapper and Rick Cook, who died when a Chinook helicopter, ZD576, crashed on the Mull of Kintyre in June 1994.

For 16 years the RAF and Ministry of Defence insisted that there was no evidence of a relevant technical malfunction on the last flight of Chinook ZD576. They blamed the pilots for the crash. But leaked MoD technical papers established that the Chinook’s engine computer systems could fail in unpredictable ways – sometimes intermittently – and leave no evidence.

In the end – after a 17-year campaign for justice by the pilots’ families – the UK government set aside the RAF’s finding against Tapper and Cook, mainly because of doubts over whether the pilots or technical malfunction, or a combination of both, caused the crash.

Arguably, the Chinook and 737 controversies established the principle that, despite the absence of firm evidence of a technical malfunction, a major incident could still be caused by one, or a series of them.

This may be an important consideration in Post Office cases because, in some criminal trials of sub-postmasters, the absence of evidence of a technical malfunction that caused the losses shown on Horizon has counted against the defendants.

It counted against former sub-postmaster Lee Castleton who disputed in a civil action the Post Office’s claim that he owed amounts totalling £27,000. These sums were shown on Horizon as losses.

The judge in the case said, “It is inescapable that the Horizon system was working properly in all material respects.” Castleton lost the case and was left with costs of £321,000. The following year he filed for bankruptcy.

In a separate case, a criminal hearing where former sub-postmaster Seema Misra was the defendant, a jury agreed with the Post Office’s case that the Horizon system was tried and tested, had been in use at thousands of Post Offices for several years, and was fundamentally reliable and robust.

Misra was jailed for the theft of £75,000 in a case based on the Post Office’s computer evidence. She said she hadn’t taken a penny.

When sub-postmasters could not prove the existence of a fault on Horizon that explained the losses, the conclusion was that they were personally responsible for the shortfall.

About 30 of the 198 individual complaints against Horizon are from former sub-postmasters who received criminal convictions over the losses.

Boeing and the Post Office

With its turnover of about $94bn [£76bn), Boeing is nearly ten times the size of the Post Office. The Post Office has a turnover of less than £1bn. Boeing has vast facilities and specialist teams to investigate crashes full-time. Still, its judgments on the probable cause or causes of major incidents are not infallible.

A number of 737 incidents have shown that, even with relevant incident data available, it may take years of assiduous and expensive independent investigations to get to the likely truth.

In the case of the 737 incidents, the suspect component at the centre of investigations, a power control unit, was based on an old design (certified in the 1960s) – and straightforward in its operation relative to the Horizon system.

In comparison, the Horizon system has hundreds of thousands of lines of code and is complex, taking into account its many upgrades over more than a decade and its interactions with different hardware, networks, interfaces and a central data centre. Adding to this complexity are user uncertainties over procedures for dealing with problems.

But one of the most striking single aspects of any comparison between 737 crashes and the Horizon controversy is that it took professional full-time independent investigators in the US several years and thousands of tests on one suspect component only, before they were able to establish not that the component in question had been the cause of two fatal crashes and a succession of other incidents but that it had been the “probable” cause.

More than $1m was spent investigating the power control unit and still there was no firm evidence that the suspect component was the cause.

The Post Office has, arguably, required a higher standard of proof from local sub-postmasters.

By insisting that there was no evidence of a malfunction that resulted in losses, the Post Office put the onus on sub-postmasters to prove otherwise. Establishing that Horizon was the “probable” or “likely” cause – the standard of proof required in commercial aircraft accidents – was not good enough in cases of sub-postmaster complaints.

In response to the complaints of former sub-postmasters, the Post Office has made a number of similar statements:

“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.”

Another Post Office statement said,

“To date, and after two and half years of investigation and independent review, the facts are that Post Office has found no evidence, nor has any been advanced by either an Applicant [former sub-postmaster] or Second Sight [the independent investigators of sub-postmaster complaints], which suggests that Horizon does not accurately record and store branch transaction data or that it is not working as it should.”

Boeing made similar points in its submission to the National Transportation Safety Board on the crash of Flight 427. Boeing pointed to a lack of evidence of technical malfunction while pointing to evidence of the actions of human operators (pilots).

Boeing said,

“There is no evidence to support a conclusion that an uncommanded full rudder deflection occurred (the rudder moving in the opposite direction to that commanded by the pilots).

