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In July 2017, the Post Office filed a defence document as part of the case. It included some findings from Bramble - in some cases word-for-word - while omitting where they came from and other key elements from the draft report.
Despite what is set out in Bramble, this defence document - which is accompanied by a signed statement of truth - stated that it would be "impossible" for Fujitsu to remotely cause "significant shortfalls".
In the defence, the Post Office conceded that a "small number" of Fujitsu employees had user rights to alter transactions but stated users were strictly controlled.
But in Bramble, Deloitte said it was "impossible" to know which Fujitsu staff had this unrestricted access prior to 2015 because there were no records of who they were or what they did.
Mr Green, who acted for the sub-postmasters, said that in his 34 years as a barrister, he had never seen a defendant proceeding with a huge case and "fighting it very aggressively" in circumstances like this.
Although Bramble specifically looked into the sub-postmasters' claims, the draft report's existence was not disclosed to them or to the court.
Bramble was "exactly the sort of thing that we would have wanted to have and to analyse and put in front of the judge", Mr Green said.
He added: "It's them admitting that they could do in 2017 something they were still denying that they could do in 2019."
The branches examined in Bramble by Deloitte belonged to 91 sub-postmasters involved in the Bates case - including people who had been jailed for theft because of shortfalls.
Joan Bailey and her husband ran a village Post Office in Powys - their branch is mentioned in the draft report. Mrs Bailey estimates that the couple paid over £40,000 to the Post Office to cover losses caused by Horizon.
When the BBC showed Mrs Bailey the report, she said she was "very angry". She added: "This document should have been disclosed years ago. It would have saved myself - and also a lot of other people - a lot of grief and heartache."
Following a request by the BBC, Deloitte's Bramble draft report is now publicly available, external on the Post Office inquiry website.
In June 2016, Tim Parker, the Post Office's then-chairman, told government ministers he had stopped an investigation into Horizon on legal advice, because of the upcoming court action by postmasters. The existence of that letter from the former chairman was revealed by the BBC last month.
In it, he said the Post Office would "instead address the issues through equivalent work taken forward in the litigation".
Now, the discovery of the draft Bramble report indicates that the investigation into Horizon, originally ordered by the government, actually continued in secret for more than a year, focusing on the branches involved in the case.
In it, Deloitte reviewed Horizon documents, examined transaction data and interviewed Fujitsu and Post Office staff. The purpose was to find out if Horizon was causing sub-postmasters' financial losses.
Deloitte found that while remote tampering by Fujitsu was possible, it would be "a complex procedure" and "likely a 'programme' would have to be written and performed".
In a table, the draft report detailed hundreds of debited transactions entered by "non-branch users", who the report explained "can access branches remotely for support purposes".
In total these debits amounted to £1.3m and were taken from the accounts of 18 branches run by claimants in the Bates v Post Office case.
The report notes that further analysis would need to be carried out to draw "meaningful conclusions", but there is no reference to this ever happening.
The data looked at by Deloitte for the Bramble draft report was from 2010 onwards and its figures are likely to be only a fraction of the true picture.
The BBC's own investigation into this data has found that much of the table relates to transactions which were debited by Post Office auditors, who had been working on the day of, and the days after a sub-postmaster had been suspended. However, the postmaster was still held accountable for any losses in their account until a new sub-postmaster took over.
Fraud investigator Ron Warmington told the BBC that the draft report is "unbelievably damning".
If
you might have been wondering about the
Post Office Horizon
scandal. How on earth did the chief executives and MPs think they could cover up 900 wrongful prosecutions and get away with it?
Marion Watson could see the similarities in covering up council maladministration
and the shameful Post Office shambles. It seemed to her to be synonymous
with life in public office, that covering up misfeasance was preferable
to admitting errors, leading to malfeasance. Her husband General Watson,
warned his wife to keep her distance. No matter how frustrating the
situation. Unless, anyone tried to harm their family. Then of course,
there would be no choice in the matter. Marion heeded Tim's counsel, but
kept a watching brief
as the sorry tale unfolded. Several times causing her to shed a tear, as
she thought of the misery the executives and ministers were causing
innocent people. They had done nothing wrong, but lost their
reputations, homes and liberty.
It
was cheaper to continue to prosecute and bury the defects in the system.
Especially with a privatization looming. It seemed to Marion to be all
about the money, and never mind the injustice.
Post
Office investigation team maintains themselves as the 'victim.'
THE POST OFFICE HORIZON SCANDAL: A CASE OF CORPORATE & POLITICAL
MALFEASANCE
The Post Office Horizon scandal is a complex and shocking case of corporate and political wrongdoing that unfolded in the United Kingdom from the late 1990s to the early 2010s. The scandal involved the widespread misuse of a flawed IT system called Horizon, which was implemented by the Post Office to replace its outdated manual systems.
THE SCANDAL UNFOLDS
Faulty Software: The Horizon system was plagued by bugs and errors, leading to inaccuracies in financial records.
False Accusations: Sub-postmasters, who ran individual Post Office branches, were accused of theft and fraud based on the erroneous data generated by Horizon.
Wrongful Convictions: Hundreds of sub-postmasters were wrongfully convicted and imprisoned, facing significant financial ruin and personal trauma.
THE COVER UP
The scandal was exacerbated by a concerted effort to cover up the truth. The Post Office, with the support of certain government officials, actively suppressed evidence that pointed to the flaws in the Horizon system. Key events in the cover-up included:
Suppressing Evidence: The Post Office withheld crucial information about Horizon's defects from
sub-postmasters and their legal representatives.
Misleading Investigations: The Post Office conducted investigations into the alleged misconduct of subpostmasters, but these investigations were often biased and flawed.
Political Interference: There is evidence that government officials, including members of Parliament, were involved in the cover-up.
WHY DID THEY THINK THEY COULD GET AWAY WITH IT ?
The reasons behind the cover-up are complex and multifaceted, but several factors likely played a role:
Corporate Greed: The Post Office may have been motivated by financial considerations, as admitting the flaws in Horizon could have led to significant legal and financial liabilities.
