Expert Witnesses – Who Needs Them?

 

During the week the News at Six on BBC starts at 6pm and finishes at 6.30pm.  Half an hour every night regardless of what stories are to be told, there will be news to report and it will last 30 minutes.   In much the same way the format of trials such as the present one is laid out in advance.  There will be one expert witness allowed from each side who will investigate the matter put before them, write a report and be cross examined on the contents of that report in the witness stand.  In the current trial each expert has spent the best part of a week each in court defending their assumptions.

Personally speaking from reading the transcripts and witness statements I think we have learned next to nothing from their appearances.  I do however think that Dr Worden’s statistical approach needed to be delivered in order for that approach to be ruled out in its entirety as totally inappropriate for the purposes of determining what transpired to cause the claimants in this case to have such discrepancies in their branch accounts.   Statistics are of no use when examining the cause and effect of what must be abnormal occurrences in a system that everybody agrees works as it should most of the time.

I am sure most will be aware that a normal distribution curve of events is bell shaped and that mean, median and standard deviation can be calculated from that graph.  However the norm will always be skewed when unlikely events take place towards the ends of the bell shaped graph.   Probability plays no part in determining whether or not a particular branch will suffer from communication problems or not and how frequently these will occur.  Nor will it play a part in determining whether or not an intermittent hardware failure will occur.  The reason being is that while you may use historical analysis to determine the number of events that are likely to occur it would be impossible to use the same analysis to quantify the extremes of the amounts involved.  You may arrive at an average but, as we have already seen, the financial amounts involved differ hugely from pennies to millions.

Dr Worden has produced a computer based model of his assertions and challenged the court to use this and adapt the input to what the court considers reasonable in order to provide an outcome based on those factors.  Perhaps they might, perhaps not but there is another way that can be considered.

Monte Carlo simulation allows a computer to generate thousands if not millions of different results by re-iterating the formula using a randomly selected set of inputs limited by their range.   The results are then analysed using standard statistical techniques and again a bell graph of results can be charted.  In financial risk this, or a similar method, is used to determine the likelihood of an event happening.  However risk analysts are not overly concerned about the most likely event they are more interested in any incidents outside the norm that have skewed the shape of the results graph one way or another.

If for instance there is a 10,000 to one chance of an extreme event occurring and you use 10,000 iterations in your Monte Carlo simulation then the likelihood is that that one extreme event will be used in the risk calculation.  Risk analysts will then look at the graph of results, and from my personal experience of this very example, discount the 10,000 to one chance from their interpretation.   Use a million iterations and then that same event will likely occur 100 times and the analysts will leave the effect of that event occurring in their risk estimate.   There is one huge problem though with all of this risk analysis using statistics and that is the determination of the probability factor if you have not enough historical information to determine it.   The 10,000 to one chance in my example was from my experience working in credit risk and it was the ‘probability’ that a AAA rated corporation would fail.  At that time in the 90s from my recollection there were only 7 AAA rated corporations in the world and none of them had ever failed.  So 10,000 was just a guess.  Move forward a few years and hundreds if not thousands of AAA rated entities has been created by the banks to hold debt and as we know the collapse of many of these AAA debt bins led to the financial crisis.  I don’t know what the current probability is now of these failing but it will certainly be less than 10,000 to one.

Going back to Horizon, there is no probability table that can be used.  Up until now there has never been an investigation in to how often the system fails the user and there is one absolutely certain statistic that has been ignored and unless things change within the Post Office will never be found out and that is the number of times that a subpostmaster has had to make good losses in their branches over the years and the amounts that they have lost.   Dr Worden attempted a probability table on this very statistic and it was laughable I am afraid because he has no historical data to support it – no one has.

I am afraid Dr Worden’s efforts were in vain, yet as I said it is good that now exposed to the court they can be discounted as it leaves the uncertainty factor, the balance of probability that what the claimants alleged happen did happen, intact.

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The Lowest Common Denominator?

Having now read the ‘expert’s’ reports into matters relating to Horizon errors as well as the preceding testimony and evidence in this and the previous trials, it appears to me that there is a key ingredient missing from the mix of information required to assess not just the outcome of this litigation but also the future of the network and how to fix it as it is clearly broken.

All subpostmasters are not born equal.  They differ in all the ways nature intended but the most important difference between them that has not yet been incorporated into any of the arguments put forward in this trial is the great disparity in levels of intelligence.   Subpostmasters are, like politicians, not required to have any educational qualifications nor do they sit any form of aptitude test in order to be approved to run their branch.

That said there are some mightily impressive figures out there who are clearly highly intelligent and who may have chosen to become a subpostmaster purely for lifestyle reasons rather than a career in high finance or academia.   The very clear and outstanding example of this is Alan Bates, the leader of the claimants, who perhaps could have followed a different career path into litigation and one in which I am sure he would have been most successful – not to say he is not about to be so in any event.

The expert witnesses have agreed upon a list of countermeasures that would and should play a part in preventing Horizon errors creating permanent discrepancies in a branch’s accounts.  One of them is referred to as UEC User Error Correction where the reliance is on the subpostmaster to detect the error whether human or computer and correct it by themselves.  For instance in the Dalmellington error it is accepted that 80 or so branches detected the error and entered a separate transaction to correct the discrepancy that occurred as a result of a computer error (the fact that the transaction that they entered was illegal and a criminal act that other subpostmasters have been imprisoned for is another story).

