The Post Office Horizon scandal: an explainer

The scandal over the treatment of Post Office sub-postmasters wrongly accused of fraud has gripped the UK in the past couple of weeks, triggered in part by ITV drama Mr Bates vs the Post Office. We round-up some of the key dates and moments in the Post Office’s Horizon computer scandal so far.

The story of the Post Office scandal has been a slow burner starting 25 years ago with the rollout of the Horizon computer system, a vast IT project awarded to Fujitsu that was designed to reduce benefit fraud and cut costs. The project at one point faced cancellation as the new Labour administration had reservations over the scheme’s management, but nonetheless it went ahead in 1999. The first convictions of sub-postmasters over shortfalls, based on Horizon data, took place in 2000.

As early as 2003 outside experts were already aware of faults. IT expert Jason Coyne was instructed to examine the Horizon system as a neutral expert witness in the Post Office’s civil case involving the Cleveleys Post Office branch in Lancashire.

He concluded there were fundamental problems within the accounting system, but because sub-postmaster Julie Wolstenholme had claimed unfair dismissal and the case was settled out of court, his findings did not become widely known.

In 2004 subpostmaster Alan Bates approached Computer Weekly journalist Tony Collins over his suspicions about the Horizon system. But with only one source it was not possible to publish a story. It was not until 2008 when further cases of subpostmasters being prosecuted emerged – Lee Castleton and Jo Hamilton – that Computer Weekly could begin running articles. First journalist Rebecca Thomson then, from 2010, Karl Flinders began investigating the Horizon system and the prosecutions of subpostmasters.

Between 2000 and 2015 more than 900 sub-postmasters were prosecuted on the basis of the faulty Horizon software. Many lost their life savings, and were forced to live in near-poverty; some were jailed; there were four suicides. More than 60 have died without receiving any compensation for their wrongful treatment, an echo of the recent Windrush scandal. Overall, 3,500 branch owner-operators were wrongly accused.

The Post Office during this period used threats of legal action to prevent the “fraud” cases being publicised and told staff in its call centre – the first contact point for sub-postmasters having problems – to tell callers they were the only ones experiencing problems. But where IT experts were used to defend sub-postmasters, the Post Office often backed down as long as the defendant signed a non-disclosure agreement.

Vast legal fees were paid by the Post Office to ensure sub-postmasters who refused to accept they had done wrong. For example, the Post Office spent more than £300,000 on winning a case brought by Lee Castleton, a sub-postmaster in Bridlington, over an unexplained shortfall of £35,000. Castleton cited Horizon problems as the cause of the shortfall. He was bankrupted by the case.

2015: An independent investigation led by a firm called Second Sight was halted by the Post Office after its evidence suggested that there had been serious miscarriages of justice. This prompted former sub-postmaster Alan Bates to launch a group litigation order. BBC Panorama covered the scandal and raised public awareness.

2019: Justice For Sub-postmasters Alliance won a High Court case, led by former sub-postmaster Alan Bates. Mr Justice Fraser found “bugs, errors and defects in the Horizon system caused discrepancies in postmasters’ branch accounts”. He dismissed an attempt by the Post Office to have himself recused from the trial. The Post Office agreed to settle out of court for £58 million, but the sub-postmasters’ legal costs amounted to £47 million, leaving them with only about £20,000 each. The Criminal Cases Review Commission now began to look at further prosecutions with a view to quashing them.

2020: The Post Office Horizon IT Inquiry was established in non-statutory form on 29 September. It was converted to a statutory inquiry on 1 June 2021 under Wyn Williams. It is gathering evidence from all parties and will consider whether the Post Office has learned the lessons and embedded the cultural change necessary from the findings in Mr Justice Fraser’s judgments and the impact on affected postmasters.

2021: The Court of Appeal quashed a further 39 convictions. The court made the rare finding that the Post Office had acted in such a way as to subvert the integrity of the criminal justice system and public confidence in it.

2021: Separate to the Bates litigation, more than 120 sub-postmasters brought an employment tribunal claim against the Post Office arguing they should be classed as “workers” and entitled to paid holiday, pension rights and sick pay.

2022: The claim (Baker and Others v Post Office), which would have gained new rights for the 8,500 sub-postmasters in the UK, did not succeed. The Central London employment tribunal ruled in March 2022 that the postmasters were not required to render personal service under their contracts. This meant they did not meet the ‘limb b’ definition of the worker status test. They were therefore not workers. The tribunal did acknowledge that postmasters were under the control of the Post Office and integrated into the Post Office’s business, but noted that these factors could be present in contractual relationships other than employment relationships.

