Tuesday, November 12, 2019

What Bates v Post Office did next: Court of Appeal

The Royal Courts of Justice, home of the Court of Appeal
This is a proper court building. I turned up early with the specific intention of staking out a place in Court 63 near a plug point in order to make sure I could bang out some tweets, when I just happened to bump into a Senior Litigation Lawyer I know. He too was heading to Court 63.

We exchanged pleasantries and got through the x-ray machine without too much difficulty, but because we were chatting, and because I was subconsciously thinking, "this chap is on home territory", I let him take the lead.

Several minutes later, after encountering interminable flights of stairs, walking along basement corridors into dead ends and having navigate the RCJ's famous Bear Garden (disappointing lack of bears or garden) twice, we eventually worked out that we needed to be in the West End of the East Wing, not wherever we were. So we began walking (at some pace now, given we didn't want to arrive after the judge) back out through a courtyard, up some more steps into another entirely wrong part of the building before we gave up and started again.

"I thought you would know where to go!" I said to the Senior Litigation Lawyer as we semi-ran towards the court.
"I live in Leeds!" he replied.

We eventually found the right place - one of the pokey "modern" courtrooms at the back end of the estate. I staked out a good position on the press bench, found a power source (yay!) and was settled with my laptop set to speed-tweet mode before the judge arrived.

Meet the team

The legal team representing the Post Office at this appeal hearing are a new bunch. Helen Davies QC from Brick Court Chambers led the barristers, and the solicitors are Herbert Smith Freehills. Behind the HSF team were the Post Office's WBD team of solicitors including Andy Parsons. Alan Bates for the JFSA was present, as was Angela van den Bogerd, a Post Office director.

Everyone was robed, with wigs (the Bates v Post Office litigation at the Rolls Building is conducted in suits), and the court was packed. And getting stuffier and stuffier. Some barristers, who have to expend quite a bit of brain power during a hearing, looked worried. The heroic QC for the respondent Subpostmasters, Patrick Green, took an executive decision to open a window close to where I was sitting. Everyone relaxed.

Lord Justice Coulson entered and announced he wasn't going to talk much ("which is a good thing") as he had a sore throat.

So what happened? Well... the Post Office are not seeking to persuade Coulson LJ that their application to appeal significant chunks of the first trial judgment is correct, just that it has reasonable grounds of success. It's a low-ish bar. Lord Coulson can cherry pick what he will or won't allow, accept all grounds or chuck it out.

Today's oral hearing follows a skeleton argument and Grounds of Appeal submitted by the Post Office back in September, to which the Subpostmasters replied with a Statement of Objection. Thanks to both parties' commitment to open justice, you can read them all here.

The Post Office's latest QC is very good, as they all are, but within seconds (and despite saying he wasn’t going to talk much), the judge interrupted Ms Davies' introduction to tell her: "You can take it that I have read this stuff, some of it twice, some of it three times." She moved on.

The Post Office's case is that the judge has erred in his interpretation of case law in a number of areas, particularly with regard to good faith elements of relational contracts, the termination clauses within the Subpostmaster contracts, the areas of the Subpostmaster contract which are too onerous or unusual to be lawful, whether the Subpostmaster contract is governed by the Unfair Contract Terms Act (UCTA) and the obligations on a Subpostmaster as an agent of the Post Office.

These are all crucial areas to the Post Office, because if they are found in breach of contract as interpreted by Judge Fraser in a future "breach" trial, they will be liable for gazillions.

When it comes to termination Ms Davies spelt it out. She told Lord Justice Coulson that the Post Office has received particulars relating to the Heads of Loss/Quantum/Further Issues trial which is due to take place in March. She said that Lead Claimant Naushad Abdulla is claiming that if he had not been summarily terminated by the Post Office he would expect to be in post until 2043, and wished to claim against them for loss of future earnings. Ms Davies made no comment as to whether this was likely, but her point stood. If Fraser J's interpretation of the termination clause in the Subpostmaster contract was correct, then the way in which the Post Office terminated Mr Abdulla's contract would likely be found in breach, costing it lots and lots of money. Multiplied by a large chunk of the claimants in a similar situation. Hence the hundreds of millions of pounds being bandied around.

Although Coulson LJ didn't say so, that's not his problem.

The judge, throughout Ms Davies' evidence, sought to restrict her submissions to the specific Grounds of Appeal she was meant to be talking about, and I got the sense this was for two reasons.

Anything not limited to the Grounds of Appeal was off limits, as those were the grounds on which the appeal application was admitted. Also, much as the Post Office might want one, any appeal is not going to be a retrial, and by accepting wider submissions as part of the application, there was a danger Coulson could end up being asked to make a decision on the Common Issues trial he would be less qualified to make than Sir Peter Fraser.

At one point he even told Ms Davies, that "no one" would ever know more about the Subpostmaster contract than Fraser J - the point being that whilst the decisions of the Court of Appeal supersede the High Court and the judges at the Court of Appeal are more senior than High Court judges, the sheer amount of work that Fraser had put into studying the Subpostmaster contract could not be lightly dismissed or repeated.

Everything's Gone Green

It was this element which Patrick Green, QC for the Subpostmasters, latched onto with his opening remarks. Speaking after Ms Davies had been on her feet for two hours, he told Lord Coulson "not only does the judge [ie Fraser] deserve credit for the work put into the judgment, but he also deserves credit for getting it right."

What followed was a slow demolition of Ms Davies arguments, using specific examples from the first trial which sought to explain to Lord Coulson that Fraser J was looking at everything in the round to inform his decisions. Not just case law, but witness evidence, arguments presented by the legal team and his own knowledge and experience.

Mr Green raised the issue of the contractual obligations of the Subpostmaster, pointing out the judge was given six lever arch files of double-sided printing which was the sum total of the rules and contracts the Subpostmaster signs up to on taking over a Post Office. Mr Green said that in court none of the Post Office witnesses could answer any of his questions as to what was in these documents and how they were implemented. He raised the example of the Book of Rules, which according to the paperwork, the Subpostmaster is bound by. The Book of Rules ceased to be used by the Post Office some 20 years previously and when the claimants lawyers had asked for it, no one at the Post Office could find one. Mr Green used this as an example of the real contractual environment the Subpostmasters were working in on a day to day basis.

"The judge" said Mr Green, "heard gallons of evidence about the run-up to the making of these contracts.  He also heard evidence from which he could understand the contractual context, how things actually worked in practice, and there was also some evidence that you could characterise as post-contractual: what happened? "

This continued in a similar vein until 3.30pm, when Ms Davies was able to reply to Mr Green. At one point she mentioned that Fraser looked at lots of issues outside the straight up Common Issues which were being decided in the first trial.

Lord Coulson interrupted her pointing out this complaint was raised in the Post Office's recusal application.

"Sorry, my Lord, forgive me...?" asked Ms Davies, who was not present during the recusal application.

"It was a point that was taken that the judge should not have dealt with those points." explained Lord Coulson. "He should not have descended into the detail in relation to the terms because that was for the breach trial."

"Clearly" muttered Lord Coulson, "that was piffle."

Whilst much of Ms Davies' reply to Mr Green's objections were very technical, she did score a couple of hits. In some ways it would be extraordinary if Fraser J hadn't made some mistakes in his epic 180,000 word first trial judgment. Whether or not they are egregious enough to allow any appeal is for Lord Coulson to decide.


And he is going to decide soon. The mediation I first mentioned back in October is definitely going to happen. Both parties are going to sit down in a room to go through a confidential discussion process on the 27th and 28th of November.

What is said in that room will probably never be repeated by either party. If initial talks are successful, I expect the mediation will continue next year alongside preparations for the March 2020 trial.

I was told that there are no pre-mediation discussions about anything other than logistics. It's a blank sheet of paper and a chance for each side to speak candidly to each other outside legal protocols.

From what we have heard from the claimants, the Post Office is going to have to sit down with millions of pounds in front of it on the table. It will also presumably have be open to solutions which deal with the criminalised cohort of Subpostmasters AND demands for some kind of public apology.

If all three of the above are not part of any deal, the claimants will likely reverse out of the room and head straight back to Court 26 of the Rolls Building, and this litigation will continue.

