Category Archives: presumption

50 more lawyers are hired over the Post Office IT scandal: not a great way to say sorry?

 

Photo: Andrew Buchanan,- Unsplash

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 Justin 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”.

Exceptional

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.”

Comment:

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

 

Ministers plan hasty review of the Post Office IT scandal before more facts emerge?

By Tony Collins

The full truth has yet to unravel over the Post Office IT scandal – but more disclosures are likely in the next few months when the Court of Appeal starts the first hearings into whether to quash the convictions of 47 sub-postmasters who were prosecuted on the basis of evidence from the Post Office’s flawed Horizon system. A directions hearing for the 47 cases is due to be held on 25 November.

Lawyers are preparing evidence for the Court of Appeal that may put the scandal into a wider and more controversial context – and would render as irrelevant an impending government lessons-learning “review” of Horizon.

More than 1,800 business people – sub-postmasters and mistresses – who ran branch post offices under franchise contracts with the corporate Post Office, experienced unexplained balance shortfalls on the branch accounting system Horizon, built and run by Fujitsu.

The Post Office required the sub-postmasters to make good unexplained balance shortfalls from their own pockets. At times, the shortfalls amounted to tens of thousands of pounds.

Whether or not sub-postmasters made good unexplained shortfalls, the Post Office still prosecuted in many cases: for theft, false accounting and fraud. It followed up prosecutions with civil actions, all based on Horizon evidence.

The prosecutions were almost invariably successful because of a major flaw in the criminal justice system – a legal “presumption” in which judges are recommended to accept computer evidence as reliable unless the defence can show it’s not. But defendants cannot prove an institution’s complex system is faulty in a specific way, and on the dates and times in question, unless they know the system intricately enough to pinpoint the correct documents to ask for, among the many thousands of confidential papers that the prosecution may be reluctant to disclose. Anyone who wants to prove an institution’s computer system is not as robust as it claims may need tens of millions of pounds to do so. Barrister Paul Marshall wrote a paper in July for the Commons’ Justice select Committee on how the presumption made the Post Office IT scandal possible and makes many other injustices likely.

After Horizon went live in 1999, increasing numbers of sub-postmasters complained to their MPs that they were being convicted of crimes they did not commit, on the basis of evidence from the flawed Horizon system. But government business ministers and the Post Office rejected all complaints about the system. They said there was no evidence the system was not robust.

Photo by Metin Ozer on Unsplash

Poor conduct

The helpless state of sub-postmasters changed after a former sub-postmaster Alan Bates, who founded Justice for Sub-postmasters Alliance, raised, with help, litigation finance to sue the Post Office to expose Horizon’s faults. The case was a success and exposed not only Horizon’s material faults that caused numerous shortfalls on the system but also the Post Office and Fujitsu’s poor conduct in the years before, and during, the litigation.

In the light of the High Court’s findings, the Criminal Cases Review Commission, has referred 47 unsafe Horizon-based convictions to the Court of Appeal. The Commission is confident the convictions will be overturned because of what it calls the Post Office’s “abuse of process”.

The government has announced a review of the Post Office’s Horizon-related failings but it excludes consideration of court-related matters and will therefore not take in findings from the appeal cases.  The first Court of Appeal rulings are expected in the first half of next year – by which time the government review may be finished.

Review imminent?

Alok Sharma, secretary of state for the business department, BEIS

Alok Sharma, secretary of state for the Post Office’s “sponsor”, the Department for BEIS, told the House of Commons’ BEIS select committee in July that the “plan is to start an inquiry [review] by September at the latest”.

Government business minister in the House of Lords, Martin Callanan, told peers last week that the appointment of someone to chair the review is imminent. He said, “I am hoping that an appointment can be made imminently, because we all want to see this under way as quickly as possible.

But a review long before the Court of Appeal rulings highlights a disconnect in the way the Horizon affair is seen by both sides – ministers and officialdom on one side and, on the other, sub-postmasters, MP, peers and campaigners for justice. The gap between the two sides is as wide as ever and suspicion runs deep.

Paul Scully MP, postal affairs minister who wants an “independent” review and doesn’t support a judge-led inquiry into the Post Office Horizon IT scandal

Naive

Sharma and his junior business minister Paul Scully, the postal affairs minister in the Commons, appear to see their uncritical support for the current Post Office board as important to the institution’s financial stability. The Post Office receives hundreds of millions of pounds in investment funding from taxpayers.  But this uncritical ministerial approach is seen by those on the other side as deferential and naive, accompanied as it is by BEIS’s apparent indifference to criticism.

