Lessons from the Post Office Horizon Case

There are many lessons for many different audiences from the sorry saga that began with 1996 ICL Pathway Bid to transform Benefits Payments via the Post Office  and then evolved after the withdrawal of the Benefits Agenda, the take-over of ICL by Fujitsu, the prosecutions of Sub Postmasters for “accounting discrepancies” (after a system different to the pilot, let alone the original plans,  was rolled out prematurely, under increasing cost and timetable constraints),  through an increasingly brutal and determined cover up of a cover up of a cover up, to the final unravelling. It will be interesting how how far down and back the statutory enquiry goes. I will also be interested to see how far down and back Nick Wallis goes with his book, The Great Post Office Scandal, which I urge readers to pre-purchase.

Those commenting on the UK’s most widespread miscarriage of justice and the conduct of Post Office senior management tend to pass over the causes and consequences of the disgrace of the UK’s oldest law enforcement agency, created in the 17th Century during the Commonwealth of Oliver Cromwell for the protection (and interception) of communications (the embryonic mail services).  After the Victorian General Post Office took over the telephone companies and wireless licensing, it was a key part of the UK state surveillance system until the telecoms operations were privatised as BT. But as late as 1988 (see The Times May3rd 1988) the Post Office Investigation Department (with 240 investigators) prosecuted 3,500 individuals for offences from stealing mail to defrauding Girobank and was bidding to become the UK’s premier fraud investigation operation.

Then came the IOCA Review followed by RIPA. The Post Office was still one of the largest public bodies with its own investigatory powers. The first of the prosecutions now being overturned came at about the time of Criminal Justice Act 2003. They continued while the Attorney General was issuing new guidance regarding the disclosure of evidence (2005) and adding an annex specific to digital evidence (2011). Meanwhile the Post Office had (and still has) a critical role with regard to government plans for digital identities and tackling multi-channel (mail, text, phone and e-mail) fraud.

I am therefore delighted to carry a guest blog from Esther George.

We met when I was organising the EURIM – IPPR Study into Partnership Policing for the Information Society and she was High Tech Crime Manager, Policy Advisor and Senior Prosecutor for the Crown Prosecution Service. She ran and developed the CPS high tech crime training programmes, from 2002 – 14.  She currently runs training programmes for prosecutors and judges around the world as well as a newsletter .

She has a different perspective on the case and leads through to some lessons that have implications for all those with “investigatory powers”. They also have implications for those looking at wider public-private partnerships for addressing on-line crime.    

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The Case of Horizon – UK’s most widespread miscarriage of justice

On 23 April 2021, a group of thirty-nine (39) sub-postmasters/mistresses saw their names cleared at the UK Court of Appeal after a very long running complex legal battle with the UK Post Office (PO). The PO said it “sincerely apologises” for “historical failures”.

The facts are that between 2000 and 2014, many PO sub-postmasters and sub-postmistresses were accused of stealing, misappropriation of funds and false accounting. Some paid back the monies it was alleged that they stole. While others pleaded guilty to offences they did not commit, serving jail time and obtaining a criminal record in the process. Many were financially ruined and have described being shunned by their communities.

It was later recognised that it was the PO’s defective Horizon Accounting Software System which failed because of a number of ‘bugs’ in its system.

Horizon was first introduced into the Post Office network in 1999. The system, developed by the Japanese company Fujitsu, was used for tasks such as monetary transactions, accounting and stocktaking. By 2000: Post Office literature stated that Horizon terminals were being installed “every five minutes” in 18,000 Post Office branches, with 63,000 Post Office employees trained to operate the system.

Very soon, sub-postmasters were complaining about bugs in the system. They reported shortfalls, some of which amounted to many thousands of pounds. The PO always responded that the system was not at fault

Many stories have emerged where some sub-postmasters attempted to plug the gap with their own money, even remortgaging their homes, in an (often fruitless) attempt to correct an error.

Between 2000 and 2014, the Post Office prosecuted 736 sub-postmasters and sub-postmistresses – an average of one a week all based on the inaccuracy of information from a recently installed computer system called Horizon.

In September 2009: A campaign group on the issue, Justice for Sub-postmasters Alliance (JFSA) was formed by Alan Bates, a former Sub-postmaster and others. By 2012: Investigative firm Second Sight conducted an independent inquiry into Horizon. In January 2012: The PO set up the Initial Complaint Review and Mediation Scheme, to which 150 former sub-postmasters sign up. Second Sight uses their testimonies to conduct another investigation.

