Monday, November 12, 2018

Day 3 write up: Pam Stubbs finishes being cross-examined and Mohammad Sabir starts

Pam Stubbs arriving at the High Court today
Although the courtroom was busier than its been since the trial started, with a large number of former Subpostmasters and observers from the Post Office, there were only two journalists present, a deeply unwell Karl Flinders from Computer Weekly and meself.

I spent the day live-tweeting proceedings. You can read the morning session's tweets here and the afternoon session tweets here. Or read them in their original form as a thread on my twitter feed.

The day started with the second half of Pam Stubbs' evidence. Pam was a Subpostmaster at the Barkham Post Office near Wokingham for 10 years after her husband's death. In 2009 she moved, with her Horizon terminal into a Portakabin in the Post Office car park whilst her branch, shop and accommodation attached to it was more-or-less rebuilt. By the time she was suspended in June 2010, the Post Office claimed she had managed to lose around £25,000 and was demanding it back.

Pam was asked to confirm that she had no real problems with Horizon before she went into the Portakabin. The Post Office's QC, the extremely capable David Cavender, notes that there appeared to be a lot of mistakes made by Pam or Pam's assistants in the branch. Pam admits that some assistant were better than others, and she had a particular problem with an assistant who would press the same button multiple times when "remming out" cash (counting, packaging up and remitting cash out of the branch for collection by CashCo), which caused problems. Pam says she became very hot on ensuring it was done properly.

Pam is asked why, when large sums of money started going missing, she didn't take steps to see if the assistants were messing up and/or walking out of the door with it. Pam says the discrepancies were so large and so random, that checking Horizon figures to see even how and when the sums of money might have been going where and when was impossible. She says she was advised to hunt the extra zeroes in her transactions to see if any customer was walking out the door with 10x the money they'd withdrawn. This information just wasn't in the Horizon receipts, so it was impossible to even start investigating. She said one day such a large discrepancy arose, but with no extra zeroes obvious in the transaction receipts, she concluded that every single customer who came into the Portakabin must have had an incorrect transaction to get close to the sums of money Horizon said she was missing.

At one point in court the farcical day when an auditor was sent down to visit her Portakabin was discussed. He sat with Pam for a complete morning session to see if he could see what she was doing wrong. As she keyed her customer transactions into her Horizon terminal, he sat with a his laptop running Horizon software, keying the same customer transactions into his offline version.

When Pam ran a balance check at the end of the session (counting cash and stock versus what Horizon says she should have in the till), she was around £190 down.

The auditor told her he would feed his transactions into her Horizon terminal and she would find, because he had done everything correctly, it would balance to zero. It didn't - the discrepancy got worse - it became £362. This caused some consternation. He checked everything again and eventually told Pam that although he couldn't explain it he was going to have to accept the Horizon figure on the screen, which became her discrepancy and her debt.

There was subsequently revealed to be an internal memo about this episode. Whilst the Post Office was still considering legal action against Pam for the cash discrepancy, someone suggested that things needed to be resolved quickly as the only thing the visit of the auditor had achieved was potentially creating a witness for the defence. I have asked for this document.

Pam maintained throughout her experience at the time, and in her witness statement that the Post Office did little or nothing in terms of investigating her situation with Horizon by talking to Fujitsu (which operated and supported Horizon under contract to the Post Office). There was as internal documents reveal quite a bit of to-ing and fro-ing between the Post Office and Fujitsu, but this was never revealed to Pam. However Mr Cavender was able to point out that actually the Post Office was doing far more than Pam knew to resolve the situation. I have asked for this document too.

There was then a really lengthy discussion about £7,000 which was chalked up as a discrepancy.

What happened is that another auditor arrived whilst Pam was cashing up to rem out (Pam's Post Office was one where local businesses would come to pay in their cash. She and before her, her husband were so trusted that each week they would take in far more than they ever paid out - Barkham is not the sort of area which does much business in the way of paying out cash benefits etc).

As is the rules, the auditor takes over. Somehow the auditor managed to rem out £7K more than left the branch. This £7K stayed in Pam's safe when it should have gone to CashCo. She didn't know it had already been remmed out, so the following week she remmed out the £7K alongside £15K of other takings.

