Savo Ilic - stock.adobe.com
When Alan Bates and his partner Suzanne Sercombe decided to buy a Post Office and shop to give themselves time to pursue their hobbies while maintaining a stable salary, little did they know that they would soon be dedicating their lives to fighting against a government organisation over an IT problem.
Former subpostmaster Alan Bates spearheaded the recently concluded group litigation against the Post Office, which saw the government-owned organisation throw money at a legal battle to fight Bates and around 550 others. The Post Office ultimately lost.
Before telling his story, it is important to acknowledge that this isn’t the end of the matter for Bates, just the start of a new phase. The court battle is won, but the pain and suffering of subpostmasters at the hands of computer errors are far from over.
Speaking from his home just outside Llandudno in North Wales, Bates said the Post Office will not escape further interrogation for the way it has treated subpostmasters that have suffered unexplained losses.
Now that everything is public, Bates and the growing number of subpostmasters behind him are armed with evidence. “We had to go to the extreme of the court to expose all of this, and the Post Office can’t hide it any more. It shows all the incompetence that has been going on at the Post Office,” he says.
Nowhere to hide
Bates says the Post Office has a way of dealing with challenges and criticism where bosses “take the flak, get their heads down, batten down the hatches and ride out the storm”.
“This is what they do every time and that is what they are going to do now, but this isn’t going away because we have almost 1,000 pages of damning evidence about what has been going on,” he says.
The battleground for Bates will move almost a kilometre to the west from the High Court to Westminster. “We are rallying our troops, if you like, to see their MPs and try to get them to take up the battle for us,” he says.
There is now the small matter of forcing the government to pay the huge legal costs that subpostmasters built up fighting the case, as well calls for a judge-led public inquiry into what happened, why it happened and how to prevent it happening again.
“First, we want the money back that we had to pay for the investigation and court case, which the government should have done itself, and we then want a full public inquiry,” says Bates. “It is up to us as a group to explain to our MPs over the next month or so what happened, why it happened and what we want them to do.”
This has already begun with subpostmasters across the country telling their stories to their local representatives in Parliament – and it is having some effect already.
Gill Furniss, Labour MP for Sheffield Brightside and Hillsborough, and shadow minister for steel, post and consumer protection, recently gave a speech in Parliament where she asked the government whether it would call a full inquiry into the “circumstances that led to this tragedy”.
Jumping back more than two decades, it would have been hard for Bates to imagine he would be making waves in Parliament in the future.
A new lifestyle
It was 1998 when Bates and Sercombe bought a Post Office in Craig-y-Don, north Wales. It was a plan to give them both time to spend on things outside work – in Bates’s case, this was walking the hills; for Sercombe, arts and crafts – while still working.
Bates says: “We were looking around generally for opportunities and honed in on a Post Office [branch] because it offered, in theory, security with an income, and if you had enough space you could develop the retail side of your business.”
They looked around the country and found the most viable option to be the Post Office in Craig-y-Don. It was a busy business where the previous owners had been in place for many years before retiring.
The couple saw the opportunity to develop the business and it ended up going all to plan, with the retail part of the business expanding after a significant financial investment. A large extension added 50% more space and the premises were modernised internally. The couple moved the Post Office from the back of the building to the front of the premises and employed five part-time staff.
Things start to go wrong
Back then, the Post Office was run using manual systems, but by the end of 2000 the Post Office’s Horizon retail and accounting system, from Fujitsu, replaced this and things quickly went wrong.
“It was within a matter of weeks that we suddenly found a large shortfall of about £6,000 that turned out to be a duplication of a Giro transaction,” says Bates. The error had happened during a software upgrade.
Bates is a man of detail, and he chronicled events through his correspondence with the Post Office. “I spoke to the area manager about it and fortunately I thought it so serious that I should detail it in writing,” he says.
Little did Bates know at the time, but details like this would be cited nearly 20 years later in the High Court as part of the legal fight he would later take up with the Post Office.