By 2013: The PO finally admitted that there were defects within the Horizon software, but claimed the system had been fixed and was effective. In 2014: A report found that the technology “was not fit for purpose” in some branches. The PO says that “there is absolutely no evidence of any systemic issues with the computer system”.

In 2014:  James Arbuthnot MP accused the PO of rejecting 90 per cent of applications for mediation. The PO said that the claims by Arbuthnot were “regrettable and surprising”. The MP then branded the company as “duplicitous”.

In 2015: the PO scraped the independent committee overseeing the investigation, and terminated the Initial Complaint Review and Mediation Scheme without notice and published a report clearing themselves of any wrong doing. Later that year, Private Eye reported that the PO had ordered Second Sight to end their investigation just one day before the report was due to be published, and to destroy all the paperwork they had not handed over. The UK trade magazine Computer World UK reported that the PO had obstructed the investigation by refusing to hand over key files to Second Sight. The Post Office denied these claims.

In 2017, the JFSA took the Post Office to court through a group litigation action by 550 former employees, who were mainly ex sub-postmasters. By 2018, Second Sight’s second investigation found that PO software experienced 12,000 communication failures every year, with software defects at 76 branches, as well as old and unreliable hardware.

Finally in December 2019, at the end of a long-running series of civil cases, the Post Office agreed to settle with 555 claimants. It accepted it had previously “got things wrong in [its] dealings with a number of postmasters”, and agreed to pay £58m in damages. The claimants received a share of £12m, after legal fees were paid.

A few days later, a High Court judgement said that the Horizon system was not “remotely robust” for the first 10 years of its use, and still had problems after that. The judge said the system contained “bugs, errors and defects”, and that there was a “material risk” that shortfalls in branch accounts were caused by the system.

The judgement also referred to Fujitsu’s incompetence and that they were inaccurate about what they had told the PO in what was kept in the ‘Known Error Logs’. It pointed out the PO’s obstructive attitude to disclosure and their failure to consult and audit data.  The judgement spoke about the PO’s institutional obstinacy and their lack of transparency and accuracy.

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This approach by the Post Office has amounted, in reality, to bare assertions and denials that ignore what has actually occurred, at least so far as the witnesses called before me in the Horizon Issues trial are concerned.  It amounts to the 21st century equivalent of maintaining that the earth is flat.” 

Hon. Mr Justice Fraser

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Despite their own failings and that of Fujitsu, the PO confirmed earlier this year that it will retain its controversial Horizon contract with Fujitsu until 2024, following a one-year extension to its retail and accounting system agreement.

Following the High Court ruling, more cases were brought forward to the Criminal Cases Review Commission (CCRC), an independent body which investigates suspected miscarriages of justice. So far, it has referred 51 cases back to the courts. To date, six people’s convictions have been overturned. Another 42 cases were heard in one hearing at the Court of Appeal in March 2021. Of these, 39 were unopposed by the Post Office on at least one count – generally that the person did not receive a fair trial. With these 39 convictions quashed, it becomes the most widespread, known, miscarriage of justice in the UK.

What happens next? The ruling has also determined that these 39 convictions were also “an affront to the public conscience”.

This means that the postmasters may pursue civil action against the Post Office for malicious prosecution, seeking significant sums in damages. Three more cases referred by the CCRC have yet to be heard. It is also reviewing 22 more cases, and inviting others to make an application, which could go directly to the Court of Appeal, if a conviction is believed to be unsafe.

The Post Office has set up a historic shortfall scheme designed to repay those who lost out, but excludes those who were part of the High Court settlement. More than 2,400 claims have been made to the scheme. Ministers said this was more than the Post Office expected and held the potential for the government having to step in to cover some of the cost.

An inquiry has also been set up “to establish a clear account of the failings of the Horizon IT computer system, and assess whether lessons have been learnt at the Post Office” will report in the summer. However the JFSA which was instrumental in the High Court litigation, refused to take part, describing it as a whitewash and called for a full public inquiry instead.

The work now starts to see what went wrong and where. The Metropolitan Police is currently investigating allegations of perjury; the Solicitors Regulation Authority is looking into what role solicitors played in the disclosure of key evidence; and the issue of private prosecutions is under the spotlight more than ever. The High Court judge said he would refer Fujitsu to the Director of Public Prosecutions for possible further action because he had “grave concerns” about the evidence of the company’s employees.

