The Criminal Cases Review Commission published its submission to the Post Office Horizon IT Inquiry. For those of you unaware, in broad brush terms, this Inquiry relates to the prosecution of large numbers of sub-postmasters for failures which the defendants say arose out of the flawed Horizon accounts system run by the Post Office. The Court of Appeal has overturned some convictions and other appeals are being heard; a group litigation against the Post Office was settled; and, other litigation appears on the, ahem, horizon. The journalist Nick Wallis, supported by crowd-funding, has been documenting and reporting on the case for a long time (he maintains a blog here). He summarises the saga thus:
Over many years Subpostmasters (the people who run local post office branches) have been held legally responsible for the accounts presented to them by the Post Office’s branch IT system, Horizon.
However, Subpostmasters are not in control of that system. It is operated by the Post Office.
Subpostmasters are unable to dispute the accounts presented to them and are held contractually liable by the Post Office for any discrepancies. Until High Court judgment in March 2019, if Horizon says you should have £80,000 worth of cash and stock in your branch and you only have £50,000, the Post Office considered you owed them £30,000.
The Post Office is not contractually obliged to investigate the cause of a Horizon discrepancy. Many Subpostmasters are certain computer glitches or other uninvestigated causes outside their control are behind discrepancies appearing in their accounts.
Postmasters who refuse to sign off their accounts are told they are not allowed to move from one branch trading period to the next. The should either agree to make any discrepancies good, or shut their branches, putting them in breach of contract.
In the past, Subpostmasters who refused to make good discrepancies were sacked, losing everything they’d invested in their branches.
Potential miscarriages of justice
Some Subpostmasters, mystified by continual or large scale losses and scared of being sacked and losing their businesses, signed off accounts they knew were not an accurate reflection of their stock and cash. They say they did this to avoid being held liable for discrepancies which were out of their control, which they could not afford to make good, and to keep trading. The Post Office called this false accounting.
Subpostmasters unwilling or unable to make good large discrepancies were sometimes prosecuted (by the Post Office’s in-house prosecution team) for theft, false accounting and/or fraud. This was done on IT evidence alone, without proof of criminal intent. Despite this, some Subpostmasters were successfully persuaded by their own solicitors to plead guilty to false accounting, on being told the Post Office would drop theft charges.
Once the Post Office had a criminal conviction, it would attempt to secure a Proceeds of Crime Act Order against convicted Subpostmasters, allowing it to seize their assets and bankrupt them.
In simple terms the Post Office (POL, Post Office Limited) held all the aces in this relationship. They controlled the numbers, they controlled the contracts (which is one of the things I am interested in) and it controlled the day to day decision-making which affected how problems with the system were dealt with and what consequences were visited on sub-postmasters should things go wrong. Interestingly it delegated quite a bit of the running of the IT system, to a sub-contractor, Fujitsu. POL contracted for a well-run system and the result was that Fujitsu had the incentives to run the system well or to present the system as running well. The High Court civil cases more than suggested it was the latter which won out. One of the outcomes so far is that Fujitsu witnesses have been referred to the DPP for investigation by the High Court judge trying the group litigation.
A feature of the case(s) was that POL relied the Horizon system and on evidence from Fujitsu in bringing prosecutions against sub-postmasters. The cases were not brought by the CPS. Prosecutions were brought by POL (in broad terms, at least initially, it thought sub-postmasters were either grossly negligent or attempting to swindle them).
The way the Inquiry is framed suggests it is the IT system which is its main focus. It is clear though that issues of governance and whether the Post Office have learnt the lessons from the litigation are an 9it is to be hoped the most) important part of the remit (terms of reference can be find here). The CCRC submission to the Inquiry takes the reader through the main issues in the cases so far. It is a long-running and building scandal which has tainted the lives of many sub-postmasters, some of whom were imprisoned.
As you might expect I am going to focus on the issues germane to the role, or likely role, of lawyers in these matters. Given the stage of the cases under consideration, the ongoing tribunal, my own lack of familiarity with the (copious) details of the case, despite fairly extensive reading on it, and the like, I am going to raise the uses in fairly general terms.
To summarise the CCRC’s view was that
“the Common Issues and Horizon Issues judgments i[in the High Court] read as a whole raise significant doubts about whether POL can be said to have approached the prosecutions of SPMs “with clean hands”, an expression which the CCRC considers to include acting in good faith as a fair-minded and objective prosecutor.”
They note with particular concern the following findings in the High Court judgments:
1. POL deliberately chose not to disclose full details of defects in Horizon because they might have an impact on ongoing legal cases (paragraph 457, Horizon Issues judgment).
