Megan, Justine and Tom were law student scholars, participating in the WS Society Summer Scholarship programme during August 2024. This article summarises their research and presentation.
Introduction
This report aims to provide a succinct review of the Post Office/Fujitsu Horizon IT Scandal, its legal and personal consequences, and its current-and-forthcoming implications for in-house practitioners.
Contextual Background:
From 1999 onwards, the UK Post Office began to install Fujitsu’s ‘Horizon’ system on a nationwide basis. The Horizon accounting system sought to standardise transactional record-keeping throughout all subordinate UK Post Offices, operated by individuals known generally as sub-postmasters. Horizon - in an effort to identify dishonesty - would notify the sub-postmaster of any financial discrepancies between the cash present within the till, and the value anticipated.
Immediately following installation however, the Horizon system regularly identified discrepancies nationwide. Sub-postmasters, confident that they were not missing the anticipated capital, reported the errors to the Post Office; these triggered audits and prohibited sub-postmasters from operating until the discrepancies were resolved.
Under increasingly accusatory scrutiny, and the Post Office’s repeated affirmation as to the infallibility of the Horizon system, some sub-postmasters resorted to fraudulently amending their Horizon records to satisfy the system, others were falsely advised that their complaints were unique to them; but all were informed that it was their contractual obligation to recoup any identified shortfalls. Many sub-postmasters succumbed to the threat of prosecution and made efforts to personally reimburse the system’s discrepancies. For some, this ‘debt’ was impossibly vast resulting in inter alia, unregulated loans, the commission of theft and reset, and financial destitution. As a result, prosecutions fell ample and nationwide; based upon the fictitious infallibility of the Horizon system and its inability to differentiate an innocent system error from user fraud.
Today, the Post Office/Horizon system scandal is considered the largest miscarriage of justice in British history.
“Under increasingly accusatory scrutiny, and the Post Office’s repeated affirmation as to the infallibility of the Horizon system, some sub-postmasters resorted to fraudulently amending their Horizon records to satisfy the system, others were falsely advised that their complaints were unique to them.”
Prosecutions
Within 16 years, upwards of 700 prosecutions were enacted by the Post Office. Within England & Wales, the Post Office - under the Police and Criminal Evidence Act 1984 - was empowered to instigate private prosecutions and hence did so without external review. Conversely, within Scotland, prosecutions are enacted publicly by the Procurator Fiscal upon evidence submitted by Police Scotland. Here however (until revoked by the Lord Advocate in 2024) the Post Office was authorised to act as a specialised reporting agency, and so was able to replace Police Scotland.
Various sub-postmasters were found to be unfairly prosecuted. One English instance is the Post Office’s manipulation of defendants to plead guilty to false accounting to avoid a custodial sentence of theft or fraud. This occurred in at least 14 of the 20 appellants in Hamilton & Others v Post Office [2021] EWCA Crim 577, and is contrary to the Code for Crown Prosecutors.
A Scottish example is the case of sisters Jacquie El Kasaby and Rose Stewart, who regardless of their complaints rejection by the Procurator Fiscal, were continually pursued by the Post Office for their £34,000 discrepancy; at one stage being threatened by private debt collectors. The sisters, uninformed as to the reason for their case's dismissal, paid £10,000 to appease the Post Office’s phantom debt.
At trial, the Post Office markedly failed to submit their auditor's error logs, consequently misleading the fact-finder as to the system's reliability. Within the now eminent English case of Bates v Post Office Limited [2019] EWHC 3408, Justice Fraser highlighted that in-house lawyers' strategic concealment of the Horizon audit logs was not ‘procedurally acceptable or fair’, and that the Post Office had concealed the extent of Horizon’s fallibility from prosecuting counsel - leading them to ‘entirely unwittingly, and on instruction, [provide] misleading information to the [factfinder]’.
Government Response
In response to the burgeoning scandal, in 2021 a public inquiry was launched to investigate and publish the failings of the Post Office, and the testimony of its victims.
The inquiry disclosed that numerous senior Post Office staff were aware of the fallibility of Horizon, all whilst prosecutions continued. Fujitsu engineer Gareth Jenkins was found to have concealed Horizon’s defects, acting as an expert witness in various prosecutions regardless; an example being Seema Misra, who was ultimately incarcerated whilst pregnant. Mr Jenkins remains under investigation for perjury. Not least Mr Jenkins, but Post Office CEO Paula Vennells remains accused of knowledge of the system error(s) before prosecutions concluded.
