Saturday 16 March 2019

Common Issues trial: the judge's comments part 1

If you want to read the judgment, click here. Or open it up in a different window and you can cross-refer to it if you come across anything below you want to explore in more detail.

Here are some choice takes from paragraphs 1 to 279 (out of 1122).

About Horizon:

8. The different Claimants all had different experiences with Horizon over different periods of time. However, there is at least one common theme. At the time, these accounting shortfalls that came to the notice of the Post Office were pursued as exactly that – shortfalls - with the relevant Claimants. The Post Office’s stance both then, and now, was and is that the Claimants were responsible for these shortfalls, and that the shortfalls represented actual amounts of money missing from the Claimants’ accounting. An alternative way of putting what may amount to the same point, but using the approach of the pleadings, is that the Post Office maintains it is for individual sub-postmasters to prove that the shortfalls were not their individual responsibility, and failing proof of that by an individual sub-post-master, then the shortfalls were their individual responsibility and the sub-postmaster in question would have to pay the relevant sum to the Post Office and face the consequences.

About the Post Office's approach to shortfalls:

10. When shortfalls occurred, the Post Office demanded (and I use that word advisedly) that each individual sub-postmaster pay the sums in question. This stance was consistent with what remains the Post Office’s general position, which is that if Horizon shows a shortfall of X pounds, that shortfall of X pounds must have been caused by the sub-postmaster, either through mistake or dishonesty. Some shortfalls started in the hundreds of pounds, and moved into the thousands, and then tens of thousands, of pounds over a few months. Some Claimants paid these amounts to the Post Office out of their own resources, even though they did not believe or accept that there was anything deficient in their accounting. Some of the shortfalls were only for modest sums. Some Claimants were lucky enough to find accounting irregularities in their favour. Others were convicted in the criminal courts of false accounting, fraud, theft or other offences, and some were imprisoned. The Post Office’s position in this litigation is not quite that it is impossible for Horizon ever to generate any errors, but rather that the system is what is called “robust” and can be relied upon.

About the Post Office's approach to the litigation:

14. It does appear to me that the Post Office in particular has resisted timely resolution of this Group Litigation whenever it can, and certainly throughout 2017 and well into 2018. A good example of this is the fact that for these Common Issues, the Post Office submitted in paragraph 24 of its Opening Submissions that the six Lead Claimants’ cases should not be treated as representative of the other Claimants. I cannot accept that such an approach would be in the interests of anyone.

About the foot-dragging:

16. Until this litigation is resolved, I intend to hold substantive trials in tranches every single judicial term from November 2019 onwards into the future. This is so that this litigation is resolved as swiftly as possible in accordance with the overriding objective. I explained this to the parties in October 2017, throughout 2018, again during the Common Issues trial, again in January 2019, and I repeat it now. Even on that intended timetable, some Claimants may be waiting far longer than is ideal to have their claims fully resolved either in their favour, or against them. Some of the Claimants are retired; some are elderly; some have (as I have said) criminal convictions under review by the Criminal Cases Review Commission. Nobody involved in this litigation is getting any younger as time passes. The Post Office itself is under a cloud in respect of these unresolved allegations and I consider it to be an obvious point that resolution of this litigation as soon as possible is in the interests of all the parties – all the Claimants and the Post Office – in the interests of justice and the wider public interest.

About the Post Office acting in a manner perhaps not appropriate:

19. The Post Office, in many instances with some vigour, pursued the shortfalls with different Claimants as accounting discrepancies for which those Claimants were contractually and legally responsible. The Claimants denied responsibility for them, and in all the Lead Cases, their evidence is that they did their best to investigate them but could not do so because of the way that Horizon operated, and because of the way that the Post Office behaved. The Lead Claimants all gave evidence that they had sought the assistance of the Post Office in getting to the bottom of the shortfalls. Not only did they not receive such assistance, Mr Bates as an example (who had prior experience in IT matters) asked for further training and was told he was not entitled to any.

About the Post Office's idea that justice is only justice if it favours the Post Office:

21. This judgment is concerned with the Common Issues. However, this cannot be done in complete hermetic isolation from any facts at all. The Post Office adopted a curious position so far as the Lead Claimants’ evidence of fact is concerned. Having failed to have that evidence struck out, and not having sought to appeal that order, Mr Cavender QC cross-examined on a great many aspects of it. The Post Office made submissions that some of the Lead Claimants were positively lying to the court (for instance Mr Abdulla), and were mistaken in fact as to contract documents provided prior to contract formation (for instance Mr Bates). However, at the same time, the Post Office urged me not to make findings as to credit... The Post Office was entitled to challenge the credit of the Lead Claimants, if it so chose, and it did. However, the Post Office seemed to want findings on that only if they were in the Post Office’s favour. This is a peculiarly one-way approach by any litigant.

Re lead claimant Pam Stubbs:

138. In my judgment these submissions by the Post Office are bold, pay no attention to the actual evidence, and seem to have their origin in a parallel world. It is unclear to me how someone can be expected to ask for a copy of something that they do not know exists. I am aware that there are many SPMs across the country, and some of them will have been in post for many years, but documents signifying their acceptance of terms and the contracts upon which they are engaged should not simply become “lost” because they are a number of years ago. I reject this explanation.

