wellignton - stock.adobe.com

Government distances itself from Post Office decisions in Horizon IT litigation

Department for Business, Energy & Industrial Strategy says it did not make decisions in the Post Office’s recent court battle

The government has distanced itself from the Post Office’s contractual and operational practices, as well as decisions the company made in its multimillion-pound litigation with subpostmasters over a faulty computer system.

The long-running court case, which followed years of campaigning by subpostmasters who ended up claimants, consumed millions of pounds of taxpayers’ money and has seen the Post Office’s reputation damaged.

The subpostmasters have, for decades, alleged that the Horizon IT system they use in branches was causing accounting inaccuracies, for which they were blamed and punished. These allegations have been proved correct after an extensive legal battle.

The government, through the Department for Business, Energy & Industrial Strategy (BEIS), confirmed that ministers kept a close eye on and were kept up to date with the case, but added they did not play a role in the litigation.

The Post Office made some controversial decisions during the trial, such as its request to have High Court judge Peter Fraser recuse himself, which he refused, and then appealing this decision, which was also rejected. It also sought permission to appeal significant parts of his judgment from the first trial in the litigation, which was also rejected. All this racked up millions of pounds of extra costs.

BEIS also said it was not involved in the Post Office’s practices relating to its contracts with subpostmasters and operational matters. The subpostmaster contracts with the Post Office were described by Judge Fraser as being heavily imbalanced in favour of the Post Office. The treatment of subpostmasters by the Post Office was likened, by Lord Justice Coulson in the Court of Appeal, to the way Victorian factory owners treated their workers.

When it came to operations, the Horizon computer system at the centre of the dispute was similarly criticised by the judge, and described as not remotely robust, contrary to what the Post Office had argued in court.

A BEIS spokesperson confirmed that “ministers monitored the litigation and were updated regularly with developments”, but added: “While publicly owned, Post Office operates as an independent, commercial business within the strategic parameters set by government. As such, government did not play a day-to-day role in the litigation or on the contractual and operational matters that were at the heart of it.”

But Mark Baker, branch secretary for subpostmasters at the CWU, who is a serving subpostmaster, said BEIS cannot distance itself from the Post Office decision-making process. "BEIS has a government representative who sits on the board of the Post Office. That rep presumably took part in those board meetings that made decisions on the litigation, including attempting to recuse a judge."

Government ‘should have been more proactive’

The Post Office agreed to pay damages of £57.75m in an out-of-court settlement after a judgment confirmed subpostmasters were right in their claims that the computer system they use in branches was responsible for inaccurate accounts.

Alan Bates, the subpostmaster who led the legal battle against the Post Office, recently sent a letter to Kelly Tolhurst MP, minister for postal affairs, calling on the government to pay the legal costs they have incurred to enable subpostmasters to receive a figure closer to their actual losses. Claimants will be left with about £10m between them. Bates was writing on behalf of subpostmaster campaign group Justice for Subpostmasters Alliance (JFSA).  

BEIS confirmed that it had received the letter from Bates and was considering it. “We have received the letter from Mr Bates and are considering the correspondence. We are pleased that a comprehensive resolution to the litigation was reached in December,” the spokesperson said.

In his letter, Bates accused the government of not doing enough to prevent the problems, which forced the subpostmasters to go the expensive length of taking the group litigation route for redress of their grievances.

“Ministers and the Department for Business, Energy & Industrial Strategy should have been considerably more proactive in delving into the problems that individuals, the media and MPs have been raising with the department ever since Horizon was introduced,” he wrote.

Computer Weekly first reported the problems with Horizon in 2009, when it made public the stories of a group of subpostmasters. Soon after this, as more subpostmasters came forward, Bates formed the JFSA and began campaigning. Bates first contacted Computer Weekly in 2004, four years after he had first alerted the Post Office to the problems.

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


Read more on IT for financial services

Data Center
Data Management