Response to the letter of Paula Vennells to BEIS Select Committee dated 24th June 2020

I have sent the following to the BEIS Select Committee

Response to the letter of Paula Vennells to BEIS Select Committee dated 24th June 2020

As a former subpostmaster, since the proposed inception of the Network Transformation program in 2010, I have been and remain a staunch critic of Post Office Ltd (POL).   I have repeatedly expressed my views to, and made direct contact with, senior management and the board of POL.  In return I have received acknowledgement from them and in some cases their legal team which I understood to be some sort of veiled threat.   In addition I have made many Freedom of Information requests, often using an assumed name to prevent further harassment, the answers to which in some cases have been very revealing but in most cases I have been met with obstinate refusal to release information which should be in the public domain.    I have done all of this out of my desire to return the Post Office network to its proper place in the High Streets and Villages of this land and for it to provide a decent income and prove a worthy investment for the thousands of SPMRs the network depend upon, just as I once was.

I would like to take this opportunity to comment on Ms Vennells recent letter to you and point out some ‘inconsistencies’.   I would also like to point out that it is my opinion that the legal process has not yet been completed and all parties to potential future litigation, Ms Vennells, Post Office Ltd and Fujitsu are clearly taking every opportunity to lay the groundwork for their future defences including these replies to your questions.  I would be very surprised if Ms Vennells’ reply had not been reviewed and amended by her lawyers accordingly.

It should be pointed out that Ms Vennells has chosen in her letter to take the opportunity to elucidate on other points not covered by your questions to her.   It is therefore fit and proper in my opinion to consider the matters that she chose not to cover.  One very important one is the matter of her remuneration during the period of her ‘tenure’ as MD and CEO of POL.   It is now fact that the Profit and Loss Ms Vennells reported on from 2010 to 2019 would have contained the proceeds of repayments from SPMRs that the SPMRs were not liable for.  While these may not yet have been quantified there is a Clawback provision in her employment contract for bonuses received unduly.  At no time has she offered to repay such an amount which I find shocking and disgraceful.

Please see my comments on her letter below.

Kind regards

Tim McCormack

Quotes from Ms Vennells’ letter to you are in italics:

(4) it is contrary to what I believed throughout my time as CEO of Post Office between 2012 and 2019

Let me start by being necessarily pedantic in order to make my point.  I fail to see the difference in responsibilities between Ms Vennells’ role as Managing Director of Post Office Ltd from 2010 to 2012 and her role as CEO up until her dismissal/forced resignation in 2019.  Does her comment infer that from 2010 to 2012 she believed something else to be true?

In her letter to you she uses the terms ‘I believe(d)’ and ‘I understood’ repeatedly to defend her actions or inactions.   It must be pointed out that a significant defence in future prosecutions of any individuals and/or organisations as a result of this scandal will be that they believed the circumstances to be true at the time.

Were her beliefs consistent and unchanging throughout that period?  I doubt very much that is the case.

(6) I wish to state for the record that I do not accept any personal criminal misconduct.

Ms Vennells’ ignores for some reason the fact that she was (and remains because of her current positions) a public officer while in charge at POL.  As such she can be held liable under the Misconduct in Public Office Act.   Failing to report criminal activity within an organisation, failing to account for proceeds of criminal activity and in my opinion in all probability personally benefitting from the proceeds of criminal activity are all possible lines of inquiry the Metropolitan Police will be investigating in due course.  Ignorance of the law can never be used as a defence and as was clearly pointed out to Ms Vennells in a BBC Panorama program, her legal staff deliberately withheld evidence of Horizon errors from Seema Misra while her trial was ongoing.

(4) Before I became managing director, I had no real involvement that I can remember in dealing with complaints about Horizon, and I had no responsibility for investigators or prosecutions

She became MD in October 2010.  The inference from this statement is that from that moment onwards she had involvement in complaints about Horizon and clearly a responsibility for the actions of her investigators and prosecutions.  A very notable admission by Ms Vennells.

(7) The Committee may have the impression from previous evidence that the relationship with Second Sight was wholly negative, but from my perspective that is not right. Second Sight did valuable work in identifying specific areas where there was need for improvement.

Second Sight did indeed indentify specific areas but not just for the need for improvement.  They identified the general suspense accounts as warranting further investigation.   It is notable that the National Audit Office has not audited these,  Second Sight were dismissed when they asked for access to them and a Judge led inquiry is being denied which would almost certainly call for evidence from them.  Also noteworthy is Ms Vennells reply later in her document to specific questions about these accounts.

(10) What I did not know during my tenure as CEO was that many of the problems encountered by sub-postmasters could have been caused by the defects which the Judge in the group litigation found to have existed in the Horizon technology

Ms Vennells is lying.  She was well aware of Horizon errors causing losses to SPMRs.  The most obvious case is one which I brought repeatedly to her attention and one that was highlighted significantly in the litigation, that of the Dalmellington error.  That was in 2015, roughly in the middle of her ‘tenure’.  Mr Kelly has submitted very good documentation of another which was not even mentioned in the trial and could it please be pointed out and noted once and for all that the filename used by Fujitsu and POL, the KNOWN ERRORS LOG infers of course that all the errors contained in it were previously UNKNOWN and that nobody knows how many UNKNOWN errors there are in any computer system!  Justice Fraser did not find a finite number of bugs in Horizon.

  1. I am sorry for the hurt caused to sub-postmasters and colleagues and to their families and I am sorry for the fact that during my tenure as CEO, despite genuinely working hard to resolve the difficulties, Post Office did not identify and address the defects in the Horizon technology. This regret is constantly with me.

Here she reveals she was the CEO of an organisation that failed completely to recognize what Alan Bates first realised nearly 20 years ago.   She was CEO of an organisation that spend £110m defending the indefensible (see her comment in her email to me below).  She is describing the management and staff of the organisation she presided over as being incompetent.  It surely follows that she is as well.

  1. I also believed that the need to carry out their work objectively and courteously was embedded within the investigations team.

Note the use of the term ‘I believed’.   How did she come to that belief and why has she not further defined that period which she allegedly believed this to be true?  Did she believe this to be true up until she left in April this year?

  1. First, I played no role in investigatory or prosecutorial decisions or in the conduct of prosecutions. There was full separation of powers, with the team responsible for prosecutions reporting to the General Counsel. It would have been inappropriate for me to involve myself in operational decisions made on a case by case basis.
  2. Second, I am not a lawyer. Post Office relied on lawyers (both internal and external) for advice in relation to criminal matters, and lawyers held the operational responsibility for investigating and prosecuting criminal misconduct. My main role, and the role of the rest of the Board, was to set policy, informed by legal advice.

First, as I have pointed out above, ignorance of the law is no excuse regardless of what advice you have received from your legal team.  Second, as I have pointed out above, Ms Vennells has inferred quite rightly, that on becoming MD of POL she took on the responsibility of all departments in her organisation including the legal department.

  1. I recall that I first raised the issue of Post Office prosecutions with the then General Counsel shortly after I became CEO because I wanted to understand the rationale for the policy. It was explained to me that the practice was an inheritance from Post Office’s days as a division of the Royal Mail; that it was a long-standing arrangement that had been reviewed by Royal Mail management in the past; that it was practically necessary given the pressure on the CPS budget; and that Post Office approached prosecutions with the same rigour as the CPS, that it is to say that we applied the Police and Criminal Evidence Act 1984 and the Code for Crown Prosecutors. The application of the Code meant, as I understood it, that decisions to prosecute were made by applying two tests: first, whether there was sufficient evidence to provide a realistic prospect of conviction and second, whether a prosecution was required in the public interest.

Ms Vennells was responsible for setting budgets and monitoring these against actual costs throughout her stay at the top of POL.   How could she possibly have justified the costs of this prosecution machine that she inherited against the recovery rate from suspected SPMRs?   The decision to carry on with an internal prosecution department after the split from RMG in 2012 was absurd and either a reflection of her incompetence or the desire to prosecute SPMRs where the evidence was clearly not sufficient for the CPS / Police to be interested in.   Asking the Police and the CPS to investigate and prosecute SPMRs is a free service!

  1. Regarding the question of evidence, first, as I say, it was my understanding from discussions with the in-house legal team and Post Office’s external criminal solicitors that Post Office applied the same procedures and tests as the CPS regarding the collating and consideration of evidence. Secondly, in cases involving technical IT issues, we often obtained input and evidence from Fujitsu (which at the time I believed was acting properly). Thirdly, an additional layer of oversight was provided by the courts and the CCRC. Fourthly, in July 2014, Post Office engaged a senior criminal QC to advise on the response to a letter received from the CCRC regarding convictions relating to Horizon, and also to advise on prosecution related issues. In referring to this advice I do not and do not intend to waive any privilege of Post Office or myself, if any, over the advice the criminal QC gave.

Again the use of ‘I believed’.   As stated above, why did Ms Vennells not offload the significant cost of funding a prosecution department to the Police and CPS?

  1. I should add that Post Office was also mindful of its disclosure obligations in relation to convictions. When we went through the Scheme, Post Office lawyers considered each and every case in the Scheme where there had been a conviction in order to assess whether there was anything that had emerged from the Scheme which Post Office was obliged to disclose.

This is an absolutely appalling response from Ms Vennells.  She watched the BBC Panorama program.  She saw the memo printed out by the Head of her legal services and she was certainly made aware separately by myself and others of the implication of this memo on the trial of Seema Misra.   In my opinion this is a criminal offence of failing to report a crime of conspiracy to pervert the course of justice at the very least as well as misconduct in public office.

  1. If a software fault or defect was reported to the NBSC, a log would have been kept of the call, and Fujitsu should have been alerted. Fujitsu needed to be alerted because the IT technology itself was operated and monitored by Fujitsu in its own operations centres. Fujitsu itself should have maintained logs of all bugs and defects and the measures taken to deal with them (regardless of whether a defect was first reported to Fujitsu by Post Office or a subpostmaster, or identified by Fujitsu). I also understand that, under its contract with Post Office, Fujitsu was obliged to inform Post Office of IT errors, and what had been done to correct them.

Despite repeated requests by myself and others since knowledge of the Known Errors Log became public for details of known errors to be provided to Subpostmasters, POL refuse to do so to this day.  How can SPMRs be expected to investigate discrepancies in their accounts if they are not provided with known deficiencies in the computer system.

