Wednesday, February 5, 2020

House of Lords Post Office debate

Post Office: Prosecution Powers

This short debate was initiated by Lord Arbuthnot - a tireless campaigner for Subpostmasters for many years.

Watch it here:


Here's the link if you can't see the embedded video above: https://youtu.be/Tat0OyFiWi0

And if you would like to watch and read along at home, here is the transcript copied and pasted from Hansard:

2.34pm Tue 4 Feb 2020

Lord Arbuthnot of Edrom: To ask Her Majesty’s Government what recent assessment they have made of the Post Office’s powers to conduct prosecutions.

The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy and Northern Ireland Office (Lord Duncan of Springbank) (Con):

My Lords, the Post Office’s powers to bring a private prosecution, which fall under Section 6(1) of the Prosecution of Offences Act 1985, are not specific to that company. It has the same right as any other person, whether an individual or a company, to bring a private prosecution.

Lord Arbuthnot of Edrom (Con): My Lords, I am grateful to my noble friend for that Answer. Last year, the Post Office had to settle litigation brought by 555 sub-postmasters at a cost to it of nearly £60 million. The Court of Appeal described the Post Office as treating sub-postmasters

“in capricious or arbitrary ways which would not be unfamiliar to a mid-Victorian factory-owner.”

The judge at first instance held that a Post Office director had set out to mislead him. How can such an organisation possibly conduct its own prosecutions when it cannot command the trust of the courts or, indeed, of the country?

Lord Duncan of Springbank: My noble friend raises challenging points. I must stress that the leadership of the Post Office got it badly wrong and, as a consequence of those actions, people have experienced unfortunate situations. That has changed. There has been a change in culture, a new chief executive and a new recognition that the old ways of doing things cannot go on. That is why the Minister responsible in my department, Kelly Tolhurst, now has quarterly meetings with the National Federation of SubPostmasters as a way of ensuring a better relationship with those who are at the sharp end of the Post Office.

Baroness Burt of Solihull (LD): My Lords, this is far more than “unfortunate”; it is a shocking story of obfuscation, cover-ups and downright abuse of sub-postmasters—the face of arguably the most trusted brand in this country—by the most senior people running it, yet they were able to do this because they had the power to conduct their own prosecutions with no independent assessment of the case for the defence ​or the prosecution. Can I therefore I join the sub-postmasters in asking the Government to review this and other issues that this sorry case has thrown up through a full, independent public inquiry?

Lord Duncan of Springbank: The individuals affected are indeed the face of the Post Office in towns and villages up and down the land. The situation which arose was unacceptable and the courts have shown that. There needs to be manifest change in the way the Post Office does business and a recognition that that way is not acceptable going forward. We will be doing things differently; we will bring in a new national framework to ensure that the past situation cannot be repeated. This is the time for us to bring about the real change which is required right now.

Lord Morris of Aberavon (Lab): My Lords, when I was a law officer, we brought most governmental and quasi-governmental organisations which did prosecute under the supervision of the Attorney-General. Would that be appropriate in this case?

Lord Duncan of Springbank: I suspect that it will be quite some time before the Post Office embarks upon another adventure of this sort, for many obvious reasons. We need to recognise that a number of manifest failures led to this situation. These need to be understood, and they are being by the new culture inside the Post Office. The reality remains that the Post Office got it wrong. For that, there needs to be a serious change, and at the heart of it must be not just profits but recognising the role of the sub-postmasters themselves.

Baroness Neville-Rolfe (Con): My Lords, as the Minister responsible at the time, I was uneasy because it involved claims of dishonesty by apparently honest citizens. I therefore advised the Post Office to take outside legal counsel to try and get at the truth. Now that we have reached the present stage, what arrangements for compensation have been, are still being or will be made for those affected?

Lord Duncan of Springbank: My noble friend is right to draw attention to this. As my noble friend Lord Arbuthnot said at the outset, there will be a settlement of nearly £60 million for those who brought the class action itself. There will also need to be individual criminal examination for those who have experienced the sharpest end of the law. I cannot comment on these matters, but I recognise how important they are to bring about the justice required.

Lord McNicol of West Kilbride (Lab): My Lords, there are a number of points to pick up on, but I will focus on the £60 million. How much of that will the sub-postmasters themselves receive? My understanding is that, unlike in many other cases, the legal fees have to come out of that £60 million, which is one of the reasons for the settlement. Some clarification of how much the sub-postmasters themselves will receive would be welcomed by all.

Lord Duncan of Springbank: The simple answer to that question is: not enough. The reality is that perhaps only a fraction of the money which has been won in this court case—around £12 million of the £60 million—will end up in the pockets of the sub-postmasters. That is a shocking realisation but it is, unfortunately, the answer to the noble Lord’s question.

Lord Berkeley (Lab): My Lords, what action are the Government going to take against the people who were running the Post Office when all this was going on? Have they just been moved to another job and got promotion, or will some action be taken against them? As other noble Lords have said, people have died, committed suicide and lost their businesses.

Lord Duncan of Springbank: There is a new chief executive and a new regime is in place. I cannot comment on the individuals who were in positions of power during that time because I simply do not have the answer. I recognise the anger the noble Lord brings to his question, and that it is shared by the House today.

Lord Polak (Con): My Lords, the department has a representative on the board of directors. What is his exact role?

Lord Duncan of Springbank: We have a non-executive director who is responsible for representing the department and the Government. His role has evolved from a perhaps more passive approach to a much more active one going forward. We have to have a much stronger view about how we manage this area, through the chief executive, the chairman and the non-executive director with responsibility for governance and clear adherence to the responsibilities of the board itself.

