Unexplained Losses

Continuing on with my background on this developing story …..

The Subpostmaster’s contract is very clear.  It states the Subpostmasters are responsible for all unexplained losses at their branches.   A loss occurs when the system generated accounts show that the branch should be holding more cash and value stock items than physically exist in the branch.    If subpostmasters can prove that the loss is down to an explainable event that will rectify itself in due course then they are allowed to accept the loss into a suspense account until the rectification takes place.

The law is very clear.  If the subpostmaster makes any attempt to hide any such unexplainable loss by falsifying their accounts and over declaring their value stock position they are guilty of an offence.

Looking at it from POL’s point of view.  They are not omni-present at each and every branch to oversee each and every transaction.  If the unexplained loss is as a result of a counter assistant stealing then I can see, understand and accept that the loss would be attributable to the SPMR (with a proviso that POL do not and have never assisted SPMRs in training, advice and support in countering this type of theft)

But if the subpostmaster is the only person on the counter and an unexplained loss occurs how can a SPMR prove that they did not steal the money?

The only way to do so is PROVE without any other doubt how the loss occurred.    They have to prove it, POL does not.

How could they prove this?

Well first they would need the absurd – continuous CCTV images of all value stock from the moment the last time the office balanced correctly until such time as the loss was discovered.

They would need printouts of all transaction logs over the same time span that affected their branch

They would need CCTV images of all REMittances for their branch being prepared in the Cash Centre

They would need all paperwork that related to all the transactions that occurred during that period.

They need a record and transaction logs for all sub systems in the Financial Services Centre that would have been involved in processing the transactions of the branch.

Then of course there is the possibility that the system itself generated the error as a result of a bug.  The SPMR actually needs to prove that the system could not be responsible.  That is ludicrous.

And of course they would need several forensic auditors to go through it all to find the error that caused the loss.

Once that is done the SPMR is no longer responsible for the loss, POL are UNLESS POL can then prove that loss was down to the negligence of the SPMR.

SO of course the bleeding obvious conclusion is that the SPMR hasn’t a hope in hell of proving an unexplainable loss.

POL win every time.

But that may be about to change.

Clause 12 of the contract provides that the subpostmaster is responsible for all losses caused through his own negligence, carelessness or error, and also for all losses of all kinds caused by his assistants.  By exclusion he is not responsible for losses caused by POL or the computer system or the multitude of manual processes that happen out side of his branch to the paperwork he has generated.

We can restate the above as: Unless the SPMR can explain the losses are attributable to POL then he is liable.

There is in my opinion a key word in all of this – “Unless”

What if we turned it around and said that POL are liable unless they can prove their systems are reliable and trustworthy?

What if the subpostmaster could prove without a shadow of doubt that the system does create unexplainable losses to a branch in a random intermittent fashion?  What if the subpostmaster could prove without doubt that POL knew of these errors and did nothing to warn subpostmasters of their existence?  What if we could provide Hansard copies of Select Committee hearings in which the Managing Director of POL and the CEO of the NFSP categorically deny these bugs exist? What if we could prove that the losses were generated even though no physical cash was involved?

Would it really be the case then that the subpostmaster would still have to prove that these did not occur at his branch.  Is it the subpostmaster’s duty to find ALL of these bugs for POL?  Even if only one has been found surely it is bad enough?  But if there is more than one?

I get angry thinking about this but I now know of several software errors that exist in HOL that cause these losses where no money was involved.  I also know that they know about them and have done nothing about it.  The inescapable conclusion is that these very same errors could well have caused the losses incurred by the JFSA group and that there was NO CASH INVOLVED.   POL however sought in court to recover CASH from these poor people.   An absolute disgrace and one I am certain is about to be rectified.

Finally – let me add.  Up until the advent of NT, subpostmasters signed a contract with POL that was written in the 60s long before a computer system arrived on the scene to assist them.   It is an anachronistic contract that has no place in the 21st Century – similar to POL management then.



4 thoughts on “Unexplained Losses

  1. I you suddenly had a large unexplainable discrepancy at the end of a day, would printing out a log of all transactions carried out during that day be evidence that the end user could not have caused that discrepancy?


    • Hi Barbara, unfortunately it’s not as simple as that. The answer unfortunately is both yes and no. The transaction log may indeed reveal how the discrepancy has happened but there are so many reasons why it has happened that it could still be the responsibility of the SPMR to cover the loss. If you have a loss at your branch that you haven’t found and need assistance please let me know and I can pass it on to someone who can help you. Cheers, Tim


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