Lord Coulson asked if it would be helpful if the parties got his decision on the appeal application before the mediation started, suggesting "it may have some materiality to the mediation."

Ms Davies wryly agreed, saying that "can't be ruled out."

So Coulson LJ told the court unless they heard otherwise he would deliver his decision on the Post Office's application to appeal on or before 22 November, giving the parties sight of it before they get down to mediation.

I suspect Fraser J will also be looking to hand down the Horizon trial judgment before mediation begins.

Neither judge is bound to do this as mediation is an entirely separate process to the courts, but given both the appeal application decision and the Horizon trial judgment will have a massive bearing on the chances of either party succeeding in this litigation, knowing what they contain will necessarily inform their approach.

If you can, please help keep this crowdfunded public-interest journalism project going by chucking a few quid in the tip jar below. Contributors who give £20 or more will start receiving regular "secret" emails which have all the info and gossip about this litigation as it makes its way through the courts. Click here to see how and where your money is being spent.

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Tuesday, November 5, 2019

The Post Office's Journey Into Disaster: oversight/accountability pt 1

I realise this blog post will be of interest to perhaps seven or eight people, but hopefully those people will be of sufficient influence to make it worthwhile. If you're a casual reader, I challenge you to get through it. A mince pie to all who do:

Accountability and oversight

The government has a problem. It has allowed the Post Office (of which it is the sole owner) to find itself mired in a multimillion-pound litigation at the High Court, and become the subject of a long-running investigation by the Criminal Cases Review Commission.

If the Post Office loses the claim against it at the High Court, it will face a damages bill which could run into hundreds of millions of pounds. This could stop the Post Office from being a going concern. Which will then become a bigger problem for the government.

Jo Hamilton
Ministers consistently deflect attention from this looming potential disaster by telling journalists the Post Office is a private limited company making its own operational decisions. This is horseshit.

Jo Hamilton is a former Subpostmaster from South Warnborough in Hampshire who was prosecuted for theft by the Post Office in 2006, despite a Post Office internal memo stating there was no evidence of theft. She pleaded guilty to false accounting (a condition of dropping the theft charge) and was spared prison by spending her life savings (and remortgaging) to make good the discrepancy alleged to have arisen at her branch.

Jo featured in the 2015 Panorama episode (filmed shortly after the above memo came to light) and her case is lodged with the Criminal Cases Review Commission which deals with miscarriages of justice. Jo has been waiting for some time for any indication she might get redress. The CCRC has been investigating for four years now, and the High Court case (Jo is one of the 550+ claimants) has been rumbling on since 2016.

David Hamilton
Jo is in her sixties, working as a cleaner. Her husband David is in his seventies, grafting in all weathers as a landscape gardener. I've seen what the cold does to his fingers. It's not good. The Hamiltons have no retirement fund. Time is running out for many of the claimants in this case. So what has the government been doing to bring this long-running situation to a conclusion?

In a letter dated 1 Aug 2019, the Minister for Postal Services, Kelly Tolhurst, told Jo's MP:

"Post Office Limited is handling the defence of this group litigation. While publicly owned, Post Office Limited operates as an independent, commercial business and the matters encompassed by this litigation fall under its operational responsibility. However I would like to reassure you that I take this matter very seriously and I am monitoring it closely.... I believe that the courts are the right place to hear and resolve what are long-standing issues between some Postmasters and the Post Office Limited so that postmasters with claims can obtain a remedy if the court finds there is validity to those claims."

This final sentence, stating that the courts are the "right place" to resolve what has happened to Jo, is a line which echoes the Post Office's statement that the litigation “offers the best opportunity for the matters in dispute to be heard and resolved.”

From reading the above, you'd think the government and Post Office, out of the kindness of their hearts, trotted along to the High Court and asked the judiciary to look into the claimants' issues.

Instead the government has done nothing to help abandoned Subpostmasters, and the Post Office has been dragged kicking and screaming to court where it has deployed a series of viciously aggressive litigation tactics in the hope the claimants' case would collapse and/or run out of money.

If this blog post achieves anything, it should nail the lie that the Post Office is solely responsible for handling the Horizon scandal. It is not.

Successive governments have been well appraised of what has been going on. They had multiple opportunities (and reading the documentation below - requirements) to intervene in a way which might have been meaningful to the claimants, yet they failed to do so.

I appreciate the last thing any ambitious government minister would want to do is kick a hornet's nest (especially over a story like this, which has failed to get much media traction over 20 years), but you would think someone might consider sticking their necks out.

How did it come to this?

As well as selling stamps, checking your passport photo and paying out your benefits, over the last 20 years the Post Office has had a nice sideline in allegedly destroying the lives of many of its Subpostmasters.

Former Subpostmaster Alan Bates was raising the alarm about this in 2004. Over the last decade, several dozen backbench MPs raised the alarm in parliament, led by James (now Lord) Arbuthnot. The government and the Post Office went through the motions of looking into the issue, but a Post Office-funded complaint scheme collapsed in acrimony.

Earlier this year I buttonholed the Postal Services Minister and two senior civil servants about the government's oversight of the Post Office. After the encounter I concluded the government would be mad not to be scrutinising the Post Office, but I wasn't really any the wiser as to how.

The Shaikh down

Just before summer I was approached by a reader of this website, Eleanor Shaikh, who asked if she could do some background research into the government's oversight of the Post Office, with a view to sharing it on this blog.

Eleanor sent me an extraordinary document, packed with references, and gave me her blessing to check, re-order, re-phrase and publish it as appropriate. All errors below are therefore mine, but the credit for this work belongs solely to her.

Let's start at brass tacks. What is the Post Office?

The Post Office is a legal entity called Post Office Limited. It is wholly-owned by the government. It was created on 2 April 2012 as it demerged from Royal Mail Group. A “Special Share” was allocated to and is currently held by the Secretary of State at what is now the department for Business, Energy and Industrial Strategy (BEIS).

BEIS describes the Post Office as one of its Partner Organisations, specifically a Public Corporation, defined as such because it derives: “more than 50 per cent of [its] production costs from the sale of goods, services or regulatory activities.” (p19 3.37 - 3.38 BEIS Accounting Officer System Statement) 

Oversight of the Post Office is provided by an outfit called United Kingdom Government Investments, a government-owned company staffed by civil servants and controlled by the Treasury. (p13 UKGI annual report 2018/9)

UKGI calls itself “the government's centre of excellence in corporate finance and corporate governance”. According to the Post Office annual report 2017/8, UKGI monitors the Post Office for “compliance” and “performance” and appoints non-executive directors to the Post Office board. 

As well as being a Partner Organisation of BEIS the Post Office is designated an official government Arm’s Length Body (ALB). ALBs are defined by the Treasury as “central government bodies that carry out discrete functions on behalf of departments, but which are controlled or owned by them. They include executive agencies, non-departmental public bodies (NDPBs) and government-owned companies.” (HM Treasury's Managing Public Money, 2015, quoted on p12 of a National Audit Office document Departments’ oversight of arm’s-length bodies)

Despite UKGI stating it is acting "as shareholder for, and leading the establishment of, UK government’s arm’s length bodies”, the NAO document above traces ultimate responsibility for ALBs to the Cabinet Office, stating it is the Cabinet Office which:

"oversees the public bodies landscape... It relies on departments to follow its guidelines and to establish appropriate and robust ‘sponsorship’ arrangements for ALBs. The Cabinet Office also owns the process for reviewing ALBs."  (p16, fig 2)

This structural connection to the Cabinet Office is interesting, not least because Paula Vennells, former chief executive of the Post Office was appointed as a non-executive director of the Cabinet Office earlier this year.

Ms Vennells' tenure at the Post Office spanned critical years of the Horizon controversy, yet she has consistently refused to be held to account for her actions during that period. Now she is a non-executive director of the very government department with ultimate responsibility for the oversight of the Post Office. 

Interestingly, when the blogger Tim McCormack asked the National Audit Office to investigate the Post Office over its various failings, the NAO replied (see below) saying it can't, specifically: "there has been no change to our access rights that would permit us to undertake an investigation into matters concerning Post Office Limited."
NAO letter to Tim McCormack

Executive power

The current Secretary of State for BEIS is Andrea Leadsom. She holds the Post Office special share on behalf of the government. Ultimate responsibility for the Post Office lies with her. But how is her power exercised?