Lord Bichard (CB): My Lords, a large corporate organisation such as the Post Office can always point to the fact that it has changed its ways and things will be better in future. Some of these people have lost their lives; £12 million compensation does not seem enough. In fact, no financial compensation would seem enough. Is the Minister satisfied that these people are getting due recompense?

Lord Duncan of Springbank: Those who have lost their lives could not possibly get due recompense throughout this process, no matter what the answer might have been. The situation is clear: during a significant period in the history of the Post Office, wrongdoing took place. It has admitted that it got it wrong and it is bringing about change now. I do not believe you can compensate adequately for those who have lost their lives.

The debate ends.

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Tuesday, February 4, 2020

The CCRC, Subpostmasters and the Court of Appeal


The conclusion to the epic civil litigation of last year was significant. The Post Office coughed up £58m and an apology, but there is still a whole bunch of people with criminal convictions wanting to know what's going to happen to them.

I asked Gill Furniss, the shadow postal services minister to give me her perspective, and she said:
"A terrible injustice has been done to these public servants. Their lives were thrown into chaos and the stress and misery they were caused is unimaginable. Labour welcomes that these innocent people are now a step closer to having their wrongful prosecutions quashed. The Government must now hold a full inquiry into this scandal and lay our exactly how they will ensure all those affected get the answers and justice they deserve."
Last week the Criminal Cases Review Commission wrote to 34 former Subpostmasters and former Post Office workers to let them know they are planning to convene a meeting of CCRC commissioners in March 2020. This meeting will decide whether or not to recommend their cases be sent to the Court of Appeal.

In the same letter, the CCRC also mentioned that another "around 20" Post Office applicants had been accepted into the process "recently".

The CCRC told me "recently" meant since the 16 Dec judgment and "around 20" actually meant 22. There was some speculation that the new touchy-feely Post Office might have, in the spirit of co-operation and openness referred these cases themselves, but the CCRC said this was not the case. Either way there are now 56 Post Office cases before the CCRC, all of which will be considered in March.

How did we get here?

The CCRC have been sitting on its initial tranche of Subpostmaster cases since 2015, when it was first suggested to them that multiple major miscarriages of justice may have occurred.

In their latest annual report, (published in July 2019), the CCRC said:
"A case is counted as long running if two years has elapsed since the date of its allocation for review and a final decision has not been issued. We aim for less than three per cent of cases to reach this stage... 27 of the cases on the long running list are closely connected in that they are all cases involving the Post Office Horizon computer system. These cases are being reviewed together, as overarching issues, expert evidence and current trials in the civil court impact on them all."
As the CCRC admitted, this means... "we have not met our target for long running cases."

There have been a few bumps in the road. Back in 2018 the CCRC told applicants they were minded to make a decision about referring their cases to the court of appeal in the autumn of the same year. This would have meant ignoring the huge volumes of pertinent information just about to surface at the first Bates v Post Office High Court trial which was due to start on 7 November 2018.

Lord Arbuthnot (one of the prime movers in getting the CCRC to accept the original tranche of Subpostmaster applicants) was alert to the inadvisability of such a course of action. On hearing the CCRC was potentially about to make a decision on its Subpostmaster cases, he wrote to them saying:
"I would worry that any decision not to reopen these criminal cases, before the allegations have been examined in the cases that are currently before the [High] court, might be subject to judicial review."
The CCRC listened. In subsequent letters to applicants, they indicated they were prepared to wait for the first trial judgment, which was handed down on 15 March 2019, and then the second, which appeared on 16 December 2019.

Post-litigation

And that's where we are now. In March 2020 (exact date tbc), at least three CCRC commissioners will meet to discuss the possibility of the now 56 cases before them being referred to the court of appeal.

Multiple CCRC commissioners are only asked to convene if there "seems" a possibility of an applicant's case being referred to the court of appeal. This may seem like a low bar, but if the CCRC's case review managers believe there is no possibility of the Subpostmasters having their convictions overturned, their cases would only be considered by a single commissioner.

Case review managers and the commissioners are looking for new evidence or a new legal argument which could render the basis of any conviction unsafe.

Subpostmasters with criminal convictions may argue that many of the judge's findings in the civil litigation represent a new (and definitive, legal) interpretation of the Subpostmaster contract. For instance, in paragraphs 820 and 821 of the common issues trial judgment, Fraser J rules:
"if and insofar as, during or at the end of any branch trading period, any SPM [Subpostmaster] contacted the Helpline in relation to any shortfall, discrepancy or disputed TC [transaction correction], the Branch Trading Statement for that period cannot be treated as an account rendered by an agent to the principal which can only be opened up if the SPM can demonstrate a mistake...The issue of an SPM as an agent deliberately rendering a false account to his or her principal, in relation to any such Branch Trading Statement for such a period therefore simply does not, in my judgment, arise."
The Post Office prosecuted many people for false accounting on the basis that a branch trading statement generated by a Subpostmaster on the Horizon system was always a "settled account", notwithstanding any dispute or discrepancy previously reported to the Helpline.

If, as the judge has now ruled, many of these settled accounts were not settled accounts, the lawfulness of any prosecution for false accounting must now be in question.

Of course not every Subpostmaster case before the CCRC involves false accounting and every circumstance is different. It's not known if the CCRC have found common themes running through every prosecution or if they are divided into batches with different themes applying to specific cases.

It could be something as simple as the Post Office's repeated denial (until 2017) that remote access to branch accounts was possible. Now the Post Office has accepted that both it and Fujitsu had the power to access branch accounts, it follows that Subpostmasters were not solely responsible for them.