Detail is coupled with persistence in Bates’s character, the perfect mix for getting to the bottom of a complex problem. “I managed to find the bulk of the duplications and why they had happened, but there was about £1,000 shortfall and I didn’t know what to do with it. I asked the Post Office for advice, but they never responded,” he says.
He kept asking the Post Office what he should do about the shortfall, but received no response. Every time a new area manager was put in place – which was regularly in Bates’s case, with five different appointees in three years – he would bring up the matter with them.
Not wanting to accept figures that he did not understand, Bates always rolled what he described as “shorts and overs” through and would not reset the system to zero. “My concern was that if I reset it, I was accepting the figures that Horizon had put in there,” he says.
Bates had also asked for access to the system to check the data that had been put into the system. “This did not seem unreasonable, but they never responded to the request. Eventually a new area manager grasped the nettle and realised it was ridiculous and had been going on for too long,” he says.
This particular area manager arranged for the loss to be written off in 2002. It was at this time when the Post Office had an early sign that Bates would not roll over.
“They ordered me to stop rolling over and put that in writing, and after some toing and froing they tried to terminate me on one clause of the contract,” he says. “After taking legal advice, I was told if the Post Office did that they would be purporting to change the terms of the contract, which is illegal. When I put that in writing to them, they terminated me with three months’ notice without giving me a reason.”
Bates suspects his rolling over of accounts that had unexplained losses or surplus was the reason.
Ended without reason
The couple’s last day of service to the Post Office was on 5 November 2003. “We kept the shop bit, but we had to close the post office,” says Bates. “The [Post Office] walked away with the branch that we had paid the previous subpostmaster for.”
Sercombe described this period as the toughest time. “When we got the termination and went into the notice period, it was a very harrowing time and it affected us physically as well,” she says.
They had to soldier on because they had a business to run. “But [we] couldn’t succumb to that, and we didn’t even go to the doctors about the stress because we were worried about how it might affect us getting work in the future,” says Sercombe.
After having planning permission refused for a redevelopment, the couple sold the shop in 2006.
The Post Office part of the business had cost more than £60,000, with the valuation model used being one-and-a-half times the Post Office annual turnover, but only the shop could be sold on.
It was not surprising then that when the Post Office terminated the contract, Bates immediately contacted his MP, Betty Williams, who took it up with the Post Office. The Post Office said they would appoint someone to look at it, but in January 2004 Williams wrote back saying the Post Office had reviewed his case and couldn’t do anything about it.
“Realising there was going to be no appeal and they weren’t going to reinstate me, I thought, ‘Let’s get on with the battle’,” says Bates.
In 2004, on the advice of a friend, Bates contacted Computer Weekly by letter.
“A friend who works in the computer industry has suggested that I write to you as someone knowledgeable of government computer schemes and their associated problems,” he wrote in the letter.
“We have lost our investment and livelihood by daring to raise questions over a computer system we had thrust upon us, and we are trying to track down two specific lines of enquiry which I hope you may be able to offer some assistance or steer us in the right direction.”
Bates had already become a thorn in the side of the Post Office by putting up a large banner outside his shop promoting his postofficevictims.org website. “I was doing things to annoy the Post Office and was winding them up,” he says.
But this led to people asking for advice about buying Post Offices. For example, a retired bank manager who was thinking of taking over a Post Office wrote to Bates for advice. “He had read a letter I did for a local newspaper, about my problems, and he couldn’t believe what had gone on,” says Bates.
In 2008, after being contacted by other subpostmasters, Computer Weekly had enough material to continue to investigate. The following year an article was published about the plight of subpostmasters that had suffered at the hands of Horizon. Bates was one of seven subpostmasters featured, but there were many more. Following this article, BBC Wales’s current affairs programme Taro Naw picked up on the situation.
We are not alone
After the publicity, the subpostmasters affected began talking to each other and decided to meet up. Between 30 and 40 people turned up to the meeting in Fenicompton in Warwickshire.
This was the 2009 meeting that ultimately led to the creation of the Justice for Subpostmasters Alliance (JFSA) campaign group, and was the beginning of the next phase of Bates’ fight for justice – only this time, he and Sercombe were not alone.