  1. It is a truism that all IT systems contain bugs and defects, and I knew that there were or had been bugs in Horizon (because I was told about them). I also believed that bugs and defects were being properly reported, and being dealt with as and when they arose.

In short, I believed that the systems for reporting, investigating, and rectifying defects were working as they should.

Another excruciating use of the ‘I believed’ phrase.   It is essential you realise why she and presumably her lawyers are using this.  Just as importantly you have to question the decision making ability of Ms Vennells who was prepared to spend £43 million in legal fees to defend a system she knew was defective.

 

  1. Whenever I was told about a bug in Horizon, I wanted to know what was being done about it, and to be given confirmation that it had been resolved satisfactorily, both in terms of the technical IT, and also to ensure that any problems the bug or defect had caused at branch level were identified and reversed.

That is a very deep level of interest into bugs.   If you consider the ‘bug’ I raised with Paula in the email attached to this document, that issue was never resolved and could conceivably still exist in the system today.   In a poll I took on Social Media of around 1000 SPMRs some time after Angela van den Bogerd had told Paula not to worry about it, some 70% of respondents said they had encountered such an error.  Ms Vennells in this particular case did not ensure that it had been resolved satisfactorily.

Personally, I visited the operations centre frequently to understand and follow through how we could improve things, partly because of the historic shortcomings,

When did Ms Vennells decide to start visiting the operations centre because of historic shortcomings?   That would be interesting to know because she is admitting to historic shortcomings while even at the end of her employment in 2019 she was engaged in spending millions defending litigation against historic shortcomings.

I believe I helped create a culture that welcomed input and criticism as that is how we learned.

She certainly did not welcome my criticism or that of others that challenged her idiotic NT project.  The network would be in a far better place if she had and learned from what we had to say.

Secondly, it was the view of Post Office that the conduct of prosecutions was outside the scope of the Scheme. Thirdly, Second Sight, as forensic accountants, had no expertise to consider legal matters.

Failing to investigate the prosecutions was a grave mistake.  As will be seen when the Malicious Prosecution trials start the POL legal team were only interested in upholding the integrity of the Horizon system in many of these cases and it will become apparent that they deliberately withheld substantial evidence in order to gain convictions.

  1. Second Sight also told us they suspected that money paid in by sub-postmasters to cover shortfalls may have ended up in Post Office Ltd’s central suspense accounts and ultimately its profit and loss account. Did Post Office Ltd, as they contend, frustrate them in investigating this possibility and did you as CEO look into this. Do you think this could have been a possibility?
  2. I have very little recollection of this issue and I can only tell the Committee what I now recall. I believe that Second Sight raised it with me in conversation. Since it was a technical financial control issue, I asked the CFO to look into it, and I can see from the transcript of the evidence to the Committee on 2 February 2015 that Second Sight had already met with the CFO to discuss the further information they said they required. I cannot remember how this was resolved, but I do not recall any further communication from Second Sight to me on this issue.

There is no better evidence submitted to you than this to support the call for an independent judge led inquiry with full disclosure powers.  In 2015 Second Sight met to discuss this matter.  This is now 2020 and NO ONE has been allowed to investigate these suspense accounts.    This reply from Ms Vennells is pure obfuscation and clearly she knows more than she is letting on.

  1. It is clear with hindsight that the information I was given about remote access was seriously inaccurate. I only became aware of this from the litigation, after I had left the Post Office

She could probably argue in court that the above statement is so ambiguous that at least one interpretation of it could be considered correct.  I suspect the committee will form another opinion though.

 

Addendum

 

Paula Vennells

Wed 10/12/2014 13:47

To:

  • You

Cc:

  • Gavin Lambert;
  • Angela Van-Den-Bogerd;
  • Rod Ismay;
  • Lesley J Sewell;
  • Kevin Gilliland

Tim, hi.

 

If there is one thing you should know about me is that I do listen.

 

But please be careful that you don’t over generalise or conflate different points.

 

We are not defending the indefensible – all systems have issues from time to time.  And they need to be (and are) fixed when they occur.  We have records of when that has happened, of alerting users and then putting in place an appropriate fix.  We operate in a dynamic market and Horizon, like all epos systems is constantly updated.

 

To your challenges.  I listen and I’m therefore concerned at what you say. I’m copying three people who I expect to get to the bottom of it. And who I trust to do so: Gavin Lambert who works directly for me, Angela van den Bogerd, and Rod Ismay. I am also copying Lesley Sewell (CIO) and Kevin Gilliland. I want Lesley and Kevin to be in the loop – they are the directors responsible for ensuring our branches have the appropriate service.

 

Angela will be in touch with you directly.

 

In the meantime, I wish you a happy Christmas when it comes.

 

Paula

 

Ps. If the colleague you mentioned needs support, please let Kevin know.

 

 

 

From: Tim McCormack [mailto:timandagi@outlook.com]
Sent: 10 December 2014 08:00
To: Paula Vennells
Subject: FW: Second Sight – Horizon Errors – Media Coverage

 

Angela …

 

I think you should make sure that Paula gets to read the message below.

 

In an absolutely bizarre coincidence shortly after sending the email  I was made aware that yesterday, as a result of the stress caused by an occurrence of this problem and the subsequent refusal by NBSC to acknowledge that it could happen, a Subpostmaster was rushed to hospital with stress related heart problems.   He had the presence of mind to record details of the incident as proof that it had happened which for the first time gave me an indication of what might be happening to cause it.

 

This could well make the news today or at the weekend as a follow up to yesterday’s events.  Paula should be prepared to answer the obvious questions.

 

Cheers, Tim

 

PS I have never in my life come across such an amazing coincidence – if I was in the least bit religious and knowing of Paula’s faith I would declare it a divine intervention.

You learn more from one criticism than from ten compliments

From: timandagi@outlook.com
To: paula.vennells@postoffice.co.uk
Subject: Second Sight – Horizon Errors – Media Coverage
Date: Wed, 10 Dec 2014 00:04:28 +0000

Dear Paula

 

Yet again today Mark Davies, speaking on behalf of POL, relied on the defence that there are no systemic errors in Horizon and this is proved because we deal with so many customers per day in so many branches.   I think Mark and yourself might like to review the periodic Message to Branches that are sent out via Horizon.   There are a catalogue of systemic errors that arise from time to time and are fixed.   Some involving automatic transaction corrections.

 

Paula, as I keep saying, you are surrounded by people in your office that tell you all is well.  You have no personal knowledge of operating Horizon nor probably any in depth technical knowledge.  What if the people that are telling you all is well have the same attributes?

 

So forget systemic errors for the moment and consider ‘intermittent’ errors which by and large are caused by communication problems.

 

I know of more than one but one in particular:

 

It exists.

 

It occurs at different times in different branches.

 

It is noticed.

 

They are reported to NBSC (I would really like to see the number of times this has been reported to NBSC)

 

It causes a financial loss to the SPMR.

 

They are not fixed BUT the wise SPMR knows how to get his money back so you don’t hear many complaints.   You would from the Audit team if they caught someone doing it though.

 

So why haven’t these intermittent errors been fixed.   To put it simply – because they are intermittent.  There is no known sequence of events that can cause this error to re-occur in any particular branch.  How can you fix something if you don’t know what caused it in the first place?   You have to throw the whole thing out and start all over – the only way.

 

On our ‘chat’ forums, there are documented reports over the years of the same error repeating itself randomly in a wide number of branches, including at Duns and my previous PO.

 

I am pretty sure I can arrange for the error to be replicated though by asking a large sample of offices to repeat the process until the error occurs – and I am also sure that I can obtain transaction logs and associated CCTV coverage of the error manifesting itself.

 

I can show you it happening.  I can explain the financial consequences but neither I nor your best technical team will be closer to fixing the underlying problem.  You cannot make it go away.

 

I would also be happy to stand up in court and declare that Horizon has intermittent faults, probably caused through communication errors, provide clear and undeniable evidence as well as bring along a fair number of your most trusted SPMRs to bear witness that it has happened to them too.

 

I hope you get my point – I can show one error occurring that you can’t fix nor can you explain – if you could explain it then you could probably fix it – so how many other intermittent errors like this are in the system that cause unexplainable financial losses to SPMRs?

 

I am trying to help you but the hole you are digging for yourself is getting deeper by the day.  Please stop trying to defend the indefensible.

 

Cheers, Tim

 

 

If Poirot investigated POL

An intriguing question put to me yesterday made me think this morning of something I perhaps should have considered a long time ago.   So Post Office Ltd (POL) are no longer going to initiate prosecutions on their own behalf which suggests that alternatively they will now report any suspicion of criminal activity within their company to the Police for further investigation.

Before I go on – just in writing that I see an initial problem for them for, despite my many reminders to them (Vennells and Parker and the rest of the board) they do not appear to have as yet taken it upon themselves to report the very clear Misconduct in Public Office offences that their staff and perhaps even themselves have committed over the years.   Failing to report a crime I believe is a criminal offence in its own right but I stand to be corrected by the myriad of lawyers and barristers who read these blogs on the Post Office Scandal.

Despite the many miscarriages of justice now before the appeal court, over the years there have always been a few subpostmasters (SPMR) that have freely admitted to having their hands in the till for whatever reason and have served their sentence for doing so.   It has to be likely that there will be some SPMRs in the future who will be tempted to bite the hands that feed them and POL will have a duty to report these suspicions of criminal activity to the Police.

So without going to the extent of interviewing a Detective Chief Inspector to find out the steps the Police would take to investigate the matter, I am putting on my Poirot moustache this morning and thinking of what I would do if I were investigating such an offence.

The best place to start for me is the case of Seema Misra because I know it so well.  I have read the transcript and the witness statements and seen the evidence produced before the court.   I know how POL went about the investigation.   What would the Police have done then differently and what difference have the decisions of Justice Fraser in the recent litigation made to the way Police would investigate now and arrive ultimately at the decision whether or not to forward the case to the CPS to consider prosecution of the suspect.

So back to January 2008 and the auditors arrive at West Byfleet Post Office to carry out a surprise audit.   Seema is aware that there is a shortage in her accounts but has hid that from POL by not declaring the accounts properly and in the meantime is going to great lengths to repay the value of the discrepancy.   Seema had really no idea of how the discrepancy had occurred.  At the time of the audit she, like all other SPMRs had been given to believe that Horizon was totally reliable so she did not consider that as the source.  She had definitely suspected the assistants that she inherited from the previous SPMR and from day one of her tenure of West Byfleet Post Office while the experienced POL trainer was in attendance she was aware that mistakes could occur that would leave her liable to Post Office for the amount of the discrepancy (there was an error of £150 in Seema’s accounts that very first day which even the trainer could not find).   Seema acknowledged the discrepancy to the auditors and the hiding of it within her accounts but she flatly denied stealing a penny.   She explained that the loss had built up over time and she was trying to pay it back and if allowed to keep her Post Office would do everything she could to continue to pay all of it back.