“Following the inquiry, in 2024 Holyrood proposed and passed the Post Office (Horizon System) Offences (Scotland) Act 2024 to ensure legislative redress for Scottish victims and harmonise with its English equivalent.”
The Act, via s1(1) seeks to quash (defined in s7(1)) sub-postmasters' wrongful convictions where its legal tests are met (for deceased accused/defendants, see (s4(3)(a)-(ii)). The Act is a retrospective and scandal-specific means of legislative redress.
In determining a relevant offence (s1(2)(a)), conditions A-E must be met (s2(2)(a)-(6)(a)/(b)). First (s2(2)(a)-(b)), the offence(s) must have been committed between the dates of 23 September 1996, and the 31st December 2018; this is to capture the period where chiefly the Horizon system was in use. Condition B (s2(3)(a)-(d)) provides the grounds on which the offence must be based upon. These are all crimes of dishonesty; s2(3)(e) however expands these grounds to ancillary offences, which are defined in s2(7)(c) as assisting a primary offender in the relevant offence. Condition C & D (s2(4) & s2(5)) establish that at the time of such an offence, the accused was carrying out business in connection with their sub-postmaster duties. Finally, Condition D (s2(6)(a)-(b)) stipulates that at the time of the offence, the Horizon system must have been in use to some capacity.
Implications for In-House Practitioners:
The Post Office/Horizon scandal demonstrates marked failures of numerous in-house lawyers' duties as defined by the SRA and LSS. An example is Jarnail Singh, who regardless of provably possessing information pertaining to Horizon’s fallibility, denies any cover-up involvement. It is submitted that an in-house lawyer's duty to the general public ought to be emphasised alongside their commitment to their company, this may be achieved both via internal and external oversight.
Ethical Auditing:
This report proposes a novel ethics audit for in-house solicitors, applied on a risk-posed basis. The composition and functionality of this body remains to be determined and would require extensive think-tanking and funding. This body would allow for both increased whistleblower access, and a point of reference for dubious practice.
Ethical Certification:
A cost-effective whilst less universal alternative to ethical auditing is a voluntary ethical certification. This could be carried out by a third-party body similar to ICAS and could serve a similar purpose to clients as Athena Swan Charters but as a certification of ethical culture and practice.
Digital Evidence, and the Revival of Section 69 PACE 1984:
Aside from this implication, there is also the additional issue of how digital evidence is treated at trial. The status quo deems digital evidence unanimously trusted unless proven otherwise; however, prior to 2000, s69 operated within the Police and Criminal Evidence Act 1984 (PACE 1984), which established that all digital evidence ought to be proven accurate to be admissible as evidence, as opposed to a generic presumption of its accuracy. This operated as a presumption of guilt upon software. However, in 1995 the Law Commission advised repealing the section. James Christie argues that the revoking of s69 was pursued under an erring as to the difference between generally infallible computer hardware (the provided analogy being a wristwatch), and more complex fragile software. It is submitted that if s69 had remained during the Horizon Prosecutions, it may have allowed for more trustworthy digital evidence accuracy. It is hence submitted that the revival of an s69 equivalent would safely accommodate for increasing digital evidence reliance.
The Importance of Contingency Plans and Training:
The Post Office/Horizon scandal highlights the consequences of a lack of internal codified contingency plans and solutions. In Bates, Lord Justice Fraser expresses the expectation that the system should "prevent, detect, identify, report or reduce the risk" of system errors. Bates also highlighted the lack of sub-postmaster training regarding the Horizon system. It is submitted, that where an organisation vests financial reliance in a computer system, proportionate training ought to be delivered to its operators; the potential that an IT system may be at fault must likewise be championed.
Contractual Clarity:
Obligations, responsibilities, warranties, and liabilities must consistently be contractually clear between IT system manufacturers and users to avoid wrongful prosecutions. If the Post Office and Fujitsu had stipulated where liability rests in the event of the short-falling error - it may have prevented liability falling on sub-postmasters.
Corporate Culture:
The Post Office incentivised prosecutions for both financial and professional gain. Once a cultural practice takes root, other than resignation, it is nearly impossible for in-house lawyers to subvert it as their duty lies in the company's success and longevity, reliant on senior management's direction. Business leaders must closely monitor their company's culture, particularly in its formative stages, to ensure sustained ethical practice during its growth.