Another issue in play is Horizon's robustness. Many of the convictions under consideration were achieved between 2000 and 2010 on the basis of computer evidence. On 16 Dec 2019 Fraser J ruled that during this period, Horizon was not "remotely robust" and prone to errors which may well have had an impact on branch accounts - the evidence used as a basis for prosecution. Again - this could be a reason a case might get referred to the committee of commissioners.

There is another striking problem the CCRC currently faces. It has been reviewing some Subpostmaster cases for five years. Yet now it appears to be proposing to prepare some cases for the March commissioners' meeting in five weeks. Is that fair? What if more applicants come forward, too late for March's meeting? How will they be dealt with? Would that involve potential negotiation with the court of appeal? A rolling programme of commissioners' meetings? Or would all further applicants be told to wait until the court of appeal has dealt with the first tranche of referrals - presuming some or all actually get referred.

The court of appeal process

CCRC commissioners will only refer cases to the court of appeal if they believe there is a "real possibility" that the convictions in question could be quashed.

If the commissioners do decide to refer to the court of appeal, the reasons for the referral will be set out in reasonably comprehensive "Statement of Reasons".

On receiving this statement of reasons, the court of appeal is obliged to accept the referred cases, and the applicants become appellants.

Appellants have their cases considered by three appeal court judges. In a normal case the judges would review the evidence as referred by the CCRC and make a decision (with or without a hearing).

Appellants may wish to add extra evidence to support their case, and whilst it is very unusual, it is perfectly possible that the respondent (usually the CPS, but in all Subpostmaster cases - the Post Office) have the right to oppose the appeal. If either of those circumstances arise there will need to be a hearing.

Bearing in mind there are 56 Subpostmaster cases being considered, if all of them are referred to the court of appeal it is extremely unlikely they will all be heard at once.

Some appellants may want the judges to consider extra evidence to bolster their chances, some may not. The Post Office might want to contest some or all of the cases. Some cases may have been referred for different reasons and the court of appeal may want to consider them in separate cohorts. All this affects the speed at which a case can proceed.

I spoke to someone who knows a lot about this sort of thing. He said it can take between three to nine months for a relatively simple single case to be heard from CCRC referral to court of appeal ruling. If the court of appeal does end up considering several dozen cases, no one has any idea how long it could take. Frankly we are in unchartered territory.

Whilst the CCRC has referred multiple cases relating to specific issues over a period of time (the convictions of asylum seekers for example), the Subpostmasters would constitute the largest single cohort of cases referred at once (if, indeed, they are all referred).

If the applicants get through enough hoops to have their convictions quashed they might have an opportunity to bring a case against the Post Office for malicious prosecution, which would potentially allow them to recover damages.

As per the Kingsley Knapley website:
"Claims for malicious prosecution enable a defendant to recover damages where he or she has been wrongly prosecuted under an improper motive. To successfully pursue a claim under the tort of malicious prosecution, the claimant would need to prove each of the following limbs: 
- the matter terminated in the claimant’s favour (i.e he/she was acquitted); 
- the prosecution had been brought without reasonable and probable cause; 
- proceedings were instituted or carried on maliciously; and 
- the claimant suffered damage as a result."
A quashed conviction would satisfy the first "limb" of the above. Proving the third could open up a whole new chapter in this story, which I will continue to cover on this blog.

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Wednesday, January 15, 2020

Letter demanding a public inquiry into the Post Office scandal

Eleanor Shaikh
This was sent on 10 January to the Secretary of State for Business, Energy and Industrial Strategy, Andrea Leadsom by Eleanor Shaikh. Eleanor's research into the extent of the government's control of and responsibilites regarding the Post Office has already made waves in Westminster.

This letter is another tour de force...







THE CASE FOR A STATUTORY PUBLIC INQUIRY INTO THE POST OFFICE HORIZON SCANDAL

Dear Andrea Leadsom,

As a constituent of Jeremy Hunt I have been seeking justice for over two years for my ex-subpostmaster, Chirag Sidhpura, who was accused of theft by POLtd after an alleged shortfall of £57k at our branch in Farncombe, Surrey.

Chirag was not party to the Group Litigation as his case began in October 2017 and developed after the deadline to join. But for two years his plight has been hopelessly neglected by POLtd and my appeals to your predecessor, Greg Clark, on his behalf have achieved nothing to help his situation by way of engendering active shareholder intervention.

Now that the High Court Litigation has concluded and the catastrophic errors in POLtd’s management of its Horizon IT system finally exposed, it is vital that a public inquiry be established to determine how such far-reaching and profound failures were allowed to occur in a company owned solely by the UK Government and in the face of numerous warnings. These include the June 2015 Whitehall debate on the POLtd Horizon controversy during which MPs’ appeals for a judicial inquiry were disregarded by BIS.

I enclose a document which looks at significant presages of failure running up to the Horizon scandal which BEIS (and formerly BIS ) consistently failed to interpret during the years it chose to rescind its duty of oversight. The document draws upon multiple sources to chart the structures of governance by which meaningful oversight and intervention by BEIS, as Sponsor Department, could have been deployed over its Arm’s-Length Body. 

Its conclusions chime with the comprehensive findings of the Cross-Party BEIS Committee Report of October 2019. Unable to comment upon matters pertaining to the Group Litigation, this committee still raised wide-ranging concerns regarding the inadequacy of departmental scrutiny from BEIS over POLtd:
It is important that POL is held properly accountable by the Government for its decisions, whether strategic or operational, and there needs to be consistency in the criteria applied by Government in its decision of whether or not to intervene… 
We recommend that the Government undertake an urgent review of its mechanisms for holding Post Office Ltd to account and produces a clear statement of how it will do so in the future. This should examine how all Post Office Ltd’s decisions, operational or strategic, are supporting the comprehensiveness and sustainability of the Post Office network’.
The lack of scrutiny which handed POLtd free reign to conduct itself so disgracefully - and the cover-up which appears to have developed in its absence - has left a trail of human suffering so appalling that a public inquiry is the very least and the very last remaining mechanism by which we must all learn lessons, write them indelibly in the public domain and then hope to move forward.

