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Subpostmasters suing the Post Office for the suffering they claim to have experienced as a result of computer system problems and an unfair contract have been vindicated by a High Court judgment.
In a ruling today (15 March 2019), Judge Fraser found there was a culture of secrecy and confidentiality generally in the Post Office, but particularly around the Horizon accounting and retail system subpostmasters use to run the branches.
Fraser issued significant judgments on the nature of the relational contract between subpostmasters and the Post Office. As a result, the Post Office will be bound by obligations to subpostmasters, which it had failed to offer in the past. These include good faith, fair dealing, transparency and cooperation.
The judge’s criticisms of the Post Office included “oppressive behaviour” when demanding sums of money that could not be accounted for by subpostmasters.
“There can be no excuse, in my judgment, for an entity such as the Post Office to mis-state, in such clearly expressed terms, in letters that threaten legal action, the extent of the contractual obligation upon a [subpostmaster] for losses. The only reason for doing so, in my judgment, must have been to lead the recipients to believe that they had absolutely no option but to pay the sums demanded. It is oppressive behaviour,” said the ruling.
“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.”
The Post Office said it was considering appealing certain legal interpretations of its contract with subpostmasters.
A long journey to court
The case in the High Court is part of a group litigation order (GLO), through which more than 500 subpostmasters are suing the Post Office. It is not the final decision in the case, with at least three more trials set to be held, one of which is currently underway.
The first trial was held in November 2018 and focused on the contractual relationship between the Post Office and the subpostmasters who manage its local branches. The 300-page document containing the judgments and observations of Judge Fraser for the first trial was handed out in the High Court.
Outside court, Alan Bates, who formed pressure group Justice for Subpostmasters Alliance (JFSA), which ultimately forced the GLO, said: “This is a stunning victory for the claimant group and we couldn’t be happier. This has been the result of many years’ work to achieve justice for over 500 people. The case has exposed how the Post Office has mistreated people and highlighted a culture of secrecy around Horizon and Post Office practices.”
Bates, a former subpostmaster, has campaigned tirelessly to expose the potential for losses due to Horizon errors since 2000 when he discovered a shortfall of over £1,000 which he couldn’t account for. He was a subpostmaster at Craig-y-don Post Office in Wales from 1998 to 2003.
Patrick Green QC, representing the subpostmasters in the case, said: “This is incredible vindication for subpostmasters and a very important legal decision. This is the end of a very long road where they have tried to get a fairer contractual relationship.”
The plight of some subpostmasters was first reported in 2009, when Computer Weekly revealed that the lives of some subpostmasters 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).
After the judgment was handed down, Jo Hamilton, one of the subpostmasters who first spoke to Computer Weekly in 2009, said: “I know it is not the end, but it is the beginning of the end. It feels amazing after all these years.”
Post Office takes criticisms on board
Post Office chairman Tim Parker said that despite recent improvements, the judge’s comments were a forceful reminder to do better. “We have taken his criticisms on board and will take action throughout our organisation,” he said.
There will be at least four trials in the case. The second trial, which is focused on the Horizon computer system itself, has just completed its first week. A third trial, scheduled for October 2019, will focus on individual subpostmasters’ claims, and a fourth trial will probably be held in early 2020.
Parker said the Post Office would continue to defend the overall litigation.
“This judgment from the first trial is long and detailed and we will take time to consider it fully. There are, however, areas around the interpretation of our contracts where the judge’s conclusions differ from what we expected from a legal standpoint and we are therefore seriously considering an appeal on certain legal interpretations,” he added.
During the first trial, there were revelations about the fallibilities of Horizon and how they are dealt with.
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.
In preparation for the second 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.
One known error, which featured heavily on day one of the current 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 affected, 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 case continues.
Separately, the Criminal Courts Review Commission (CCRC) is reviewing about 30 claims from subpostmasters who say they were wrongfully prosecuted as a result of problems with the Post Office’s Horizon system.
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