Campaign4Change

By Tony Collins

Police have re-interviewed two people as part of an investigation into a Post Office computer scandal that saw hundreds of workers wrongly convicted of crimes, says the Sunday Mirror.

The Post Office pursued more than 700 sub-postmasters and sub-postmistresses for theft, fraud and false accounting based on information from Fujitsu’s faulty Horizon system.

The Metropolitan police are now investigating the accuracy of evidence from two people who worked for Fujitsu, after a High Court judge referred the case to the Director of Public Prosecutions.

The man and woman were spoken to under caution on suspicion of perjury, says the paper. It adds that dozens of postal workers were jailed between 1999 and 2015 and that courts were not told about the system’s flaws, say campaigners. It is alleged the Post Office and Fujitsu covered up the flaws.

Scotland Yard told the Sunday Mirror that a man and woman in their 60s have been re-interviewed under caution on suspicion of perjury. A spokeswoman said, “No arrests have been made and enquiries continue.”

The Justice for Sub-Postmasters Alliance says a cover-up of Horizon’s IT problems involved Whitehall departments as well as the government-owned Post Office. The Alliance’s founder Alan Bates wants the criminal investigations to be widened. So far more than 70 victims have had their convictions overturned after one of the biggest miscarriages of justice in UK legal history.

In January 2020, the Metropolitan Police Service received a letter from Mr Justice Fraser via the Crown Prosecution Service. Mr Justice Fraser was the High Court judge who found that “Legacy” Horizon, which was in use at the Post Office until 2010, had numerous bugs, errors and defects and was not remotely robust. The system’s successor, known as HNG-X also had a “significant” number of bugs, errors and defects. The judge learned that various courts had been told of the efficacy of Horizon.

The Met police subsequently assessed Mr Justice Fraser’s letter and opened a criminal investigation. The Met has confirmed it is aware of the Criminal Cases Review Commission’s referrals to the Court of Appeal and subsequent proceedings.

Sunday Times

Yesterday the Sunday Times reported that ministers have set aside more than £1 billion to settle claims with victims of the Post Office IT scandal. It said the business department, BEIS, has “quietly made three grants available to the Post Office”, which confirms that “compensating sub-postmasters could cost more than £1 billion”. The last grant in December 2021 was for £685m.

Karl Flinders of Computer Weekly first reported on the £1bn set aside as compensation money last Monday. His article said at least three payments were paid by the Department for Business, Energy and Industrial Strategy (BEIS) to the Post Office last year. One of over £94m was made in July and another of £685m on 20 December, both labelled as their purpose “rescue aid” – part of a subsidy scheme known as Post Office Historical Matters Compensation. In March last year, £233m was paid with the purpose labelled as “employment” within a subsidy scheme known as Post Office Historical Shortfalls Scheme.

A BEIS spokesperson told Computer Weekly the subsidy figures are a top estimate of what could be needed, and had been set aside for potential use. “It has not been spent and will only be given to the Post Office in arrears if and when required.”

Journalist Nick Wallis, author of The Great Post Office IT Scandal reports on his blog that the money set aside for paying compensation makes the Horizon IT disaster a “fully-fledged £1bn scandal”.

He also says it is mystifying that neither Paul Scully MP, who is the Postal Affairs minister, nor the two senior civil servants who sat either side of him at a hearing of the BEIS Select Committee in the House of Commons on 11 January 2022 [Carl Cresswell and Tom Cooper], mentioned anything about the £685m compensation grant. Wallis says that compensation was exactly what the committee was there to discuss.

The absence of any ministerial reference to £685m or the other amounts at either the BEIS committee or a House of Lords debate on 10 January which was specifically on Post Office compensation, suggests that openness and transparency over the scandal may be more of an aspiration than a reality for government and Whitehall, and particularly for the Department for BEIS.

Comment

In a scandal characterised by government and Whitehall cover-ups, it is perhaps unsurprising that both houses of Parliament – in separate exchanges this month over Horizon-related compensation – have been left uninformed about the £1bn set aside for compensation.

The Department for BEIS can argue that the money was not mentioned to Parliament because it has not been allocated yet: it is merely set aside for possible compensation.

But is it not important for MPs and the public to know that the scandal may cost taxpayers £1,000,000,000?

It is as if Scully and his officials at BEIS see the cost of dealing with the scandal as purely a matter for government rather than a matter for the public, MPs and taxpayers.

But it is public money involved (and it is public money that pays the salaries of ministers and BEIS officials).

Compensation doublespeak?

Orwell’s 1984 includes the memorable slogans War is Peace, Freedom is Slavery and Ignorance is Strength. In the context of the Post Office IT scandal, perhaps the ministerial words “as soon as possible” mean the opposite.

Scully uses the phrase as soon as possible repeatedly when referring to a need to pay compensation to all victims of the scandal. But it is more than two years since Alan Bates and his group of 555 won their High Court case and still they have not received full compensation.

The latest ministerial ruse is to announce that paying the Bates 555 fair compensation needs a “mechanism”. Which seems to be a means of delaying proper compensation indefinitely.

Events in government over the last few weeks raise questions about poor standards in public life. Indeed today, in the 22nd year of the Post Office IT scandal, the whole affair continues to be characterised by a lack of openness and transparency, doublespeak and deliberate delays in paying full compensation to all victims.

But Scully, with the support of BEIS officials, seem proud to defend their way of doing things. For them, the payment of full compensation to the Bates 555 is a technical and legal matter – a mechanism, a work-related affair that has no personal consequences whether full compensation is paid or not. In this Whitehall world of no consequences, time, in fact, is not of the essence.

More people may die awaiting the money that is owed to them. But to Whitehall devising a mechanism for making payments is more important.

**

The Great Post Office IT Scandal – Nick Wallis’ book

£1bn set aside to pay compensation – Karl Flinders, Computer Weekly

By Tony Collins

The Sunday Mirror has reported that former sub-postmasters who exposed the biggest miscarriage of justice in British legal history plan to launch a fresh claim for £300m “fair” compensation.

The paper says that sub-postmasters won a settlement from the Post Office in 2019 but received only an average of £20,000 each.

The government has insisted the settlement is full and final but the Justice for Sub-postmasters Alliance, led by Alan Bates, is seeking “fair” compensation of £300m. That figure equates to, on average, about £540,000 for each member of his 555-strong group.

The Post Office wrongly accused hundreds of people who were running branch post offices of fraud, theft or false accounting on the basis of money shown as missing on the Horizon accounts system. Horizon’s supplier Fujitsu and the Post Office concealed bugs and defects that were causing unexplained losses and let innocent people lose homes and businesses, go to prison or be made bankrupt. A small number of those blamed for Horizon shortfalls committed suicide.

Bates and his group exposed the scandal by suing the Post Office in the High Court. Since the litigation ended in December 2019, more than 70 wrongful convictions have been quashed and hundreds more appeal cases are in the pipeline.

But Bates and his group are denied access to government compensation schemes. He said,

“It seems the Government is determined to keep punishing us and denying us the money we are owed because we dared to expose the failings of the Post Office”.

Nick Wallis, journalist and author of The Great Post Office Scandal, reported in December 2021 that the Department for Business, Energy and Industrial Strategy and its Postal Affairs minister Paul Scully were still insisting that the settlement reached at the end of the litigation was “full and final”.

But Bates says that, although the settlement was signed in good faith, it later emerged that the Post Office had withheld a vital document, the so-called Clarke Advice, which could have shown that the institution’s managers knew as early as 2013 that it was wrongly prosecuting postal workers.   

Had the Clarke Advice been disclosed in 2013 it could have undermined the Post Office’s case for going to the High Court in defence of Horizon. The Clarke Advice was not disclosed until after the settlement – and only then because of the tenacity of barrister Paul Marshall.

Bates seeks a legal firm to help him have the settlement agreement set aside as fundamentally flawed.

Labour MP Kevan Jones said:

“The postmasters who uncovered the Horizon scandal deserve to be compensated. It’s unacceptable for the Government to carve them out of existing compensation schemes, and we urgently need to see proposals to reverse this.”

The Clarke Advice was dated 15 July 2013 and was written by a barrister, Simon Clarke, who worked for solicitors that had been instructed by the Post Office in relation to prosecutions. The document revealed a failure to tell the courts about Horizon’s bugs while sub-postmasters were put on trial on the basis that the system was robust.

This failure to disclose the bugs put the Post Office in breach of its duty as a prosecutor, said the Advice. “By reason of that failure to disclose, there are a number of now convicted defendants to whom the existence of bugs should have been disclosed but was not,” it said.

