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As the court battle between subpostmasters and the Post Office resumed in a second trial, documents revealed that the computer system at the centre of the dispute was considered high risk.
The court heard that an internal Post Office review found that its IT was not fit for purpose and would be expensive and difficult to change.
More than 500 subpostmasters are suing the Post Office through the Bates versus Post Office group litigation order (GLO).
In 2009, Computer Weekly revealed that the lives of some subpostmasters, who run Post Office branches, were turned upside down as a result of being fined, sacked, made bankrupt and even imprisoned because of unexplained accounting shortfalls. Some claimants were sent to prison, one while pregnant. They blame the accounting and retail system they use, known as Horizon, for the problems. The Post Office denies this.
Horizon, which was introduced in 1999/2000, is used by nearly 12,000 post office branches. Subpostmasters are held liable for any unexplained losses (see timeline below).
Citing Post Office documents, Patrick Green QC, representing subpostmasters, said the Post Office had stated in public that plans to replace Horizon had nothing to do with dissatisfaction or lack of confidence in the system. He said it stated this was because its current contract was coming to an end.
But a Post Office review of its IT, also revealed in court, categorised the Horizon branch system as being of “high operational risk”. This was the middle level of three categories, between “severe risk” and “within appetite but attention required”.
Known errors of Horizon system
In preparation for the trial, a document known as the known errors log was disclosed, revealing thousands of errors that the Post Office and Fujitsu knew about but did not inform the subpostmaster network of. One known error, which featured heavily on day one of the trial, was first made public by Computer Weekly in November 2015.
The issue, which has become known as the Dalmellington case, named after the branch, involved an incident in which thousands of pounds’ worth of payments were duplicated for one subpostmaster. If undetected, this would have appeared as a loss when the accounts were completed, which would be the responsibility of the subpostmaster.
The problem, which was investigated by the Communications Workers Union (CWU) postmaster branch, involves the process where subpostmasters transfer money from a core Post Office branch to a remote branch created to serve rural areas, known as an outreach, which is basically a branch on a laptop. These processes are known as remittances.
It occurred because a subpostmaster repeatedly pressed the command to send a transaction because the screen didn’t change and it did not appear to have been sent. As a result, four payments of £8,000 were recorded as being sent from a remote branch to a central branch, but only one was recorded as received. Accounts showed the subpostmaster was £24,000 short.
In an email at the time, an Atos representative said: “This issue is caused by the user forcing log-off when the post-login checks have not fully completed. We have experienced previous instances of this issue in other branches [that] have been caused in the same way (forced log-off).”
Pressure exerted by campaigners following the Computer Weekly article led to the Post Office investigating the matter.
Helen Baker, president of the postmaster branch at the CWU at the time, was contacted by the subpostmaster at Dalmellington when the accounting shortfall appeared. At the time, she alerted Computer Weekly to the issue.
Following day one of the latest trial, Baker told Computer Weekly that when the subpostmaster involved contacted her for help, she looked into the records and identified what had happened. Subpostmasters generally do not have the training to spot things like this, she said, although the accounts shortfall is their responsibility. “Most subpostmasters do not know where to look or what to look for when there is a shortfall,” she said.
Without help, said Baker, this type of loss might not be noticed until much later. She said if the subpostmaster at Dalmellington, Ann Ireland, hadn’t acted quickly, there would have been an apparent loss that she would have found it difficult to explain at a later date.
She added that subpostmasters are told by the Post Office that they do not need to balance once a week, but only once a month, whereas her own advice is to “do it straight away when you make a transaction”.
In relation to the Dalmellington bug, Antony de Garr Robinson QC, acting for the Post Office, said in court that the Post Office had got to the bottom of what had happened.
“They identified 112 potential branches with financial impact, 108 of which had been fixed or made good. Of the other four, only two had a significant problem, and further research showed that those two branches were not actually affected by the Dalmellington bug at all, they just had similar symptoms that were the result of an entirely separate cause and that were fixed entirely separately,” he said.
He said Dalmellington-type problems would be picked up by Post Office teams before a subpostmaster lost money.
Post Office kept quiet about IT errors
The first trial in November focused on the contractual relationship between the Post Office and the subpostmasters who manage its local branches.
But the computer system’s alleged faults were a constant theme during the trial. For example, documents referred to in court revealed evidence of a known problem with Horizon described by the Post Office and its IT partner Fujitsu.
A Post Office internal memo from August 2010, referred to in court and entitled Receipts payments mismatch issue memo day 1 OP_0008387, revealed that discrepancies showing at the Horizon counter disappear when the branch follows certain process steps, but will still show in the back-end branch account.
The memo added that this issue could be damaging if revealed. “If widely known, it could cause a loss of confidence in the Horizon system,” the memo said. “There could be a potential impact upon ongoing legal cases where branches are disputing the integrity of Horizon data. It could provide branches with ammunition to blame Horizon for future discrepancies.”
During cross-examination, Post Office director Angela van den Bogerd admitted that the Horizon IT system had made mistakes, which the Post Office was responsible for correcting, but said the Post Office did not necessarily have to tell its subpostmaster network about the errors. Van den Bogerd said the Post Office could have told subpostmasters about the errors, but did not.
The current trial is the second of four planned.
Judgments from the first trial are expected this week.
The case continues.
September 2009: Postmasters form action group after accounts shortfall
November 2009: Post Office theft case deferred over IT questions
January 2013: Post Office announces amnesty for Horizon evidence
December 2014: MPs to debate subpostmaster IT injustice claims
May 2015: IT system related to subpostmaster prosecutions under review by CCRC