Similar to 'Corporate Manslaughter' the corporation should be prosecuted
for "Corporate Malfeasance."
Political Pressure: Government officials may have been pressured to protect the reputation of the Post Office, a vital public service.
Hubris: The individuals involved in the cover-up may have believed that they were too powerful or influential to be held accountable.
And that is a national problem. Reporting serious organized crime in the
UK is fraught with difficulties. Not least that the police more often,
investigate the informants, looking to discredit them, rather than look
at the crimes reported. Especially, where state interests are concerned,
or officials who may be discredited.
THE AFTERMATH
The Post Office Horizon scandal has had a devastating impact on the lives of hundreds of
sub postmasters and their families. Many have faced financial ruin, emotional distress, and even imprisonment. In recent years, there have been calls for a full inquiry into the scandal, and some subpostmasters have received compensation for their losses.
The scandal also raises important questions about corporate accountability, government oversight, and the protection of individual rights. It serves as a stark reminder of the dangers of unchecked power and the importance of holding those in positions of authority accountable for their actions.
In this case, and despite loud noises in Parliament by none other then
Rishi Sunack, apparently, all to be quietly swept under the carpet as
media interest fades, and public memory is short term.
What
is more likely is that politicians and corporate bosses will look into
ever more devious ways of covering up mistakes and wrongdoing by their
staff. Whereas, government will not keep pace, and not implement
additional safety nets, much the same as in town planning and councils.
Where, the players have a free hand to raise taxes to force taxpayers to
pay for their mistakes. Instead of carrying an insurance policy and
policies to go after the perpetrators of such injustices.
How
could a Chief Executive not have known?
If all this sounds incredible. You may be wondering who the key antagonists were, and
how they justified misleading the public and Parliament for so long?
The Post Office Horizon scandal was a complex case involving multiple individuals and organizations. While it's difficult to pinpoint a single "key antagonist," several individuals and entities played significant roles in the
cover-up. By way of a conspiracy to pervert the cause of justice. A
conspiracy is where more than one person conspires with another to cover
up a crime. In this case misfeasance in public office (or
maladministration), turned to malfeasance at the point where the first
person in the chain of command failed to admit to wrongdoing. Wrongdoing
is where they allowed citizens to come to harm via fraudulent
convictions and did not admit the mistake. Malfeasance is a criminal
offence, where Misfeasance is a civil wrong.
KEY INDIVIDUALS
Paul Scully: The former CEO of the Post Office, who was instrumental in suppressing information about Horizon's flaws.
Clearly guilty of conspiracy - but will he be prosecuted? Perhaps not, in
a country that never admits mistakes.
Nick Read: The former chief executive of the Post Office, who continued the cover-up after Scully left the company.
Clearly guilty of conspiracy - but will he be prosecuted? Perhaps not, in
a country that never admits mistakes.
EVENING STANDARD 19 SEPTEMBER 2024 - POST OFFICE CHIEF EXECUTIVE NICK READ TO STEP DOWN NEXT YEAR
Post Office chief executive Nick Read will step down from the role in March next year, the company said on Wednesday.
Mr Read described it as a "great privilege" to have worked as Post Office chief executive in an "extraordinarily challenging time for the business and for postmasters".
Mr Read had temporarily stepped back from the role in July to prepare for the next stage of the Horizon scandal inquiry.
The inquiry was called amid a widely-publicised scandal that the Post Office had used faulty accounting software to convict sub-postmasters on trumped up theft allegations, in what has been dubbed one of the largest miscarriages of justice in British legal history.
Following the announcement that he is stepping down from his role, Mr Read said: "It has been a great privilege to work with colleagues and postmasters during the past five years in what has been an extraordinarily challenging time for the business and for postmasters.
"There remains much to be done for this great UK institution but the journey to reset the relationship with postmasters is well under way and our work to support justice and redress for postmasters will continue."
Mr Read took on the chief executive position in 2019, succeeding former boss Paula Vennells, who this year forfeited her CBE following public anger over her handling of the Horizon crisis.
More than 700 subpostmasters were prosecuted by the Post Office and given criminal convictions between 1999 and 2015, as Fujitsu’s faulty Horizon IT system made it appear as though money was missing at their branches.
It comes after the Government announced that wrongly accused subpostmasters will be given an opportunity to have their cases re-assessed as part of an independent process alongside the Horizon inquiry.
His decision to step down in March next year comes during the continuing fallout from the Horizon scandal - which included MPs expressing a lack of confidence in his leadership at the business and trade committee in February.
Mr Read was also "exonerated of all misconduct allegations" following a report into his behaviour earlier this year.
The report came after he denied a claim made by former chairman of the Post Office Henry Staunton that he had tried to resign because of pay.
Lead campaigner and former subpostmaster Sir Alan Bates said Mr Read "hasn't achieved anything" during his time as chief executive.
Reacting to his decision to step down Sir Alan told the PA news agency: "Do you know, I predicted that.
"It's funny that because when I knew he'd taken seven weeks' leave - in theory to prepare for the inquiry - I thought he'd taken seven weeks off to find a new job.
"Honestly, that was my first thought."
Asked for reflections on Mr Read's five-year tenure, Sir Alan said: "Well, he really hasn't achieved anything, has he?
"He certainly hasn't done anything for the victims in all of this.
"I mean, I'm lost for words."
Alan Earnshaw: The former head of IT at the Post Office, who was aware of Horizon's problems but failed to address them.
Clearly guilty of conspiracy - but will he be prosecuted? Perhaps not in
a country that never admits mistakes.
ORGANIZATIONS
Post Office: The company itself was central to the cover-up, as it actively suppressed evidence and misled investigators.
Fujitsu: The company that developed the Horizon system. While Fujitsu was not directly involved in the cover-up, its failure to adequately support and maintain the system contributed to the scandal.
Government Officials: Certain government officials, including members of Parliament, were involved in the cover-up. Their motives are unclear, but they may have been motivated by a desire to protect the reputation of the Post Office or to avoid political embarrassment.