The Post Office added this £7K  to Pam's outstanding debts and demanded it back. However after she was suspended, the mistake was realised and a transaction correction was issued. The first £7K was a phantom amount and the transaction correction recognised this. However because this came through after Pam was suspended, no one told the relevant department and Pam was still receiving demands for the money.

I really couldn't work out why Mr Cavender was highlighting what seemed to be a case of double incompetence by the Post Office to make a point. First an auditor, not Pam remmed out the wrong amount on Pam's account. Second, long after the error had been resolved the Post Office were still demanding it s part of her debt.

Then it became clear. This, Mr Cavender pointed out, was not a Horizon error, yet Pam had blamed her woes on Horizon.

The final point of interest in Pam Stubbs' cross-examination was her refusal to surrender her Horizon printoffs/receipts for examination by a Fujitsu or Horizon expert against their data. She said she wanted them to come to her. She said she did print off one day's worth of receipts to send off for them to look at. It went to 22 pages. And, she said, that was a quiet day. She said she couldn't do the maths, but if she did that every day for the 8 months in dispute it would be a lot of photocopying.

The judge helpfully intervened to point out it would be around 5,500 pages she'd have to send off.

Nonetheless, said Mr Cavender, you didn't do it.

No - said Pam - she thought it would be better if a Fujitsu expert came to her and they could sit side-by-side at her dining room table going through their data and her data to see where the discrepancies were. This never happened.

Pam was re-examined by the dashing Patrick Green, counsel for the claimants, who asked her about a reassurance she got that the huge discrepancies she was suffering would remain in dispute until the Post Office had completed their investigation into what was happened with Horizon at her branch and shared it with her.

Patrick Green then asked her about a letter she got less than a month later demanding £10,000, telling her she was responsible for all losses in her branch and asking her to contact them with a method of payment. What did you read into that, he asked?

Pam supposed it meant that the Post Office had no intention of carrying out an investigation into Horizon and, furthermore, she said, they didn't because they didn't want to know if the result showed Horizon in a bad light. Also if they had done an investigation she never saw it, despite her requests and the repeated requests of her MP, she has never seen the evidence or results of any investigation into Horizon at her branch.

The afternoon was a generally different kettle of fish. Mohammad Sabir took the stand and was cross-examined on much the same terms as Alan Bates on Day 2 of this trial. Mr Sabir took over two Post Office branches, Cottingley and Crossflatts (in Bingley, north west of Bradford) in the space of twelve months in 2006/7. He was terminated in October 2009.

Mr Sabir's spoken English and understanding of English is not that great to the extent that Mr Cavender was having difficulty making himself understood. Unlike Alan Bates and Pam Stubbs, whose cases I know well, Mr Sabir was something of an unknown quantity to me.

Mr Sabir's initial cross-examination evidence largely consisted of him telling Mr Cavender he didn't understand what he was being asked or didn't remember what he did understand he was being asked. Thankfully after an hour I was given Mr Sabir's witness statement, which at least gave me a clue about the conversation I was supposed to be reporting on.

In short, Mr Sabir became Postmaster of two Post Offices. He never really seemed to feel on top of Horizon and he had particular problems with how to account for his lottery scratchcards on Horizon. He tried to get rid of both Post Offices, but before he could he was audited, a discrepancy of £5K was found on his scratchcards in one branch, he was suspended in both branches and then terminated.

In court, instead of agreeing a statement might be correct, Mr Sabir would say "Yes please." As a result there were dozens of exchanges thus:

Mr Cavender: "Is that correct?"
Mr Sabir: "Yes please."

which I never quite got used to.

Anyway, there were a couple of significant exchanges. As with Alan Bates, Mr Cavender was keen to pursue what I'll call the Line of Incredulity - the idea that someone as experienced in business as Mr Bates or Mr Sabir would ever sign a contract without having view or knowledge of its contents. In this case the mythical Subpostmaster contract, which so far, Alan Bates, Pam Stubbs and Mohammad Sabir say they never saw.

