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Subpostmasters proved right on IT system failures as calls for full public inquiry mount

Post Office has been “in denial” about the robustness of its core retail system, which a judge said was to blame for problems experienced by subpostmasters in a multimillion-pound group action

Subpostmasters involved in the multimillion-pound IT-related group litigation against the Post Office are to call for a full public inquiry into the organisation’s behaviour towards them.

This comes after a High Court judge confirmed that allegations made by subpostmasters about the reliability of the computer system they use were right. He also described the Post Office’s denial of anything contradicting what the system – known as Horizon – said was today’s equivalent of maintaining that the Earth is flat.

As part of a the group litigation, Judge Peter Fraser handed down his judgments on the second trial in the case held earlier this year, which examined the robustness of the Horizon system.

Over the two decades since the Fujitsu system was introduced, subpostmasters have experienced accounting inaccuracies which they could not explain. Some who looked into it believed the Horizon system could be to blame, but the Post Office always denied this.

The plight of some subpostmasters was first reported by Computer Weekly in 2009, when it revealed that the lives of some had been turned upside-down after being fined, sacked, made bankrupt or even imprisoned because of unexplained accounting shortfalls.

In his latest judgment, Fraser said the Post Office had exhibited “a simple institutional obstinacy or refusal to consider any possible alternatives to their view of Horizon, which was maintained regardless of the weight of factual evidence to the contrary”. 

He added: “That approach by the Post Office was continued, even though now there is also considerable expert evidence to the contrary as well, and much of it agreed expert evidence on the existence of numerous bugs.

“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.”

Fraser said evidence of particular problems with Horizon, from claimant and defendant witnesses, had helped him to reach his conclusions. “I found some of the factual evidence to be of great assistance,” he said. “That of Mr Roll [former Fujitsu whistleblower] and Mr Godeseth [Fujitsu chief architect on the Post Office account] was extremely useful.

“The latter, one of the Post Office’s main witnesses, was sufficiently damaging to the Post Office’s case on the Horizon issues that they were, essentially, forced almost to disavow him, and the Post Office’s closing submissions were highly critical of the accuracy of his evidence.”

Known about problems

During the trial, evidence revealed that the Post Office had known about problems but did not reveal them to the subpostmasters who relied on the system.

Before he handed down his judgments, Fraser said he had “grave concerns” about the evidence of the Fujitsu employees. He said he would be supplying a dossier to the director of public prosecutions for further investigation.

The judgment on the second trial was announced despite the Post Office settling the long-running legal dispute with subpostmasters and agreeing to pay £57.75m in damages.

According to broadcast journalist Nick Wallis, who has followed the case closely for many years, the claimants were told in a pre-judgment meeting with their solicitors that the most they can expect to get from the £58m settlement is £8-11m, after the legal fees have been paid and the litigation funders have taken their cut.

The costs of the litigation have been huge as the Post Office threw money at a case that one of its legal team said was an “existential threat” to its business model.

Conservative peer James Arbuthnot said the subpostmasters had been vindicated in every respect. “It is an excellent Christmas present – but won at great cost,” he said. “The cost falls partly on the taxpayer, but also heavily on the subpostmasters themselves, who will have their damages reduced by the amount the litigation funders will, justifiably, deduct.

“Now that these battles are being won, it is time to turn our attention to how it all came about and went so far. We need an inquiry and, since the Post Office has repeatedly given inaccurate information, including to me, it needs to be led by a judge. It may be that the best person to conduct the inquiry would be the judge who already has such extensive knowledge of the details, Sir Peter Fraser. He has done much of the work already.”

Lee Castleton, a former subpostmaster in Bridlington, Yorkshire, was one of the furst subpostmasters interviewed by Computer Weekly in 2009. He was declared bankrupt after he refused to pay the Post Office £27,000 – money it said he owed because the accounts of his branch showed deficits over a 12-week period in 2004.

Proved right

Castleton has always insisted he did not owe the money – although it showed as a loss on the Post Office’s Horizon system. He has now been proved right.

Speaking outside court, he told Computer Weekly: “These [the subpostmasters] are lovely people and hopefully this will change their lives for the better. It will make some kind of amends for all the things that have been said about them and done to them.”

Castleton added: “For the last 15 years, I never thought I would see this day.”