This next stage eventually took them to the High Court in London in 2018, but Bates had long suspected a courtroom might be the only place to get justice if the Post Office retained its stance that the Horizon system could not be to blame for unexplained losses. Legal action had been in his mind since 2003, after a government response to his complaint suggested this might be the only route. However, although Bates and Sercombe had legal insurance, they did not have the money to take the Post Office to court.
In 2013 the Post Office set up a mediation scheme to try to get to the bottom of the problems being experienced by subpostmasters, but prematurely abandoned it. This happened on the eve of the publication of a report into Horizon by forensic accounting firm Second Sight, which the Post Office had commissioned. The report was full of criticisms about the Post Office being too quick to take legal action against subpostmasters.
When the mediation scheme fell apart in 2015, Bates decided the best way forward was the legal route. The advantage now was that Bates was in possession of all the reports Second Sight had done as part of its work commissioned by the Post Office as part of the mediation scheme, including individual case reports of the problems experienced by subpostmasters. “I felt we had a package that was good enough to interest a law firm,” says Bates.
While trying to find a law firm to take on a case against the Post Office, Bates was contacted by James Hartley, partner at Freeths solicitors, who had read about the situation in the press.
Bates was already engaged with another firm at the time, but he and Hartley decided keep in touch in case things didn’t work out with the current law firm. “As things stalled for a few months with this legal firm, I decided to give James a call. We ended up working with Freeths and never looked back,” says Bates.
Once Freeths were on board it became a lot easier for Bates “because the lawyers did all the heavy lifting”, he adds.
The legal team was in place and a group litigation order – where a number of claimants with similar claims get together to initiate an action – was seen as the next step for the subpostmasters to redress their grievances with the Post Office. With Freeths Solicitors and Henderson Barristers Chambers, they prepared a civil action.
This is a very expensive route, but it was seen as the only one. Funding came from litigation funder Therium, which works by a number of funders investing in litigation, paying fees and other costs. If the case is a success, they make a profit, but are risking their investment if the case is lost.
Let them be judged
The first trial analysed the contractual relationship between the Post Office and subpostmasters. After weeks in court, including lead claimants and senior Post Office staff being questioned, the judgment was published in March the following year. It was damning, with Judge Peter Fraser describing the Post Office's contract with subpostmasters as “oppressive”.
In the judgment, he said: “The Post Office describes itself on its own website as ‘the nation’s most trusted brand’. So far as these claimants, and the subject matter of this group litigation, are concerned, this might be thought to be wholly wishful thinking.”
It was vindication for Bates and affected subpostmasters. The Post Office even tried to get the judge to remove himself from the case, alleging bias. When he refused, the Post Office went to the Court of Appeal, where their request was once again rejected.
The Post Office later went on to make an application to appeal large parts of the first trial judgement, but the Court of Appeal rejected it. Lord Justice Coulson in the Court of Appeal likened the treatment of subpostmasters by the Post Office to the way Victorian factory owners treated their workers.
All of this was costing millions of pounds as legal teams on both sides constructed their arguments.
The second trial began in March 2019 and put the Horizon system and its supporting technologies and processes under the spotlight. Fujitsu, the company that supplies the Horizon system, featured heavily. Revelations during the trial included, in contrast to Post Office prior claims, the existence of a Known Errors Log containing thousands of Horizon bugs.
Before the judgment for the second trial was announced in December 2019, the Post Office settled with the subpostmasters for £57.75m. When the judgment for the second trial was published a few days later, the Post Office’s decision to get out became obvious.
The judgment came on 17 December 2019 and it was explosive, shattering the Post Office claim that Horizon was robust and not to blame for accounting shortfalls. In his judgment, Judge Fraser said: “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.”
Bates commented: “The judgement was a broadside, not just a smoking gun.”
This signalled the end of another phase in Bates’ battle and the beginning of a new one.
Bates is driven by the desire to get justice for subpostmasters victims. “It is frustrating in some ways because you think you could be doing other things, but the more time you spend on it and with other victims and the misery it has caused, you realise how horrible it is what the Post Office has done,” he says.
