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Case No: HO16X01238, HOQ17X02637 and HQ17X04248
Neutral Citation Number: [2019] EWHC 3408 (QB)
THE POST OFFICE GROUP LITIGATION
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
Rolls Building
Fetter Lane
London. EC4A INL
Date: 16 December 2019
Before:
THE HONOURABLE MR JUSTICE FRASER
Between :
Alan Bates and Others
Claimants
~and -
Post Office Limited
Defendant
Patrick Green QC, Kathleen Donnelly, Ognjen Miletic and Reanne MacKenzie
for the Claimants (instructed by Freeths LLP) .
Antony de Garr Robinson QC, Simon Henderson, Owain Draper and Rebecca Keating
for the Defendant (instructed by Womble Bond Dickinson LLP)
Hearing dates: 11, 12, 13, 14, 18, 19, 20, 21 and 27 March;
3, 9 and 12 April; 4, 5, 6, 7, 11, 13 and 14 June 2019;
1 and 2 July 2019
Draft distributed to parties on 28 November 2019
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Mr Justice Fraser:
This judgment is part of the long-running legal dispute between the claimants, who are
all either former or serving sub-post masters and sub-post mistresses (“SPMs”), and the
Post Office. All the SPMs in the litigation had contracted with the Post Office at
different times to run branch Post Offices in different locations across the country. The
Post Office introduced a computer system called Horizon in 2000 across all its
branches. That was changed in 2010 to an online version called Horizon Online or
HNG-X, and the former version is now called Legacy Horizon. The claimants’ case is
essentially that both Legacy Horizon and Horizon Online (which used many elements
of the existing system) were or are unreliable, and this led to unexplained shortfalls and
discrepancies in their branch accounts. The Post Office denies this, asserting that the
systems were and are robust, and extremely unlikely to be the cause of such matters.
There are numerous different causes of action brought against the Post Office, and the
Post Office counterclaims against the claimants, including seeking damages for fraud.
This is group litigation under CPR Part 19.
This judgment concerns the operation and functionality of the Horizon system itself. It
follows the lengthy Common Issues judgment, which is Judgment (No.3). That
judgment was extremely long, for two main reasons. It concerned six different
claimants, each of whom had contracted with the Post Office at different times, and
each of those six claimants’ cases concerned very different facts. Very few of the
material facts relating to contract formation were agreed for any of these six, and
therefore factual findings had to be made for each of them in this respect.
Approximately 500 paragraphs were necessary to do this. Although first instance
judgments must be reasoned so that parties understand the outcome (and so that any
judgment can be subject to appropriate review), very lengthy judgments can be difficult
to follow. If a judgment becomes too long, or too technical, it can be counter-productive
to wider understanding on the part of those not immersed in the fine detail of every
aspect of the case.
Thave therefore included technical detail about the Horizon system, its operation, and
some aspects of the technical evidence, in a Technical Appendix to this judgment. The
contents of that appendix should not be seen as being of subordinate effect to the
contents of the judgment itself; this is done simply for the convenience of readers. It is
also intended that readers who do need to immerse themselves in technical matters to a
very fine level of detail may not find it necessary to study the appendix, and reading
the judgment alone may be sufficient. Notwithstanding that approach, however, this
judgment too is extremely long. This is due to the complexity of the Horizon system,
which even for computer systems is extraordinarily complicated for the reasons
explained below; the period of time over which the complaints range (which starts with
the introduction of Horizon in 2000 and runs to date); and due to the way that the
litigation has unfolded. There are some matters in this judgment that go to issues
affecting the group litigation going forwards, such as disclosure, which have increased
its length. It is also the case that this litigation is being very strongly contested on both
sides. I have endeavoured to provide a reasonable level of detail to explain my findings
on the Horizon Issues to assist both sides as much as possible. Finally, the only findings
that are made in this judgment are those necessary to come to conclusions on the
Horizon Issues. All other matters in all the claims of the claimants and the
counterclaims by the Post Office remain for decision in later judgments.
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4, This judgment is in the following parts:
Paragraph no.
