By Tony Collins
In a settlement statement last December, the Post Office seemed to mark an end to a long dispute with sub-postmasters over its Horizon branch accounting system.
More than 550 sub-postmasters had sued the Post Office in the High Court to establish that Horizon was flawed and that they were not to blame for unexplained shortfalls shown on the system. The Post Office defended Horizon, arguing it was robust, but settled when it became clear it was losing the case.
The litigation cost the Post Office £46m in legal expenses and £57.75m to settle. It had hired four QCs and two firms of solicitors to handle the case and had spent £500,000 alone on determining its litigation strategy. The judge in the case, Mr Justice Fraser, remarked on the Post Office’s apparent legal approach when he 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.”
But in settling the dispute and apologising, the Post Office’s new CEO said he was “very pleased we have been able to find a resolution to this longstanding dispute”.
He added, “Our business needs to take on board some important lessons about the way we work with postmasters, and I am determined that it will do so. We are committed to a reset in our relationship with postmasters, placing them alongside our customers at the centre of our business. As we agree to close this difficult chapter, we look forward to continuing the hard work ahead of us in shaping a modern and dynamic Post Office, serving customers in a genuine commercial partnership with postmasters, for the benefit of communities across the UK.”
At the heart of the dispute was whether Horizon, which was built and run by Fujitsu, had material faults that could alter post office branch balances and show phantom losses of tens, or sometimes hundreds, of thousands of pounds.
Whether or not Horizon was at fault, the Post Office demanded that sub-postmasters made good the shortfalls from their own pockets. It cited Horizon in the courts as robust evidence that the shortfalls represented actual money and prosecuted sub-postmasters for theft, false accounting and fraud. It also used Horizon evidence to obtain confiscation orders on countless homes, businesses and cars. Lives were ruined. At least 2,000 sub-postmasters were affected. One sub-postmaster, Martin Griffiths, stepped in front of a bus. His inquest heard the Post Office was pursuing him over shortfalls of tens of thousands of pounds. There have been other early deaths of Horizon victims including Fiona Cowan and Julian Wilson.
Remorse – or 50 more lawyers?
The litigation established that Horizon had numerous flaws. The Post Office and Fujitsu had hidden defects, bugs and errors for years – and the Post Office had not properly investigated Horizon before it blamed sub-postmasters for shortfalls shown on the system. As a result of the High Court Horizon judgment, the Criminal Cases Review Commission, which looks at possible miscarriages of justice, referred 47 sub-postmaster cases to the Court of Appeal. The Commission has never referred such a large number of convictions on one issue to the Court of Appeal. It criticised the Post Office for an “abuse of process”.
The Commission categorised the Horizon-related cases as “exceptional”. Usually the Commission considers applications only when a convicted person has first had their case heard and rejected by the Court of Appeal. But in exceptional circumstances the Commission can consider “no appeal” cases.
All but one of the 47 sub-postmaster applications are “no appeal” cases, which suggests that the Commission, in referring all of them to the Court of Appeal, regards the grounds for quashing their convictions as exceptionally strong.
The Court of Appeal is expected to hear the cases over the next few months and first rulings are likely early next year. They may reveal whether Horizon’s flaws were deliberately hidden from judges and juries and whether the prosecution’s choice of criminal charges was in any way influenced by strengthening the Post Office’s position when seeking confiscation orders for homes, businesses and cars.
A Directions Hearing for the Court of Appeal cases is scheduled for November. A key date for those hoping to have their convictions quashed is 2 October 2020 when the Post Office must indicate whether it will oppose any, some or all of the Court of Appeal cases. It is possible the Post Office will contest some of them, despite its apology and conciliatory remarks in the settlement statement, at which time it referred to a “genuine desire to move on from these legacy issues and learn lessons from the past”.
Horizon dispute very much alive
If the Post Office has no intention of contesting any of the Court of Appeal cases, it is unclear why it would need a large force of lawyers. The Post Office has retained more than 50 barristers and two QCs to consider the disclosure of documents relevant to the appeals to the Court of Appeal and a Historical Shortfall Scheme in which at least 1,300 sub-postmasters are seeking the return of money the Post Office demanded from them.
The Post Office’s large ongoing legal spend suggests the Horizon dispute is very much alive. It further raises the question of why ministers and civil servants still have an apparently “hands-off” approach to the Post Office’s legal spending.
