British Post Office scandal

The British Post Office scandal is a major British business, legal, ethical and political scandal involving the prosecution by the Post Office between 2000 and 2014 of 736 of sub-postmasters for theft, false accounting and/or fraud, resulting in criminal convictions, imprisonment, loss of reputation and livelihood, bankruptcy, divorce, and even suicide amongst those involved. The financial discrepancies leading to the allegations and convictions were later found to be due to faults in the Post Office's new computer system, Horizon.

The Post Office has a single shareholder, the British Government. Subsequent to a press outcry and later investigations, a number of sub-postmasters (SPMs) convicted of criminal offences had their convictions declared unsafe, obtained unlawfully, and quashed. In 2021 the government promised financial compensation to the victims of the scandal, as the Post Office did not have sufficient resources. The cases constitute the most widespread miscarriage of justice in British legal history. As of February 2022, 72 former sub-postmasters had had their names cleared. An inquiry into the scandal, investigating whether the Post Office and software supplier Fujitsu knew about faults in the IT system, and what went wrong leading to later quashed criminal convictions and civil proceedings against staff, was held in 2022 and expected to take most of the year.

Overview

In 1999 the UK Post Office introduced a computer accounting system named Horizon. By 2013 the system was being used by at least 11,500 branches, and was processing some six million transactions every day. From 1999 onwards unexplained discrepancies and losses began to be reported by sub-postmasters. The Post Office maintained that Horizon was "robust" and that none of the shortfalls or discrepancies in SPMs' branch accounts were due to problems caused by Horizon. Sub-postmasters unwilling or unable to make good the shortfalls were sometimes prosecuted (by the Post Office's in-house prosecution team) for theft, false accounting and/or fraud. Between 1991 and 2015 there were 918 successful prosecutions. These were largely private prosecutions by the Post Office relying on IT evidence alone, without proof of criminal intent. Public prosecutions also occurred in Scotland, Northern Ireland and in the Crown Court. Despite this, some SPMs were successfully persuaded by their own solicitors to plead guilty to false accounting, on being told the Post Office would drop theft charges. Once the Post Office had a criminal conviction, it would attempt to secure a Proceeds of Crime Act order against convicted sub-postmasters, allowing it to seize their assets and bankrupt them. According to press reports, these actions by the Post Office caused the loss of dozens of jobs, bankruptcy, divorce, unwarranted prison sentences and one documented suicide.

In 2019 the Horizon Issues trial judgment in the Bates & Ors v Post Office Ltd group litigation at the High Court found that software errors and defects did exist and that it was possible for these to cause apparent discrepancies or shortfalls in branch accounts or transactions, to undermine the reliability of Horizon accurately to process and to record transactions. Mr Justice Fraser found that this had happened on numerous occasions.

In September 2020, the Post Office declared it would not oppose 44 postmasters' appeals against conviction but it did unsuccessfully oppose their appeals against improper prosecution. In December 2020 six convictions were quashed, and in April 2021 the Court of Appeal quashed a further 39 people's convictions. The court also made the rare finding that the Post Office had acted in such a way as to subvert the integrity of the criminal justice system and public confidence in it. The prosecutions were found to be an abuse of process and an affront to the conscience of the court. The appelants should not have been prosecuted or convicted. The BBC called the convictions "the UK's most widespread miscarriage of justice".

In April 2021 Post Office chief executive Nick Read announced that the Horizon system would be replaced with a new cloud-based IT system.

Horizon computer system

The system cost £1 billion and was designed by ICL/Fujitsu Services. The system was originally introduced in 1995 on a pilot basis in a small number of post offices, alongside a joint work programme between the Department of Social Security's Benefits Agency and Post Office Counters Ltd. The objective of this programme (known as the BA/POCL Programme) was to provide an automated system for making benefits payments through post offices and thereby reduce fraud.

At the Conservative Party conference in October 1995, the social security minister Peter Lilley brandished a smartcard as the intended replacement for the benefit book, declaring that, with the Benefits Agency and International Computers Limited, Post Office Counters Ltd would install smartcard reading terminals at every branch, through a private finance initiative (PFI) to be delivered under a commercial contract. At the time smartcards were under consideration as part of the full system, but a final choice of technologies had not been made.

After a lengthy competitive procurement exercise, begun in 1994, the contract for further development and full implementation in all post offices was awarded in May 1996 to ICL's Pathway division, which had been created for the purpose. ICL later became part of Fujitsu.

In 1999, four years and £700 million of taxpayers' money after the pilot scheme began, the government, by now Labour, stopped the scheme in its tracks. The Department of Social Security withdrew from the deal, leaving ICL/Fujitsu to run the system. ICL has since criticised the PFI payment criterion: it would have been paid partly on how many customers post offices attracted. Stuart Sweetman, the then group managing director of customer and banking services for Consignia (the name used at the time by the then holding company for Post Office Counters Ltd, Parcelforce and Royal Mail), said in 2001: "Looking back, I think it was over-ambitious ... You can't export all the risk to a supplier."

On 8 April 2021 Post Office chief executive Nick Read announced that the Horizon system will be replaced by a new IT system that would be "more user-friendly, easier to adapt for new products and services, and cloud-based to ensure easy maintenance and ready interoperability with other systems." In a speech to senior staff, he said: "We are already taking the first steps towards migrating off the Horizon system for good, in favour of a modern, cloud-based system which postmasters will find more intuitive and easier to operate. This will not be easy – it will after all be among the biggest, if not the biggest, IT roll-out in the country when the time comes. But the change is both necessary and overdue, and it begins now."

Problems

Sub-postmasters began to find computer generated errors within weeks of the system being installed. These problems were reported to the Post Office via the 'Helpline' the SPMs were instructed to use. The Post Office resisted the SPMs' claims that there were faults in the system, insisted that the SPMs made up any shortfall and, when asked, denied that other SPMs had reported problems. In 2000 there were six shortfall convictions that relied on Horizon data; in 2001 41 SPMs were prosecuted and in 2002 there were 64. In around 2000 problems with the system were reported by Alan Bates, the SPM at Craig-y-Don from March 1998 until November 2003. In 2003, Alan Bates had his contract as SPM terminated when he refused to comply with Post Office policy. He reported his concerns to Computer Weekly in 2004, which finally gathered sufficient evidence to publish them in 2009. A campaign group on the issue, Justice for Sub-postmasters Alliance (JFSA) was formed by Bates and others in September 2009. By 2012 concern in the media, and amongst a number of members of parliament, had grown. As a result, an independent investigative firm, Second Sight, was commissioned by the Post Office to conduct a separate, independent inquiry, in 2012. At around this time, Paula Vennells became CEO of the Post Office.

Second Sight reports

1. Interim Report dated 8 July 2013;
2. Briefing Report Part One dated 25 July 2014;
3. Briefing Report Part Two version 1 dated 21 August 2014;
4. Briefing Report Part Two version 2 dated 9 April 2015.

Of the first report Vennells has later (2020) said that "it concluded, while it had not found evidence of system-wide problems with the Horizon software, there were specific areas where Post Office should consider its procedures and operational support for sub-postmasters." Ron Warmington, of Second Sight had said in 2019 "if the Post Office Board had believed ... and acted on ... what Second Sight reported ... instead of being led by the nose by its own middle management and in-house and external legal advisors, huge amounts of money, and human suffering, would have been avoided." In July 2013, Second Sight issued an interim report and Post Office Ltd admitted that software defects with Horizon had indeed occurred, but said that the system was effective. The review discovered problems in 2011 and 2012, when Post Office Ltd discovered defects that had caused a shortfall of up to £9,000 at 76 Post Office branches. The BBC reported that the Post Office later made good those losses and the SPMs were not held liable. However, more than 150 sub-postmasters continued to raise issues with the system, which they claimed had, by error, put them in debt by tens of thousands of pounds, and that in some cases they lost their contracts or went to prison. In 2019 Mr Warmington said,

the Post Office has improperly enriched itself, through the decades, with funds that have passed through its own suspense accounts. Had its own staff more diligently investigated in order to establish who were the rightful owners of those funds, they would have been returned to them, whether they were Post Office's customers or its Subpostmasters. When is the Post Office going to return the funds that, in effect, belonged to its Subpostmasters?" and "It also seems to be clear now that some of those funds could have been generated by Horizon itself, or by errors made by the Post Office's own staff, or by those of Fujitsu. They weren't "real" losses at all. They were phantom discrepancies.

Second Sight's report of 9 April 2015, titled Initial Complaint Review and Mediation Scheme and marked as confidential, states that they were first appointed by Post Office at the request of Members of Parliament in July 2012. Undertakings were given by Post Office to satisfy MPs that Second Sight would be able to conduct an independent investigation into the matters of concern. The report described the Horizon system as, in some cases, "not fit for purpose". The lead investigator for Second Sight claimed that there were about 12,000 communication failures every year, with software defects at 76 branches and old and unreliable hardware. The system had, according to the report, not been tracking money from lottery terminals, tax disc sales or cash machines – and the initial Post Office Ltd investigation had not looked for the cause of the errors, instead accusing the SPMs of theft. The report was dismissed by the Post Office. However, it was leaked to the BBC in September 2014. The BBC's article on the report also said that training on the system was not good enough, that "equipment was outdated", and that "power cuts and communication problems made things worse".

In March 2015, Private Eye magazine and other sources reported that Post Office Ltd had ordered Second Sight to end their investigation just one day before the report was due to be published, and to destroy all the paperwork which they had not handed over. Post Office Ltd then scuppered the independent committee set up to oversee the investigation, as well as the mediation scheme for SPMs, and published a report which cleared themselves of any wrongdoing. Of the 136 cases, 56 had been closed, and Post Office Ltd would put the rest forward for "mediation" unless a court ruling prevented them from doing so. After ending the inquiry, Post Office Ltd said that there were no wide-scale problems, and that:

This has been an exhaustive and informative process that 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.

Mediation scheme

Post Office Ltd then went into mediation with some of the affected sub-postmasters (SPMs). By December 2014, however, MPs had criticised Post Office Ltd for how it handled the SPMs' claims, and 140 of those affected had withdrawn their support for the Post Office-run mediation scheme. 144 MPs had been contacted by SPMs about the issue, and James Arbuthnot, the MP leading on the matter, accused the organisation of rejecting 90% of applications for mediation. Post Office Ltd said that the claims by Arbuthnot were "regrettable and surprising". Arbuthnot further claimed that Post Office Ltd had been "duplicitous", and said that:

I do not want to build up hopes that the other methods are going to be more successful than the current ones, so I will not be specific – but it will involve legal and political campaigns.

In February 2015, ComputerWorld UK, a UK trade magazine for IT managers, reported that Post Office Ltd were obstructing the investigation by refusing to hand over key files to Second Sight. Post Office Ltd (Angela van den Bogerd) claimed in the Business, Energy and Industrial Strategy Committee hearing of 3 February 2015 that they "have been working with Second Sight over the last few weeks on what we agreed at the outset. We have been providing the information", but the lead investigator for Second Sight, when asked by Adrian Bailey MP, if that were the case, said "No, it is not", as he had not been given access to prosecution files, which he needed to back up his suspicions that Post Office Ltd had brought cases against SPMs with "inadequate investigation and inadequate evidence". He said that these files were still outstanding eighteen months after they had been requested. Paula Vennells (then Chief Executive, Post Office), subsequently apologised to workers affected by the scandal, saying: "I am truly sorry we were unable to find both a solution and a resolution outside of litigation and for the distress this caused." Her letter to the Energy and Industrial Strategy Select Committee claims that the message she and the Post Office board were consistently given by Fujitsu, from the highest levels of the company, was that while, like any IT system, Horizon was not perfect and had a limited life-span, it was fundamentally sound. She had repeatedly raised the question of whether Post Office or Fujitsu had the ability to access and alter branch information remotely, both internally and with Fujitsu, and was always given the same answer: that it was not possible for branch records to be altered remotely without the sub-postmasters' knowledge. She raised this with Fujitsu's then-CEO and was told that the system was "like Fort Knox". "He had been a trusted outsource partner and had the reputation of a highly competent technology sector CEO. His word was important to me."