At this stage let the new process take over and for the moment let us assume that all parties agreed that Horizon was not the source of the problem (it could well have been but for the sake of this argument let us ignore it).

POL must now decide whether or not to call the Police.   Let us consider their options.

  1. Has a crime definitely been committed? Based on what POL know, there is a shortage in the branch accounts that needs to be explained and paid for.   Seema does not know definitely where it has gone but she suspects her former staff without being able to provide any proof of that.  The one definite fact that Seema is aware of is that she did not take any money out of the branch.  In fact she was putting more and more into it to cover the discrepancy.
  2. POL are aware that mistakes do occur from time to time and sometimes for significant amounts which are later rectified by means of Transaction Corrections.   However the total discrepancy at West Byfleet is a large amount and clearly has grown over time.   POL need to investigate a few things before calling the police.
  3. They need to make sure POL themselves are not to blame and must verify that there are no outstanding Transaction Corrections in Seema’s name to be cleared. They need to declare an actual amount of the discrepancy for their own accounts and also to the police should they decide to report the matter to them.
  4. False accounting is a crime and Seema readily admitted to that. However as we now know, notwithstanding the possibility of Horizon errors, according to Justice Fraser a SPMR cannot be held responsible for the accuracy of their accounts and it is fairly reasonable to assume that POL will never again pursue SPMRs for that particular offence.
  5. POL’s concern at this stage is to recover the amount of the discrepancy and ensure that if there has been criminal activity then the culprits be brought to justice. The possibilities of how the discrepancy occurred are:

i) by mistakes at the counter (e.g. crediting a customer making a deposit with £1,000 instead of £100)

ii) theft by the assistants

iii) theft by Seema

 

  1. As Seema has ‘hidden’ the discrepancies over some time it would be impossible for anyone to determine if they had occurred, when they occurred and for what amounts. If it was possible then the customer who benefited could be liable for the amounts and by keeping them could be convicted of an offence themselves.  However if the discrepancy is decided to be by mistake then it becomes a debt owed by Seema to POL and no crime has been committed.
  2. At this stage then what do POL decide to do? Call in the Police or accept Seema’s willingness to treat it as a debt?   Certainly there is at that time (2008) wording in Seema’s contract that stipulates she is responsible for all losses regardless of how they occur and that would include theft by her assistants, so regardless of how the loss occurred POL will get all their losses back and the only decision left for them is whether or not to allow Seema to continue as an SPMR.
  3. That generates a problem for POL in that if it were mistakes causing the problem then Seema may continue to make the same mistakes. The profitability of the Post Office may not be sufficient to finance the repayment of the ‘debt’.  Allowing  Seema to continue in office may not result in POL getting their accounts sorted and they cannot force Seema to sell any assets she owns unless they raise a civil action which would not only cost a significant amount of money to do but they would have no idea from the start whether or not Seema has sufficient assets to cover the debt and/or their legal costs should they be successful.
  4. So what now – it seems POL’s only option is to call in the Police to investigate and in my opinion this is how the police would handle this matter given the circumstances above:

 

They would ask POL what crime they believe had been committed and by whom.   POL at this stage have not one shred of evidence that Seema has been stealing.  No examination of her bank accounts, no search of her accommodation and no results from an investigation into her lifestyle.   No indication whatsoever that theft by Seema is the likely cause of the losses.   They know that the assistants have been sacked and/or left.  They do not know where they live and have no investigative powers to find out if they have a criminal history and large balances in their bank accounts.  They have reason to believe that the amount of the discrepancy has been reduced substantially since they left by Seema paying in amounts to cover the loss.   POL must state to the police that they believe the crime to be theft by persons or persons unknown with immediate suspicion falling on Seema and her assistants.

The Police would also ask POL if there was any other way the amount could go missing and POL would have to admit to the possibility that counter mistakes could have played a part.  The Police (please remember that this is all in my opinion) would then ask POL how they could rule that out beyond reasonable doubt which they might remind POL is the standard of evidence required in a criminal court.   POL cannot, to this day, rule that possibility out.  Implying that a person working in a sub post office, that they do not know, is more likely to commit a crime than make a mistake, without any evidence to support that premise, is frankly astonishing yet that culture remains currently in Post Office land.

It is there that the Police then and now will drop the case and not proceed with further investigation.   The overwhelming likelihood is that at the very worst a debt has been incurred by the SPMR to POL.  As we now know to be the case, the computer system may be an additional reason for the discrepancy but that is just another reason why the Police would not be interested in pursuing the matter.   In my opinion POL are quite justified in saying that they will no longer prosecute SPMRs. However perhaps they really meant that they would not bring private prosecutions and that they would rely on the Police to investigate.  POL have clearly not considered the above.  The Police will just not be interested.  Happy days indeed for the very few SPMRs who do have criminal intentions.

My interest in considering the above argument though was to consider how a Police investigation would differ from POLs so let me suppose that for whatever reason, the Police were called in to Seema’s case and they started an investigation.

There is an immediate difference to the process.  Seema may be under suspicion along with her assistants but she is treated as if she is innocent from the start.   Her explanation of how the accounts got out of sync will be investigated fully because the Police have to either prove beyond reasonable doubt that all alternative explanations other than Seema stealing were not possible/did not happen or provide evidence that proved beyond reasonable doubt that Seema had committed a crime.

I think just by letting you know the steps POL themselves took to exclude the possibility that the assistants were not responsible for the losses will show that the Police would have to do a lot more.   POL sent an investigating officer around to the last known address of the suspects who had left Seema’s employ years earlier.  The officer found that they no longer lived there and was told that there was no forwarding address and it was presumed they had returned to India.   That was it.  No more interest by POL in proving beyond reasonable doubt that they were not miscreants.   In my inquisitive mind though and perhaps not being entirely politically correct at this sensitive time,  I would wonder why people would return to India when from all accounts many are desperate to come here to make a fortune.    I would wonder about people returning to India with a large amount of cash that would allow them to live in considerable luxury for many years.    I may be open to putting in a call to my counterparts in India asking for these people to be located and asked a few questions about their income and lifestyle.   That is investigating to a reasonable doubt level and even then would require a suitable explanation for the repatriation of the assistants.

Let us say that was affirmed by the police in India, then my attention, as the investigating police officer, would turn to Seema.  I cannot discount the possibility that mistakes could be the cause of the loss but Seema remains a suspect because she managed the Post Office branch and of course the accounts were altered to hide the discrepancy.   In this regard POL did all they could to find evidence of theft and the Police could probably do no more.   They found nothing and the Judge in her trial said as much in summing up the evidence against her.  The prosecution could show no signs of enrichment from the alleged proceeds of a criminal act.   Their case rested solely on there being no other possible reason for the losses recorded in her accounts and they did not come close to doing so.   In hindsight Seema’s trial was obfuscated by the possibility of Horizon errors being to blame.   POL hid evidence that allowed their prosecutor to ‘prove’ to the Jury that the only Horizon error the world had been told about at that time had not occurred at West Byfleet.  Of course as we now know there were many errors existing in this most unreliable system at that time each of which could have caused the losses at Seema’s branch and as I have stated elsewhere, why should she have looked for a computer error being the source when the CEO was stating publicly that it was a truly robust and reliable system.

There is no doubt that POL will ultimately have to review their decision not to prosecute SPMRs in the future, probably when the Police inform them of the bleeding obvious and that they cannot undertake any such investigation on POL’s behalf.    POL will then understand, finally, that the only long term solution is to have full CCTV coverage throughout their network.  You know – just like all the banks have, like the supermarkets have, like the casinos have and like POL’s own cash centres have – all those businesses where large amounts of cash are entrusted to employees and agents.   A simple solution ignored is a testament to the intelligence and ability of POL management.    Mmmm perhaps that is where the real problem lies ………

 

 

The Trial of Seema Misra

 

Tomorrow  BBC viewers in the South of England will be reminded of the disgraceful behaviour of Post Office Ltd (POL) in seeking to prosecute the former subpostmistress of West Byfleet Post Office for theft.   Seema will tell the viewers in no uncertain terms, I am sure, of the enduring misery and suffering her conviction and incarceration for theft causes her and her family to this day and into the future.

Seema’s conviction remains with the Criminal Case Review Commission (CCRC) until such time as they decide to return the conviction to the appeal court for consideration.   It has sat with the CCRC since April 2015 and it will be close to 5 years when the decision is finally made to return the conviction as unsafe.   There are of course some reasons for the delay such as the intervening Group Litigation which was only concluded in December and of course staff shortages in these recessionary times.

However there is no doubt in my mind, and the minds of many more able people than I, that the conviction will be overturned and while I have written many times in this blog about why I know this to be so I think perhaps I should summarise the details once more.   The evidence that Seema is not guilty of theft is provided for the most part by Post Office Ltd themselves in the transcript of the proceedings in court when Seema stood trial in Guildford Crown Court on a charge of theft starting on Monday 11th October 2010.

Seema could not explain how the computer system had managed to derive a £87,000 loss at her branch when POL auditors finally visited her office in January 2008.    Far more importantly POL could not explain the losses either and in keeping with their mindset that Horizon could not be to blame they charged Seema with theft and prosecuted her.  It is important to note that the police were not involved and the POL brought the prosecution themselves under what they believed to be the powers invested in them by legislation. (a dubious point that we will leave for now)

Seema was represented by a Mr Hadrill and her costs were to be covered by legal aid.   POL were represented by a Mr Tatford who would be paid for by POL.   In the run up to the trial and purely by chance Seema had come across a reference to a bug in Horizon that had been referred to in a civil trial featuring Lee Castleton who had also been victim of unexplainable losses at his post office.   The bug has become known as the Calendar Square bug which was the name of the Post Office where it was first noticed.   This was the first time Seema had even considered the possibility of a bug in the system causing the losses she had encountered and it is an extremely important point in its own right.  Why would a subpostmistress consider the possibility of a bug being the problem if POL consistently tells her that there are no bugs in the system and if there was one it would be extraordinary if it only affected her branch.  As POL managers still to this day say “no one else in the network is experiencing these problems so it must be your fault”.

