INDUSTRY FOCUS
Always keep your eyes on the horizon
The old nautical saying “keep your eyes on the horizon” delivers a kind of long-distance wisdom about maintaining day-to-day control on dry land as much as it does on the waves. It refers to a bird’s-eye view of the world where you have total visibility on which to base the right strategic decisions. The phrase is believed to be a remedy for motion sickness, a disturbance in the inner ear leading to a sense of spatial imbalance, which led bilious ancient mariners to take themselves up on deck in bad weather to maintain eye contact with the line of the horizon.
It would also have been a useful piece of advice for all of the key stakeholders in what has become a standard-bearer for one of modern history’s most extreme examples of internal fraud—or, correction, the accusation of fraud.
The “Horizon Scandal,” as it became known, saw the Post Office, a respected Crown-bearing institution sitting as a pillar at the heart of our communities, doggedly and mercilessly pursuing a self-destructive path of attempting to prove false positives against its own counter employees, simply (as it transpired over time) because it had taken its eye off the horizon.
Horizon, in this instance, refers to the multi-million-pound computer system developed and supplied by Fujitsu and used by part of the UK’s postal service, Post Office Ltd. In 2013, the system was being used by at least 11,500 branches and was processing some six million transactions every day. However, it controversially came under scrutiny when it generated at least 2,000 errors in the system, which according to widespread press reports, may have caused the loss of dozens of jobs, unwarranted prison sentences, bankruptcies, and one documented suicide.
Rather than reviewing software glitches and ordering a high-level internal enquiry, Post Office Ltd. decided to bring the full weight of the criminal legal system against those branch managers whose books failed to balance as a result of Horizon’s errors, even though—it transpires—it knew there was a problem with the IT system. The Post Office eventually acknowledged “it had made mistakes” but not before millions of pounds was spent on a high court group legal challenge on behalf of the subpostmasters, which secured a payout of nearly £58 million to settle with 557 claimants.
The payout, agreed at the end of 2019, means claimants and their lawyers will split £57.75 million in order to settle Bates and others v the Post Office. Compensation to individual subpostmasters—it could be argued—will fall well short of what they went through. And despite the payout, the whole affair has raised more questions than it has answers as many subpostmasters have now taken their cases back to court in an attempt to quash their original convictions and clear their names.
So why did the Post Office pursue this “divide and conquer” strategy? None of those charged were made aware of other subpostmasters who had fallen foul of the IT failure, which resulted in what many fraud experts would see as, at best, a textbook example of how not to carry out an investigation and, at worst, a total PR and brand damaging disaster that includes claims of a cover up.
What Happened?
The story dates back to the early noughties when the Post Office began accusing thousands of subpostmasters of “dipping into the tills” based on “evidence” from its Horizon IT platform. Many were told to pay back supposedly missing funds or face prosecution. Some were convicted and imprisoned while hundreds more were advised to plead guilty to lesser charges to end further action.
One example was that of Seema Misra, who was pregnant with her second child when she was convicted of theft and sent to jail in 2010. “If I hadn’t been pregnant, I definitely would have killed myself,” she said. “It was the worst thing. It was so shameful.”
Seema became a subpostmistress in West Byfleet in Surrey in June 2005 and was suspended in January 2008 after an audit found a discrepancy of £74,000 in her accounts. She was so worried about the discrepancies that she had been feeding at least £100 per day from her shop into the Post Office tills in an attempt to make the books balance. One day, there was a £10,000 hole. This state of affairs went on for two years, during which time she said there was very little support from the Post Office.
In another case dating back to 2003, newly married Balvinder Singh Gill moved to Oxford from his home town of Coventry to “start a new life” as subpostmaster at the town’s Cowley Road branch. But “a decade of hell” later, he had suffered a mental breakdown that led to him being sectioned. He says his life was destroyed after he was accused of stealing £108,000 from the Post Office.
“I had problems from day one,” he said. His weekly balance would show a “massive shortfall,” and he just could not balance the books. One morning, six months in, he was suddenly locked out of the office by auditors. “They turned up a little bit like a pseudo Police force. They interviewed me in a back room. They interrogated me,” he said.
Eventually he was told he had to repay the full amount in monthly instalments and was chased relentlessly by debt collectors. “Financially, it really wiped me away. I had to declare bankruptcy. They said if I didn’t pay it back, they’d take me to prison. They said I was the only case,” he said.