Court cases

The Post Office proceeded aggressively against its staff in criminal prosecutions in magistrates' courts and the Crown Court and with civil actions. At the time of the prosecutions the Post Office had no different standing in law to that of any other private prosecutor in the British legal system. It acted as a private prosecutor in England and Wales. In Scotland, it reported allegations of crime to a procurator fiscal, and in Northern Ireland to the Public Prosecution Service. However, The Post Office's unique position, with a history as a prosecutor going back to 1683, gave the Criminal Cases Review Committee the greatest cause for concern upon its referral to the Court of Appeal. Historically Royal Mail had been a public authority.

The Post Office is not a typical private prosecutor. The Private Prosecutors' Association question whether the Post Office was conducting private prosecutions at all and was in fact a "publicly-owned entity and a public prosecutor" during the relevant period. The Criminal Cases Review Commission (CCRC), in its written submission to the Commons Select Committee, questioned whether any organisation with the Post Office's combined status, as victim, investigator and prosecutor, would be able to take decisions on investigations and disclosure "appropriately free from conflict of interest and conscious or unconscious bias". Counsel for the defence in the case of Misra raised the issues of insufficient disclosure, conflict of interest etc.

Paul Marshall, counsel to three appellants in the case of Hamilton, until forced to resign from the case by an allegation by the Post Office of contempt, or information to the court indicating contempt, or breach of disclosure terms, in written evidence to the parliamentary Justice Committee, rejected the notion of the private nature of the prosecutions as a single cause of the scandal. The Scottish Criminal Cases Review Commission has written to some 73 SPMs who may have been wrongly prosecuted and/or convicted. Marshall alleged four inter-related causes:

1. Legal – legislative failure.
2. Legal – court/judicial failure.
3. Post Office mendacity/opportunism.
4. Failure in Post Office corporate governance.

As the mediation process broke down the affected SPMs began to consult and combine their efforts into legal action. The action taken against the Post Office took the form first of the Group Litigation in the name of Bates and others, a civil action in the High Court by some 600 people, and the linked appeal cases, first of R v Christoper Trousdale & Others in the Crown Court, and then of Hamilton and Others in the Court of Appeal (Criminal Division). In the Trousdale and Hamilton appeals, the findings in the civil case (Bates) were used to support the appeals against convictions. In Bates six 'lead claimants' and 23 'Common Issues' were identified and agreed to enable the court to examine the 600 cases. The court of appeal judgment, that all of the successful appeals had suffered a prosecution that was an affront to the conscience of the court, has important implications for future cases against the Post Office.

Further cases since the Hamilton appeal have been heard and further appeals and civil claims are expected. The Financial Times headlined "Sub-postmasters set to file UK lawsuits for malicious prosecution". As of 19 July 2021, 57 people have had their convictions quashed.

Magistrates' courts

Magistrates' courts are not courts of record. An appeal from a conviction in a magistrates' court is by way of case stated to a higher court, usually to the Crown Court. As of July 2021 the number of convictions obtained by the Post Office, directly or via public prosecution in magistrates' courts is unknown or unpublished.

On 30 June 2021 the Post Office issued a statement that, inter alia, said:

"To date such appeals have been heard by Southwark Crown Court. ... If people have previously tried to appeal and failed, or pleaded guilty in a Magistrates' Court, they can apply to the CCRC. ... Post Office is contacting people with potentially relevant convictions, following an extensive search of historical records and urges anybody who believes that they may have a relevant case to come forward. ... Post Office's post-conviction disclosure exercise, by external criminal law specialists Peters & Peters, has examined around 4.5 million documents and thousands of physical and electronic sources have been interrogated. In addition, Peters & Peters liaised with a number of third parties including Fujitsu Services Limited, Royal Mail Group, the Courts, the CCRC and approximately 50 law firms and agents historically instructed by Post Office to obtain material relevant to the convictions."

Crown Court

R v Christoper Trousdale & Others – December 2020

The first subpostmaster appeals against convictions were at Southwark Crown Court before Circuit Judge Taylor, sitting as a deputy judge of the High Court. The cases were from magistrates' court convictions in London, Luton, Basingstoke, Oxford, Burton-upon-Trent, and Scarborough between 2004 and 2012. "The Post Office is currently reviewing around 800 prosecutions made between 1999 and 2014, where Horizon data was used in evidence." The six appealed against their convictions. The appeals were unopposed; the respondent, the Post Office offered no evidence, the appeals were allowed and Not Guilty verdicts were entered. Little if any mention was made of the distinction between unsafe convictions and prosecutions that should not have been brought. Judge Taylor said:

the CCRC referred 41 of the applicants to the Court of Appeal ... by way of statements of reasons and in respondents notices by the Post Office it was indicated ... appeals were not opposed ... these six appellants were referred by the Criminal Cases Review Commission to this court under section 11 of the Criminal Appeal Act of 1995 and the statement of reasons for each of those referrals identified that in view of the findings of fact by Mr Justice Fraser in the group litigation that there was a real possibility that the Crown Court would set aside their pleas of guilty and stay further proceedings an abuse of process.

This case was heard before submissions about ultra vires or wrongful prosecutions were made in Hamilton & Others. Just three months later it was known publicly that these submissions were to be made and that the Post Office intended to oppose them in Hamilton.

Five of the six appellants were represented by counsel – one was unrepresented and had been advised by the court that she need not attend. Costs were awarded to the appellants. During the hearing counsel for Mr Ashraf said

May I just mention one matter as I know that Mr Ashraf wants this to be mentioned. It is in relation to the prosecution characterisation which has given two different explanations. He wants it to be known, less it to be reported, that that is what happened. He disputes that. I have explained to him that it matters not for present purposes but he just wanted me to mention that and I know the court will not mind that I had." ... "I am very grateful. Otherwise I would only ask ...

The transcript gets diverted by the complexities of the electronic or online system

"MR PATEL: (inaudible) similarly for (inaudible) (Some disturbance with microphones in court room) MR BAKER: I think it may be Mrs Rudkin and I would ask that they mute their microphones. JUDGE TAYLOR: Yes, could all those on CVP mute your microphones please. Yes, if you can leave the camera on and mute the microphone. ... (Pause) ..."

and Mr Ashraf's objection to the two different prosecution characterisations, and whatever else his counsel is about to ask, remains unknown.

At the end of the hearing the judge said, "I am sure that all of the appellants are grateful for the approach that the Post Office has taken finally to this matter and that it can be put to rest for them."

R v Seema Misra – October 2010

Seema Misra was prosecuted and sentenced to imprisonment at Guildford Crown Court. In written evidence to Parliament's Justice Committee, the barrister who had started her representation at her appeal in the Hamilton case said, "At Mrs Misra's criminal trial, "on ... three separate occasions, the defence applied to three separate judges to have the prosecution stopped on the basis that the disclosure given by the Post Office was woefully inadequate and the prosecution an abuse of process..." The submissions at Guildford Crown Court were dismissed and Ms Misra was charged with one count of theft, to which she pleaded not guilty, and six of false accounting to which she pleaded guilty.

In a further application, during the trial, that the trial be stopped, Mr Hadrill, for Mrs Misra, said of the prosecution's expert witness "he operates under a restriction because he is an employee of Fujitsu who are under contract to the Post Office and he can only comply with his contractual terms as best he can and there is no suggestion his integrity is anywhere at fault as to what he is permitted to do, bearing in mind this is a Post Office prosecution. I don't go behind that but it is not an independent prosecution at arm's reach from the loser company and Mr Jenkins, so we have to have concerns as to the quality of his evidence and the best he has done in regard to the restrictions he operates under." The application was again unsuccessful. The prosecution told the jury "In a Post Office case it is a Post Office investigator who conducts the interview because of course they are familiar with Post Office procedures in a way a Police Officer would not necessarily be."

Mrs Misra, recalling the moment when she was sentenced to 15 months in prison in 2010 said "It's hard to say but I think that if I had not been pregnant, I would have killed myself."

High Court

Post Office Ltd v Castleton – January 2006

Cases cited in PO v Castleton

• Shaw v Picton (1825) 4 B & C 715, 729
• Camillo Tank Steamship Company Limited v Alexandria Engineering Works (1921) 38 TLR 134, 143

This was a civil case in which the Post Office sued Mr Castleton. The case was heard before Judge Richard Havery QC in December 2006 and January 2007. The defendant represented himself and counterclaimed damages in the sum of £11,250 on the ground that the Post Office wrongfully determined the contract as a subpostmaster following his suspension. The judge found for the Post Office on the claim for £25,858.95. He found the deficiencies were real, the business was not properly managed and that Mr. Castleton was therefore in breach of his contract with the Post Office. "Moreover, the losses must have been caused by his own error or that of his assistants. The counterclaim was dismissed." Unable to afford the losses and the £321,000 in legal costs, Mr. Castleton declared himself bankrupt.

Bates & Others v Post Office Ltd

On 22 March 2017 Senior Master Fontaine made a Group Litigation Order with the approval of the President of the Queen's Bench of the High Court and, on 31 March, Fraser J was nominated managing judge in Bates & Others v Post Office Ltd, brought by approximately 600 claimants. At the start of the proceedings, the Post Office unsuccessfully opposed the making or the existence of a GLO. The Post Office had set up a litigation sub-committee, attended on 24 April 2019 by Tim Parker, Tom Cooper, (director of UK Government Investments), David Cavender QC, Alisdair Cameron, Ben Foat, staff from Womble Bond Dickinson and from Herbert Smith Freehills. There was an unsuccessful application by the Post Office that the judge recuse himself, an appeal, and two separate submissions described by judges as attempts to put the courts in terrorem. At the Judgment No. 6 the judge said:

The recusal application was issued the day after Mr Godeseth's cross-examination had made it clear, not only that this remote access existed, but after he was taken in careful cross-examination through specific examples of Fujitsu personnel manipulating branch accounts, and leading to discrepancies in branch accounts. I am aware that criticism of the Post Office and Fujitsu in this respect may prove to be controversial, as earlier criticism of certain aspects of the Post Office's case in Judgment (No. 3) was not well received by it. However, if criticism is justified, I consider it would be detrimental to proper resolution of the group litigation if that criticism were to be withheld simply because it might lead to a further negative reaction by the Post Office. It is also an inherent part of the judicial function in any litigation to make findings, which may include criticisms where justified, that may be contrary to a litigant's own view of the merits of their case. Some litigants are so convinced of the righteousness of their own position that they consistently refuse to accept any possible view of the litigation other than their own. Such a blinkered view is rarely helpful, and would be particularly unhelpful from a publicly owned institution.

The SPMs were financed by a litigation fund, Therium. High court battles are expensive. Defendants try to intimidate funders by running up costs and with delaying tactics, in the hope the latter might walk. The matter ended by consent when the Post Office agreed to pay costs of £58 million, without admitting liability, and compensation was therefore not awarded. Of that payment, £46 million went to the financial backers.