Seema Misra was imprisoned partly on the assessment of the judge in her trial based on the evidence put before the court that she would have spotted any computer error that may have caused a discrepancy in her accounts.   That is simply not the case and whether a subpostmaster can detect an error in such a sophisticated computer system must certainly be a factor of the intelligence level and capability of the individual concerned.

So that leads me to this true story in which I played a part and which certainly helps form my opinion on the stories I read and hear about subpostmasters unable to run their branch properly and who as a result suffer huge losses.  It is not their fault – it is the fault of Post Office Ltd for allowing them anywhere near a Post Office branch.

Five years or so ago I assisted a potential applicant with his business plan submission to become a subpostmaster in a nearby town.  This gentleman seemed reasonably astute and ran a small convenience store close to my post office.  He was successful in his application and he and his brother expanded his empire by buying and running the new convenience store and PO in a nearby town.

Some three months after he had opened and had been a subpostmaster for that time, I was behind the counter in my post office when one of his assistants came in a with a letter to post, wanting it signed for.   I took the envelope and read the address on the front, it stated (not exact address of course):

ABC Company Ltd

82 High St

That was it.  No town and no postcode.

I explained to the assistant that I could not process the letter as it had not sufficient information in the address.  The assistant took the letter and went back to his boss who appeared quickly hilding the letter and asking me what on earth was wrong with it.  I am usually quite cool and collected in explaining matters like these to customers but the conversation became somewhat heated as he insisted that this was all that was on the letter as a reply address.  I believe that the recipient was a solicitor and my erstwhile friend was insistent that a solicitor would know how to address a letter correctly!

I asked to see the letter which he went away to get and sure enough the letter looked something like this:

Dear Sir

kajshkad k;jsdfk kkjsdf kjh sdkjjhsdfk kkjsdhfkjkkksdf kkkksdfjh

kajshkad k;jsdfk kkjsdf kjh sdkjjhsdfk kkjsdhfkjkkksdf kkkksdfjh

kajshkad k;jsdfk kkjsdf kjh sdkjjhsdfk kkjsdhfkjkkksdf kkkksdfjh

kajshkad k;jsdfk kkjsdf kjh sdkjjhsdfk kkjsdhfkjkkksdf kkkksdfjh

kajshkad k;jsdfk kkjsdf kjh sdkjjhsdfk kkjsdhfkjkkksdf kkkksdfjh

kajshkad k;jsdfk kkjsdf kjh sdkjjhsdfk kkjsdhfkjkkksdf kkkksdfjh

kajshkad k;jsdfk kkjsdf kjh sdkjjhsdfk kkjsdhfkjkkksdf kkkksdfjh

Please reply to :

ABC Company Ltd

82 High St

 

 

He pointed to the last lines and said “There you are.  See what I mean?”

At that point I turned the page of the letter over and the text of it continued

 

Eyemouth

Berwickshire

TD14 3GH

 

 

This is NOT a simple mistake.  This is .. well I don’t quite know how to describe it .. certainly NOT the actions of a subpostmaster capable of detecting any sort of error in his branch accounts whether computer or otherwise.   This person should not even be allowed to accept mail from a customer.  Perhaps I wouldn’t even blame the trainer for allowing this person to continue in his role because there are no tests before or after to determine what an individual has taken on board and therefore their level of competence.   I do blame POL though – entirely – for letting this happen.

It is vitally important that this factor – the level of competence of individual subpostmasters – be taken into account when attempting to assess the issues put before the court.   Dr Worden’s attempt at categorising actions subpostmasters would take on detection of a loss in their branch by defining the probability of each action on the amount of the loss is totally absurd and extremely annoying particularly when he confesses in yesterday’s transcript that he had made no contact (perhaps he was not permitted by POL to do so) with any subpostmaster.

My example above is just one of many.  Perhaps the worst, perhaps not.  Any subpostmaster who is or has been a member of various social media forums will know and understand that this rather low level of ability is common within the network although I have no idea of how prevalent it is.

It is of POL’s own doing that this has been allowed to happen – I would suggest the situation has developed more so since the inception of NT and the rush to get offices converted which is now being replaced by the necessity to find enough idiots to take on a post office and maintain the network size at its legislated level for the convenience of the Goovernment.

To fix it POL will have to start with the Lowest Common Denominator and work upwards although they might want to examine the ability and intelligence levels of their own staff first who got them in this mess.

 

 

 

 

What are POL’s chances?

 

Looking Ahead

We are reaching the conclusion of the Horizon trial and recently I have found it interesting to review the opening statements of both the Claimants (Cs) and the Defendants (POL)

The next trial will be looking at Breaches of Contract and Causation (whether or not Horizon or other areas could have caused the losses the Cs are looking to recover).

An interesting extract then from POL’s opening statement in the Horizon trial:

4.The robustness issues are so important because of their impact on the “breach” trials that will be held in this Group Litigation. When the Court comes to decide the claims made by individual Cs, it will do so with the benefit of the generic judgments it will have given in the Common Issues and the Horizon Issues trials:

24.1The Common Issues judgment will have determined the contractual rights and obligations between Post Office and the relevant Cs and certain other incidents of their legal relationships.