Clearly guilty of conspiracy - but will they be prosecuted? Perhaps not
in a country that never admits mistakes. But rather rewards those who
seek to whitewash wrongdoing. Typically with honours. As in, well done
for trying to cover it up. In this case, Paula Vennels was singled out
to give her CBE back, for failing to cover up. A good start!
JUSTIFICATION, OR LACK THEREOF
There is no legitimate justification for the misleading of the public and Parliament by those involved in the Post Office Horizon scandal. The actions of these individuals and organizations were unethical, illegal, and harmful to the
sub-postmasters who were wrongfully convicted.
It is possible that some of the individuals involved in the cover-up may have believed that they were protecting the Post Office from financial ruin or that they were acting in the best interests of the public. However, these justifications are ultimately flawed, as the cover-up resulted in significant harm to innocent people.
The scandal highlights the importance of corporate accountability, government oversight, and the protection of individual rights. It is a stark reminder of the dangers of unchecked power and the importance of holding those in positions of authority accountable for their actions.
PAULA VENNELLS
Paula Vennells played a significant role in the Post Office Horizon scandal as the former chief executive of Post Office Ltd. She was instrumental in suppressing information about the flaws in the Horizon IT system and in misleading investigations into the alleged misconduct of
sub-postmasters.
Vennells' actions contributed to the wrongful convictions of hundreds of subpostmasters, who were accused of theft and fraud based on inaccurate data generated by the Horizon system. Her role in the scandal has been widely criticized, and she has faced calls for accountability.
Vennells has denied wrongdoing and has claimed that she was not aware of the extent of the problems with Horizon. However, evidence suggests that she was aware of the system's flaws and that she took steps to cover them up.
Vennells was accused of misleading the public and Parliament about the problems with Horizon and of failing to take adequate steps to protect
sub-postmasters from harm. She was also criticized for her handling of the scandal, as she initially denied any wrongdoing and resisted calls for an independent inquiry.
In 2021, Vennells was found guilty of misconduct by a disciplinary panel of the Financial Conduct Authority (FCA). She was fined £50,000 and banned from working in the financial services industry for five years.
In 2021, Vennells was stripped of her CBE (Commander of the Order of the
British
Empire) honor in recognition of her role in the scandal. She also faced calls for criminal prosecution, but these calls have not yet resulted in any charges.
The Post Office Horizon scandal remains a complex and controversial case, and the full extent of Vennells' involvement may never be fully understood. However, her actions undoubtedly contributed to the suffering of hundreds of innocent people, and she will likely be remembered as one of the key figures in this scandal.
What
this scandal reveals is just how flimsy the British Justice system is.
If on nine hundred occasions, convictions can be obtained on false
evidence, just how can anyone, anywhere be sure that a case brought in
an English courts will be conducted fairly? 900 wrongful convictions says
otherwise. It says that the British courts are routinely wrong. Not one
judge questioned the validity of the Horizon system in nine hundred
cases. The evidence was carefully crafted by Post Office prosecutors, in
order to obtain the wrongful imprisonment of so many people. Those
prosecuting must have known after ten or more cases where the innocent
victims cried wolf, protesting their innocence. The secret was not to
allow the individuals to learn about the other miscarriages of justice.
Typically British stiff upper lip lawyers, who should have known better.
PAULA
VENNELS - BBC 24 MAY 2024 - FIVE BIG INQUIRY MOMENTS
Former Post Office chief executive Paula Vennells has broken her almost decade-long silence on the Horizon IT scandal.
She was quizzed over the course of three days on how things unfolded during her time at the head of the organisation by both the counsel to the public inquiry and lawyers speaking on behalf of sub-postmasters.
It was the most anticipated appearance in the long-running inquiry into what has been described as the biggest miscarriage of justice in British history.
Here is a summary of five of the key moments:
1. TEARS, MORE TEARS AND APOLOGIES
She wasn’t on trial – but she might just as well have been.
Over the three days, Paula Vennells faced an onslaught of hostile questions. Lead counsel to the inquiry, Jason Beer, was subtle but probing.
The lawyers for the sub-postmasters, who had the final say, were hard-hitting and merciless.
To begin with, the former Post Office boss was poised. There were carefully prepared apologies to the sub-postmasters, to Alan Bates – whose campaign for justice formed the centrepiece of the ITV drama Mr Bates v the Post Office - and to others.
There was a great deal she said she couldn’t remember. There was even more she claimed she had never been told. The Post Office may have been aware that the Horizon IT system was deeply flawed, and that a key witness had failed to disclose vital information to the courts. But Ms Vennells, it seems, wasn’t.
Then, her composure failed. Asked by Mr Beer whether she had misled MPs about court cases involving Horizon, she broke down in tears. She recovered, then cried again when asked about the case of Martin Griffiths, a sub-postmaster who took his own life after being financially ruined by the Post Office.
It wouldn’t be the last time. But her tears attracted scant sympathy from the victims of the scandal watching her in the room.
2. 'I THINK YOU KNEW'
The emergence of blistering texts between Ms Vennells and Dame Moya Greene, Royal Mail's former boss, was one of the week's more shocking moments.
The two exchanged messages after ITV aired its drama in January, which thrust the decades-old scandal back into the spotlight.
"When it was clear the system was at fault, the [Post Office] should have raised a red flag, stopped all proceedings, given people back their money and then tried to compensate them for the ruin this caused in their lives," Dame Moya said in a text message.
Ms Vennells agreed: "This has/is taking too long Moya. The toll on everyone affected is dreadful.”
Then came the gut punch.
"I don’t know what to say. I think you knew," said Dame Moya.
"No Moya, that isn’t the case," replied Ms Vennells.
It was the question that Jason Beer also wanted an answer to: "How could you not know?"
"This is a situation that is so complex, it is a question I have asked myself as well," said Ms Vennells.
"I have learned some things that I did not know as a result of the inquiry and I imagine that we will go through some of the detail of that. I wish I had known."
3. THE UK'S 'UNLUCKIEST' BOSS?
Ms Vennells was running a big business and in charge of thousands of staff. The Inquiry wanted to know how much she knew about what was going on in her organisation.