The extent to which the government was aware of the Post Office's approach to its defence was questioned during the parliamentary debate on 19 March 2020. David Jones MP said, "Of course the Post Office has a non-executive director appointed by the Government. One must assume that that non-executive director is reporting to Ministers." Kevin Jones MP replied, "If I had been the Minister, I would have had that person in and scrutinised what was going on ... That would certainly have applied in the past few months, given the hundreds of millions of pounds that have been spent defending the indefensible." Bambos Charalambous MP, "The Post Office seemed to have unlimited funds at its disposal to fight this action, ... The Post Office is an arm's length organisation, but there seems to be no accountability ..." Chi Onwurah MP, "Its only shareholder is the Secretary of State for Business, Energy and Industrial Strategy, so more should have been done to address the scandal before it was allowed to fester to this extent."

Arbuthnot, sitting in the House of Lords as Baron Arbuthnot of Edrom, in a written question asked, "... whether the Accounting Officer with responsibility for the Post Office has played any role in advising ministers on the Government's policy in relation to ... (3) the sub-postmasters' litigation against the Post Office". In an article headed "Did government officials collude in trying to remove a judge?" journalist Nick Wallis sets out and assesses the government's reply to Arbuthnot's questions, "Mr Chisholm (Principal Accounting Officer at BEIS) has never been held to account for his actions in monitoring or blessing the Post Office's behaviour since he was appointed BEIS Permanent Secretary in 2016. We don't know what he advised ministers about the progress of the litigation or the post-Common Issues "changes" to "strategy".

During the case six separate judgments were handed down:

Judgment No 1 Applications to alter timetable – November 2017

Referring to costs and delay the judge said "Fitting hearings around their availability has all the disadvantages of doing an intricate jigsaw puzzle, with none of the fun associated with that activity."

Judgment No 2 Application to strike out evidence – October 2018

Cases cited in Judgment 2

• Wilkinson v West Coast Capital [2005] EWHC 1606 (Ch)
• Re Unisoft Group Limited (No 3) [1994] 1 BCLC 609
• Vernon v Bosley [1994] PIQR 337
• Yam Seng Pte Ltd v International Trade Corp [2013] EWHC 111 (QB)
• Garnac Grain Co Inc v HMF Faure & Fairclough Ltd [1968] AC 1130
• Coleman v Mellersh (1879) 11 Ch.D 150

This decision followed a case management hearing and dismissed an application to strike out roughly one-quarter of the lead claimants' evidence – more than 160 paragraphs. The judge commented that adverse publicity for Post Office was not a matter of concern for the court if the evidence was relevant and admissible. He also warned against the aggressive conduct of litigation, particularly in a group action of this nature.

The Post Office justified its application to strike out passages with five main areas of complaint:

• Post-contractual – events that took place after the contracts were formed.
• Subjective – knowledge and belief of the claimant and not common knowledge to the defendant.
• Breach – evidence that goes to issues of breach and liability and that cannot be relevant to issues of contractual construction.
• Horizon – evidence that goes to the Horizon Issues which are not being dealt with in the Common Issues trial (the claimants' case, disputed by the Post Office, is that the Horizon system threw up unexplained shortfalls in the claimants' accounting.
• Loss and damage – matters which go to causation, loss and damage; said to be not relevant to the Common Issues trial.

The Post Office argued:

1. The court had ordered that evidence be served restricted to the Common Issues.
2. There would be insufficient time at trial to deal with the evidence advanced by the claimants.
3. The defendant did not have its own evidence available in response to the challenged passages.
4. There was no benefit in the court receiving such evidence.
5. The court should not make findings on the matters included in the evidence, in particular (but not limited to) matters of breach alleged against the defendant by individual claimants.

The SPMs opposed the application:

1. This was group litigation. What may not be of relevance to one lead claimant could very well be of relevance to others.
2. Common Issues 12 and 13, which deal with the principles of agency as they affect sub-postmasters as agents, are without doubt to be dealt with at the Common Issues trial.
3. The Post Office's pleading expressly raises consideration of the matters which the defendant seeks to strike out.
4. The Post Office's own evidence contains passage after passage where the same subject matter is dealt with from the defendant's overall perspective.

In the judgment in the Court of Appeal refusing permission to appeal the recusal application, Lord Justice Coulson said that the SPMs had submitted "that the strike-out application arose because the PO wished to adduce extensive factual evidence in their favour but objected to any evidence to the contrary from the SPMs. As they put it 'the Post Office wanted the case decided all one way'. There remains a distinct flavour of that approach within the recusal application." "The application by the defendant to strike out this evidence appears to be an attempt to hollow out the Lead Claimants' case to the very barest of bones (to mix metaphors), if not beyond, and to keep evidence with which the defendant does not agree from being aired at all." Counsel for the SPMs, in a written submission that was quoted and accepted by the judge said the application "appears to be an attempt by Post Office to secure an advantage at the Common Issues Trial by selectively tailoring the evidence which the Court is to consider."

The application was dismissed.

Judgment No 3 Common Issues – March 2019

Cases cited in Judgment 3

• AB v Catholic Child Welfare Society [2016] EWHC 3334 (QB), paras 23-24
• Abu Dhabi National Tanker Co v Product Star Shipping Ltd, The Product Star (No 2) [1993] 1 Lloyd's Rep 397
• Acer Investment Management Ltd and another v The Mansion Group Ltd [2014] EWHC 3011 (QB) at [109]
• African Export-Import Bank v Shebah Exploration and Production Co Ltd [2017] EWCA Civ
• Amey Birmingham Highways Ltd v Birmingham City Council [2018] EWCA Civ 264
• Arnold v Britton [2015] AC 1619 per Lord Neuberger at [21]
• Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988
• Autoclenz Ltd v Belcher [2011] UKSC 41
• AXA Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133
• Bates v Post Office Ltd (No.2) [2018] EWHC 2698 (QB)
• Blue v Ashley [2017] EWHC 1928
• Bou-Simon v BGC Brokers LP [2018] EWCA Civ 1525
• Bramelid v Sweden (1982) 29 DR 64
• Bristol Groundschool Ltd v Intelligent Data Capture Ltd [2014] EWHC 2145 (Ch)
• British Fermentation Products Ltd v Compair Reavell Ltd [1992] 2 All ER (Comm)
• St Albans City and DC v International Computers Ltd [1996] 4 All ER 481
• Telefonica O2 UK Ltd v British Telecommunications plc [2014] UKSC 42
• Cape Intermediate Holdings Ltd v Dring [2018] EWCA Civ 1795
• Carewatch Care Services Ltd v Focus Caring Services Ltd and Grace [2014] EWHC 2313 (Ch)
• Cavendish Square Holding BV v Talal El Makdessi [2015] UKSC 67
• Circle Freight International Limited (T/A Mogul Air) v Mideast Gulf Exports Limited (T/A Gulf Exports) [1988] 2 Lloyd's Rep 427
• Coleman v Mellersh [1850] 2 Mac & G 309
• Commerzbank AG v Keen [2006] EWCA Civ 1536
• D&G Cars Ltd v Essex Police Authority [2015] EWHC 226 (QB)
• Deweer v Belgium (1980) 2 EHRR 439, 460
• DoBuy 925 v National Westminster Bank [2010] EWHC 2862 (QB) at [93]
• Dolphin Maritime & Aviation v Sveriges Angartygs Assurans Forening [2009] EWHC 716 (Comm) at [74]
• Equitable Life Assurance Society v Hyman [2000] 3 All ER 961, 972
• Euroption Strategic Fund Ltd v Skandinaviska Enskilda Banken AB [2012] EWHC 584 (Comm)
• First Abu Dhabi Bank v BP Oil International [2018] EWCA Civ 14
• Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 2) [2001] EWCA Civ 1047
• Garnac Grain Company Inc v HMF Faure & Fairclough Ltd and Ors [1968] AC 1130, 1137
• Geys v Société Générale [2013] 1 AC 523
• Globe Motors v TRW Lucas Variety Electric Steering [2016] EWCA Civ 396
• Gogay v Hertfordshire County Council [2000] IRLR 703
• Goodlife Foods Ltd v Hall Fire Protection Ltd [2018] EWCA Civ 1371
• Granville Oil & Chemicals Limited v Davis Turner & Co Limited [2003] EWCA Civ 570, [2003] 2 Lloyd's Rep 356
• Greenclose Ltd v National Westminster Bank plc [2014] EWHC 1156 (Ch)
• Hadley Design Associates v Westminster [2003] EWHC 1617 (TCC)
• Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] 1 QB 433 (CA) at 438F-439A
• J Spurling Ltd v Bradshaw [1956] 1 WLR 461, 466
• K/S Victoria Street v House of Fraser (Stores Management) Ltd [2011] EWCA Civ 904 at [68]
• Kreglinger v New Patagonia Meat and Cold Storage Co Ltd [1914] AC 25
• L'Estrange v Graucob [1934] 2 KB 394
• Lalji v Post Office [2003] EWCA Civ 1873
• Legione v Hateley (1983) 152 CLR
• Lewes v Morgan [1817] 5 Price 42 at 836
• Ludgate Insurance Co Ltd v Citibank NA [1998] Lloyd's Rep IR 221
• Mannai Investment v Eagle Star Life Assurance Co Ltd [1997] AC 749 at [768]
• Marex Financial v Creative Finance [2013] EWHC 2155 (Comm)
• Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd [2015] UKSC 72
• JN Hipwell & Son v Szurek [2018] EWCA Civ 674
• McClory v Post Office [1993] 1 All ER 457
• Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (t/a Medirest) [2013] EWCA Civ 200
• Modern Engineering Ltd v Gilbert Ash (Northern) Ltd [1974] AC 689
• Monde Petroleum v Westernzagros [2017] 1 All ER (Comm) 1009
• Myers v Kestrel Acquisitions [2015] EWHC 916 (Ch)
• O'Brien v MGN Ltd [2001] EWCA Civ 1279
• Olley v Marlborough Court Ltd [1949] 1 KB 532
• Overseas Medical Supplies Limited v Orient Transport Services Limited [1999] 2 Lloyd's Rep 273
• Paciocco v Australia and New Zealand Banking Group Limited [2015] FCAFC 50, para 288 (Federal Court of Australia)
• Paciocco v Australia and New Zealand Banking Group Limited [2016] HCA 28
• Paragon Finance plc v Staunton, Paragon Finance plc v Nash [2001] EWCA Civ 1466
• Peekay v Australia and New Zealand Bank [2006] EWCA Civ 386 at [43]
• Persimmon Homes Ltd and others v Ove Arup & Partners Ltd [2017] EWCA Civ 373
• Philips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472
• Post Office Ltd v Castleton [2007] EWHC 5 (QB)
• R v Derby Magistrates Court ex p. B [1996] AC 487
• Rainy Sky SA v Kookmin Bank [2011] UKSC 50
• Re Webb [1894] 1 Ch.D 73
• Secret Hotels2 v HMRC [2014] UKSC 16 at [31]
• Sheikh Al Nehayan v Kent [2018] EWHC 333 (Comm)
• Spencer v Secretary of State for Defence [2012] EWHC 120 (Ch)
• SRCL Ltd v NHS England [2018] EWHC 1985 (TCC)
• Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600, 608
• Stretford v Football Association Ltd and another [2006] EWHC 479 (Ch)
• Sumukan Ltd v Commonwealth Secretariat [2007] EWCA Civ 1148
• The Zockoll Group Ltd v Mercury Communications Ltd [1999] EMLR 385
• Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163
• Timeload Ltd v British Telecommunications PLC [1995] EMLR 459
• Watford Electronics v Sanderson [2001] EWCA Civ 317; [2001] 1 All ER (Comm) 696
• Watson v Rodwell [1879] 11 Ch.D 150
• Watson v Watchfinder.co.uk [2017] EWHC 1275 (Comm)
• Wells v Divani [2019] UKSC 4
• Wood v Capita Insurance Services Ltd [2017] AC 1173
• Woodeson v Credit Suisse (UK) Ltd [2018] EWCA Civ 1103
• Yam Seng Pte Ltd v International Trade Corp Ltd [2013] EWHC 111 (QB)
• Yuanda (UK) Co Ltd v WW Gear Construction Ltd [201] EWHC 720 (TCC)

The sub-postmasters and the Post Office had identified 23 issues relating to the contractual relationship between them and about which they disagreed. The judge made findings on each so that obligations under all iterations of the contracts would be settled, both retrospectively and prospectively. Of the 23 issues 16 were decided in the SPMs favour. The parties agreed that broadly the claimants were more successful. Issue 1 was later described by the judge as important He found Subpostmasters' contracts are relational contracts. "This means that the Post Office is not entitled to act in a way that would be considered commercially unacceptable by reasonable and honest people."