Today’s hearings

This morning, the Business, Energy and Industrial Affairs [BEIS] Committee will question Nick Read, CEO of the Post Office, Paul Scully, the government minister in charge of the Post Office, Carl Creswell, a director of the Department for BEIS which provided public funding for the Post Office and Tom Cooper, director of UK Government Investments who was the government’s representative on the Post Office board.

They will be asked about the obstacles facing former sub-postmasters seeking financial compensation and how effective the Post Office and the Government have been in attempting to address the financial loss suffered by sub-postmasters.

Ministers and civil servants who appear before select committees are usually briefed on how to answer possible questions and what they can and cannot say, particularly if the subject matter is considered legally sensitive.

If there are any new disclosures of information they are likely to have been pre-agreed by departmental communications teams and lawyers.

Under civil service conventions, civil servants who appear before select committees must represent their departments and particularly their minister. They rarely give their own opinion unless it is one consistent with the departmental and ministerial “lines to take” as pre-agreed.

Civil servants have a duty of honesty and integrity but there is no statutory requirement for officials or ministers to be open and candid in what they tell MPs. The Matrix Churchill affair in the 1990s showed that there can be a Whitehall expectation that half-truths, if deemed in the national interest, may be necessary when answering Parliamentary questions.

Select committees have little power to force the full truth from witnesses. On one occasion the Public Accounts Committee made a government lawyer representing HMRC give evidence on oath but it caused a furore among leading civil servants and has not been repeated.

Comment:

The “patronising disposition of unaccountable power”

Postal Affairs minister Paul Scully used an odd expression last month.

He was describing the reasons for giving the Post Office government funding to pay compensation to former sub-postmasters and sub-postmistresses whose convictions have been quashed. He said,

“… we are not making the funding available from the goodness of our heart; we are doing so because it is the right thing to do. I do not think anybody—as well as being a Government Minister, I am a constituency MP and a human being—can read these cases and listen to those involved, and fail to be moved by what has happened over the last 20 years.” [My emphasis]

The expression “right thing to do” was odd in the context of a scandal in which the government refuses to pay a penny in compensation to hundreds of sub-postmasters who were not convicted but still lost homes and businesses on the basis of Horizon “evidence”. Some including Lee Castleton lost, directly, hundreds of thousands of pounds. Many former sub-postmasters and sub-mistresses have not received full refunds of money they were made to pay for Horizon losses.

In this context, it is possible to see the phrase “right thing to do” as evidence of the patronising disposition of unaccountable power – the title of an official inquiry report into the Hillsborough disaster.

The phrase right thing to do can be used entirely inappropriately. It would be unsurprising if the Chinese government used it to explain why it was putting its citizens into “re-education” camps that are surrounded by barbed wire.

It is also an inappropriate phrase when used by a UK government minister in the context of dividing scandal victims into two groups – those worthy of full and fair compensation and those not.

Doubtless the phrase was written for Scully by officials in his business department, BEIS. These officials would appreciate the irony of saying it was the right thing to do to pay some victims and not others, especially when the unfunded group has exposed deep-rooted flaws in the Whitehall machine and embarrassed mandarins.

Also aggravating the injustices suffered by the Bates 555 is the government’s repeated use of the phrase full and final to deny fair compensation to the group. The phrase suggests that the settlement was negotiated entirely in accordance with established and accepted patterns of conduct and behaviour.

But how can that be the case when the Post Office withheld from the settlement negotiations – and from the High Court – a document that, if disclosed, could have fundamentally undermined the Post Office’s £40m defence of Horizon?

That the Post Office went ahead with the litigation and reached a settlement as if the Clarke Advice had never existed has never been explained.

If government ministers had genuinely wanted to do the right thing, they would have set aside the settlement last year and paid full and fair compensation to Bates and his group members.

It ought not to require a new Bates-led legal action to show that the deal was one-sided and flawed.

Has much changed?

The lack of openness and transparency continues. The Post Office is still refusing routinely to supply documents despite freedom of information requests from campaigners including Eleanor Shaikh and Tim McCormack.  Looked at from the outside, the Post Office machine looks bright, modern and newly-polished but inside, from a Whitehall viewpoint, its original trusted engine is reassuringly familiar.

It is possible today that the minister Scully will reiterate vague promises he has made before about compensating the Bates 555 but the longer government and the Post Office hold onto money that belongs to the group’s members, the more the use of the phrase right thing to do will look incongruous, even ridiculous.

**

100 MPs sign letter calling for full and fair compensation for the Bates 555 – Christopher Head initiative

Nick Wallis’ book The Great Post Office Scandal

Scandal at the Post Office – the intersection of law, ethics and politics – Paul Marshall

Government inquiry to look into compensation for scandal victims – Karl Flinders, Computer Weekly

by Tony Collins

Ministers have been accused of frustrating a public inquiry into the Post Office IT scandal by pushing for legal documents relating to civil and criminal cases to be kept secret.

The Sunday Mirror reported yesterday that the government opposes a move by the inquiry to see documents that could reveal whether the Post Office’s lawyers knew of Horizon’s flaws when they put sub-postmasters on trial.

Between 1999 and 2015, more than 700 sub-postmasters and sub-postmistresses were prosecuted on the basis of data from the Post Office’s flawed Horizon branch accounting system which was supplied and maintained by Fujitsu.

The prosecution case was, in part, that Horizon could be trusted when its data showed money was missing from the accounts of branch post offices. Prosecutors accused sub-postmasters of fiddling the books or stealing the money, although investigators had found nothing untoward when they checked sub-postmasters’ lifestyles, bank account and home. Judges and juries accepted the prosecution case. Some innocent defendants were imprisoned, some given community service. Some victims of the scandal went bankrupt and some have since died while awaiting justice. None of the courts required prosecutors to prove Horizon’s integrity.

New cover-up?

Criminal and civil cases were at the heart of the scandal. But Whitehall officials, with the support of government ministers, have sought to keep court-related matters at the margins of the Horizon inquiry. At first, business minister Paul Scully and his colleagues tried to stop the inquiry from investigating any matter relating to the Post Office’s prosecution function. Indeed, the business department, BEIS, excluded prosecution matters from the inquiry’s original terms of reference. This specific exclusion was later dropped.

But now BEIS has asked the inquiry’s chairman, retired judge Sir Wyn Williams, not to investigate legal advice relating to individual civil and criminal cases. BEIS’s submission to Sir Wyn said last week,

“… the Department submits that it is not necessary to, and the Inquiry should not proactively, investigate legal advice received in relation to individual civil and criminal cases. This is likely to be immensely time-consuming, and is tangential to and unlikely materially to assist in resolving the issues with which the Inquiry is concerned as per its Terms of Reference.

“The Department also observes that other fora are better suited to identifying and resolving specific failings – including negligent or improper legal advice – in individual cases.”

This part of the BEIS submission to Sir Wyn has prompted accusations that the current government wants a new cover-up of possible misconduct by prosecutors or improper legal advice. The business department has already participated in a 20-year cover-up of Horizon’s defects and security weaknesses.

Post Office submission to the inquiry

The Post Office’s submission to the Williams inquiry also raises a question of whether it will suppress legal emails and documents. The Post Office is said to be reforming itself in the light of the scandal. But is it set to join BEIS in a new cover-up? The Post Office’s submission to the Williams inquiry warns that it cannot be forced to disclose legally-privileged documents.

Says the Post Office in its submission to the inquiry,

“… Section 22 of the Inquiries Act 2005 expressly provides that there is no power to compel the disclosure of evidence or documents which are the subject of legal professional privilege, reflecting the fundamental right of confidence in communications
between a client and their lawyer.

“… Unless POL [Post Office Ltd] were to waive privilege in at least some part of the legal advice referred to at section B(i) of the Notice of Preliminary Hearing, then there effectively could not be any investigation into those issues, and no adverse inference could be drawn were POL to decline to waive privilege.”

In section B(i), Sir Wyn had asked for responses to his question, “Is it necessary for the Inquiry to investigate whether and to what extent Royal Mail Group and Post Office Limited acted upon legal advice when they:
a. formulated policies and guidelines on the civil and criminal liability of SPMs [sub-postmasters], managers and assistants for shortfalls shown by Horizon; and
b. brought civil and/or criminal proceedings against SPMs, managers and assistants alleged to be responsible for shortfalls shown by Horizon?