In a double blow for the family, in 2009 his mother, Kashmir, now the subpostmistress, was found guilty of stealing £57,000 from the same branch, a conviction she is now hoping will be overturned by the Criminal Cases Review Commission (CCRC). The family went from being reputable business owners to working in local kitchens or petrol stations on minimum wage.
“Our reputation in our community was totally destroyed. My family broke up over this. I broke up with my wife some years later,” said Balvinder. “More than the money, it’s just the justice. Mainly that we can get on with our lives and put right a lot of people who thought we were bad.”
Wendy Buffrey, the former subpostmistress of the Up Hatherley branch in Cheltenham was advised to plead guilty to false accounting in 2010 to avoid jail after a shortfall of £26,000 was identified in her accounts. Unable to explain the discrepancy, she took out a loan to repay the difference and is still counting the cost today. “We lost our business. We lost our home. I had to pay the Post Office £26,000,” said Wendy. “We had to start again. There isn’t any monetary figure that can compensate for the way we were treated and the way things happened to us.”
She was given 150 hours community service but has always maintained her innocence and also awaits the CCRC judgement on her case. “To have my name cleared means an awful lot to me. I don’t like being labelled something that I’m not. I don’t like that I’ve got a criminal conviction for something I didn’t do. You don’t ever think that could possibly happen to you, but it did,” she said. “For twenty years we have been labelled thieves and fraudsters, and we’re not and never have been. We have that confirmation from the Post Office that they now agree that things have gone wrong. It’s just a shame they didn’t investigate it from the beginning, and we wouldn’t be in this position.”
Rubbina Shaheen was accused of taking £43,000 from her branch and ended up serving three months in jail. The settlement gives her hope that her conviction for falsifying accounts at the Greenfields Post Office in Shrewsbury will be quashed. She was jailed in 2010 after accepting a plea bargain to drop a theft charge.
“When they said I was going to prison, I was just totally devastated. I didn’t know what to say, what to do,” said Rubbina, age fifty-four, who is on dialysis for renal failure. Her husband, Mohamed Hami, age sixty-five, added, “We were both on suicidal watch. The only good part is that we were both holding each other’s hands.”
Rubbina worked as subpostmistress, whilst her husband ran the connecting convenience store. She initially had money deducted from her salary after an £8,000 discrepancy was identified in 2007, but two years later, her contract was terminated after £43,000 went missing. Despite Rubbina identifying at least eleven errors on the Horizon system, she was not believed, said her husband.
After her release from prison, the couple ended up living in a van, evicted from the shop’s living quarters by the bank after falling into arrears. Eventually they cashed in their pensions to buy a derelict house in Brockton, Shropshire, and he took a job at a Shropshire school, selling tuck.
Rubbina, who was not part of the group action, is now feeling “hopeful but at the same time sceptical” that she will be vindicated by the CCRC. Her husband feels the Post Office should be “hung out to dry” for making them feel like “absolute dirt.” He added, “Nothing can replace our health. Let’s hope, fingers crossed, that we can hold our heads high again.”
The CCRC said that it would now consider the impact of the out-of-court settlement on the thirty-four Horizon-related cases it had under review. The Post Office accepted it had got things wrong in its past dealings with a number of subpostmasters and looked forward to moving ahead.
Has Justice Been Done?
Freelance journalist Nick Wallis, who has been reporting on the case since 2010, pointed out that litigants would have spent about £22 million, assuming their legal bills were similar to the Post Office’s. Wallis noted that each of the 550 claimants would expect to be paid between £47,000 and £78,000. He said, “Given that these people have already had to pay back money the Post Office claimed they had stolen, and in some cases were prosecuted for stealing, these are not huge figures.”
One former subpostmaster said, “This is nothing but a great win for the Post Office. My losses alone came to £200,000. This compensation will not cover the fraudulent claims that the Post Office took from me. I am seventy-five and still work to live and pay my mortgage. There will be no celebrating this decision.”
In the group legal action last year, the high court heard that the Post Office and Fujitsu knew full well that Horizon was flawed but pressed on anyway with its deployment and the procuring of criminal charges against subpostmasters running branch offices. In his summary, the judge said, “The Post Office has resisted timely resolution of this group litigation whenever it can.”