According to Bates, many subpostmasters experienced far greater suffering than he and Sercombe did. “We were quite fortunate in comparison to a lot of people, so you have to be able to manage this,” he adds.
It was, however, a constant struggle, but Bates says they were able to break from it when necessary. “You can get overrun by things, with all the misery and the rest of it. A long time ago I learned to be able to lift a problem down from a shelf, open it up and work on it, then put it away back on the shelf and not worry about it,” he says.
When it comes to high points, the judgment in the first trial ranks near the top, but Bates said this was not a surprise because “it was clearly the truth”.
Sercombe is not surprised about how Bates has dealt with the long battle, but she was surprised by his strength. “I didn’t realise just how strong he was,” she says.
She adds that while Bates has not changed, he has emerged. “Over the past 20 years, he has shown that his previous work as an operations manager made him organised. He would always just get on with the job and step by step achieve things. He used all these skills throughout this process. There were many times I considered giving up the fight, but I am not sure Alan did,” she says.
Sercombe admits there were times she questioned whether it was all worth it and came close to giving up at one point. “There was a period before we got Freeths on board that we didn’t seem to be getting anywhere. We had a discussion about whether we should carry on or not, but by that time it was too late because so many people were on board,” she says.
“We didn’t see anyone else in the group that could jump in and take over. We seemed to be the only couple that didn’t have families and lots of other dynamics going on, and we freer in our lifestyle.”
When it comes to continuing the battle now that the court case is over, she says: “You have to think about where we would be if we didn’t have the settlement, we’d still be going to court and immersed in it anyway.”
Watching Bates face stiff questioning from the QC representing the Post Office, Sercombe said she was impressed with how he paced himself, but she adds: “I wasn’t really worried, I was quite confident.”
While the two court judgments were the high points for Sercombe, she adds being in London for the High Court allowed her to revisit some of her passions from the time when she was a student near the city. “Going back to London has allowed me to revisit some of the places I used to visit, like the art galleries,” she says.
Asked whether he would take on the Post Office again if he could go back in time, Bates says: “Well that depends how far back you go. If we could go back far enough, we would never buy a Post Office.”
Click here to sign a petition calling for a full judge-led public inquiry into the Horizon scandal.
Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009
- May 2009: Bankruptcy, prosecution and disrupted livelihoods – postmasters tell their story.
- September 2009: Postmasters form action group after accounts shortfall.
- November 2009: Post Office theft case deferred over IT questions.
- February 2011: Post Office faces legal action over alleged accounting system failures.
- October 2011: 85 subpostmasters seek legal support in claims against Post Office computer system.
- June 2012: Post Office launches external review of system at centre of legal disputes.
- January 2013: Post Office admits Horizon system needs more investigation.
- January 2013: Post Office announces amnesty for Horizon evidence.
- January 2013: Post Office wants to get to bottom of IT system allegations.
- June 2013: Investigation into Post Office accounting system to drill down on strongest cases.
- July 2013: Post Office Horizon system investigation reveals concerns.
- October 2013: End in sight for subpostmaster claims against Post Office’s Horizon accounting system.
- October 2013: Former Lord Justice of Appeal Hooper joins Post Office Horizon investigation.
- November 2013: 150 subpostmasters file claims over ‘faulty’ Horizon accounting system.
- September 2014: Fresh questions raised over Post Office IT system’s role in fraud cases.
- December 2014: MPs blast Post Office over IT system investigation and remove backing.
- December 2014: Why MPs lost faith in the Post Office’s IT investigation, but vowed to fight on.
- December 2014: MPs to debate subpostmaster IT injustice claims.
- December 2014: MP accuses Post Office of acting “duplicitously” in IT investigation.
- January 2015: MPs force inquiry into Post Office subpostmaster mediation scheme.
- January 2015: Post Office faces grilling by MPs over Horizon accounting system.
- February 2015: Post Office CIO will talk to any subpostmaster about IT problems, promises CEO.