A. Introduction 5
B. The Horizon Issues 18
Cc. Features of this Group Litigation 57
Dz Evidence of Fact: The Claimants 76
E. Evidence of Fact: The Post Office 202
F. Documents and Available Information 559
G. The Experts’ Agreements 654
H. The Period 21 March 2019 to 4 June 2019 706
I The Expert Evidence 71
J Conclusion on Expert Evidence 870
K. Audit Data 905
L. Overall Conclusions 925
M. Answers to the Horizon Issues 965
Appendices:
1. Technical Appendix
2. Summary of bugs, errors and defects
3. Glossary
A. Introduction
5. These proceedings are being conducted pursuant to a Group Litigation Order (“GLO”)
made on 22 March 2017 by Senior Master Fontaine, and approved by the President of
the Queen’s Bench Division. A more comprehensive introduction to the issues
generally between the parties is contained at [2] to [43] of Judgment (No.3) “Common
Issues”, which is at [2019] EWHC 606 (QB). Other judgments concerning procedural
rather than substantive issues, are the first Judgment at [2017] EWHC 2844 (QB) and
Judgment (No.2) “Strike Out” at [2018] EWHC 2698 (QB). During the Horizon Issues
trial which is the subject of this judgment, the Post Office issued an application that I
recuse myself as Managing Judge in this group litigation, and stop the Horizon Issues
trial, so that it could be recommenced at some later date in the future (before a
replacement Managing Judge). That application was refused and the judgment is at
Judgment (No.4) “Recusal Application” at [2019] EWHC 871 (QB). Permission to
appeal was refused by the single Lord Justice on 9 May 2019. There is also Judgment
(No.5) “Common Issues Costs” at [2019] EWHC 1373 (QB) which made various orders
in respect of the costs of the Common Issues trial, a hearing in respect of that having
taken place on 23 May 2019.
This trial concerns what the parties referred to at the case management stage as the
Horizon Issues. The intention behind the case management of this litigation was that
the contractual issues (which were called the “Common Issues” and affected all the
claimants) and the computer issues relating to the operation, functionality and reliability
of the Horizon system (which were called the “Horizon Issues”, and also affected all
the claimants) would be resolved first. The parties needed time to prepare for these two
trials, which took place in late 2018 (for the Common Issues) and into the spring of
2019 (for this one), in particular to perform disclosure, and prepare and serve evidence.
For the Horizon Issues, this included expert evidence, for which I gave permission,
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from two IT experts, one for the claimants (Mr Coyne) and one for the Post Office (Dr
Worden).
The recusal application caused significant delay and disruption to the Horizon Issues
trial. Originally, that trial had been programmed to finish (including delivery of oral
closing submissions) by 11 April 2019, a date which became unachievable as a result
of that application. Following Judgment (No.4) the remaining witness of fact for the
Post Office to be called in person, Mr Parker, a senior Fujitsu employee, was called on
1] April 2019.
The two IT experts could not be called until 4 June 2019 onwards. The two experts
therefore had a period of some weeks, following on from the evidence of fact, before
they were called to give their oral evidence. There was therefore an interval between
11 April 2019 and 4 June 2019 when the experts were called. Their evidence
collectively took two court weeks.
The effect of this interruption upon the trial timetable meant that there was therefore
time available for each of the experts to consider the full scope of the cross-examination
of the factual witnesses that had taken place some weeks before, and reflect (with more
time than is usual for experts whilst a trial is underway) upon whether that impacted
upon their views. Experts are supposed to consider the factual evidence advanced by
both sides in litigation neutrally, and if witnesses are cross-examined, then — at least
potentially — other evidence that might emerge ought, if it is important, to be considered
by those experts in arriving at their final opinions given in evidence. In a conventional
trial, expert evidence will usually follow on almost immediately after the evidence of
fact has been heard. This means that, in practical terms, most experts will only have a
very short time in which to consider any potentially important factual developments in
any case before they are themselves cross-examined. Here, there was no such
restriction.
The Horizon Issues trial timetable was therefore different to a conventional trial in this
respect, because the vast majority of the oral factual evidence, with the single exception
of Mr Parker’s evidence, was completed by 2] March 2019. That is 75 days, or almost
11 weeks, before Mr Coyne was called by the claimants, and even longer before Dr
Worden was called by the Post Office. The approach of the experts to the opportunity
presented by that interval further to assist the court with their evidence is notable, in
my judgment. I will deal with this further in Parts H and I of this judgment. For a more
detailed description of the architecture of the Horizon system (both Legacy Horizon
and Horizon Online) reference should be made to the Technical Appendix. For a
general understanding of the issues in this litigation, an overview is sufficient.
Horizon is both an accounting system, and also supports a large number of what are
called business applications. Some transactions that a customer might wish to carry out
in their local Post Office branch are what are called retail activities, such as buying a
Post Office product. One example of this is buying a book of stamps. However, the Post
Office has a large number of business customers whose products are offered to the
public through branch Post Offices. The Post Office calls these companies “clients”.
