Post Office scandal – cover-up a ‘dark chapter’ in government, corporate and legal history | Computer Weekly

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The most recent stage of a statutory public inquiry into the Post Office IT scandal uncovered the strategies utilized by the Post Office and provider Fujitsu to cowl up software program errors and push the blame and prices for the accounting discrepancies they brought about onto the determined customers in Post Office branches, destroying their lives.

Part three of the inquiry targeted on the operation of the controversial IT system on the centre of a nationwide scandal. It mapped out how Fujitsu and the Post Office, in lockstep, lined up enormous issues to guard their reputations and monetary performances, whereas permitting the subpostmasters who relied on the software program to be “sacrificed”.

The statutory public inquiry was set as much as verify how and why subpostmasters had been wrongly blamed and punished for accounting discrepancies in their branches. After the introduction of software program from Fujitsu in 2000 to automate primarily guide practices in Post Office branches, subpostmasters started to see unexplained shortfalls in their accounts. They had been subsequently blamed for the shortfalls, which didn’t really exist, and had been made to repay them. Greater than 700 had been prosecuted for monetary crimes, with many serving jail sentences. Hundreds extra suffered life-changing hardship as a results of failed companies and repaying unexplained shortfalls.

In 2009, a Computer Weekly investigation first revealed that subpostmasters had been being blamed for unexplained accounting shortfalls, which they believed to be attributable to software program errors (see timeline of Computer Weekly articles under). It has develop into a nationwide scandal involving the federal government, the Post Office and IT provider Fujitsu.

Within the closing assertion to section three of the general public inquiry into the Horizon IT scandal, the federal government’s dealing with of the Post Office through the years was likened, by a KC representing former subpostmasters, to a canine proprietor standing by as their vicious pet “mauled a defenceless little one”.

From January this yr till final week, section three heard from former Post Office and Fujitsu executives to look at how subpostmasters ended up paying such a heavy worth for the failing of a pc system and the help infrastructure round it. Though the newest section has extra proof to listen to in July, closing statements from taking part barristers had been heard.

Darkish chapter

In closing, Edward Henry, representing former subpostmasters, mentioned it was “undisputable” that the Post Office and Fujitsu had recognized for years by 2010 that there have been severe issues with the Horizon system. “From the very starting, across the nation, subpostmasters, baffled and bewildered, couldn’t address the [IT] system,” he mentioned.
In actual fact, the Post Office and Fujitsu already knew of great issues when the system was rolled out in 2000, as section two of the inquiry proved.

• Learn a round-up of section two of the inquiry •

“What the Post Office did in widespread with Fujitsu, their mutual connivance, was to disclaim this,” Henry informed the inquiry. “Not merely to disclaim this in truth and to dispute it vigorously, however to disclaim it virtually psychologically.”
Publicity of the issues with Horizon would have been an existential menace to the Post Office and “deadly” to Fujitsu’s valuation. Henry mentioned if the Post Office had not modernised by way of automation, it will have been “curtains” for the enterprise, but when new expertise had been carried out and failed, the results would have been “catastrophic”.

“That is as darkish a chapter in our governmental, corporate and legal history as may be imagined, and sadly it’ll get darker but”
Edward Henry, KC

He mentioned that was the start of a widespread curiosity in preserving issues secret, between the Post Office and Fujitsu, which “conspired to reach at a place of mutual curiosity” and determined that it was higher that some subpostmasters “had been placed on the rack moderately than the Post Office collapse and a corporate’s popularity be ruined”.
Henry highlighted the federal government’s position in the scandal as the one shareholder in the Post Office, which was given “unfettered operational management”.
“The federal government is just like the proprietor of a harmful canine mauling a defenceless little one, saying, ‘Sorry, so sorry, nevertheless it has nothing to do with me’,” he mentioned. “The federal government is accountable as a result of it did not correctly handle the Post Office. That is as darkish a chapter in our governmental, corporate and legal history as may be imagined, and sadly it’ll get darker but.”