Difficulties proving whether Horizon was or wasn’t to blame
That a complex computer system is at the heart of the dispute presents difficulties for both sides in producing evidence. For sub-postmasters, they can prove Horizon had numerous flaws that could alter branch accounts and that Fujitsu personnel had a “back door” to branch accounts which they could use to edit, add or delete transactions without the knowledge of sub-postmasters. Also, sub-postmasters can show from the litigation rulings that Fujitsu did not keep a proper record of what its IT personnel did when accessing branch accounts. The High Court judgments further showed that it was not unknown for Fujitsu personnel, when accessing branch post office accounts, to use the same counter number actually in use by the sub-postmaster or an assistant. This meant that the sub-postmaster, looking at the records, could end up believing the transaction inserted by Fujitsu had been performed within the branch itself. This information was only disclosed by Fujitsu (and therefore the Post Office) late in the litigation in January and February 2019.
All these things sub-postmasters could prove but it is almost impossible for them to obtain the information that proves Horizon was at fault in their particular case. This difficulty was summed up by Mr Justice Fraser,
“For a SPM [sub-postmaster] to demonstrate they were not at fault, if there was a loss, could be verging on nigh on impossible. Firstly, they would have to concentrate upon and analyse all of the branch records for every single transaction within the particular trading period. That would be an onerous burden for a single SPM. Secondly, those records would only be between the branch and the Post Office; SPMs have no access to data between the Post Office and its clients, and are not able to obtain it…a SPM simply does not have access to the type of information that would make such an onerous exercise possible even in theory.”
For the Post Office, establishing evidence that Horizon was working well at the time and date and branch post office in question may also be difficult. The Post Office relies for information about Horizon from Fujitsu which had thousands of Horizon known error logs that, for years, the Post Office might not always have seen. Also, Fujitsu sometimes wrongly categorised system problems as “user error” – in other words the fault of the sub-postmaster or an assistant. A further problem is that the Post Office may not be able to find the relevant records or might not have kept them. A big spend on a scientific approach to disclosing documents may therefore be unjustified.
Mr Justice Fraser made several comments in his judgements on the Post Office’s apparent lack of an open approach to disclosure of evidence. He referred to the difficulties for sub-postmasters of obtaining the Horizon known error log. At first, the Post Office said the log was not relevant and then suggested it may not exist. The judge referred to this approach as “disturbing” and “misleading”. These are some of the judge’s other comments about the Post Office’s lack of openness:
an “… overly intricate attempt to sow confusion and obscure the true issues in the case.”
“expenditure of time, resources and money by the defendant [Post Office] on restricting the claimants’ [sub-postmasters’] evidence.”
“It is difficult to see how they [sub-postmasters] can have such an opportunity if they are denied access even to copies of information or records.”
“It took a trial, tens of millions of pounds and several years to ascertain the truth about remote access [to branch accounts by Fujitsu].”
Post Office response
Asked last week why the Post Office is still spending large sums on lawyers despite its apology last year and criticisms by the judge, the Post Office said in a statement,
“The Post Office has been working closely with the Criminal Cases Review Commission since a number of former postmasters applied to overturn their convictions for offences based on evidence from the Horizon computer system, used in Post Offices since 1999.
“We are also conducting an extensive review of historical convictions which relied upon Horizon, to identify and disclose material that might cast doubt on the safety of those convictions in accordance with Post Office’s duties as former prosecutor.
“The Criminal Cases Review Commission has so far decided to refer for appeal the convictions of 47 applicants. The majority of these referrals are to the Court of Appeal (which relate to convictions in the Crown Court) with six separate referrals to Crown Courts (which relate to convictions in the Magistrates’ Court).
“The cases span the period between 2001-2013 and are technically and factually complex. The Court of Appeal has granted Post Office until 2 October 2020 to file its Respondent’s Notices.”
The new battalion of lawyers is being funded by an institution that only last December announced that it was learning lessons from the Horizon-related judgments in the High Court – judgments that included criticisms of its excessive legal costs.
But some who have read the hundreds of pages of judgments in the litigation may wonder if two parallel worlds are in operation.
The judge referred at different stages to the Post Office’s evidence in terms of a Lewis Carroll nursery rhyme, the earth as flat and a parallel world. It further emerged that sub-postmasters were expected to sign an agreement that referred to a non-existent Book of Rules and the Post Office argued in the litigation that, contractually, it was entitled to act in a vindictive, capricious or arbitrary way.
Where the judge found the Post Office’s conduct anomalous and surprising, he commented on it which, perhaps, was one reason the Post Office tried to remove him. That is the Post Office’s world.