A lack of effective challenge over nearly 20 years could be said to have provided an environment for numerous injustices to happen.

Ministers may be further fuelling accusations of indifference by refusing a judge-led inquiry into the scandal and rejecting calls by MPs and peers to pay the £46m costs of the sub-postmasters’ side of the litigation last year that exposed much of what is now known about Horizon’s defects.

Mistakes – or deliberate concealment of Horizon problems?

Scully has said the Post Office “got things wrong” and made “mistakes”. But some lawyers say mistakes and incompetence had little to do with the scandal.  If it emerges that the Post Office and its Horizon supplier Fujitsu deliberately concealed Horizon IT problems from the courts where the reliability of the Horizon system was a central issue in whether the accused went to prison, MPs and peers are likely to demand a government response, whether or not the review into the scandal has finished.

For sub-postmasters, it was one thing to be imprisoned for a crime they did not commit because of mistakes by investigators, prosecutors and the courts; it is another thing to lose their freedom, home, livelihood, life savings and sometimes their health because the corporate culture and practice within a state institution seemed to regard the concealing of its IT problems as more important than anything, including individual liberty.

A possible further consideration over the coming months is whether the prosecution’s charging decisions were sometimes based in part on the Post Office’s financial interests rather than purely in the interests of justice – all matters that the government review of the scandal will disregard.

Photo by Andrew Buchanan on Unsplash

The Post Office side

The Post Office’s position has been that Horizon is not perfect but a range of “countermeasures”, such as manual or IT-based corrections to incorrect transactions, made the system “robust”. Therefore, the Post Office has taken it as read that inexplicable shortfalls shown on Horizon must be down to criminality or incompetence of the sub-postmaster.

It is still the Post Office’s position that sub-postmasters have yet – if ever – to prove that a Horizon glitch caused a particular shortfall for which they were prosecuted or required to make good losses. The Post Office’s CEO Nick Read said in a letter to the BEIS select committee in June 2020,

“The [High Court] judgment did not determine whether bugs, errors or defects did in fact cause shortfalls in the individual claimants’ accounts …”

But to show it got some things wrong in the past, the Post Office has paid £57.75m in compensation, made an apology, launched a historical shortfall compensation scheme, set aside a place on the board for a postmaster and says it is reforming its culture and organisation.

Internal emails disclosed to the High Court suggest the Post Office is reluctant to be open about Horizon defects in case sub-postmasters exploit a bug to steal or defraud. The Post Office is a cash intensive business and needs to be able to trust Horizon to track any dishonesty. All sub-postmasters must be seen as a potential fraudsters, even though they are vetted before taking over a branch post office, typically invest £80,000-£120,000 in buying a post office premises that is often to a linked retail business and it would not, in theory, make sense for sub-postmasters to steal from themselves.

Horizon’s reliability is vital to the commercial success of the Post Office. The Post Office says the system works well every day for 11,500 post offices where there are often several people at each site using the system for a diverse range of products. On average, Horizon handles about six million transactions a day.

Mr Justice Fraser

The story’s other side

Robust? A system with 10,000 manual interventions a week? Mr Justice Peter Fraser, in the High Court Horizon legal case last year, found that Horizon needed more than 10,000 manual interventions a week – which he said suggested something was wrong.  “I do not accept that on a properly functioning and robust system there should be such a high number as that every week,” said the judge. His comment raises a question of how the Post Office was ever allowed in court cases to describe Horizon as robust.

Innumerable Horizon shortfalls are suspect. Fujitsu was “far too ready” to ascribe the effect of Horizon bugs, errors and defects to possible user error, said the judge. At no point, it appears, did successive Post Office boards ask why the institution was experiencing apparent massive crime-waves among sub-postmasters since Horizon was introduced.

