Photocreo Bednarek - Fotolia
When you become a village subpostmaster, you take on certain things. You often acquire the village shop, and you begin to run a business that is the heart of the village. You get to know everybody there, because everyone needs the post office. And they get to know you and usually your family as well.
There is a gradual transition from the shop being the heart of the village to you being the heart of the village. The village comes to know, respect and love you and to count on you for all sorts of little things – you will know when a pensioner hasn’t been in recently and might need someone to look in on them, and you will know who would be best for the task.
So when the Post Office introduced its new Horizon computer system, and then began to suffer losses apparently created by these pillars of the community, alarm bells should have begun to ring. The Post Office should have begun to question whether this was the first major public IT procurement that was perfect – but it did not.
It insisted that the system was robust, and that the only people who could alter the subpostmasters’ figures and accounts were the subpostmasters themselves, so the mistake must lie with them. The judge in the recent litigation, Peter Fraser, has found that the system was not remotely robust, and that Fujitsu, the system’s creator, could and did alter the subpostmasters’ figures and accounts.
In individual cases, the Post Office began to prosecute. A curious feature of this matter is that the Post Office can prosecute cases itself without any outside independent assessment of the strength of the prosecution or defence cases, such is the trust in which the Post Office is held. In at least one case – that of my former constituent, Jo Hamilton of South Warnborough – the Post Office, knowing it to be untrue, said the subpostmaster was the only one to be suffering such unexplained losses.
It was not as though Jo Hamilton had failed to seek their advice. She would regularly ring the helpline and, on those occasions when she could get through, she might be told to take certain actions with the programme. She was horrified to find that this could double the apparent loss she was suffering. Sometimes the discrepancy was in favour of the subpostmaster.
The helpline advice was to put that extra money aside for those times when it went the other way. It seems not to have occurred to the Post Office that this was advice to commit the crime of false accounting – a crime to which it eventually forced Jo Hamilton to plead guilty (in exchange for the Post Office dropping the accusation of fraud for which, it told her, she would have gone to prison, as others did).
At around this time, Parliament became aware of the issue. MPs agreed with the Post Office management that there would be a forensic accountancy examination, coupled with a mediation scheme, to look into what had gone wrong and things seemed to be improving. But then the Post Office sabotaged its own scheme, for example by excluding from its operation those who, like Jo Hamilton, had pleaded guilty to anything and by sacking the forensic accountants they had chosen, just as those accountants were about to report on the system’s failings. It seemed that the accountants’ interim report had not been to the Post Office’s liking.
So the subpostmasters had no option but to take the matter before the court. And it turned out that Jo Hamilton was not, as she had been told, alone. There were hundreds and hundreds of them. They managed to secure the backing of litigation funders. Understandably, this came at a steep price.
The backers were taking on what has been described as the most trusted brand in the country, the Post Office. They were backing a group of people who had been described as fraudsters by the Post Office, a claim which, incredibly, was supported by the subpostmasters’ own “union”, the National Federation of SubPostmasters, an unimpressive organisation which is wholly funded by the Post Office and which has kowtowed to the Post Office at every step of this awful story.
I cannot remember so one-sided a victory as that which the subpostmasters secured during the court cases. Various phrases about the behaviour of the Post Office stand out from the judgments. Angela van den Bogerd, the Post Office’s business director, “did not give me frank evidence, and sought to obfuscate matters, and mislead me”, the judge said. “The Post Office describes itself on its own website as ‘the nation’s most trusted brand’… this might be thought to be wholly wishful thinking.”
The Post Office felt entitled to treat subpostmasters in “capricious or arbitrary ways which would not be unfamiliar to a mid-Victorian factory-owner”, the judge added, and the Post Office appears to “conduct itself as though it is answerable only to itself”. He said the Post Office’s approach “amounts to the 21st century equivalent of maintaining that the earth is flat”, and added: “A theme contained within some of the internal documents is an extreme sensitivity (seeming to verge, on occasion, to institutional paranoia) concerning any information that may throw doubt on the reputation of Horizon, or expose it to further scrutiny.”
It is now apparent that the Horizon programme was only a part of the problem. The larger problem was the Post Office’s own behaviour, not least its behaviour in court. The extraordinary waste of money that was incurred by the Post Office by bringing in Lord Grabiner QC (without the knowledge of its own legal team) to try, absurdly, to get the judge to recuse himself, was rightly treated with contempt by the Court of Appeal. And in the most recent judgment, the judge expressly ordered that claimants who had been subject to criminal prosecutions should not be disbarred, by settling the civil case, from pursuing the Post Office over criminal matters, including malicious prosecution.