For every kind of activity which a customer wishes to transact in their Post Office
branch, Horizon needs to have the functionality to perform it. This functionality means
supporting the counter activity of carrying out the transaction, which is another way of
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saying Horizon enables the SPM or their assistant to transact the business over the
counter. That business may be a combination of Post Office retail activity, and
purchasing services or products offered by the Post Office on behalf of its clients.
However, in conjunction with the ability of a SPM to serve a customer (what is called
counter or front office), there is the associated “back office activity” of settling with
Post Office's ‘client’ organisation, who has provided some service to the customer - such
as the DVLA, or a bank. Accounting is a theme or thread that runs through all of these
business requirements of Horizon, but it is only a part of them. The number of services
provided by Post Office branches is large and has increased steadily from 1998 to the
present day. The number of clients has almost certainly increased, and the functionality
of Horizon has expanded in line with the growth in service, both on the counter and in
the back office.
For those activities where the Post Office branch is acting like a retail outlet (such as
selling stamps), both the hardware and software is provided by Horizon to support this
activity. This is the Electronic Point of Sale Software component of Horizon, that is
referred to as “EPOSS”. EPOSS allows the SPM or assistant to record that some goods
have been provided to a customer, compute the price of those goods, and allow the
customer to pay the money required for all their purchased goods, using either cash or
a credit/debit card. Often, a customer may wish to carry out two or more different
activities in one visit to the counter - for instance, to settle a utilities bill and to buy
some stamps. This can be done in the same activity and so Horizon has the concept of
a customer carrying out a 'basket' of activities and settling the total amount due for the
basket in several ways - by one single credit card transaction, by a cheque, or by cash.
Baskets of Post Office activities and non-Post Office activities are not supported by
Horizon. Often, a local Post Office branch will be a retail outlet too, selling non-Post
Office goods such as groceries, newspapers or even (as with Mr Bates at Craig-y-Don)
a haberdashery. If a customer wishes to buy a newspaper and some stamps, the
newspaper is not sold by the Post Office; it is simply sold by the associated, though in
accounting terms separate, retail outlet run by the SPM which uses the same premises.
So, the customer has to settle in two parts. In some premises, a customer may queue up
to purchase (say) greetings cards and pens (from the retail side of the branch Post
Office). If they then wish to perform some activities with the Post Office, they may then
need to queue up at a separate counter position to do that; that separate and second
activity would be transacted through Horizon. In this respect, the National Lottery is an
exception and spans the two businesses.
The Post Office’s clients include high street banks, Camelot, gas and electricity
companies (for paying utility bills), DWP (for paying benefits and pensions) and DVLA
(for paying road fund tax). Because of the different nature of the services provided
through the Post Office for all of these many hundreds of client organisations, the
services provided through the Post Office will be different from the service provided
for other clients. There is therefore the need for some unique software functionality
within Horizon. This must be provided both in the branch and the back office to support
the activities for that client. This is a part of what makes Horizon such a large and
complex system. The other reason that Horizon is so complex is because it has evolved
over a long period. As will be seen below, the original concept and design for Horizon
was for a joint Post Office/DWP project so that welfare benefits could be paid to benefit
claimants in a certain way. That changed and the DWP withdrew from the project, but
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the need to offer other and an increasing number of products has led to many additions
being added on to the system, increasing its complexity over time.
As well as the counter activities necessary to run a branch Post Office, Horizon also
supports the periodic process of balancing and rollover for each branch; essential
elements in the accounting to the Post Office performed by the SPM. Every branch
operates in Trading Periods, which are either four or five weeks (according to a
timetable published periodically by Post Office). At the start of each Trading Period the
branch is supposed to be 'in balance’. This means that the physical stock and cash in the
branch agrees with the data regarding the stock and cash held in Horizon. Then, during
the Trading Period, Horizon records all customer transactions made at the branch, so it
records the changes in cash and stock. It is also required to record any replenishments
or remittances of cash or stock in the branch. Thus, Horizon records all changes in cash
and stock held at the branch during the Trading Period, and should be able to compute,
from the starting amounts and the changes, the expected amounts of cash and stock at
the end of the period.
Without reciting the entire background to the group litigation between the Post Office
and the claimants, it is the accounting and functional accuracy of Horizon that is at the
heart of the current disputes, which have run for a great many years. The claimants
maintain that the Horizon system in operation threw up numerous discrepancies and
shortfalls in their branch accounts, for which the Post Office unfairly held them
responsible. The Post Office dispute this, and maintain that these occurrences are
explicable by carelessness, fault or criminality on the part of the claimants.
