Post Office scandal – cover-up a ‘dark chapter’ in authorities, corporate and legal history

Dark chapter

In closing, Edward Henry, representing former subpostmasters, stated it was “undisputable” that the Post Office and Fujitsu had recognized for years by 2010 that there have been severe issues with the Horizon system. “From the very beginning, around the country, subpostmasters, baffled and bewildered, could not cope with the [IT] system,” he stated.

In reality, the Post Office and Fujitsu already knew of significant issues when the system was rolled out in 2000, as part two of the inquiry proved.

• Read a round-up of part two of the inquiry •

“What the Post Office did in common with Fujitsu, their mutual connivance, was to deny this,” Henry informed the inquiry. “Not simply to deny this in fact and to dispute it vigorously, but to deny it almost psychologically.”

Exposure of the issues with Horizon would have been an existential menace to the Post Office and “fatal” to Fujitsu’s valuation. Henry stated if the Post Office had not modernised via automation, it could have been “curtains” for the enterprise, but when new expertise had been carried out and failed, the implications would have been “catastrophic”.

“This is as dark a chapter in our governmental, corporate and legal history as can be imagined, and sadly it will get darker yet”

He stated that was the start of a widespread curiosity in maintaining issues secret, between the Post Office and Fujitsu, which “conspired to arrive at a position of mutual interest” and determined that it was higher that some subpostmasters “were put on the rack rather than the Post Office collapse and a corporate’s reputation be ruined”.

Henry highlighted the federal government’s position in the scandal as the one shareholder in the Post Office, which was given “unfettered operational control”.

“The government is like the owner of a dangerous dog mauling a defenceless child, saying, ‘Sorry, so sorry, but it has nothing to do with me’,” he stated. “The government is responsible because it failed to properly manage the Post Office. This is as dark a chapter in our governmental, corporate and legal history as can be imagined, and sadly it will get darker yet.”

Deliberate actions

In his closing assertion to part two of the inquiry, Sam Stein KC, additionally representing victims of the scandal, requested whether or not the struggling induced to many tons of of victims was the results of was a “cock-up or cook-up”. He informed the inquiry that he’s assured part three has supplied proof that the reply is the latter.

“I posed the question as to whether what we might find within phase three was cock-up or cook-up. My respectful suggestion is there can be no doubt that the answer is cook-up,” stated Stein.

He added that the Post Office had made little reference to its personal failures in the most recent part of the inquiry, however had “turned its tank turret gun on Fujitsu”, accusing the provider of failing to share details about laptop issues with it.

“The Post Office has considerable form for blaming others,” stated Stein. “It blamed and criminalised subpostmasters throughout the history of Horizon. It now seeks to blame Fujitsu. But the truth is, Fujitsu and the Post Office are equally to blame.”

“The Post Office has considerable form for blaming others. It blamed and criminalised subpostmasters throughout the history of Horizon. It now seeks to blame Fujitsu. But the truth is, Fujitsu and the Post Office are equally to blame”

He described a “partnership of deception” in which the Post Office was the senior companion: “The Post Office planned the heist, gave the orders, while Fujitsu brought the shooters to the scene.”

Tim Moloney, representing victims for Hudgell Solicitors, stated the proof heard in part three echoed the experiences of the subpostmasters he represents. “The problems experienced in the operation of Horizon had been well signposted in its development. Poor quality had, to a degree, been acknowledged by Fujitsu and the Post Office,” he stated.

Moloney stated proof from the most recent part uncovered how some errors, which have been recognized in the event, have been by no means fastened. “Bugs, errors and defects continued to appear throughout the roll-out of Horizon and beyond. Bugs, errors and defects appeared in both legacy Horizon and Horizon online,” he added.

Details of the errors recognized throughout growth weren’t handed onto the tech groups supporting subpostmasters. “There had been limited dissemination or appreciation of the knowledge of bugs, errors and defects identified in development to those individuals working in support,” stated Moloney.

“At a senior level, there was an awareness that the genesis and development of Horizon had been difficult. But down below, with those involved in support, there was no such appreciation,” he added. “The implications of this lack of institutional memory are clear [in phase three evidence].”

As a consequence, the Horizon system tech assist operations turned the primary line in the Post Office’s technique to preserve particulars of Horizon issues secret from the subpostmasters utilizing the system.

Yet extra damning proof

What is understood is that the Post Office and Fujitsu knew about issues with the Horizon system that might trigger unexplained losses. What part three of the general public inquiry did was reveal a concerted effort to maintain this information out of the subpostmaster community.