The Post Office’s submission continued,

“As the Inquiry would expect, POL was already actively considering the issue of whether it should waive privilege (and, if so, to what extent), irrespective of the Chair’s decision whether to amend the List of Issues to include the questions at section B(i). As the Inquiry may equally understand, the issue is by no means straightforward having regard to any litigation in relation to matters which are being considered by the Inquiry, the range of different contexts to which privileged material might pertain, and the potential impact on those proceedings of any waiver of privilege in the Inquiry.

“POL can assure the Inquiry that it will seek to reach a view in principle on this issue as soon as it reasonably can, but it is unlikely that it will be able to do so, given the complexities involved, before the hearing on 8 November 2021. In reaching its decision POL will aim to be as helpful to the Inquiry as possible.”

But Sir Wyn has announced that he wants responses on the question of legal privilege by 4pm today. He wants legal privilege on matters relevant to his inquiry – relevance having been set out in various documents – to be waived. His request for a waiver has gone to the Post Office, Fujitsu, BEIS and UK Government Investments, which is the government’s shareholder on the Post Office board.

Alan Bates, who founded the Justice for Sub-postmasters Alliance, says,

“I would be very surprised and extremely disappointed if Sir Wyn allowed Post Office to keep it all secret as this material is crucial to establish the real truth, and isn’t that something the Inquiry has been set up to do?”

A spokesperson for BEIS said,

“The Government remains committed to fully cooperating with the inquiry and ensuring there is a comprehensive and public summary of the failings that occurred, so that something like this cannot happen again.”

Comment

From the start of the Horizon IT scandal, the Post Office has barely moved a muscle without legal advice. It won’t be much of a public inquiry, therefore, if legal emails and other similar documents remain a state secret.

That Sir Wyn’s inquiry would have a problem getting to the truth was predicted last year by the inquiry’s critics. Journalist and author Nick Wallis pointed out that the civil service did not want any inquiry into the scandal.

Indeed, it would be surprising, particularly at this stage of the scandal, if BEIS and its ministers, with other parts of Whitehall, were to be struck suddenly by a need for openness. It hasn’t happened before in Whitehall and there is no reason to believe it is going to happen now.

If anything, Whitehall’s excessively-secretive culture has become more deeply embedded since the 1990s when Sir Richard Scott published what remains the most in-depth study into the workings of the government machine.

Scott’s inquiry was into the so-called arms-to-Iraq affair. As in the Post Office IT scandal that began a few years later, innocent people were put on trial while evidence that could have helped the defence was kept a state secret. This was Economist’s summary of the 1,800-page Scott report,

“Sir Richard exposed an excessively secretive government machine, riddled with incompetence, slippery with the truth and willing to mislead Parliament”.

The report characterised the nature of the government as:

… little disposed to volunteer information that may expose them to criticism … The enforcement of accountability depends largely on the ability of Parliament to prise information from governments which are inclined to be defensively secretive where they are most vulnerable to challenge.

In the arms-to-Iraq affair, government ministers went a step further than has happened so far in the Post Office scandal. Ministers, supported by officials, signed public interest immunity certificates, so-called “gagging orders”. These orders could have kept vital documents from being seen by defence teams during criminal trials. But the trial judge used his powers to, in effect, overturn the gagging orders.

That the certificates were signed at all showed how little those in power cared whether or not people facing jail would have all the facts at their disposal.

That same state culture applied during the Post Office Horizon trials when the defendants were facing jail and were denied facts about Horizon that could have acquitted them.

The arms-to-Iraq affair ended in miscarriages of justice and the Court of Appeal’s quashing of convictions, as has happened in the Post Office scandal. The Guardian’s Richard Norton-Taylor said the arms-to-Iraq affair provides a “classic study in the abuse of unaccountable power by arrogant government officials”. Does that same criticism apply in the case of the Horizon scandal?

But in the arms-to-Iraq affair, victims eventually won compensation. One received £2m. Another received £5m after charges had forced him to sell his company and he was later declared bankrupt. So far, in the Post Office scandal, hundreds of members of Bates’ JFSA have received an average of £20,000 each – not enough to cover sums they were made to pay the Post Office to cover questionable Horizon shortfalls let alone provide compensation for their devastated lives.

A new cover-up likely?

BEIS and the Post Office could challenge Sir Wyn on the matter of legal privilege. If they do, Sir Wyn would probably have to give in. Indeed, lawyers working for government wrote the statutes on public inquiries and those laws give a legal right to withhold legally-privileged documents. The Post Office is right in its submission to say that the inquiry cannot force the documents to be disclosed.

But, as Bates says, the documents are vital if the truth is emerge.

Perhaps the inquiry was always headed for this point: a clash between the need for objective truth and Whitehall’s age-old culture of self-protective secrecy. But if truth is subject to non-disclosure and the inquiry is further disempowered by being unable to recommend fair compensation for hundreds of members of Bates’ Justice for Sub-postmasters Alliance, is there any point of a public inquiry?

A statutory non-inquiry?

Following Boris Johnson’s promise to “get to the bottom of the matter” in February last year, a reluctant Whitehall set up a largely private “review” of the Horizon affair. Then, under Parliamentary pressure, Whitehall turned the review into a public inquiry but minister Scully refused to make it statutory because that would cost too much and take too long. But, under pressure from the JFSA and the Court of Appeal, Scully and BEIS officials later agreed to convert the inquiry to a statutory one.

Now, perhaps, it’ll become a statutory non-inquiry, a state-funded emollient. It is hard to see how Scully and his colleagues in the Cabinet Office and Downing Street would want it otherwise.

Of course the main unofficial object of any inquiry is that nothing it publishes embarrasses the present government. Indeed, if the Williams inquiry criticises an old computer system and a past Post Office chief executive or two that’s fine. But nothing to do with the present administration thank you.

All in all, the inquiry, therefore, looks like being a runaway success for the state. But not for the scandal’s victims. More of them will probably die waiting for justice. If Johnson, Scully and his colleagues much care, it doesn’t show.

**

Nick Wallis’ new book The Great Post Office Scandal

Daily Mail adaptation of Nick Wallis’ book

Government and Post Office should stop discussing victim compensation and pay it – Karl Flinders, Computer Weekly

Outrage as top legal firm hired to defend government role in Post Office IT scandal, reports Sunday Mirror

By Tony Collins

The Government is spending £1.6m on lawyers to defend its role in the Post Office scandal that has left hundreds fighting for compensation, says the Sunday Mirror.

The paper’s consumer correspondent Stephen Hayward, who has written several pieces on the scandal, said in his article yesterday,

“More than 700 sub-postmasters were wrongly prosecuted for theft and false accounting between 1999 and 2015 – and some were even jailed. In reality the “losses” were caused by a faulty computer system.

“The Government is hiring top legal firm Eversheds Sutherland to represent it at a public inquiry.

“Campaigner Alan Bates said: “It’s an outrage. The Government should … admit their wrongdoing instead of throwing money at lawyers.”

“But UK Government Investments [which represents government interests on the Post Office board] said the lawyers were hired to meet inquiry ‘requirements’.”

Comment

Bates is right. If government has any spare money – which clearly it does if it can afford £1.6m for Eversheds Sutherland – it ought to be sharing it with the Justice for Sub-postmasters Alliance. It could put any spare legal cash towards paying back money its publicly-owned Post Office wrongly demanded from hundreds of the Alliance’s sub-postmasters and sub-postmistresses.

The government has not paid them a penny. All the group’s members have received is an average of £20,000 each directly from the Post Office – which doesn’t cover money the Post Office made them pay to cover spurious Horizon “losses”. Proper compensation for lives ruined by wrongful conviction or bankruptcy remains nowhere in sight.

Indeed, government ministers and Whitehall officials have been consistently indifferent throughout the scandal. From January 2000, when the Post Office, HM Treasury and other parts of Whitehall welcomed delivery of a £1bn faulty Horizon system from Fujitsu, any wrongdoing has been somebody else’s fault.

Even after the Bates 555 defeated the Post Office in the High Court and proved Horizon’s faults and weaknesses, as well as a Whitehall and institutional cover-up, government ministers and Whitehall officials acted as if they hadn’t known. See no evil. Hear no evil. It was a scandal that happened elsewhere and didn’t involve them.

Where they have been remarkably painstaking, however, is in ensuring the public inquiry into Horizon has narrow terms of reference that marginalise the role of government ministers and Whitehall officials. As a further measure of self-protection, the government is paying £1.6m for one of the world’s top ten legal firms. The contract will last until December 2023.