24.2The Horizon Issues judgment will have determined, in effect, the extent to which Post Office can generally rely on the contents of the relevant Cs’ Horizon-generated branch accounts as evidence of the true accounting position. In each case, Post Office will rely on the relevant branch accounts as evidence of a deficiency (or shortfall) for which the relevant C is liable. For that purpose, PostOffice will wish to say that Horizon is generally reliable to a high degree and so, absent special circumstances, the accounts generated from Horizon can be taken as accurate. Against that, the relevant C will wish to say that Horizon is not anything like so reliable and that, accordingly, the branch accounts generated by Horizon cannot be given anything like as much weight as Post Office contends.

So far so good then for the Claimants particularly those who claimed for losses under the old SPMR contract (pre Network Transformation) as practically all of the issues under this contract were settled in the claimants favour.

Any decisions in favour of the claimant’s issues in the Horizon trial will therefore put them in a strong position for the third trial.

Without commenting on the current trial or the next one, other than to note there are errors in Horizon from time to time which has been admitted by POL, I would take issue with the above statement from POL with regard to the present day activities of subpostmasters.

A subpostmaster who today discovers a shortfall in his accounts of say £1,000 has the following options:

  1. They can look at the transaction logs for common user errors. The transaction log being a print out on 4” wide receipt paper roll that may be several metres long and contain unknown acronyms and product codes.  This data is available to the post office however in electronic form and can be rapidly searched and sorted.  It is way beyond my comprehension why subpostmasters are not provided with that facility.
  2. They can look at their CCTV footage to see if anything unusual has happened. CCTV though is not a pre-requisite and a lot of offices don’t have any let alone cameras that cover every counter from both sides.  A very important point is that POL have NO access to this information even if cameras are present (excluding some branches that have recently been installed with anti-crime surveillance equipment)
  3. They can call the Hell Line for assistance and/or advice. Good luck with that one.

 

A subpostmaster faced with a unexplainable discrepancy DOES NOT have the option to query whether or not a problem with Horizon was to blame, but it is and always has been a possibility.    The oxymoron of course is that POL/Fujitsu only find out and investigate these errors in Horizon when a subpostmaster informs them of something strange happening that causes a discrepancy that he cannot explain.   Even worse, POL for whatever inexplicable reason, decide not to inform their subpostmasters when an error does exist in their system that can cause these  losses.  They rely it seems totally on back office procedures to pick up and automatically correct shortages caused by known errors which does not help the poor subpostmaster locate his problem.

 

As an aside, not only does that way of dealing with errors cause the subpostmaster lots of wasted time and effort in trying to locate the source of the error plus sleepless nights, in most cases it will result in the subpostmaster having to put his own money into the safe to balance the books until such time as this confidential error have been rectified.  It truly is an absurd way of doing things.

 

Of course there are several other ways a discrepancy can occur in a subpostmasters account that would be inexplicable such as theft or counter fraud.   There is however a reason for EVERY discrepancy and to find that reason it may be down to excluding all other logical possibilities.  In Seema Misra’s case POL decided that theft by her could be the only explanation and the attempted in court to prove that was the case by EXCLUDING all other possibilities.

 

How could they do that with no CCTV recordings as evidence?   How could they do that without revealing to the court all known Horizon errors and specifically excluding ALL of them as the possible source of the discrepancies?  How could they do that without investigating whether or not there was an unknown, yet to be discovered error in Horizon, that could have caused the shortages?

 

The last sentence is intriguing.   Errors in computer systems exist until they are found.   It has been suggested and agreed by both experts in the current trial that some of the errors that have so far been found existed in the system for years before they were located and fixed.  So how can you possibly bring a prosecution against a subpostmaster until you are sure you have excluded ALL the possibilities?  How long do you have to wait before the possibility of an UNKNOWN Horizon error can be discounted?

 

So POL have the almighty problem of justifying their actions or lack of them in this regard.  For me the overwhelming evidence that cannot be counted on in court is the fact that so many claimants are vociferous and persistent in their belief – no their knowledge – that they stole not one penny.   Where the losses went is not for the claimants to find out because they do not have and never had the tools and wherewithal to do that, it is for POL to do that and in the absence of CCTV footage and no knowledge of what errors currently exist in the system and for how long they have existed then they have no chance.

Remember we need continued coverage of the trial from Nick Wallis and that has to be paid for so drop a tip or two in his tip jar at http://www.postofficetrial.com

Thanks too to Tony Collins http://www.ukcampaign4change.com for his excellent articles on the background to this trial.

 

 

Post Office Ltd – The End is Nigh

With all the attention that is being focused on Post Office Ltd (POL) at the moment with the on-going trial (www.postofficetrial.com) you would think POL would be displaying a modicum of common sense when it comes to even more unwanted publicity that would tend to put off anyone considering buying a post office.

There are many key components to a sustainable Post Office Network but none is as important as a steady stream of individuals keen enough to borrow and invest in purchasing a Post Office from an incumbent subpostmaster.   You see all subpostmasters need to retire eventually and to do that they have only two options, sell the business on or close it completely.  As the NFSP are very helpfully pointing out today in the press, more and more subpostmasters are finding the latter the only option they have and while I don’t blame the NFSP for making this point it is just adding fuel to the fire and will only serve to put more individuals off buying a post office.