A 2014 Civil Service document, Introduction to Sponsorship, maps the line of accountability within government departments from an ALB to the Secretary of State, or 'Sponsor Department'. The term ‘sponsorship’ is used to refer to the link between departments and their ALBs. ‘Sponsor’ refers to the Secretary of State or Accounting Officer (AO) acting on his/her behalf. Page 14 of Introduction to Sponsorship notes:

“On behalf of the Secretary of State, acting through the senior sponsor, the department must exercise meaningful and commensurate oversight of ALB strategy, financial management, performance and risk management.”

It adds: “the Secretary of State is ultimately accountable to Parliament for the overall effectiveness and efficiency of each ALB of which their department is responsible.”

It's not just about oversight. BEIS is required to actively involve itself in the affairs of the Post Office, as the 2015 cross-government briefing Companies in Government states:

“Departments are expected to play an active role in the governance, financial management, risk management and performance monitoring of ALBs and are responsible for managing the relationship with an ALB on behalf of the Minister and the AO." (p32)

Another National Audit Office document reminds us:

"The Minister in charge... has a duty in Parliament to account, and to be held to account for all the policies, decisions and actions of the department including its arms’-length bodies." (Comptroller and Auditor General, Accountability to Parliament for taxpayers’ money, (session 2015-2016 HC849 National Audit Office Feb 2016’p12, point 1.3) italics added)

That said, the Secretary of State can discharge his/her responsibilities through the senior sponsor, or departmental AO, who in turn is responsible for overseeing that the ALB AO manages public money appropriately, as the guide Introduction to Sponsorship notes: "intervening where necessary if an ALB is drifting off track." (p11)

Everybody say AO

Alex Chisholm has been BEIS’s Principal Accounting Officer (AO) since he succeeded Sir Martin Donnelly in 2016. Mr Chisholm is also the BEIS Permanent Secretary, appointed by the Treasury. His role as AO includes “responsibility for regularity and priority of the public finances… for keeping proper records and safeguarding assets”

As AO for BEIS, Alex Chisholm’s responsibilities extend to being the Accounting Officer for the Post Office, either directly or through the Post Office chief executive. His powers, according to The Accounting Officer’s Survival Guide are extensive:

"...the principle accounting officer always has powers of influence through his or her position. Both principal accounting officers and arm’s length body accounting officers should appreciate that this intrinsic power exists and may be used. In extremis, and depending on the scale of the issue, the principal accounting officer may even need to replace the leadership of the arm’s length body." (p7, point 35)

It is essentially up to the AO to use his/her own discretion to ascertain when it may be appropriate to intervene in the activities of an ALB and to personally judge the level of any such intervention if necessary:

"All sponsors must strike a balance between control and allowing the sponsored body to operate independently day-to-day. Control is necessary because it is the department that is ultimately accountable to Parliament for the use of public funds by their sponsored ALBs… Another reason for control is that ALBs can pose risks to their sponsoring department, whether they be financial, legal, reputational or otherwise." (BEIS Accounting Officer System Statement 2018, p14, point 3)

Explicitly, as per the Accounting Officer's Survival Guide: "It is the accounting officer’s job to spot when issues are sufficiently tricky or significant to merit his or her intervention." (p10, point 55)

Next time the government says that it cannot or should not intervene in the operational affairs of the Post Office, point them to the documents above.

When the Post Office tried to pull a fast one

The executive line of accountability through the AO between the Post Office and BEIS was exercised earlier this year when Alex Chisholm found the Post Office was using government grant money intended for transformation and business investment to fund its legal fight against the Subpostmasters in the High Court. 

In a letter dated 3 January Mr Chisholm told Post Office chief executive Paula Vennells she must not to use any government money given to the Post Office for transformation and business investment to pay litigation costs. 

Mr Chisholm’s letter contained the reminder "As Principle Accounting Officer I am personally responsible for ensuring the department has a high standard of governance and exercises effective controls over the management of resources, including those of its partner organisations". 

Ms Vennells ended up handing £2.3m back to the government. I am indebted to Tony Collins and Tim McCormack for getting this information into the public domain. Ms Vennells, as we know, was rewarded with her non-exec gig at the Cabinet Office and a CBE. 

Sounds like Mr Chisholm is watching the Post Office like a hawk, right? But how thoroughly was BEIS’s Accounting Officer monitoring the Post Office in the years leading up to the current litigation, when the Post Office was merrily suspending, sacking and prosecuting so many Subpostmasters? And who was checking on the AO's oversight?

An Accident of History

Scattered across documents currently in the public domain are intimations that in the complex landscape of ALBs all is not as it should be, and that the Treasury needs to tighten its oversight of AOs.

Starting with AOs, the National Audit Office says: "HM Treasury has not asserted its own key role in setting the overall framework for AO accountability and providing clarity about expectations on AOs". (Accountability to Parliament for taxpayers’ money, p9 point 12)

It adds: 
"departmental accounting officers must take firmer ownership of the whole systems of accountability for which they are responsible, particularly where responsibilities are delegated, devolved or shared." (ibid, p10 point 16)

With regard to ALBs, the House of Commons Committee of Public Accounts 2016/7 report, Departments’ oversight of arm’s-length bodies notes the regulation and oversight of ALBs is "not particularly clear across government", "very messy" and to some degree "an accident of history." (p8, point 5)

It urges the Cabinet Office to "use its position at the centre of government to ensure that departments improve the way they manage their business through arm’s length bodies." (p3 para 2) and adds: "unclear lines of accountability between departments and arm’s length bodies mean that it is not clear who to hold to account. Members of the public interacting with an arm’s-length body should be able to find out easily what the chain of command is from arm’s-length bodies through to departments." (p5 point 2)

At the end of Departments’ oversight of arm’s-length bodies the question is raised as to "whether the fashion for arm’s-length bodies went too far. Perhaps what we need to do is look very closely at what we are left with and see whether they need to be brought closer to Government so that the risks are reduced." (p22 Q46)

Wait. There's more.

Written to address the debate on the relationship between government and its ALBs back in 2010, the Institute for Government sets out a 10 point programme of embedding sustained  accountability in its document Read Before Burning: Arm’s Length Government For A New Administration sets out a 10 point programme of embedding sustained accountability for ALBs, noting:

"ALBs remain the one part of government without any routine process of independent reviews, meaning that inquiries typically take place only after things have gone badly wrong." (p11, par 5)

and: "one key question here is the need to more fundamentally consider how ministers and Parliament can execute their scrutiny functions in relation to ALBs." (p6, par 2)

Read Before Burning's 2012 blockbusting sequel - It Takes Two: How To Create Effective Relationships Between Government and Arm’s-Length Bodies continues the theme: "we identified a range of problems between government and its arm’s-length bodies - a lack of clarity on roles and responsibilities, underinvestment in sponsorship as a function, problems of turnover on both sides of the relationship, lack of induction - as well as more specific areas of tension over the degree of independence of ALBs." (p6 par 4)

Finally, the 2014/5 Public Administration Select Committee report Who’s Accountable? Relationships Between Government And Arm’s Length Bodies acknowledges: "Accountability for arm’s length bodies is confused, overlapping and neglected, with blurred boundaries and responsibilities." (p10, point 13)

But it goes on to offer a solution:

"Accountability arrangements are set out in documents known as ‘framework agreements’ or ‘framework documents’ and in ‘Accountability System Statements’ or ‘Statements of Accounting Officers’ responsibilities’. This is a formal agreement which ought to exist between all Departments and their ALBs, to be regularly updated and publicly available." (p17, point 27)

The function and importance of such agreements are also referred to in many of the above documents, as well as HM Treasury's Managing Public Money (2013, updated 2016) which devotes a 17 page annex to the drawing up of Framework Agreements.

In the annex, the authors are clear:

"Sponsors will be involved in agreeing an appropriate Framework Document with an ALB, detailing the overriding principles of governance and the relationship with the sponsoring department." (p16, point 3.1)

And, significant to an analysis of the BEIS/PO Ltd relationship: "it should detail the circumstances of, and rights upon, intervention." (p34)

So where is the Framework Agreement/Document/System Statement which details the relationship between government and the Post Office?

Reader, it doesn't exist.