Senior Post Office executives informed employees, as a part of inner messaging, to not reveal issues attributable to the Horizon IT system as a consequence of issues that the organisation would face severe enterprise and legal difficulties.

Speaking in a part three listening to in February, Shaun Turner, a former government working in the Post Office National Business Support Centre (NBSC), which supported subpostmasters utilizing the controversial accounting system, stated he was conscious “as a general theme” of issues in the organisation that if the issues have been recognized it could trigger a insecurity in Horizon.

He stated this was “largely [formed] from the messaging that was coming out of the business, particularly in the post-2009 period, around the robust nature of the Horizon system, which led to particular sensitivities around any perceived issues with the system”.

“From my recollection, the Computer Weekly article and the early days of the Justice for Subpostmasters Alliance [campaign group] were … mentioned in the business, and messaging was coming out to internal staff, like myself, around the robust nature of Horizon. My impression was that messaging was coming from senior leadership. I imagine that messaging was coming from board level down.”

• Read extra concerning the Post Office’s Horizon messaging technique. •

The secrecy breached

But phrase was getting out, and determined subpostmasters started asking questions. In 2009, Computer Weekly revealed the primary investigation into reported Horizon issues and its results. This and different questions pressured the Post Office, determined to guard Horizon’s repute, to fee a report back to guarantee these that the software program was dependable. The newest part of the inquiry featured Rob Ismay, the writer of the report.

The inquiry heard how the report lacked objectivity and was designed to falsely present the software program with a clear invoice of well being. The report’s writer admitted he didn’t even examine alleged issues with the software program, however merely talked to the IT staff and employees from Fujitsu, the provider of the software program, who reassured him it was dependable.

There have been no phrases of reference for the report, which was instigated by then Post Office managing director David Smith, nevertheless it was made clear to Ismay that he ought to simply report on “positive reasons to be assured about Horizon” to provide the software program a clear invoice of well being.

The Post Office had thought-about an exterior evaluate and report, based on Ismay, however determined in opposition to that for causes together with that individuals would nonetheless have doubts over the system and ask questions whatever the consequence, and that the businesses that may perform the audit would have “significant caveats” in their report, which might sow doubt about conclusions.

• Read extra about Rod Ismay’s report into the Horizon system •

Sinister motives

Giving the Horizon system a clear invoice of well being meant, based on the Post Office, that any unexplained accounting discrepancies have been the fault of the subpostmasters, whether or not deliberate via theft and false accounting, or attributable to human error, with the latter turning into a default choice.

Subpostmasters who challenged the Post Office’s stance on Horizon, threatening to show its darkish secret, have been made examples by the Post Office, which used its legal and monetary sources to close them up and deter others from talking out.

The hurt achieved by the Post Office’s strategies of silencing subpostmasters who suffered losses can’t be depicted higher than in two circumstances featured in part three, which noticed the Post Office destroy the lives of two victims of the scandal. The Post Office despatched one to jail via felony motion and crushed the opposite in a civil case.

Subpostmasters who challenged the Post Office’s stance on Horizon, threatening expose its darkish secret, have been made examples by the Post Office, which used its legal and monetary sources to close them up and deter others from talking out

In 2006, when his department confirmed a lack of £26,000 that he couldn’t clarify, the Post Office demanded that former Bridlington subpostmaster Lee Castleton make up the shortfall. Castleton stated the losses in his accounts have been attributable to laptop errors, however he had no means of proving it. He refused to pay it again, and took the Post Office to court docket to contest its insistence that he ought to pay.

The Post Office threw all the things on the legal problem introduced by Castleton, and the court docket dominated that the debt was actual, not illusory as Castleton argued. Post Office witnesses in his case stated there was no proof of any downside with the system and that they have been unable to establish any foundation upon which the Horizon system might have induced Castleton’s losses. The decide in Castleton’s case awarded the Post Office damages of roughly £26,000, the quantity of the unexplained loss, and prices of £321,000, which bankrupted Castleton.

During part three, a Post Office doc revealed it had sought to make use of the Castleton case to “send a clear message” to different subpostmasters that it could take a agency line on these elevating related allegations. Barrister Flora Page, representing former subpostmasters affected by the Horizon scandal, referred to a doc that may seem in the inquiry at a later date.