In an absurd attempt to maintain the Network size, Post Office Ltd are offering interested parties the opportunity to open a brand new post office more often than not in close proximity to an existing one.  There is absolutely no commercial sense in this for anyone involved.   This won’t increase overall sales of Post Office products, it will make existing Post Offices harder to sell therefore increasing the chances of them closing altogether and it will increase the costs associated with supporting a Post Office for POL.  It is complete and utter madness.

I was going to write more about this but it seems I already have as my evidence statement to the BEIS select committee has just been published http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/business-energy-and-industrial-strategy-committee/post-office-network/written/99315.pdf and it re-iterates much of the above.  I wrote that in April so POL decided in their wisdom to provide me with a clear cut example of the very problem I am referring to above as well as one quite local to me.

In the same newspaper last week two reports – side by side – tell of one subpostmaster clearly infuriated with POL and desparate to sell only to find one of these White Space offices opening up right next door to him in a small town with a more than ample supply of Post Offices.

https://www.thesouthernreporter.co.uk/business/concerns-voiced-over-shock-shutdown-of-hawick-post-office-1-4926354

https://www.thesouthernreporter.co.uk/news/new-post-office-set-to-open-in-hawick-next-month-1-4927937

POL are completely out of control and led by idiots.   If the management are not replaced then there is no hope for the network.   A very sad state of affairs for all of those who still have their own money invested in their post offices and those lucky enough to sell on have been replaced by people who clearly have no business acumen and who didn’t do their research properly and are now regretting their decision.

 

POL and the Money Tree

With £3 million already spent at the 31st March 2018 on defending the current Group Litigation Order trial brought by the Justice for Subpostmaster Alliance (JFSA), Post Office Ltd (POL) are looking at significant legal costs as they attempt to delay the trial in one way or another.   The absurd recusal application alone cost them £500k.   Now they say they are definitely going to appeal the decision of the court in the first trial which is a ‘double down’ on what they have already spent on that to date.

I am not entirely sure of the sequence of events as far as legal costs go but the recusal hearing gave some insight into the process when the JFSA QC claimed costs, the POL QC objected to the amount they were claiming and that will result in a case management hearing to determine how much POL pay JFSA.   In much the same way, the costs for the first trial in the series will be settled except in this case POL actually won a few points so some of the costs will be to the account of JFSA.   Of course then there will be an appeal and I would assume at that time the JFSA may concede the points POL won from the start so ALL the costs will fall to POL for that one when they lose again.

It is pretty much clear cut that POL will lose the Horizon trial as well and there is no doubt that they will appeal that one, they have to otherwise the consequences of losing must take place immediately and again the costs become payable fairly soon after the decision is published.  A much longer trial and considerable background detective work went into this one by the JFSA so the costs will be far higher.   By the end of the year the whole process will have repeated itself in the Breach and Causation trial and I am as confident as I can be that POL will lose that one completely.

The end of POL’s financial year is 31st March so costs to date will be reported on when they publish their accounts in September and they will then certainly have to advise a contingent amount for the appeal process.   In fact they may even have to start considering the possible total liability they face should they complete the quadruple and lose all four trials, something I would definitely not bet against.

So stab in the dark time, how much is this all going to cost in total?   I sat in the trial for a couple of days and there were 20 or so highly paid legal professionals attending, plus the back office staff plus the court costs.   I am going for £100 million by the time it is all over and let’s say £80m of that is to POL’s account.    If that is the case then that means POL lost and the JFSA claimants have won so it won’t just be the legal fees they are paying it will be the quantum of those claims as decided by the Judge.    These will be huge and include compensation for wrongful imprisonment which if it had been carried out by the Crown Prosecution Service would have been limited to £500k.  As Post Office Ltd carried out the prosecution as a private company then there is no maximum amount of compensation.   (that is my opinion and not necessarily a legal fact!)

My guess is that the total claim will be in excess of £500m plus the legal costs of £80m – let’s just round it up to £600m

The big problem for POL is that they have no access to that sort of cash.   A bigger problem for POL and the Government is that from a political perspective POL cannot go bust so they need to raise that money in some way and in fact at some point in the near future they (the Government and POL) are going to have to comment on where they expect to raise the capital required should the very likely happen and they lose the cases.   It is not just POL, POL’s auditor’s will have to express a view  on the viability of the business as a going concern if a source of funds is not available to meet the company’s legal penalties.