If openness and transparency were the priority – which history shows it isn’t – Whitehall officials could answer the inquiry’s questions directly. Senior civil servants already draft Parliamentary answers and write annual and other reports. They do not need a top firm of lawyers for that.

The inquiry is different, however. It may mean independent scrutiny. There may be requests for emails, memos, correspondence, internal reports and minutes of board and committee meetings. But Whitehall has ensured, in writing the rules for statutory inquiries, that there are several grounds for withholding evidence, such as legal privilege and the need for confidentiality in the national interest. Is this one reason for paying £1.6m to hire top lawyers?

Government and Whitehall have form when it comes to self-protection at public inquiries. The most in-depth look at how the government machine works was the Scott inquiry into the Matrix Churchill arms-to-Iraq affair. The Economist summed up Sir Richard Scott’s 1,806-page report,

“Sir Richard exposed an excessively secretive government machine, riddled with incompetence, slippery with the truth and willing to mislead Parliament.”

How much the government machine has changed since the Scott report is a matter for debate.

From the viewpoint of senior civil servants, there is no mendacity or excessive secrecy: it is a question of following protocols and complying with requirements. UK Government Investments says it is giving every possible assistance to the complex Horizon inquiry and has appointed specialist legal advisors to ensure it can meet the inquiry’s requirements.

But £1.6m worth of meeting the inquiry’s requirements … while hundreds of scandal-hit former businessmen and women go uncompensated?

The Great Post Office Scandal – Nick Wallis’ forthcoming book.

Post Office victims dying without cash – Sunday Times

Post Office board “appalling” and “short-sighted” said minister in 2000 – Karl Flinders, Computer Weekly

By Tony Collins

The Sunday Mirror has reported the “low levels of participation” in aspects of the government’s public inquiry into the Post Office IT scandal.

It also reports comments by campaigning Labour MP Kevan Jones that the inquiry has had a wasted year because it still does not have the scope to look into compensation for most of the victims who sued the Post Office and exposed failings in the organisation’s Horizon accounting system.

Horizon was supplied by Fujitsu and went live in more than 18,000 post office branches in 1999 and 2000. Unexplained shortfalls in branch balances began appearing within weeks. By default, the Post Office blamed sub-postmasters for incompetence or dishonesty and demanded they pay back the allegedly lost money. For nearly 20 years the Post Office continued to blame sub-postmasters for shortfalls and denied Horizon was at fault.

Using Horizon as evidence, the Post Office prosecuted more than 700 sub-postmasters and sub-postmistresses for theft, fraud or false accounting and made more than 2,400 others pay back shortfalls shown on the system. It also took civil actions to confiscate homes, cars and possessions. Some of the Post Office’s victims went to jail or were made bankrupt and lives were lost after stress, illness or suicide.

It is only since the litigation brought by the Justice for Sub-Postmasters Alliance and its legal team that the government, Whitehall officials and the Post Office have accepted that Horizon’s many defects and errors caused shortfalls for which sub-postmasters were wrongly blamed.

The litigation ended in December 2019 and the prime minister Boris Johnson agreed in February 2020 to a request by Labour MP Kate Osborne to set up an independent public inquiry. But now, more than 18 months later, the inquiry is still not fully underway.

The inquiry’s chairman, retired judge Sir Wyn Williams issued a progress report last month. He said that the inquiry had hoped to engage in telephone interviews with employees nominated by the Post Office who were employed in managing branch accounting shortfalls such as helpdesk and case handlers and those involved in cash reconciliation, audits and managing suspensions, terminations and disputes since January 2020. But “no one in those spheres offered to take part”, he said.

However Post Office employees did take part earlier this year in group “discussions” with the inquiry team over matters such as a commitment to addressing Horizon Issues and cultural change, branch account balancing measures and transaction corrections.

The Justice for Sub-postmasters Alliance has made no commitment to participate in the inquiry because Sir Wyn has no scope to look at compensating the group’s victims.

In his progress report, Sir Wyn reveals that a survey to establish how well whistleblower complaints were being handled drew only 15 responses in total from the Department for Business, Energy and Industrial Strategy and UK Government Investments. They are the two government organisations most closely implicated in the scandal other than the publicly-owned Post Office.

The survey had been aimed at discovering whether people were aware of whistleblowing policies and procedures, whether they had confidence in how complaints were handled, what barriers there were to raising concerns and the extent to which their employer supported and encouraged employees to raise concerns.

.Is the public inquiry likely to be a flop?

Former sub-postmaster Lee Castleton, who was made bankrupt after experiencing Horizon shortfalls, said the inquiry is in danger of turning into an expensive flop unless its current terms of reference are widened.

Campaigning Labour MP Kevan Jones said, “It was clear from the outset that a non-statutory inquiry would be wholly inadequate for a scandal of this nature. The Government has wasted another year setting up an inquiry that did not have the power to answer any of the important questions, and still does not have the necessary scope to look into financial compensation for the victims of this scandal.”

Alan Bates, who founded the 555-strong Justice for Sub-postmasters Alliance, said he wanted to know the real intentions of the inquiry. “Does it have any concern at all in relation to the 555 who struggled for years to expose what has been going on. Without the 555 none of this would ever have been discovered and the biggest miscarriage of justice would have remained buried, and the incompetence of a major national public corporation would have remained hidden.

“The main point about this Inquiry is what difference it will make, because the courts have already handed down detailed judgments of what went wrong and who was responsible, and as we all know now, it is POL [Post Office Limited] which is not only guilty, but incredibly guilty. Yet it seems this Inquiry is just interested in looking into the minutia of the individuals involved, which will not make any difference to the fact that at the end of the day POL was responsible, just as the court found.

“We don’t need the minutia established in order to resolve the 500’s only interest, which is the financial redress they are rightfully owed. If the Inquiry has any interest at all in looking after the victims, this issue has to be at the top of its agenda.

“Other than those in power deciding they don’t want to address it first and prefer to compound the suffering this group has already been forced to endure, there is no reason at all why the financial redress issue can’t be dealt with first, as it is a separate issue to the other matters the Inquiry is to look at.  It can’t be left hidden away in the middle of an endless list, or left for years until the Inquiry reports before it considers the real victims position in this scandal.” 

Jones’ Letter to the Public Accounts Committee

Kevan Jones has written to the Commons’ Public Accounts Committee calling for an investigation into how the Post Office used public money to challenge the postmasters’. Below is his letter to Labour MP Meg Hillier who chairs the committee:

“During the entire Horizon Scandal, the Post Office continually used public money to pursue a condemned legal case in an attempt to bankrupt litigators, as well as its own commercial interests.

“This use of public money has not been accountable to Parliament, due to the particular position of the Post Office as an arms-length body of the Department for Business, Energy and Industrial Strategy.

“My office has continually made attempts to understand the nature and amount of public money being used by the Post Office. Even outside periods where much of this scandal has been sub-judice, I have not been successful in understanding either. As a result, I have contacted the Speaker’s Office and the Procedure Committee on numerous occasions during this period.

“At the time of writing, there are a number of outstanding cases of public money being spent where my office has only been able to make estimates of the amount of public money which has been spent, having been denied official figures from the Department of Business, Energy and Industrial Strategy.

“These costs include but are not limited to:

the cost of the initial mediation scheme, which ran from 2012-15. the cost of the Common Issues and Horizon trials (circa £150m). the Historic Shortfall Scheme (circa £320mn).

the cost of payments required for 63 overturned prosecutions, with another potential 500, and the costs of Post Office hiring multiple external legal firms to review these cases over many months.

the costs of payments sent to Fujitsu as part of correcting Horizon’s technical problems over a number of years.

“My estimation places the money spent by Post Office, in relation to the Horizon Scandal, at over £1bn.

“Unfortunately, it is unlikely that the Government’s statutory inquiry will include within its scope the Post Office’s use of public money. Moreover, it is not within the scope of the case currently being pursued by the Parliamentary and Health Service Ombudsman.

“In your position as Chair of the Public Accounts Committee, I am hoping you may be able to advise on a strategy to increase the transparency of the Post Office’s use of public money and bring it accountable to Parliament in this crucial respect.”

Comment

Despite Sir Wyn’s best intentions, things are not looking good for the Horizon IT inquiry, in part because of low levels of participation. The main problem is that it is difficult to see who can benefit from the inquiry other than lots of lawyers.

Public inquiries are usually set up to appease a concerned public. The National Audit Office found that government typically accepts outright fewer than 50% of recommendations of public inquiries; and there is also no obligation on departments to publish what improvements they have made in response to recommendations.