Deliberate actions

In his closing assertion to section two of the inquiry, Sam Stein KC, additionally representing victims of the scandal, requested whether or not the struggling brought about to many lots of of victims was the results of was a “cock-up or cook-up”. He informed the inquiry that he’s assured section three has supplied proof that the reply is the latter.
“I posed the query as as to whether what we would discover inside section three was cock-up or cook-up. My respectful suggestion is there may be little doubt that the reply is cook-up,” mentioned Stein.
He added that the Post Office had made little reference to its personal failures in the newest section of the inquiry, however had “turned its tank turret gun on Fujitsu”, accusing the provider of failing to share details about pc issues with it.
“The Post Office has appreciable kind for blaming others,” mentioned Stein. “It blamed and criminalised subpostmasters all through the history of Horizon. It now seeks accountable Fujitsu. However the fact is, Fujitsu and the Post Office are equally accountable.”

“The Post Office has appreciable kind for blaming others. It blamed and criminalised subpostmasters all through the history of Horizon. It now seeks accountable Fujitsu. However the fact is, Fujitsu and the Post Office are equally accountable”
Sam Stein KC

He described a “partnership of deception” in which the Post Office was the senior companion: “The Post Office deliberate the heist, gave the orders, whereas Fujitsu introduced the shooters to the scene.”
Tim Moloney, representing victims for Hudgell Solicitors, mentioned the proof heard in section three echoed the experiences of the subpostmasters he represents. “The issues skilled in the operation of Horizon had been effectively signposted in its growth. Poor high quality had, to a diploma, been acknowledged by Fujitsu and the Post Office,” he mentioned.
Moloney mentioned proof from the newest section uncovered how some errors, which had been recognized in the event, had been by no means fastened. “Bugs, errors and defects continued to look all through the roll-out of Horizon and past. Bugs, errors and defects appeared in each legacy Horizon and Horizon on-line,” he added.
Particulars of the errors recognized throughout growth weren’t handed onto the tech groups supporting subpostmasters. “There had been restricted dissemination or appreciation of the information of bugs, errors and defects recognized in growth to these people working in help,” mentioned Moloney.
“At a senior stage, there was an consciousness that the genesis and growth of Horizon had been tough. However down under, with these concerned in help, there was no such appreciation,” he added. “The implications of this lack of institutional reminiscence are clear [in phase three evidence].”
As a consequence, the Horizon system tech help operations grew to become the primary line in the Post Office’s technique to maintain particulars of Horizon issues secret from the subpostmasters utilizing the system.

But extra damning proof

What is understood is that the Post Office and Fujitsu knew about issues with the Horizon system that might trigger unexplained losses. What section three of the general public inquiry did was reveal a concerted effort to maintain this information out of the subpostmaster community.
Senior Post Office executives informed employees, as a part of inner messaging, to not reveal issues attributable to the Horizon IT system on account of considerations that the organisation would face severe enterprise and legal difficulties.
Talking in a section three listening to in February, Shaun Turner, a former govt working in the Post Office Nationwide Enterprise Help Centre (NBSC), which supported subpostmasters utilizing the controversial accounting system, mentioned he was conscious “as a basic theme” of considerations in the organisation that if the issues had been recognized it will trigger a insecurity in Horizon.
He mentioned this was “largely [formed] from the messaging that was popping out of the enterprise, notably in the post-2009 interval, across the strong nature of the Horizon system, which led to specific sensitivities round any perceived points with the system”.
“From my recollection, the Computer Weekly article and the early days of the Justice for Subpostmasters Alliance [campaign group] had been … talked about in the enterprise, and messaging was popping out to inner employees, like myself, across the strong nature of Horizon. My impression was that messaging was coming from senior management. I think about that messaging was coming from board stage down.”