Horizon, whether in its first incarnation as Legacy Horizon until 2010, or what is called
Horizon Online since then (originally HNG-X, now since 2017 HNG-A running on a
different windows system), is at the centre of this group litigation. It should also be
noted that it is not a system that is operated by the Post Office. It was originally
designed, “rolled out” and operated by ICL, a company that was partly owned by
Fujitsu, and which is now fully absorbed within Fujitsu, and has been for many years.
There is a contract between Fujitsu and the Post Office in respect of Horizon, and
perhaps in its current form it is rather different than the original contractual relations
between those two entities. The contractual relationship between the Post Office and
Fujitsu is not of direct relevance to the Horizon Issues, but arises tangentially only in
respect of what is a sub-issue, namely the charging structure operated by Fujitsu for
what are called ARQ requests for audit data and whether this inhibited the Post Office
in this respect. The operation, functionality and accuracy of Horizon is an extremely
thorny issue (or bundle of issues), although given the breadth of allegation and counter-
allegation in the group litigation they are not the only issues. Providing the answers to
the Horizon Issues will not lead to complete resolution of the litigation. It should
however resolve one of the central issues about Horizon’s accuracy and functionality.
The Horizon Issues
The Horizon Issues are as follows. In the 3 Case Management Order of 1 March 2018,
leading counsel for the parties were ordered to meet and seek to agree the Horizon
Issues to be tried in March 2019. This was done, the issues were agreed by the parties
and approved by the court. I take the following from the Case Management Order dated
23 March 2018, which was the next order made, and was a Consent Order. The
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paragraph references to the pleadings were included in the list of Horizon Issues, which
were themselves appended to the Order of 23 March 2018 itself. These include at the
beginning an agreed definition of “the Horizon System”.
“AGREED LIST OF HORIZON ISSUES
definitions for the purpose of this list of issues
“the Horizon System” shall for the purposes of this list of issues mean the Horizon
computer system hardware and software, communications equipment in branch and
central data centres where records of transactions made in branch were processed, as
defined in the Generic Particulars of Claim (“the GPOC”), at §16 and as admitted by
Post Office in its Defence at §37.
BUGS, ERRORS AND DEFECTS IN HORIZON
Accuracy and integrity of data
(1) To what extent was it possible or likely for bugs, errors or defects of the nature
alleged at §§23 and 24 of the GPOC and referred to in §§ 49 to 56 of the Generic
Defence to have the potential (a) to cause apparent or alleged discrepancies or shortfalls
relating to Subpostmasters’ branch accounts or transactions, or (b) undermine the
reliability of Horizon accurately to process and to record transactions as alleged at §24.1
GPOC?
(2) Did the Horizon IT system itself alert Subpostmasters of such bugs, errors or defects
as described in (1) above and if so how?
(3) To what extent and in what respects is the Horizon System “robust” and extremely
unlikely to be the cause of shortfalls in branches?
Controls and measures for preventing / fixing bugs and developing the system
(4) To what extent has there been potential for errors in data recorded within Horizon
to arise in (a) data entry, (b) transfer or (c) processing of data in Horizon?
(5) How, if at all, does the Horizon system itself compare transaction data recorded by
Horizon against transaction data from sources outside of Horizon?
(6) To what extent did measures and/or controls that existed on Horizon prevent, detect,
identify, report or reduce an extremely low level of risk of the following:
a. data entry errors;
b. data packet or system level errors (including data processing, effecting, and recording
the same);
c. a failure to detect, correct and remedy software coding errors or bugs;
d. errors in the transmission, replication and storage of transaction record data; and
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e. the data stored in the central data centre not being an accurate record of transactions
entered on branch terminals?
OPERATION OF HORIZON
Remote Access
(7) Were Post Office and/or Fujitsu able to access transaction data recorded by Horizon
remotely (i.e. not from within a branch)?
Availability of Information and Report Writing
(8) What transaction data and reporting functions were available through Horizon to
Post Office for identifying the occurrence of alleged shortfalls and the causes of alleged
shortfalls in branches, including whether they were caused by bugs, errors and/or
defects in the Horizon system?
(9) At all material times, what transaction data and reporting functions (if any) were
available through Horizon to Subpostmasters for:
a. identifying apparent or alleged discrepancies and shortfalls and/or the causes of the
same; and
b. accessing and identifying transactions recorded on Horizon?