Pam Stubbs, another lead claimant, said: “I am over the moon. We have been vindicated, proved not guilty. It was not us – it was the computer system.”

Stubbs paid tribute to Alan Bates, the former subpostmaster who led the claimants. “He is brilliant,” she said. “He never gave up once and he deserves a great deal of praise, as do the legal team.”

As early as 2000, just after Horizon was introduced, Bates experienced problems, which he explained to the Post Office. When the Post Office did nothing, he began a one-man campaign to get to the truth.

Bates set up a website to find others who had suffered at the hands of the system, contacted Computer Weekly, set up a campaign group, and eventually – and against the odds – took legal action against the Post Office, and won.

Bates said MPs have now approached him with concerns about the behaviour of the Post Office, and subpostmasters will call for a full public inquiry. “From the findings of the court, it seems to me that the Post Office either knew how bad the Horizon system was and covered it up, or it was incompetent management and lack of control, or possibly a combination of both,” he said. 

“This is why we will be calling for a full public inquiry come the new year. I think there will be many MPs who have supported the group over the years and who are going to be utterly shocked at the revelations in the judgment, and they are going to want answers.”

Major problem

Helen Baker, former subpostmaster and president of the Communications Workers Union (CWU) postmaster branch, was involved in the revelation of a major problem with the Horizon system. Known as the Dalmellington bug, and made public by Computer Weekly in 2015, it has featured in the group litigation as evidence that errors could cause loss for subpostmasters.

“Yesterday saw a momentous judgment, not only about the Post Office Horizon system, but the culture behind the decisions that led to atrocious treatment of so many postmasters, who can now hold their heads high knowing they have been vindicated,” said Baker.

“When I first came across the Dalmellington duplication errors, it was not the fact that that the Horizon system caused the errors that shocked me, it was the decisions that surrounded it. The discovery that not only had this error happened a number of times and the fix was six months or so away, but also the refusal to reveal the possibility of this error occurring to the subpostmaster community.

“I sincerely hope that the Post Office now changes the way it communicates and trains both the directly employed as well as the postmasters – that it acknowledges when errors occur, investigates, puts it right and communicates the situation to the whole network as soon as it becomes aware.”

Mark Baker of the CWU, who is a serving subpostmaster, said he was pleased claimants have “some sort of closure”, adding: “They have been fully vindicated, but I think this is just the beginning of the end of the story. This whole matter will rumble on because there are 11,000 subpostmasters that have to work with this system daily, which has now been labelled as not being robust.”

Baker said the system either has to be heavily modified or, “more sensibly”, replaced with a new platform. “It does not have to be as sophisticated as the previous system because the number and variety of transactions is smaller,” he said.

“But the change I want to see more than anything else is the Post Office sitting down with subpostmasters and rebuilding the trust that was lost.”

Baker said independent representation for subpostmasters is vital, and the CWU is ready to sit down and talk to the Post Office.

Call for an inquiry

When Bates first wrote to Computer Weekly in 2004, he said he understood that fighting the Post Office would take a long time, but he was determined to do it. Now his call for a full public inquiry could mean the dispute still has some way to go.

Tim McCormack, a former subpostmaster and campaigner for justice for affected subpostmasters, said: “In the light of Justice Fraser’s comprehensive decision paper on the Horizon trial, it is clear that both he and the claimants have been totally reliant on the Post Office disclosing all the information available to it. What is alarming is that even after the trial was complete, the Post Office was still providing further revelations of new evidence to the court.

“It is perfectly clear that the current management of the Post Office do not have the investigative ability, or, it seems, the desire to enquire for their own benefit the actual reality of the situation, both historical and current.”

Post Office chairman Tim Parker, said: “In reaching last week’s settlement with the claimants, we accepted our past shortcomings and I, both personally and on behalf of the Post Office, sincerely apologise to those affected when we got things wrong. We have given a commitment to learning lessons from these events, and today’s judgment underlines the need to do so.

“While the judgment does recognise improvements we have made and that our current Horizon system is robust relative to comparable systems, it makes findings about previous versions of the system and past behaviours, which further demonstrate the importance of the changes we must make in our business, particularly the ways in which we support our postmasters.

“Importantly, our new CEO has made clear the need to reset our relationship with postmasters and started the process to build a much better relationship with them.” 

Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009

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