- March 2015: Post Office ends working group for IT system investigation day before potentially damaging report.
- March 2015: MPs seek reassurance over Post Office mediation scheme.
- March 2015: Retiring MP aims to uncover truth of alleged Post Office computer system problems.
- April 2015: Post Office failed to investigate account shortfalls before legal action, report claims.
- April 2015: Criminal Courts Review Commission set to review subpostmasters’ claims of wrongful prosecution.
- May 2015: IT system related to subpostmaster prosecutions under review by CCRC.
- June 2015: Post Office looking to replace controversial Horizon system with IBM, says MP.
- July 2015: Campaigners call for independent inquiry into Post Office Horizon IT system dispute.
- October 2015: James Arbuthnot takes Post Office IT fight to House of Lords.
- November 2015: The union that represents Post Office subpostmasters has warned of a problem with the Horizon accounting system.
- November 2015: An email from Post Office IT support reveals a problem with the Horizon system and supporting processes that could lead to accounting errors.
- November 2015: Group litigation against Post Office being prepared in Horizon dispute.
- February 2016: Post Office faces group litigation over Horizon IT as subpostmasters fund class action.
- June 2016: Post Office chairman Tim Parker says there would be “considerable risk” associated with changing its Horizon computer system.
- November 2016: The legal team hired by a group of subpostmasters will take their case to the next stage.
- January 2017: The group action against the Post Office that alleges subpostmasters have been wrongly punished for accounting errors gets a green light from the High Court of Justice.
- March 2017: 1,000 subpostmasters apply to join IT-related group litigation against Post Office.
- April 2017: Investigation into claims of miscarriages of justice in relation to a Post Office accounting system has appointed a forensic accountant firm.
- May 2017: Hundreds of subpostmasters have applied to join IT-related legal action since March.
- July 2017: Post Office defence in computer system legal case due this week.
- August 2017: Campaigners submit initial evidence in group litigation against Post Office over controversial Horizon IT system.
- October 2017: Subpostmasters’ group action against the Post Office reaches an important milestone.
- November 2017: An end is in sight for subpostmasters’ campaign against alleged wrongful prosecution, which they blame on a faulty computer system.
- November 2017: The High Court judge managing the subpostmasters versus Post Office legal case over an allegedly faulty computer system tells legal teams to cooperate.
- January 2018: Forensic investigation into Post Office IT system at centre of legal case nears completion.
- April 2018: Criminal Cases Review Commission forensic examination of the IT system at the centre of a legal case against the Post Office has raised further questions.
- May 2018: Post Office branches unable to connect to Horizon computer system for several hours after morning opening time.
- October 2018: After over a decade of controversy, next week marks the beginning of a court battle between subpostmasters and the Post Office.
- November 2018: Case against Post Office in relation to allegedly faulty computer system begins in High Court.
- November 2018: High Court case in which subpostmasters are suing the Post Office has revealed a known problem with a computer system at the core of the dispute.
- November 2018: A High Court trial, where subpostmasters are suing the Post Office for damages caused by an allegedly faulty IT system, ends second week.
- November 2018: Post Office director admits to Horizon errors and not sharing details with subpostmaster network.
- November 2018: The High Court trial in which subpostmasters are suing the Post Office has reached an important stage.
- December 2018: CCRC may hold off subpostmaster decision until after Post Office Horizon trial.
- December 2018: Court case where subpostmasters are suing the Post Office set to span at least four trials and extend into 2020.
- January 2019: Subpostmasters’ campaign group attacks Post Office CEO Paula Vennells’ New Year honour amid ongoing court case.
- January 2019: Thousands of known errors on controversial Post Office computer system to be revealed.
- March 2019: Tech under spotlight at High Court in second subpostmasters versus Post Office trial.
- March 2019: Post Office considered Horizon IT system “high risk”, court told.
- March 2019: CCRC watching Post Office Horizon trial closely.
- March 2019: Judge rules that Post Office showed “oppressive behaviour” in response to claimants accused of accounting errors they blamed on Horizon IT system.
- March 2019: Post Office ‘lacked humanity’ in the treatment of subpostmasters, says peer.