There is, without doubt, sufficient public interest in the controversy to warrant such an inquiry: at its centre the once trusted and much-loved brand of POLtd which serves communities across the land in a social mission far beyond its purely commercial remit. A brand which is entrusted with contracts from multiple government departments yet which, for two decades, has hounded and prosecuted its own sub-postmasters for mysterious shortfalls without first conducting thorough investigations or admitting known errors in its IT system. 

An inquiry is needed to unpick the twists and turns on the road which led ‘the nation’s most trusted brand’, as POLtd obsolescently describes itself, to its final destination where, tens of millions of pounds poorer, the sinister alter-ego of its corporate identity has been revealed through painful and eye-wateringly expensive litigation.

An inquiry must uncover each step on this humiliating path right down to POLtd’s lowest, darkest hour in which the very contracts it used to hold innocent men and women liable for vast branch discrepancies - caused by its own negligence - were proven to be worth no more than the paper they are written on.

The catastrophic fallout of POLtd’s behaviour is belatedly emerging now victims’ testimonies fall under the media’s spotlight. It is a scenario which leaves in its wake the wreckage of reputations and of businesses, the loss of homes and the breakdown of marriages. It has criminalised the innocent and casts a shadow of depression, PTSD and stress-related illness. At its most harrowing it has led to imprisonment and suicide. It is a pattern replicated hundreds of times over and behind the ranks of the 550 Claimants made visible through the Group Litigation await unseen cases estimated by the Communication Workers Union to be also in the hundreds. And this notwithstanding the thirty-four POLtd cases under consideration by the Criminal Cases Review Commission under for potential malicious prosecution, among which are 22 prison sentences. The scale of injustice is unprecedented and simply staggering.

It is essential that a rigorous and impartial investigation be carried out to establish factually the causes of events which led to such widespread and corrosive impact and for inference to be drawn from these facts regarding the likelihood of liability. To this end I respectfully ask that you set in motion a statutory public inquiry under the Inquiries Act 2005.

Such an inquiry must identify ways to prevent a recurrence of this tragedy, it must hold individuals and organisations to account and frame recommendations to give much-needed reassurance to sub-postmasters still serving POLtd’s customers across the land. Its legacy must rebuild public confidence in a brand upon whose Services of General Economic Interest many communities rely, with a dependence felt nowhere more keenly than in remote, rural or deprived, urban areas and by vulnerable customers comprising the elderly, disabled and those on low incomes. 

Such an inquiry must allay public concerns by reaching beyond the compass of the High Court at a time when serious reservations over the network sustainability of POLtd are already, justifiably, being voiced.

A PUBLIC INQUIRY INTO THE POST OFFICE  HORIZON SCANDAL MUST:

1: Evaluate the level of competence of the present POLtd Board, senior management and investigative department, the majority of whom remain in office despite two damning High Court Judgements. 

For years,  the Board’s readiness to accept a dangerously misplaced, self-interested belief in Horizon’s infallibility, despite a wealth of evidence to the contrary, must be questioned and suitability for continuance of Board membership be carefully weighed. In this, an inquiry may be mindful of Lord Arbuthnot’s suggestion that, with the exception of the recently appointed CEO Nick Read, ‘the government should clear out the entirety of the board and senior management of the Post Office and start again’.  

Scrutiny must be applied to the Board’s decision to pursue litigation of such magnitude which hung on an inversely slender chance of success and for sanctioning a trajectory for POLtd whose direction was so high-risk as to be described by its own counsel as presenting an ‘existential threat’ to its entire operations. 

Displaying scant capacity for self-reflexivity or rational judgement, POLtd’s Board and upper echelons of management clung with brutal determination to a blind faith in Horizon which, according to Judge Fraser, ‘amounted to the 21st century equivalent of maintaining that the earth is flat’ (929, Horizon Issues Judgement, 16th December 2019). It presided over a culture described as ‘capricious and arbitrary’ and which ‘demonstrates the most dreadful complacency, and total lack of interest in investigating these serious issues, bordering on fearfulness of what might be found if they were properly investigated’. (217, Horizon Issues Judgement, 16th December 2019). 

An inquiry must determine if this self-same body is genuinely capable of forging the radical overhaul which it is now incumbent upon POLtd to deliver. Can the panel assure itself and the public that this same Board now suddenly possesses the credibility, the business acumen, the will and the ethical compass to engineer the wholesale reparation of POLtd’s IT systems, its support & investigative mechanisms and its corporate culture as envisaged by Second Sight in its prescient recommendations of January 2016? (See enclosed document ‘Fixing the Post Office’). 

On this Board sits BEIS’s representative, a UKGI colleague entrusted to evaluate and, if necessary, to challenge POLtd strategy and risk parameters. In the light of internal POLtd documents revealed during the litigation relating to Horizon’s flaws, this Board member’s exposure to, or failure to uncover, critical information in the years leading up to the crisis-  and this individual’s subsequent transmission of, or failure to transmit, such information to the Sponsor Department, must also fall within the remit of an inquiry.