Mr Cavender said that Mr Howarth, the Post Office employee representative who interviewed Mr Sabir for the job has given a statement to the court in which he says spoke to Mr Sabir about, and explained the contractual relationship between Mr Sabir and the Post Office. He asked if Mr Sabir remembered this.

At this point the judge jumped in quite fiercely and told Mr Cavender he was doing something he shouldn't be doing and which he'd been warned about before. He pointed out that Mr Howarth in his statement says he doesn't remember interviewing Mr Sabir and what he actually says in his statement is that this is what he would have done, rather than what he did do. The inference being that saying something would or should have happened is very very different from a witness saying this is what did happen.

Mr Cavender rephrased the question to Mr Sabir in these terms. Mr Sabir said how should he remember if Mr Howarth couldn't. The judge intervened agained to point out that Mr Sabir's memory should not be contingent on Mr Howarth's. Mr Sabir couldn't remember anyway.

Mr Sabir was eventually sacked because he had nearly £5K's worth of scratchcards debtits which he wasn't declaring on his accounts, yet was rolling them over as accurate. Mr Cavender said he had £5K in his safe, why didn't he put that money towards the scratchcard debt. Mr Sabir said he was trying the Horizon helpline for more info on how to do this and couldn't interrogate Horizon well enough to find out how to sort out his scratchcard mess. It was only when an auditor came in, worked it all out and came up with a figure for the discrepancy that he could pay the money, but by then it was too late, as he was suspended.

But, said Mr Cavender - that means you were signing off incorrect figures whilst all this was going on. He used the word falstifying. Mr Sabir pushes back on this. He wasn't falsifying his figures.

Mr Cavender says at the very least they were incorrect - why was he signing off incorrect accounts?

Mr Sabir says he had to or Horizon wouldn't roll-over into the next accounting period and he wouldn't be able to trade.

I've requested some of the documents discussed today. It would be good to read them.

We have a new witness on day 4 of the trial. It all begins at 10.30am in court 26 in the High Court Rolls Builing on Tuesday 13 November 2018.

Post Office internal memos: Serious Horizon errors

Both the following documents were referred to in court on 7 November 2018, Day 1 of the Common Issues trial, part of the Bates and others v Post Office group litigation at the High Court.

I requested to see them, and they were released to me late on Friday.

The first document, which was written in August 2010 (although it isn't visibly dated, I understand the Post Office does not dispute this) should be visible to you below. If it isn't, you should be able to find it online here.

It is a note of a meeting in which a Horizon IT error is discussed between senior people at the Post Office and senior people at Fujitsu. Fujitsu used to operate Horizon under contract to the Post Office.

The error discussed is serious. It affects around ("circa") 40 branches. It could cause those branches to have a negative balance, even though the individual Postmaster in charge of each branch believes they have successfully balanced to zero.

The impact of this error is discussed:

"If widely known could cause a loss of confident in the Horizon System by branches"
"It could provide branches ammunition to blame Horizon for future discrepancies"
"Our accounting systems will be out of sync with!what is recorded at the branch"
"The branch has appeared to have balanced, whereas in fact they could have a loss or a gain."
"Potential impact upon ongoing legal cases where branches are disputing the integrity of Horizon Data."

We'll come back to that last point in a moment, but it is telling that the memo also notes:

"At this time we have not communicated with branches affected"

There is good news for those who are in the know:

"Fujitsu are writing a code fix which stop the discrepancy disappearing from Horizon in the future. They are aiming to deliver this into test week commencing 4th October [2010]. With live proving at the model office week commencing 11th October. With full roll out to the network completed by the 21st of October. We have explored moving this forward and this is the earliest it can be released into live."

but there is also bad news:

"The code fix will on stop the issue occurring in the future, but it will not fix any current mismatch at branch."

So what to do? Three options are discussed:

SOLUTION ONE- Alter the Horizon Branch figure at the counter to show the discrepancy. Fujitsu would have to manually write an entry value to the local branch account.
IMPACT - When the branch comes to complete next Trading Period they would have a discrepancy, which they would have to bring to account.
RISK- This has significant data integrity concerns and could lead to questions of "tampering" with the branch system and could generate questions around how the discrepancy was caused.This solution could have moral implications of Post Office changing branch data without informing the branch.