So what is to be done? There are many, many questions, some of which are set out below, but many of which require the sort of public inquiry already called for. I have suggested that the judge who has already done so much of the work in understanding this case would be an ideal person to conduct such an inquiry.
There are so many people in the frame for bearing some of the blame that it is hard to know where to begin – but that does not mean that nothing should happen. Clearly, Paula Vennells, the former Post Office CEO, who stepped down just before the court cases but who presided over much of the worst of the Post Office’s actions, needs to be called to account.
But she was advised by a board, management and legal counsel. The legal counsel has now, along with Vennells, gone, but not yet the board and the senior management. Their failure to do a proper risk assessment of Horizon and the possibility that it might not be perfect created, in the Post Office’s own words, “an existential threat to the Post Office’s ability to continue to carry on its business”. They should take responsibility for it and go. I exempt from this the new CEO, Nick Read, who arrived in September and who does seem to have brought in a degree of sense that was previously absent.
Cruelty and incompetence
A new board, with a new chairman, should publicly recognise the cruelty and incompetence of what has happened and begin to forge a new culture within the Post Office. That culture needs to recognise that the subpostmasters are the Post Office. They are its ambassadors and its public face. They deserve to be treated with humanity, respect and integrity.
And the new board should find a way (perhaps involving Fujitsu, which I come to below) of recompensing the subpostmasters for the real losses they have suffered over and above the small amounts they will manage to recoup from the damages the Post Office has paid. In my view, this should also begin to address those subpostmasters and their staff who were caught up in this mess but who, for whatever reason, were not or did not feel able to join in the legal action.
Now, Fujitsu. The judge said he had “grave concerns” about the evidence of the Fujitsu employees, and felt the veracity of evidence provided by Fujitsu employees in a number of Post Office prosecutions of subpostmasters needed to be properly scrutinised. To that end, he said he would be supplying a dossier to the Director of Public Prosecutions for further investigation.
It may well be that the Post Office may feel let down by Fujitsu, but it is certain that the subpostmasters will. Might they have a cause of action against Fujitsu for a breach of its duty of care? Was it Fujitsu that altered the accounts of the subpostmasters? Might there be some tripartite settlement between the Post Office, Fujitsu and the subpostmasters to create the compensation fund that is needed?
Many questions still to answer
But there may be another source of money for that fund. It is still unclear where the money that the Post Office said it had lost, and recouped in many cases from the subpostmasters, went. Did it go into the profits of the Post Office? What is the truth behind the issue of “suspense accounts” raised in the trial? There are so many questions still to be answered on this point, and the settlement of the litigation does not mean they go away.
And this brings in the shareholder – the government. It must have seemed a good idea at the time to hive off the operation of the Post Office to a quasi-commercial board at arm’s length from the government. It would mean that commercial decisions could be taken in a business-like way, and the government would be able, in due course, to sell the Post Office as a going concern.
But surely the government, as owner, had some duties of care towards those who, like the subpostmasters, were affected by the way the Post Office was behaving? The government was going to have to bear the cost of any potential adverse finding and the reputational opprobrium that went with it. So who was the senior civil servant in charge of overseeing the Post Office?
And then comes an easy question. How can the Post Office, in the light of its failings to treat the court frankly and honestly, continue to prosecute its own cases? Answer: it cannot possibly do so. That must stop immediately.
My final question is this: how does the honours system give Paula Vennells, who presided over this ghastly fiasco, a CBE, and nothing to the true hero of the story, Alan Bates – the person who, to the embarrassment of the Post Office, the civil service, the government and indeed the honours system, managed against dreadful odds to bring the Post Office to account? What is such an honours system worth?
Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009
- May 2009: Bankruptcy, prosecution and disrupted livelihoods – postmasters tell their story.
- September 2009: Postmasters form action group after accounts shortfall.
- November 2009: Post Office theft case deferred over IT questions.
- February 2011: Post Office faces legal action over alleged accounting system failures.
- October 2011: 85 subpostmasters seek legal support in claims against Post Office computer system.
- June 2012: Post Office launches external review of system at centre of legal disputes.