As a result of adding to her defence the possibility of computer error causing the losses, expert witnesses were appointed.  The defence chose Professor Charles MacLachlan and POL chose a Fujitsu employee named Gareth Jenkins.   As expert witnesses do, Charles and Gareth worked together in order to prepare their reports to the court.  In fact such was the scrutiny of Prof MacLachlan, he and Jenkins were still working on looking at possible problems in Horizon up to and including the first day of the trial.   And that is another extremely important point that I will come back to in a minute.

Just to add some background into my research into this subject.   In November 2015 the barrister Stephen Mason obtained permission from the trial judge to publish the transcript of the trial.  https://journals.sas.ac.uk/deeslr/article/view/2217

I happened to have enough time and interest to read the whole thing through, not once but several times and I also took the opportunity to concatenate all the daily transcripts into one single word document some 1500 pages long.  I have worked through it in detail and annotated my findings and obvious discrepancies in the evidence, ultimately providing it to the CCRC as evidence that Seema was truly the victim of a miscarriage of justice.  That was over 4 years ago and since then even more evidence has come to light, mainly through the disclosure evidence produced at the GLO trials as well as Justice Fraser’s findings of fact in those trials.

It would take an extremely long blog post to delve into all the inadequacies of the prosecution’s case against Seema over the length of the trial but luckily all I have to do to convince all and sundry of Seema’s innocence, the likely criminal behaviour of POL’s expert witness and the dreadful behaviour of Mr Tatford representing POL is to look in detail at the very first day of the trial.  In fact only the first part of the first day before the jury was even sworn in.

Before the jury was introduced to the court Mr Hadrill and Mr Tatford discussed some issues with the Judge.  The first was the subject of disclosure. I have no details of what further disclosure Prof MacLachlan required but I assume from later testimony it was more details of the now infamous Known Errors Log.   This had been requested by the defence in May but was turned down by a judge in a separate hearing because it would take an additional 45 hours of expert witness work and they don’t come cheap.   Why people still have to go to prison because the judicial system cannot justify the expense to find out the true facts is a subject for another day.   What is crucial though is that this was not the Crown prosecuting Seema it was POL themselves and surely they would have wanted to get to the bottom of it?  No, and it wasn’t just Seema who POL tried to prevent having access to crucial evidence but even at the GLO trial POL were claiming that the Known Errors Log was irrelevant and they still prevent access to this day to the log for subpostmasters who ask.

Mr Tatford: Regrettably the Crown’s view is that the defence have never in this case provided focused disclosure requests. They have asked for everything. Initially this was everything in relation to the West Byfleet post office, two and a half years of transactions. It was explained repeatedly that providing that material was enormously expensive and offers were made to the defence to suggest a period of data they would like to look at because of course they have the advantage of the defendant’s instructions, because the defendant is saying there was a computer problem – easy to say it, but a computer problem should be visible, at least the symptoms of it to the user of the computer, and this defendant was using the Horizon computer system at her post office every single day, probably perhaps hundreds of times a day.

What an extraordinary statement – fundamentally flawed in so many ways – and no better example than when in the Horizon trial it was exposed that not only were errors in the branch accounts caused by Horizon  bugs but not even Fujitsu were aware of them until many years later when they were eventually discovered.   Only a few minutes in to the trial and if Sir Peter Fraser had been in the chair it would have been stopped then.

Mr Tatford: It is for the Crown to prove the case, to prove that the defendant stole the money. If the jury think the deficiency might be down to a computer error, Calendar Square or something else, then that would probably help them to move a great way towards acquitting the defendant

Thanks to Mr Tatford here for illuminating the obvious and not so obvious.  First of all he refers to ‘the money’ showing his lack of knowledge of as to the effects of a computer bug that generates a shortfall in the accounts of a branch.   Horizon does not have hands and legs to steal physical cash from the safe.  A computer error in this case merely performs an erroneous transaction that has the effect of recording the wrong amount in the accounts.  No ‘money’ physically changes hands.

More importantly though, he provides us with glowing testimony that even he would be obliged to consider the innocence of the defendant should the defence be able to prove that computer errors could be to blame.  Mr Tatford surely would be the first now to support the notion that Seema was wrongly convicted after he has read Justice Fraser’s conclusions in the Horizon Trial.

Mr Hadrill: It transpires that what Professor McLachlan has seen this lunchtime on the computer, the laptop of Mr Jenkins is a third formatted programme. It is called an NT event log. Its existence was never known before today. It clearly had not been declared before today,

Prior to this statement by Mr Hadrill he had been explaining to the court the lack of disclosure by POL and Fujitsu.  POL had argued about the cost of providing any additional disclosure but here was Mr Jenkins providing brand new evidence on the very first day of the trial.  It is extremely significant for many reasons.   First the contents of the log eventually persuaded Prof MacLachlan later in the trial to concede that it was most likely that the Calendar Square bug had not affected Seema’s accounts and I will come back to that later.  Far more importantly was the fact that this was Gareth Jenkins providing evidence to the court that had not been requested again I will tie that into a later conclusion about Mr Jenkin’s behaviour in court.

It is also worth weighing up the fact that Jenkins provided this additional disclosure against what Mr Telford had to say about why POL didn’t provide disclosure above.

Back to the court discussing the possibility of the Calendar Square error affecting West Byfleet:

Mr Telford: paragraph 6 details the problem was dealt with in March 2006. So the problem is completely irrelevant from March 2006 onwards.

 

On 11th October 2010, in sworn testimony before Guildford Crown Court both POL and Fujitsu claimed that the Receipts and Payments mismatch bug that had occurred in Calendar Square Post Office had been ‘fixed’ in March 2006.

Justice Fraser in his findings of fact in the latest Horizon Trial stated it was still apparent in 2010:

  1. Callendar Square/Falkirk bug. This is a bug present in Legacy Horizon. It is agreed that this bug occurred between the years of 2000 and 2006, although there is an issue about when it stopped. In my judgment, the period when the effects of this occurred are 2000 to 2010

In my personal opinion this type of error was still occurring even in Horizon Online up until 2016 and the possibility that something similar still exists is most likely.

Again Mr Tatford is extremely generous in providing Seema with all the evidence she requires to submit to the appeal court:

Mr Tatford: One wonders why if that was the cause of the problem, why everything was not made better quite frankly when the problem was solved in March 2006, but it would appear the hole in the accounts appeared to grow, not become smaller.

It is for the Crown to prove that she stole the money and if the jury think that part of the deficiency may be down to this then that may persuade them that the rest of the deficiency may also have had an innocent reason and that would lead them to acquitting the defendant, but that line of reasoning, the evidential basis for it, can be put before the jury.

 

The judge now sums up his findings of these discussions and in doing so says this:

A vast quantity of material has been disclosed and considered and the defence have ample material I am quite satisfied to test the integrity of the Horizon system.

Sadly he was mistaken and I am also sure he would freely admit to have been duped by POL and Fujitsu into believing what he said to be factual.

And there we have it ladies and gentleman.  We have only now arrived at the point in the trial where the jury is about to be sworn in and the actual trial is set to begin but we already have enough evidence from the discussion between the Judge and the counsel for the defence and prosecution to cast more than great doubt on the safety of Seema’s ultimate conviction, we have ,as will be seen, more than sufficient evidence to prosecute individuals from POL and Fujitsu for attempting to pervert the course of justice.

So what about Mr Gareth Jenkins.  He has been working as an expert witness on this case for many months before the trial started.  He clearly knew it was going to start on Monday 11th October 2010 and as an expert witness he would have been briefed by the prosecution as to his responsibilities and duties according to CPS guidelines for expert witnesses.  He made a conscious decision to provide the court with additional evidence on the day the trial began that had not previously been requested by the defence expert witness. It was crucial evidence that led to a major part of the defence’s case being destroyed in court.

It must surely therefore be an inescapable conclusion that Mr Gareth Jenkins deliberately withheld knowledge of a Horizon Error from the court that would have, by POL’s own written admission, upheld Seema’s defence of a Horizon error being responsible for the losses incurred at her branch.  I refer of course to the infamous Memo of a meeting held between POL and Fujitsu with regard to a Receipt Payments Mismatch of exactly the same generic problem that has existed in Horizon since its exception and it is of my opinion still has the potential to exist in the system today.   Gareth Jenkins was present at the meeting and the minutes specifically state that there could be an impact on ongoing legal cases where branches are disputing the integrity of Horizon.   The minutes also reveal two action points that Gareth Jenkins must action by 8th October just TWO DAYS before the Misra trial is due to start.  Just to make matters worse Fujitsu, under the command of Gareth Jenkins would be rolling out the fix to the first branch on the 11th October while Seema’s trial was in progress.

https://www.scribd.com/document/392954195/Bates-v-Post-Office-Receipts-Payments-Mismatch-Issue-Memo

Had Gareth Jenkins elected to inform the court of this error and the effect it had on branch accounts there can be no doubt it would have had a significant effect on the outcome of the trial as Mr Tatford repeatedly and so helpfully commented on.   Mr Jenkins will soon be regretting that decision and he will have ample time do so.

The detail of this trial was relatively secret.  Post Office Ltd and Gareth Jenkins must have been safe in the knowledge that nobody would concern them enough to have the transcript published nor could they ever have imagined that the minutes of that meeting would have been made public.    The prospect of a ‘Horizon’ trial was not even a remote possibility in 2010.   The behaviour of these people is reprehensible, the failure of POL management not to pursue criminal charges against them is bordering on criminal activity itself and the absolute travesty of justice that has delayed Seema’s conviction being overturned earlier than this is intolerable.

Thanks as ever to Nick Wallis at http://www.postofficetrial.com for the reporting of the trial among many other helpful things including obtaining the transcript and the copy of the infamous memo.  To Stephen Mason as well who had the remarkable foresight to obtain the transcript of Seema’s trial without which her conviction might have gone unchallenged and Mr Jenkins and POL escape without censure.

The Digital Vaccine

The Digital Vaccine

More than slightly off my favourite topic.   Inspired by social media concerns about the use of contact apps, personal data and human rights etc

In summary, a small electronic device dedicated to contact tracing, costing less than $1 to produce and distributed freely to the world’s population before the start of the next pandemic.   With no personal data stored and capable of alerting the wearer that they have been in contact with an infected person.