Adding to the judge’s comments, MP Kevan Jones, who raised the issue in the House of Commons on behalf of one of his constituents who had been wrongly accused, said, “This House has considered the Horizon settlement and future governance of Post Office Ltd. Innocent people jailed, individuals having their good name and livelihoods taken away from them, the full use of the state and its finances to persecute individuals—those are all characteristics of a totalitarian or Police state. But that is exactly what we have seen in the twenty-first century in the way the Government and the Post Office have dealt with subpostmasters and their use of the Horizon system. The Horizon system was the biggest non-military IT project in Europe. It cost over £1 billion to install and affected 18,000 post offices throughout the UK.”
MP Kevan Jones continued, “I first came to be involved in the issue when a constituent came to see me in my surgery. That constituent was Tom Brown. Tom, like many other thousands of subpostmasters, was a hard-working and well-respected individual. He had won awards from the Post Office for fighting off an armed robber in his post office, but because of the introduction of the Horizon system, he was accused of stealing £84,000 from the Post Office. Even though he said and demonstrated that that was not the case, the Post Office took him to court, and he went through the agony of being publicly shamed in his local community—we must remember that a lot of these individuals are the stalwarts of their local communities.
“Tom went to Newcastle Crown Court, and on the day of the trial the Post Office withdrew the case, but the damage had already been done. His good name had been ruined, and he had lost—because he had to go bankrupt—in excess of nearly half a million pounds in the form of his business, the bungalow that he had bought for his retirement, and some investment properties. He now lives with his son in social housing in South Stanley. The man who should have had a nice retirement, and who was well respected in his community, has been completely ruined and is destitute.
“The scandal of this—what makes me so angry and why I have persistently hung on to the campaign— is that the Post Office knew all along that the Horizon system was flawed.”
After the group action, the Post Office Chairman Tim Parker said, “We are grateful to the claimants for taking part in this mediation and agreeing a settlement, bringing the group litigation to a close. I am grateful to Nick Read (the recently appointed Post Office CEO) for his important engagement in the mediation process. We accept that, in the past, we got things wrong in our dealings with a number of postmasters, and we look forward to moving ahead now with our new CEO currently leading a major overhaul of our engagement and relationship with postmasters.”
Nick Read said, “I am very pleased we have been able to find a resolution to this long-standing dispute. Our business needs to take on board some important lessons about the way we work with postmasters, and I am determined that it will do so. We are committed to a reset in our relationship with postmasters, placing them alongside our customers at the centre of our business. As we agree to close this difficult chapter, we look forward to continuing the hard work ahead of us in shaping a modern and dynamic Post Office, serving customers in a genuine commercial partnership with postmasters, for the benefit of communities across the UK.”
Alan Bates, who led the subpostmasters in the high court action against the Post Office, which is believed to have cost the UK taxpayer £100 million in legal fees, said, “The steering committee would like to thank Nick Read, the new CEO of Post Office, for his leadership, engagement, and determination in helping to reach a settlement of this long-running dispute. During the mediation, it became clear that he intends to reset the relationship between the Post Office and its subpostmasters and put in place new processes and support for them, as part of a wider programme of improvements. It would seem that from the positive discussions with Post Office’s new CEO, Nick Read, that there is a genuine desire to move on from these legacy issues and learn lessons from the past.”
But this is not the end of the matter. In March this year, MPs announced that the Post Office and Fujitsu executives would be summonsed before UK Parliament’s Business, Energy, and Industrial Strategy Committee as part of a probe into the Horizon IT system scandal. Rachel Reeves, the Labour MP who chairs the committee, said in a statement, “We will hear from subpostmasters about the impact of Horizon on their lives and take the opportunity to hold executives from Post Office Ltd. and Fujitsu to account for their handling of the problems around the Horizon IT and accounting system.”
So far there has been no suggestion that any individual from the Post Office or Fujitsu will face criminal charges for their part in the scandal. Although there is an admission that “mistakes were made,” for many subpostmasters this admission falls well short of the total vindication required to compensate for the reputations and livelihoods destroyed by the scandal. The high court payout will not benefit all of those who were accused, and even those who did receive compensation will be more interested in clearing their names than any financial “redress.” It is therefore up to those subpostmasters and the work of Parliament’s Business, Energy, and Industrial Strategy Committee to cast its far-reaching influence over the whole affair and beyond as lessons need to be learned from the sorry affair.
Perhaps, the first of these lessons is a salutary one: that we constantly need to maintain a focus on the horizon.