And there's more on Pam Stubbs, who I remember thinking at the time I spoke to her might have done over by the Post Office. Turns out she was:

165. Mrs Stubbs has, since leaving the Post Office, involved her Member of Parliament, The Right Honourable Sir John Redwood, who is now a backbench MP but has previously been a cabinet minister in the Government of Prime Minister John Major. At the very least, the Post Office maintains – or at least it did, when she was cross- examined – that it performed “an investigation”. Mrs Stubbs says she has never seen the outcome of any investigation into these matters; and her MP who intervened on her behalf, whom Mrs Stubbs said was promised “a full investigation” by the Post Office, has never been provided with any results either. It might be thought that if there were any proper investigation which actually reported on this, it could and should have been put to Mrs Stubbs, but if what was put to Mrs Stubbs in this trial is said by the Post Office to amount to such an investigation, then it is telling. The “investigation” appears, on the material deployed in this Common Issues trial, to have consisted of nothing more than Fujitsu asserting that there was “nothing wrong with the kit”. That is not, in my judgment, an investigation under any normal understanding or meaning of that word in society generally. The Post Office’s way of dealing with this wholly ignores the provision in the SPMC and a SPM’s liability for losses in that document (which on the Post Office’s case is what applied). There was simply a blanket assertion by the Post Office that she had to pay these sums. The suggestion that there was any investigation is not made out on the documents produced and put to her during her evidence.

This bit is really damning:

169. A degree of common sense has to be brought to bear upon the issues in these proceedings generally, and Mrs Stubbs’ experience is a good example of how common sense assists in everyday life. She operated this branch together with her husband for 12 years, and discrepancies were, if they occurred at all, measured in single pounds or even pennies. She operated this branch as the SPM for over ten years, and the only times there were discrepancies of a higher order were when there were electrical power issues in 2000 which personnel at the Post Office concluded were caused by Horizon. She was not told this, and made up the shortfall herself. She then operated for another nine years perfectly satisfactorily, until the move to the portacabin. From November 2009 losses appeared. Not only did losses then continue, they appeared in sizeable amounts and accumulated to staggering levels. Over the Christmas and New Year period, when the branch had been closed for some days, they jumped up to over £9,000, when she knew that this amount of cash unaccounted for simply could not be possible. She obtained all the information she could, including from Horizon, and prepared hand written accounts to investigate. She could not get to the bottom of it, and in the period during 2010 until she resigned (having been told she had to do so in order to market her branch) these losses climbed higher and higher.

170. Mrs Stubbs simply could not resolve these shortfalls, or explain them. She showed a degree of restraint and forbearance when giving her evidence, as she was pressed on such matters as: there had been an investigation, there was nothing to suggest Horizon was at fault, and Fujitsu said there was nothing wrong with the system. As Mrs Stubbs explained in her written evidence:
“I investigated matters as far as I possibly could. However, I was unable to ascertain the possible cause(s) of the shortfalls without assistance from Post Office. I was able to review the data printable from the Horizon system, but I could not interrogate it without access to the data that Post Office held or had access to. When you are looking for a reason for an error, you need to have all the information. I explained to Post Office on a number of occasions that I needed to be able to compare the data held on my Horizon system, with the data held at Fujistu / Post Office's head office. However, as I mention above, it was not until I saw some limited ARQ data, that I realised it contained some entries that were not accessible or viewable by a Subpostmaster. There is simply nothing you can do if you do not have sight of the other end of the transactions - particularly if the person who does is requiring you to find and prove the cause of the problem. The transaction logs gave me no more information than was showing on the Horizon system so I was unable to investigate further.”

171. The Post Office’s case is that Horizon does not cause such shortfalls and the honesty of SPMs and/or their assistants is the usual explanation. Mrs Stubbs was adamant that she would not let this matter drop. She explained in her written evidence that:

“Post Office's attempt to impose liability upon me was a matter of obvious significance to me both financially and as a matter of principle. My unwillingness to let this go reflects the understanding I have always had that Post Office was obliged to carry out a fair investigation into it and only require me to pay where losses had occurred and were my fault.”

172. In my judgment Mrs Stubbs is a careful and honest witness. She did her best at the time to try and work out what was happening, the reasons for it, and also notified the Helpline on numerous occasions, as well as keeping her own separate paper records in an attempt, or more accurately numerous and concerted attempts, to work out precisely how these shortfalls could have arisen. None of the Post Office personnel involved at the time with Mrs Stubbs, who attempted to obtain some input or explanation from Fujitsu were called as witnesses, so it is not possible to know what their full involvement was, the extent of their knowledge of the background matters, how many other SPMs they knew of may have had similar issues, nor the degree to which they considered Mrs Stubbs’ good record of over two decades (including her involvement when her husband was alive) to be relevant. I make it quite clear that I do not speculate on any of that. Nor is it possible to know what the outcome of the trial of the Horizon Issues will be later this year. Mrs Stubbs ran the branch perfectly satisfactorily for many years, with the exception of the periods that coincided with the electricity supply problems in 2000, and the move into the portacabin in 2009. On the evidence before me in this trial, and upon my assessment of Mrs Stubbs as a witness, I consider that she is reliable, thorough and honest. I accept her account of contract formation and the fact she never received, nor did she have any knowledge of, the SPMC.