The problems of an app for contact tracing:

  1. The legal and human rights teams are ready, willing and able to detail all the associated problems with relying on data collected on a private device from other users and distributing that data into the public domain for analysis. Whether you agree or disagree perhaps the most important issue with this particular concern of using contact apps is the precedent it sets for such violation of standard human rights protection in the future.
  2. We already see a wide variety of apps being used and considered around the globe and ‘around the globe’ is the problem here. This is a pandemic and the next one will be a pandemic as well.  It has been spread through international travel and a global solution is required; not one unique to every country one visits.
  3. While smartphones are seemingly ubiquitous in the western world they are not and most likely never will be so in the third world where pandemics will no doubt hit the hardest. While the cheapest may get even more cheaper should a call be placed for every citizen of the world to have access to one the overall global cost would still be prohibitive as would limited battery life which is a severe restriction for populations without ready access to an electricity supply.
  4. Mobile phone signal coverage will continue to get better but there are significant gaps in coverage even in the western world.

What is needed?

A contact tracing device needs to be able to do the following:

  1. It needs to be able to emit a signal that is capable of being read by a similar device in close proximity to it.
  2. It needs to be able to receive a similar signal and it needs to be able to store the ID of the device that it receives such signals from with a time stamp.
  3. It needs to be able to transmit (perhaps using SMS) on a daily basis a message containing details of all contacts
  4. It will require to have a battery life of up to 3 months
  5. It needs to be small enough to be worn such as a bracelet or necklace but should be visible to others
  6. It needs to be able to receive a signal from a control device that will indicate to the owner/user that they have been in contact with a carrier.
  7. It needs to be able to communicate to the owner/user that the device has received the message in (f) either visibly or by sound
  8. The standard signal that it sends out must be able to include a warning protocol that indicates the wearer has been in contact with a carrier.
  9. The device must be capable of having its warning message reset as and when the wearer has been tested and cleared for the virus.
  10. This will still require massive amounts of testing given the particular circumstances of any new virus.   Contact transmission can occur in a relatively large timeframe given that we have been told that the current virus can remain contagious on surfaces for several days.

What is not needed?

  1. No personal information of the carrier is needed. No name, no date of birth, just the ID of the device
  2. No location data is required. If everybody is wearing one of these devices then there is no need to identify where the possible transmission took place only that a proximity contact was made at a particular time.
  3. You probably wouldn’t need a mask – a mask serves mostly as an indication you are willing to observe the rules. Wearing such a device visibly would tend to fulfil that function.
  4. A real vaccine. There would be no point.  A global system capable of identifying all contacts of carriers within seconds would surely have the Ro number below 1 immediately.
  5. No need for lockdown in any shape or form.   Wearers of devices that have been triggered as having been in contact with a carrier will be refused access to all public places.  Of course there will be those who flaunt regulations but those who do will be caught and could face lengthy jail sentences.

How would it work in practice:

The world prepares for a future pandemic by ensuring the entire population has a cheap device as described above to each household and/or worker.    With reference to the current pandemic it is starting to appear that the virus was spreading in asymptomatic form much earlier than was realised so global testing will be required given that there will be many carriers prior to results from the contact device becoming known.  Of course there is also going to be a delay before tests become available .

The population will be advised to start wearing the devices at all times when outside their place of residence and that they must ensure they are tested before their device can be reset if it warns them that they have been in the proximity of a carrier.

Within weeks data from the contact devices can start to be collected and collated in central databases.    Places of population density such as workplaces, shops and restaurants etc will be advised to screen all devices as patrons attempt to enter the premises.

All the benefits of the current apps now in use but with a global coverage and free of any concern about personal data usage.   A re-usable solution for future outbreaks and at a cost far less than delivering physical vaccines.   No lockdowns, the economy hardly restricted and international travel and trade free to continue. The only problem I can see with this possible solution is that I can’t see an insurmountable problem with it and there must surely be one because far more intelligent people than I must have already considered such an obvious solution.

I would love to hear from you if you can point out the failings in what I suggest that might help to improve the solution or identify why it is impossible and impractical.

Fairs Fair

It is difficult not to repeat one’s self when discussing Post Office Ltd (POL).  Platitudinous statements such as  “they are a law unto themselves” and “POL are unaccountable” are scattered fairly frequently through all my blog posts on the matter.   It makes me wonder though, in this ever more polarised and opinionated world we live in, why my opinion on what is fair is so completely at odds with that of Post Office management?

I know that if I was in charge at POL I would have ensured a long time ago that all those affected by the Horizon scandal would have been re-imbursed completely in terms of actual cash recovered from claimants plus consequential damages.   I would be the first to admit that reaching a settlement with claimants would be difficult and that yes, as the payments would have to be a) limited and b) adjusted for personal circumstances, there could be no possibility that when dealing with so many claimants that a solution could be found that would be equitable to all.   The main reason I say this is because individual settlement figures once known would be compared by the individual claimants and it is likely that some would consider their case worth more compensation than the ones they have found out about.

I would hope and trust though that whatever settlement I was able to reach would first of all be acceptable by a substantial majority of those affected and that it would therefore be approved by my board of directors as well as those people responsible for authorising such payments in Government and the Civil service.

That is my attempt to describe a FAIR settlement.  I would have done this in order to be able to bring this matter to a close and to show to the network of subpostmasters that the people in charge now are paying more respect to them than they have in the past; that owning a Post Office branch is indeed a privilege and not a curse and that there is a future in running one not imminent failure.

So what part of the actual settlement proffered by POL to the Claimants last year could be described as fair?   Not one of the claimants will receive the total amount of their claim and many will not even receive the amount that they paid back to POL when their Horizon systems went haywire.   In my fair settlement I would have wanted a majority to be relatively pleased with the settlement offered not only because they deserved it but because it would allow the matter to be put to bed and the company could move on.   In the actual settlement I think I am safe in saying that NOT ONE of the claimants is satisfied with the deal reached.   The matter continues to raise the ire of the public and the company continues to attract unwanted attention and ridicule.

So what was the purpose of offering and mediating settlement of such a low amount that they POL would have known would not have quelled the fury of the claimants?   Did they think they would go away?   I can’t imagine they did.  They must have thought though that they couldn’t do much in response because the settlement included a full and final clause stating the claimants couldn’t sue again.

Let’s just remind ourselves who we are talking about when we talk about POL here at this time.   Tim Parker the chairman is at the centre of it all.   He liaises with BEIS and since Vennells departed in January 2019 I would assume that he and not AL Cameron was the real ‘brains’ behind the litigation tactics and then ultimately the settlement.   Nick Reid would only have been told to settle and been given a figure to work with.   The rest of the board will not really have been involved.  I would assume that given many are new arrivals and as non exec board members of POL are purely decorative appointments  anyway that they would have paid no attention to the detail and rubber stamped whatever Parker told them he wanted.

So Reid is empowered to settle and is given a figure to work with.  He is new in the job and eager to impress.  The concept of fairness in settlement terms has already been limited for him.  Offering all the amount he was authorised to settle would have been the fairest thing he could do but that would not impress his new boss Parker.   Getting ‘away with’ a million or two less might earn him some ‘Brownie’ points in his new job but as it is public purse money that amount is really neither here nor there – no the real impressive bit for the boss is managing to negotiate a reduced settlement regardless of how much he saved.   Reid then is choosing between limited fairness and personal achievement.   If he could have offered more then we will find out in due course and he can be sent on his way but from what I hear he did seem to take a personal interest in what was being said at the mediation meetings and he may still gain approval in the longer term.

So the mindset of what is fair in POL’s eyes is most likely to be found in Parker’s head.   He would have been the person who told Reid the upper limit of what could be offered.  It is clear he and his legal team were using their financial muscle right from the start in the GLO as litigation tactics to bring about exactly what transpired in terms of the settlement – a time when faced with increased financing costs the claimants were forced into a position where they had to settle.  Parker’s presumption of fairness at this point was not based on whether or not the claimants would receive any compensation at all but rather on forcing the hand of the claimants to accept that they could not pursue in court the next stage of the litigation which would have been far more damaging to POL in terms of financial consequences.

So why does Parker’s idea of what is fair bear no resemblance to mine?  Is it because he thinks nothing of the ‘little people’ who are at the vanguard of his operation?  I think that is probably the explanation.  An arrogant curly haired little twat who is under the impression that he is going to get away with all of this without any harm to his reputation.  I am in no position to issue threats such as I will see he doesn’t get away with it – I am just one of the little people he has no time for – but I do hope that what goes around comes around and when all this is finally and fairly settled his pathetic behaviour will be well publicised and his reputation ruined once and for all.  With Parker in place at POL it is not a company worth working for.  No sense of decency and no sense of fairness.   No prospect at all of changing to remedy the failures of the past AND the present.  These are clueless people in charge of a failing operation with not an iota of commercial acumen between them all.

Fujitsu and the Dalmellington Bug

 

Last week Post Office Ltd very surprisingly but nevertheless with much appreciation from me provided the details I requested of the Fujitsu analysis of the Dalmellington bug.   I would assume all readers of this blog are now well aware of the circumstances of this particular bug and the crucial part it played in the recent litigation.    If not then I published this blog post in November 2015 https://problemswithpol.wordpress.com/2015/11/10/the-error-in-horizon/ which provides the details as I knew them at that time.   I had tried to inform Paula Vennells directly about it but in reply all I got was a letter from her lawyers.

Funny thing though is that all the ‘players’ in this fiasco surrounding this particular bug are still employed by POL with the exception of Ms Vennells.   I’ll come back to that because if POL are opening a new chapter and being as open and honest as they can by revealing the mistakes they made in 2015 and 2016 then surely to goodness they should also be learning the lessons of the repeated failures of POL and Fujitsu that this issue highlights.  As will be seen they didn’t learn then, they didn’t learn during the litigation and they certainly aren’t learning now otherwise they would not have provided me with so much detail of their employees’ ineptitude.

So if you are sitting comfortably I will begin:

First of all you need to open this document in another window or tab https://www.whatdotheyknow.com/request/653223/response/1560819/attach/html/5/Fujitsu%20Presentation%2021%20F%201415%20004.pdf.html

This is the presentation Fujitsu made to POL once they had done their initial investigation into the bug which I had revealed to them earlier and which had also made front page news on Computer Weekly thanks to the CWU highlighting the error publicly – something I might add would never have been done if POL had noticed it first.