Regarding the dispersal or suppression of crucial, if potentially incriminating, information on Horizon’s flaws between interested parties see the enclosed document ‘Who Was In The Know’ in which Ron Warmington (MD, Second Sight) expertly delves into the realms of who might have known what about ‘the Truth’ at given points in the sequence of events. The net is cast as wide as the hierarchies of POLtd, Fujitsu, Ministers and the Government-appointed Civil Servant Board Member.
Email correspondence between POLtd CEO Paula Vennells, Angela Van den Bogerd, senior POLtd management and Fujitsu engineers such as Gareth Jenkins, Stephen Parker (Fujitsu Post Office application support) and Andy Dunks (Fujitsu IT security analyst) must be subject to meticulous investigation. Confidentiality Commitments used by POLtd to silence voices which run counter to its corporate narratives must be waived.

2: Seek to establish how POLtd was permitted by BEIS to conduct highly aggressive and costly legal tactics with such reckless regard to the public purse. According to Judge Fraser ‘Both this level, and rate, of expenditure is very high, even by the standards of commercial litigation between very high-value blue chip companies’.

POLtd’s legal costs were recorded as £20m in its Reports and Accounts of 2018/19 which is exclusive of the £3m of the previous year, of its legal costs to the end of 2019, of the £57.75m price-tag of its ‘final’ settlement and of costs pertaining to the unresolved CCRC cases.

POLtd’s attempt to sack the managing Judge mid-trial (‘virtually unheard of in sensible civil litigation’ according to The Register, 18th December 2019) and its ill-advised attempt to appeal the Common Issues Judgement (failing on every one of its 26 counts), are just two examples of its attritional, financially irresponsible and arguably irrational conduct. It flies in the face of assurances given to Parliament by BEIS’s Lord Henley (19th November 2018) on the very issue:
As the sole Shareholder, the Government expects the Post Office Limited to ensure value for money principles in its use of resources at all times’.
An inquiry must therefore ask who sanctioned such costly and cavalier legal tactics fuelled by the public purse, widely thought to be effected to prolong or even derail the judicial process. It was a strategy which unnecessarily inflated not only POLtd’s legal costs (on which the Public Accounts Committee and National Audit Office must be drawn) but also, ultimately, cost the victims dearly. An inquiry might consider whether, by exhausting the Claimants resources, POLtd arguably coerced them to a premature settlement before the hearing of all four scheduled trials.

Of the £57.75m received by Claimants in this settlement as little as £8-£11m will remain once their legal, insurance and funding costs are met. According to their own legal team ‘People will not recover anything like their full losses’ (James Hartley, Computer Weekly, 13th December 2019).

It is a travesty that this deflated figure fails even to match the total sum of phantom shortfalls estimated at £18m which have been repaid to POLtd by sub-postmasters over the years.

Had POLtd dealt fairly and transparently with its sub-postmasters from the outset, Claimants would not have been forced to adopt the third-party funding structure which inevitably so materially diminished their victory.

Had BEIS exercised intelligent shareholder oversight and/or  intervention, POLtd could have been persuaded to conduct itself with appropriate fairness and transparency from the beginning - both in respect of its behaviour towards sub-postmasters and its behaviour during the litigation.

An inquiry might therefore advise whether, on this issue, the Government should itself release  funds to supplement the compensation so it more realistically reflects the scale of damages suffered and recognises the role played in this controversy by successive governments in turning an indefensibly blind eye.

3: Determine if millions of pounds of unallocated funds which have for years accrued in POLtd suspense accounts represent the reverse effect of IT failure. It is suspected by Independent Forensic Accountants Second Sight, who spent years investigating POLtd, that they may, in part, represent the accumulation of phantom shortfalls generated by Horizon but subsequently made good by sub-postmasters under duress. 

This being the case, it is only logical that these substantial sums, hitherto creamed off to inflate POLtd’s own profits or else left hanging in suspense limbo for years, should be released to further supplement the Claimants’ remuneration.

4: As a matter of urgency consider whether POLtd should any longer be trusted with the powers it wields to bring about its own prosecutions. This privilege currently permits POLtd to do so independently of the Crown Prosecution Service, thereby escaping the checks and balances that CPS involvement would routinely invite.

Throughout two High Court trials POLtd was consistently proven to withhold evidence despite the overarching duties of disclosure beholden to a prosecuting authority. On its secrecy Judge Fraser remarked:
there are obligations upon parties in terms of disclosure. So far as criminal cases are concerned, these concern the liberty of the person, and disclosure duties are rightly high. I do not understand the motivation in keeping this type of matter, recorded in these documents, hidden from view; regardless of the motivation, doing so was wholly wrong’ (457, Horizon Issues Judgement, 16th December, 2019).
Of its current Business Improvement Director, Angela Van Den Bogerd, he observed that:
she did not give me frank evidence, and sought to obfuscate matters, and mislead me’ (Common Issues Judgement, 15th March 2019),
Her witness statement also stated, in terms, the exact opposite of what the reality of the situation was’ (249, Horizon Issues Judgement, 16th December, 2019).
Such scant regard for the truth, even under oath at the High Court, exhibited by the highest ranking (but not only) POLtd witness, is incompatible with POLtd’s authority to bring criminal cases in the name of the Crown and must be relinquished with immediate effect. Ideally this should not await the formal process of an inquiry.

Moreover, POLtd employees’ consistent track record of mis-presenting, twisting or concealing fact (including before the BIS Select Committee, 2015) has prompted Lord Arbuthnot to call for inquiry to be Judge led, indeed for a full Judicial Inquiry.

5: Finally, identify means of embedding more rigorous departmental oversight of POLtd by BEIS and for it to relinquish once and for all the defence of POLtd’s ‘operational independence’ by which it has erstwhile sought to rationalise its non-intervention.