In court, Fraser criticised testimony given by Post Office witnesses. The judge said Angela van den Bogerd (Head of Partnerships, Post Office) "did not give me frank evidence, and sought to obfuscate matters, and mislead me." Fraser commented on the evidence given by Stephen Parker, Head of Post Office Application Support, Fujitsu:

"I do not consider that Mr Parker was interested in accuracy in any of his evidential exercises. ... I do not consider his evidence in his witness statements to have been remotely accurate, even though he stoutly maintained that it was."

Of the evidence of one Post Office witness, the judge said "The Post Office appears, at least at times, to conduct itself as though it is answerable only to itself. The statement that it is prepared to preserve documents – as though that were a concession – and the obdurate to accept the relevance of plainly important documents, and to refuse to produce them, is extremely worrying." Fraser said in the Horizon Issues trial,

the possibility of future (as opposed to current) criminal prosecutions, or the potentially criminal impact upon individual SPMs, did more than hover in the background to the Horizon Issues trial. Some claimants who gave evidence in this trial were expressly accused by the Post Office of criminal offences in cross-examination in this trial, something which had also occurred in the Common Issues trial.

When the judgment was delivered the Post Office said it would appeal. On 23 May the judge refused the Post Office permission to appeal and set out his reasons on 17 June. The Post Office applied for permission to appeal that refusal. However, during the Horizon Issues evidence, just as the judge returned to court for the final afternoon, Joshua Rozenberg reported "he was told that the Post Office had served an application for his recusal ... Counsel representing Post Office on the Horizon issues had apparently not seen it. He made no mention of it that morning".

Judgment No 4 Application for recusal – April 2019

Judgment paragraphs cited in recusal application Judgment No.2 26 & 32

Judgment No.3 574 to 598;

Specific findings of fact

20; 104; 105; 106; 115; 141;

142; 165; 172; 193; 208; 217;

218; 219; 222; 223; 246; 247;

248; 249;263; 264; 274; 297;

302; 303; 309; 310; 311; 327;

328; 346; 352; 357; 402; 403;

437; 462; 479; 480; 492; 514;

515; 516; 517; 541; 543; 556;

557; 558; 569; 567; 723; 806;

819; 824; 852; 955; 1115; 1116;

1118.

Critical invective

21; 28; 30; 34; 36; 117; 120;

123; 295; 368; 369; 370; 393;

394; 476; 483; 519; 520; 521;

522; 523; 532; 560; 561; 576;

577; 589; 595; 596; 723; 724;

1059; 1111; 1120.

Criticism of Post Office witnesses

375; 400; 408; 416; 418; 441; 425;

451; 458; 544; 545; 546; 547.

The Post Office brought in Lord Grabiner QC to make an application to Fraser J that he recuse himself. Grabiner is widely described as a 'legal heavyweight'. Statements supporting the recusal application alleged that paragraphs 22 to 25 of Judgment No 3 were findings, or observations that fell outside the scope of the Common Issues trial. Paragraph 24 of that judgment gave the clear impression that the judge has already formed a firm view on these matters that will prevent him from taking an impartial view when they are revisited at subsequent trials. The statement further alleged that the judgment contained critical invective directed at the Post Office and that parts harshly criticised the Post Office's witnesses on irrelevant matters. The SPMs argued that the Post Office was insufficiently specific and the judge required the Post Office to identify the relevant paragraphs of Judgment No 3. In response, the Post Office cited 110 different paragraphs.

Cases cited in Judgment 4

• Otkritie International Investment Management Ltd and others v Urumo [2014] EWCA Civ 1315
• FAGE UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5
• Wheeldon Brothers Waste Ltd v Millennium Insurance Company Ltd [2018] EWCA Civ 2403 at [7]
• JSC BTA Bank v Mukhtar Ablyazov [2012] EWCA Civ 1551
• Harb v HRH Prince Abdul Aziz Bin Fahd Bin Abdul Aziz [2016] EWCA Civ 556
• AWG Group Ltd v Morrison [2006] EWCA Civ 6
• Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451
• Porter v Magill [2002] 2 AC 357
• A-B and others v British Coal Corporation [2006] EWCA Civ 172
• Mengiste v Endowment Fund for the Rehabilitation of Tigray and others [2013] EWCA Civ 1003
• Livesey v The New South Wales Bar Association (1983) 151 CLR 288 at p 299
• Zuma's Choice Pet Products Ltd v Azumi Ltd [2017] EWCA Civ 2133
• Arab Monetary Fund v Hashim (No. 8) (1993) 5 Admin LR 348
• Stubbs v The Queen [2018] UKPC 30
• Steadman-Byrne v Amjad [2007] EWCA Civ 625
• Hart v Relentless Records Ltd [2002] EWHC 1984 (Ch) at 38
• Re Q (Children) [2014] EWCA Civ 918
• Lawal v Northern Spirit [2004] 1 All ER 187
• El Faraghy v El Faraghy [2007] EWCA Civ 1149
• O'Neill (No.2) v Her Majesty's Advocate [2013] UKSC 36
• Lanes Group plc v Galliford Try Infrastructure Ltd [2011] EWCA Civ 1617

The recusal application was dismissed on two grounds, no bias, and waiver due to delay by the Post Office. Lord Grabiner had been asked to explain the delay in making the application. He replied "It was made at board level within the client and it also involved the need for me to be got up to speed from a standing start. And I am not the only judicial figure or barrister that has looked at this with a view to reaching that conclusion. It has also been looked at by another very senior person before the decision was taken to make this application. The delay, such as it is, is very, very tiny". This submission was rejected. The judge decided the issue of waiver as a result of the delay in making the application for recusal.

"Even if I had found that there were grounds of apparent bias on the face of Judgment No. 3, I would not have recused myself. This is because of the fact that the Post Office waited until almost two weeks after it had received Judgment No. 3 before it did anything in respect of making an application to recuse."

The recusal application was opposed by the SPMs and dismissed by the judge.

Judgment No 5 Common Issues costs – June 2019

Cases cited in Judgment 5

• Perriam v Wayne [2011] EWHC 403 (TCC)
• Alyson Austin v Miller Argent (South Wales) Ltd [2011] EWCA Civ 928
• de Jongh Weill v Mean Fiddler [2003] EWCA Civ 1058
• Kastor Navigation Co Ltd v AXA Global Risk (UK) Ltd [2004] EWCA Civ 277
• Hislop v Perde [2018] EWCA Civ 1726
• Silvia Henry v News Group Newspapers Ltd [2013] EWCA Civ 19
• Mars UK Limited v TeKnowledge Limited [1999] 2 Costs LR 44
• MacInnes v Gross (No. 2: Costs and Consequential Matters) [2017] EWHC 127 (QB)
• Elvanite Full Circle Ltd v AMEC Earth & Environmental (UK) Ltd (No 2) [2013] EWHC 1643 (TCC)
• Excalibur Ventures LLC v Texas Keystone Inc and others [2015] EWHC 566 (Comm)

The issuing by the Post Office of the recusal application on 21 March 2019 caused significant disruption to the Horizon Issues trial which had started on 11 March 2019, and to the Group Litigation as a whole. The SPMs applied for the costs of that application; the Post Office sought that the judge reserve costs, in the following terms

the court can't be sure that things will happen in the future that will affect and alter its view about incidence of costs. It simply cannot do so. If it does so now, in my submission as a matter of principle, that would evidence a predetermination or would go towards suggesting the court has reached a view about matters as to how things are going to pan out in the future.

The judge was troubled by this submission. Inherent was a veiled or implied threat that the Post Office will say that the overall outcome of the litigation, or other future issues, has been decided. The Post Office was attempting to put the court in terrorem again. After asserting no predecision he said, "I do nonetheless consider that it is appropriate that I consider whether to make a costs order now ... " After considering cases cited the application by the Post Office to reserve costs was dismissed. "The claimants would not be on an equal footing with the Post Office, a publicly funded body, if I reserved the costs of the Common Issues trial until the very end of the litigation ... I do not however consider that the presence of litigation funding should sway this decision one way or the other. I agree with Mr Cavender that the presence of such funding should not put a claimant in a better position vis-à-vis the correct stage in litigation at which costs should be addressed, compared to a non-funded party. However, regardless of who is funding litigation, a funder or an individual litigant, cash flow is a relevant consideration for most litigants. It is a consideration that might weigh less heavily upon publicly funded bodies such as the Post Office, but even such entities are likely to be concerned to some extent with cash flow."

Of the SPMs submissions that their award of costs should not be reduced, the court rejected them. "I have decided that the correct approach in this case is to make a percentage reduction to the Claimants' recovery of their costs; I then have to decide what the correct percentage reduction is." Two different particular features of the case were identified.

• The degree of success of the Post Office on some of the Common Issues.

As explained in Judgment No 4 between [266] and [269] the claimants were not 100% successful.

It is also too soon to say if individual claimants will ultimately prevail in the litigation overall.

• The way the Post Office conducted the trial.

The Post Office put facts in issue at the beginning and during the Common Issues trial which it plainly ought not to have done, and which extended the length of the trial significantly.

Taking those matters into account, considering all the facts of the case, applying my detailed knowledge of it as the Managing Judge of the Group Litigation and as the judge who heard the trial, and taking account of all the circumstances of the Common Issues trial, I am satisfied a modest adjustment is justified to the recovery of the Claimants' cost ... in my judgment, the Claimants should have their costs subject to a 10% reduction to take account of the features that I have identified. Cost awarded on a standard basis.

At the end of this section of the case, i.e. of Judgment 5, Fraser expressed the following:

I have expressed concerns on different occasions before about cost effective conduct of this litigation. Those concerns have simply increased during the course of 2019. ... On any view, the Post Office's own costs will now be in excess of £13 million. The Claimants' costs now exceeded £12.6 million, ... Both sides are therefore spending similar sums by way of costs, and both sides' costs are of a high level. The Group Litigation is part of the way through the Horizon Issues trial ... once that trial is over, the parties should be prepared for a further and detailed costs management discussion with the court. Costs of this order cannot pass without comment.

Judgment No 6 Horizon issues – December 2019

The Horizon issues

This is intended as a précis of a summary of the judgment with an indication of the judge's determination of these issues.

"Providing the answers to the Horizon Issues will not lead to complete resolution of the litigation. It should however resolve one of the central issues about Horizon's accuracy and functionality."

Bugs, errors and defects in Horizon

Accuracy and integrity of data

(1) To what extent was it possible or likely for bugs, errors or defects of the nature alleged at §§23 and 24 of the GPOC and referred to in §§ 49 to 56 of the Generic Defence to have the potential (a) to cause apparent or alleged discrepancies or shortfalls relating to Subpostmasters' branch accounts or transactions, or (b) undermine the reliability of Horizon accurately to process and to record transactions as alleged at §24.1 GPOC?

It was possible for bugs, errors or defects of the nature alleged by the claimants to have the potential both (a) to cause apparent or alleged discrepancies or shortfalls relating to Subpostmasters' branch accounts or transactions, and also (b) to undermine the reliability of Horizon accurately to process and to record transactions as alleged by the claimants.Y

(2) Did the Horizon IT system itself alert Subpostmasters of such bugs, errors or defects as described in (1) above and if so how?

