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Did government allow Post Office to sack forensic accountants to cover up Horizon scandal?

Whatever the Post Office told government about its decision to sack investigators examining subpostmaster prosecutions for theft could identify if the government was part of a cover-up

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A lawyer has questioned the government’s role in attempts to cover up the Post Office scandal, which saw subpostmasters’ lives destroyed after they were wrongly blamed and punished for branch account shortfalls.

Barrister Paul Marshall of Cornerstone Barristers, who represented subpostmasters appealing wrongful criminal convictions, said what the Post Office told the government about its decision to sack investigators examining subpostmaster prosecutions will shed light on its role in delaying justice.

The Post Office scandal saw hundreds of subpostmasters prosecuted for financial crimes due to unexplained accounting shortfalls caused by errors in the Horizon retail and accounting computer system used in branches. A total of 736 subpostmasters were convicted of financial crimes such as theft over a 15-year period following the introduction of the Horizon system in 2000. Some were sent to prison or served non-custodial sentences, while others that were not prosecuted had to make up cash shortfalls, leading to bankruptcy for many. It is described as the biggest miscarriage of justice in UK modern history and it ruined the lives of hundreds of families.

A multimillion-pound High Court Group litigation, brought by 555 former subpostmasters against the Post Office, found in December 2019 that the subpostmasters were right in their claims that the computer system contained errors that could cause the losses they were blamed for.

Since December 2020, 47 former subpostmasters have had their criminal prosecutions, which were based on evidence from the Horizon system, overturned and hundreds more are expected to appeal.

But the truth could have been reached much earlier. In 2012, as part of an external review triggered by pressure from MPs, forensic accountancy company Second Sight was hired by the Post Office to look into allegations that errors in the Horizon system were causing unexplained shortfalls.

Truth could have come to light sooner

Over a three-year period, Second Sight investigated about 140 individual cases of subpostmasters who had suffered unexplained losses. It examined thousands of documents and created a structured, evidential database of more than 34,000 individual documents. It identified 19 thematic issues that were common features to many of the cases and cross-referenced each case to others with similar characteristics.

Second Sight said the Post Office had not properly investigated the causes of the shortfalls and had ruled out Horizon errors from the start. It also said there was inadequate evidence to prosecute for theft. 

But in 2015, a month after it began raising concerns and requesting access to full subpostmaster prosecution files, the Post Office terminated its contract.Second Sight was asked to complete remaining cases during its month long notice period and carried out separate work until July 2015.

In 2015, a month after Second Sight began raising concerns and requesting access to full subpostmaster prosecution files, the Post Office terminated its contract

Although the Post Office had stopped prosecuting subpostmasters by 2015, had Second Sight been given what it needed, it would have got to the truth earlier.  This would have saved millions of pounds in legal costs to taxpayers and former subpostmasters, who would have been vindicated years earlier.

In a webinar discussing the legal ramifications of the Horizon scandal, Cornerstone Barristers’ Marshall raised the question of what the government knew of the Post Office’s decision to sack Second Sight.

The Post Office is wholly owned by the government. It falls within the Department for Business, Energy and Industrial Strategy (BEIS) and a member of the government sits on the Post Office board.

Marshall, who alongside Flora Page, a barrister at 23 Essex Street, represented three subpostmasters in successfully appealing criminal convictions at the Court of appeal, said from the moment Second Sight’s contract was terminated until the High Court judgment in 2019, the Post Office “adopted a policy of denial, concealment and obfuscation”.

Evidence has since emerged that the Post Office knew of Horizon issues all along but still prosecuted subpostmasters for theft and false accounting, based on Horizon evidence. It claimed money from thousands of subpostmasters who suffered shortfalls.

In the webinar, Marshall said: “Is it plausible that the Post Office sacked Second Sight in March 2015 without briefing the government, which owns it and pays its bills, on the reason for doing so? I think it is unconceivable that it did not do so.

“Assuming the Post Office did brief the government on its reasons for sacking Second Sight, the Post Office either gave a truthful account ... or it gave an incomplete and misleading explanation. If the Post Office gave a truthful explanation, that would arguably make the government complicit in the cover-up of tremendous, unprecedented and widespread injustice”
Paul Marshall, Cornerstone Barristers

“Assuming the Post Office did brief the government on its reasons, the Post Office either gave a truthful account of the reasons for sacking Second Sight and withdrawing from the mediation, or it gave an incomplete and misleading explanation. If the Post Office gave a truthful explanation, that would arguably make the government complicit in the cover-up of tremendous, unprecedented and widespread injustice. On the other hand, if the Post Office gave a misleading explanation to government why has there not been the slightest suggestion of this from the government.”

“I am of the view there almost certainly was a cover-up. Who was involved remains to be seen.”

Second Sight was getting close to the truth in 2015 and had requested further evidence, including all the prosecution files for subpostmasters taken to court by the Post Office.

Ian Henderson, co-founder of Second Sight, said: “At the request of the Parliamentary Select Committee, I provided further evidence justifying our need for access to the full prosecution files.”

In February 2015, Henderson wrote to MPs with his reasons for the request. He explained that the prosecution knew there was insufficient evidence to support a charge of theft, but proceeded with it, nonetheless; the offer by the prosecution to remove the charge of theft was used to put pressure on the defendant to plead guilty to the false accounting charges and to make good the alleged losses; the threat of proceeding with a charge of theft was primarily to assist in the recovery of losses, and not in the interest of justice; and the prosecution insisted that, as part of the agreement to drop the charge of theft, no mention of alleged problems with the Horizon computer system would be made.

“The new facts that have come to light as a result of examining a single complete legal file have identified a number of issues that indicate possible misconduct by a prosecutor on behalf of Post Office and a possible miscarriage of justice,” said Henderson.

Second Sight was sacked a month later, with the Post Office citing that the mediation scheme had run its course.

Conservative peer, James Arbuthnot, said he is in little doubt that Second Sight were getting too close for comfort to the truth of what was going on in the Post Office.  “That – and the refusal to give them access to the documents and data they needed, in breach of the Post Office’s agreements with them and with MPs – were clearly all part of the journey towards covering the whole scandal up and hoping the subpostmasters would go away.  It spectacularly failed, of course, but at huge human cost.”

A Post Office spokesperson said: “Post Office publicly announced in March 2015 that it was putting forward all remaining [subpostmaster] cases in the scheme forward for mediation, except those which were the subject of previous Court rulings.  The scheme’s working group set up to assess whether cases should move forward to mediation was therefore closed. Second Sight’s engagement with Post Office continued to enable them to finalise remaining case reviews that were ongoing at that stage.

“Concerns had been expressed by Post Office and by applicants that the Scheme was taking longer than those involved would have liked. These delays were acknowledged by Sir Anthony Hooper in a letter to the then Minister for Employment, Consumer Affairs and Equalities, Jo Swinson MP, in December 2014.”

At the time when the Second Sight contract was terminated, Angela van den Bogerd, Post Office head of partnerships, said: “This has been an exhaustive and informative process which has confirmed that there are no system-wide problems with our computer system and associated processes. We will now look to resolve the final outstanding cases as quickly as possible.”

A Department for Business, Energy and Industrial Strategy spokesperson said: “The Complaint Review and Mediation scheme was independent of government and Post Office took the decision to close the scheme at the time. We would expect the Post Office Horizon IT Inquiry to look at these issues to ensure that we get to the bottom of where mistakes were made, so that something like this cannot happen again.”

In 2009, a Computer Weekly investigation revealed the stories of seven subpostmasters affected by the losses which led to many more who had suffered losses coming forward (see timeline below for Computer Weekly coverage of the scandal).

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

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