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Post Office software convictions go to appeal

The Criminal Cases Review Commission (CCRC) has referred the cases of 39 convicted Post Office operators to the Court of Appeal on the grounds of abuse of process to open a final chapter of one of the UK’s most notorious accounting software scandals.

1st Apr 2020
Editor in Chief (interim) AccountingWEB
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Post Office software convictions go to appeal
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The number of referred cases is notable, with another 22 convictions based on figures calculated by the Post Office’s Horizon computer system are also being considered as part of the legal review.

Yet these case referrals are just the epilogue of a long-running saga that saw the Post Office reach a £58m settlement with 550 postmasters and mistresses in December in a civil case brought in the name of Alan Bates, founder of the Justice for Postmasters Alliance.

Details of the full history are now emerging in a Commons business committee investigation and the civil cases that paved the way for the CCRC action.

The criminal cases were based on accounting summaries produced by the Post Office’s Horizon computer system as evidence of fraud and theft by subpostmasters during the last decade.

AccountingWEB’s long-time anti-money laundering correspondent David Winch first alerted the community to the Horizon case in 2013 when he explained how shortfalls identified by the software were alleged to have been caused by dishonest misappropriation of cash or stock.

Unexplained cash and stock shortfalls

If Horizon flagged up cash or stock shortfalls, the subpostmasters were required to make good the missing sums under their contracts with the post office. If they challenged the computer’s evidence, they faced prosecution for making false statements about their cash in hand.

As JFSA head Alan Bates put it to  the commons enquiry last month, “With Post Office, you are guilty until you have proven yourself innocent… There is this culture of nailing everything down. ‘Nothing is wrong; it is always the subpostmaster that is at fault. We are perfect.’”

Forensic report

While the Post Office continued to prosecute subpostmaters and mistresses on the basis that its Horizon software was robust, it commissioned a forensic report from accountants Second Sight in 2013 that delved into the workings of the accounting system.

Second Sight’s Ian Henderson and Ron Warmington told MPs last week how the Post Office had thwarted their investigation. “Many documents were withheld, and there was little real transparency as our inquiry progressed,” said Henderson.

“We identified evidence of flaws and bugs in Horizon. We also heard direct evidence of Post Office or Fujitsu altering transactions and balances without the knowledge of subpostmasters. Not only did Post Office refuse to accept that, but they refused to supply to Second Sight the documents that would enable us to investigate that issue.”

Warmington also explained how telecommunication interruptions “gave rise to oddities” within Horizon at branch level. “We even came across cases where stock of stamps was negative. It is a bit difficult for that to happen, is it not? How do you have minus 100 stamps? That is what was coming up on the system,” he said.

From the initial engagement, the accountancy firm made it clear to the Post Office that it would be seeking the truth and expected to do so in an unrestricted way. By the end of the engagement, Warmington told the committee, “It was one of the worst, most difficult investigations I have ever carried out in terms of the client relationship.”

December settlement

On 11 December 2019 the Post Office agreed a settlement with the claimants in which chairman Tim Parker said: “In the past, we got things wrong in our dealings with a number of postmasters.” The undertaking to “reset” the organisation’s relationship with postmasters was accompanied by a £57.75m payment. After allowing for the costs of fighting the case, the claimants are likely to share £10m.

On 16 December, there was a High Court judgement in favour of the subpostmasters’ association (Bates v Post Office [2019] EWHC 3408 (QB)). In an epic decision with numerous technical appendices, Mr Justice Fraser concluded on the central point of contention that “Horizon was not remotely robust. The number, extent and type of impact of the numerous bugs, errors and defects that I have found… makes this clear.”

Citing a subsequent board decision in 2016 that the software was not fit for purpose, the judge took apart the evidence presented on the Post Office’s behalf by one of its expert witnesses.

“Conclusions that the specific losses were not caused by bugs/lack of robustness was only reached by means of his statistical approach... This was so heavily based on assumptions that were either not valid, or conceptually flawed, that his conclusions were not valid either. I would go further – the whole process he adopted so far as his statistical exercise was concerned was both invalid and of no evidential value,” the judge wrote.

In contrast, the Post Office’s continual attempts to play down the evidence from postmasters demonstrated “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. That approach by the Post Office was continued, even though now there is also considerable expert evidence to the contrary…

“This approach by the Post Office has amounted, in reality, to bare assertions and denials that ignore what has actually occurred… It amounts to the 21st century equivalent of maintaining that the earth is flat.”

Last chapter

In the face of these recent developments, it appears that the Horizon saga is moving to its conclusion, though the Commons business select committee investigation continues (subject to being able to hear further evidence) and no other sanctions besides the civil settlement have been taken against the Post Office.

The only other loose ends are those convicted postmasters and mistresses awaiting exoneration from the Court of Appeal. The CCRC commented that it can only refer a case for appeal “if it considers that there is new evidence or new argument that raises a real possibility that the appeal court will quash the conviction(s)”. 

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By rememberscarborough
02nd Apr 2020 10:22

Heart goes out to those who were failed by our legal system where they were made to try and prove their innocence rather than the system proving their guilt.

Too many will never recover from this trauma regardless of any amount of money thrown at them. All I hope is that they realise that there are many, many people who believe in their innocence.

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By Brend201
02nd Apr 2020 18:29

rememberscarborough wrote:

Heart goes out to those who were failed by our legal system where they were made to try and prove their innocence rather than the system proving their guilt.

Too many will never recover from this trauma regardless of any amount of money thrown at them. All I hope is that they realise that there are many, many people who believe in their innocence.

I scrolled down to comment and found that you had used almost the exact words I would have used.

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By Brend201
03rd Apr 2020 10:52

Removed duplicate.

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By wilkotax
03rd Apr 2020 11:14

There is an excellent detailed analysis of this case in the latest issue of Private Eye (number 1519) for anyone who is interested. The Eye has been reporting on this case for some years.

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By rockallj
14th Apr 2020 11:02

The PO should be be shamed of themselves.

Why should they be the arbiters of "guilty until proven innocent" when the law of this land is the other way round?

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