For, left to its own devices and  without the supervision of a higher authority it is doubtful that POLtd will engineer its own transformation.

POLtd is a company whose corporate DNA was, until less than two months ago, so entrenched in its sense of absolute power that it’s ‘oppressive’ conduct towards sub-postmasters was likened by Lord Justice Coulson to that of ‘a mid-Victorian factory-owner’. It was said to exhibit ‘institutional obstinacy’ and, according to Judge Fraser, borders on ‘institutional paranoia’ (946, Horizon Issues Judgement, 16th December 2019).

The litigation has exposed in POLtd a split personality which has, for twenty years, presented a highly polished and (almost) convincing veneer of propriety to the Government, to the public and to numerous courts of law. And with such unparalleled autonomy that it dared even deploy counsel and expert witnesses to uphold a facade which has been proven to be the exact opposite of reality.
Tighter shareholder oversight is critical.

Correspondence between two broken ex-sub-postmasters seeking resolution from POLtd’s terrifying incompetence as recently as December 2019 (supplied) suggests that the pace of corporate transformation is either insufficiently urgent, superficial, or both, and that any rhetoric from POLtd’s well-tuned PR machine to the contrary must be fully scrutinised and substantiated by BEIS to ensure it is not concealing default behaviours of POLtd’s former self.

The emails were written in desperation, the culmination  of months of mismanagement of cases involving alleged discrepancies at two branches. They were sent just days before POLtd congratulated itself on its  ‘major overhaul of our engagement and relationship with postmasters’ (joint statement on the announcement of settlement, 11th December 2019) and shed light on the hand-me-down teams to whom, even with the noblest of intentions, a new CEO must delegate his vision.

An inquiry must satisfy itself that Nick Read alone constitutes a sufficient enough change of guard for the undertaking of mobilising such inertia. Chairman Tim Parker’s response to Judge Fraser’s Common Issues Ruling ‘We have taken his criticisms on board and will take action throughout our organisation’  of March 2019 is looking seriously late on delivery, yet to anyone caught in POLtd’s invisible noose, a delay can be the difference between life and death.

If POLtd’s corporate culture, network modernisation and sustainability is to be guaranteed under its new CEO and the watchful eye of BEIS, it must be built on the foundation of a Framework Agreement drawn up between these parties. It may be pertinent for an inquiry to consider why this has not yet occurred. This should formally establish principles of governance and lines of accountability within the POLtd/BEIS relationship including the remit of UKGI. It should include in its scope details of the ‘circumstances of, and rights upon, intervention’ belonging to BEIS and must be conceived in the light of a thorough re-examination of the entire viability of POLtd’s business model. This model has, to date, sustained itself on the premise of its entitlement to offload liability for all branch shortfalls onto sub-postmasters, an entitlement which the Common Issues Judgement ruled POLtd no longer possesses - indeed never did. It is for an inqury to seek evidence that will assure stakeholders that the dysfunctional nature of POLtd’s business model is being reshaped to accommodate this seismic shift.

Final words here must go to my ex-sub-postmaster, Chirag Sidhpura, who was powerless to prevent all that he had ever worked for being snatched from his grasp by a company owned by your department.
I lost everything overnight, my dignity, respect and everything which I built over the course of 5 years, Post Office took it all away without a proper investigation and explanation, with no care in the world of how would a family man support his family without pay’. 
‘This brought stress into my marriage, family life, to the point where my wife said to me it’s either the business or your family, but I could not walk away from either as I had done nothing wrong’. 
‘My frustration was still there and getting worse, I broke down and didn’t know which way to turn, my family life was suffering, interaction with my children was getting worse. After talking to my doctor I was prescribed Setraline anti-depressants which has helped’.
Chirag’s is another unresolved story which bears witness to the complacency, incompetence and cruelty of POLtd management until as recently as 2019.

The High Court Litigation may be over and victory rightly seized by the Claimants but the battle to reclaim POLtd and restore it to the fully-functioning, dynamic, Nolan-principled business that it must become has only just commenced.

Will BEIS up tools and actively involve itself in redrawing POLtd’s road map and will you, as its Secretary of State, trigger a public inquiry laying the foundation for this rejuvenation? For the sake of all sub-postmasters - past, present and future - I sincerely hope that you will.
  
I look forward to your response,

Yours sincerely, 
Eleanor Shaikh


N.B. I have identified three instances where a potential conflict of interest within an inquiry exists. The first, that of Paula Vennells whose tenure as CEO of POLtd spanned critical years of the Horizon controversy, now in office as a non-executive Director of the Cabinet Office. Aside from the very serious concerns aired in the Fit and Proper Person referral made against Ms Vennells (supplied) it should be noted that, not only must Cabinet Office advice be sought on whether or not an inquiry should be held, but also that the Cabinet Office functions as the pinnacle of overarching oversight of departmental ALBs. Owning as it does the process for reviewing ALBs the Cabinet Office may itself, therefore, come under scrutiny during a public inquiry. Ms Vennells position at its core risks compromising any impartiality in both respects due to her significant personal interest in investigations not being conducted.

Additionally, according to the Cabinet Office Inquiries Guidance it falls to the Permanent Secretary of your department, Alex Chisholm, to ‘put processes in place to start collecting relevant evidence... suspending the usual process of archiving and destruction of papers’.

Alex Chisholm is also the principle Accounting Officer of BEIS, is a non-executive Director of UKGI and until 2017 the Accounting Officer of POLtd’s parent company Postal Services Holding Company. Given questions might be asked by an inquiry as to whether or not Alex Chisholm was successfully is discharging his combined duties of oversight in all these roles and given that BEIS will be both sponsor of and party to the inquiry, such potential conflicts of interest must be brought to its attention.