“While there is not conclusive evidence of a crew-commanded, sustained left-rudder input, such a possibility is plausible and must be seriously considered, especially given the lack of evidence of an airplane-induced rudder deflection.”

Indeed Boeing’s conclusion in its submission to investigators of 737 incidents was similar to the Post Office’s position that there was “no systemic problem” with Horizon.

Boeing said,

“There is no data to indicate that the Eastwind Flight 517 event, the United Flight 585 accident, and USAir Flight 427 accident were caused by a common airplane malfunction.” [Boeing had argued that each incident was different – a similar argument to the Post Office which said each complaint by sub-postmasters  about the Horizon system was “demonstrably different and influenced by its own particular facts”.]

In a separate submission to the National Transportation Safety Board, the manufacturer of the 737’s suspect power control unit, Parker Hannifin, made a point similar to Boeing’s.

“In sum, after years of one of the most critical examinations in aviation history, there is no evidence that the main rudder PCU [power control unit] from Flight 427 malfunctioned or was other than fully operational.”

Last word

But the National Transportation Safety Board, as a statutory authority, had the last word.

Its conclusion did not coincide with the view of Boeing or Parker Hannifin.

It said the most likely cause of the crash of Flight 427 was that the rudder moved in the opposite direction to that commanded by the flight crew. The final investigation report said,

“Probable Cause

“The National Transportation Safety Board determines that the probable cause of the USAir flight 427 accident was a loss of control of the airplane resulting from the movement of the rudder surface to its blowdown limit [full aerodynamic limit].

“The rudder surface most likely deflected in a direction opposite to that commanded by the pilots as a result of a jam of the main rudder power control unit servo valve secondary slide to the servo valve housing offset from its neutral position and over-travel of the primary slide.”

Could both sides be right?

On the face of it, the Post Office and former sub-postmasters have contradictory arguments, just as Boeing’s assertions and the investigators’ finding of likely technical malfunction may seem contradictory.

It’s possible, though, that these arguments are not as contradictory as they seem.

It is conceivable the Post Office was correct when it said there was no conclusive evidence of a technical malfunction; and it’s equally conceivable the former sub-postmasters were correct when they said a technical malfunction was partly or entirely to blame for the losses.

Possible similarities and differences

Campaign4Change has looked closely at some of the similarities and differences between 737 rudder incidents and the Post Office cases.

The Post Office and Boeing investigated each incident as a separate matter. Both organisations found no systemic problems. But, unlike Boeing, the Post Office always had the upper hand in its investigations: it was able to require that sub-postmasters pay, in many cases, tens of thousands of pounds that were shown as losses on Horizon.

There’s a risk of trivialising the consequences of 737 crashes when making comparisons with the Horizon controversy. It can be argued, though, that both involved major incidents that ruined lives; and both cases raise the question of whether any large corporation, once it has taken a position that its equipment was not to blame for a single major incident – let alone a number of incidents – will ever change its mind unless forced to.

One particular difference between the UK and US investigations into major incidents is that the US regulatory system allows Boeing to make a submission to the investigations board – which it did, contesting the board’s draft finding that blamed technical malfunction for 737 incidents and crashes – but Boeing had to abide by the independent board’s final decision.

The Post Office did not have to abide by the findings of its independent investigators Second Sight and was able to end Second Sight’s contract. The Post Office said it had given Second Sight “notice regarding its contract“.

Another difference: in the US, the regulatory system allowed the National Transportation Safety Board to require information from the various equipment manufacturers; and the Board’s investigators could obtain information independently of the manufacturers, usually with their cooperation but not necessarily.

In comparison, the Post Office determined what information it passed to Second Sight and the families. On this point Second Sight had its concerns.

In one of its reports for the Post Office, Second Sight said,

“We have experienced significant difficulty in obtaining access to a number of documents we believe are necessary for the purposes of our investigation, notwithstanding Post Office’s commitment to make requested documents available to us.”

The Post Office says it made available to Second Sight thousands of documents but not those that were the subject of legal privilege .

There’s a further difference between the US and UK investigations. In the US, the National Transportation Safety Board did its own investigations or supervised those carried out by equipment manufacturers. It even had the power to exclude equipment owners from participating in the inquiry.