Innumerable Horizon-based prosecutions suspect.  Prosecutions and convictions were based on an assumption by the courts and juries that the accused was responsible for the Horizon-based branch post office data in question. But the High Court judge found last year that all software specialists at Fujitsu’s Software Support Centre at Bracknell had powerful “APPSUP” system privileges that enabled them to do almost anything on the Horizon database, including “injecting” transactions into a branch post office’s accounts without the knowledge of sub-postmaster.  Some Fujitsu personnel had APPSUP access privileges they were not supposed to have.  They were able to edit the branch accounts, add “balancing transactions” or  delete transactions. Sometimes alterations could take place live without the sub-postmasters’ realising or having given their consent. Fujitsu specialists were able at one time to use a sub-postmasters’ ID number which could leave sub-postmasters believing they had made the changes carried out by Fujitsu. The judge found there was a lack of control of the role and the recording of access.  Logs were maintained between 2009 to July 2015 but did not record actions, only whether a user had logged on and logged off. Even after July 2015, the logs “are not a useful source of evidence about remote access”, due to their lack of content, said the judge.

“In my judgment, this amounts to a deficiency in controls,” he said.

“The whole of SSC [Fujitsu’s Software Support Centre] had the APPSUP role for many years, and internal Fujitsu documents recorded that they were not supposed to have that role. There were a large number of personnel within SSC,” said the judge.

The High Court – Royal Courts of Justice

Photo by Mahosadha Ong on Unsplash

The High Court was told that the APPSUP role was used 2,175 times between 2009 and 2019. The judge said,

“… anyone with the APPSUP role could pretty much do whatever they wanted. [They] had the potential to affect the reliability of a SPM’s [sub-postmasters’] branch accounts to a material extent. Further, the evidence shows clearly that there were instances when this in fact occurred,…”

Does APPSUP access – which the judge devastatingly observed was “effectively unaudited” – render unsafe innumerable prosecutions, convictions and civil claims for alleged shortfalls? The Court of Appeal is expected to look at this point: that Fujitsu personnel had online access to post office branches’ accounts without full records being kept of what they did and without sub-postmasters’ knowledge.

At the heart of the scandal. The Post Office is answerable to nobody for the worst aspect of the scandal: deliberately concealing IT problems while prosecuting on the basis of the alleged reliability of the system and pursuing payment of alleged Horizon losses through the civil courts when it was known the system was flawed.

In criminal or civil cases where Horizon’s reliability was the central issue, the prosecution did not disclose that the system had thousands of known errors, bugs or defects, needed up to 10,000 manual interventions a week and branch post office accounts could be changed remotely without the knowledge of sub-postmasters.

Still answerable to nobody.  A Government review of the IT scandal will not consider whether the Post Office deliberately concealed Horizon problems from criminal and civil courts.

Still huge losses for scandal victims. The Post office paid £57.75m to settle a High Court case it was clearly losing. But it was a minimal sum and left sub-postmasters, after costs, with huge deficits. The way the civil justice system works means sub-postmasters cannot recover the costs or claim them in follow-up civil actions. Scully has refused to pay the sub-postmasters’ costs which comprise £46m of the total £57.75m settlement payment. Ministers have said the settlement amount was not a matter for government – but the government owns the Post Office and has a seat on its board.

Peer Peter Hain

Former minister and now peer Peter Hain told the House of Lords last week,

“The Minister says that he does not want to interfere, but the Government are 100% owner of the Post Office—the Permanent Secretary of the department is its accounting officer and there is government representation on the board. The Government are ultimately responsible for this scandal. It is not good enough to keep delaying this with lots of process and reviews. They [sub-postmasters] must be compensated fully.”

Horizon bugs, errors and defects caused shortfalls or discrepancies numerous times.  The judge found that bugs, errors or defects of the nature alleged by sub-postmasters “have the potential” to cause apparent or alleged discrepancies or shortfalls relating to sub-postmasters’ branch accounts or transactions, and also that “all the evidence in the Horizon Issues trial shows not only was there the potential for this to occur, but it actually has happened, and on numerous occasions”.

No remorse for wrongful prosecutions? The Post Office specified in the settlement terms that its compensation was not intended for any convicted sub-postmaster.

Limited apology: the Post Office’s apology to sub-postmasters “affected” was vague and generalised; it did not say what, specifically, the Post Office was apologising for; and it referred to events “in the past”. The apology did not appear to cover the Post Office’s conduct during the litigation, which was between 2017 and 2019, and which was much criticised by the High Court. One critic’s view is that the main regret of the Department for BEIS is that the litigation laid bare Horizon’s faults and the concealment of them.