May 2023: It was revealed that the Post Office had included within its executive bonus scheme a target related to completing the work needed for the inquiry. It was also reported that Post Office fraud investigators used racist terms to categorise black workers. Documents published between 2008 and 2011, obtained via a freedom of information request, showed that fraud investigators were asked to group suspects based on racial features. The categories on the document included “Chinese/Japanese types”, “Dark Skinned European Types” and “Negroid Types”.

September 2023: The government announced that sub-postmasters who have had their convictions on the basis of Horizon evidence overturned would be offered compensation of £600,000 in full and final settlement of their claim.

January 2024: The early January screening of Mr Bates vs the Post Office by ITV, starring Toby Jones and Lia Williams, brings a wave of public and media interest in the case. The public inquiry hears from Stephen Bradshaw, a Post Office investigator, who was involved in allegations against sub-postmasters. He told the inquiry he had heard reports of problems with the Horizon software, but wasn’t “technically minded… I would expect that to come from the people above”. He had been accused of mafia-like behaviour by subpostmasters, allegations which he rejected. On 10 January the UK government announced it was going to launch legislation to exonerate wrongly convicted Post Office branch managers and said there would be a “new upfront payment of £75,000 for some of those affected”. On 13 January it emerges that the Post Office could be facing a £100 million bill after claiming inflated tax relief figures for its compensation payments to postmasters. On 17 January, Gerald Barnes, a software developer at Fujitsu since 1998, worked on numerous technical tasks relating to the shift from the Post Office’s use of paper-based accounting methods to the automated Horizon IT system. “Error handling wasn’t as good as it could have been if designed properly from the start,” he said. The following day, 18 January, Fujitsu announced it would not bid for further UK government contracts while the inquiry was running.
19 January In a very significant development Paul Patterson, European CEO, Fujitsu, tells the inquiry that the Post Office was made aware of bugs in Horizon between 199-2018 and said he did not know why evidence of software bugs were not provided to subpostmasters when they were being prosecuted. He said such withholding of evidence was “shameful”.

Key figures involved in the scandal

From Post Office and Fujitsu

Adam Crozier: CEO Royal Mail 2003-10. Post Office Ltd became independent of Royal Mail in 2012.
Paula Vennells: CEO of Post Office 2012-2019 and group network director 2007-2012. Awarded CBE in New Year’s Honours List 2019, which she has now offered to return.
Angela van den Bogerd: had a 33-year career at the Post Office with jobs including network change operations manager, head of network services, head of partnerships, director of support services, and people and change director. Was briefly head of people at the Football Association of Wales after leaving the Post Office in 2020. She was criticised by the judge in the 2019 group case for not giving frank evidence and seeking to mislead.
Simon Blagden: Fujitsu non-executive director who stepped down in 2019. A Tory donor, Blagden was appointed chair of Building Digital UK by then digital secretary Nadine Dorries in 2022.
Paul Patterson: European CEO, Fujitsu.
Tim Parker: chairman of Post Office Ltd from October 2015-2022. In June 2016, he told sub-postmasters that replacing the Horizon system would “incur considerable risk”.
Gareth Jenkins: former chief IT architect for Fujitsu who provided reports backing up the reliability of Horizon in a number of Post Office prosecutions. Jenkins has asked the public inquiry for immunity against incriminating himself and has been investigated by police amid concerns his court evidence wasn’t consistent with information he may have had about problems with the system.

Campaigners and journalists

MPs who supported the Justice for Subpostmasters Alliance: James Arbuthnot: first as an MP (Conservative) then as a Lord, Arbuthnot campaigned on behalf of the subpostmasters, initially via his north-east Hampshire constituent Jo Hamilton, who contacted him asking for help in 2009. Kevan Jones (Labour) for North Durham. Andrew Brigden (Conservative, now Independent) for north west Leicestershire.
Key journalists: Rebecca Thomson, Karl Flinders (both Computer Weekly), writers and investigators BBC Panorama in 2015)
Investigators: Ian Henderson, Ron Warmington of Second Sight, who discovered documents pointing to system failings and whose investigations was prematurely closed by Paula Vennells in 2015.
Whistleblowers: Fujitsu developers have provided campaigners with evidence that subpostmasters’ account figures could be altered remotely. One told ComputerWeekly in 2021 that he had made his superiors aware of bugs early on in the Horizon roll out and urged them to scrap it.

 

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