There is a further conundrum in the fact that POL’s hands are very much tied by their articles of association.   While these articles allow them to spend up to £50m without approval from the Secretary of State (SoS) which would allow them to pay the legal fees, they also prevent POL from borrowing any amount in excess of £75m without the SoS permission whether that amount is to be borrowed from the Government or not.  So the SoS has the power to prevent POL paying the claimants their dues.  Perhaps it is time for the SoS to make it clear that when the JFSA win the SoS will not use their power to stop POL raising the funds necessary to pay off the claimants.   In any event it would be an extraordinary act of political suicide to cast POL into the insolvency courts because the government withdraws support not only from POL but from the claimants whose suffering the government were as guilty of as POL. (just re-read the above and to make it perfectly clear – when the JFSA win it is the Secretary of State who will make the decision directly or indirectly whether or not to pay the claimants .  Secretary of States come and go as do parties forming governments so I am not sure they should remain in denial of the problem and put all questions to them asked in the house about the matter back to POL or refused due to sub judice)

POL as we know remain unaccountable to nearly everyone, except now the JFSA who are truly holding them to account so I imagine they think they can get away with misusing the funds they have at their disposal in order to settle this.  I did say they didn’t have any and legally they don’t but that has not stopped them in the past from making use of government funding they are not entitled to.  In this trial alone they have already had to repay the government funds they misused.

POL remain bound by EU State Aid rules, at least for 2 years after Brexit if it ever happens.  They are prevented from using the Working Capital Loan provided by BEIS for anything other than financing the level of cash they require to keep in the network.  I have caught them out before with misusing this and if they try it again I will see it.

They could try and tell us that the source of funds was the working capital in the business less the BEIS loan but they can’t utilise that either because the conditions of the BEIS loan state clearly that BEIS retain a lien over the working capital as security against the loan.   It all gets a bit incestuous I know but rules are rules and conditions must be met.

Any business can always try and leverage their cash flow in a way to free up cash to pay off liabilities.  By extending the time they take to pay creditors and reducing the time they allow debtors to pay them could solve their problems if they hadn’t already gone down that road.  I am pretty sure the government is keen to see small businesses being paid quickly by their departments so it is something of a surprise to see that in the last financial report from POL in 2018 their creditors were owed twice as much as their debtors.  There is no more meat on that particular bone of capital to pick from.

POL aren’t going to continue to make a profit for very much longer.  They only recently did for the first time in years but what they seem to forget is that they need subpostmasters to carry on making that profit for them and who in their right minds will be buying a post office in the light of the extraordinary disclosures that have already been made, are waiting to be made and are going to be repeated in the appeal court.   So raising debt to pay off the claimants will be problematic as again they are restricted by state aid rules and it remains to be seen whether or not Brexit happens if those state aid rules will continue to be enforced.

And then ….

When the court case is over and the claims settled there is more expenditure needed.   A fairly significant amount to put in place what I will call the replacement therapy.  Political expediency demands a post office network and a phoenix rising from the ashes of this burnt out mismanaged enterprise will be required.   Replacing the staff (OK some of them won’t get redundancy payments because they will be jailed) will be expensive and putting in place the systems and technology that should have been in place from the start will add to the cost.  However that is a reasonable expenditure for the Government to provide grant funding for under state aid rules but the government will also have to wake up to the realisation that subpostmasters will not work for less than the minimum wage and as a result a network of 11,500 offices will always require financial support.

And Oh! … how the government would wish that that was the end of it all.  But no there is more.  The CWU are bringing POL before an employment tribunal with the awarding of worker’s rights to subpostmasters almost certain.   Holiday pay, sick pay, maternity leave, workplace pensions all going to have to be paid for.

And just like those ads you see on TV .. but wait there is more .. this trial is only the first round .. there are far more claimants being added every day.  When I attended the trial in London I was surprised to meet several ex subpostmasters who had come along to find out what it was all about and who had never heard of the JFSA.  The publicity hasn’t really started and most shamefully the position of POL has not changed one bit and they haven’t even informed the network of the errors that were in the system let alone the ones they know are current.   Kimberley diamond mine is not the biggest hole in the world….

Need I say all this could have been avoided?  If they had done it properly from the start?  If they had listened to the people like Alan Bates there would have been no claimants to bring a court case in the first place.   Does the government really want to entrust the very people who are continuing to deny there is a problem even after two highly respected judges have found against them so far, to sort this mess out?

When we add it all up it is beginning  to look a lot like a billion (there’s a song in there but I’ll leave that til Xmas) So will somebody please tell me and the rest of the world how on earth POL intend to pay for it all?  I think this question must be the last remaining concern for the JFSA team as they stride towards total victory in the courts.

As ever, grateful thanks to Nick Wallis (www.postofficetrial.com) for his coverage as well as Karl Flinders at Computer Weekly and Tony Collins at https://ukcampaign4change.com/ whose latest blog post looks at this very question of where is the money going to come from.

Time for the conspiracy theories

 

I have been dreading this moment.  I have stayed away from conspiracy theories because they are usually so easy to discredit.   The amount of people needed to be involved and hold their silence is the first thing that one would look at in order to shoot down the conspirators.   Then there is the type of people of involved.  In this case they hold very senior positions in their respective spheres.  It really would be bordering on the incredulous if a conspiracy theory turns out to be correct.   But hey! Nothing – I repeat – Nothing in Post Office Land surprises me anymore so I will say it one more time (won’t be the last) everything they say and do is “beyond belief” which is the definition of incredulous.

This morning sees the revelation courtesy of Nick Wallis and his blog at www.postofficetrial.com (stick a penny in the tip jar please) that Lord Justice Coulson has turned down the appeal by Post Office Ltd to allow them to appeal the decision by Justice Fraser not to recuse himself from the current Post Office Group Litigation trials.    It marks the end of one chapter of this long drawn out claim by the JFSA claimants, that they were mistreated by Post Office Ltd.