The National Audit Office also found that public inquiries typically take evidence from hundreds of witnesses and consider an average of about 52,000 documents. But Sir Wyn has received only 350 documents so far from the institutions involved.

At some inquiries, documents such as formerly confidential emails, memos, letters and reports between the parties and government departments including the Cabinet Office and Downing Street were published as the inquiry went along.

The Horizon inquiry has published no formerly confidential emails between the parties and the government institutions involved.

The National Audit Office found there was a potential for conflicts of interest where a department sponsors an inquiry and is also a core participant in the inquiry. In the case of the Horizon inquiry, the Department for Business, Energy and Industrial Strategy , which is the Post Office’s “sponsor” department and has provided it with billions of pounds in funding, has been in charge of setting up the inquiry, writing its controversially-narrow terms of reference and is homing the inquiry team at the BEIS headquarters in Victoria Street, London.

The National Audit Office said,

“Managing potential conflicts may also be further complicated where staff from the sponsor department are seconded to work directly on the inquiry team.”

It is hard to see how the Horizon inquiry team, working as it does in the Department for BEIS’s offices and seeing its officials regularly as they use and go in and out of the building regularly, and also making use of the government’s secretariat and lawyers, could end up finding, say, that BEIS covered up or turned a blind eye to the Post Office scandal or that there was institutional dishonesty in some of its public statements.

There is also the question, given the non-confrontational approach of the inquiry team, how much of an appetite exists for finding out how much the Cabinet Office and Downing Street have been involved in damage-limitation events since the litigation settlement.

It is also unclear whether an appetite exists for any vigorous challenge to senior Whitehall officials who are likely to explain what they didn’t know, why they weren’t told and how they asked all the right questions but weren’t given the right answers.

Full email exchanges, if they are disclosed, may reveal how much was known and what decisions were taken within Whitehall and the Department for BEIS.

Compensation?

Then there is the critical question of compensation for the Bates 555 who exposed the scandal, much to the chagrin of Whitehall departments whose officials had fully backed the Post Office side in the High Court litigation.

The government line is that the £58m paid to the Bates 555 to settle the litigation was “full and final”. But the government, Whitehall officials and the Post Office knew at the time that the £58m was inadequate. They were aware that, after costs, it did not refund to the 555 the payments they had made to the Post Office to cover unexplained Horizon shortfalls let alone provide them with fair compensation.

Since then, the settlement deed which said the £58m settlement was full and final has been questioned by some lawyers. In the deed, the Post Office did not accept the validity of any of the sub-postmasters’ claims or of any the facts or matters in relation to their claims. But the Post Office has since told the Horizon inquiry it accepts all of the findings of the litigation. The case proved the validity of the 555’s claims.

The settlement deed has also been undermined by the Post Office’s non-disclosure during the litigation and settlement negotiations of the “Clarke Advice” which showed that the Post Office was aware, years before, that Horizon was capable of causing shortfalls for which sub-postmasters and sub-mistresses had been wrongly blamed.

It is now clear, therefore, that Boris Johnson and the postal affairs minister Paul Scully are using the phrase “full and final settlement” as an excuse not to pay compensation to those who campaign has embarrassed Whitehall officials and the government.

The least Scully and his BEIS department can do is make sure the matter of compensation for the 555 is included in the Horizon inquiry’s agenda or is the subject of a separate government review.

If included in the Horizon inquiry’s formal discussions, it would give the inquiry a credibility it does not yet have.

Sir Wyn’s public inquiry progress report

The Great Post Office Scandal – Nick Wallis’ forthcoming book

Government minister holds secret meeting with Post Office IT scandal victims – Karl Flinders, Computer Weekly

By Tony Collins

In an article published today, Conservative peer Lord Arbuthnot asks, “Who would buy an organisation which had this awful reputation for skulduggery and deceit?”

He criticises the absence of “full and proper” compensation for 555 members of the Justice for Sub-postmasters Alliance [JFSA],  who brought the Post Office IT scandal to light. For more than a decade, first as an MP, former defence minister James Arbuthnot has sought justice for victims of the scandal.

Separately, Alan Bates, founder of the JFSA, questions why anyone would want to buy a Post Office branch in the light of the scandal. He says the treatment of the JFSA’s 555 victims bears testament to how little the Post Office has changed in the wake of the scandal.

Over 14 years, from 2000 to 2014, the Post Office prosecuted a total of 736 sub-postmasters and sub-postmistresses based on data derived from a flawed computer system, Horizon, which was built and supplied by Fujitsu. The Post Office concealed Horizon’s flaws from the courts, sub-postmasters, Parliament, the public and media.

Sub-postmasters and sub-postmistresses who had been mystified at the cause of financial shortfalls being shown on the Horizon accounting system, were prosecuted for theft, false accounting and fraud. Some went to prison. Many were financially ruined, shunned by their communities and suffered poor health. Some have since died.

Alan Bates, through his legal team, brought details of the scandal to light by suing the Post Office in the High Court. But the government and Whitehall appear to have reacted badly to the litigation’s uncovering of the widest miscarriage of justice in British legal history. Bates sees that the government and Whitehall, in not paying fair compensation, are punishing the JFSA’s 555 members for bringing the scandal to public attention. 

Bates’s article on the JFSA’s website

Bates says the JFSA is often asked about the merit of buying a post office after all that has happened and whether the situation has improved. He says that the Post Office, a once-respected organisation, “has been brought into such disrepute by the way it has been treating subpostmasters that the brand has suffered irreparable damage”.  He questions whether the Post Office has changed since the High Court case. He says,

“There have many words and promises of how Post Office has changed, ‘seen the light’ and how things will be different in the future, but what has been the reality?

Nick Read, the Post Office’s CEO, has said the Post Office “caused what for some has been very deep pain”. Read added that “absent the possibility of turning the clock back, compensation appropriate to that pain must follow”.

In May 2021, Boris Johnson and the Postal Service minister Paul Scully also promised compensation when speaking on Zoom to three of the 555 JFSA members. Johnson and Scully promised to work with the three and other victims to “ensure they were quickly and fairly compensated for the devastation the Horizon scandal had caused to their lives” and told them, ‘We will work with you to get something that is fair and speedy”. But fair government compensation for the “Bates 555” group has not materialised.

Bates criticises Johnson and Scully.  “.. the 555 victims group have been left in financial ruin having paid £46m to cover the costs of the legal action that thousands of others are benefitting from, and they were only left with just over £10m to share, when their true losses are closer to £350m.” He says,

“The truth is, that both Post Office and government are happy to make wild promises and then simply ignore them. However we all know it is deeds not words that really matter.” 

Bates suggests that no JFSA member believes justice has been done given the lack of financial redress. On whether things have improved and whether a potential buyer of a branch can trust Post Office, Bates says that, if the questions are considered on the basis of deeds and not words, the answer is, he adds, a “very definite no”.

Lord Arbuthnot

Below is the article by Lord Arbuthnot which is published today on the PoliticsHome website. Lord Arbuthot writes ….

“You may have thought the Post Office Horizon scandal was over, and that it had been dealt with.  It isn’t.  It hasn’t been.

“The plight of the subpostmasters, wrongfully accused by the government-owned Post Office of stealing money when it was actually the new Horizon accounting system that was to blame, has horrified the country.  In April this year we saw the Court of Appeal overturned the largest number of miscarriages of justice ever to be considered by the Criminal Cases Review Commission.

“It clearly horrified the Prime Minister too, because he said on the day of the verdicts:, ‘… we’ll have to make sure that people get properly looked after because it’s clear that an appalling injustice has been done’.

“So what have the government/Post Office been doing about it?  First, the government has set up an inquiry (which is now, after the scathing judgement of the Court of Appeal, a statutory one) under the chairmanship of retired High Court judge Sir Wyn Williams.

“Second, just as Parliament went into recess, it was announced that those who had had their convictions overturned could apply for up to £100,000 in interim compensation.  This was an acknowledgement that the story was a shocking one, but it was also an attempt to reduce the claims for malicious prosecutions that will be made.

“Alongside that, the Post Office has set up a compensation scheme for wronged subpostmasters, called the Historic Shortfall Scheme, which is slowly – oh so slowly – beginning to pay some of the smaller claims.

“But – and this is shameful – the 555 subpostmasters who brought the matter to light by taking the brave step of taking the Post Office to court, are expressly excluded from that shortfall scheme.  This is because, in their bitterly contested litigation where the judge described the Post Office’s obstinate denial of the problem as “the 21st century equivalent of maintaining that the earth is flat”, the subpostmasters were forced (having run up legal and funding fees of £45 million) to settle the action on unfavourable terms.