Quoting the doc, Page stated there was a clear intent on the a part of the Post Office to defeat Castleton in court docket and declare heavy prices, “not to make a net financial recovery, but to defend the Horizon system and hopefully send a clear message to other subpostmasters that the Post Office will take a firm line and to deter others from raising similar allegations”.

She informed the inquiry: “So that was the purpose. It was not ever envisaged that the Post Office would actually get that costs order back – that was a loss leader, if you like. But the purpose was to send a clear message to deter others.”

Castleton was not alone in being focused by the Post Office and made an instance of.

In 2012, Seema Misra a former subpostmaster in West Byfleet, Surrey, was discovered responsible of theft after unexplained accounting shortfalls appeared in her department and, pregnant along with her second baby, was despatched to jail. She had her wrongful conviction overturned in April 2021, after it was confirmed that the Post Office’s department software program contained errors that might trigger phantom shortfalls.

Following Misra’s conviction, an inner electronic mail from then Post Office senior felony lawyer Jarnail Singh, copied to a number of executives, bragged concerning the profitable prosecution of a subpostmaster for theft regardless of data of proof that may have put her prosecution in query. This electronic mail was revealed throughout a current part three listening to.

In the e-mail, Singh wrote: “After a lengthy trial at Guildford Crown Court [Seema Misra] was found guilty of theft. This case turned from a relatively straightforward general deficiency case to an unprecedented attack on the Horizon system. We were beset with unparallel [sic] request for disclosure requests by the defence. Through the hard work of everyone, counsel Warwick Tatford, investigation officer Jon Longman and through the considerable expertise of Gareth Jenkins of Fujitsu, we were able to destroy to the criminal standard of proof (beyond reasonable doubt) every single suggestion made by the defence.”

The electronic mail additionally stated the legal victory for the Post Office would dissuade different subpostmasters from “Horizon bashing” once they have shortfalls.

A complete of 86 former subpostmasters have now had felony convictions overturned and extra are anticipated to comply with.

• Read extra concerning the devastating assault on Lee Castleton •

• Read extra concerning the therapy of Seema Misra •

Rudderless assist staff simply following orders

Subpostmasters experiencing issues have been in the darkish from the beginning, and calling for assist meant a lengthy wait on the helpline – or “hell line”, as customers referred to it.

The Horizon helpdesk was the primary line in Fujitsu department tech assist operations. According to proof given to the inquiry, the helpdesk has a poisonous, rudderless and resentful work atmosphere, the place racism was a each day incidence and subpostmasters have been thought-about incompetent or corrupt.

Speaking on the inquiry, IT marketing consultant Amandeep Singh, who labored at ICL on the Post Office’s Horizon helpdesk in Wakefield, Yorkshire, from 2000 to 2001, revealed particulars about life on the opposite finish of the phone line that subpostmasters turned to for assist with the IT system they used in branches.

Singh, who was on a 12-month work placement with ICL as a part of his laptop science diploma, stated there was a tradition of not trusting the subpostmasters. “People were having genuine software problems,” Singh informed the inquiry, however spoke of “a pre-built prejudice that you can’t trust the people and that they are incompetent”.

Asked whether or not this prejudice contributed to the Horizon scandal, he stated: “If you have already made a judgement call [that] the people you are supporting are incompetent or corrupt in some way, it would take a lot for people to think the software has a problem. We were much happier to push down on the subpostmasters and say ‘it’s your issue’ than to push it upwards and ask whether there is an issue or question why we are having so many calls about this.”

• Read extra concerning the Horizon helpdesk •

Beyond the Horizon helpdesk, there have been additional ranges of assist, with the software program assist centre (SSC) a key proponent that was supposed to analyze and repair issues with the Horizon software program.

Later in part three, proof emerged that the SCC was nicely conscious of the issues being skilled by subpostmasters from the early days in Horizon’s operational life and the stress it was inflicting them. During proof given by Barbara Longley, a former administrator in the SCC staff, a quote from one of many staff’s name logs was learn out. The message about a struggling subpostmaster was from 2001, shortly after Horizon’s roll-out.

“The system seems to lose transactions and the [subpostmaster] is concerned that for every transaction error he notices there is the probability that there are ones he misses, leading to discrepancies. The [subpostmaster] is at present finding the whole scenario very stressful and is suffering sleepless nights due to these problems,” stated the log.

In an early signal that legal challenges to Horizon’s reliability have been possible, the log continued: “In the light of what has gone on, the PM is prepared to break his contractual obligations with [the Post Office] and refuse to pay any more discrepancies and will take legal action if required.”