No, the Horizon system did not alert SPMs.N

(3) To what extent and in what respects is the Horizon System "robust" and extremely unlikely to be the cause of shortfalls in branches?

The Horizon system was therefore not "extremely unlikely" to be the cause of shortfalls in branches, as contended for by the Post Office.N

Controls and measures for preventing/fixing bugs and developing the system

(4) To what extent has there been potential for errors in data recorded within Horizon to arise in (a) data entry, (b) transfer or (c) processing of data in Horizon?

There is a material risk for errors in data recorded within Horizon to arise in (a) data entry (b) transfer or (c) processing of data in Horizon in both the Legacy Horizon and HNG-X forms.Y

(5) How, if at all, does the Horizon system itself compare transaction data recorded by Horizon against transaction data from sources outside of Horizon?

This is largely automated. It has not however been automated throughout the whole life of Horizon from 2000.N

(6) To what extent did measures and/or controls that existed on Horizon prevent, detect, identify, report or reduce an extremely low level of risk of the following:

a. data entry errors;

b. data packet or system-level errors (including data processing, effecting, and recording the same)

c. a failure to detect, correct and remedy software coding errors or bugs;

d. errors in the transmission, replication and storage of transaction record data; and

e. the data stored in the central data centre not being an accurate record of transactions entered on branch terminals?

I do not consider that the measures and/or controls that existed in Legacy Horizon, or HNG-X prevented, detected, identified, reported or reduced to an extremely low level of risk any of the sub-items at (a) to (e). Indeed, I reject the Post Office's case that there was such an extremely low level of risk. That is, in my judgment, a wholly complacent and unjustified position that has existed for many years.N

Operation of Horizon

Remote access

(7) Were Post Office and/or Fujitsu able to access transaction data recorded by Horizon remotely (i.e. not from within a branch)?

Yes. This answer is substantially agreed. Both the Post Office and Fujitsu could read data remotely. Y

Availability of information and report writing

(8) What transaction data and reporting functions were available through Horizon to Post Office for identifying the occurrence of alleged shortfalls and the causes of alleged shortfalls in branches, including whether they were caused by bugs, errors and/or defects in the Horizon system?

This issue is substantially agreed. The Post Office had access to data and systems that were not available to SPMs.Y

(9) At all material times, what transaction data and reporting functions (if any) were available through Horizon to Subpostmasters for:

a. identifying apparent or alleged discrepancies and shortfalls and/or the causes of the same; and

b. accessing and identifying transactions recorded on Horizon?

Because the reports and data available to SPMs were so limited, their ability to investigate was itself similarly limited. The expert agreement to which I refer at [998] above makes it clear in IT terms (based on the transaction data and reporting functions available to SPMs) that SPMs simply could not identify apparent or alleged discrepancies and shortfalls, their causes, nor access or properly identify transactions recorded on Horizon, themselves. They required the co-operation of the Post Office.N

Access to and/or editing of transactions and branch accounts

(10) Whether the Defendant and/or Fujitsu have had the ability/facility to (i) insert, inject, edit or delete transaction data or data in branch accounts; (ii) implement fixes in Horizon that had the potential to affect transaction data or data in branch accounts; or (iii) rebuild branch transaction data:

a. at all;

b. without the knowledge of the Subpostmasters in question; and

c. without the consent of the Subpostmaster in question.

Fujitsu: The answer is "yes" to each of Issue 10(i), 10(ii) and 10(iii), and to each of (a),(b) and (c) too.Y

The Post Office: this could only be done by the Post Office utilising its Global User role. This permitted the Post Office to inject transactions without the knowledge or consent of the SPM. However, it could only be done by someone who was physically present in the branch, as that is the only way Global User could be used by the Post Office. The answer therefore for the Post Office is "yes" only in respect of that part (relating to injecting transactions) of (i)(a) (b) and (c). With that exception, the answer for the Post Office is "no" to the other eight permutations.N

(11) If they did, did the Horizon system have any permission controls upon the use of the above facility, and did the system maintain a log of such actions and such permission controls

There were permission controls; they were however inadequate.N

(12) If the Defendant and/or Fujitsu did have such ability, how often was that used, if at all?

The inability of the Post Office, and/or the experts for both parties, to be able to provide a clear and precise answer to what is, in essence, a very simple question (even though the actual answer might be a large number) directly arises from Fujitsu's plainly inadequate records. On the evidence from the two experts, the answer should be in approximate terms only and would be about once a day over the whole life of the system, to the extent that any records are available.Y

(13) To what extent did use of any such facility have the potential to affect the reliability of the Branches' accounting positions?

The answer to this issue is that these facilities had the potential to affect the reliability of a SPM's branch accounts to a material extent. Further, the evidence shows clearly that there were instances when this in fact occurred, which goes wider than the issue posed (which asks about potential) but which I find is also relevant to the Horizon Issues as a whole.Y

Branch trading statements, making good and disputing shortfalls

(14) How (if at all) does the Horizon system and its functionality:

a. enable subpostmasters to compare the stock and cash in branch against the stock and cash indicated on Horizon?

b. enable or require Subpostmasters to decide how to deal with, dispute, accept or make good alleged discrepancy by (i) providing his or her own personal funds or (ii) settling centrally

c. record and reflect the consequence of raising a dispute on an alleged discrepancy, on Horizon Branch account data and, in particular:

(i) does raising a dispute with the helpline cause a block to be placed on the value of an alleged shortfall; and

(ii) is that recorded on the Horizon system as a debt due to Post Office?

d. enable Subpostmasters to produce (i) Cash Account before 2005 and (ii) Branch Trading Statement after 2005?

e. enable or require Subpostmasters to continue to trade if they did not complete a Branch Trading Statement; and if so, on what basis and with what consequences on the Horizon system?

This is substantially agreed by the experts. The Horizon system can compare cash and stock figures, but it has no facility to record a dispute. The comparison is done by the system comparing its electronic records of what cash and stock is held in a branch, with the corresponding figures inputted by the SPM at the end of a trading period.

Transaction corrections

(15) How did Horizon process and/or record transaction corrections?

This too is substantially agreed in terms of technical content, and I have explained in the body of the accompanying judgment, that TCs are outside the definition of the Horizon system.

Summary of bugs, errors and defects

1. Receipts and payments mis-match bug

This is a bug present in Horizon Online. This bug occurred in 2010. The majority of incidents are recorded as occurring between August and October 2010.

2. Callendar Square/Falkirk bug

This is a bug present in Legacy Horizon. It is agreed that this bug occurred between the years of 2000 and 2006, although there is an issue about when it stopped. In my judgment, the period when the effects of this occurred are 2000 to 2010.

3. Suspense account bug

This is a bug present in Horizon Online. Its identified years of effect are 2010 to 2013.

4. Dalmellington bug/branch outreach issue

This is a bug present in Horizon Online. Its effects were experienced between 2010 and 2015.

5. Remming in bug

This is a bug present in Horizon Online. It was present for about five months in 2010 between March and August.

6. Remming out bug

This is a bug present in Legacy Horizon. It was split into two in the Bug Table, 6(i) and 6(ii). Bug 6(i) was identified as February/April 2007, recorded as fixed approx. 2007. Bug 6(ii) was in May 2005.

7. Local Suspense Account issue, not the same as 3. Suspense Account bug

This is a bug present in Horizon Online. This was reported in 2010 and recorded as fixed in September 2010.

8. Recovery issues

These are bugs, errors and defects present in Horizon Online. With years of effect from 2010 to 2018.

9. Reversals

This is a bug present in Legacy Horizon. Occurred for a short period in 2003.

10. Data tree build failure discrepancies

This is a bug present in Legacy Horizon. Its identified effect was during 1999 and 2000, running up to 2007.

11. Girobank discrepancies

This is a bug present in Legacy Horizon. This is treated as a single bug by the experts in the Bug Table. The Technical Appendix finds there was more than one bug, error or defect under this heading. It occurred between May and September 2000.

12. Counter-replacement issues

This is a bug, error, or defect present in Legacy Horizon. It also included hardware issues. There were two KELs associated with this. The first was created in 2000 and last updated in July 2007. The second was created in 2002 and notes occurrences running up to 2009.

13. Withdrawn stock discrepancies

This is a bug present in Horizon Online. Mentioned in 2010 and 2011.

14. Bureau discrepancies

This is a bug present in Horizon Online. It arose in 2017.

15. Phantom Transactions

This is a bug present in Legacy Horizon. This is referable to Horizon issue 4 and not Horizon issue 1. It arose in 2001.

16. Reconciliation issues

This is a bug present in both Legacy Horizon and Horizon Online. This is not a bug with the potential to cause impact on branch accounts. The underlying PEAKs do however demonstrate software faults. Mentioned in 2000, 2002, 2010 and 2014.

17. Branch customer discrepancies

This arises in Legacy Horizon. This is referable to Horizon issue 4 and not Horizon issue 1. This is an error, or defect and does not have the potential to cause impact to branch accounts. Occurred in March 2008.

18. Concurrent logins

This is a bug present in Legacy Horizon. This occurred in 1999 and 2000, and the PEAKS run to 2002.

19. Post & Go/TA discrepancies in POLSAP

This is a bug present in Horizon Online. Occurred in 2012.

20. Recovery failures

This arises under Horizon Online. This is referable to Horizon issue 4 and not Horizon issue 1. Two of the PEAKs show errors and defects, they do not show bugs. Mentioned in 2010, 2012 and 2015.

21. Transaction correction issues

This arises in Legacy Horizon. This is referable to Horizon issue 4 and not Horizon issue 1. Although the Technical Appendix finds it is evidence of a bug, there is no impact on branch accounts. Occurred in 2005 to 2010.

22. Bugs/errors/defects introduced by previously applied PEAK fixes

This is a bug present in Legacy Horizon. There is no impact on branch accounts and this is therefore taken into account under Horizon issue 4 and Horizon issue 1. Some of the PEAKS are from 2000 and one is from 2004.

23. Bureau de change

This is a bug present in both Legacy Horizon and Horizon Online. Arose in 2005, 2006 and 2010 onwards.

24. Wrong branch customer change displayed

This is a bug present in Legacy Horizon. Occurred in 2005.

25. Lyca top up

This is a bug present in Horizon Online. Occurred in August 2010.

26. TPSC 250 report

This is a bug present in Legacy Horizon. The date range is between 2005 and 2009, with the majority of the incidents occurring in 2005

27. TPS

This is a bug present in Legacy Horizon. Its years of effect are 2006 to 2010

28. Drop and Go

This is a bug present in Horizon Online. Occurred in July 2017. The date of the KEL suggests HNG-A, but the KEL is expressly headed HNG-X.

29. Network banking bug

This arises under Legacy Horizon. This did not have financial impact on branch accounts. It is an error, or defect but arises from communication failures from outside Horizon, probably from equipment or lines provided by BT. KEL raised in 2004 and updated in 2005, with 12 associated PEAKs in the range 2004 and continuing on to 2010 when Legacy Horizon was discontinued.