Now we need to look back at what has transpired, the sequence of events, the decision making process and the people involved to try and come up with a plausible explanation as to why POL asked the judge to recuse himself and even more relevant why they decided to appeal his decision not to.

On Thursday 21st March on the last day of factual evidence to be presented to the court and during the lunch break, Justice Fraser found himself reading a request from POL QC Lord Grabiner to recuse himself.    The application was put together by a Mr Parsons, a partner in the law firm Womble Dickinson.  (https://www.postofficetrial.com/2019/03/horizon-trial-application-to-recuse.html)

My immediate impression when I read this application was that it had been put together in ten minutes.  Both Patrick Green QC, Justice Fraser himself and now Lord Justice Coulson tend to agree, as all have said the application lacked any substance at all.  Justice Fraser went so far as to instruct Womble Dickinson to go away and put some meat on the bones and present it back to the court for deliberation.

POINT ONE Two Judges and one QC immediately thought that the initial application was scandalously short of substance so from a conspiracy theorist point of view the question has to be asked, at that moment in time did not POL legal team think so too?  It would be a couple of sandwiches short of a picnic for the legal profession if they did not surely.

POINT TWO How long did it take to prepare the application?  This is a really serious point.  If,as Lord Grabiner went on to explain in the actual recusal hearing, that the matter had been under consideration for some time, was decided by a board meeting of POL and a further delay was necessitated by the need to take advice from a mysterious very senior legal figure, then why oh why did the application lack so much substance?  Surely that substance would have had to be revealed to the mystery legal man (MLM) for him to provide advice on it?

POINT THREE Why was no notice given to Justice Fraser immediately the decision was made to ask for a recusal?  So short was the notice that even POL’s QC in court that day knew nothing of it and just to confirm point one he also agreed the application lacked substance.  How on earth could their own QC not know the application HAD been prepared?   Lord Justice Coulson remarked specifically on this point (no notice given to Justice Fraser) in his decision saying that it was “at best discourteous; at worst, it betrayed a singular lack of openness on the part of POL and their advisors”

POINT FOUR POL’s legal team consist of multiple QCs from different chambers.   They all must be instructed to carry out the requests of their clients.   The legal teams can advise their clients of the chances of success and the cost but at the end of the day the decision to make the recusal application and the decision to appeal Justice Fraser’s decision not to recuse himself had to be taken by POL.

POINT FIVE the appeal has been decided.  The trial continues with the new timetable but the same judge and the same witnesses and evidence.  The only thing the recusal application and appeal has done is to delay the trial by a few weeks.  (at a cost to POL and the taxpayer of some £1m) Was that the only objective?

So the overriding question must be WHY did POL decide to ask for the recusal?  The overriding answer must be: to win the case, but a recusal application is only one part of that strategy.   It wasn’t going to stop the trial being completed under another judge, the same evidence would be produced and the same questions asked.  There is nothing to suggest that a new judge would come to a different decision than the one that Justice Fraser will arrive at.

Lord Justice Coulson goes so far as to suggest that there must be more to the timing and manner of the recusal request than meets the eye given the nature of what followed after they had made it.  My interpretation of Lord Justice Coulson’s comments in this regard are that the recusal request was a spur of the moment tactical decision made to delay the trial as it clearly never had any chance of success.

I have previously considered that POL have been purposefully using delaying tactics in order to push the costs up for the claimants as ultimately these costs will come out of any compensation that may be awarded to them.   Given that even POL must realise now that they are on a hiding to nothing in court then the claimant’s funders must also be extremely confident in the outcome and will not be willing to back off now given their expenditure to date.

So fellow conspirators where does that leave us?  What rationale was behind this recusal fiasco?  Will we ever find out?  What theories could provide a solution to this conundrum?

  1. a) has POL’s expert witness realised what is going on and is about to change his testimony?
  2. b) was it important enough to have the trial stopped until after the 31st March which is the end of POL’s financial year?
  3. c) Are POL actually making these decisions or is the mysterious senior legal figure a politician or the legal representative of the civil service as the sole shareholder?
  4. d) did Mr Parsons make a mistake and didn’t deliver the recusal application in time to prevent the witness testimony on the last day of the trial which was pretty damning against POL?

I originally thought either a) or d) made sense but neither explains the appeal which was legally unsound and POL should have been advised of this by their legal team.

Thoughts from fellow conspiracy theorists welcome as I think the more minds work on this the better.

The evidence of Stephen Parker – Fujitsu Head of Post Office Application Support

Thursday 11th April – Horizon Trial Day 12

The transcript for this trial as well as expert commentary on proceedings is available at http://www.postofficetrial.com.  Without the efforts of journalist Nick Wallis we would not have access to this information and he relies on money to survive unlike POL who seem to rely on Subpostmasters to survive.  So it would be very kind of you all to put a little something in his paypal jar in order that he can continue to provide us with the coverage we need.

Stephen Parker is now the head of Fujitsu Post Office Application Support.  As a witness called by Post Office Ltd hi job was to counter the allegations made by Richard Roll who was a witness for the claimants and worked at Fujitsu in the early 2000s when Mr Parker was his line manager.  Mr Parker was clearly impressed with Mr Roll’s work.  So much so that he went so far as to give him a personal reference despite the fact that this was against Fujitsu HR policy at the time.