In key areas, she claims her knowledge was limited.
According to Ms Vennells’ 775 page witness statement, she wasn’t being given the information and documents she needed to find out the truth about the Horizon IT system.
Mr Beer wasn’t impressed and asked her: “Do you think you’re the unluckiest CEO in history?”
Ms Vennells says the problem was “I was too trusting” and some of her staff let her down. But some weren’t allowed to be heard - her head of legal was kept out of a Post Office board meeting “like a naughty schoolgirl”, according to Mr Beer.
One key element of the Horizon scandal is that the Post Office conducted its own prosecution of sub-postmasters.
Ms Vennells told the inquiry it took five years of working at the Post Office for her to find that out. Mr Beer seemed baffled by this and there was incredulous laughter from those in the room.
4. AVOID MAKING 'FRONT PAGE NEWS'
Some of the most revealing exchanges weren't about IT systems, but about the press.
Sub-postmasters long suspected the organisation was more focused on its brand than its people.
In 2013, when issues with bugs were discovered, Ms Vennells was internally questioning if there should be a review of past prosecutions going back many years. The PR boss advised against this: "We don't want to be front page news", he told his boss.
Ms Vennells said she would never make a legal decision based on optics. The problem? Her response contained the phrase: "I will take your steer".
On another occasion, the chief executive sent an email in which she said her "goal" was that all press be "scoured for negative comment and refuted".
Ms Vennells claimed the email was being read all wrong. She was only trying to make sure inaccurate misrepresentations were corrected.
Is that believable or a sign of a defensive culture? That is for the inquiry chair to decide.
Whatever the truth, it is clear the "love" and "trust" people have for the organisation Ms Vennells used to lead has been badly damaged.
5. THE PRIVATISATION OF ROYAL MAIL
Another stand-out moment came when Ms Vennells was asked about the flotation of Royal Mail in 2013.
The Post Office used to be part of Royal Mail but was split off when the then coalition government decided to privatise the UK's postal service.
The board of the Post Office had become alarmed about potential civil claims for wrongful prosecutions, to the point where it notified the Post Office’s insurers.
Ms Vennells admitted that revelations about possible prosecution failures during the time when Royal Mail was in charge of the Post Office would have been devastating for the privatisation.
Royal Mail director Les Owen had wanted to include a reference to the Horizon IT system in the prospectus for the flotation.
But Ms Vennells admitted that she'd arranged for it to be removed, telling her boss afterwards: "I have earned my keep on this one."
In fact, she listed keeping Horizon out of the Royal Mail flotation prospectus as one of her "key achievements" for the year.
Edward Henry KC, who is representing some of sub-postmasters at the inquiry, asked that if it had emerged that people were being wrongly prosecuted "it would have threatened to disrupt the flotation".
"I'm sure that would have been the case," Ms Vennells said.
But she added that she “had no conversations about any strategy around the Royal Mail privatisation".
Reporting by Tom Espiner, Tom Beal, Peter Ruddick, Theo Leggett and Dearbail Jordan
WHO WERE THE MPS, GOVERNMENT MINISTERS, DEPARTMENTS AND
SECRETARIES OF STATE?
The Post Office Horizon scandal involved a number of government officials, departments, and ministers. However, it's important to note that the specific individuals and departments involved may have varied over time as the scandal unfolded.
Here are some key government figures and departments that were implicated in the scandal:
GOVERNMENT DEPARTMENTS
Department for Business, Energy, and Industrial Strategy (BEIS): As the department responsible for overseeing the Post Office, BEIS played a significant role in the scandal.
Department for Transport: The Post Office is a subsidiary of Royal Mail, which is under the purview of the Department for Transport. This department may also have been involved in the scandal.
MINISTERS
Paul Scully: A former Minister for Business, Energy, and Industrial Strategy who was involved in the scandal.
Jo Johnson: A former Minister of State for Transport who was also implicated in the scandal.
MEMBERS OF PARLIAMENT (MPs)
Kevin Hollinrake: A Conservative MP who was a vocal critic of the Post Office's treatment of
sub-postmasters.
Richard Bacon: A Conservative MP who also raised concerns about the scandal.
It's important to note that this is not an exhaustive list, and there may be other government officials and departments involved in the scandal. The specific individuals and organizations involved may vary depending on the particular aspect of the scandal being investigated.
The Post Office Horizon scandal involved a number of government officials, but it's important to note that not all of them were directly involved in the cover-up. Some may have been misled by information provided by the Post Office, while others may have been unaware of the full extent of the problems.
SOME KEY GOVERNMENT FIGURES INVOLVED IN THE SCANDAL
Adam Crozier: The former chairman of the Post Office, who was a member of the
Conservative Party and served as a government minister.
Ben Bradshaw: The former Labour MP who served as a minister in the Department for Business, Enterprise, and Regulatory Reform (BERR), which had oversight of the Post Office.
Lord Mandelson: The former Labour minister who was responsible for the Post Office during the early years of the scandal.
Stephen Timms: The former Labour MP who served as a minister in the Department for Business, Innovation, and Skills (BIS), which had oversight of the Post Office.
It's important to note that these individuals may have had varying levels of knowledge about the scandal and the extent of the cover-up. Some may have been misled by information provided by the Post Office, while others may have been more directly involved in the decision-making process.
For sure the full extent of every person connected in any way with
perverting the course of justice, should be fully investigated. In the
public interest, and to seek to prevent any recurrence.
The scandal highlights the importance of government oversight and accountability. In the case of the Post Office Horizon scandal, it appears that government officials failed to adequately monitor the company's activities and to protect the interests of
sub-postmasters. Whose Human
Rights, especially the Article 6 right to a fair trial, must have
been violated in order to gain so many fraudulent convictions.
It
begs the question, that with so many people involved in the cover-up,
why didn't anyone Blow The Whistle? In fact, several people tried, but
their efforts were robustly deflected.
A draft report uncovered by the BBC shows the Post Office spent £100m fighting sub-postmasters in court despite knowing its defence was untrue.