“Sir Wyn’s inquiry is forbidden from looking into this, despite the duress applied on the subpostmasters, their inequality of bargaining power as against a taxpayer-backed Post Office, and the fact that when they settled the case the subpostmasters did not know (because the Post Office kept it secret) that the Post Office had been advised in 2013 that false evidence had been given against the subpostmasters.  The settlement should be set aside.

“So where does this leave the Prime Minister’s words?  I can tell you where it leaves the 555 subpostmasters – impoverished, many bankrupt, many having lost their homes and some their family (having been told by the Post Office that they must sack their apparently dishonest relations who worked for them), and, appallingly, some dead through suicide or illness brought on by this shocking story.  Many of the group litigants were not convicted – they reluctantly paid the Post Office, so that the recently announced compensation is not available to them.  The Post Office is keeping their money.

“Quite apart from the issue of morality, this jeopardises the government’s eventual hope of selling the Post Office as a going concern.

“The Post Office could, if circumstances were right, act as the vibrant heart of both rural and urban communities, even acting as a bank in those many areas where banks have closed their branches, or as a government portal providing essential services.  But who would buy an organisation which had this awful reputation for skulduggery and deceit?  It is in the interests of the government, as well as being the right thing to do, to give full and proper compensation to all those wronged by this awful saga.”

**

Alan Bates’ article

Lord Arbuthnot’s article

Nick Wallis’ forthcoming book “The Great Post Office Scandal”.

Overturned convictions of subpostmasters mount up, but 555 victims no closer to justice – Karl Finders, Computer Weekly

By Tony Collins

Scotland Yard detectives have interviewed a man and woman on suspicion of perjury, according to the Sunday Mirror.

It follows claims that courts were given wrong information when they convicted post office workers.   The Post Office prosecuted 736 sub-postmasters and sub-postmistresses over a period of 14 years based on information from a faulty computer system Horizon. The courts were not told details of Horizon’s flaws.  

A police spokesman told the Sunday Mirror that a man and a woman had been interviewed under caution on suspicion of perjury and inquiries were continuing.

Met police are already investigating the accuracy of evidence given by two people who worked at Fujitsu, the Japanese-owned supplier of Horizon. It came after a High Court judge, Mr Justice Peter Fraser, found that important evidence given to courts “was not true, and was known not to be the truth, the whole truth and nothing but the truth, at the time it was given”. The judge asked the Director of Public Prosecutions to investigate. He passed the matter to the Metropolitan Police.

Some sub-postmasters and sub-postmistresses went to prison following convictions for false accounting, fraud or theft that were based on Horizon evidence. Many were financially ruined and have described being shunned by their communities. Some have since died.

Fifty-nine convictions have been overturned this year and hundreds more are expected to be quashed. Government compensation bills will run into hundreds of millions of pounds. As the publicly-owned Post Office cannot afford the compensation claims without government help, it is technically insolvent as a result of the scandal.

Has the police investigation widened?

Alan Bates, founder of the Justice for Sub-postmasters Alliance, told his group of 555 last week that he and his legal team have had meetings with the Director of Public Prosecutions and the Metropolitan Police. Further meetings are planned. He told the group,

“With our legal team from Howe & Co we have had meetings with both the DPP and the Met.  Needless to say they are unable to make any comment about how their work is progressing as it is an open case, but we did receive assurances about how seriously they are taking matters and how, despite the Judge only referring two names to them, they will go where the evidence takes them.”

In its formal complaint to the Parliamentary Ombudsman of maladministration, the Alliance said the cover-up of Horizon’s flaws involved government departments as well as the Post Office and Fujitsu. In his email to the Alliance last week, Bates said that,

“… the Ombudsman route will enable us, without any interference from others, to name those at Post Office and on the Board, those at BEIS [Department for Business, Energy and Industrial Strategy] and its predecessors and those in other Government departments who knew or should have known about the failings surrounding the Horizon system from very early on.   We know the names of the really guilty in all of this and have most of the evidence we need as well as knowing where the rest of it is …”

He said he would provide an update on how the Alliance’s complaint to the Ombudsman is progressing in the coming weeks.

The continuing police investigation is in marked contrast to a government inquiry into the scandal which is looking mainly at the failings of the computer system and within the Post Office rather than how hundreds of sub-postmasters and sub-mistresses came to be wrongly convicted.

Public inquiries cannot determine individual criminal or civil guilt but the terms of reference of the Post Office Horizon inquiry make no provision for looking, in a general sense, at how and why the widest miscarriage of justice in British legal history happened.

Call for criminal probe into financial investigators, senior management and lawyers

The Law Society Gazette said,

“In a joint statement, Paul Harris and Oneija Taher of Edward Fail, Bradshow & Waterson; and Sam Stein QC and Lynton Orrett of Nexus Chambers [who represented some victims of the scandal] called for an urgent criminal investigation into what went on.”

They added: ‘The investigation must be wider and question financial investigators, senior management and lawyers acting on behalf of the Post Office.’

In a blog, Richard Moorhead, professor of law and professional ethics at Exeter Law School, called for the Solicitors Regulation Authority and the Bar Standards Board to join any investigation.

**

Government to make interim payments of up to £100,000 for some victims of the scandal but it ignores the “Bates 555” who sued the Post Office and exposed the extent of the scandal – Nick Wallis’ Post Office Trial blog

The “Bates 555” are excluded from Government-funded compensation schemes for victims of the Post Office scandal – Karl Flinders, Computer Weekly

Whitehall “punishes” the Bates 555 who exposed the Post Office IT scandal – Campaign4Change

Questions over Whitehall’s oversight of the Post Office – researcher Eleanor Shaikh

By Tony Collins

The Sunday Mirror published a story yesterday (at the top of page 4) on a threatened boycott of the public inquiry into the Post Office IT scandal.

The piece was by the paper’s consumer correspondent Stephen Hayward, who has written a number of stories on the scandal. It says victims of the scandal are angry the inquiry will not look at compensation or the Government’s role. It quotes Alan Bates, founder of the Justice for Sub-postmasters Alliance.

“As things stand, it’s unlikely we will engage with the inquiry.”

Last Friday, Bates sent an email to Alliance members saying that financial redress for the group is still excluded from the inquiry’s terms of reference and “with that exclusion in place there is absolutely no benefit to the group in taking part”.

The inquiry’s terms of reference specifically rule out any consideration of the £58m the group received in settlement of its High Court litigation which exposed the scandal. The settlement left those in the 555-strong group with an average of only £20,000 each after costs were paid. Many members of the group lost hundreds of thousands of pounds after the Post Office wrongly held them liable for supposed losses shown on the Post Office and Fujitsu’s Horizon system.

The business department BEIS, which funds and oversees the Post Office, set the inquiry’s terms of reference which raises the question of whether it has a conflict of interest.

BEIS’s critics say the Department could have stopped the scandal long before it devastated hundreds of lives. The Department’s mandate required that it intervene at the Post Office in certain circumstances but it failed to step in. The scandal led to more than 700 sub-postmasters being convicted on the basis of questionable Horizon “evidence”. The inquiry’s terms of reference are focused on Horizon IT and not on failings within government, Whitehall or the criminal justice system.

The Bates 555 have filed a complaint against BEIS with the Parliamentary Ombudsman. The group accuses the department of maladministration

List of issues

Although the inquiry’s terms of reference are currently fixed and represent a “boundary”, Wyn WIlliams, the government-appointed chairman of the inquiry, is to publish a “list of issues” to be investigated. These are expected to be published in September. It is unclear how this list could include any earnest consideration of compensation when the terms of reference specifically rule out discussion of the settlement deal.

Bates’ email to Alliance members says that until the list of issues is finalised in September “we still won’t have a final position about the Inquiry”.

He says it is “really important for as many people as possible to sign up for Core Participant status and we will wait to see the finalised list of issues”.  He adds, “However should they fail to take on board our key requirement that matters pertaining to financial redress be part of the Inquiry, then we’ll be providing a form we can each send to Sir Wyn to withdraw from being a Core Participant.  And be assured that if we do that, there are others and organisations from outside the group who have made it clear to me that they too would act similarly.”

 Comment

Bates is right to be sceptical. The government and Whitehall officials have given the inquiry narrow terms of reference in which the focus is on the failings of a computer system, not compensation to victims or human failings within successive governments or the business department.