Judicial review on historical shortfall scheme?  As part of the settlement terms of the litigation last year, the Post Office has set up a Historical Shortfall Scheme to compensate sub-postmasters who say they were wrongly blamed for Horizon shortfalls. But the way the scheme has been set up may be the subject of a judicial review. Chirag Sidhpura, a former sub-postmaster, hopes to crowdfund his application for a judicial review. He says the historical shortfall scheme is fundamentally flawed, unfair and has closed prematurely given that the facts may be clearer after the Court of Appeal hearings.

 

Houses of Parliament

Photo by Michael D Beckwith on Unsplash

Ministers reject scandal victims’ every request.  Successive government business ministers, including the present ones, have refused every request of sub-postmasters including the return of their costs of exposing the Horizon scandal in the High Court.

Board place for postmaster a PR move? The Post Office’s place on the board for a postmaster is perceived as a good PR move that few outside the Post Office or civil service expect to make any difference.

Horizon problems still secret. The Post Office is still keeping secret Horizon Known Error Logs despite much specific criticism in the High Court about a lack of openness  over the logs. In July 2020, the Post Office refused a Freedom of Information request by Post Office critic and blogger Tim McCormack.

McCormack asked the Post Office for a “list of errors in Horizon that are due to be remedied in this next release and the notes held against these errors in the Known Errors Log”. Refusing his request, the Post Office said,

Questions  not answered. MPs on the BEIS select committee gave the Post Office a list of written questions on Horizon this year but did not always receive full answers.

Impossible to prove Horizon glitches on particular shortfalls?  The  Post Office said in a letter to MPs on 25 June 2020 that the litigation did not determine whether a Horizon glitch caused a particular shortfall in any individual case.

But sub-postmasters say nothing can be proved without the Post Office’s full disclosure of Horizon problems on the dates and times in question. A major point in contention at the High Court hearings was the lack of openness of the Post Office and Fujitsu over Horizon’s problems. Sub-postmasters cannot prove a particular Horizon glitch caused their shortfall if the Post Office does not disclose the relevant documents, they are no longer available, it cannot obtain them from Fujitsu or the documents don’t accurately show the effects of particular bugs on individual branch accounts.

Post Office CEO twice not given the full truth. If the Post Office’s own CEO was not told the full truth on Horizon, how were sub-postmasters to obtain the documentary evidence to establish that specific errors, bugs and defects caused their particular shortfall?

A large section of Mr Justice Peter Fraser’s judgment – about 12 pages – was devoted to “Inaccurate statements by the Post Office.”

In July 2016, the then CEO asked for an investigation into a sub-postmasters’ complaint about Horizon being the cause of her losses – as reported by Tim McCormack in his 2015 blog post the Dalmellington Error in Horizon.

But internally within the Post Office there was a high-level request for the CEO’s request to be stood down. A senior executive at the Post Office replied internally to the CEO’s request, “Can you stand down on this please? [A redacted section then follows] … My apologies.”

The judge said,

“I can think of no justifiable reason why the Post Office, institutionally, would not want to address the Chief Executive’s points and investigate as she initially intended, and find out for itself the true situation of what had occurred.”

It took many tens of millions of pounds to obtain a “yes” answer 

The CEO had also asked her managers whether it was possible to access the system remotely. The answer was “yes” – but it took several years, the Horizon litigation and many tens of millions of pounds to establish the “yes” answer.

The judge said,

“This trial has shown that the true answer to the enquiry she [the then CEO] made in early 2015 was “yes, it is possible.” It has taken some years, and many tens of millions of pounds in costs, to reach that answer.”

The then CEO’s question in 2015 was, “is it possible to access the system remotely? We are told it is.”

Her managers exchanged long emails on how to answer.  The CEO’s question was in the context of her forthcoming appearance before a committee of MPs. The Post Office had, for years, denied to Parliament and the media that it was possible for Fujitsu to access branch post office accounts. Prosecutions and civil cases to claim money from sub-postmasters had been based on sub-postmasters themselves always being responsible for Horizon’s output – which was untrue.

The judge said,

“… the Post Office has made specific and factually incorrect statements about what could be done with, or to, branch accounts in terms of remote access without the knowledge of the SPM [sub-postmaster]. The evidence in this trial has made it clear that such remote access to branch accounts does exist; such remote access is possible by employees within Fujitsu; it does exist specifically by design; and it has been used in the past.”