- March 2019: A High Court judge heard that the Post Office did not investigate a computer system error that could cause losses, despite being offered evidence.
- March 2019: The Post Office legal team in the case brought by more than 500 subpostmasters has called for the judge to be recused after questioning his impartiality.
- March 2019: A senior civil servant asked the Post Office to repay public money it had wrongly allocated to paying legal costs.
- April 2019: Subpostmaster claimants’ legal team makes application for the Post Office to pay millions of pounds of costs associated with trial.
- April 2019: Post Office to appeal judgment from first Horizon trial.
- April 2019: The Post Office’s claim that the judge overseeing the case concerning its controversial Horizon IT system was biased has been dismissed – but will now be considered by the Court of Appeal.
- April 2019: MP questions government over Post Office Horizon case.
- April 2019: Government says no conflict of interest in trial despite Post Office chairman’s dual role.
- May 2019: The Court of Appeal has refused the Post Office’s application to appeal a major decision in the Horizon IT trial.
- May 2019: The Post Office has applied for permission to appeal judgments from the first trial in its IT-related legal battle with subpostmasters.
- May 2019: The judge in the Post Office Horizon trial has ordered the organisation to pay the legal costs of its courtroom adversaries, and refused to give permission to appeal a major judgment.
- June 2019: Post Office asks Court of Appeal for permission to appeal judgment in first Horizon trial.
- July 2019: The Post Office has admitted that some subpostmasters are at risk of accounts not balancing due to an error it does not understand.
- July 2019: Problem revealed during High Court trial left subpostmaster with £18,000 surplus after IT system failed to register full amount of cash scanned in.
- August 2019: Subpostmasters suffering slow running and frozen terminals while Post Office searches for a fix to issues apparently caused by a software update.
- August 2019: The Post Office has fixed the latest problems with its Horizon system, affecting hundreds of branches.
- October 2019: A High Court judgment for a trial that focused on the Post Office’s IT system at the centre of a multimillion-pound litigation will be announced early next month.
- November 2019: The Court of Appeal has rejected a Post Office application to appeal judgments made in its multimillion-pound battle with subpostmasters over IT system failures.
- November 2019: Peer calls for clear-out of Post Office board after Court of Appeal confirms major court defeat.
- December 2019: The Post Office has settled its long-running legal dispute with subpostmasters, and will pay £57.75m in damages.
- December 2019: Subpostmasters ended their legal battle with the Post Office at the optimal time, according to the lawyer that managed the High Court action.
- December 2019: Subpostmasters proved right on IT system failures as calls for full public inquiry mount.
- December 2019: Criminal Courts Review Commission to review Horizon judgment ‘swiftly’.
- December 2019:National Federation of Subpostmasters cries foul after court ruling on controversial computer system.
- December 2019: Former Post Office CEO apologises to subpostmasters over Horizon scandal.
- December 2019: Call for former Post Office CEO to step down from public roles after IT court battle lost.
- January 2020: Fujitsu must face scrutiny following Post Office Horizon trial judgment.
- January 2020: Subpostmaster group calls for government to pay legal costs for Horizon trial.
- January 2020: Why subpostmasters are calling on the government to pay Horizon trial costs.
- January 2020: Department for Business, Energy & Industrial Strategy says it did not make decisions in the Post Office’s recent court battle.
- January 2020: Government should not be allowed to dismiss subpostmasters’ claims over Horizon IT scandal.
- January 2020: Police sent information about potential Fujitsu staff perjury in subpostmaster prosecutions.
- January 2020: Prosecutions are a significant step closer to being sent to the Court of Appeal as Criminal Courts Review Commission forms a group of commissioners to review them.
Read more on IT for retail and logistics
Post Office scandal victims have days to raise thousands of pounds or perpetrators go scot-free
Subpostmasters to force scrutiny of government’s role in Post Office IT scandal
What the Court of Appeal referrals mean to those who campaigned for justice for subpostmasters
CCRC findings on subpostmaster prosecutions reveal incompetence of successive governments