• Learn extra in regards to the Post Office’s Horizon messaging technique. •

The secrecy breached

However phrase was getting out, and determined subpostmasters started asking questions. In 2009, Computer Weekly revealed the primary investigation into reported Horizon issues and its results. This and different questions compelled the Post Office, determined to guard Horizon’s popularity, to fee a report back to guarantee these that the software program was dependable. The most recent section of the inquiry featured Rob Ismay, the writer of the report.
The inquiry heard how the report lacked objectivity and was designed to falsely present the software program with a clear invoice of well being. The report’s writer admitted he didn’t even examine alleged issues with the software program, however merely talked to the IT group and employees from Fujitsu, the provider of the software program, who reassured him it was dependable.
There have been no phrases of reference for the report, which was instigated by then Post Office managing director David Smith, nevertheless it was made clear to Ismay that he ought to simply report on “optimistic causes to be assured about Horizon” to offer the software program a clear invoice of well being.
The Post Office had thought of an exterior evaluate and report, based on Ismay, however determined in opposition to that for causes together with that individuals would nonetheless have doubts over the system and ask questions whatever the end result, and that the businesses that might perform the audit would have “vital caveats” in their report, which might sow doubt about conclusions.

• Learn extra about Rod Ismay’s report into the Horizon system •

Sinister motives

Giving the Horizon system a clear invoice of well being meant, based on the Post Office, that any unexplained accounting discrepancies had been the fault of the subpostmasters, whether or not deliberate by way of theft and false accounting, or attributable to human error, with the latter changing into a default choice.
Subpostmasters who challenged the Post Office’s stance on Horizon, threatening to reveal its darkish secret, had been made examples by the Post Office, which used its legal and monetary assets to close them up and deter others from talking out.
The hurt executed by the Post Office’s strategies of silencing subpostmasters who suffered losses can’t be depicted higher than in two circumstances featured in section three, which noticed the Post Office destroy the lives of two victims of the scandal. The Post Office despatched one to jail by way of legal motion and crushed the opposite in a civil case.

Subpostmasters who challenged the Post Office’s stance on Horizon, threatening expose its darkish secret, had been made examples by the Post Office, which used its legal and monetary assets to close them up and deter others from talking out

In 2006, when his department confirmed a lack of £26,000 that he couldn’t clarify, the Post Office demanded that former Bridlington subpostmaster Lee Castleton make up the shortfall. Castleton mentioned the losses in his accounts had been attributable to pc errors, however he had no method of proving it. He refused to pay it again, and took the Post Office to courtroom to contest its insistence that he ought to pay.
The Post Office threw every little thing on the legal problem introduced by Castleton, and the courtroom dominated that the debt was actual, not illusory as Castleton argued. Post Office witnesses in his case mentioned there was no proof of any downside with the system and that they had been unable to determine any foundation upon which the Horizon system may have brought about Castleton’s losses. The decide in Castleton’s case awarded the Post Office damages of roughly £26,000, the quantity of the unexplained loss, and prices of £321,000, which bankrupted Castleton.
Throughout section three, a Post Office doc revealed it had sought to make use of the Castleton case to “ship a clear message” to different subpostmasters that it will take a agency line on these elevating related allegations. Barrister Flora Web page, representing former subpostmasters affected by the Horizon scandal, referred to a doc that may seem in the inquiry at a later date.
Quoting the doc, Web page mentioned there was a clear intent on the a part of the Post Office to defeat Castleton in courtroom and declare heavy prices, “to not make a internet monetary restoration, however to defend the Horizon system and hopefully ship a clear message to different subpostmasters that the Post Office will take a agency line and to discourage others from elevating related allegations”.
She informed the inquiry: “In order that was the aim. It was not ever envisaged that the Post Office would really get that prices order again – that was a loss chief, when you like. However the function was to ship a clear message to discourage others.”
Castleton was not alone in being focused by the Post Office and made an instance of.
In 2012, Seema Misra a former subpostmaster in West Byfleet, Surrey, was discovered responsible of theft after unexplained accounting shortfalls appeared in her department and, pregnant together with her second little one, was despatched to jail. She had her wrongful conviction overturned in April 2021, after it was confirmed that the Post Office’s department software program contained errors that might trigger phantom shortfalls.
Following Misra’s conviction, an inner e-mail from then Post Office senior legal lawyer Jarnail Singh, copied to a number of executives, bragged in regards to the profitable prosecution of a subpostmaster for theft regardless of information of proof that might have put her prosecution in query. This e-mail was revealed throughout a latest section three listening to.
Within the e-mail, Singh wrote: “After a prolonged trial at Guildford Crown Courtroom [Seema Misra] was discovered responsible of theft. This case turned from a comparatively easy basic deficiency case to an unprecedented assault on the Horizon system. We had been beset with unparallel [sic] request for disclosure requests by the defence. By way of the arduous work of everybody, counsel Warwick Tatford, investigation officer Jon Longman and by way of the appreciable experience of Gareth Jenkins of Fujitsu, we had been capable of destroy to the legal customary of proof (past affordable doubt) each single suggestion made by the defence.”
The e-mail additionally mentioned the legal victory for the Post Office would dissuade different subpostmasters from “Horizon bashing” once they have shortfalls.
A complete of 86 former subpostmasters have now had legal convictions overturned and extra are anticipated to observe.