SOLUTION TWO - P&BA will journal values from the discrepancy account into the Customer Account and recover/refund via normal processes.This will need to be supported by an approved POL communication. Unlike the branch "POLSAP" remains in balance albeit with an account (discrepancies) that should be cleared.
IMPACT - Post Office will be required to explain the reason for a debt recovery/refund even though there is no discrepancy at the branch.
RISK - Could potentially highlight to branches that Horizon can lose data.

SOLUTION THREE - It is decided not to correct the data in the branches (ie Post Office would prefer to write off the "lost" [sic]
IMPACT - Post office must absorb circa £20K loss
RISK - Huge moral implications to the integrity of the business, as there are agents that were potentially due a cash gain on their system

The meeting decides to go for solution two. Note it is accepted as fact that all three solutions are possible. Bearing in mind that until January 2017 the Post Office maintained it was impossible to remotely alter branch accounts, this is significant.

[In January 2017, the Post Office admitted in court it was perfectly possible to alter branch accounts (a practice a former Fujitsu employee told the BBC's Panorama was rife when he was working there), and explained the reason it had been denied for so long is because the people doing the denying were not aware of the truth]

Returning to the point about impact discussed in the memo: "Potential impact upon ongoing legal cases where branches are disputing the integrity of Horizon Data."

The memo was written in August 2010. In October 2010 the trial of Seema Misra, Postmaster at West Byfleet branch in Surrey began. She was accused of theft by the Post Office. She claimed it was a bug in Horizon causing the problems.

One of the people listed as being present at the meeting in the note below is Gareth Jenkins, a Fujitsu technical specialist. Gareth Jenkins was also the IT expert supplied by the Post Office to explore possible Horizon errors in the Misra case with the defence's own IT expert witness Charles McLachlan.

To the best of my knowledge (I have read the transcript and done a search for the relevant terms just now) the receipts and payments mismatch of 2010 was not discussed in court at Seema Misra's trial. Mr Jenkins was examined by both the prosecution and defence barristers about a receipts and payments mismatch in 2005 (the Calander Square incident), but this latest one, to the best of my knowledge, was not disclosed.

Please note - Mr Jenkins seems to have spent a lot of time looking at the Horizon system in Seema Misra's branch. I am sure he would have raised any problems as he found them. I am not suggesting for one second that he, Fujitsu or the Post Office found and then hid a problem at Seema Misra's branch. However, just because they didn't find one, it doesn't mean there wasn't one.

Despite the judge pointing out in his summing up that there was no direct evidence Seema Misra had stolen anything, she was unanimously convicted of theft by a jury at Guildford Crown Court. Seema was sent to prison on her son's birthday, whilst eight weeks pregnant. She has vociferously insisted upon her innocence and she is both a claimant in Bates v Post Office and her case is currently under review by the Criminal Cases Review Commission, which I hope reads this blog.

The other memo is much more straightforward. You should be able to read it below, or online here:

It is an internal Post Office memo during which a Post Office manager discusses visiting Pam Stubbs, now a Lead Claimant in Bates v Post Office. Pam took the witness stand on Friday and will continue today. The memo is dated 2000, but must have been written in the first part of 2010, as Pam's problems started in the latter part of 2009 and she was eventually suspended in the summer of 2010.

Whilst Pam's temporary Horizon terminal, installed by the Post Office, is throwing up discrepancies in the thousands, she is going through hell. I remember when I first started recording my conversations with Pam. She described spending late nights ploughing through her receipts and Horizon printouts time and time again in order to find out where she'd gone wrong, standing at her counter the next morning in floods of tears, whilst receiving demands from the Post Office that she make good the discrepancies showing up on her Horizon terminal or risk losing her branch.

The memo below is unequivocal. "It is" says the Post Office manager about Pam's problems, in bold type, "Horizon related."

Pam was never told about the existence of this memo until this current trial. I am sure there is a very good reason for that.

Pam is due to re-start her cross examination in court in at 10.30am today (in 16 minutes, at the time of writing). If you would like to read my live tweets from the trial, follow me @nickwallis on twitter.