2. POL “routinely and comprehensively” overstated the contractual obligations on SPMs to make good losses. The High Court concluded that there was no excuse for this, that it must have been done to make SPMs believe they had no choice but to pay, and that it was “oppressive behaviour” by POL (paragraphs 222 and 723, Common Issues judgment).
The CCRC is concerned by this evidence that POL, which was victim, investigator and prosecutor in the cases in question, consciously deprived defendants and the courts of a full and accurate understanding of the reliability of the Horizon system; and that it behaved oppressively to SPMs by overstating their contractual obligations.
The CCRC rely heavily on the judgments issued by Fraser J in the group litigation, who had criticised POL for “excessive confidentiality” (as part of a broader set of concerns about the manner in which the litigation was conducted). Fraser J had said, that the Post Office had been “obstructive” in its pre-action behaviour, although reliant “to a large degree” on the “not.. entirely reliable” Fujitsu. Fraser J had concerns about, “the entrenched attitude of witnesses for the Post Office”, and, “concluded that at times Post Office and Fujitsu witnesses had expressly sought to mislead him in their evidence”.
In terms of the handling of the prosecutions themselves, the CCRC points out POL lawyers prosecuting would have been bound by the CPIA Code of Practice. And, as a result, would have been under an obligation, “In conducting an investigation… [to] pursue all reasonable lines of inquiry, whether these point towards or away from the suspect.” The CCRC say:
In the light of the above High Court findings, the CCRC is concerned that POL investigators did not pursue all reasonable lines of inquiry, but instead routinely assumed a theory of the case which was adverse to the SPMs under investigation without putting that theory to the test.
And that, “POL investigators did not pursue all reasonable lines of inquiry with Fujitsu, and did not give adequate scrutiny to the quality and thoroughness of Fujitsu’s own enquiries into Horizon problems.” It is clear from the CCRC’s submissions and Fraser J’s judgment that this was not a one off, short term failure, but a failure that was maintained well beyond the initial decisions to prosecute. As Fraser J said, “By 2013 Horizon was an extraordinarily controversial subject; there can simply be no sensible excuse for the Post Office’s failure to try and understand this particular subject.” The CCRC marks the time period of problematic conduct as being 2001 to 2013.
The handling of the prosecutions, the appeals, and the ensuing civil cases are likely to draw the main attention, but there is another matter of significant import if, as seems likely, lawyers were involved. As the CCRC note,
“Fraser J also found that POL, in its communications with SPMs, had misstated the contractual obligations on them:
“[T]here is a lot to be desired from the Post Office’s behaviour as identified in the cases of the Lead Claimants… 1) Even though the Post Office’s own case on the relevant provision in the SPMC29 dealing with liability for losses requires negligence or fault on the part of a SPMC, this was routinely and comprehensively ignored by the Post Office, who sent letters of demand for disputed sums in express terms as though the SPM had strict liability for losses. These letters entirely misstated the legal basis of a SPM’s liability, even where they had been appointed under the SPMC.” [paragraph 723].
[In relation to letters sent to a particular SPM, Mr Sabir, in January and March 2010:] “There can be no excuse, in my judgment, for an entity such as the Post Office, to misstate, in such clearly express terms, in letters that threaten legal action, the extent of the contractual obligation upon a SPM for losses. The only reason for doing so, in my judgment, must have been to lead the recipients to believe that they had absolutely no option but to pay the sums demanded. It is oppressive behaviour.” [paragraph 222].
If the strategy for doing this, and the letters in particular, were designed, drafted, or overseen by lawyers in the organisation, on the facts as stated here (which of course only tells us part of the story) suggests there is cause for their conduct to be investigated for taking unfair advantage under the Solicitors’ Code. This should sit alongside scrutiny of the conduct of the investigations and prosecution of these cases, which involved private practice firms, at least in some aspects. Any such investigation should look carefully at the division of labour and process of instructions giving to consider whether the ways in which this was organised led, by design or accident, to the problems. Similarly the process of evidence gathering and the strategy for conducting the civil litigation seems to merit a good hard look for two reasons: Fraser J’s concerns extend well beyond the more normal judicial pronouncements on poor behaviour in litigation (bad as that behaviour can sometimes appear). The second is that the case may be an example how poor corporate governance and less than ethical lawyering feed each other with catastrophic results. These concerns come at a time when the Legal Services Board is expressing anxiety as to why the general public thinks there is one law for the rich and another for ordinary folks. This is a public interest case par excellence.
I hope that the Inquiry and the SRA take up the opportunity to work together to investigate a case sorely in need of investigation. The Inquiry needs not to be fobbed off by the usual protestations about legal professional privilege (which the SRA can look behind) or the Horizon Inquiry thinking lawyers work is too technical to fall within the mainstream of their remit. The ways lawyers work can be, and in this case arelikely have been, one but not the only central feature of the problems at work in this terrible most concerning of cases.