The other world is the one in which people who know about the scandal do not understand why the Post Office is not in the least embarrassed at having the luxury, as a publicly-funded institution, of engaging four QCs and two firms of solicitors to contest a High Court litigation that ought not to have been necessary in the first place. Moreover, the Post Office seems not in the least uneasy about having made a public apology over the Horizon IT scandal but not paid back even half the money it demanded from sub-postmasters for Horizon shortfalls.
Those observing the scandal may also wonder, given the hundreds of lives ruined, why the Post Office seems to show few real signs of compassion, humility, empathy and remorse.
Lee Castleton is among the former sub-postmasters who continues to suffer the consequences of the scandal 13 years after the Post Office took him to court over Horizon shortfalls of about £26,000 and subsequently landed him with legal costs of 13 times that amount – £321,000. The problem for Castleton is that his case was in the civil court. He might have been better off if he had received a criminal conviction which today he could seek to overturn and then, if successful, take action against the Post Office. As things stand, there is little Castleton can do to right the financial wrongs he has suffered. He has received £51,000 from last year’s Horizon settlement – but £36,000 of this has gone into paying off what is left of the £321,000 Post Office legal bill that bankrupted him. The Horizon settlement has, for him, covered less than 20% of the Post Office’s court fees that he was made to pay and offered him no recompense for a ruined life.
The Post Office has been criticised by MPs, peers, forensic accountants it hired – Second Sight – the High Court, the Appeal Court, sub-postmasters and the Criminal Cases Review Commission.
But then there is the Post Office’s world. This is one in which postal affairs ministers are completely supportive. Not a word or hint of criticism of the current Post Office board from any business minister or the business secretary. In the Post Office’s world, every sub-postmaster is a potential fraudster. The challenge is minimising the potential for hundreds of millions of pounds worth of fraud. In this world, there is little place for humility and compassion. Any weakness in the system could be exploited by the unscrupulous. In this world, the Post Office is strong, seen to be strong, always in control and willing to take the action that needs to be taken to keep the vital network of post office branches in place, commercially sound and on a solid procedural, administrative and IT footing. And therein lies the two irreconcilable worlds.
Nobody in government is willing to bridge the two worlds. Ministers in successive governments seem to say to the Post Office, in essence, “We know you’re running a vital public service and a complex one in which we in our short time as ministers cannot hope to understand even superficially. We must therefore trust that, whatever you say, you know what you are talking about.”
Someone dynamic, senior and independently-minded in government is needed to intervene. But it will not happen with government business ministers who seem little more than Post Office flatterers.
Where is the public spending watchdog the National Audit Office?
There are some big questions that will remain unanswered until somebody in government gets a grip on the scandal. One question is: where is the public spending watchdog the National Audit Office? For years the Post Office has been seemingly awash with money to spend on lawyers. The NAO seems nowhere in sight.
And why is nobody in government challenging business ministers in their quest for a Horizon review that campaigning peer Lord Arbuthnot calls a “pathetic response to a national outrage”.
To do the right thing, ministers, civil servants and the Post Office could start by accepting the principle that it is not emasculating to make proper amends for a vast number of miscarriages of justices. To carry on spending huge sums on lawyers shows that, despite the good words and apology in the settlement statement, the Post Office’s culture and attitude is the same as it was when Horizon went live in 1999.
Worse, the Post Office could decide to contest Horizon cases that are due to go to the Court of Appeal. The Criminal Cases Review Commission has already categorised these Horizon cases as “exceptional”. For the Post Office to contest a single one of them, therefore, would be an extraordinary perpetuation of the Horizon scandal.
It would also reinforce the case for a full judge-led inquiry into how it is that ministers and civil servants continue to flatter and uncritically support an arm of the state that has held, in its hands, the future of more than 2,000 people but seems, to some, to continue to act as if in a Lewis Carroll nursery rhyme. One Lewis Carroll rhyme is, incidentally, called The Crocodile…
How cheerfully he seems to grin,
How neatly spreads his claws,
And welcomes little fishes in,
With gently smiling jaws!
Chirag Sidhpura’s crowdfunding appeal to support a Judicial Review of the Post Office’s Historical Shortfall Scheme which he regards as fundamentally flawed and unfair.
Hundreds of victims of Post Office IT scandal will be excluded from new compensation scheme – Daily Mail
The Post Office Trial – BBC Radio 4 series presented by Nick Wallis
Post Office Horizon IT scandal victims face further battles as government digs heels in – Computer Weekly