In 2010 American Airlines was excluded from participating in an investigation into an incident involving one of its 757 aircraft because its technicians downloaded and accessed information from the plane’s black box [digital flight data recorder] before it was examined by independent investigators.

US regulations require that the National Transportation Safety Board is the first to see, download or access information from the black boxes.

A Board press release criticised American Airlines. It said,

“Although a thorough examination by our investigators determined that no information from the DFDR [digital flight data recorder] was missing or altered in any way, the breach of protocol by American Airlines personnel violates the Safety Board’s standards of conduct for any organization granted party status in an NTSB investigation.

“Because maintaining and enforcing strict investigative protocols and procedures is vital to the integrity of our investigative processes, we have revoked the party status of American Airlines and excused them from further participation in this incident investigation.”

When the Post Office investigated Horizon systems in the light of losses shown on the systems, it had the authority to retain full control of system information throughout.

As well as being the owner of the system, the Post Office was responsible for commissioning the investigations into the actions of the sub-postmasters. It was also the prosecuting authority and supplier of the material facts involved.

Other possible considerations

  1. In the US, there was no procedure for pilots to follow if they had a rudder hardover (where the rudder moves to its fullest extent and jams against a mechanical stop). The principle was that pilots were not trained to cope with problems that theoretically couldn’t occur. Were sub-postmasters faced with malfunctions that were considered impossible and so hadn’t been trained to cope with them?
  2. Human operators may make the ultimate mistake but they might have been reacting to malfunctions, problems with design, inaccurate information or confusing interfaces. [The Post Office had 1.5 million Horizon helpline calls in a three-year period which is a possible sign that many local post office staff did not fully understand the system or how it worked.]
  3. The US pilots’ trade union ALPA [Airline Pilots Association] was formed partly because of a perception that the government’s automatic response to major incidents was to blame pilots.
  4. After major incidents, the Post Office and Boeing have pointed to the extraordinary record of reliability of their equipment, the implication being that a systemic problem is highly unlikely. The 737 had (and still has) an extraordinary safety record: 264 million flight hours and an uncommonly low crash rate. Airlines have ordered at least 11,550 of them, more than any other commercial aircraft in history. It’s in use in 111 countries. Its reliability record is the best in the world. On average more than 2,000 737s are in the air at any one time. It has carried 17 billion passengers – about twice the world’s total population. It has flown about 120 billion miles, the equivalent of 640 round trips from the earth to the sun. The Post Office says of Horizon: “Horizon 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.   There have been 500,000 users of the system since it was introduced.”
  5. The design of the 737 rudder system had been considered fail-safe. It was thought it would work properly even when problems occurred. The system had built-in “redundancy”. Every lever inside the lower power control unit had a second lever that moved in concert, in case one should break. There were two hydraulic systems in case one should fail. There was a standby actuator in case the main power control unit stopped working. Even so, after thousands of tests, investigators found it could fail in very rare circumstances.
  6. The Post Office has listed the many procedures and processes in place for subpostmasters to handle problems or technical failures. The Post Office said, “Horizon is capable of handling power and telecommunications problems. In Post Office branches, postmasters are responsible for power supplies and the cabled telecommunications lines. Interruptions in power supplies and telecommunication lines are a risk faced by all IT systems. There are, however, recovery systems built into Horizon to prevent losses occurring where there is a power or telecommunication failure. There is no evidence to suggest that either of these events would cause losses in branches where the recovery process has been correctly followed by branch staff. There is however evidence of branch staff failing to follow the recovery process properly. This would cause discrepancies in a branch accounts and could be a cause of losses. It is however the result of human error by Applicants [former sub-postmasters] or their staff, and not a failing of the Post Office or Horizon.”
  7. US air crash investigators were able to glean much from listening to voices in the cockpit shortly before incidents occurred. No such luxury existed in the investigation of Post Office Horizon losses. The Post Office cannot have known what was in the minds of the sub-postmasters at the time: whether they had criminal intent or were utterly baffled by what was appearing on their screens.
  8. The National Transportation Safety Board after its initial investigation into the fatal crash of United Airlines 585 at Colorado Springs in 1991, reached a conclusion that the probable cause was “undetermined reasons”. Would the Post Office consider such a possibility in the case of Horizon losses?
  9. After the unexplained crash of Flight 585, the National Transportation Safety Board kept tabs on 737 rudder problems even without evidence they were the likely cause of any serious incidents. Does this mark a different investigative approach to the Post Office which appears to have had a mindset that its equipment could not be to blame for losses?
  10. The fact that five leading members of the National Transportation Safety Board voted publicly on the probable cause, or causes, of a major incident limited the potential for an institutional mindset to develop. The Board often modified or rejected the findings of its investigators.
  11. Tests could not be carried out on 737 equipment until all parties agreed on how each piece would be tested. Agreement involved the Federal Aviation Authority as regulator, Boeing, the pilots’ union ALPA and the machinists’ union. In contrast the Post Office was in complete control of its investigations into Horizon losses.
  12. The existence of the National Transportation Safety Board is a check against parties protecting their own corporate interests, namely the reputation of their equipment, after a major incident. What similar check exists to prevent the Post Office from seeking to protect its corporate interests – namely the reputation of its equipment – after a number of major incidents?
  13. Would the conclusions of the investigations into the 737 incidents have been different if Boeing had been the authority in charge of the final report?