The first part of the cross examination was to do with the several changes Mr Parker had made to his witness statement.  For some unknown reason a very diligent chap in the Fujitsu Support Centre, a Mr Simpkins, allegedly took it upon himself to look further into the PEAK log to see if he could find more instances of transactions being injected into the counter records of branches.  Well he found a few more and on the 20th of March, the day before Mr Parker was due to give evidence, Wombles informed the court of this and Mr Parker’s witness statement was duly updated.

A technical point here was revealed in that the additional search used to find the extra transactions included the following terms; “RiposteMessageFile, RiposteImport and RiposteMessage”.  Very specific terms which it appears were not originally used by this highly experienced team to locate the additional injected transactions.

The RiposteImport command in particular was quite an amazing omission from the original search criteria because it is one of the few methods available for injecting transactions into a counter.  Why it would be left out of the original search criteria is astonishing and worthy of further interpretation.

Mr Parker’s witness statement also revealed that over a period of 4 years, the Post Office Service Support Centre at Fujitsu received over 27,000 calls which would equate to more than 20 per day.    Quite a figure for a robust computer system.

Systemic Errors?

In an article for the Digital Evidence and Electronic Signature Law Review (http://journals.sas.ac.uk/deeslr) (http://journals.sas.ac.uk/deeslr/article/download/2303/2256) I wrote:

“The Post Office consistently claims that the system is used by thousands of operators each day to process millions of transactions and must therefore be considered to ‘be in order’ as the law puts it. This, they suggest, proves there are no ‘systemic’ bugs in the system.”

The Post Office has misused the term ‘systemic’ repeatedly over the years so it came as a surprising revelation in court when Mr Parker stated:

there were only rare circumstances where a coding issue had an estate wide impact and, in those instances, Mr Roll would have been involved in executing avoidance actions to mitigate impact to the estate

They may be rare in Mr Parker’s opinion but his evidence is that they do exist and occur.  There is however more to read into this statement.  These system wide errors were by definition in the system for some time before they were noticed and fixed.  There is no evidence to suggest – and as a former subbpostmaster I can attest to this – that the ‘estate’, the network of subpostmasters, were ever informed that these errors existed before they were fixed.

Mr Green goes on to question Mr Parker about how he set about trying to decide 15 years later how many actual software errors Mr Roll worked on while he was at Fujitsu.  Without access to the referenced spreadsheet it is impossible to comment but this line of questioning did however reveal something else.


Q   And at the bottom we can see that there is an agreement
at least with Mike Crowshaw’s explanation of the
imbalances in periods 10 and 11 which were due to
a stock transfer of  £12,000 which was not settled
correctly to the presence of a corrupt DLL file on the
PC involved.
A   That’s what the notes say, indeed.

In my opinion, and that of others I have spoken to, there appears to be an underlying and recurring theme of major errors occurring in the system when it comes to stock transfers.   These could be between stock units within the branch (the ‘Falkirk’ error) or between the cash centre and the branch (the ‘Dalmellington’ error –although that was slightly different in that it was between two branches).  However in both cases, transfers and remittances, the values involved can be significantly high and involve, initially, a one way transaction out until it is accepted at the receiving end.  The Falkirk error was investigated in court in the trial of Seema Misra (see transcript published at http://journals.sas.ac.uk/deeslr/article/view/2217) where Mr Gareth Jenkins of Fujitsu attempted to prove to the court that the same error had not occurred at Seema’s branch at West Byfleet by examining NT Logs for possible hardware failures.   In the example quoted above they are also looking at a hardware error as a possible cause of the problem, but in this case a corrupt DLL file (dynamic link library which contains many different modules of code that can be used by the calling program).   Without going into detail there is not a cat in hell’s chance of Fujitsu, or anyone else for that matter, being able to go back in their history files and determining for certain whether or not a corrupt DLL file was to blame or not.   I think this is one of the more revealing bits of evidence to date in the trial.

Fujitsu Support Centre is in a bit of a mess

With so few people dealing with so many problems you can perhaps begin to understand (if the consequences had not been so serious) why the administration of the department became a bit lax shall we say.  Perhaps the trial was not a good time to rely on the internal records of their performance to have a go at Richard Roll’s testimony.

Q   Okay.  He says:
“This Peak is the regression of the Peak PC0234448”;
yes?
A   Indeed he does, yes.
Q   And underneath he has put:
“Category 41 — product error diagnosed”?
A   He does indeed, yes.
Q   The reason he does that is because there has been
a regression to a problem that had previously happened
as a result of a subsequent software release not having
caught a fix?
A   That’s the note that the developer has made, yes.
Q   And if we look on page {F/1326/5} please, towards the
bottom of the first blue box, penultimate paragraph:
“Risks (of releasing and of not releasing proposed
fix):  Without this fix, there will be possibilities of
system errors at counter and while doing reversal
transaction”; yes?
A   That’s what it says indeed.