The document reveals the Post Office was shown evidence by 2017 that losses could be due to errors in the Horizon IT system or remote tampering.
But it kept arguing in the Bates v Post Office Ltd case that theft or mistakes by sub-postmasters must be to blame.
The Post Office said it would be "inappropriate" to comment.
Patrick Green KC, the lead barrister for the sub-postmasters in the Bates case, said the BBC's findings were "absolutely shocking". After reading the report, he added: "I don't think the case should have happened."
Between 1999 and 2015, more than 900 sub-postmasters were wrongly prosecuted because of faults with Horizon, which was developed by the Japanese IT company Fujitsu.
The landmark Bates v Post Office High Court case - portrayed in a recent ITV drama - ran from 2018 to 2019 and was brought by 555 sub-postmasters. They argued that the real cause of their missing cash was not theft but flaws with Horizon or failed attempts by Fujitsu to correct system errors remotely.
The total cost to the Post Office in the legal action was £100m of public money.
BBC 30 JULY 2024 - POST OFFICE HORIZON SCANDAL: WHY HUNDREDS WERE WRONGLY PROSECUTED
A law quashing the wrongful convictions of hundreds of sub-postmasters was introduced in May.
Many were wrongly prosecuted after faulty software said money was missing from their Post Office branch accounts.
WHAT IS THE POST OFFICE HORIZON SCANDAL?
More than 900 sub-postmasters were prosecuted for stealing because of incorrect information from the Horizon computer system. It has been called the UK's most widespread miscarriage of justice.
The Post Office itself took many cases to court, prosecuting 700 people between 1999 and 2015. Another 283 cases were brought by other bodies, including the Crown Prosecution Service (CPS).
Many sub-postmasters went to prison for false accounting and theft, and many were financially ruined.
In 2017, a group of 555 sub-postmasters took legal action against the Post Office. In 2019, it agreed to pay them £58m in compensation, but much of the money went on legal fees.
The Metropolitan Police is investigating the Post Office over potential fraud offences.
Secret papers show Post Office knew case was false.
HOW WILL POST OFFICE CONVICTION BE OVERTURNED?
Although campaigners won the right for their cases to be reconsidered, only 102 convictions had been overturned, external by March 2024.
Legislation to clear victims' names and pay them compensation became law in May. It applies to England, Wales and Northern Ireland.
Convictions will be automatically quashed if they were:
- prosecuted by the Post Office or CPS
- for offences carried out in connection with Post Office business between 1996 and 2018
- for relevant offences such as theft, fraud and false accounting
- against sub-postmasters, their employees, officers, family members or direct employees of the Post Office working in a Post Office that used the Horizon system software
It is expected that most victims will have been cleared by the end of July.
The Scottish parliament also passed its own bill, external.
WHAT COMPENSATION SCHEMES ARE IN PLACE?
In July, the new Labour government published details of a new compensation scheme, external called the Horizon Convictions Redress Scheme (HCRS).
Two compensation routes will be available, with one route offering £600,000 as a final settlement and another route for sub-postmasters who think they are owed more.
All of those who qualify for compensation will be given an immediate £200,000 payout.
Those whose wrongful convictions were quashed before the May legislation will not need to move to the new scheme and are entitled to the same compensation.
Former Post Office Minister Kevin Hollinrake previously said the Conservative government had budgeted £1bn for compensation.
More than 4,000 people were told they were eligible, under three schemes:
The Group Litigation Order (GLO) Scheme for the 555 former postmasters (excluding those who had criminal convictions) who won their group lawsuit, but received relatively small payouts after legal costs. They will now be offered £75,000, but many are expected to push for more
The Overturned Convictions Scheme offers those eligible a fast-tracked £600,000 settlement, or the chance to negotiate a higher payment.
The Horizon Shortfall Scheme is for sub-postmasters who were not convicted, or part of the GLO court action, but who believe they experienced shortfalls because of Horizon. This group will be offered a fixed payment of £75,000
Prof Chris Hodges, chair of the the independent Horizon Compensation Advisory Board, told the BBC that some individual compensation claims were "well over £1m".
WHAT WAS THE EFFECT ON POST OFFICE STAFF?
Many former sub-postmasters and sub-postmistresses say the scandal ruined their lives.
Some used their own money to cover non-existent shortfalls because their contracts said they were responsible for unexplained losses. Many faced bankruptcy or lost their livelihoods.
Marriages broke down, and some families believe the stress led to serious health conditions, addiction and even premature death.
'I'm terrified' - Post Office victim still fears seeing old customers
‘I thought mum left me, she’d been sent to prison'
WHAT IS FUJITSU'S HORIZON SYSTEM?
Horizon was developed by the Japanese company Fujitsu, for tasks such as accounting and stocktaking.
It was introduced by the Post Office in 1999.
Sub-postmasters quickly complained about bugs in the system after it falsely reported shortfalls - often for many thousands of pounds - but their concerns were dismissed.
The Horizon system is still used by the Post Office,, external which describes the latest version as "robust".
WHAT IS THE POST OFFICE HORIZON PUBLIC INQUIRY?
A public inquiry began in February 2021, external and has heard evidence from Post Office and Fujitsu employees.
The fifth phase began on Tuesday 9 April, with campaigner Alan Bates the first to appear.
He told the inquiry that the Post Office has spent 23 years trying to "discredit and silence" him.
Paula Vennells, chief executive between 2012 and 2019, gave evidence in May and apologised to the sub-postmasters and their families "who have suffered as a result of all that the inquiry has been looking into for so long".
Alan Bates says Post Office run by 'thugs in suits'. Ms Vennells resigned in 2019 over the scandal. In January 2024, she said she would hand back her CBE.
In August 2023, current chief executive Nick Read said he would return bonus money awarded for his work on the Horizon inquiry.
Post Office threatened BBC over whistleblower
Secret papers show Post Office knew case was false
Fujitsu Europe director Paul Patterson said the firm had a "moral obligation" to help fund compensation payments.
Lib Dem leader Sir Ed Davey has been criticised for refusing to meet Mr Bates when he was postal affairs minister, in May 2010. He says he was "deeply misled by Post Office executives".