A useful book on the crash of Flight 427 is by Bill Adair, which is an inside account of the 737 rudder incidents. He had access to all the main parties involved.

Also useful is the final report of the National Transportation Safety Board into the crash of Flight 427. It contains Boeing’s submission.

In January 2017, the High Court granted Justice for Subpostmasters Alliance, which represents the accused former sub-postmasters, a Group Litigation Order against the Post Office.  There are 198 sub-postmasters on the High Court claim form and several hundred more are likely to join as claimants.

If the case goes to appeal, it could continue for years.

Or the Post Office could choose to settle rather than spend public money fighting a case which could be seen as a self-vindicating exercise – one that prolongs the misery for the subpostmasters and their families.

Campaign4change emailed the Post Office a list of detailed questions, based on this article. A Post Office spokeswoman replied that, “given that there is currently litigation it’s not appropriate for Post Office to comment”.

Last year, after a BBC Panorama documentary on the complaints of sub-postmasters and the Horizon system, the Post Office issued the following statement:

BBC Panorama – Our response

The Post Office wholly rejects extremely serious allegations repeated in BBC’s Panorama programme of 17 August 2015. The allegations are based on partial, selective and misleading information.

  • 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 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.

This is about individual cases and the Post Office will not discuss those in public for very good reason.  The Criminal Cases Review Commission (CCRC) is reviewing a small number of cases involving criminal convictions. It will be provided with all available information including confidential legal material not available to others and we believe the CCRC should be allowed to complete its reviews without external comment.  We also gave a commitment of confidentiality to people who put forward cases to us for re-investigation.

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.

Background facts

Prosecutions

The Post Office has always taken its duty to act fairly, proportionately and with the public interest in mind extremely seriously.  The Prosecutions it brings are scrutinised by defence lawyers before they advise their clients and are, ultimately, ruled upon by the courts.

If money is missing from a Post Office branch and the fact that cash is missing has been dishonestly disguised by falsifying figures in the branch accounts, the Post Office is entitled to take action and does so based on the facts and circumstances of that specific case. Though rare, where there is evidence of criminal conduct, a decision may be made to prosecute.

Prosecutions are brought to determine whether there was criminal conduct in a branch, not for the Post Office’s financial considerations.

Post Office prosecutors are all experienced criminal lawyers, many of whom have significant experience in prosecuting for both Post Office and the Crown Prosecution Service.   In the rare instances that prosecutions are undertaken, the Post Office follows the Code for Crown Prosecutors (the same code as the Crown Prosecution Service).  The Code requires a prosecution to have sufficient evidence and be in the public interest, both of which are kept under review right up to and including any trial.   It means there must be sufficient evidence for each charge – if a theft charge is brought, there must be sufficient evidence for a realistic prospect of a conviction for theft.

A charge upon which there is no evidence will inevitably fail. It is the duty of the defence lawyers to identify to the court where there is insufficient evidence to sustain a charge.  If the court agrees then the Judge must dismiss that charge.

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.

The Horizon Computer System

Horizon 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.   There have been 500,000 users of the system since it was introduced.

Nevertheless, rigorous re-investigations were undertaken into claims made by 136 mainly former postmasters that the system caused losses in their branches.