Lastly, Michael Keegan, potentially implicated in the controversy through his role at Fujitsu, was last year appointed a Crown Representative at the Cabinet Office. As Fujitsu’s UK Chairman 2015-2018, previously its CE, and a UK board member since 2010, Keegan’s tenure spans critical years during which his IT company managed Horizon on behalf of POLtd. So gravely concerned was Judge Fraser by the veracity of evidence given by Fujitsu employees to previous courts in a number of criminal cases, that he is passing a separate dossier to the Director of Public Prosecutions.
Fujitsu is a long-standing and major IT supplier to the government.

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Friday, January 3, 2020

Horizon trial judgment is handed down - inc transcript

Sir Peter Fraser
The handing down of the Horizon trial judgment on 16 dec 2019 was expected to be a damp squib. After all, the parties had settled five days previously.

On the day, it all went off. You can read my report here.

The following piece is mainly about ensuring the judge's exact comments in court are made available to all - although, as you'll see, there appears to be a spelling mistake in the transcript on a crucial word!

The most interesting bit came at the end of the hearing. Having handed down the judgment and dealt with housekeeping, Sir Peter Fraser gave the following announcement:
"Based on the knowledge that I have gained both from conducting the trial and writing the Horizon Issues judgment, I have very grave concerns regarding the voracity of evidence given by Fujitsu employees to other courts in previous proceedings about the known existence of bugs, errors and defects in the Horizon system. These previous proceedings include the High Court in at least one civil case brought by the Post Office against a sub- postmaster and the Crown Court in a greater number of criminal cases, also brought by the Post Office against sub-postmasters and sub-postmistresses.
Max Hill QC
After very careful consideration, I have therefore decided, in the interests of justice, to send the papers in the case to the Director of Public Prosecutions, Mr Max Hill QC, so he may consider whether the matter to which I have referred should be the subject of any prosecution."
Sir Peter went on:
"It will be entirely a matter for the DPP what, if anything, he does in respect of this referral... I wish to make it clear that the specific subject to which I will drawing the specific attention of the DPP relates to the evidence on previous occasions of Fujitsu employees."
Notwithstanding the likely homonymical typo in the transcript (I think his Lordship was understood to say "veracity" rather than "voracity"), Fujitsu, and the employees who gave evidence against Lee Castleton, Seema Misra et al are now firmly in the firing line.

If you want to know exactly why the judge felt the need to pass on a folder to the DPP I would recommend you have a crack at the long, but very readable judgment.

In it, the judge finds Andy Dunks, Fujitsu's IT Security Analyst "expressly sought to mislead" him.

He says Fujitsu's Head of Post Office Application Support, Stephen Parker, effectively lied to the court, by choosing "specifically to give the impression in his 1st witness statement that Fujitsu did not have the power (the word Mr Parker expressly chose) to inject transactions into the counter at branches, even though he knew that it did."

And the judge finds in conclusion that Fujitsu:
"do not... appear to me to have properly and fully investigated... myriad problems, nor did Fujitsu categorise... incidents correctly. They also seem to have moved away, in their investigations, from concluding that there were any issues with the software wherever it was possible for them to do so, regardless of evidence to the contrary."
If the DPP is minded to do anything, it might not be long before Inspector Knacker starts knocking on a few doors.

So, for completeness, here is a full transcript of the final hearing, which took place in Court 26 of the High Court's Rolls Building, starting at 2.30pm on Monday 16 Dec 2019. Enjoy:

IN THE HIGH COURT OF JUSTICE QUEEN’S BENCH DIVISION
No. QB-2016-004710
Rolls Building Fetter Lane London, EC4A 1NL
Monday, 16 December 2019
BETWEEN:

Claimants

BATES & ORS

- and -

Defendant

POST OFFICE LTD
Before:
MR JUSTICE FRASER

MR P. GREEN QC (instructed by Freeths LLP) appeared on behalf of the Claimants.
MR O. DRAPER (instructed by Womble Bond Dickinson (UK) LLP) appeared on behalf of the Defendant.

MR JUSTICE FRASER: There are three items on the agenda for this afternoon. The first is handing down the judgment. 

This was distributed in draft on 28 November 2019 to the parties’ legal advisors and two members of the steering committee, but it was under embargo until now. The usual embargo in this case was slightly amended so that the two mediators involved in assisting the parties settle the litigation were also permitted to see the draft judgment. That judgment is to be handed now, which means its contents become public, so I am going to ask my learned clerk to do that. 

There are a number of printed copies. There are ten in folders; there are eight printed copies not in folders. The judgment has three appendices, one is the technical appendix, one is a glossary and one is a summary of the findings on the numbers of bugs, defects and errors that I have found to exist within the Horizon system. 

If anyone who is in court would like a copy and they put their email address on the three forms which have been provided for that purpose, or they give my learned clerk their email address, they will be emailed a copy straightaway after this hearing. 

The judgment is also going to be placed on the Bailii website which is at www.bailii.org with the neutral citation [2019] EWHC 3408 QB. It will also be placed on the judicial website straight after this hearing at www.judiciary.uk. If anybody does go onto the Bailii website and search for it under the name Bates v Post Office, they should just remember that it is the sixth judgment, so it is Bates v Post Office (No 6). That is the first item. 

The next item, Mr Green.

MR GREEN: My Lord, the parties, as your Lordship know, agreed a settlement to be 
incorporated in a Tomlin order to be made by your Lordship, subject to your Lordship’s approval, of course. We have revised it in the light of your Lordship’s observations about the malicious prosecution claims and the provision made for those. 