I am going to go through it bit by bit but first it really must be pointed out that there are many people out there who hear the company name Fujitsu and associate it with Japanese quality and perfection.   They then read about these wonderful highly secure controls and audit features within the Horizon environment and consider that these are further proof of excellence and care in the Horizon development and maintenance team in Fujitsu.   This is the wrong assumption.  The people working there are no more diligent than you or I.  In fact based on what I have seen they seem to be less than diligent and one might wonder if they were any good at their job why have they ended up maintaining a system that up until recently was based on a technology platform nearly 30 years old that even Microsoft had washed their hands off more than 10 years ago.  No – please don’t assume these people are or have been good at their job.  The evidence submitted in the trial through disclosure proves that these people are less than adequate.

Lets start from the top – the presentation says Branch Outreach Issue – in evidence submitted by POL themselves I believe in the trial they said all but one of the known occurrences of this error was in an Outreach Branch situation.   So not every one and I would be particularly concerned about the one that wasn’t an outreach because that indicates something very serious – that their explanation of how this error occurs is wrong and they haven’t looked for the real reason it has been happening.

 

The Forced Log Out  Doesn’t correctly close down the Post Log On script.  This leaves the script on the “stack” of incomplete processes

This is where it gets messy.  Fujitsu doesn’t seem to tell POL why the Forced Log Out (a process where if you leave your Horizon terminal for a period of time the system will automatically log you out) doesn’t close the system down properly.  Now Fujitsu may well have found out why this happened but I don’t think they did because they did not deem it necessary to investigate in any great detail which I would have assumed would have started with a chat with the subpostmistress involved.  You see one thing about this error is that it was intermittent.  Anne, the subpostmistress at Dalmellington had performed this remittance function many times without a problem and all of a sudden she was presented with an unfamiliar option and she chose the wrong one three times as it happens because it appeared to be the logical choice.   So why did it happen so infrequently?  The week after we found out about the error and having received the explanation from ATOS/Fujitsu as to why it happened we recreated the exact same sequence of events on an identical set of equipment and could not make it happen.

It seems to me based on evidence and disclosure produced in the trial, my own anecdotal evidence gathered from social media and subpostmasters I have spoken to as well as the very first Horizon error that was discussed in detail during a trial  (the Calendar Square bug) that hardware problems are a recurring feature of errors in Horizon.   I note that in this instance in order to investigate the extent of the error historically that Fujitsu looked through the BLE files which they describe as “branch data transfer files to POLSAP “ I have no knowledge of exactly what these files contain but I doubt very much that they hold the NT Event Logs for each workstation on the network.   The NT Event Logs are the ones that the infamous Fujitsu genius Gareth Jenkins relied on to prove to the court in Seema Misra’s trial that the original Calendar Square error had not occurred at Seema’s branch.   So it appears that Fujitsu in this case have completely discounted hardware errors as being the cause of this intermittent error.  In fact nowhere in the presentation do they seem to account for the randomness of the event during a process which would occur regularly each week at every outreach branch without error in most of them.

Of course it should be pointed out here as it has been in the Horizon trial and in Seema’s trial just how expensive it is for Fujitsu to perform what could best be described as due diligence in seeking the real cause of the error in Horizon.   The underlying question is why POL would have to pay for what Fujitsu themselves admit is their error but then again I worked many years in the software industry and providing a ‘maintenance’ contract post implementation of installing the software you have written and been paid for is part and parcel of the economics of third party software development companies.

Regardless of that cost though, it should never be or have been a factor in preventing the quest for the truth when people who relied on the integrity of the software faced criminal prosecution and incarceration as a result.

Now we come to the ‘Initial Results of the Audit’

Nothing at all could be more damning of Fujitsu AND of POL.  I would dearly love to know who from POL attended this presentation because each and every one of them needs to be sacked for incompetence.

The first sentence says so much – 112 occurrences of duplicate pouch Ids over the past 5 years.

STOP RIGHT THERE!

I can’t remember exactly when it occurred in the trial but I think it was either POL’s expert witness or Mr Godeseth from Fujitsu who suggested that if Oracle – the underlying database in all of this – had a problem with allowing duplicate entries into a field in a database that was set to hold only unique entries then it would be a major worldwide catastrophe.   It just doesn’t happen and if it did it would, in my opinion, be of sufficient newsworthiness to be the lead story in every news outlet in the world.   So discounting that as a possibility then the only other conclusion is that the field into which the Horizon system accepts the pouch ID is not set to be unique!

There are only two possible reasons that this could be allowed.  One the financial cost which could be part and parcel of the contract signed to have the database design altered – in this case a simple keystroke although additional code would have to be added to capture the possibility that an attempt is made to enter a duplicate key – or on the other hand the degradation in system performance which would be the result of asking Oracle to perform the uniqueness check.   Could be a combination of the two reasons even – every database designer takes these facts into account when designing the attributes of individual components of a storage table.

In 2010 the presentation says that they found and ‘fixed’ 19 occurrences of a duplicate pouch entry.  If they had fixed this problem by creating a unique field for the pouch code then there would have been no more similar errors.  Then they say in 2011 they came across a similar error in what I have just noticed is 46 errors at multiple counters (Note NOT outreaches!).  Again if they had then changed to a unique field no more errors such as these would not have occurred.  Why were POL not asking or demanding this?   Perhaps because they have no internal IT staff?  They seem to be reliant on the likes of Ms Van den Bogerd to make all these decisions who really do not have a clue about much at all.

Fujitsu go on to tell us that in total 108 such errors have occurred without ANYBODY at all in the organisation becoming worried about it or even putting two and two together and realising that this was a real problem that at the very least the call centres should be advised about so they could help subpostmasters experiencing similar problems.   I don’t why that didn’t happen then but it seems to me that the very people who didn’t think of doing anything about it in 2015 are still the same people tasked with doing something about it if similar events occur now and that is just a recipe for disaster (the last disaster costing £160 million)

Then it says that all these errors having been noticed were followed by a reversal at the time by the SPMR with interestingly 4 items still to be confirmed.   I’ll come back to that later.

The presentation states that FSC (Chesterfield) and NBSC (Call Centre/Help Desk) have been advised and that a hot fix – not one that remedies duplicate Ids for ever – will be applied and I know that was to be done in March of 2016 so from December 2015 we know that both FSC and NBSC were made aware that there was a problem most notably in Outreach branches where duplicate pouches might exist because of a computer error.  We have to surely be able to assume that at this point in December 2015 all the past errors had been identified (apart from 4) and rectified and if this error occurred between now and the fix going live in March 2016 then the help desks would know all about it.

Fujitsu now enter into the presentation their ‘arse protection’ statements which on the face of it must have gone unchallenged.  I fear this is indicative of the totally unworthy amount of respect that POL have given Fujitsu staff over the years and that has resulted in an unwarranted granting of blind faith in them to deliver perfect code and detection of all errors.   It would have taken just one person to point out to Fujitsu at this point in the presentation what actually occurred at Dalmellington was that three additional records were entered by the system itself into the database and the SPMR who relied on these records for her accounts could only see one side of each transaction – actually I think she could only see the nett balance of £24k which the system had decided she owed POL.   The ‘audit’ process at this stage was completely broken.

Detailed Preliminary Findings

Again I have to wonder what was being said by POL at this presentation.   Look at the numbers of errors and the number of calls raised to Fujitsu about them.   No wonder Fujitsu have a hard time keeping the system up to scratch if there is not one person at POL capable of investigating errors being reported to the Help Desk and collating them.   I recall specifically talking to Angela van den Bogerd about this problem of no help desk system being in place and she agreed.   I wrote a system for Texaco call centre in the early nineties to handle this type of work – its not rocket science and probably off the shelf software these days.

So what happened to Branch FAD 157242 that ‘lost’ £25k in 2013?   Guess we will never know.

2 branches had 5 occurrences of this problem!  Unbelievable that it wasn’t investigated further and identified as an error.  That is just rank stupidity and surely a clear indication of the level of ability in POL.

And then of course Fujitsu and POL at this stage, end of 2015, are very aware of the impending litigation so they make sure that none of the potential claimants are involved and that this error could give them real grounds for legal action success.   Well blow me out of the 88 branches that reported this problem 7 were from branches that at some time had severe financial losses held against them by POL and no doubt were among the recent successful claimants.   It is a very statistically significant percentage.

Finally but may be not quite yet, Fujitsu wrap up the presentation.  Everything is wonderful we have found all the errors and accounted for them all but four (in the trial this was later boiled down to 1 I think) and we have provided a fix and told the NBSC and FSC all about the problem so no worries.

You would have thought that given the circumstances that would be that.  This presentation in December 2015 puts POL’s mind at rest that all is now in order.

Why then did I take it upon myself to email Paula Vennells in July 2016 pointing out (remember of course that I had no knowledge of this presentation) that despite what I had told them in November 2015 about Dalmellington and despite POL saying that the problem would be fixed in March 2016 that the error still existed in the system?  That sent Paula off to tell everybody to investigate it immediately but as was revealed in the trial the team tasked to do this was stood down the same day.   Why were they stood down – interestingly that question was neither put nor an answer volunteered during the trial – was it as a result of someone pointing out to Paula that Fujitsu had done all the investigation on this and it had been resolved?   That is probably the answer – the trouble is that it wasn’t and I have the proof of that and that POL were hounding a SPMR for payment of what could only have been a ‘Dalmellington’ error.  That is why I wrote to Paula and as I didn’t hear back from her I imagine it had been resolved.  Maybe it was, maybe it wasn’t but the fact that POL were still going after a SPMR in July 2016 for an error that had already been pointed out to them is criminal as far as I am concerned.

Why are these people still in their jobs?

Dear Paul

(A public reply to a response from Paul Scully MP to an email I sent him)

Thank you for your reply to my recent email to you.   There are numerous points in your reply that should be discussed further but may I take this opportunity to focus on just one.

First of all might I suggest that we both agree that the sustainable future of the Post Office network is what we want.   How we achieve this though is where we may be at odds.   You are quite new to your position and understandably you have to leap into your ministerial career running from the start and in order to do that you rely on the civil servants who work for your department.  The Civil Service, God bless them, have for time immemorial provided continuity and control over the machinations of ever-changing governments and ministerial appointments.   They are however not perfect and they make mistakes; in our case very grave mistakes.   None of the people that are currently offering you advice and information have ever run a sub post office and very few of them will have any commercial experience whatsoever.  Letting these people oversee the operation of Post Office Ltd since its separation from Royal Mail in 2012 has been a serious error.