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.

Resolution of cases

The Post Office was approached in 2012 by a small number of largely former Postmasters and MPs with the concern that faults in the Horizon computer system had caused losses at their Post Office branches.

In response the Post Office set up an independent inquiry and, when that found nothing wrong with the system, established a scheme to enable people to put forward individual complaints, providing financial support to those making claims so that they could obtain independent professional advice.

There were 150 cases put forward, 43 of which involved criminal convictions.

A number of the cases are now resolved, through mediation or otherwise, and the remainder of cases where the courts have not previously ruled have been put forward for mediation.

Mediation is overseen by the Centre for Effective Dispute Resolution (CEDR), an established leading and entirely independent organisation.   Those who have been offered mediation can still exercise their available rights if mediation is not successful – mediation itself doesn’t stop that.

Mediation cannot overturn a previous court ruling – only the courts can do so.

Campaign4Change’s questions to the Post Office

Based on this article, Campaign4Change put some questions to the Post Office:

  1. If an organisation the size of Boeing can be mistaken when it clears its own equipment and blames the human operators (pilots), it is possible that the Post Office was mistaken when it cleared its own equipment and blamed the sub-postmasters? [Boeing, which is much bigger than the Post Office, has vast test facilities and matching resources for investigations.]
  2. One outcome of the US investigations was that “no firm evidence of a technical malfunction” did not necessarily mean there was no technical malfunction. The 737 rudder system malfunction was found eventually to have been intermittent. It left no trace. [We know from the crash of a Chinook helicopter on the Mull of Kintyre in June 1994 that it’s possible for computer systems to fail to work properly – sometimes with an intermittent fault – and leave no trace.) Does the Post Office accept that mechanical or digital equipment can suffer from an intermittent fault that leaves no trace?
  3. Any comment please on the point that “no evidence of a technical malfunction” does not necessarily mean “no technical malfunction”?
  4. Any comment please on the point that large corporations, once they have cleared their equipment from blame after a single major incident – or further similar incidents – are unlikely ever to change their minds unless forced to?
  5. One of the most striking single aspects of any comparison between 737 crashes and the Horizon controversy is that it took professional full-time independent investigators in the US several years, millions of dollars and thousands of tests on one suspect component only, before they were able to establish not that the component in question had been the cause of two fatal crashes and a succession of other incidents but that it was the “probable” cause. There was no evidence that the suspect component was the cause. Has the Post Office required a higher standard of proof from sub-postmasters by requiring “evidence” to suggest that a Horizon malfunction or malfunctions caused the incidents in question?
  6. Boeing had to abide by the findings of the National Transportation Safety Board even though the Board did not agree with Boeing’s conclusions. The Post Office did not have to abide by the findings of its independent investigators Second Sight and was able to end Second Sight’s contract. Any comment please?
  7. In the US, the regulatory system allowed the National Transportation to require information from the various equipment manufacturers; and it could obtain information independently of the manufacturers, usually with their cooperation but not necessarily.   In comparison, the Post Office determined what information it passed to Second Sight and the families. On this point Second Sight had its concerns. In one of its reports for the Post Office, Second Sight said, “We have experienced significant difficulty in obtaining access to a number of documents we believe are necessary for the purposes of our investigation, notwithstanding Post Office’s commitment to make requested documents available to us.” Any comment please?
  8. The National Transportation Safety Board had the power (which it exercised) to exclude organisations that owned the equipment in question from participating in the inquiry. When the Post Office investigated Horizon systems in the light of losses shown on the systems, the Post Office, although owner and operator of the equipment in question, had the authority to retain full control of system information throughout.  Any comment please?
  9. The design of the 737 rudder system had been considered fail-safe and was certified on this basis. It had built-in “redundancy”. Even so, after thousands of tests, investigators found it could fail in very rare circumstances. The Post Office has explained at some length its Horizon failure back-up processes and procedures. Nevertheless could these prove fallible in very rare circumstances, in ways not yet fully understood?
  10. Boeing said it was open to any theory even if it meant Boeing was at fault. Is this the Post Office’s position?
  11. After the crash of United Airlines Flight 585 at Colorado Springs in 1991, the National Transportation Safety Board kept tabs on 737 rudder problems even without evidence they were the likely cause of any serious incidents.  Does this mark a different investigative approach to the Post Office which appears to have had a mindset that its equipment could not be to blame for losses?
  12. The NTSB after its initial investigation into the fatal crash of United Airlines 585 reached a conclusion that the probable cause was “undetermined reasons”. Would the Post Office consider such a possibility in the case of Horizon losses?
  13. Tests could not be carried out on 737 equipment until all parties agreed on how each piece would be tested. Agreement involved the Federal Aviation Authority as regulator, Boeing, the pilots’ union ALPA and the machinists’ union. In contrast the Post Office was in complete control of its investigations into Horizon losses.  Any comment please?
  14. The existence of the National Transportation Safety Board is a check against parties protecting their own corporate interests, namely the reputation of their equipment, after a major incident. What similar check exists to prevent the Post Office from seeking to protect its corporate interests – namely the reputation of its equipment – after a number of major incidents?