The structure is that the settlement does not embrace the malicious prosecution claims to which that paragraph refers, which are those of convicted claimants, and that is why there is a provision in paragraph 3 that neither the stay provided for in paragraph 1 nor the discontinuance provided for in paragraph 2 prejudice the right of any convicted claimant to bring an individual claim for malicious prosecution. 

What we have added, your Lordship will see, that last sentence, which is to the extent that convicted claimants require permission under CPR rule 38.7 to make another individual claim for malicious prosecution following discontinuance under paragraph 2 above. Such permission is granted. 

MR JUSTICE FRASER: Yes. Now, that provision – I will just check this with Mr Draper in a moment – as I understand the operation of it is so that if there is any claimant who is currently subject to the group litigation wishes to advance a claim for malicious prosecution---- 

MR GREEN: Exactly.

MR JUSTICE FRASER: --that is not caught by the settlement.

MR GREEN: Exactly.

MR JUSTICE FRASER: Because that is a claim that is actually included on the claim form. 

MR GREEN: Your Lordship is absolutely right. Exactly.

MR JUSTICE FRASER: Right. And the discontinuance does not yet occur until an application 
is made under paragraph 2.

MR GREEN: Exactly right. So, it is a Tomlin order until the application for discontinuance is 
made and granted, and then it comes to an end.

MR JUSTICE FRASER: Right, I am just going to ensure that Mr Draper is on board; I am sure 
he is. Mr Draper, I see you appear for the Post Office today.

MR DRAPER: I do appear for the Post Office. My Lord, yes, the provision there is just to 
ensure there is no possible argument about abuse of process if there is, if you like, what 
might be contended to be a second claim in relation to malicious prosecution.

MR JUSTICE FRASER: That is why I raised the point because I think the intention of the 
parties is that any such claimant in that situation issues a fresh claim form. Is that right? 

MR DRAPER: My Lord, yes.

MR JUSTICE FRASER: But for the moment this action is not yet discontinued in any event. It 
is just subject to a stay under the Tomlin order.

MR DRAPER: That is right.

MR JUSTICE FRASER: Right. Thank you very much. I am going to make that order. I have 
signed one copy of the Tomlin order. I am going to hand that down now, as well as return the confidential schedules that were lodged at the same time. I will give those to Mr Green. So far as the parties are concerned, is there anything else today? 

MR DRAPER: My Lord, no. 

MR JUSTICE FRASER: Right. There is one more thing from the court’s point of view. By signing the consent order that I have just signed, today is the final substantive hearing day of the Post Office Group litigation. This means that I am therefore effectively no longer the managing judge. 

What I have to say now does not have any effect upon that function in any event and I will still be able to make any further procedural order in January 2020 if one is sought, as anticipated in paragraph 2 of the Tomlin order, for the withdrawal of the group litigation order. However, I am making these comments now in open court at the conclusion of the Horizon Issues trial in the interests of open justice and transparency. 

The Horizon Issues trial involved very detailed analysis of the Horizon computer system.
In the year of its inception in 2000 up to 2018, in order to address the Horizon issues, both the evidence and the judgment that I have just handed down considered in great detail the contents of contemporaneous documents within Fujitsu and the Post Office dealing with the operation of the Horizon system generally, but particularly in respect of the known existence of Fujitsu of bugs, errors and defects in Horizon. 

Based on the knowledge that I have gained both from conducting the trial and writing the Horizon Issues judgment, I have very grave concerns regarding the voracity of evidence given by Fujitsu employees to other courts in previous proceedings about the known existence of bugs, errors and defects in the Horizon system. These previous proceedings include the High Court in at least one civil case brought by the Post Office against a sub- postmaster and the Crown Court in a greater number of criminal cases, also brought by the Post Office against sub-postmasters and sub-postmistresses. 

After very careful consideration, I have therefore decided, in the interests of justice, to send the papers in the case to the Director of Public Prosecutions, Mr Max Hill QC, so he may consider whether the matter to which I have referred should be the subject of any prosecution. 

In arriving at that decision I have considered the relevant authorities, including:
  • R v Patel [2016] EWCA Crim 2001, which was a decision in the Court of Appeal Criminal Division of Lord Justice Simon and Mr Justice Hickinbottom, as he then was, at paragraph 84; 
  • Hussein v William Hill Group [2004] EWHC 208 QB, a decision of Mrs Justice Hallett, as she then was, at paragraph 50; 
  • and a number of others.
It will be entirely a matter for the DPP what, if anything, he does in respect of this referral. The contents of the letter that I send him will be confidential, although I will copy it to the parties in this litigation through their solicitors. 

I wish to make it clear that the specific subject to which I will drawing the specific attention of the DPP relates to the evidence on previous occasions of Fujitsu employees. 

This matter is entirely separate from any aspects of the process currently underway at the Criminal Cases Review Commission in respect of claimants who were convicted. Paragraph 66 of the judgment that I have just handed down explains why this court has no involvement in the process underway at the Criminal Cases Review Commission. 

Mr Green, Mr Draper, nothing else?

MR GREEN: Nothing further, my Lord.

MR JUSTICE FRASER: Mr Draper?

MR DRAPER: No observations, my Lord.

MR GREEN: My Lord, may we thank you on behalf of all parties for the hard work that has 
gone into several thousand pages of judgments.

MR JUSTICE FRASER: Yes. My learned clerk did actually do a word count on all six of the 
judgments and it is just slightly fewer than War and Peace, but not by very many. Thank you all very much, and if I could wish everyone a very happy Christmas.

[Judge rises]

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