- January 2013: Post Office admits Horizon system needs more investigation.
- January 2013: Post Office announces amnesty for Horizon evidence.
- January 2013: Post Office wants to get to bottom of IT system allegations.
- June 2013: Investigation into Post Office accounting system to drill down on strongest cases.
- July 2013: Post Office Horizon system investigation reveals concerns.
- October 2013: End in sight for subpostmaster claims against Post Office’s Horizon accounting system.
- October 2013: Former Lord Justice of Appeal Hooper joins Post Office Horizon investigation.
- November 2013: 150 subpostmasters file claims over ‘faulty’ Horizon accounting system.
- September 2014: Fresh questions raised over Post Office IT system’s role in fraud cases.
- December 2014: MPs blast Post Office over IT system investigation and remove backing.
- December 2014: Why MPs lost faith in the Post Office’s IT investigation, but vowed to fight on.
- December 2014: MPs to debate subpostmaster IT injustice claims.
- December 2014: MP accuses Post Office of acting “duplicitously” in IT investigation.
- January 2015: MPs force inquiry into Post Office subpostmaster mediation scheme.
- January 2015: Post Office faces grilling by MPs over Horizon accounting system.
- February 2015: Post Office CIO will talk to any subpostmaster about IT problems, promises CEO.
- March 2015: Post Office ends working group for IT system investigation day before potentially damaging report.
- March 2015: MPs seek reassurance over Post Office mediation scheme.
- March 2015: Retiring MP aims to uncover truth of alleged Post Office computer system problems.
- April 2015: Post Office failed to investigate account shortfalls before legal action, report claims.
- April 2015: Criminal Courts Review Commission set to review subpostmasters’ claims of wrongful prosecution.
- May 2015: IT system related to subpostmaster prosecutions under review by CCRC.
- June 2015: Post Office looking to replace controversial Horizon system with IBM, says MP.
- July 2015: Campaigners call for independent inquiry into Post Office Horizon IT system dispute.
- October 2015: James Arbuthnot takes Post Office IT fight to House of Lords.
- November 2015: The union that represents Post Office subpostmasters has warned of a problem with the Horizon accounting system.
- November 2015: An email from Post Office IT support reveals a problem with the Horizon system and supporting processes that could lead to accounting errors.
- November 2015: Group litigation against Post Office being prepared in Horizon dispute.
- February 2016: Post Office faces group litigation over Horizon IT as subpostmasters fund class action.
- June 2016: Post Office chairman Tim Parker says there would be “considerable risk” associated with changing its Horizon computer system.
- November 2016: The legal team hired by a group of subpostmasters will take their case to the next stage.
- January 2017: The group action against the Post Office that alleges subpostmasters have been wrongly punished for accounting errors gets a green light from the High Court of Justice.
- March 2017: 1,000 subpostmasters apply to join IT-related group litigation against Post Office.
- April 2017: Investigation into claims of miscarriages of justice in relation to a Post Office accounting system has appointed a forensic accountant firm.
- May 2017: Hundreds of subpostmasters have applied to join IT-related legal action since March.
- July 2017: Post Office defence in computer system legal case due this week.
- August 2017: Campaigners submit initial evidence in group litigation against Post Office over controversial Horizon IT system.
- October 2017: Subpostmasters’ group action against the Post Office reaches an important milestone.
- November 2017: An end is in sight for subpostmasters’ campaign against alleged wrongful prosecution, which they blame on a faulty computer system.
- November 2017: The High Court judge managing the subpostmasters versus Post Office legal case over an allegedly faulty computer system tells legal teams to cooperate.
- January 2018: Forensic investigation into Post Office IT system at centre of legal case nears completion.
- April 2018: Criminal Cases Review Commission forensic examination of the IT system at the centre of a legal case against the Post Office has raised further questions.
- May 2018: Post Office branches unable to connect to Horizon computer system for several hours after morning opening time.
- October 2018: After over a decade of controversy, next week marks the beginning of a court battle between subpostmasters and the Post Office.
- November 2018: Case against Post Office in relation to allegedly faulty computer system begins in High Court.
- November 2018: High Court case in which subpostmasters are suing the Post Office has revealed a known problem with a computer system at the core of the dispute.
- November 2018: A High Court trial, where subpostmasters are suing the Post Office for damages caused by an allegedly faulty IT system, ends second week.