The Post Office’s reply (as mentioned earlier) was that “given that there is currently litigation it’s not appropriate for Post Office to comment”.

Postmasters tell their story – Computer Weekly investigation in 2009

Sub-postmasters and Horizon – timeline of events, 2009 to 2016 – Computer Weekly

Post Office prosecutions plummet

By Tony Collins

post officeThe number of Post Office prosecutions of postmasters has fallen sharply in recent years, from dozens a year to single figures, according to figures released under the Freedom of Information Act.

The Post Office has prosecuted subpostmasters in the past because of false accounting or theft after the Post Office’s Horizon IT system showed discrepancies in the accounts.

The law allows the Post Office to act as investigating authority – and prosecuting authority – when it suspects losses shown on the Horizon system are due to dishonesty by subpostmasters who run local post offices.

Some sub-postmasters have been jailed and some have been made bankrupt or ruined financially after the Post Office required that they repay losses shown on Horizon.

More than 150 subpostmasters are in the midst of a collective legal action against the Post Office. The action is being coordinated by the Justice for Subpostmasters Alliance. The Post Office is fighting it.

Subpostmasters say the losses were the result of faults in the Horizon or associated equipment and communications, which the Post Office denies. Subpostmasters say that evidence of discrepancies is not the same as evidence of theft.

These are the figures for Post Office prosecutions in the past six years:

post-office-prosecutions

The Post Office also gave figures for the number of postmasters suspended:

subpostmasters-suspended

Comment

In its Freedom of Information response the Post Office gave no reason for the plummeting number of prosecutions.

One possible factor is that the Post Office might have re-examined its approach to prosecutions. In 2013 forensic accountants Second Sight began reporting on complaints by about 150 subpostmasters that they were being incorrectly prosecuted or asked to repay money they did not owe.

In 2014 the BBC reported on the contents on of a leaked Second Sight report  that said Post Office investigators did not look for the root cause of the errors – and instead accused the sub-postmasters of theft or false accounting.

The Post Office has issued a point-by-point rebuttal of Second Sight’s reports.

In a separate blog post, I have suggested that the Post Office settle the Justice for Subpostmasters Alliance’s legal action – which would mean compensating the individuals and families involved – to avoid protracted legal proceedings causing more suffering.

Post Office Horizon IT – for Julian Wilson time ran out on justice

Justice for Subpostmasters Alliance

Second Sight’s report

 

Post Office closes amid Horizon broadband problems

By Tony Collins

A Post Office has closed – temporarily perhaps – because the postmistress is refusing to spend more of her own money balancing the books on the Horizon IT system.

The York Press has published an article on the concerns of Wendy Martin who runs a Post Office branch in Clifton, York.

A broadband connection from her branch to the Horizon system goes down regularly, which she says stops payments being processed centrally. This has left her business hundreds of pounds down at the end of the month and her covering the shortfall.

Under her contract with the Post Office – and all such contracts – subpostmasters are responsible for any losses shown on Horizon.

About 150 sub-postmasters have complained to the Post Office about shortfalls which they say were accounting discrepancies related to Horizon problems rather than theft or fraud.

The Post Office’s legal action following cash shortfalls has led to the ruin of  dozens of subpostmasters who have lost their livelihoods, been made bankrupt or gone to jail. There were criminal convictions in 43 cases.

Subpostmasters claim the Post Office failed to investigate irregularities properly before launching criminal proceedings.