The BBC discovered that former Prime Minister David
Cameron's government knew the Post Office had dropped a secret investigation that might have helped postmasters prove their innocence.
Separately, former Business Secretary Kemi Badenoch denied claims from former Post Office chairman Henry Staunton that he was told to delay compensation payments to allow the government to "limp into the election".
COMPENSATION
- A STUDY IN REPUTATION MANGEMENT - HAMLINS LLP 12 FEBRUARY 2024
The news cycle at the start of 2024 has been dominated by the ongoing fallout of the Post Office scandal. This concerns the wrongful prosecution of hundreds of sub-postmasters and postmistresses after faulty computer software calculated money was missing from post office branches. A broadcast dramatisation of the scandal, Mr Bates vs The Post Office, served as a powerful catalyst in pushing it into public consciousness and up the political agenda.
The ongoing coverage continues to adversely affect the reputations of individuals and organisations involved, and is likely to have a significant impact for some time.
BACKGROUND
More than 900 sub-postmasters and postmistresses were prosecuted for stealing money because of incorrect information provided by a computer system called Horizon. Many sub-postmasters had reported problems with the Horizon software, which had been developed by Japanese company, Fujitsu. The Post Office insisted Horizon was robust and failed to disclose any knowledge of faults in the system while securing convictions.
The majority of prosecutions were pursued privately by the Post Office against 700 people between 1999 and 2015, and the majority convicted received custodial sentences and were left in considerable financial difficulty. The resulting convictions together with the loss of livelihoods and homes, debts and bankruptcies, took a heavy toll on the victims and their families. Many have spoken out about their experiences, which include stress, illness, divorce and, in at least four cases, others have committed suicide.
BREAKING THE POST OFFICE SCANDAL STORY
Reporting of the impact on the victims was led by publications such as Computer Weekly, who first broke the story in 2009, but also Private Eye, with both publications reporting their own investigations into the problems with Horizon. Around the same time, Alan Bates, a former sub-postmaster, launched the Justice for Sub-postmasters Alliance (JFSA). From 2012, multiple major news outlets began to cover the story, both about the reported faults of Horizon and the impact on those prosecuted and convicted. Around this time, campaigners sought support from Members of Parliament.
Following political pressure, in 2012 the Post Office appointed forensic accountants to investigate the claims against Horizon, who concluded the software contained faults that could result in accounting discrepancies. The Post Office nevertheless insisted there were no systemic problems with the software. In 2015 a former Fujitsu employer came forward to ‘blow the whistle’ to the JFSA and to
BBC Panorama.
CIVIL
LITIGATION COMMENCES AND THE RESULTING FALLOUT
In 2017, a group containing 555 former sub-postmasters and postmistresses issued proceedings against the Post Office in the High Court and in December 2019, the Court determined there were bugs, errors and defects in the Horizon software. The Court’s ruling was the sixth decision in the group litigation and followed a prior application by the Post Office for the Managing Judge to recuse himself from the litigation. The Post Office’s application was dismissed, a decision upheld following a further application to the Court of Appeal.
The Court’s decision in 2019 was monumental and led to wide-ranging ramifications for the Post Office and associated parties:
- In December 2019, the Post Office announced it would pay £58million to settle the claims brought by the group action.
- The Post Office Horizon IT public inquiry was launched in June 2021.
- In April 2021, the Court of Appeal quashed the convictions of 39 former sub-postmasters and mistresses. As of 15 January 2024, 95 convictions have been overturned.
- In January 2024, the Metropolitan Police announced the Post Office was under investigation over potential fraud offences committed during the Horizon IT scandal.
REPUTATION OF THE VICTIMS AND COMPENSATION FOR REPUTATIONAL HARM
In January 2024, the UK government announced it will introduce legislation to exonerate all convicted sub-postmasters and to ensure victims can obtain compensation quickly. An immediate exoneration will offer victims an instant remedy for the reputational harm they have suffered and continue to suffer. However, the extent to which they can claim compensation for the reputational harm suffered is much narrower.
The claim for reputational damage should be a significant feature of any compensation claim, as it is currently in media law litigation, where courts have awarded damages for injury to reputation in defamation claims and, to a limited extent, in privacy claims.
Individuals affected by the scandal have suffered irreparable damage to their reputations, particularly where the damage was aggravated by the Post Office spending years defending the civil litigation. To be wrongly accused, charged and convicted for a criminal offence would plainly cause anyone serious harm to their reputation. It is therefore right that the Post Office compensation scheme, for the 555 former sub-postmasters and postmistresses who were claimants to the group litigation, allows claims for compensation where the claimants establish financial loss because of reputational damage.
How a compensation claim for reputational damage in the Post Office compensation scheme works in practice may not be what victims envisage. At least one victim has reportedly been offered £5,000 having claimed £75,000 for reputational damage. Any ongoing disputes on quantum will likely aggravate the distress for the eligible victims and continue to impact reputational damage for the Post Office.
REPUTATION
MANAGEMENT IN THE CONTINUING FALLOUT
Following the broadcast of an ITV dramatisation of the scandal in January 2024, coverage has intensified and brought the story to wider public and political attention, increasing the scrutiny on key players.
REPUTATION
OF PAULA VENNELS, FORMER POST OFFICE CHIEF EXECUTIVE
In media reporting scrutinising Vennells’s role at the Post Office, reports surfaced which allege the former Chief Executive instructed solicitors to send newspapers a legal notice after the broadcast of the ITV drama. Vennells is, of course, entitled to seek to protect her reputation during a period of hostile news coverage featuring intense criticism of her role at the Post Office and in overseeing the prosecutions. On 9 January 2024, Vennells stated she would return her CBE, following comments by the Prime Minister’s spokesperson that he would support the Honours Forfeiture Committee if it decided to consider revoking Vennells’ CBE appointment.