Post Office applied to remove the judge a day after Horizon’s chief architect confirmed Fujitsu had “remote access” to branch accounts. 

The judge noted that the Post Office applied to remove him as judge the day after Horizon’s chief architect, in cross-examination, had made it clear, not only that remote access existed, but after he was taken in careful cross-examination through specific examples of Fujitsu’s personnel manipulating branch accounts, and leading to discrepancies in branch accounts.

Fujitsu less than forthcoming –  judge. The judge said problems with Horizon would never have been revealed without the sub-postmasters’ litigation. He said,

“In my judgment, however, there are sufficient entries in the contemporaneous documents to demonstrate not only that Fujitsu has been less than forthcoming in identifying the problems that have been experienced over the years, but rather the opposite.
“The majority of problems and defects which counsel put to [Horizon Chief Architect at Fujitsu] and which were effectively admitted by him, simply would not have seen the light of day without this group litigation.”

Post Office’s “entrenched” view of Horizon.  The judge said,

“The problem with the Post Office witnesses generally is they have become so entrenched over the years, that they appear absolutely convinced that there is simply nothing wrong with the Horizon system at all, and the explanation for all of the many problems experienced by the different Claimants [sub-postmasters] is either the dishonesty or wholesale incompetence of the SPMs [sub-postmasters]. This entrenchment is particularly telling in the Post Office witnesses who occupy the more senior posts.”

Mr Justice Fraser described as “most disturbing” and “extraordinary” the concealment of Horizon problems while court cases in which the integrity of Horizon was a central issue were ongoing.

Jury not told of bug that corrupted branch accounts

As pregnant sub-postmistress Seema Misra waited for her Crown Court trial on charges arising from shortfalls shown on Horizon, she could not have known that a high-level meeting involving Fujitsu and the Post Office was taking place over a system bug that corrupted some post office branch accounts.

If disclosed to her jury, details of the bug could help establish her innocence. Unfortunately for her, the high-level meeting – and the bug – were kept confidential.

It was only many years after Seema Misra’s trial that details of the meeting came to light – and only then because of the High Court litigation. A note of the high-level meeting in 2010 warned of the impact of Fujitsu and the Post Office being open about the bug, which was called the “Receipts and Payments Mismatch Issue”. Mr Justice Fraser described the notes of the meeting as a “most disturbing document”. The notes warned,

  • If widely known [the bug] could cause a loss of confidence  in the Horizon System by branches
  • Potential impact upon ongoing legal cases where branches are disputing the integrity of Horizon Data
  • It could provide branches ammunition to blame Horizon for future discrepancies.

Mr Justice Fraser said of the memo,

“To see a concern expressed (in the memo) that, if a software bug in Horizon were to become widely known about, it might have a potential impact upon ‘ongoing legal cases’ where the integrity of Horizon Data was a central issue, is a very concerning entry to read in a contemporaneous document.
“Whether these were legal cases concerning civil claims or criminal cases, there are obligations upon parties in terms of disclosure. So far as criminal cases are concerned, these concern the liberty of the person, and disclosure duties are rightly high.
“I do not understand the motivation in keeping this type of matter, recorded in these documents, hidden from view; regardless of the motivation, doing so was wholly wrong. There can be no proper explanation for keeping the existence of a software bug in Horizon secret in these circumstances.”

Concealment

In proposing solutions to the Receipts and Payments Mismatch bug, the emphasis in the memo was on concealment. Indeed the confidential notes reveal that a risk with one of the solutions to the bug is that it could reveal the ability of Fujitsu’s IT specialists to change branch data without informing the branch – which for the next seven years, in statements to Parliament and the media, the Post Office would deny was possible.

The notes in 2010 said,

“RISK- This [proposed solution] has significant data integrity concerns and could lead to questions of ‘tampering’ with the branch system and could generate questions around how the discrepancy was caused. This solution could have moral implications of Post Office changing branch data without informing the branch.”

It was not until the High Court litigation that the Post Office conceded that Fujitsu had a back door through which its IT specialists could access the accounts of branch post offices without the knowledge of sub-postmasters.

Barrister Paul Marshall, who has written extensively on the Horizon scandal, says that Fujitsu’s back door to branch accounts undermines every prosecution that relies on Horizon data.