Government ministers have given the impression that if they could explain the Post Office IT scandal by sending a computer system to prison and thus avoid any human culpabilities, they would. One of the inquiry’s main objectives is to establish a clear account of “the implementation and failings of Horizon over its lifecycle”. The inquiry’s latest statement appears to have an emphasis on identifying poor “decision-making processes” rather than the humans who made decisions that ruined sub-postmasters’ lives.

Wyn Williams, the inquiry’s chairman, is a respected retired judge. But he may struggle to change perceptions that the government and Whitehall have set up the inquiry to be of little value other than demonstrate a dutiful response to the scandal. There is also scepticism among some sub-postmasters about whether the inquiry is completely independent of government.

The government set up inquiry, is paying for it and has restricted its terms of reference. It appointed the chairman and assessors and is providing the secretariat. The inquiry is based at the HQ of BEIS, which is the government department most heavily implicated in the scandal. Government ministers have powers to limit what information is given to the inquiry.

Perhaps the inquiry will end up criticising the Post Office’s former CEO Paula Vennells and Horizon’s supplier Fujitsu. But Vennells and Fujitsu seem to be the only names on the government’s unofficial list of acceptable candidates for criticism.

Any sign that the inquiry is likely to make any real difference to anyone or anything has yet to emerge.

**

Government inquiry into Post Office IT scandal a stitch-up?

Whitehall “punishes” 555 sub-postmasters who exposed Post Office IT scandal

Did government allow Post Office to sack forensic accountants to cover up Horizon scandal? – Karl Flinders, Computer Weekly.

Journalist Nick Wallis to publish definitive account of the Post Office IT scandal

By Tony Collins

The BBC’s consumer correspondent Coletta Smith reported yesterday that 400 payments to sub-postmasters have been made as part of the Post Office’s “Historical Shortfall Scheme”.

Smith also reports on Anjana and Baljit Sethi who are among 2,000 other sub-postmasters who are still waiting for compensation under the scheme.

The Post Office said 2000 claims are “progressing” and added, “We are committed to fairly resolving claims, with assessment by an independent panel, and are keeping people updated on their cases.”

The Sethis have been struggling from the fall-out of the Post Office IT scandal for nearly 20 years. They are now into their 70s. They lost their business, their jobs and were forced into bankruptcy. They could not afford to pay an unexplained shortfall of £17,000 shown on the Post Office’s centrally-run Horizon system. Fujitsu built the system. The Post Office decided to close the Sethis’ store in which the couple had invested £120,000.

Post Office IT scandal

The Post Office required that sub-postmasters make good from their own pockets unexplained shortfalls shown on an untrustworthy accounting system Horizon. It also wrongly prosecuted more than 700 sub-postmasters and sub-postmistresses for theft, false accounting and fraud on the basis of Horizon evidence. It’s the biggest miscarriage of justice in British legal history and no democracy anywhere in the world has wrongly convicting hundreds of people on the basis of defective technology.

Many victims of the scandal lost hundreds of thousands of pounds each. In total, the Post Office wrongly held more than 3,400 sub-postmasters and sub-postmistresses responsible for unexplained shortfalls shown on the Horizon system.

Unfair?

A group of 555 sub-postmasters and sub-mistresses led by Alan Bates exposed the scandal. But the government has decided not to include the group’s members in publicly-funded compensation deals for victims of the scandal.

Bates, with help, raised the money to sue the Post Office in the High Court. The case proved that the Post Office was wrong to claim that Horizon was robust. The judge, Mr Justice Fraser, found that Horizon was not remotely robust. He also found that the Post Office was wrong to hold sub-postmasters liable for unexplained shortfalls. But the group ran out of litigation funding and had to settle the case prematurely. The Post Office’s £57.75m settlement left the Bates 555 with huge losses because £46m of the money went in costs. Most of those in the group have not received back money they were made to give the Post Office to cover shortfalls shown on Horizon.

They see this injustice that as being compounded by the government’s willingness to pay fair compensation to sub-postmasters who did not sue the Post Office. Those victims of the scandal who did not take part in the litigation have been eligible to join the Post Office’s Historical Shortfall Scheme which is not open to the Bates 555.

About 2,400 people who joined the scheme are due to receive about £63,000 each on average, the Post Office having said in its annual accounts that £153m has been set aside for compensation claims. The postal affairs minister Paul Scully has announced that government will help the Post Office to pay the claims.

In contrast, Scully has made no commitment to pay fair compensation to those who sued the Post Office. This means the litigants have received, after group costs, an average of only £20,000 each – a third of the average being paid to non-litigants.

Critics say this unfairness has been further compounded by the government’s decision to set up a public inquiry into the scandal that specifically rules out any consideration of the litigation settlement deal. The Bates 555 is threatening to boycott the inquiry unless compensation becomes part of its formal remit.

Update:

The Post Office has confirmed the 400 payments. Its spokesperson said,

 “We set up the Historical Shortfall Scheme to provide redress for those who may have experienced shortfalls related to previous versions of the computer system Horizon. Around 400 compensation payments have been made through the scheme and other claims are progressing. We are committed to fairly resolving claims, with assessment by an independent panel, and are keeping people updated on their cases.”

Asked whether there is any openness and transparency related to the payments and whether any of the payments were contingent on recipients signing so-called gagging clauses, the Post Office spokesperson said scheme applicants are “not asked to sign confidentiality agreements as a condition of accepting compensation offers”.  

Post Office scandal – I just forgot to laugh – BBC

The Banner Lady – Tim McCormack’s blog on the excellent work of Eleanor Shaikh

The Great Post Office Trial – journalist Nick Wallis’ BBC R4 series

Post Office IT inquiry finally begins after chances to address problems were ignored – Karl Flinders, Computer Weekly

By Tony Collins

“As matters stand, it is unlikely the JFSA [Justice for Subpostmasters Alliance] will engage with the Inquiry,” says Alan Bates who founded the Alliance.

Last Friday [11 June 2021) Wyn Williams, the respected retired judge who chairs a government inquiry into the post office Horizon system,  made a new and earnest appeal.  

Sir Wyn wants – and “expects” – many more sub-postmasters to participate now that the non-statutory inquiry set up in September last year is on a statutory footing. He said in a statement,  

“I hope and expect that many more current and former sub-postmasters will be willing to participate in the work of the Inquiry following its conversion.

But he may still struggle to convince some sub-postmasters that there is any point in their participating, given the inquiry’s narrow terms of reference as set by the Post Office’s funding department, BEIS.  

The terms do not mention consideration of compensating 555 sub-postmasters who defeated the Post Office in a group litigation that exposed the Post Office IT scandal.

It means the group has no clear reason to take part in the inquiry. Its members have not had returned to them the many tens, and sometimes hundreds of thousands of pounds, that they lost when the publicly-owned Post Office made them pay for unexplained shortfalls shown on its unreliable Horizon system. Horizon was built by Fujitsu at a cost, mostly funded by taxpayers, of about £1bn.    

The Post Office IT scandal

Over 14 years, the courts convicted more than 700 sub-postmasters of financial crimes based on data derived from an unreliable branch accounts system, Horizon, whose material faults the Post Office and Fujitsu kept hidden. The Post Office continued to use data from Horizon as evidence to demand money from sub-postmasters. The scandal has affected more than 3,000 sub-postmasters across Britain.

When the Post Office ceased prosecutions based on Horizon in 2014, postal affairs ministers and government officials continued to hold that Horizon system was reliable. It took a High Court legal action by Alan Bates and 555 sub-postmasters to prove in 2019 that the system was not remotely robust.

Although Bates and his legal team won their case to establish that the Post Office was wrong to blame sub-postmasters for Horizon’s faults, their private legal funding ran out and Bates had to accept a government-approved settlement that left the 555 sub-postmasters with huge losses. Postal affairs minister Paul Scully has repeatedly refused to commit the government to giving back the money sub-postmasters lost in the scandal. He maintains that the litigation settlement was “full and final”.

Boycott?

Bates’ group boycotted the previous non-statutory which he saw as a potential whitewash. Although the inquiry is now on a statutory footing, the boycott may continue.  

Bates said, “I see no signs yet of the JFSA’s concerns that the financial reparations will be included in the Inquiry. In fact they still seem to be specifically excluded.  As matters stand, it is unlikely the JFSA will engage with the Inquiry.”

If the Alliance boycotts the inquiry, will the chairman force sub-postmasters to participate under powers he has under the Inquiries Act 2005?