Despite the problems of accountability and oversight of ALBs being specifically highlighted since at least 2010, despite a solution being posited by the Public Administration Select Committee, despite a seventeen page how-to document written by the Treasury, and despite clear evidence the Post Office went rogue in its treatment of Subpostmasters (finally acknowledged in a 180,000 word High Court judgment handed down in March this year), no one in government or the civil service has yet written a framework agreement which might get the Post Office back under control.
Eleanor Shaikh, pictured shortly after a successful deep dive
 into yet another tranche of tedious documentation.

We know this because Eleanor Shaikh, after doing all the above research, went looking for the Post Office's framework agreement, and couldn't find it.

After entering a request under the Freedom of Information Act, she was fobbed off on 15 May this year with the Post Office's Articles of Association and Entrustment Letter. Eleanor persisted, and on 15 June, BEIS admitted that:

"there is currently no Memorandum of Understanding, Framework Document or Accountability Systems Statement which exists between this Department and the Post Office. I am sorry this was not made clear in our previous replies."

Maybe Eleanor's requests have prompted the great minds at BEIS to start knocking something together, because in the same letter she was told "we are working towards putting one in place."

About time, lads. About time...

Part 2 of this admittedly niche appraisal of the failures of oversight and accountability affecting the Post Office will follow shortly. In it, Eleanor's research gets all up close and personal with the repeated failures of the government in its duty to investigate several red flags about the Horizon computer system which were thrown up over the last decade.

If you can, please help keep this crowdfunded public-interest journalism project going by chucking a few quid in the tip jar below. Contributors who give £20 or more will start receiving regular "secret" emails which have all the info and gossip about this litigation as it makes its way through the courts. Click here to see how and where your money is being spent.

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Wednesday, October 23, 2019

Costs, KELs, mediation and another investigation?!

The Rolls Building sign, about to topple
onto an unsuspecting barrister.
There was a costs hearing at the Rolls Building today, but the revelations concerning the cash both parties have burned through on this case was the least interesting thing about it.

What was originally only going to be an hour in court became almost a full day's hearing as the two parties vied to have various eye-watering expenses attached to proceedings or removed.

I made a guesstimate in an earlier blog post that the combined costs for this litigation must be around £42m by now.

Today I found out that up to 3 Sep this year the combined totals spent were at least £36.3m, but excluding money spent by both parties on their fight in the Court of Appeal. Also outside this total was the Post Office's costs in contracting a technical team at Fujistu and a team of "shadow" experts sitting within the Post Office reviewing all the stuff they get from their own systems and Fujitsu before it is disclosed to the Post Office's legal team.

I don't know for sure, because I didn't have the spreadsheets the parties were poring over (which were 7 weeks out of date anyway), but I reckon I my £42m guesstimate is possibly a slight underestimate, if anything.

More mediation news

The most newsworthy nugget for me today was a sense of how desperate the Post Office appears to be to start settling the case. They want to do this via a process called Alternative Dispute Resolution (ADR), a structured method of resolving matters outside a courtroom.

We know the Post Office has been keen on mediation more or less since it failed to get the presiding judge sacked for producing a judgment it didn't like. But today the urgency was spelled out in court by its barrister Owain Draper, who was, at the time, trying to justify the Post Office's gargantuan ADR budget. Mr Draper told Fraser J:

"There's no shying
 away, my Lord, from the fact that Post Office has spent
 and proposes to spend a great deal of money seeking to
 settle the litigation at this stage. It's seeking to
 devote resource proportionate to what it's spending on
 fighting the case trying to settle it, trying to resolve 
it by compromise. If one puts the costs of settlement
 in the context of the total costs of the proceedings,
       whilst very substantial, they are not out of line.

That's not to say the Post Office is about to fold - the next trial date (2 March 2020) is slowly rumbling towards us - and the Post Office will be aiming to put its case robustly. It is also taping its hands ahead of a Court of Appeal hearing in November, where it will seek to land some body blows on the first trial judgment - to lessen the impact on its current business and the value of the litigation claim.

Any decisions in the Post Office's favour, including in the forthcoming Horizon judgment, will inform its approach to mediation. ADR is therefore not a softening of the Post Office's position in this litigation - it's just another battlefront.

Horizon trial judgment release date

The judge announced the Horizon trial judgment (judgment number six, confusingly) will appear in two distinct parts. Part one will be the main judgment and part two will be what he called a "technical appendix" which he described as dealing "with some of the more technical computer aspects,
 which an average reader won't necessarily need or want
 to read."

Fraser J said he had hoped to get both parts to the parties by the very end of October (next week) in draft, but now that wasn't going to happen "so if any of you do have children.. who have half-term holidays next week, you
 won't be getting the draft judgment during half-term."

The judge said he was now intending to release the judgment early in November, but before that could sink in Mr Draper stood up with a potential problem. Basically the Post Office's Fujitsu team, diving around in Horizon's murky depths, came across some KELs [Horizon Known Error Logs] relating to problems potentially affecting Subpostmasters, which had not been disclosed to court.

KELs bells

"What we have discovered" announced Mr Draper, "are not new KELs in
 the sense that they are documents never before the court
 in any form, they are just back versions of existing

How many? The guess was "in the low hundreds". The judge wanted to know more.

"My understanding" continued Mr Draper "is some of them differ in tiny
 and immaterial respects, like a typo has been corrected" but others were earlier versions of the KELs which were "less complete versions of the final one.

The claimants' barrister, Mr Warwick, was not going to take Mr Draper's description at face value, suggesting "the claimants would very likely have quite a lot to say
 about these particular [KELs]... suffice to say, my Lord, that the
 explanation given of the nature and number of those
 documents is not necessarily accepted at all."

The judge was unbothered. He wearily admitted he had a recollection of seeing something about these undisclosed KELs in recent correspondence from both parties, but he was taking "what could be described
 as a passing mental note of it and not really paying too
 much attention", because
 "I'm at the point where, so far as I was concerned,
 the trial has ended."

He asked the parties to keep him informed of any development on the KEL front, particularly one that might delay the handing down of his judgment because though now it wasn't coming out in October "it won't be much past
 the early days of November."

This means it should land before the Court of Appeal hearing on 12 November.

Oh so you want to do a proper investigation now, do you?

Finally, a note on the effect of the Common Issues trial judgment of 15 March 2019 and how it is still sending shockwaves through the Post Office. The Post Office has tasked Herbert Smith Freehills (HSF) to take charge of its ADR processes. According to Mr Warwick, HSF is planning to "investigate, with respect to each of the 555 claimants,
 training materials, accounts, correspondence... they want to investigate whether each has been subject
 to a bug or error that caused a lasting shortfall, so
 they want to look at Horizon data date by date.

He added this proposed investigation "covers decades, different contracts and
 many different types of alleged breach of duty."

HSF propose this would be done at a budgeted cost of £1,328 per claimant [good luck with that one - ed].

Mr Warwick looked askance at the idea that this should be a recoverable cost from the litigation. He said that in the light of the Post Office's responsibilities which the judge had decided were part of the Subpostmaster contract in the first trial judgment, this was "simply something that
 this business has to undertake anyway as business cost".

The implication being if the Post Office had interpreted its contract properly and done these kinds of investigations when problems arose, we wouldn't be having a litigation in the first place.

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Wednesday, October 16, 2019

Post Office director bonuses sort-of slashed over High Court litigation failures

A fun document.
A cloud hangs over this year's Post Office annual report. Just twelve months ago the Post Office casually suggested the group litigation brought by Alan Bates and other claimant Subpostmasters "lacks merit".

Now it is taking things very seriously. Looking at the numbers, it's not hard to see why. The financial implications of a claimant victory could stop the Post Office from trading as a going concern.

Of course, anything like that is a long way off. But the gizzard-twisting amounts of money already spent on legal fees makes you wonder if the taxpayer-owned Post Office really knows what it's doing.

The numbers

According to the 2018/9 annual report:

Up to the financial year ending March 2018, the Post Office spent £3m fighting the claimants.

During the financial year ending March 2019, the Post Office spent a whopping £20m.

In this last exciting twelve month period we:

- witnessed the first (Common Issues) trial, during which a Post Office director was found to have tried to mislead a judge under oath.