This is not a one off.  This is a service support centre making a balls up of a fix for an error they had already spotted and thought they had fixed.   It happens all the time in the industry and an excellent example comes from a relatively unknown little software company that provided the underlying operating system (NT) to the Horizon network called Microsoft.  In 2004 they withdrew support for the NT operating system but before they did they sent out one final update to correct errors that had been reported to them.   Within 6 months of what was supposed to be the final release of NT, Microsoft were forced to send out another ‘fix’ to solve the problems that the previous upgrade had caused.   Since 2004 to 2018 when the last counter using NT in the Post Office network was upgraded, worldwide users of NT had noted many more additional bugs including some very interesting ones with relation to the evidence that has been produced in court to date. (https://nt4ref.zcm.com.au/bugs.htm)

Whose fault is it?

Fujitsu supply the software but that is not the only component of the overall computer system known as Horizon.  It needs a computer to run on, a keyboard to enter data and a printer to produce the output as well as many other bits and pieces.  If software is not the problem though, Fujitsu wash their hands of it and somebody else has to sort it out even if the problems have created an inconvenient loss to the subpostmaster.  Mr Parker helps Mr Green with this conundrum ….

The system is still playing up in that the screen
is hanging in the middle of transactions — PM did
transaction … but left office for 1 hour — when he
came back the monitor had 141 first-class stamps on
screen totalling £38.07″, see that?
A   Yes.  I see that.
Q   You would accept that that is not how the system is
supposed to work.  Is that fair?
A   That’s fair.

Phantom Transactions

Let me assume that the lay reader understands the concept of a phantom transaction e.g. a faulty keyboard ‘accidentally’ enters a transaction into the computer overnight while the subpostmaster is not present.  Not an everyday occurrence mind you and not one that you would be expecting to look out for if you hadn’t been warned about it (which we never were).  In practice though this would give rise to a discrepancy in the branch accounts – might not be serious but a discrepancy all the same.  The real problem though is identifying the source of the error because if the phantom transaction occurred after close of business the effect would only be noticeable the following evening when stock was declared again and who would think of looking back to the previous days transactions?

Screen Calibration Problems

The Horizon user interface is predominantly touch screen.   When the calibration goes out it is possible to think you are pressing one icon when in fact the system thinks you are pressing another.

It takes someone who has read the transcripts of this trial to understand the significance of this statement by Mr Parker:

Q   And the PM says calibration is fine, not out of
alignment, because that was an issue that sometimes
happened, wasn’t it?
A   There were screen calibration issues, yes.

The expert witness in Seema’s trial made a point about potential problems with calibration of the screen but POL (the prosecution in Seema’s trial) attacked this premise and appeared to persuade the jury that this was not an issue to be concerned with.  This is certainly evidence that the CCRC should take note of.

Duplicate Pouches

In late 2015 I and others became aware of a software error in Horizon that generated substantial losses to the affected subpostmistress because the system had generated duplicate Remittance Pouch Receipts.  Some 5 years earlier this occurred …

Can we just briefly, please, look at {F/589/1}?  You
will see this is non-critical and closed with Solicited
Known Error.  Do you see that?
A   I do.
Q   That is a problem of duplicated pouches, as you see
underneath the two tram lines.
A   Yes.
Q   And the amount that was renned in twice was £25,000.
A   That’s what the notes says, yes.
Q   It’s pretty serious for the SubPostmaster?
A   I would think so, yes.
Q   But category priority is C, non-critical?
A   That’s correct.
Q   And at {F/589/3} if you look down the penultimate blue
box, 5 March 2010, 12.33:
“POL have been informed of the error. Hopefully
they’ll issue a TC to correct loss at the branch. The
underlying problem caused by using previous button
during or just after scanning pouch barcodes, is still
under investigation”.
It is closed as Solicited Known Error?

Apart from the fact that this error seems identical to the earlier Falkirk error and the later Dalmellington issue it raises the question of errors known to be in the system yet the network were never informed about them and what to look for.  Again, from the Misra trial transcript, POL as the prosecution, made the point that if her losses had been caused by an error in Horizon then she WOULD HAVE NOTICED IT.  This was a key point made to the jury and would certainly have had an influence on their final decision which was to find Seema guilty and ultimately to send her to prison.

Conclusion

The major part of this whole cross examination of Mr Parker was to cast doubts on his interpretation of the categorisation of errors and in doing so support Mr Roll’s evidence as being reliable.   As I point out above some major flaws in Horizon were revealed and these may or may not be commented on later by the expert witnesses so I will leave further analysis on these for another day.

However they all lead to the very safe conclusion in my opinion that the Horizon computer system was and remains unreliable and I use the word ‘unreliable’ deliberately because it lies at the heart this trial and how the law as it stands interprets the reliability of a computer system.  Whatever decision the judge reaches in this trial will set an example for years to come in the legal profession because it is such a debatable point.

The barrister Stephen Mason has spent some time investigating this issue – which the judges and lawyers have ignored – and a most notable reference on the reliability of computers in litigation can be found here and is well worth reading – in particular Chapter Six of Electronic Evidence, now it its fourth edition and available as a free download from http://humanities-digital-library.org/index.php/hdl/catalog/view/electronicevidence/16/93-1

The evidence so far in this trial also points undeniably to the fact that Seema Misra’s conviction is completely unsafe and should be returned to the Appeal Court by the CCRC without delay.