But any forced participation of the scandal’s victims could convince critics of the inquiry that it was set up to serve the interests of government and its business department BEIS more than the public interest.

World first?

The inquiry exists as the government’s response to the biggest miscarriage of justice in British legal history. But the scandal’s significance may go wider still. It may be the first time any democratic nation worldwide has given criminal convictions in error to hundreds of innocent people on the basis of evidence derived from faulty technology.

The scandal- which campaigning peer Lord Arbuthnot describes as a national outrage – happened, in part, because of systemic flaws in the criminal justice system, systemic flaws in Whitehall’s scrutiny and oversight of public institutions and the Post Office’s unrestrained freedom to operate in the commercial world as Britain’s largest retail network without any effective shareholders and without, it seems, any institutional sense of right and wrong, only a mindset that what was right for the business was right for the country and employees.

But the Horizon enquiry’s terms of reference do not allow for an investigation into systemic failings in the criminal justice system or Whitehall’s systemic failings of oversight and scrutiny. Instead, Whitehall officials and the business department BEIS in particular have set up the inquiry to focus on failings at the Post Office alone and on faults in Horizon although these two areas have already been covered extensively in the group litigation. The judge in that litigation, Mr Justice Fraser, wrote more than 1,000 pages on failings at the Post Office in relation to Horizon and on the system’s technical faults. What then is the purpose of the Horizon enquiry other than to demonstrate a government response to the scandal?  

One government source told journalist Nick Wallis in June last year that the civil service opposed any government review of Horizon. Wallis quoted the senior government source as saying, “the officials weren’t happy… They didn’t want a review, they didn’t want an inquiry or anything. They wanted it all to go away’.”

Implications of a JFSA boycott of the inquiry?

The scandal has been exposed only as a result of the work of Alan Bates and his JFSA members. Without their participation, the government inquiry may have little or no credibility. It is unlikely the Alliance’s forced participation would lend any credibility to the inquiry.

If the inquiry remains focused on the Post Office and Horizon alone rather than on compensation and systemic Whitehall failings, it could be seen by the government’s critics that it has responded ineffectually and without humanity to the scandal.

Are statutory inquiries independent of government?

A House of Lords committee that investigated public inquiries called for curbs on ministers’ powers to control important aspects of the inquiry.

When ministers, with their officials, set or change a statutory inquiry’s terms of reference, they need only discuss and consult with the chair but do not need his consent. It’s the same with the government’s appointment of an inquiry’s assessors and counsel.

 A further weakness in the independence of statutory inquiries is that ministers can decide to restrict what information is published in the inquiry’s final report and can decide what documents or emails may be exempt from disclosure on the grounds of, say, the administration of justice.

The business department BEIS, although implicated in the Post Office IT scandal, has been able to control whether or not its failings of scrutiny and oversight are investigated by the Horizon inquiry – and it has chosen not to include its own failings in the terms of reference.

Organisations called to give evidence in statutory public inquiries can decline requests for information if they argue successfully that the information is not available or the request is unreasonable because of cost, time or difficulty in obtaining it. Their lawyers may also argue that they are not compelled to provide information covered by legal professional privilege.

Terms of reference

The House of Lords committee that investigated public inquiries recommended that victims of scandals ought to have a say in setting an inquiry’s terms of reference.  The committee said,

“We recommend that interested parties, particularly victims and victims’ families, should be given an opportunity to make representations about the final terms of reference.”

But there has been no consultation with victims of the Post Office IT scandal over the Horizon inquiry’s terms of reference. 

In any statutory inquiry, the terms of reference have a legal footing and usually cannot be circumvented.  Indeed the Department for BEIS says the Horizon inquiry’s terms of reference form a “boundary”. This may mean that if compensation is discussed as an issue in the inquiry when there is no mention of it in the terms of reference, it would be unclear whether any such discussion could be of any practical consequence. 

Government officials could decide to change Horizon inquiry’s terms of reference, in consultation with the chairman, to include consideration of compensation. But the government and Whitehall departments have no obligation to act on any public inquiry’s recommendations. Ministers can accept a recommendation but not act on it.

The National Audit Office investigated a wide range of public inquiries in 2018 and found it difficult in some cases to establish whether the chair’s recommendations had been acted on. The NAO also found that ministers have no duty to tell MPs whether they are going to act or not on a public inquiry’s recommendations.

Settlement “full and final”

Postal affairs minister Paul Scully has made no apology for failings in government and Whitehall’s oversight of the Post Office. He and the prime minister Boris Johnson have sought to distance government from the litigation and settlement.

Scully has said the government was not party to the settlement. He has also said the settlement was “full and final”. Similarly, Boris Johnson told Conservative MP Jonathan Lord last month that the government was “not party to the initial litigation nor the settlement that was agreed”.

But documents obtained by researcher Eleanor Shaikh under the Freedom of Information Act established that the government and business department BEIS were briefed on developments in the group litigation and chose not to intervene. The documents also show that the government and BEIS agreed the settlement.

Critics may wonder, therefore, whether Scully and Johnson are deepening the Horizon cover-up by incorrectly distancing government from key decisions that are being portrayed as having been made by the Post Office alone.

Comment

Not for the first time, government has set up a public inquiry that leads its critics to wonder whether it can serve any useful purpose other than demonstrate a dutiful response by ministers to public concerns.

In 2009 the then government set up a non-statutory inquiry into unexpectedly high deaths at Stafford Hospital. As with the Horizon inquiry, the government’s investigation into Mid Staffordshire NHS Foundation Trust covered old ground. Ministers wanted the Mid-staffs inquiry to report on deaths at the hospital and the lessons learned. But the Healthcare Commission had already investigated the trust’s failings – as Mr Justice Fraser has already reported on failings at the Post Office. What was the point of the Mid-staff inquiry investigating deaths again when the real cause of the scandal had been failings of scrutiny and oversight by regulatory agencies?  

Campaigners for justice in the case of Mid-staffs, as in the Post Office IT scandal, worked hard for a statutory inquiry that was able to investigate systemic failings in scrutiny and oversight. In the case of Mid-Staffs, campaigners succeeded. The incoming coalition government in 2010 set up a new inquiry – this time a statutory one – whose specific purpose was to look at systemic failings. The then Heath Secretary Andrew Lansley said,

“So why another inquiry? We know only too well every harrowing detail of what happened at Mid Staffordshire and the failings of the trust, but we are still little closer to understanding how that was allowed to happen by the wider system.

“The families of those patients who suffered so dreadfully deserve to know, and so too does every NHS patient in this country. This was a failure of the trust first and foremost, but it was also a national failure of the regulatory and supervisory system …Why did it have to take a determined group of families to expose those failings and campaign tirelessly for answers?”

Lansley set up a full statutory inquiry into the failures of regulatory authorities. The inquiry did not have contrived and narrow terms of reference. In contrast, the Horizon inquiry has narrow terms of reference that do not include any investigation of systemic failings of oversight and scrutiny.

At the very least the inquiry into the Post Office IT scandal ought to be looking at how to compensate those who have lost hundreds of thousands of pounds at the hands of a state institution. These victims are the very people who exposed the scandal – and they had to sacrifice £46m of the settlement money in paying their costs. Of what benefit is it to them to have an inquiry that covers old ground by re-investigating failings at the Post Office and in the Horizon system?

When Johnson and Scully seek to distance government from the Horizon scandal, they make matters worse. All this does is remind victims that ministers and officials failed to act despite warnings time and again from MPs and sub-postmasters that an apparently unaccountable state institution was ruining the lives of people of integrity. Lord Arbuthnot has worked tirelessly since 2010 to make ministers aware of the extent of the scandal. He is joined by a strong Parliamentary contingent of MPs who are campaigning for justice alongside the JFSA.

Perhaps Scully and Johnson ought to be embarrassed to admit that government ministers and Whitehall officials let the Post Office conduct itself as it did. If they are embarrassed, it doesn’t show in the inquiry’s terms of reference.

It’s possible that Wyn Williams may do what Robert Francis QC, chairman of the Mid-Staffs inquiry did: recommend a new inquiry into failings of oversight and scrutiny. That would be welcome.

But as things stand, a scandal that is a world first merits something more than a self-serving government inquiry that protects Whitehall and ministers and leaves the Bates 555 with nothing.

The Great Post Office Scandal – Nick Wallis’ forthcoming book

Did government allow Post Office to sack forensic accountants to cover up Horizon scandal ? – Karl Flinders, Computer Weekly

The Therium Conundrum – Tim McCormack