• Learn extra in regards to the devastating assault on Lee Castleton •

• Learn extra in regards to the therapy of Seema Misra •

Rudderless help group simply following orders

Subpostmasters experiencing issues had been in the darkish from the beginning, and calling for assist meant a lengthy wait on the helpline – or “hell line”, as customers referred to it.
The Horizon helpdesk was the primary line in Fujitsu department tech help operations. Based on proof given to the inquiry, the helpdesk has a poisonous, rudderless and resentful work setting, the place racism was a day by day prevalence and subpostmasters had been thought of incompetent or corrupt.
Talking on the inquiry, IT guide Amandeep Singh, who labored at ICL on the Post Office’s Horizon helpdesk in Wakefield, Yorkshire, from 2000 to 2001, revealed particulars about life on the opposite finish of the phone line that subpostmasters turned to for assist with the IT system they used in branches.
Singh, who was on a 12-month work placement with ICL as a part of his pc science diploma, mentioned there was a tradition of not trusting the subpostmasters. “Folks had been having real software program issues,” Singh informed the inquiry, however spoke of “a pre-built prejudice you could’t belief the folks and that they’re incompetent”.
Requested whether or not this prejudice contributed to the Horizon scandal, he mentioned: “When you’ve got already made a judgement name [that] the folks you might be supporting are incompetent or corrupt in a way, it will take a lot for folks to assume the software program has a downside. We had been a lot happier to push down on the subpostmasters and say ‘it’s your challenge’ than to push it upwards and ask whether or not there is a matter or query why we’re having so many calls about this.”

• Learn extra in regards to the Horizon helpdesk •

Past the Horizon helpdesk, there have been additional ranges of help, with the software program help centre (SSC) a key proponent that was supposed to research and repair issues with the Horizon software program.
Later in section three, proof emerged that the SCC was effectively conscious of the issues being skilled by subpostmasters from the early days in Horizon’s operational life and the stress it was inflicting them. Throughout proof given by Barbara Longley, a former administrator in the SCC group, a quote from one of many group’s name logs was learn out. The message about a struggling subpostmaster was from 2001, shortly after Horizon’s roll-out.
“The system appears to lose transactions and the [subpostmaster] is anxious that for each transaction error he notices there may be the likelihood that there are ones he misses, resulting in discrepancies. The [subpostmaster] is at current discovering the entire situation very irritating and is struggling sleepless nights on account of these issues,” mentioned the log.
In an early signal that legal challenges to Horizon’s reliability had been possible, the log continued: “Within the gentle of what has gone on, the PM is ready to interrupt his contractual obligations with [the Post Office] and refuse to pay any extra discrepancies and will take legal motion if required.”