Cases cited in Judgment 6

• Scicluna v Zippy Stitch Ltd [2018] EWCA Civ 1320
• Simetra Global Assets Ltd and another v Ikon Finance Ltd and another [2019] EWCA Civ 1413
• Glicksman v Redbridge Healthcare NHS Trust [2001] EWCA Civ 1097
• Farm Assist Ltd (in liquidation) v Secretary of State for the Environment, Food and Rural Affairs [2009] EWHC 1102
• Post Office Ltd v Castleton [2007] EWHC 5 (QB)
• Serafin v Malkiewicz & ors [2019] EWCA Civ 852 at [118]
• Hanley v JC & A Solicitors [2018] EWHC 2592 (QB) at [42]
• National Justice Compania Naviera SA v Prudential Assurance Co Ltd [1993] 2 Lloyd's Rep 68 (Comm Ct), aka The Ikarian Reefer
• Stevens v Gullis [2000] 1 All ER 527, 533
• Imperial Chemicals Ltd v Merit Merrell Technology Ltd (No.2 Quantum) [2018] EWHC 1577 (TCC)
• Bank of Ireland v Watts Group plc [2017] EWHC 1667 (TCC)
• Mayr and others v CMS Cameron McKenna Nabarro Olswang LLP [2018] EWHC 3669 (Comm)
• BSkyB Ltd v HP Enterprise Services UK Ltd (formerly EDS Ltd) [2010] EWHC 86 (TCC)
• Imperial Chemicals Ltd v Merit Merrell Technology Ltd [2017] EWHC 1763 (TCC)
• CGI IT UK Ltd v Agilisys [2018] CSOH 112

This judgment concerns the operation and functionality of the Horizon system itself. The hearings took place in March, April, June and July 2019. The hearings were interrupted by the Post Office's application for the judge to recuse, to appeal his refusal to recuse (judgment 4), and his judgment 3. The judgment was published in December 2019. Twenty-nine bugs, errors and defects were identified and analysed. Witnesses for the SPMs and for the Post Office submitted statements and gave oral evidence. Documents that had been submitted, and further documents, the submission of which had been resisted were, after argument and rulings, submitted. These included the 'Known Error Logs' and the 'PEAKs', a browser-based software incident and problem management system used by Fujitsu for the Post Office account. Permission, for two IT experts to be called, one for the claimants (Mr Coyne) and one for the Post Office (Dr Worden)

During this trial, the Post Office issued an application that the judge recuse himself. That led first to Fraser J's Judgment No. 4, and then to an application for permission to appeal that judgment. The applications and the appeal failed but caused considerable delay.

Court of Appeal (civil)

Permission to appeal Judgment No 3 – November 2019

Lord Justice Coulson refused permission to appeal judgment No 3 and handed down his written reasons on 22 November. Before dealing with the 26 grounds that formed the basis of the application the judge set out a number of reasons that he felt militated against granting the Post Office permission to appeal. In short, the judge said:

• The trial was long and complex – 6 weeks – 60 lever arch files – 20 witnesses of fact. The judgment is 320 pages and 1,122 paragraphs long. No judge will ever know more about this case generally, and the Common Issues specifically, than Fraser J.
• The oral hearing of the permission-to-appeal application had demonstrated the danger that consideration of one issue opened up another, and another until the trial is re-fought. That is manifestly not in the interests of justice.
• Many of the Post Office's challenges are challenges to the findings of fact made by Fraser J. Challenges to such findings of fact are not open to an appellant in the position of the Post Office. Fraser J's conclusions of law were so entangled with his findings of fact that Coulson J considered it neither just, nor practicable to endeavour to separate them out.
• The Post Office made sweeping statements of the judgment which were demonstrably wrong. The Post Office takes findings "either wholly out of context, misstated, or otherwise not correctly summarised".
• Fraser J dealt comprehensively with why he refused permission to appeal in his separate judgment of 17 June 2019 which itself runs to 91 paragraphs, and Coulson J said that he agreed with Fraser J's detailed reasons for refusing the application to appeal.
• The Post Office's approach in this application was, as Fraser J correctly labelled it "attritional". The most obvious example is the Post Office's anxiety to state what they do not like about a particular proposal from the SPMs or the consequential finding by Fraser J, without providing any practical alternative. None of this engenders any confidence in the underlying merits or prospects of success of the Post Office's application for permission to appeal.
• There is no greater or wider right to permission to appeal just because this is group litigation; indeed, from the point of view of practical justice the opposite may well be the case. In any event, the SPMC was no longer in use.
• This application is founded on the premise that the nation's most trusted brand was not obliged to treat their SPMs with good faith, and instead entitled to treat them in capricious or arbitrary ways which would not be unfamiliar to a mid-Victorian factory-owner (the Post Office's right to terminate contracts arbitrarily and the SPMs alleged strict liability to the Post Office for errors made by the Post Office's own computer system, being just two of many examples). Given the unique relationship that the Post Office has with its SPMs, that position was a startling starting point for any consideration of these grounds of appeal.

The application was refused.

Permission to appeal Judgment No 4 – May 2019

Lord Justice Coulson refused the Post Office permission to appeal the refusal to recuse. Of the submission by Lord Grabiner, that he was not the only judicial figure or barrister that had looked at the decision to seek recusal, Coulson said at paragraph 48: "Such a comment, presumably made in terrorem, should not have been made at least without proper explanation of its relevance." In her legal analysis of the case Kate Beaumont said, "Recusal applications are extremely serious. They are not a tactic to be strategically deployed by a losing party." She quotes Coulson as saying "Without making any finding, he stated that he at least understood the claimants' submission that the recusal application and the permission to appeal application were made in an attempt to de-rail the litigation as a whole."

The application was refused.

Court of Appeal (criminal)

CCRC's reason for referral

1. POL could not show that the Horizon figures were correct, nor could they show when or how the alleged shortfalls occurred.
2. There was no direct evidence that the applicants had stolen any money.
3. The applicants had no choice but to falsify accounts: they would not have been able to continue trading if the books did not balance, and they were in fear of having their branches taken away from them.
4. The terms of their contracts were unfair, and there was no motivation for them to raise Horizon problems: if they did so, POL failed to investigate properly and would inevitably hold the SPM responsible for any monies which Horizon showed to be missing.
5. POL failed to make adequate disclosure to the defence in the criminal proceedings of data on the Horizon system.

The CCRC considered that Fraser J's judgments undermined POL's approach to the criminal prosecutions of these appellants, in particular because of his findings which it summarised as follows:

1. Legacy Horizon was not remotely robust.
2. HNG-X, the first iteration of Horizon Online, was slightly more robust than Legacy Horizon, but still had a significant number of bugs, errors and defects.
3. There was a significant and material risk of inaccuracy in branch accounts as a result of bugs, errors and defects in Horizon.
4. There is a material risk that shortfalls in branch accounts were caused by Horizon during the years when Legacy Horizon and HNG-X were in use (2000-2010, and 2010 onwards).
5. There was independent evidence that supported the SPMs' version of events, including from Royal Mail's own engineers and from the Post Office's own auditors.
6. The Post Office failed to disclose to SPMs the full and accurate position in relation to the reliability of Horizon.
7. The Post Office, and also Fujitsu, adopted the default position that SPMs must be responsible for shortfalls. The level of investigation by the Post Office and Fujitsu was poor.
8. SPMs were at a significant disadvantage in terms of access to relevant information which might have enabled them to investigate and challenge alleged shortfalls.
9. SPMs had no way of disputing shortfalls within Horizon.
10. The Post Office routinely overstated the contractual obligation on SPMs to make good losses.
11. Remote access to branch accounts (i.e., by Fujitsu) was extensive, and some branch accounts were in fact altered without the SPM's knowledge. It would appear in the accounts as though such actions had been carried out by the SPM.

The three most important of those points, in the CCRC's view, were:

1. That there were significant problems with the Horizon system and with the accuracy of the branch accounts which it produced. There was a material risk that apparent branch shortfalls were caused by bugs, errors and defects in Horizon.
2. That POL failed to disclose the full and accurate position regarding the reliability of Horizon.
3. That the level of investigation by POL into the causes of apparent shortfalls was poor, and that the Post Office applicants were at a significant disadvantage in seeking to undertake their own enquiries into such shortfalls.

In March 2020 the Criminal Cases Review Commission (CCRC) referred for appeal the convictions of 39 Post Office applicants. The commission said it would be referring all those cases, which involve convictions for theft, fraud and false accounting, on the basis that each prosecution amounted to an abuse of process. In May 2020 the CCRC referred a further eight such convictions, bringing the total to 47. In January 2021 the CCRC decided to refer a further four convictions, bringing the total to 51. In May 2021 Helen Pitcher, chair of the commission, told MPs that the organisation was 'not adequately resourced' if 200 cases were to be brought forward for review. She told the justice committee that a shortage of case review managers would take months to address, and that talks are ongoing with the Ministry of Justice about extending funding.

Hamilton & Others and Post Office Ltd – April 2021

Cases cited in Hamilton

• R v Togher and others [2001] 1 Cr App R 33 at [33]
• R v Maxwell [2010] UKSC 48 at [13]
• Warren and others v Attorney General of Jersey [2011] UKPC 10 at [24]
• R v Norman [2017] 1 Cr App R 8
• R v Mullen [1999] 2 Cr App R 143
• R v Jones [2019] EWCA Crim 1059 at [25]
• R v Early and others [2002] EWCA Crim 1904 at [18]
• R v Mears [2011] EWCA Crim 2651
• R v Sadeer [2018] EWCA Crim 3000
• Tague v Governor of HM Prison Full Sutton [2016] 1 Cr App R 15 at [49]
• D Limited v A and others [2017] EWCA Crim 1172 at [50]
• R v Berry (no 3) (1994) 99 Cr App R 88
• R v Mandair [1995] 1 AC 208
• R v Wallace Duncan Smith (no 2) [1999] 2 Cr App R 444 at p449E

In April 2021, after an appeal before three judges, Lord Justice Holroyde, Mr Justice Picken and Mrs Justice Farbey, thirty-nine of the convicted former postmasters had their convictions quashed, with a further twenty-two cases still being investigated by the Criminal Cases Review Commission.

At the commencement of the case three of the applicant SPMs were represented by Paul Marshall and Flora Page, his junior. In December 2020, Marshall and Page resigned from the case under threat from the court of contempt proceedings. That threat was lifted at a hearing in April 2021 before Lord Justice Fulford. It was Marshall and Page who led the charge on the critical second limb of the appeal, that it was an “affront to the public conscience for the appellants to face prosecution.

Forty-two historic convictions of dishonesty were referred by the Criminal Cases Review Commission (CCRC) to the Court of Appeal. "The CCRC referred the cases because it considered that two cogent lines of argument in relation to abuse of process were available to each appellant: first, that the reliability of Horizon data was essential to the prosecution and conviction, and it was not possible for the trial process to be fair; and secondly, that it was an affront to the public conscience for the appellant to face criminal proceedings." Each of the forty-two cases were considered individually. Of the forty-two just two had previously appealed, unsuccessfully.

The Post Office accepted Fraser's findings of the unreliability of the Horizon systems and, in some cases, of inadequate investigation, and/or of insufficient disclosure. In these cases, the Post Office did not resist the appeal on Ground 1 but it would oppose Ground 2. The Post Office divided the appellants into three groups; A, 4 cases where it asserted that both categories 1 and 2 abuse of process applied, group B, 35 cases where category 1 applied, but not category 2, and group C, where neither category applied. The Post Office would not seek a retrial of any appellant whose appeal is allowed.

Cases cited in Felstead

• Harman v Secretary of State for the Home Department [1983] AC 280
• Taylor v Director of the Serious Fraud Office [1999] 2 AC 177
• Mahon v Rahn [1998] QB 424
• Douherty v Chief Constable of Essex Police [2019] EWCA Civ 55
• Re L (a child) [2016] EWCA Civ 173
• Re Yaxley-Lennon [2018] 1 WLR 5400
• Re Ian West [2015] 1 WLR 109

At paragraphs 79 and 80 of the substantive Hamilton judgment the court referred to a directions hearing on 18 November. That hearing led to further hearings in November, December, and January. The court addressed three issues:

• information from Brian Altman QC, counsel for Post Office, alleging potential contempt of court by Ms Page, junior counsel for three appellants (all in group B), by improper disclosure of the 'Clarke advice'
• "the issue of whether an appellant whose appeal was not resisted by POL on Ground 1 was entitled to argue Ground 2;"
• an application by journalist Nick Wallis for the release of the 'Clarke advice'. Mr Wallis' application failed.