At Seema Misra’s trial, the prosecutor told Seema’s jury that any problems with Horizon would be visible to the sub-postmaster – although at the high-level meeting of Fujitsu and the Post Office a few weeks earlier it had been made clear the Receipts and Payments Mismatch bug would not be visible to sub-postmasters.

The prosecutor told Seema’s jury,

“The Crown say it [Horizon] is a robust system and that if there really was a computer problem the defendant would have been aware of it”.

Seema was charged with theft on the basis that there could be no other credible reason for Horizon to show shortfalls.  Her lawyers asked on three occasions for her criminal trial to be stayed as an abuse of process because of inadequate disclosure by the Post Office of Horizon data. But Recorder Bruce, Judge Critchlow and the trial judge, Judge Stewart, rejected each of those applications.

When sentenced, Seema Misra blacked out. She was given 15 months imprisonment. The jury trusted Horizon’s evidence.

Nine years later, in 2019, Mr Justice Fraser would find that the Horizon system in 2010, at the time of Seema’s trial, was not robust. The original Horizon system from 1999 to 2010 was “not remotely robust”, he said.  Horizon Online from 2010 to 2017 – latterly based on Windows NT 4.0  – was “slightly” more robust than the original Horizon but “still had a significant number of bugs” and “did not justify the confidence routinely stated by the Post Office (prior to February 2017) in its accuracy”.

More criticism – this time by Criminal Cases Review Commission. The Commission referred 47 Horizon cases to the Court of Appeal on grounds of “abuse of process”. 

The Commission said there were “significant problems with the Horizon system and with the accuracy of the branch accounts which it produced”. It added that there was a “material risk that apparent branch shortfalls were caused by bugs, errors and defects in Horizon”.

Further, the Commission criticised the Post Office’s failure to disclose the full and accurate position regarding the reliability of Horizon. It added that the “level of investigation by the Post Office into the causes of apparent shortfalls was poor, and that the [sub-postmasters] were at a significant disadvantage in seeking to undertake their own enquiries into such shortfalls”.

“The reliability of Horizon data was essential to the prosecution and conviction of the [sub-postmaster in question] and that, in the light of the High Court’s findings, it was not possible for the trial process to be fair,” said the Commission.  It added that it was an “affront to the public conscience” for the sub-postmaster to face criminal proceedings.”

Turning on a former colleague whose evidence exposed the full picture?

The judge said,

“Infallibility is a rare commodity, and everyone is capable of making mistakes. However, it is how one reacts to mistakes that is telling. In this instance, the initial reaction of the Fujitsu witnesses was to seek to shift the blame for their own misleading written evidence upon someone else. In this case, that “someone else” was their former Fujitsu colleague whose very evidence was responsible for exposing the full picture.”

Comment

“There is a lot of interest in this,” said government business secretary Alok Sharma in July when asked by MP Ruth Jones about a judge-led inquiry into the Post Office IT scandal.

Sharma was not talking about the take-up of loans to small businesses or a new type of smart meter.  The scandal is described by lawyers as the widest miscarriage of justice in England’s legal history. Is it surprising then that there is a lot of interest in a judge-led inquiry?

The instincts of former sub-postmaster Alan Bates who instigated the group legal action in the High Court against the Post Office have proven correct. He knew that he could not depend on the Parliamentary business establishment to expose the scandal or mitigate its effects.

The scandal continues

Indeed, the government review of Horizon announced by Scully and Sharma seems more likely to recommend tweaking the Post Office’s corporate governance than holding to account those who allowed sub-postmasters to go to prison on the basis Horizon was robust.

The scandal goes on: ministers express their confidence the Post Office will cooperate with a review. This is the same organisation that had not always given the truth to its CEO on Horizon, had tried to stop disclosure of relevant information to the High Court about Horizon, had tried to mislead the judge in the case and had not disclosed 5,000 “known error logs” until after the end of a Horizon trial that had focused on errors in the system. On what grounds do ministers now believe the Post Office, institutionally, has a genuine interest in cooperating fully with a review after 20 years of concealment?

For more than a decade, the Parliamentary business establishment has been close to indifferent about the scandal or, at best, knowingly naive. That establishment, understandably, wants the Post Office to flourish not collapse under the weight of a self-made scandal.  But government business officials and ministers seem to treat the Horizon scandal a little as if a large energy company’s billing system has issued some inaccurate bills.