- witnessed the start of the Horizon trial, during which we discovered branch accounting data (the sanctity of which was the basis of any Subpostmaster prosecution) was manipulated regularly by Fujitsu engineers.

- witnessed a disruptive attempt by the Post Office to have the managing judge removed from the whole litigation on grounds of "apparent bias".

- received the first trial judgment, which found resoundingly in favour of the claimants.

The latter cost the Post Office £6m, as it was ordered to pay 90% of the claimants' legal fees. The remainder of the £20m was spent on its own legal expertise.

This £20m was taken out of the Post Office's operating profit as an exceptional item and helped bring down the Post Office's overall operating profit from £47m last year to £6m this year.

This serious (and some might argue, self-inflicted) dent on the bottom line appears to have brought about a slight change of tone at the Post Office. The annual report notes:
"The ongoing litigation involving Post Office and a group of postmasters... reflects the fact that there have been disagreements in the past on the management of contractual relationships. We are determined in future to have the very best working relationship fit for today’s business environment, and that we must always strive to do even better."
Also, as a direct reflection of the impact of the litigation on the Post Office business, every member of the Post Office Executive also received a 20% cut to their Short Term Incentive Payments (STIP).

For anyone worried about how those poor execs might be affected by this, don't.

The outgoing Post Office Chief Executive Paula Vennells (who oversaw numerous Subpostmaster prosecutions and an expensive failed mediation scheme) saw her STIP drop £52,600 from £196,400 last year to £143,800.

Quite a hit, but by complete coincidence, the Post Office remuneration board increased her Long Term Incentive Payment (LTIP) last year by £50,600 from £194,400 to £245,00 and gave her a basic salary top up from £253,800 to £255,000, meaning the total net personal cost to Paula Vennells for her part in the Horizon scandal has been a whopping £800. And a CBE. And a gig at the Cabinet Office.

What's happening in 2019/2020?

Undaunted by its costly adventures in court so far, the Post Office has spent much of the 2019/20 financial year building bonfires with sacks full of used fivers and gleefully torching them. I've asked the Post Office for an estimate as to how much they've spent on legal fees already this year. I was told none would be forthcoming, so forgive the guesstimates.

Since 1 April this year, we've had the recusal hearing (failed), the court of appeal recusal application (failed), the remainder of the Horizon trial (outcome tbc) and the application to appeal the first trial judgment, first at the High Court (failed) and then the court of appeal (outcome tbc).

Based on what last year cost, I would be surprised if the Post Office hadn't already spent at least £5m on legal fees this financial year - so a possible total to date is £3m (to March 2018) + £14m (April 2018 to March 2019) + c. £5m (this financial year), plus another £6m in claimant costs = c. £28m!!!

The rest of the financial year is going to be more, rather than less expensive. Between now and the end of March we've got potential mediation and a third of likely five or six trials. It is no wonder "Litigation" has been added as an official "Risk" to the business as something which has "an adverse impact on financial performance and/or reputation."

The bigger picture

According to the annual report:

"The Company had net assets of £234 million at 31 March 2019 (2018: £195 million).

At 31 March 2019 £385 million of the Company’s working capital facility was undrawn (2018: £327 million).

The Company has also shown a [trading] profit for the year of £38 million (2018: £15 million).

We have the following funding agreed with BEIS:

- a working capital facility of £950 million to 31 March 2021;
- a further £50 million facility available to provide same day liquidity to 4 April 2020;
- NSP of £50 million for 2019/20 and 2020/21 respectively;
- and we also have investment funding of up to £210 million as required for the period from April 2018 to March 2020.

Investment funding of £168 million was received in 2018/19."

Let's imagine the claimant Subpostmasters get all their own way between now and the conclusion of the litigation. On the pavement outside the High Court's Rolls Building on 15 March this year, James Hartley, senior litigation partner at Freeths, told reporters that the Post Office could find itself liable for "hundreds of millions" of pounds in damages.

If you strip away the government support from the Post Office in the numbers above and compare the remaining figures with what it stands to lose, the whole edifice begins to look very shaky. The government has already stopped the Post Office from trying to use government grant cash to pay its litigation legal fees.

The government would be insane to pull the plug on the Post Office, but it would certainly become a big story if they had to even consider it. In the meantime what do you reckon the Post Office will be telling us it's spent on m'learned friends this time next year?

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Claimant Subpostmasters consider mediation talks with Post Office

Claimant Subpostmasters suing the Post Office for hundreds of millions of pounds are now looking at mediation as a means to resolve this long-running and eye-wateringly expensive* litigation.

More than a year ago, the managing judge, Sir Peter Fraser, ordered that the parties should “consider" mediation. It has been bumbling around in the background as a possibility ever since.

This week, Freeths, the Subpostmasters' solicitors, issued claimants a circular stating:
"an independent and neutral expert is being appointed who has experience in helping to resolve very significant disputes. There will be a mediation meeting with the Mediator in November and we are obviously working very closely with your Steering Committee to plan for that and to decide whether it could offer you, the Claimants, a final resolution that would be in your best interests."
Many claimants will be wary of mediation. The Post Office set up a complaint and mediation scheme in 2013, but within eighteen month it collapsed in acrimony. James (now Lord) Arbuthnot described the scheme in parliament as a "sham", a sentiment echoed by the Justice for Subpostmasters' Alliance (JFSA).

As recently as August this year, Alan Bates, who is founder of the JFSA, member of Freeths' litigation steering committee and lead claimant, wrote to his members revealing the Post Office was pushing for mediation. At the time he wasn't convinced, stating:
"There could well be an optimum time when attending mediation might be in the Group’s best interests. But it certainly isn’t before the Horizon judgment is released... To start with, POL [Post Office Ltd] still refuses to accept it has done anything wrong, otherwise it wouldn’t have applied to the Court of Appeal to overturn the findings by the Court of the Common Issues judgment. To go to mediation immediately would mean we could find ourselves in the same position we were in at the end of the Initial Complaint Review and Mediation Scheme where, as a number of you will recall, POL turned up at mediation meetings, stated it had done nothing wrong and stated it was ‘all your fault’."
Mr Bates also noted:
"There would be substantial costs involved with attending mediation, so POL would need to demonstrate that it is serious about going into it in good faith and that it is not just a ploy to waste time and deplete our funding.  They would need to show they have the funding available to deliver financial redress to the Group and is prepared to redress the wrongs it has done to so many. And this case is not just a matter of money, many Claimants still want an apology for the grief that POL has visited upon them and their families."
Despite these misgivings, he recognised mediation might work:
"I am told that mediation (when done properly, unlike the ‘Mediation Scheme’) is a tried and tested method of resolving major disputes and it does have a good success rate in other cases. One advantage that mediation does have over the Court process, is that formal apologies, along with other requests, cannot be ordered by the Court, but they can be required by us as part of the mediation process.  Nevertheless, the current actions of POL in the court do not show it has any regrets yet over anything it has done, because it still refuses to see the error of its way despite the court clearly recognising the numerous failings by POL."
It seems that since then, Mr Bates may have been persuaded to think about giving it a go. By the time Freeths meet with their "Mediator" in November, the Horizon trial judgment should have been handed down, and there should be a decision from Lord Justice Coulson as to what (if anything) he will allow of the first trial judgment to be appealed. I suspect both these decisions will weigh heavily on how or if mediation might proceed.

In terms of where we stand right now, Freeths have pretty much the same red lines as Alan Bates, telling claimants:
"Progress will be made only if the Post Office demonstrate a significant change in mind set and approach. If mediation gives the Claimants an opportunity to achieve final closure on acceptable financial terms, then that is to be welcomed – if that does not happen, then the litigation obviously continues. Either way, we will not allow the litigation to be held up while mediation happens."
I'm not a massive fan of mediation, but that's because I'm a nosy journalist, not a claimant, and mediation is held in private. Also, big corporations often attempt to make any settlement conditional on all parties signing Non-Disclosure Agreements (NDAs), which means key parts of a story get smothered and no one is really held to account, a massive problem in this case already.

There is also one major fly in the ointment as Alan Bates himself noted back in August. What would mediation mean for those claimants whose situations are being considered by the Criminal Cases Review Commission?