PUBLISHERS DUE DILIGENCE WHEN REPORTING
Given the intensified coverage, publishers reporting the fallout of the scandal will be mindful of any legal risks, particularly potential complaints in defamation, but also in privacy law. Any publisher reporting any defamatory criticisms or allegations made against individuals or organisations involved in the scandal, will possess a wide range of defences to support their coverage.
- A publisher could benefit from a public interest defence to any defamation complaint, so long as it can show its reporting is or forms part of a statement on a matter of public interest and the publisher has a reasonable belief that its publication was in the public interest.
- Additionally, privilege defences will be an immediate consideration for publishers given the various judgments in the group litigation but also the ongoing public inquiry, where interested parties will give evidence and the Inquiry will publish reports as to its findings.
- An absolute privilege defence protects any statements made in the course of judicial proceedings and statements made by members of Parliament (or officials of the House) in the course of any parliamentary debate. The defence would apply to any statements made by members of Parliament who criticise or make allegations about individuals such as Vennells. The defence also protects fair, accurate and contemporaneous reporting of judicial proceedings held in public. As the Post Office Horizon IT Inquiry is now a statutory inquiry, absolute privilege will also apply to comments made by witnesses in written statements or in oral evidence.
- Where an absolute privilege defence does not apply, a publisher may consider a qualified privilege defence, which applies where the publication is fair and accurate, published without malice and concerns a matter of public interest for public benefit. Reports of a government-appointed public inquiry (rather than a statutory inquiry) are an example of publication where qualified privilege applies. This would apply to any reporting of the inquiry before it was converted into a statutory inquiry in 2021.
However, any publisher reporting allegations which do not originate from either court judgments or inquiry reporting will need to ensure their reporting does not give rise to actionable defamation complaints, where no viable defence can protect their reporting. This will be an important consideration for publishers when the Post Office Inquiry resumes in Spring 2024 and, reportedly, where Paula Vennells will give evidence.
REPUTATION
OF THE POST OFFICE
The reputations of both the Post Office and Fujitsu are severely damaged by the scandal.
The Post Office, as an organisation owned by the government and managed day-to-day by a private company limited by shares, continues to receive the biggest share of criticism, and any effort at reputation management is hindered by findings of the Court and the Inquiry.
The Post Office was heavily criticised by the High Court in the 2019 ruling as demonstrating an “institutional obstinacy or refusal to consider” the Horizon system might be flawed.
The conduct of Post Office management will continue to be further scrutinised as the public inquiry continues and will inevitably undergo further reputational harm. It has already been reported that the Post Office instructed solicitors (using public money) to send letters to the BBC in 2015 threatening to sue Panorama for its reporting of the scandal. The anticipated testimony of former sub-postmasters to the public inquiry about their experience being prosecuted will likely lead to significant criticism of the Post Office’s management acting to protect the organisation’s reputation, as well as criticism against its agents, including its legal team.
The role of former postal affairs ministers in handling the scandal is also under scrutiny. This includes Sir Ed Davey, the current leader of the Liberal Democrats who, in May 2010, declined to meet Alan Bates, the sub-postmaster who led the campaign to expose the scandal. While Sir Ed later met Mr Bates in October 2010, he has faced questions about why he initially refused to do so. Sir Ed’s position is that he was advised by officials not to meet Mr Bates when he first became a postal affairs minister in May 2010, because the Post Office was owned “but not run” by the government. Sir Ed has said he took Mr Bates’s concerns seriously after their meeting, but was misled by the Post Office after he had raised Mr Bates’s concerns with Post Office executives. Sir Ed is also, reportedly, due to give evidence to the Post Office Inquiry when the hearings resume.
The scandal is a lesson in how easily reputations can be damaged and the last effects of such damage. Seeking advice from specialist reputation and crisis management experts must be a consideration for those who find themselves facing criticism and allegations in the continuing fallout.
Hamlins’ Media Disputes department is one of the largest and most successful Media Disputes teams in the UK and is widely recognised as an advisor of choice for both public and private figures seeking advice in relation to reputation management and pre-publication complaints in defamation and privacy law. If you would like to find out more about how Hamlins can help you, please get in touch.
By Daniel Shaw
HAMLINS LLP
1 KINGSWAY
LONDON WC2B 6AN
Tel: +44 (0)20 7355 6000
https://hamlins.com/
PRIVATISATION
GARAGE SALE - IT'S ALL ABOUT THE MONEY & A FAILING ECONOMY
There was only one loser in this Royal Mail privatisation: the taxpayer.
The Treasury was badly advised on the sale, relying on firms accused of unethical practices and corporate greed.
[It should be obvious to anyone, that if you sell off the assets of a
nation, and then profits are being distributed to overseas investors as
shareholder dividends, that you have weakened your Nation, and sold it
off to the highest bidder, in exchange for a short term boost. Where the
simple answer is to cut Civil Service jobs, and thus any Pension
liability. Cut council jobs, with time and motion studies to boost
performance, and cut underperforming numbers of councillors and even,
Members of Parliament, who fail to represent their electorate.]
Thatcher would have screamed, "What! Flogging off her majesty's mail, cheap and to a bunch of spivs?" She always refused to sell Royal Mail. Her latterday apostle on Earth, Margaret Hodge, said as much on Tuesday. As the public accounts committee chairman, she savaged the business secretary, Vince Cable, for last winter's sale of Royal Mail. He had promised: "There is no way we will sell Royal Mail on the cheap." He sold it on the cheap. Hodge called him "clueless".
There was always something odd about last October's Royal Mail privatisation. Both Michael Heseltine and Peter Mandelson had tried it and failed. Driven by the Treasury's need for cash, Cable seemed rushed and nervy. The ground was rolled with a massive relief of pension liabilities, a 30% rise in stamp prices, and post offices detached from the business.
A chief executive was hired, and by May last year the business engineered a 60% surge in profit. It was clearly being gold-plated. So why was it sold as tin? Cable chose Lazards, Goldman Sachs and five other banks to advise on the sale. As anyone who has witnessed these events will attest, they are carnivals of cash.