Unaudited, unrestricted and unbelievable

Former SCC employees additionally confronted questions over their use of distant entry rights to make adjustments to subpostmaster accounts. The integrity of any system depends on the sort of privileged entry being tightly managed.

Although many IT methods embody the power for distant entry by suppliers, with correct controls and audit paths, the Post Office was so frightened about Horizon’s integrity being questioned that it had, for a few years, denied that distant entry by Fujitsu was even potential.

In 2015, in written proof to the BIS Select Committee Inquiry, the Post Office stated: “There is no functionality in Horizon for either a branch, Post Office or Fujitsu to edit, manipulate or remove transaction data once it has been recorded in a branch’s accounts.” The Post Office solely admitted it was in reality potential when it was left with no selection, throughout a High Court case in 2019.

Phase three of the inquiry make clear why the Post Office took this stance. It turned out that not solely have been Fujitsu employees making adjustments to department accounts with out the data of the subpostmasters, however in addition they had “unrestricted and unaudited” entry to methods.

Stephen Parker, a former SCC supervisor who confronted the general public inquiry in part three, admitted that management of SCC employees remotely accessing department methods relied on them being reliable and following the entry coverage, with no policing of their exercise.

Parker stated that, so far as he remembers, this process was associated to adjustments that may have a monetary influence on subpostmaster accounts. “It was enforced only by process,” he stated. “This means everybody was aware that this was the requirement and whenever an OCR was approved then they knew of the [process] they needed to do.”

Horizon inquiry barrister Jason Beer stated: “People are aware of the speed limit – that doesn’t mean they always abide by it, does it?”

Parker admitted that “ultimately they were trusting [people] to follow the process”.

• Read extra about Fujitsu’s unrestricted and unaudited entry to department accounts •

Heads you pay, tails you pay

In closing, barristers highlighted the difficulties skilled by subpostmasters when the IT assist couldn’t unravel a downside. The failure of IT assist groups to establish the issue left subpostmasters in a tough place. They both needed to conform to make up the loss to maneuver on to the subsequent buying and selling interval or (previous to 2003) they may put the loss in the native suspense account whereas an investigation was carried out.

However, with the quantity of unexplained losses in the suspense account rising, the Post Office determined to make subpostmasters cowl the losses themselves, somewhat than placing them in suspense.

In part two, the inquiry was informed that in an eight-month interval from Horizon’s introduction, the sum of money in dispute in the suspense account had jumped from £2m – from when accounts had been dealt with manually – to £10m. It had by no means been near this underneath the paper-based accounting mannequin, based on proof from former National Federation of Subpostmasters (NFSP) president John Peberdy.

“The Post Office was rapidly attempting to make these [alleged] losses good, to stop them being in the suspense account for so long, and they wanted to reduce the money that they saw as owed to them,” he informed the inquiry in part two.

He stated the Post Office had “nothing to lose” when it got here to Horizon inflicting unexplained losses, as a result of it was subpostmasters who have been contractually obliged to make accounts good. This rule was launched underneath the Impact programme, which signalled the tip of the suspense account, and with it subpostmasters’ skill to dispute unexplained shortfalls.

In closing, Stein KC stated: “If the paucity of training and assistance issues were not bad enough, there was a sting in the tail for subpostmasters – the Impact programme, which effectively programmed out the subpostmasters’ remaining chance to dispute phantom Horizon shortfalls.”

He added that this encapsulated all the things that was fallacious concerning the Post Office’s therapy of subpostmasters: “The Impact programme abolished the local suspense accounts, and in doing so forced subpostmasters to accept all demands made of them on pain of no longer being able to trade. This created an impossible situation for subpostmasters, the equivalence of heads, you pay; and tails, you pay.”

Hudgell Solicitors’ Moloney added: “The apparent reason for the removal of suspense as an option on rollover is disturbingly lacking in logic, being built on a faulty presumption that use of suspense may be indicative of fraud or dishonesty by postmasters.”

• Read extra about John Perbedy’s proof to part two of the inquiry •

Phase 4 begins on 6 June, however part three is but to be accomplished, with former Fujitsu engineer Anne Chambers to return for questions and the corporate’s former chief architect Gareth Jenkins to seem for the primary time, most likely in July. Both former Fujitsu employees are at present underneath investigation for potential perjury through the trials of subpostmasters prosecuted based mostly on proof from the Horizon laptop system.