During the last mediation process the Post Office did an extraordinary volte face. They first accepted people with criminal convictions onto the complaint scheme then refused to meet any who were recommended for mediation, without explanation or apology. You can imagine how crushing that must have been.

Presumably the issue of claimants with criminal convictions will be discussed and negotiated as part of the preliminaries to any formal mediation. They have to be better treated than last time.

Two months ago, Alan Bates wrote:
"Realistically, how can POL entertain any mediation whilst it still has an application in at the Court of Appeal denying there is any case for it to answer? Even it must see the nonsense of such a situation, why is it raising mediation now, is it just to pay out even more of the public purse to keep lawyers employed?  Hopefully POL is not misleading others with assurances that mediation might work, without having genuinely accepted that it has seriously wronged the Claimants and that the Court proceedings must come to an end."
I suspect his position hasn't changed much. The Post Office tell me mediation is an expected part of the litigation process and won't be commenting further.

* Close to £42m by my guess. The Post Office has admitted spending £23m on legal fees to end March 2019 (including paying out £6m worth of costs to the claimants). Assuming costs on both sides are roughly the same and guesstimating that both parties have spent another £5m each already this financial year (reasonable), that's c. £22m spent by the Post Office and c. £22m spent by the claimants, rebalanced because of the costs award to c. £28m spent by the Post Office and c. £16m spent by the claimants  = c. £42m.

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Tuesday, October 8, 2019

October 2019 Bates v Post Office group litigation update

The Royal Courts of Justice, London
We are currently awaiting two outcomes affecting this litigation. The judgment into the second (Horizon) trial and the Court of Appeal ruling on the Post Office's application to appeal the first (Common Issues) trial.

Both are important. If the Horizon trial judgment finds in the Post Office's favour, all bets are off as to the future outcome of this litigation. If the Post Office's appeal is allowed and they subsequently manage to persuade the Court of Appeal to reverse the first trial judgment, the litigants are back where they started, and their funders might decide to pull the plug. Tense, I expect, for those with a vested interest in their Lordships' decisions.

After making a few enquiries, this much I know:

Appeal application

There will be a five hour hearing on 12 November at the Court of Appeal, during which both sides will put their case verbally (you can read the Post Office's written grounds here and the claimant Subpostmasters' written objection here).

It would be unlikely (I am told) for the Appeal Court judge to make a decision that day on whether to allow the appeal. It is therefore most likely to be a written decision handed down at some stage after 12 November.

Horizon trial judgment

This is not going to appear before the 21 October, and it is unlikely to be circulated to the parties even in draft form before the end of the month. The parties will receive an update as to when they might expect the draft judgment in the week commencing 21 October.

And that, I am afraid, is the best I can do.

As they say in the army: "Wait out."

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Monday, September 2, 2019

"I hate everything about it. I will not go into a post office."

Nicki Arch
A few months back, during UK mental health week, the Post Office announced it had signed up to the Time to Change* campaign.

I asked those who felt the Post Office's actions had affected their mental health to get in touch. A woman called Nicki Arch sent me an email. It was an eye-opener.

Nicki was a branch manager at Chalford Hill post office in Stroud, Gloucestershire. In November 2000 she was suspended by the Post Office for an alleged £24,000 discrepancy. She says the Post Office tried to pin fraud, theft and false accounting charges on her. Nicki lost everything.

This is first time in 16 years she has told her story publicly:

"I originally come from Wotton-under-Edge in Gloucestershire. I left school with 5 O levels and 3 CSEs. I did my A-levels and then a business degree at Bristol University. I moved to Stroud in 1992 and got a job at Brimscombe post office working behind the counter. I stayed at Brimscombe for 5 years.

In 1997 The Subpostmaster sold up to live on a canal boat so I decided to do Post Office relief work as all the Subpostmasters in the area were complaining that they couldn’t go on holiday as they couldn't get the relief.

I was extremely busy. I was asked to do relief at the Chalford Hill branch in Stroud because the Subpostmaster was getting older and didn’t feel she could cope on her own. We got on extremely well and in 1998 she offered me a full time job with holiday pay, so I took it.

The Subpostmaster's health started to deteriorate (she was diagnosed with cancer) so she asked if I would like to take over the stationery shop too. We set up an arrangement that she would pay me a small salary and I would run the shop how I saw fit. I invested my savings in stock and did a lot of sale or return deals with greeting cards and all was well. I used an accounts company in Stroud to do all my account work. It was going really steady and all the villagers were over the moon. I had met my boyfriend by then (I was 26 when we got together). He lived with his family in Stroud and was a tree surgeon. He never got involved in the business.

Unfortunately the lady I worked for died, and in 1999 the Post Office made her husband Subpostmaster. He had never worked in a post office in his life, so he asked if I would keep it going. He took the Subpostmaster salary and paid me a small wage out of it. The shop profits were mine.

Eventually I was able to employ a part-time assistant to cover me if I wanted time off. This worked very well for several years and 3 years later, my boyfriend and I decided we would get our own home and marry.

There were some new small 2 bed houses being built very close to the post office on a shared ownership basis so we went for it.

A year later Horizon was installed. The trainer sat with me for one day and that was it. I then had to show the part-timer what to do.

When I was using Horizon I kept getting pension payments duplicating, yet cash was balancing. One day in November in 2000, the auditors turned up and said I owed the Post Office £24,000. I was mortified. My fiancé and I had not long got out first home on the government shared ownership scheme as we didn’t earn enough to get a mortgage for a starter home by ourselves.

I was told on the day that I had to be driven to a crown [post] office to be questioned and my post office was to shut down until investigations were completed. I did as I was told and locked up and was driven by two Post Office investigators to Stroud Crown office to be interviewed in a locked room. It was a recorded interview and I was denied anyone to be with me or any phone calls. I was distraught! Then they said I was responsible for £24,000 being missing and if I would just admit that I stole it I would be treated more leniently.

I was in a state of shock. I vehemently denied any involvement in theft or wrongdoing but was ignored. The interviewers were terrifying, threatening me with prison.

Eventually they let me go at 4pm so they could inform the official Subpostmaster of what was happening. I got driven back to my car and went straight home sobbing. I rang my fiancé and family as soon as I got home to tell them what had happened.

Later that evening I got a phone call from the official Subpostmaster to say that the Post Office had told him he must suspend me until further notice and I was not allowed on the premises at all. 

I asked about my shop and how I was meant to earn a living but he said that the Post Office said he had to do this and he had no choice. 

Within 24 hours everything had become ashes. I sought a solicitor, and then the long haul started.

I was questioned over and over again by the Post Office at Stroud police station with my solicitor to the point where 10 months later I was charged with theft, fraud and false accounting.

The case was referred to crown court. I was also told that I had to empty my shop and I was sacked.

It was all in the local papers and everywhere I went my customers were blanking me and saying that I’d robbed the post office. I couldn’t cope and my fiancé was told to prepare for my imprisonment.

The wedding we had planned, funded by our parents was cancelled as neither one of us felt like we wanted to celebrate. We had no idea whether we even had a future. We were heartbroken and on our knees.

I went for a routine GP appointment and my doctor was shocked when she saw me. I was a wreck and could hardly speak. She prescribed me Prozac as I was so scared and just wanted to end my life.

My fiancé and I used to sit up at night and discuss ways which we could be happy together for ever and the only idea we had was to die together.

In the summer of 2001 went to the local registry office and got married with no one there other than two witnesses.

We had no professional photos, no wedding dress and no honeymoon or party. We just went home. We were both highly medicated to keep calm, thank God.

My husband is dyslexic and was not domesticated in the slightest so my family promised to help him get through if I went to prison. He promised to wait for me and we shared each night on our own just sobbing and hoping for a miracle.

The Post Office were so threatening and we were convinced that no matter what I said it was a done deal.

In April 2002 we had a 3 day trial with which I was found not guilty and it was all over.

I walked out of court and collapsed to the floor sobbing with relief. We got home and I didn’t have a clue what to do. We had to set up an IVA as our debts had mounted because I couldn’t work.

I’d lost my business and my husband just worked as a local driver. We sold our home to pay the housing association back and stayed with my parents for a while to save up a deposit to rent a home.

We never heard from the Post Office again. We have lived with this for 19 years and have no wedding pics and started our marriage in the worst possible way.