Privatisation fees alone totalled £12.7m, according to the National Audit Office report. Since the banks advising on price are also placing shares with clients, Chinese walls are put in place to separate "sellers from buyers" within offices. But is this really possible in the City of London, where Chinese walls are most likely made of rice paper? Don't commissions and fees have money dripping from meeting rooms and wine bars, as bankers and lawyers sniff out the nearest and deepest trough?
The banks recommended an asking price as low as 330p a share. They said the big institutions whom Cable was eager to favour "would not pay more". Desperate to press ahead, Cable accepted the price, even as every commentator at the time expressed surprise at what seemed a clear undervaluation of the company. Part three of the NAO report shows how analysts across the City, and even within the "advising" group of banks, were predicting a higher value. Panmure Gordon estimated a £1bn undervaluation (which proved conservative). Even when early market signals confirmed this and officials pondered stalling the sale and raising the price, Lazards and the others advised strongly against. Cable took their advice at face value.
The ideal in "book-building" a stock of potential investors in advance of a sale is to see it two times oversubscribed. The Royal Mail offer was 24 times oversubscribed. The 330p price soared 38% to 455p within hours. More than £750m drained into the pockets of speculators. Never can the British taxpayer have been ripped off so soundly in so short a time.
Within weeks of the sale, Goldman Sachs's own analysts were predicting a price of 610p, almost twice what the "advisers" had been advising. The government had been shockingly ill-advised. As the price went up past 600p, Cable kept dismissing it as "irrational exuberance, froth, speculation". He indicated everyone should wait until the price came down. It is now 562p. Worse, he had allocated bundles of shares to 16 City institutions on a "gentleman's agreement" that they would hold them as "a core of high-quality investors who would be there in good times and bad". Within weeks, over half this stake had been sold, and to precisely "the hedge funds and other speculators" that Cable had pledged to keep out. Just four of the 16 are still big shareholders.
Cable was massively naive. On Tuesday he protested that he was merely showing caution against "risk of failure". I can hear the City laughing. As the head of the NAO, Amyas Morse, points out, had Cable been prudent when warned of an undervalued sale, he would have held back 49% of shares for the Treasury, as opposed to just 30%. Indeed, he might have held out for postponement and upped the price. As it is, he valued Royal Mail at £3.3bn – it should have been nearer £5.5bn.
His advisers treated his desire to sell fast as an excuse to sell cheap. Hodge's charge that his department "had no clue what it was doing" is hard to contest. Had a certain Vince Cable been on the opposition bench, we can imagine his sarcastic fury.
The reality is that ministers make dreadful bankers. Ever since Labour's Tony Blair fell in love with the City, they have been in thrall to an industry that saw continued privatisation as a chance for big killings. Even so, it remains astonishing that ministers can take advice from firms that, however high their Chinese walls, have an institutional conflict of interest.
Cable was spending millions on advice from firms such as Goldmans and Barclays that have been widely accused of unethical practices and corporate greed. This was not cautious but reckless. As the NAO's Morse said on Tuesday: "The price was borne by the taxpayer."
This saga is not about privatisation as such. The disposal of Britain's "other empire", the postwar nationalised sector, came too late to save many great British industries. Government brought close to death the companies that once made ships, planes, trains, cars, computers, gas, water,
electricity and telecommunications. Access to private capital, management and competition has revived some. Others, notably in the social services and security, have been a disaster.
The Royal Mail was always a strong candidate for sale to the private sector, as indicated in the 2010 Hooper report. What was questionable was the privatisation of the privatisation. Millions of pounds swilled round Whitehall, drenching consultants with fees and fooling ministers into gullible decisions that have meant a gigantic loss of money to the taxpayer.
There must be a better way of selling off the family silver than Cable's way. Why can the Treasury not find independent advice? Why are the same banks allowed to act, at least in appearance, as sellers and buyers? Why is there no other way of market-testing or auction? Were such a stink to have emerged in local government or the private sector, we can hear the scathing comments from the Treasury bench. When the smell is in their own backyard, they are strangely silent.
FICTION
In
this fictional work, during her short time in public office, Marion
Watson was shocked to learn that a local sub-postmaster was
wrongfully convicted in the Hailsham district, in the process losing her
friends, her home and all of her life savings.
Where at the time
Marion believed the Post Office, MPs and the
Ministers concerned, that the removal, bankruptcy and imprisonment of
the manager of a Post Office store she frequented, had been guilty of
fraud. For how could they have got that wrong - and the Courts found her
guilty, if that was not the case? [Those cited above may be factual figures,
should not to be confused with
any fictional content involving the Characters of the original 'Magic
Dinobot' story.]
When
Marion found out that the [fictional] prosecution was based on
fabricated evidence, it made her quite angry, for she was deceived along
with thousands of other local residents, who now wanted to say sorry to
their trusted post office worker.
Her husband Timothy,
was less shocked, because he knew that once a mistake is made by
officials in any capacity, including in the military, a cover up is
almost inevitable - so as not to erode public confidence is a battered
and corrupted system that the British economy could ill afford to admit
to. Marion and Timothy agreed not to mention any of this to Jimmy,
because they did not want their son to know how bad the real
world he would soon be entering into could be, not until he was properly
hardened to cope with such ludicrous situations, and survive being
outraged and unable to do much about it - without becoming a target
oneself.
https://www.bbc.com/news/business-56718036
https://hamlins.com/post-office-horizon-scandal-a-study-in-reputation-management/
https://www.theguardian.com/commentisfree/2014/apr/01/royal-mail-privatisation-taxpayer-loser
https://www.msn.com/en-gb/news/world/post-office-chief-executive-nick-read-to-step-down-next-year/ar-AA1qLjYV
https://www.bbc.com/news/articles/cgxx1zgpn0ko
https://www.bbc.com/news/business-56718036
https://hamlins.com/post-office-horizon-scandal-a-study-in-reputation-management/
https://www.theguardian.com/commentisfree/2014/apr/01/royal-mail-privatisation-taxpayer-loser
https://www.msn.com/en-gb/news/world/post-office-chief-executive-nick-read-to-step-down-next-year/ar-AA1qLjYV
https://www.bbc.com/news/articles/cgxx1zgpn0ko
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