Unaudited, unrestricted and unbelievable

Former SCC staff additionally confronted questions over their use of distant entry rights to make modifications to subpostmaster accounts. The integrity of any system depends on this kind of privileged entry being tightly managed.
Though many IT programs embody the flexibility for distant entry by suppliers, with correct controls and audit paths, the Post Office was so fearful about Horizon’s integrity being questioned that it had, for a few years, denied that distant entry by Fujitsu was even attainable.
In 2015, in written proof to the BIS Choose Committee Inquiry, the Post Office mentioned: “There is no such thing as a performance in Horizon for both a department, Post Office or Fujitsu to edit, manipulate or take away transaction information as soon as it has been recorded in a department’s accounts.” The Post Office solely admitted it was in truth attainable when it was left with no alternative, throughout a Excessive Courtroom case in 2019.
Part three of the inquiry make clear why the Post Office took this stance. It turned out that not solely had been Fujitsu employees making modifications to department accounts with out the information of the subpostmasters, however additionally they had “unrestricted and unaudited” entry to programs.
Stephen Parker, a former SCC supervisor who confronted the general public inquiry in section three, admitted that management of SCC employees remotely accessing department programs relied on them being reliable and following the entry coverage, with no policing of their exercise.
Parker mentioned that, so far as he remembers, this process was associated to modifications that might have a monetary impression on subpostmaster accounts. “It was enforced solely by course of,” he mentioned. “This implies all people was conscious that this was the requirement and each time an OCR was authorised then they knew of the [process] they wanted to do.”
Horizon inquiry barrister Jason Beer mentioned: “Individuals are conscious of the pace restrict – that doesn’t imply they all the time abide by it, does it?”
Parker admitted that “finally they had been trusting [people] to observe the method”.

• Learn extra about Fujitsu’s unrestricted and unaudited entry to department accounts •

Heads you pay, tails you pay

In closing, barristers highlighted the difficulties skilled by subpostmasters when the IT help couldn’t unravel a downside. The failure of IT help groups to determine the issue left subpostmasters in a tough place. They both needed to comply with make up the loss to maneuver on to the subsequent buying and selling interval or (previous to 2003) they might put the loss in the native suspense account whereas an investigation was carried out.
Nonetheless, with the quantity of unexplained losses in the suspense account rising, the Post Office determined to make subpostmasters cowl the losses themselves, moderately than placing them in suspense.
In section two, the inquiry was informed that in an eight-month interval from Horizon’s introduction, the sum of money in dispute in the suspense account had jumped from £2m – from when accounts had been dealt with manually – to £10m. It had by no means been near this underneath the paper-based accounting mannequin, based on proof from former Nationwide Federation of Subpostmasters (NFSP) president John Peberdy.
“The Post Office was quickly making an attempt to make these [alleged] losses good, to cease them being in the suspense account for therefore lengthy, and they wished to scale back the cash that they noticed as owed to them,” he informed the inquiry in section two.
He mentioned the Post Office had “nothing to lose” when it got here to Horizon inflicting unexplained losses, as a result of it was subpostmasters who had been contractually obliged to make accounts good. This rule was launched underneath the Affect programme, which signalled the top of the suspense account, and with it subpostmasters’ means to dispute unexplained shortfalls.
In closing, Stein KC mentioned: “If the paucity of coaching and help points weren’t dangerous sufficient, there was a sting in the tail for subpostmasters – the Affect programme, which successfully programmed out the subpostmasters’ remaining likelihood to dispute phantom Horizon shortfalls.”
He added that this encapsulated every little thing that was fallacious in regards to the Post Office’s therapy of subpostmasters: “The Affect programme abolished the native suspense accounts, and in doing so compelled subpostmasters to simply accept all calls for made from them on ache of not with the ability to commerce. This created an unattainable scenario for subpostmasters, the equivalence of heads, you pay; and tails, you pay.”
Hudgell Solicitors’ Moloney added: “The obvious cause for the elimination of suspense as an choice on rollover is disturbingly missing in logic, being constructed on a defective presumption that use of suspense could also be indicative of fraud or dishonesty by postmasters.”

• Learn extra about John Perbedy’s proof to section two of the inquiry •

Part 4 begins on 6 June, however section three is but to be accomplished, with former Fujitsu engineer Anne Chambers to return for questions and the corporate’s former chief architect Gareth Jenkins to look for the primary time, in all probability in July. Each former Fujitsu employees are at present underneath investigation for attainable perjury through the trials of subpostmasters prosecuted primarily based on proof from the Horizon pc system.

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