Mr Altman's information to the court on 19 November led to hearings on 3 December, 10 December and 15 January before the present court, and to Marshall and Page resigning from the case. On 3 December Altman said, "I am confident that the court understands why we brought these matters to the court's attention, ... For the avoidance of any doubt, I should like to make clear that the Post Office has not made application for anyone's committal for contempt. ... We have sought to assist the court as we were invited to do.", referring to signed undertakings, "... the court suggested that all legal representatives sign an express undertaking not to use disclosed material other than for the proper conduct of these proceedings." Lord Justice Holroyde interjected "I thought you suggested that", and Altman replied, "Ultimately, my Lord, I think it was at the suggestion of the court but that is what has happened and that is what has been done."

For Ms Page it was submitted that there had been procedural unfairness. Mr Henry, for Ms Page said, "Obviously we now know that ... the court can deal with it on its own initiative. I emphasise those word, on its own initiative, ... The court did no such thing, my Lords, my Lady. The matter was raised. The jack came out of the box as result of the respondent. ... And then, my Lords, ... but there has been substantive procedural unfairness. This is not mere technicality, complaining, ... I could use the pejorative term whinging, this actually goes to the heart of a fair process. ... what happened next? Well, my learned friend (Brian Altman QC), former first senior Treasury counsel at the Central Criminal Court, and I do not say that ad hominem, but I say that because it is profoundly regrettable that this occurred because the — " Lord Justice Holroyde interjected, "I'm bound to say it sounds a bit ad hominem." Mr Henry replied, "Well, my Lord, these proceedings are ad hominem." Holroyde: "We're not going to be helped ... I'm afraid by personalising matters." Mr Henry: "... but I do ask the court to consider whether — ... intended or not, is that these are very, very personal proceedings. They are in personam against my lay client, Ms Page." Counsel for both Marshall and Page argued that no proceedings for contempt had commenced and that it should be for the Post Office as 'respondent quasi prosecutor' to initiate any proceedings. Mr Lawrence, for Mr Marshall submitted that if properly formulated procedures under rule 48 commenced, the resolution of the issues would not be straightforward. "There was an important issue of law as to whether there is an implied undertaking in the circumstances that obtain here and, if so, its scope." Holroyde interjected, "I thought you weren't addressing us about the facts." Lawrence: "I'm not, my Lord. I'm addressing —" Holroyde: "You are. You are. You're seeking to make a point based upon an account that may have been given or be given by Mr Marshall. I'm afraid you can't have it both ways." Lawrence: "... What I'm seeking to do is I'm seeking to provide some assistance. What I'm seeking to do is to indicate the likely scope of a hearing at which a court, whether this constitution or a different constitution, ... on the potential allegations.

At the end of this 'For Mention' hearing, the court issued a brief judgment. "... we direct that the question of whether any contempt proceedings are to be initiated against Mr Marshall and/or Miss Page and, if so, whether by the Post Office or by the Court of its own initiative, must be adjourned for consideration after the appeals have been concluded. ... we direct that all further hearings must be before a different constitution." On 15 January 2021 the court set out its reasons. It led to Marshall and Page facing the possibility of an action against them, either by the court or by the Post office, for contempt of court. By 4 December barristers, Paul Marshall and Fiona Page had resigned from the Hamilton case. Mr Marshall had written two letters to the court. Of the second Nick Wallis said "It makes for troubling reading." In April 2021 the matter came before Lord Justice Fulford, Mrs Justice Cutts and Mr Justice Saini when it was declared no further action to be taken. Mr Marshall said “the threat of contempt proceedings from the outset was seriously questionable as a matter of law”.

The Attorney General instructed counsel as advocate to the court, Marshall and Page were succeeded by Ms L. Busch QC and Dr S. Fowles, and the court addressed "the issue of whether an appellant whose appeal was not resisted by the Post Office on Ground 1 was entitled to argue Ground 2." All counsel at the December hearing agreed that no appellant is entitled as of right to argue Ground 2. An earlier written submission to the contrary was not pursued. However, Ms Busch and Dr Fowles went on to argue that "... the court must act judicially. It would be wrong in principle for the court to permit the respondent (the post Office) effectively to preclude argument on Ground 2 by its concession that Ground 1 is not opposed. ... The appellants have suffered very severely as a consequence of their prosecutions, and a finding in their favour on Ground 1 alone would not fully vindicate them. ... She (Ms Busch) pointed out that there has been an important disclosure since the Commission referred the cases, and submitted that the public interest required consideration of the complete picture."

For the other applicants, it was submitted all were concerned about delay; only three of the whole group had actively sought to argue Ground 2 ... appellants would be content to have their appeals allowed on Ground 1 alone ... however, appellants do contend that Ground 2 is made out in their cases ... if the court concluded that argument should be heard on Ground 2, they would wish their submissions on Ground 2 heard.

The court ordered that, "... in the exercise of the court's discretion we would permit argument on Ground 2 by any appellant who wished to advance it. In the event, each appellant did wish to do so." The court set out its reasoning and highlighted four factors of particular importance:

1. abuse of court process is an important matter to the parties and the public, notwithstanding that the appellants had not previously applied for leave to appeal.
2. Ground 1 presupposes that there should be a prosecution. the public may legitimately feel ... that a finding in the appellant's favour on Ground 2 adds materially to a finding in his or her favour on Ground 1. ... If in fact an appellant should never have been prosecuted at all, ... the court should make that determination.
3. We are ... satisfied that case management can avoid any risk of these appeals becoming an open-ended exercise in finding facts.
4. Fourthly, we do not accept the submissions that consideration of Ground 2 will cause undue delay in the determination of these appeals.

At the April hearings, after considering the submissions of the SPMs and the Post Office the court stated "In those circumstances, we are satisfied that a fair trial was not possible in any of the “Horizon cases” and that Ground 1 accordingly succeeds in each of those cases." The court then set out its reasoning in respect of Ground 2. In short the court said:

1. POL deliberately chose not to comply with its obligations in circumstances in which its prosecution of an SPM depended on the reliability of Horizon data. ... an SPM who attributed a shortfall to a system error was dismissed as "jumping on the Horizon bandwagon". ... We are driven to the conclusion that throughout the period covered by these prosecutions POL's approach to investigation and disclosure was influenced by what was in the interests of POL, rather than by what the law required.
2. ... we are faced in these appeals with clear evidence of systemic failures by POL over many years. ... the same failures occurred in case after case, year after year, ... We see powerful force in the points that as late as summer 2013 it was still necessary for Mr Clarke to spell out basic principles ... the response to his advice was to suggest that information should not be recorded, in the hope that it would therefore not be disclosable. ... POL as prosecutor demonstrated, as Fraser J found ... "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". ... POL was able to and did, rely upon its own past abusive conduct by asserting that no previous challenge to Horizon had succeeded. ... POL ... knew that the consequences of conviction for an SPM would be, and were, severe. ... In each of the "Horizon cases" it is now rightly conceded that those human costs and consequences were suffered after the denial by POL of a fair trial.
3. ... most importantly in the context of category 2 abuse, POL's failings of investigation and disclosure (in Ms Busch's phrase) "directly implicate the courts". If the full picture had been disclosed, ... No judge would have been placed in the unhappy position of learning ... that they unwittingly sentenced a person who had been prevented by the prosecutor from having a fair trial.
4. ... the failures of investigation and disclosure were ... so egregious as to make the prosecution of any of the "Horizon cases" an affront to the conscience of the court. ... By representing Horizon as reliable, and refusing to countenance any suggestion to the contrary, POL effectively sought to reverse the burden of proof: it treated what was no more than a shortfall shown by an unreliable accounting system as an incontrovertible loss, and proceeded as if it were for the accused to prove that no such loss had occurred. Denied any disclosure of material capable of undermining the prosecution case, defendants were inevitably unable to discharge that improper burden. As each prosecution proceeded to its successful conclusion the asserted reliability of Horizon was, on the face of it, reinforced. Defendants were prosecuted, convicted and sentenced on the basis that the Horizon data must be correct, ... when in fact there could be no confidence as to that foundation.

Ground 2 therefore succeeds in each of the "Horizon cases".

The Clarke advice

The 'Clarke Advice' consists of two pieces of advice to the Post Office in 2013 by a barrister working for Cartwright King (CK(, a solicitors’ firm instructed in relation to the Post Office prosecutions. This document led to the "CK Sift Review" and the "Brian Altman General Review". The Sift review "raised the prospect of at least 26 potential miscarriages of justice and caused the immediate cessation of 4 prosecutions. It was concluded in 2014." It was disclosed in the Hamilton appeals in November 2020. by the Post Office amongst a bundle of post prosecution disclosures at the request of Aria Grace Law, the solicitors for three appellants in November, and was described by Lord Falconer, former head of the judiciary, as a likely "smoking gun".

The Clarke Advice had not been disclosed to the CCRC prior to its referral of the SPMs' cases to the Court of Appeal. Paul Marshall said "The Court of Appeal elicited acceptance that the provision of the Clarke Advice was an ‘error of judgment’ and that being done it was determined no further action was to be taken." "... the ‘Clarke Advice’ was pivotal in the Court of Appeal's finding that ... the Post Office was engaged in conduct that constituted an abuse of the process of the court and calculated to subvert the integrity of the criminal justice system or undermine public confidence in it. Its disclosure resulted in the much later disclosure of the “shredding” Clarke advice."

Aftermath

The Communication Workers' Union called for Vennells' appointment as a Commander of the Order of the British Empire (CBE), in the 2019 New Year Honours for "services to the Post Office and to charity", to be rescinded. In April 2021, after the overturning of the thirty-nine convictions, Vennells resigned as a director of Dunelm and Morrisons and as an associate Church of England minister.

Inquiries

On 26 February 2020, Prime Minister Boris Johnson committed to hold an independent inquiry. Evidence about the case was also heard by Parliament's Business, Energy and Industrial Strategy Committee on 10 March 2020. On 19 March 2020, in a debate in the House of Commons, Kevan Jones MP criticized former Post Office CEO, Paula Vennells, for her role in the scandal. Arbuthnot said in November 2019:

My own suggestion is that the government should clear out the entirety of the board and senior management of the Post Office and start again, perhaps with the assistance of consultancy services from Second Sight, who know where the bodies are buried.

In a written ministerial statement on 10 June 2020 Paul Scully, Minister for Small Business, Consumers and Labour Markets, announced the scope of the Independent Review into the Post Office Horizon IT System and Trials. Of the review's terms of reference, Lord Arbuthnot said in the Lord's chamber on 6 October "Yet the Government are expressly excluding from the scope of their inquiry the Post Office Ltd prosecution function, the Horizon group damages settlement and the conduct of current or future litigation. ... why have the Government excluded these most important things?" The minister replied the settlement agreed in December was full and final and therefore excluded from the scope of the inquiry ... the Post Office is not conducting any private prosecutions and has no plans to do so ... only the courts can decide on criminal matters, such as whether to overturn the postmasters’ convictions, so it would not be appropriate for the inquiry to look at these questions, especially when the court process is still ongoing.

The non-statutory inquiry, now titled The Post Office Horizon IT Inquiry by the government and led by Sir Wyn Williams, began work in Autumn 2020 and issued a call for evidence on 1 December 2020. The first public hearing session took place on 15 January 2021. The Justice For Sub-postmasters Alliance (JFSA) refused to take part in the inquiry, described it as a whitewash and called for a full public inquiry.

