Spring 2024Post Office Horizon Scandal

This is the first in a series of articles in which Molesworths’ dispute resolution team will review the Post Office Horizon scandal, the issues arising from it, and what might happen next.

The Post Office Horizon scandal was catapulted back into the media spotlight following the ITV drama series ‘Mr Bates vs The Post Office’. The convictions of hundreds of sub-postmasters and sub-postmistresses for false accounting and theft between 2000 and 2014 resulted in some people going to prison, loss of livelihoods, and tragically, in a few cases, loss of life. Even though a public inquiry is ongoing, it is already being described as the most widespread miscarriage of justice in English legal history.

The background

In 1999 the Post Office (“PO”) introduced the Horizon IT system, which had been developed by ICL Pathway, owned by Fujitsu. The new software was rolled out to its branches and sub-post offices.

Self-employed sub-postmasters, who ran branch POs under contract with the PO, were contractually responsible for any shortfalls in their branch accounts.

They faced immense pressure to make up for unexplained shortfalls, which, in many cases, were due to faults in the Horizon system.

The PO consistently denied that the Horizon system was faulty and resisted the sub-postmasters’ reports of faults in the system. In many cases, they falsely claimed to complainants that no other sub-postmasters had reported problems.

Under English law, every individual and organisation has the right to bring a private criminal prosecution against another individual or organisation.

The PO used its team of employed investigators and external lawyers to prosecute more than 700 sub-postmasters for crimes like theft and false accounting, based on the faulty data from the Horizon system. Many were sent to prison, and others faced severe penalties like community service, electronic tagging, and heavy fines.

Second Sight, an independent investigative organisation, was appointed in 2012 to conduct a separate inquiry into these issues. Their reports revealed software defects in the Horizon system. However, the PO initially claimed that whilst defects were in existence, the system, overall, was effective.

Legal battles in the form of a group litigation action followed and in 2019, the case was settled out of court for £58 million. However, this settlement left many claimants with a fraction of their losses after legal costs were accounted for.

In April 2021, the PO announced that the Horizon system would be replaced by a new IT system. This came as an acknowledgement of the need for a more reliable and user-friendly system.

What happens next?

1. The government has said that those wrongly convicted will have their convictions overturned quickly. The legal mechanism for doing this is still unclear.
2. The government has set up a compensation scheme, which, it says, will expediate full and fair compensation for the those wrongly convicted. But the scheme is attracting widespread criticism.
3. There is an ongoing public inquiry led by retired High Court judge Sir Wyn Williams. His report is unlikely to be available before 2025, but - when published - it is likely to call for extensive reform of the many facets that have resulted in the Horizon IT scandal.

In the next article we will consider the function and use of private prosecutions by commercial organisations.