London firm Howe & Co, which represents 555 individuals in pushing for a statutory inquiry, wrote last week to the Department for Business, Energy & Industrial Strategy – which oversees the PO – asking to pause the current inquiry, re-establish it on a statutory footing and consult again on the terms of reference.

The department should be called as witnesses under oath, not have effective control of the inquiry,’ Howe partner David Enright told the Gazette. ‘The Post Office wrongly prosecuted so many upstanding pillars of the community and its owners want to mark [their] own homework – that is unconscionable.’

Last week business minister Paul Scully told the Commons that the inquiry would look into the Post Office’s ‘who did what’ approach, but resisted calls for a full judicial inquiry.

In looking at this case there are a number of lessons we can learn from it, I have suggested four below:

  1. In the first instance it is not an ideal situation to have an institution be the victim, investigator and prosecutor in a case. The other complex matter was that they were prosecuting people who were either their own employees or those they had a contractual agreement of some sort with. It would be better in such cases that where a Government institution is the victim of an offence that either the investigation or the prosecution is performed by others such as the police and /or the Crown Prosecution Service (CPS) etc…
  2. In commissioning large technological project such as Horizon the customer should have the knowledge to work with the contractor to ensure that the contractor provides a system that is fit for purpose and takes into account the needs of the user. This is of ever-growing importance especially as the government is in the process of commissioning and installing other such projects.
  3. Disclosure of evidence to the defence – How the law of evidence applies to automated computer-based decisions. Has wide-ranging implications across the public and private sector because of the growth of artificial intelligence in its capacity as a general purpose technology across every aspect of the economy means that the number of decisions involving software-based systems will increase both in the private sector and in the delivery of public services. Computer evidence must follow the Common Law rule, that a “presumption will exist that the computer producing the evidential record was working properly at the material time and that the record is therefore admissible as real evidence”.

The presumption of the machine functioning properly in practice, means that the prosecution can rely on the presumption that a computer was operating reliably at all material times. It needs to be remembered that the presumption is rebuttable. The defendant has to raise the possibility that it was not, once that is done the prosecution will then have to prove that the computer was working properly at the material time. Section 129 of the Criminal Justice Act 2003 contains a similar presumption.

In my view this presumption was not really the problem in this case. Rather the problem was the fact that the prosecution did not make full and proper disclosure of the unused material in the case to the defence. On what we now know if  such disclosure was made the presumption would have been rebutted. The PO did not comply with the guidelines in force at the time, they were the Attorney General’s guidelines on disclosure’ issued in 2005 and the supplementary guidelines on digital material issued in 2011, which is an annex to the general guidelines. The Attorney General’s Guidelines are not detailed operational guidelines. They are intended to set out a common approach to be adopted in the context of digitally stored material.

  1. A major problem that runs through out the case is the lack of training for all involved. There was said to be a lack of training by the PO for the sub postmasters and their staff utilizing the Horizon system.

The PO investigative and prosecution team should have been properly trained in respect of electronic evidence and its disclosure.

The Court (Judge) needs to take notice of the fact that the PO in their cases are the victim, investigator and prosecutor. In such cases in order to avoid future miscarriages of justice it is essential that the judge hearing the case has been  properly trained in respect of electronic evidence and its disclosure requirement to ensure that the PO have properly fulfilled their disclosure responsibilities.

Disclaimer: The views expressed above are my own.

Thanks: I would like to thank Stephen Mason (https://ials.sas.ac.uk/about/about-us/people/stephen-mason) who is a leading expert on Electronic Evidence. We discussed this case some years ago and Stephen has been involved in working on it and was kind enough to send me some very useful material to read.

Read more:

inews  Analylsis by Jasmine Andersson

https://inews.co.uk/news/analysis/post-office-scandal-explained-horizon-sub-postmaster-timeline-events-what-happened-970153

Post Office scandal: What the Horizon saga is all about

https://www.bbc.co.uk/news/business-56718036

Post Office scandal exposes the risk of automated injustice

https://www.ft.com/content/08f485bf-6cea-46d6-962c-46263aaec5f3

Justice for Subpostmasters Alliance

https://www.jfsa.org.uk

Post Office Horizon Scandal – Where weren’t the lawyers?

https://www.lawgazette.co.uk/news-focus/news-focus-post-office-horizon-scandal-where-werent-the-lawyers/5108343.article

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