Mrs Stubbs is likely to be a key claimant in the third "breach" trial in November.

The following is about another lead claimant Naushad Abdulla. This reads like the plot of a Russian novel. But it isn't. It actually happened.

260. Ms Ridge later said “I’ve got two choices here I either call it an error or I say its’s theft”. At another point in the interview Mr Abdulla stated “Ok yeah it’s my mistake but I was told how to do it, this is how I was told to do the lottery”. Mr Abdulla said that Ms Ridge gave him the impression that if he paid off the then-figure for losses, he would be re-instated. This was when she said:
“I would appreciate if you could send me a cheque for the outstanding debt as it stands at the moment, that doesn’t take into account any errors that might come. Up until yesterday morning it was £3926.31, that doesn’t take into account that there may be errors in your favour or against ‘cos they do come through. If you can send a cheque to me at the Maidstone address which is on my original letter. All right and as I say I will then write out to you and make my decision and write out to you.”

261. He did pay this sum immediately, believing this would either help or lead to his reinstatement. It did not, and he was not. Whatever the result of any further investigation by Ms Ridge or the Post Office in terms of “going back to Camelot” – and whether that even happened at all - Mr Abdulla had his appointment as an SPM summarily terminated by her.

262. He appealed against this decision. The appeal was heard by Mr Mylchreest the Appeals Manager on 23 June 2009. Mr Abdulla was again accompanied by Mr Darvill. Mr Abdulla’s understanding that Ms Ridge was investigating further with Camelot was obviously shared by Mr Darvill, because the latter stated “Of the total loss, approximately £1,000 was related to an error in the lottery which was being investigated. Mr Abdulla expected this to generate a transactional correction.”

263. On 29 June 2009 in a letter signed by him, Mr Mylchreest wrote to Mr Abdulla and dismissed his appeal, saying:
“I have now completed my investigation into the circumstances leading up to the summary termination of your contract for services at Post Office® Charlton branch on the grounds that you misused Post Office® funds and falsified your branch trading statement.
I have carefully considered all of the information in the case papers and the evidence you put forward at your appeal interview. I have concluded that both charges against you have been proven.”

264. It is not clear if “my investigation” included any further information from or investigation of the situation regarding Camelot, either by Ms Ridge or even Mr Mylchreest. Given the time scale, this appears unlikely. Certainly no documents were produced in this trial that suggested it was. It was made clear by Mr Mylchreest that he did not accept Mr Abdulla’s explanation regarding the undated cheque. However, the losses that were held against Mr Abdulla following the audit undoubtedly included the various items shown subject to some of the TCs that I have described. So, the issue of the cheque was not the only point being held against him and relied upon to reach the decision both summarily to terminate his appointment (by Ms Ridge) and to dismiss his appeal (by Mr Mylchreest).

265. There is also a copy of the same letter, although the page break is in a different page, again actually signed by Mr Mylchreest, dismissing the appeal, but this time dated 29 May 2009. This is before the appeal hearing had even occurred. Mr Abdulla believes that this shows that the appeal hearing was a formality in the sense that a decision on

the appeal had been taken even before the hearing had taken place. Mr Mylchreest did not give evidence before me so it is not possible to know what his explanation for this was. It is very surprising, if the document is dated correctly, that a document from before the appeal had taken place could record what the decision was, unless Mr Mylchreest had made his mind up before hearing the appeal.

On lead claimant Liz Stockdale:

279. It is as though the Post Office had finally realised, or been given advice, based on some basic principles of English contract law, not least those of offer, acceptance, and notice, for the new NTC as opposed to the SPMC. Without trivialising any of the issues in this case, an awareness of a contracting party of at least the existence of terms of a written document are clearly required, in order to fix a party with notice of that document’s terms. Willingness and awareness of terms are some of the basic building blocks of the law of contract. As can be seen from the analysis of the four earlier Lead Claimants, the Post Office’s procedures in terms of the SPMC went, in my judgment, from the sublime to the ridiculous. The approach in 2000 was simply to assume the outgoing and incoming SPMs would sort the SPMC out between themselves, because the SPMC was supposed to be kept in the branch (or not kept, depending upon the individual practice adopted in each branch). This approach was wholly unsatisfactory for a number of reasons, not least there is no evidence that either an incoming or outgoing SPM was ever told that is what was expected or required of them. The documents had also used confusing and interchangeable terms for different or the same document(s), as well as referring to documents which did not even exist such as the Book of Rules (or book of rules in later versions). It should be noted that the Acknowledgement of Appointment Mrs Stockdale signed on Branch Transfer Day still, however, referred to the non-existent “book of rules”. Initially the SPM was not provided with the SPMC in advance from the Post Office at all (or was, depending upon who put what in different envelopes).

Common Issues trial: the judge's comments part 2
Common Issues trial: the judge's comments part 3 - Post Office witnesses