Unlimited Liability?

There is of course overwhelming evidence over the years of POL’s incompetence.   From selling stamps online far below their face value to their inability to spell ‘Post Office’ on their website (in case you wondered they printed ‘Post Offfice’ and it took them weeks to fix it)

But nothing so incompetent as their decision not to modify the Subpostmaster’s contract to cover themselves and limit their liability when they introduced the Horizon System into their branches at the turn of the century.

This morning I thought I would have a look at what form of words they should have introduced to the contract in order to protect themselves from what now looks like a distinct possibility – a class action suit on behalf of all subpostmasters past and present.

First though let’s think about the relationships here.   You have Fujitsu who supply and service the software.  You have ATOS who manage the support services around the entire computer system including hardware and software.   And of course you have POL who purchase these services from both parties.

There has to be agreements in place between all three and it would be inconceivable that liability is not limited within them.   I would dearly love to see these documents.  I am sure they may explain a lot.

The modified subpostmasters contract mentions Horizon 6 times but each reference is either with regard to the BT line or the Horizon User ID.   No mention of liability or warranty.

So POL have provided a ‘tool’ to its employees and agents without any form of insurance to cover their ass in the event of failure or accident.   They have lived in this situation for over 15 years without giving any consideration to changing it. Surely then POL becomes culpable for any errors in the system that affect the SPMRs accounts?

While POL remain incompetent – and that is no excuse – other software suppliers are far more aware of the potential minefield that unknown errors in their software could cause.

Take Sage for instance.   The top selling accounting package for SMEs.   They have it all covered.  Their relationship between themselves and their clients is almost exactly like POL’s relationship with SPMRs with the exception that the SPMR is actually running POLs accounts on POL’s computer system.

This is an extract from Sage’s contract:

16.4. Subject to clause 16.2 and clause 16.3: 16.4.1. we will not be liable whether in tort (including for negligence or breach of statutory duty), contract, misrepresentation, restitution or otherwise for: 16.4.1.1. any loss of profits, loss of business, lost working time, depletion of goodwill, and/or similar losses or loss or corruption of data or information; or 16.4.1.2. any special, indirect, incidental or consequential loss, costs, damages, charges or expenses however arising under this Agreement including without limitation fines or penalties levied by any relevant authority or claims from third parties; and 16.4.2. our total aggregate liability in contract (including in respect of the indemnity at clause 15.2), tort (including negligence or breach of statutory duty), misrepresentation, restitution or otherwise, arising in connection with the performance or contemplated performance of this Agreement will be limited to the total Subscription Fees paid to us by you or received by us on your behalf from a Sage Partner in the 12 calendar months immediately preceding the date on which the claim arose. 16.5. You agree that the limitations set out in this clause 16 and restrictions in this Agreement are reasonable because they reflect the fact that: 16.5.1. we cannot control how and for what purpose you use our Solution; 16.5.2. we have not developed the Solution specifically for you; and 16.5.3. although we follow good industry practice, it is not economically possible for us to carry out all the tests necessary to make sure there are no problems in the Product or provision of Support; If you believe you could experience anything that we have told you we will not be responsible for we recommend you consider obtaining insurance cover

I do love the bit about obtaining insurance cover.   It opens so many avenues of discussion.

It is a simple clause that as a purchaser or licencee of the product you have to sign up to before you use it.   Had SPMRs had to sign up to a similar clause in order to purchase their business my guess is that most would.   Why?   Because the Managing Director of POL and the CEO of NFSP Ltd have both emphasised the faith they have in the system.

BIS Select Committee Hearing 3/2/2015 George Thomson: I do not believe the system is systemically faulty.  Paula Vennells: The system itself is working very well

Wow!   Does that not then place a fair proportion of personal liability on the shoulders of these two?

I only wish they knew what I know, they will be told soon enough, although I did offer to tell Paula but she didn’t reply.

The lack of any warranty or limited liability into the use of the Horizon system by SPMRs is unbelievable.   I am as stupid as POL for not considering this when I entered into my SPMR contracts.  Why did I sign then?  Because I trusted the system to work properly.   I am both stupid and foolish.  At least I have reached a conclusion that both Paula and I can agree on for once.

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