Accountability?

Would a minister say, “there’s a lot of interest in this” if MPs had asked about other matters that warranted a judge-led inquiry, such as the Grenfell fire or failures at Mid-Staffordshire Hospitals?

The reason the Horizon scandal was allowed to happen was because the Post Office was answerable to nobody and was therefore unaccountable for its conduct. Can anyone, in truth, say it is now accountable?

At the BEIS committee hearing in July, business MPs – who have had 20 years to hold the Post Office to account, had the rare chance to question the business secretary Sharma. True, Sharma was not in office during the scandal but he is likely to have been briefed on it by his officials at some point this year. At the BEIS hearing, Sharma was asked just four questions about the Post Office IT scandal by two of the nine MPs at the hearing – and near the end of the session.

Sooner of later, ministers will need to show they care. Outside the Parliamentary business establishment, there is genuine concern: Boris Johnson called the Post Office IT scandal a disaster for sub-postmasters. Commons leader Jacob Rees-Mogg said of the Horizon matter there is “no worse scandal than imprisoning people or unjustly taking away their livelihoods when they are accused of crimes that they did not commit”. The Criminal Cases Review Commission, the High Court, the Appeal Court, sub-postmasters, the media and many MPs and peers have been forthright in their criticisms of the Post Office. But not the Parliamentary business establishment.

Journalist Nick Wallis was told by a government source that civil servants did not want even a review. “They wanted it all to go away.”

One thing is certain. Alan Bates will make sure the campaign for justice continues until sub-postmasters have at least been returned the money wrongfully taken from them.

The longer ministers keep their cheque books closed on the sub-postmasters’ losses the longer the campaign for justice goes on, as will the campaign to hold to account those who allowed miscarriages to happen, including at the Post Office and the Department for BEIS.

Government business ministers appear to believe that a public summary of the Post Office’s failings at the end of a government review into Horizon will give sub-postmasters the closure they crave. If ministers genuinely believe this summary can replace fair compensation, justice and accountability they are as naive as their predecessors.

It would take an afternoon only to write a summary of the Post Office’s failings from the litigation rulings. An afternoon’s work would save on the cost of a review. And just as pointless as a review.

No pain no gain

The obvious way to resolve the scandal now is for the right thing to be done – which will not be easy. It may be difficult and painful to come up with £46m to pay the sub-postmasters legal costs. But compare the difficulties of raising £46m with the years of suffering that an arm of the state has imposed on 1,800 or more sub-postmasters.

 

Martin Callanan, Post Office and BEIS minister in the House of Lords

Doing the wrong thing is carrying on with what is happening now: planning for a non-statutory review in which nobody is cross-examined and no documents can be demanded is easy. Writing a summary of the Post Office’s failings is easy. Going into the Lords and Commons and giving the same scripted answers whatever the question is easy. In the Lords last week, peers who briefly debated the Horizon scandal would have been better served by a cardboard cut-out of the government business minister, Martin Calllanan: a cut-out would not have raised expectations. It cannot be fulfilling for business ministers to go into the Commons or Lords and answer questions on Horizon by sounding like a pre-recorded voicemail message.

It took immense hard work and perception for Mr Justice Fraser, the judge in the litigation between sub-postmasters and the Post Office, to set out the legal position with such unsparing clarity. He was courageous too, say lawyers, because he took on an institution the size of the Post Office in a way other judges might have been reluctant to do.  Now it’s up to ministers. Their department can carry as now which will mean continuing to answer parliamentary questions and writing scripts for Horizon debates for years to come  … until, eventually, the right thing – the hard and painful thing – is done.

**

Crowd-funding appeal to support Chirag Sidhura’s application for a judicial review of Post Office’s historical shortfall scheme. 

They all wanted it to go away – Nick Wallis

The Great Post Office Trial – Nick Wallis’ beautifully-told story of the Post Office scandal, in a 10-part series on BBC R4. 

Fujitsu must face scrutiny following Post Office Horizon trial judgment – Karl Flinders, Computer Weekly An in-depth account of some misleading statements to the High Court.

Possible misconduct by prosecution – Second Sight paper to BEIS committee

Bates v Post Office Horizon judgment, December 2019