We will never get that time back. I have suffered with depression and panic attacks ever since and take anti-depressants daily to enable me to get on with life. The only thing I’m guilty of is a rubbish wedding day for my husband."

I found Nicki's story very affecting, and I wanted to know a bit more about what happened, so I gave her a call.

We ended up chatting for over an hour. We covered Nicki's mental health battles, the way Post Office prosecutors and investigators behaved and what her hopes are for the group litigation.

Nicki in happier times
To the best of my knowledge, the email above and the interview below represents Nicki's honest recollection of events and honestly-held opinions.

I started by asking Nicki to tell me what life was like before her Post Office "audit" in November 2000.

"We were engaged to be married, we'd just bought our new home. We did everything by the book. And I had a little business, and...it wasn't much, there's no way we could have lived just on my money. But it was steady. So in theory, it was a perfect world, and then suddenly, everything changed. Literally everything."

Nicki's branch audit was attended by three Post Office staff members, two of whom turned out to be rather threatening "investigators". They appeared to be expecting a large discrepancy, and when they found one, Nicki was driven straight from her branch to Stroud Crown Post Office for an interrogation.

"I just look back on it and think how ridiculous, why did I let them do it? Why go with them, even? I had to leave my car behind. They said: "You must come to the Crown Post Office." I said, "Can I ring my fiancé?" and they said: "No, you're not ringing anybody.""

The nightmare had begun.

"They stripped my life apart. I presented every single bit of financial history from the minute I left university to them. They came to my house to see what was in it. They didn't even have a search warrant. My parents were like: "These are the Post Office, so you work with them and let them do what they want to do.""

Nicki was unable to explain the cause of the discrepancy, because, as far as she was concerned, she hadn't done anything wrong. It didn't stop the investigators suggesting that if she'd just confess to theft, things would go much easier for her:

"They kept saying; "You know, it's in your own interest to just stop this messing around, and stop wasting all our times. We are the Crown. You do realise who we are?" And I'm like, hang on, you're not even police officers."

Nicki was not impressed by what they were trying to accuse her of, either. "They had no idea what the hell they were talking about. I was like: "No, that isn't what I did." and they said "Well, that's what the [Horizon] paper says." and I would say "No, the paper doesn't say that, does it?" and they would say "Oh, you're just going round in circles now, you're just wasting our time.""

Predictably, Nicki was told she was the only person having problems with Horizon. "They said "We've never, ever had a problem with this system." And I'm like, "Well, I'm the first, then, aren't I?" They said: "Don't you think we've trialled it so many times? These are professionals. Not like you, these are professional people, who have worked the system time and time again. We've never had a problem with it."
Site of the former Chalford Hill Post Office today.
Nicki remembers Horizon's supposed perfection as a recurring theme: "This Horizon system was unbelievable. It was state of the art, it was the best the Post Office has made, it been trialled and tested so many times, and I was just totally incompetent. And a thief, nearer the point."

Nicki's boss and her part-time assistant, Marlene, stopped all communication. The Post Office had told them they were needed as prosecution witnesses and they couldn't speak to her.

The local paper ran a story on Nicki being suspected of theft. No one would employ her. With only a single income, Nicki and Steve fell behind on their mortgage payments.

"I just stayed in. I did attempt, several times, to go to the supermarket, and I just felt everybody was whispering, "Oh, that's the woman who steals from pensioners," and I thought I can't, I can't do this."

Things got desperate: "Steve wouldn't tell me truly how he felt, because he didn't want to make me feel worse. We weren't married then, so he could walk away. And I kept saying to him, "Why don't you just walk away? Why don't you just go. If you go now, you won't have to be involved in any of it."

Nicki's biggest concern was what would happen to Steve if she were sent to prison.

"I thought he would never cope. He's completely dyslexic, he can't even cook, and I thought... he wouldn't even know how to pay a bill. And I'm like, "Steve, just walk away. For God's sake, just walk away from this," But luckily, he didn't."

The interrogations continued:

"I thought they were going to drop it. I thought they're never going to take this to court, surely. And I was saying to my sister they're just going to keep on and on and pressure me, hoping that I'm going to crumble. And I'm not. And that "we want to question you again, we want to question again" kept coming. And we'd set up at Stroud police station, in a little room where they'd come, and it was ridiculous. We were just going round and round in circles, and I'm like, are they ever going to charge me with anything, or is this ever going to end?"

Steve began to feel very stressed by the situation, struggling with his concentration and making mistakes at work.

"He came home one day and said, "I don't feel right. I'm going to go to the doctors." And I said, "Well, do you want me to write down how you feel, and then you can take it with you? Because you're not very good at expressing yourself."

Steve agreed. As soon as the doctor saw the note she asked Nicki to make an appointment with her.

"She said, "What on earth is going on?" I said, "Nothing." And she said, "Nicki, I've read that letter. There is something seriously wrong with anybody who writes letters like that."... and I just broke. I just crumbled. She was the first one who delved deep enough to say you can break if you want to. Because I didn't show it to anybody. I thought I can't let Steve know how I feel. You know, because I just thought, God, this is life over."

The stress started to push Steve and Nicki towards a very dark place.

"It got to the point when Steve said, oh, we'll just take a load of pills, and we'll go together. Let's not give them the satisfaction of taking our life away. At least we would have control, you know? And because we both started on antidepressants at the same time we had access to the pills."

Thankfully they didn't attempt suicide, but their lives collapsed. They had been planning a big wedding, but neither Nicki or Steve felt capable of facing family or friends.

"We were going to have a church wedding, but I said I can't... I can't smile anymore. I don't want to have to pretend in front of people.... Until we see the end of it, I cannot live, do you know what I mean? So we went straight to Stroud's registry office, got married, and within half hour we were back home."
Steve and Nicki's wedding day, 28 August 2001

Throughout this period there were pre-trial court dates to deal with. Nicki kept Steve away from it. 

"I thought he just generally couldn't cope. It would send him doolally. He did go to the trial. But up until then, I just went with a friend. I wouldn't let my parents come, either. I was so ashamed."

I asked Nicki if the Post Office ever tried to claim she was the only one with access to her Horizon terminal, something which has been comprehensively debunked across the course of the current litigation.

"That was what they thrived on, for weeks: "there's no way anybody could put anything into that computer, other than you. Those figures on that computer were you. It could never have been anyone else. Nobody could even get access to it. We couldn't see it until you printed off that weekly report and showed it to us." And it was all bullshit. Absolute lies. They could go into the computer any time."

Nicki says throughout this process, her solicitor seemed out of his depth.

"He sort of was terrified of it. He was like, "Oh my God, I don't know what the hell we're going to do. The Post Office are just going on and on and on, saying the same old thing," he said, "and I can't advise you to say any different to what you're saying, but I don't know how this is going to end," he said."But you need to be prepared for the worst.""

Steve did come along to one of the last legal conferences before the trial. Nicki's solicitor told them the Post Office had offered her a deal. The fraud and theft charges would be dropped if she pleaded guilty to false accounting. Her solicitor told her she might want to consider it.

Nicki refused. "We was walking home, and Steve said "Are you sure you don't want to just say you've done it, just so that we can actually start a life after?" I said no, I'll take whatever they give me. I'd rather do that and be able to live with myself than to do any sort of bargain that I know is a complete load of crap. And he said, "Fine. I'll stand by you, then."

Nicki's solicitor got a barrister involved for the trial. "He was a bit more, "I'm not having any of this..." you know what I mean? He was a bit, "No, they're going to have to come up with summat a bit better than that." And he wasn't scared of them at all."

He offered Nicki a piece of advice: ""Just be yourself," he said, "Don't try and solve their problems for them." and I said, "What do you mean?" He said, "You keep looking to find solutions to this," he said, "Stop it. That's not your job. That's not what you're here for.""

In April 2002, Nicki was put on trial. The Post Office's case was that Nicki was running a scam, producing duplicate records of pension payouts on Horizon, handing one out to each genuine recipient and trousering the rest.