Dr Neil Hudgell, of solicitors for SPMs said "now Post Office officials must face criminal investigation for maliciously ruining lives by prosecuting innocent people in pursuit of profits", and called for the prime minister to convene a judge-led inquiry. After the SPM's successful appeals on both grounds 1 and 2 abuse of process, in an article headed "Calls grow for SRA and police to investigate Post Office lawyers", Hudgell is quoted as saying the Post Office engaged in ‘legal gymnastics to seek to persuade the court away from finding a clear systematic abuse of process of the criminal law’; in the same article Richard Moorhead, professor of law and professional ethics at Exeter Law School, said "the SRA and BSB should investigate whether anyone should be held to account amid professional concerns about who was responsible for disclosure issues." Solicitors for SPMs wrote to the government (DBEIS) asking it to re-establish the inquiry on a statutory footing and to consult again on the terms of reference. 'The department should be called as witnesses under oath, not have effective control of the inquiry,' ... 'The Post Office wrongly prosecuted so many upstanding pillars of the community and its owners want to mark (their) own homework – that is unconscionable.'

On 19 May 2021 the government announced that an extended, statutory inquiry into the computer scandal will deliver its conclusions in autumn 2022. Witnesses could now be compelled to give evidence. Mr Scully said he and Sir Wyn had agreed that the context of the events had changed after convictions were quashed and hundreds more were expected to follow. Boris Johnson said:

We must stand with postmasters to get to the bottom of what went wrong in the Post Office Horizon IT dispute. I heard first-hand the irreparable impact it has had on their lives. That's why, in light of the recent Court of Appeal judgment, we're stepping up our independent inquiry by putting it on a statutory footing, so we can get the answers they deserve.

The University of Exeter commenced a research project into the events surrounding the Bates and Hamilton cases.

"The case offers a seminal opportunity to examine important issues in corporate governance; criminal justice; and professional regulation, as well as government and parliamentary accountability. The outpouring of concern that the scandal has prompted reveals a desire for change which needs to be maintained and harnessed."

Statutory inquiry

Inquiry terms of reference

"The Inquiry shall:

A: Understand and acknowledge what went wrong in relation to Horizon, leading to the civil proceedings in Bates and others v Post Office Limited and the quashing of criminal convictions, by drawing from the judgments of Mr Justice Fraser in Bates and others, the judgments of the Court of Appeal (Criminal Division) in R v Hamilton and others, other judgments in which convictions have been quashed, affected postmasters’ experiences and any other relevant evidence in order to identify what key lessons must be learned for the future.

B: Build upon the findings of Mr Justice Fraser and the judgments of the criminal courts specified in A above by obtaining all available relevant evidence from Post Office Ltd, Fujitsu, BEIS and UKGI to establish a clear account of 1) the implementation and failings of Horizon over its lifecycle and 2) Post Office Ltd's use of information from Horizon when taking action against persons alleged to be responsible for shortfalls.

C: Assess whether Post Office Ltd has learned the lessons from the criticisms made by Mr Justice Fraser in his judgments following the ‘Common Issues’ and ‘Horizon Issues’ trials and those identified by affected postmasters and has delivered or made good progress on the organisational and cultural changes necessary to ensure a similar case does not happen in the future.

D: Assess whether the commitments made by Post Office Ltd within the mediation settlement – including the historical shortfall scheme – have been properly delivered.

E: Assess whether the processes and information provided by Post Office Ltd to postmasters are sufficient:

i. to enable both parties to meet their contractual obligations

ii. to enable postmasters to run their businesses. This includes assessing whether Post Office Ltd's related processes such as recording and resolving postmaster queries, dispute handling, suspension and termination are fit for purpose. In addition, determine whether the quality of the service offer for postmasters and their relationship with Post Office Ltd has materially improved since the conclusions reached by Mr Justice Fraser.

F: Examine the historic and current governance and whistleblowing controls in place at Post Office Ltd, identify any relevant failings, and establish whether current controls are now sufficient to ensure that failings leading to the issues covered by this Inquiry do not happen again.

The Inquiry will consider only those matters set out in the preceding sections A-F. The Inquiry will not consider any issue which is outside the scope of the powers conferred upon the Inquiry by the Inquiries Act 2005. The Horizon group damages settlement (albeit the Inquiry may examine the events leading to the settlement), and/or the engagement or findings of any other supervisory or complaints mechanisms, including in the public sector, are outside the Inquiry's scope.

Terms of Reference are not the same as a list of issues to be explored. The former set the boundaries of the Inquiry but do not go into any detail about the individual areas of focus or the particular lines of investigation. A list of issues provides more detail about the themes which the Inquiry will focus on. Over the course of the coming weeks the Inquiry Team will formulate a provisional list of issues to be explored by the Inquiry and then publish the same.

All Core Participants will have an opportunity to make written submissions as to the list of issues before the list is finalised. If Sir Wyn considers it necessary, he will convene a hearing at which oral submissions about the list of issues can be advanced by Core Participants. The timetable for making written submissions will be announced at the same time as the provisional list of issues is published."

Sir Wyn Williams, on 19 May 2021 said, "... In the coming weeks, the Secretariat will produce and publish a statement of approach ... In September, ... a further statement of approach which will set out all relevant details ..."

On 28 July the government (DBEIS) issued its fourth statement of approach, which included the inquiry terms of reference. After setting out preliminary and organisational matters – the appointment of solicitors and counsel to the inquiry – establishment of a website and of premises etc. the statement set out terms of reference, in essence:

A: Understand and acknowledge what went wrong and key lessons that must be learned.

B: Obtain all available relevant evidence from the Post Office, Fujitsu, BEIS and UKGI to establish the failings of Horizon and the Post Office's use of information from Horizon.

C: Assess whether the Post Office has learned and has delivered or made good progress on the changes necessary.

D: Assess whether the commitments made by Post Office Ltd have been properly delivered.

E: Assess whether processes and information provided by the Post Office to postmasters are sufficient.

F: Examine the historic and current governance and whistleblowing controls are now sufficient to ensure that these failures do not happen again.

"The Inquiry will consider only those matters set out in the preceding sections A-F. The Inquiry will not consider any issue which is outside the scope of the powers conferred upon the Inquiry by the Inquiries Act 2005. The Horizon group damages settlement (albeit the Inquiry may examine the events leading to the settlement), and/or the engagement or findings of any other supervisory or complaints mechanisms, including in the public sector, are outside the Inquiry's scope."

The Inquiry formally opened on 14 February 2022, at Juxon House, in the City of London, and is expected to run for most of the year. It is being streamed online.

Exeter research project

The research plans:

• To identify and analyse corporate and institutional failure, professional ethics failures, and systematic problems in the criminal justice system.
• Provide a submission to the Williams Inquiry and to lawyers’ professional regulators.
• To suggest areas of reform for criminal justice, professional regulation, corporate governance, and governmental accountability.
• To work on how to change the behaviours and cultures that led to such injustice.

Working Paper I has examined the conduct of the Bates litigation.

• "This paper reveals wide and deep concerns about the conduct of the Bates litigation by POL ... and their lawyers."
• "Whether the breaches of CPR suggested by Fraser J's judgment were accidental, negligent, reckless or deliberate and who is responsible for such flaws needs investigation."
• "Accountability for the strategy, and operationalisation of that strategy, should not be allowed to rest unscrutinised behind legal professional privilege nor need it do so should professional regulators investigate adequately. One reason is the significant potential for professional misconduct charges to flow against a number of the lawyers involved in this case."

Possibility of actions for malicious prosecution

In December 2019, The Register reported that Mr Justice Fraser would be passing a file on to the Director of Public Prosecutions. A number of cases are under review by the Criminal Cases Review Commission raising the possibility of actions for malicious prosecution.

Compensation

In 2021, the government promised financial compensation to the victims of the scandal. Nick Read, the Post Office chief executive, has urged the government to provide funding for compensation, "The Post Office simply does not have the financial resources to provide meaningful compensation," he said in a recent speech. "I completely understand that government is keen that Post Office should be seen to be fixing its own mess – and through the work being undertaken across the business every day to place the needs and interests of postmasters first, we are doing just that. ... But financial compensation commensurate with wrongful conviction is a different matter. ... I am urging government to work with us to find a way of ensuring that the funding needed for such compensation, along with the means to get it to those to whom it may become owed, is arranged as quickly and efficiently as possible."

The government announced that SPM wrongly convicted of offences would get interim compensation of up to £100,000.

Proposed reform on digital evidence

In May 2021 the British Computer Society (the official body for IT professionals in the UK) called for reconsideration of courts' default presumption that computer data is correct.

Investigative reporting

A BBC Radio 4 series about the scandal, The Great Post Office Trial, produced by Whistledown Productions, won two gold awards in the New York Festivals Radio Awards.

A book, The Great Post Office Scandal, written by Nick Wallis, was published by Bath Publishing in November 2021.

Individual cases

• Jo Hamilton, from South Warnborough in Hampshire, claims she first noticed problems with the Horizon system in 2005 and lost £36,000; she pleaded guilty to false accounting after trying to hide the resulting incorrect deficit. She was originally charged with theft, but was told that if she repaid the money and pleaded guilty to 14 counts of false accounting, she would be less likely to go to prison. At the time, she was told that she was the only person who had had these problems. She pleaded guilty, and, under the terms of her contract, she paid her wages for the next ten months to Post Office Ltd, and had to remortgage her house to pay the money. James Arbuthnot was her MP.
• Noel Thomas, a man who had worked for the Royal Mail for 42 years, spent his 60th birthday in prison as a result of the errors.
• Sarah Burgess Boyd, from Newcastle upon Tyne, said she lost her life savings in repaying an incorrect shortfall.
• Rubina Nami was jailed for 12 months in 2010 for false accounting of £43,000. She and her husband fell behind on mortgage payments and in February 2013 bailiffs seized their home and changed the locks. They slept in their van for six weeks before being given a one-bed housing association flat by the local council.
• Seema Misra was pregnant with her second child when she was convicted in 2010 of theft, and sentenced to 15 months jail. Misra told The Guardian that had she not been pregnant, she would have taken her own life. Local press reports at that time described her as the "pregnant thief" and her husband was physically attacked in the aftermath of her conviction. Misra has indicated that her ordeal was continual for the entire time period it took for the case to reach a resolution.
• There has been one documented suicide in connection with the affair.

See also

• Bates v Post Office Ltd (No 3)

Bibliography

• Wallis, Nick (18 November 2021). The Great Post Office Scandal (1st ed.). Bath Publishing. ISBN 978-1-9163023-8-9.

External links

Official

• Statutory Inquiry - official website
• "Post Office Mediation". Archived from the original on 15 December 2019. Parliamentary sub-committee
• "Hamilton & others -v- Post Office Limited". United Kingdom Judiciary. – Official finding of the April 2021 appeals, and summary

Media

• Post Office Trial Website with the hearing-by-hearing reporting by Nick Wallis, which has formed the basis of significant media reporting.
  • Text of speech by barrister Paul Marshall to the University of Law on 3 June 2021
• Post Office Scandal Website by Nick Wallis.
• File on 4: Second Class Citizens: The Post Office IT Scandal, BBC Radio 4 documentary, broadcast 16 February 2020
• Justice Lost In The Post, Private Eye special report, May 2020
• The Great Post Office Trial, BBC Radio 4 documentary series, broadcast 25 May – 5 June 2020.
• Scandal at the Post Office, BBC Panorama programme, broadcast 8 June 2020.

Campaigning

• Justice for Sub-postmasters Alliance Campaigning group. Site includes relevant documents.
• FoI requests by Alan Bates on behalf of JFSA, made via WhatDoTheyKnow under the Freedom of Information Act 2000