Wendy Martin has closed her Post Office until the connectivity problem is corrected.

The self-employed postmistress, who has worked in various shops during an 18-year career, says she is concerned that the problem will increase and could leave her paying in more money each month until the shop goes bust.

She told The Press: “The public feel I’m doing them a dis-service because the shop is shut but I could be in a situation where I may end up in prison.

“It costs me £400 just to keep the shop closed and if I keep putting in the money I will go bust. I hope the Post Office takes this seriously and come out to sort this, but until they do I’ll have to stay shut.”

Since the York Press article was published on 29 August Wendy Martin says the Post Office told her it would be “out asap and will sort this out”. She says she “cannot afford to keep putting money in for lost transactions due to this”.

Some subpostmasters have set up a Facebook page to air some of their grievances.

The Post Office says it does not prosecute people for making innocent mistakes and never has. In response to a BBC Panorama documentary last month on Horizon and the complaints of subpostmasters, the Post Office said:

“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…

“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.”

Mediation latest

John Munton, a director of the Centre for Effective Dispute Resolution, which is mediating in the disputes between the Post Office and subpostmasters, has written to the Post Office on the results of his review of the mediation so far.

Of the 20 cases that have gone through mediation, 8 have been resolved which is 40%.  Munton says this settlement rate is “somewhat lower than the average settlement rate that we see across all the mediations that CEDR conducts”.

In an average year its settlement rate “tends to range between 65% and 75% with a further 10% to 15% of cases resulting in some progression towards final resolution”.

Munton suggests there is a fundamental mismatch between the expectations of the subpostmasters and the object of mediation which is not to award compensation but to achieve an agreement between the parties.

Subpostmasters expect to enter into talks on compensation for their lost livelihoods and money they have paid to the Post Office to cover accounting shortfalls. The Post Office’s representatives make it clear they need credible evidence to justify the claims for compensation.

The mediation process has been more effective, says Munton, “where a continuing contractual relationship is still in place between subpostmasters and the Post Office, and where both parties would like it to continue.”

Comment

The Post Office, in mediation and its entire approach to the complaints of subpostmasters, is taking an empathetic but legalistic approach. To subpostmasters who say Horizon was responsible for losses, the Post Office’s lawyers say in essence: “Prove it.”

The subpostmasters can prove little or nothing, perhaps because Horizon is not owned or run by them. All the information subpostmasters possess is supplied and owned by the Post Office or its main supplier Fujitsu. The Post Office says there is no evidence that Horizon has caused the discrepancies complained of by the subpostmasters.

This is not like a train crash where there would be an independent statutory investigation, the findings of which would have a statutory authority. In these cases, the Post Office has chosen to commission an independent investigation from forensic accountants Second Sight. The findings have no statutory authority. The Post Office is entitled to reject Second Sight’s findings. And it has.

It is unclear whether all the facts in these cases have surfaced, whether the Post Office still possesses all the potentially relevant data from disputes that date back many years, or whether it has made any mistakes in its interpretations of the facts.

The Post Office will continue to benefit from a purely legalistic approach because subpostmasters may be able to prove that Horizon can go wrong but they will never prove that it did go wrong in their particular case.

Even when statutory investigations take place into public safety incidents, it may take years to find possible or likely causes. And that’s the point. There are only possible or likely causes. In fatal air crashes involving large passenger jets, for example, the outcome is a “probable” cause or “probable” causes.

By requiring evidence of a definite cause or causes of shortfalls, the Post Office is demanding the impossible.  On the other hand, why would it pay compensation when subpostmasters cannot prove that Horizon and the Post Office’s training or procedures were at fault?

Perhaps the only sensible way for these disputes to be settled is for lawyers to stand aside and allow managers to resolve cases on the balance of probabilities.

It’s clear to outsiders that 150 subpostmasters have not had criminal intent when, as happened in some cases, they signed off unreconciled accounts as correct. Many are victims of miscarriages of justice and deserve to have adequate compensation and their names cleared. The sooner this happens the sooner the Post Office can reclaim its reputation for fairplay.

If the cases are not settled the campaign for justice could go on indefinitely.

Mediation – letter from Centre for Effective Dispute Resolution to the Post Office. CEDR – mediation review

York Post Office closes amid cash row

Post Office Horizon and last night’s Panorama