"You stand in the dock, you've got two prison blokes with you... I was in my early 30s, you know? I'd never, ever been in a courtroom in my life. I'd never been arrested, I'd never done anything. I was from a very strict family, and... and I'd done quite well for myself, considering we were from a family of six. All of a sudden, I'm in Bristol Crown Court with two prison officers behind me. My mum was like, "Oh, my God, this is the Queen's business. They're going to send you to prison." They were absolutely devastated. My dad was going through kidney failure, he was in hospital the day the trial started. It was just horrendous"

Nicki's former boss and her part-time assistant, Marlene, gave evidence as prosecution witnesses, but it didn't really work out for the Post Office.

"They went to court because the Post Office told them to, and they were questioned on oath, and my ex-boss was like, "Well, I've just helped her get her mortgage. I just happened to give her a reference, you see. So no, she hasn't got any money." And he made [their barrister] look a twat, to be honest. And Marlene went up, and she said, "Well, no, Nicki hasn't got any money." So although they were Post Office witnesses, they might as well have been mine."

I asked if the Post Office ever explained to the court how she was supposed to be doing this fraud, the actual mechanics of it.

"No." she says "They didn't have a clue. Nor did I."

Nicki remembers the Post Office barrister getting quite het up.

"He chucked a bundle of dockets at me and said "You explain this lot." and I said "I don't know what you want me to say about it." And he was shouting, and getting louder and louder, saying, "You explain how it all works," and I said, "I don't... I have nothing else to say about them. They are what they are," you know? And he was getting really angry."

The Post Office barrister then tried to get the prosecution witnesses to explain the fraud. "They tried. But we were all stood, including myself, in bewilderment to say, hang on a minute, on paper, in theory, your cash is right, your pension dockets is right, it's just your weekly report that's wrong. So how do you know you're owed any money at all? And the Post Office were like, well, Horizon's weekly report tells us we do. And the judge then stepped in and said well, no, your cash is right, your dockets are right, your customers are happy... but the weekly report Horizon report is saying different. That's where we're at."

The whole thing sounds pitiful.

"One of the prison officers was drawing funny little pictures, and passing them to me to try and cheer me up. I do remember that. I've kept one because I felt, oh, bless... I just looked at him, and I was just... I don't know what I'm doing here. And he must have felt sorry for me or something, you know, and he was trying to cheer me up. And he was there all the way through for three days, and I thought, oh God, he'll keep me upright, if I collapse."

I asked Nicki if she felt the judge smelt a rat, or whether he was straight down the line in his summing up.

"Before the jurors went out to make a decision, I do remember him saying something like make sure you consider whether we've actually got a completely innocent person stood here. It was words to that effect, And I thought: he believes me. My barrister was the same, in all fairness. I have 100% faith that he genuinely knew I was innocent."

The jury were of a similar mind. They took two hours to find Nicki not guilty.

After the trial Nicki never heard from the Post Office again, but the reverberating effect of her trauma continued. Penniless, in 2004, Steve and Nicki sold their home before it was repossessed. They entered into an IVA to stave off bankruptcy and moved in with Nicki's parents.

Nicki in hospital in 2005
In 2005 Nicki had a complete mental health collapse and was admitted to hospital with a number of physical symptoms. Steve could not cope at work - he was making mistakes and becoming a potential liability to himself and others. He started delivery driving, which he does to this day. Nicki was eventually able to get a job with social services. They have slowly rebuilt their lives.

Nicki does not hold back on what she thinks of Britain's "most trusted brand":

"I hate everything about it. Even now, I will not go into a post office, I will not use anything to do with the Post Office. I will drive to somewhere to deliver a letter before I'll post it. I can't bear it. I'm still that bitter, now. It's shocking, really. I just think, oh, get over yourself, but I can't. I'm never going to have a wedding day. I'm never going to have a father walk me up the aisle now because he's dead. It's gone, you know?"

She is particularly scathing about the Post Office's recent mental health wokeness.

"I couldn't find the words. How bloody dare they? I just do not know how they've got away with it, and I just wonder what on earth is going on in government that nobody has put a stop to it. Because they're vile. I fear for anybody who even considers working for them, let alone all the Subpostmasters now. It's not even humane. I just don't get why they're getting away with it. I just don't understand it. And I think they'll still get away with it. The people who did this to us. They've moved on. They all live with themselves. They didn't give a shit. They don't even work for the Post Office anymore, half of them. Nobody's going to be accountable. The vile people that pushed me into the back of their car... they traipsed me in public through the Crown Post Office in Stroud... All the staff there must have known what was going on, I was going to be... you know, I was some sort of villain. I had to go through the public entrance being escorted by those two, recorded interviews and all the rest of it. And those two people, who just sleep at night like babies, will carry on. And nothing anybody does, including Judge Fraser is going to change that. In fact, they've probably retired now, living it up in Costa del Sol, or something. I don't know. You know what I mean? God, I'm that bitter..."

Nicki doesn't have much hope for the group litigation.

"I don't think we'll get any money, to be honest. By the time everybody's made their profits from it... Freeths are amazing, don't get me wrong, they are brilliant. But at the end of the day, it's a business transaction to them. You know, we are a business transaction, that's all we are. We can get emotionally attached as much as we like. I don't do that anymore. Whatever happens, there is going to be not one person who will say, God, I'm really sorry. And that is never going to happen. No. They will never, ever be accountable for what they've done. They won't. And we'll all be left the same as we thought we were, without an acknowledgment, without apology... we might get 50 quid if we're lucky, what, split between 500-odd people? I don't know. It won't be nothing significant. It won't be life changing for any of us."

Despite this, Nicki is following the trial closely, and was delighted with the judgment which was handed down on 15 March: "I'm slowly falling in love with Judge Fraser," she says. "When I read his verdict, I thought, yeah, you've got it. You've got it. You know exactly where we're coming from."

Nicki was on Prozac for more than a decade. Her longest period without drugs was three years, but since she joined the litigation the anxiety has come back. Nicki has taken early retirement from her job in social services and is back on the antidepressants. On Steve, she says:

"20 years on, we're solid. Absolutely solid. It's probably one of the strongest marriages you would ever get. And we've got two kids now. Steve is just amazing, though. I don't know how he done it. I think he's more... mind over matter. It was a hideous time, don't get me wrong. At times, we were both on our knees, screaming. And I still can't answer now what on earth made him stay. Because nobody in their right mind would. I can't think of anybody who would want to have lived through what he did. I've always said, if I get any money whatsoever, he will have every penny. Because there's nothing, no amount of money, nothing I could ever give that man that he deserves for standing by me and taking this on as his life. Because I'm just... I'm just one screwed up human being, you know? I'm not the same person as I was when he met me. I may look similar, but I'm not the same. I'm bitter, I'm nasty, I can...you know, my moods are shocking. And I'm still like that to this day. Because I'm used to being at rock bottom. I'm confident there. I'm on two Prozac every single day, just to function, just to keep well and contented. It is horrible. It is horrible."

Nicki has never spoken to anyone about what happened to her in this much depth before. She's never met another litigant or even spoken to Alan Bates, founder of the Justice for Subpostmasters' Alliance.

"I know the sort of person I am. I know if I get friends with these people, if I go up and meet people who've gone through the same as me, I'm going to have a bond with them like no other. And I'm going to jump into this all guns blazing, and it's going to overtake my life. And for what? I've spoke to them on Twitter, and.. I would love to meet somebody who knows exactly how I feel. Because I've never done it yet. Never. So for somebody to say, actually, Nicki, I've done exactly the same, and they took me away as well... you think you'd make friendships like no other. Because nobody else in the world could have that same bond and same memory, and know exactly what you live with than those other people. But it's all time and emotional consuming, and I just think would my family get affected by it, would I come home, you know, when all this is over, and we still land up with nothing."

My thanks to Nicki for speaking to me. Given her description of her trial, I am particularly keen to get hold of the court transcripts. Nicki tells me when she was trying to obtain documentation as a claimant for the litigation, she was told all the recordings of her interviews by Post Office investigators had disappeared. I would very much like to hear the Post Office's side of this, but they say they will not comment on individual cases.

You can read more individual stories from some of the claimants (and non-claimants) currently in dispute with the Post Office over what was meted out to them whilst they were Subpostmasters, branch managers and assistants or counter staff.

* I asked Time to Change how they felt about lending their credibility to the Post Office in the light of the Post Office's alleged activities with regards to its Subpostmasters' over a period of twenty years. Time to Change listened politely and told me they weren't going to comment. I wrote a piece about their silence.

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