You say in your letter that BEIS has relied on POL ‘experts’ for their opinion in the past and with hindsight this opinion has been wrong.   Does it not strike you as rather bizarre that these ‘experts’ are not only still employed by POL but are also STILL providing you, the minister in charge, with their opinions and advice.   Trouble is that in my opinion you are being fed a load of bullshit designed to deflect attention from what is really happening in POL land.

To quote from your reply to me:

On the matter of 400 new post office branches, which I quoted during the debate on the 19 March, I can confirm that these have all opened since 2017 as part of the New Network Location strategy. The Post Office New Network Location strategy is about locating post offices where customers are in order to provide them with a better and more accessible service, while safeguarding the overall stability of the branch network. The network as a whole has been at its most stable for decades, at over 11,500 branches.”

The actual truth of the matter is somewhat different.   Take the name for a start.  “New Network Location Strategy”.   Whatever happened to the old strategy?  Post Office Ltd has ALWAYS kept an eye on demography and attempted to open new offices in locations where there is an increased need for more outlets due to population growth.     Sorry, but the NEW strategy is all about the need to maintain 11,500 outlets which is not a number that is plucked out of thin air it is the number of outlets that is required by legislation and EU State Aid regulations in order for POL to meet its USO.

It is not about locating them anywhere near where they are actually required it is about getting another Post Office opened up to make the numbers up.   So desperate are POL to achieve this that they allow these ‘white space’ sites to open up in close proximity to existing Post Offices with no apparent concern whether it affects the future viability of the existing Post Office.   This is bad enough practice for existing sub postmasters but what idiot would now purchase a sub post office knowing that POL can come along and open another practically next door to the one they are buying.  It gets worse because there are idiots out there who do purchase sub post offices and invest their life savings in doing so.   When they apply to Post Office Ltd to take over they must supply a business plan to support their application and POL make no attempt to tell them that their business plan may fail if POL decide to open a white space office next door.   It is bordering on criminal behaviour if you ask me.

By the way, you might want to ask about the contract these subpostmasters sign.  There is no demographic protection in it which is a pretty standard term in franchise contracts.

Now as I said I want the network to be sustainable and have a real future on the High St.    Do you really think this New Network Location Strategy is the way to achieve that?   Do you think that anybody who supports this strategy should actually have a senior position in the company?   The reason that they need this new strategy is precisely because the network has become unsustainable which is mainly down to the long term effects of their last great strategic decision, Network Transformation.

You can go and ask Paul if what I say is the real truth of the matter and you will find nobody in POL or BEIS willing to tell you.   You will be kept in the dark and told only what they want you to believe.  As far as they are concerned you are here today and gone tomorrow.  They think they know best.  They are wrong and if your stay in this position is prolonged you may very well be the minister that oversees the collapse of the network as the country struggles out of this virus and not one bank will lend money to idiots willing to purchase a post office.

You can make a difference Paul and I believe if you work with Nick Read you can get rid of the people that are misleading you and get the right people in that can bring hope to the thousands of subpostmasters who are staring total loss of their investment in the face.

I wish you well.

Kind regards

Tim

 

An open letter to Paul Scully MP

Dear Paul

I will shortly publish this on my blog and you are more than welcome to reply – in your own words not the civil servants.

As I listened to your reply to this afternoon’s debate in the House of Commons I thought “here we go again”.  Yet another minister put in charge of Post Office matters repeating the mantra provided to him by the civil service.

It was therefore very unfortunate that these same civil servants provided you with a lie, a downright blatant lie, to provide to those members in the chamber and to be recorded for posterity in Hansard.   I’ll come back to that point later but just as I was formulating what I was going to write in this letter up stepped Kevan Jones and made exactly the points I was going to make so I hope you listened to him and appreciated the advice he gave you.  In order to get to the bottom of this scandal and not become a part of it you MUST be your own man and investigate on your own the truth behind what has transpired.

Paul, the people who provided you with the script to churn out today are deeply deeply involved in the cover up.  They are so arrogant that their ignorance has caught them up.  They are as useless at supervising the goings on at the Post Office as they are at attempting to cover up their past behaviour and as we all know the cover up is a mere phase of a scandal.   Once outed with evidence whistleblowers will come forward for pure arse protection reasons and not for any form of restitution for the subpostmasters affected.   These civil servants think that because they and the Post Office are unaccountable that nobody has been watching them over the years, nobody has been taking notes and nobody has been researching whether or not what they say is the truth.  Well sorry mate several people have and I am one of them and in a minute I will give you a very quick introduction into not only their lies but their very deliberate change in the wording they have given you to pass on to the House of Commons.

As an aside you happened to mention 400 new Post Offices being opened in the last couple of years.  Do you have any idea who, why, where and when this happened?   No I don’t believe you do. You just repeated what was put before you.  Well Paul drop me a line and I will tell you all about it.   It is not something POL should be particularly proud of but I can tell you why they have done it and it is not good news.

I, and some others, see a glimmer of hope in you Paul.  If you are prepared to make a difference then the only thing you have to learn right now is that we are the good guys and the senior civil servants embroiled in this fiasco are the ones who are leading you down the wrong path.  I hope you will sit down with Kevan soon and let him explain why he was shaking his head,as I was, when you repeated verbatim a line that the Minister used in the House of Lords in reply to Lord Arbuthnot.

You were told to say that POL have the same rights as any private individual to bring a criminal prosecution.  That is not true and I have more than enough confidential material to support that assertion.  They have always operated under the legislation that has provided RMG to bring private prosecutions for interference with the mail since the 19th Century.   They have, actually I should say they believe they have, special prosecutory powers, because since 2012 and the separation of RMG and POL the legislation in this regard is open to question.  Happily a question I have put to POL myself and they have answered it truthfully – something the Civil Servants now reading this will be looking for.   I’ll give you a very easy example – what private individual bringing a criminal prosecution has full access to the Central Criminal Database (unaudited access as far as I can gather as well)?

Now if you understand and accept the above ask yourself why have the Civil Servants changed their answer? They have been asked the same before and provided the real truth.  It is clearly to distance themselves from the fall out of the scandal.  They are trying to cover up what they have done in the past and shift the blame on to another scapegoat.  Do some research of your own Paul and you will find the truth.  It is exactly what Paula Vennells tried to do but she asked the wrong people.  If you ask the civil service you will be told what they want you to hear.  Ask me, ask Lord Arbuthnot, ask Justice Fraser for goodness sake and you will hear the real truth and it will confirm that the real problem, the overriding problem is within the department you head.

I wish you well Paul in your new ministerial career.  Make the wrong choice now and it could be a short one.  No I correct that, if you make the wrong choice the civil servants will probably allow you to stay longer in the role if you agree to protect them.  Make the right choice and expose them for what they are and your ministerial career may be shortened somewhat but your reputation will still be intact.

All the best in sorting this out and I would encourage you to watch the Panorama program on Monday.

Cheers,

Tim

The Settlement

The Settlement

We all know that the settlement offered and accepted by the claimants in the recent litigation between them and Post Office Ltd (POL) is morally repugnant.  Why?  Because the sum settled on was not enough to pay the funding and litigation costs of the claimants while leaving enough to settle the individual claims of the 550 or so claimants all of whom I imagine will be out of pocket even though they won their case.   In addition the difference between the actual losses that the SPMRs mistakenly paid back to POL and what they receive indicates that POL will remain beneficiaries of their own (POL’s) mistakes.

A recent Freeths memo sets out why they settled as they did in detail and I have every reason to believe that their decision to do so was correct.  However they did so as a result of mediation and at the end of the day a figure £58m was agreed upon.  It was agreed between the parties, the claimants on one side and POL on the other.  What hasn’t been discussed due to confidentiality agreements is the negotiating tactics of POL in the settlement mediation.

One can only assume they knew what they were doing and that despite the decisions of the court they were in a relatively strong position because they knew of the funding costs and the impact on the ultimate settlement to claimants, having to fund further costs for the litigation through to the end of the GLO would have.

POL would also have had a figure in mind as to how much they could pay out.  Clearly, given the state of their finances, the government (aka the BEIS Civil Servants at the heart of this scandal) would have had to be involved in deciding how much they were prepared to finance.    In mediation that is one of your cards that you aren’t going to let the other side know too readily but on the other hand it can be used as a negotiating tactic.  For instance POL could quite easily have said that £50m is all we can pay out at this stage – we have no idea if the government will fund anymore.

In reply the claimants were limited because any settlement figure agreed upon could NOT take into account the cost of litigation funding.  It is not fair that that is the case but that is the way it is.  Also as I have mentioned in a previous blog, once both parties agree to mediation then any settlement offer turned down can and may be used against the party who turned it down at a later stage when costs and damages are awarded by the court.

There is of course a figure we don’t know and that is, at the time of mediation, the total quantum of the claims plus actual litigation costs (not including the funding).  Would that have been in the region of £58m?  I think perhaps not because Freeths point out that POL were still prepared to put up a fight against individual claimants based on their claims being time barred.  That would have been a risk to the claimants had they lost that argument but on the other hand, if I had had the money to fund the litigation myself, it would have been a risk I would have been prepared not only to take but to call their bluff on.  Media exposure on that particular line of argument would have destroyed POL.   Imagine that – the court finds that POL extracted money from claimants illegally and refuses to pay them back because they didn’t claim in time?  What Government would sanction such behaviour?  That is not to say the Civil Servants wouldn’t. (and in reading this of course HMRC are notorious for doing exactly that)

So I think POL offered a lot less than what they would have likely had to pay out if the litigation had run its course and right now that is the despicable part of it.   They used their financial muscle in mediation to save them many millions of pounds in their own litigation costs and of course the final settlement figure.

A lot of good things have been said about the new CEO at POL, Nick Read, but we have to remember he was involved in the settlement.  He was the ‘figurehead’ that signed it off but to be fair he was probably a complete non-entity in the decision making process.  However he remains responsible for the completely immoral consequences of the amount agreed upon.   The company he is responsible for has benefited financially in the past from money extracted from these poor claimants.   The claimants have not been reimbursed fully while some current and past directors and CEOs bonuses have been paid based in part on these immoral earnings.  Nick is responsible for ensuring that these people are held to account and that where necessary bonus payments are clawed back.  It would be completely reprehensible behaviour on his part if, were he to recover monies from the directors in this way, that the sum received was not distributed in some way to those that suffered at their hands.