- November 2018: Post Office director admits to Horizon errors and not sharing details with subpostmaster network.
- November 2018: The High Court trial in which subpostmasters are suing the Post Office has reached an important stage.
- December 2018: CCRC may hold off subpostmaster decision until after Post Office Horizon trial.
- December 2018: Court case where subpostmasters are suing the Post Office set to span at least four trials and extend into 2020.
- January 2019: Subpostmasters’ campaign group attacks Post Office CEO Paula Vennells’ New Year honour amid ongoing court case.
- January 2019: Thousands of known errors on controversial Post Office computer system to be revealed.
- March 2019: Tech under spotlight at High Court in second subpostmasters versus Post Office trial.
- March 2019: Post Office considered Horizon IT system “high risk”, court told.
- March 2019: CCRC watching Post Office Horizon trial closely.
- March 2019: Judge rules that Post Office showed “oppressive behaviour” in response to claimants accused of accounting errors they blamed on Horizon IT system.
- March 2019: Post Office ‘lacked humanity’ in the treatment of subpostmasters, says peer.
- March 2019: A High Court judge heard that the Post Office did not investigate a computer system error that could cause losses, despite being offered evidence.
- March 2019: The Post Office legal team in the case brought by more than 500 subpostmasters has called for the judge to be recused after questioning his impartiality.
- March 2019: A senior civil servant asked the Post Office to repay public money it had wrongly allocated to paying legal costs.
- April 2019: Subpostmaster claimants’ legal team makes application for the Post Office to pay millions of pounds of costs associated with trial.
- April 2019: Post Office to appeal judgment from first Horizon trial.
- April 2019: The Post Office’s claim that the judge overseeing the case concerning its controversial Horizon IT system was biased has been dismissed – but will now be considered by the Court of Appeal.
- April 2019: MP questions government over Post Office Horizon case.
- April 2019: Government says no conflict of interest in trial despite Post Office chairman’s dual role.
- May 2019: The Court of Appeal has refused the Post Office’s application to appeal a major decision in the Horizon IT trial.
- May 2019: The Post Office has applied for permission to appeal judgments from the first trial in its IT-related legal battle with subpostmasters.
- May 2019: The judge in the Post Office Horizon trial has ordered the organisation to pay the legal costs of its courtroom adversaries, and refused to give permission to appeal a major judgment.
- June 2019: Post Office asks Court of Appeal for permission to appeal judgment in first Horizon trial.
- July 2019: The Post Office has admitted that some subpostmasters are at risk of accounts not balancing due to an error it does not understand.
- July 2019: Problem revealed during High Court trial left subpostmaster with £18,000 surplus after IT system failed to register full amount of cash scanned in.
- August 2019: Subpostmasters suffering slow running and frozen terminals while Post Office searches for a fix to issues apparently caused by a software update.
- August 2019: The Post Office has fixed the latest problems with its Horizon system, affecting hundreds of branches.
- October 2019: A High Court judgment for a trial that focused on the Post Office’s IT system at the centre of a multimillion-pound litigation will be announced early next month.
- November 2019: The Court of Appeal has rejected a Post Office application to appeal judgments made in its multimillion-pound battle with subpostmasters over IT system failures.
- November 2019: Peer calls for clear-out of Post Office board after Court of Appeal confirms major court defeat.
- December 2019: The Post Office has settled its long-running legal dispute with subpostmasters, and will pay £57.75m in damages.
- December 2019: Subpostmasters ended their legal battle with the Post Office at the optimal time, according to the lawyer that managed the High Court action.
- December 2019: Subpostmasters proved right on IT system failures as calls for full public inquiry mount.
- December 2019: Criminal Courts Review Commission to review Horizon judgment ‘swiftly’.
- December 2019:National Federation of Subpostmasters cries foul after court ruling on controversial computer system.
- December 2019:Former Post Office CEO apologises to subpostmasters over Horizon scandal.
- December 2019: Call for former Post Office CEO to step down from public roles after IT court battle lost.
Read more on IT for government and public sector
CCRC findings on subpostmaster prosecutions reveal incompetence of successive governments
Subpostmaster prosecutions to be considered by Court of Appeal for miscarriages of justice
Meeting reviewing subpostmaster applications to appeal criminal prosecutions moves into second day
Coronavirus: Post Office postpones subpostmaster compensation scheme amid Covid-19 crisis