Nick has a lot of work ahead of him but until he does something of significance as a result of the decisions of the court then he is as much to blame as his predecessors for the consequences of this scandal.

And Nick the consequences are just starting.  Your predecessors made no attempt to find out for themselves what transpired in the past and I bet you haven’t had the inclination to do so for yourself yet.  Well all is about to be revealed and what a mess it is going to be for you to sort out.   There WILL be further criminal convictions in this scandal and they WILL be from your employees and contractors.   Your failure to report them of the crimes they have clearly committed will be revealed and the consequences of that failure will be noted against your role as a public officer!

For the claimants who will now receive a lot less than they paid POL in the first place it is a grotesque situation and what I am about to say will make it no less so but these are the facts as they stand:

  1. Up until Alan managed to convince Trillium to fund the litigation POL were going admit and pay nothing to the claimants.
  2. If there had been 100 less claimants you would have received individually 20% more but vice versa if there had been 100 more then you would have received significantly less. I doubt very much whether the settlement figure was linked to anything other than what POL was prepared to pay at the time.
  3. It is true that new claimants coming forward will receive a far higher percentage of their claims than you will have done but had they come forward earlier and joined your group you would have got less. That is their good fortune and I doubt very much whether they held off claiming deliberately.  They will thank you from the bottom of their hearts I am sure for what you achieved and what you should be very proud of having achieved.   This doesn’t help off course in mitigating the overwhelming feeling of unfairness of it all and I am truly sorry about that.
  4. Part of the litigation strategy for Freeths was surely (I cannot know this for certain but it appeared to be so) was in the first place to attract as many claimants as possible. POL’s case would have been far stronger if there remained only the original 30 or so.  I believe having so many would also have influenced Trillium in coming forward with the funding.   As it turns out a real Catch 22 situation.
  5. For what it is worth, the media attention on the outcome of the trial and the unfairness of the settlement situation is far far greater than had it been if the settlement figure had been closer to fully covering your costs. The consequence is that the people who were responsible for the scandal will not now get away with it and the damage to the PO Brand that they were always so keen to protect themselves from is far far worse than they could ever have expected.
  6. And finally – please don’t give up hope that there will not yet be a resolution to the unfair settlement. As the scandal deepens to involve the criminality of those concerned there will be increased rationale for further and deeper public exposure.  The only way forward for POL to mitigate both the brand damage and the further exposure is to ensure your settlement is increased to cover the costs of the funding.   How that comes about I don’t know yet but the Government aka the Civil Service are very good at making the rules up as they go along – it will be in their best interests to change them to your satisfaction.

Someone quite notable in this campaign recently chastised me for not having the slightest idea of how it felt to be a claimant which was a rather hurtful remark yet true.  I have no idea how you feel but I know you have been treated unjustly and surely that is all that matters.  As a result you have my support which means little in the greater scheme of things but more importantly you have an ever increasing support of important and senior influential figures.  While that support level continues to grow you have every chance of still righting this unjust settlement so let’s keep getting angry until you get even.

The POL Perspective

Along the way of this long drawn out saga the POL board at various times have had to sit down and make decisions on what to do next.   This is my take on one such day …

Its decision day …

Alan Bates has been a thorn in the side of POL for around 15 years.   He has tried unsuccessfully in the past to raise funding for litigation with ShooSmiths, he has raised the profile of his complaints to the degree that a mediation scheme has been set up, closed down unexpectedly and several convictions have been returned to the CCRC for appraisal.  A forensic accounting team have investigated and found POL wanting but only now with amazing perseverance he has gathered enough claimants and evidence together with Freeths solicitors that he has secured multi-million pound litigation funding from Therium.  Not only that but the Master of the Rolls has just decided to approve the Group Litigation Order.   It is a pivotal day in the lives of senior POL management and their board of directors.   They have to seek legal advice.  They have to make a decision on what to do and they have to seek approval for their actions from their sole shareholder, the Government or rather should we say the Civil Servants in the BEIS Department and that decision must be made today …..

The key word above is ‘they’.  It might well boil down to an executive order but the decision will be made by a collective of senior management officials and board members.  The decision when it comes will bring with it cabinet responsibility and like it or not the members involved in reaching that decision will have to back it 100%.   No dissent is allowable because this is a serious matter concerning many millions of pounds in potential settlement fees and legal costs and any sense of dissent among those responsible for making the decision will be pounced upon by the claimants and the media.

Making a serious decision like this is not going to be an easy process.  There are many factors to take into account, much knowledge needed and every option must be considered right through the best and worst case scenarios.  It’s going to be a long day and we need to act fast.

Of course we knew this moment may arise.  We fought against the Group Litigation Order.  We felt that the claimants did not have a case against us.  Some of them are convicted thieves don’t you know.  Convicted by a jury of their peers in a criminal court.  That must mean something surely.   Most of the rest pleaded guilty to the charge of false accounting.  You don’t plead guilty to something if you didn’t do it.   No, we are right and they are wrong, but what happens if we can’t prove that and they end up winning?

What are our options?  We can certainly fight this all the way and stand up for our company’s reputation and brand image.  Or we could offer a settlement right now and clear the slate for ever.   But we would get the same outcome and probably better one if we take them on in court and win the day, proving once and for all that they are just a bunch of miscreants after a quick buck that they stole from us in the first place.

Let’s just make sure of our facts first though.  What are the claimants claiming?  They say Horizon errors caused losses in their branches and not theft or errors as we have alleged, indeed proven in court.  Do they have a case against us?   Is Horizon reliable?  Has it ever made mistakes that have caused branch losses as they suggest?   Who do we ask about that because we don’t know ourselves what is actually the truth?   Let’s get our brightest most intelligent senior employees in here to tell us what the truth actually is.

So that was interesting.  They say that Horizon never makes mistakes that Fujitsu aren’t aware of and don’t fix straightaway.   Yes there are bugs from time to time but nothing to worry about.  Fujitsu take care of all that for us.  OK but shouldn’t we ask Fujitsu directly?  No we don’t need to, these people have been using Horizon and supporting SPMRs from day one and they would know if there was anything we had to worry about.  Remember there have been a few thieves who have challenged Horizon reliability in court over the years and we won hands down every time.

So let’s get the legal eagles in here to tell us about our options with this.  They are going to make a bundle out of it so they best start earning their crust now.   What happens when we win?  Will we get our legal costs back?  These people have no money remember.  Don’t worry about that they have got Therium Capital backing them and they will pay all our legal costs when they lose.  Are you confident about our case and our defence?   Of course we are.  We have been looking at the case put forward by the claimants and it is all bluff.  They can’t prove that Horizon is unreliable.  It has been running successfully for 15 years or more and handled billions of transactions successfully.  Why would computer errors affect only a small and insignificant number of branches.  If there was a major problem it would have affected far more.   The alternative which is the real truth of the matter is that they stole the money or made mistakes and in terms of their contracts they have to pay up the difference.

OK but why does the Master of the Rolls think they have a strong enough case for Group Litigation?   We have been through their claims and to be perfectly frank they would appear to be strong if they had any substantive evidence to back them up but they don’t.   We are confident we can easily disprove these in court.  Of course you have the option always just to settle the matter before litigation starts.  It would certainly eliminate the small and very unlikely risk that you will lose in court and also limit the amount of legal costs you would incur but I should point out that there is another matter you should consider.   The funding they are receiving has a very high interest rate.   The cost of that funding cannot be recouped through any future settlement.   This will be a very expensive action to bring against you running into many millions of pounds and by the time they or we offer to settle the cost of the litigation funding will be eating into what would be left to distribute among the claimants.   We would point out that in time that cost will eventually exceed any potential settlement figure so in that respect we have them over a barrel in any event.

Is there anything else you should tell us about any possible risks involved?  Well there is always the matter of disclosure.  At this point we don’t know what they will ask for.  There is the small matter of the Known Errors Log that leaked out in the Misra trial and because of its unfortunate name will definitely be something they will ask for but we are fighting that already.  I understand it has several thousand entries in it but none of them are to do with errors that have not been picked up by Fujitsu and fixed and the SPMRs have not been out of pocket.  I wouldn’t worry too much about it if I were you.

So now we have to consider the options.  First we could settle here and now and close the door on this distraction.   We don’t know how much in total they are likely to claim but we have the advantage of having the threat of prolonging litigation and increasing their funding costs past the point of no return.  We could insist on a NDA and declare nothing proven to the media and that Horizon was reliable and robust.    Of course that all depends on where they stand on early settlement.  They could decline.

Or we take them on in court and see where that takes us.  It’s going to be expensive and it’s going to be a prolonged affair with some media attention I would imagine.  However a clean win in court will allow us to hold our heads up high and show the nation that we were right all along and our computer system is extremely reliable and robust which is what we have been saying all along.  In fact it maybe because we have been saying that, that any early settlement even with an NDA would work against us.

So we probably have no better option at present than to continue to defend the action.  We have repeatedly stated that we believe their claims have no merit in our annual report and we should stick by that.  All agreed?

Well then let’s consider the consequences of this.  If we do well in court the matter should be over fairly quickly.  However the major consequence is the possibility that they do better than expected and for whatever reason start winning.  We need to have a strategy in place to deal with this.  Perhaps the legal eagles gave us the best option and that would be if we were ever in a position where we thought we might lose is to do everything we can to bump up the costs of litigation.  You know we could appeal the decisions of the court, we could try and lengthen the trial process by asking for more trials to be included, heavens if need be we could even ask the Judge to recuse himself that always takes up more time and money as a separate hearing would be needed.  That is a good strategy and one that would limit our risk of failing in court as the claimants would be forced into early settlement because of their litigation funding costs.

OK so we have a strategy and a fall back plan.  Is this the right decision?  Is there anything we haven’t thought about?  Well we do seem to be over reliant on just two sources of advice, our own staff and our own legal team.  If the claimants are right after all then the conclusion would be that the people we have relied on for advice are wrong and have been wrong all along.  What should we do about that?

You are right of course.  We need to double check this with independent assessors.  The best way forward would probably be for the chairman to meet with some independent forensic auditors who know a lot about the detail of the claimant’s cases and for the chairman to bring along one of our BEIS QCs to the meeting so he can assess the situation better.  Let’s meet back after that happens and decide on our next steps.  All agreed?

To be continued ….