Access to and/or Editing of Transactions and Branch Accounts
(10) Whether the Defendant and/or Fujitsu have had the ability/facility to (i) insert,
inject, edit or delete transaction data or data in branch accounts; (ii) implement fixes in
Horizon that had the potential to affect transaction data or data in branch accounts; or
(iii) rebuild branch transaction data:
a. at all;
b. without the knowledge of the Subpostmasters in question; and
c. without the consent of the Subpostmaster in question.
(11) If they did, did the Horizon system have any permission controls upon the use of
the above facility, and did the system maintain a log of such actions and such
permission controls?
(12) If the Defendant and/or Fujitsu did have such ability, how often was that used, if
at all?
(13) To what extent did use of any such facility have the potential to affect the reliability
of the Branches’ accounting positions?
Branch trading statements, making good and disputing shortfalls
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(14) How (if at all) does the Horizon system and its functionality:
a. enable Subpostmasters to compare the stock and cash in branch against the stock
and cash indicated on Horizon?
b. enable or require Subpostmasters to decide how to deal with, dispute, accept or make
good alleged discrepancy by (i) providing his or her own personal funds or (ii) settling
centrally?
c. record and reflect the consequence of raising a dispute on an alleged discrepancy,
on Horizon Branch account data and, in particular:
(i) does raising a dispute with the helpline cause a block to be placed on the value of an
alleged shortfall; and
(ii) is that recorded on the Horizon system as a debt due to Post Office?
d. enable Subpostmasters to produce (i) Cash Account before 2005 and (ii) Branch
Trading Statement after 2005?
e. enable or require Subpostmasters to continue to trade if they did not complete a
Branch Trading Statement; and if so, on what basis and with what consequences on the
Horizon system?
Transaction Corrections
(15) How did Horizon process and/or record Transaction Corrections?”
Given the nature of the proceedings, and the disputes about the Horizon system which
were apparent on the face of the pleadings, I had indicated to the parties at an early
stage that the generic disputes about the operation of the Horizon system, which would
need expert evidence, would be resolved after the contractual issues (which became
called the Common Issues, and led to Judgment (No.3)). The issues were not foisted on
the parties by the court. The court approved the wording of the issues agreed by the
parties during the case management stage of the litigation. There was no difficulty about
this at the time.
However, the meaning of issues I and 3 in particular proved, at the Horizon Issues trial
itself, to be controversial. This is regrettable. Nor was any controversy aired with the
court prior to the actual trial. That too is regrettable. The court is well used to parties
who disagree over the answers to certain issues in litigation generally. It is
unsatisfactory when they also disagree about what any particular issue itself actually
means, or the question that is being posed (including being posed to experts) by an
issue, particularly once that issue has already been finalised and ordered.
Here, the two main areas of dispute over the meaning of the Horizon Issues were as
follows (there were others, but these are the most important ones). The claimants
approached Issue I as it was worded, requiring consideration of whether bugs, errors
or defects had the potential to cause discrepancies or shortfalls in SPMs’ branch
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accounts or transactions. In other words, this issue was not limited to consideration of
whether bugs, errors or defects had in fact actually caused discrepancies or shortfalls.
The Post Office, on the other hand, approached Issue I as requiring consideration of
whether bugs, errors or defects had in fact actually caused discrepancies or shortfalls,
and by reference to the claimants’ accounts specifically. This approach by the Post
Office sought, in my judgment, to narrow the scope of the Horizon Issues. This was not
raised at the case management stage.
The second main area of dispute concerned Issue 3. This includes consideration of the
concept of “robustness”. This word has been at the heart of the Post Office’s defence
of the Horizon system for many years. The Post Office has said publicly, and on many
occasions, that no computer system is 100% accurate and/or perfect but Horizon is
“robust”. This approach by the Post Office pre-dated the commencement of the group
litigation and was at the heart of the Post Office’s response to the increasing criticisms
from different quarters about Horizon. I deal with this important concept below in more
detail at [36] below. What the Post Office effectively means by this (in outline terms
only) is that the Horizon system can properly and safely be relied upon by the Post
Office for the purposes for which it is designed and intended. The parties — and this is
clear on the pleadings, as well as in the terms of Horizon Issue 3 ~ disagree over whether
Horizon is robust. In the Reply, the claimants challenged this in the following terms:
“It is therefore denied that Horizon ‘is robust and [...] is extremely unlikely to the cause
of losses in branches’ (paragraph 16). In fact, the relatively small chance of errors
admitted by the Defendant, would be likely to produce the very picture reflected in the
Claimants’ case.”
Mr de Garr Robinson for the Post Office was somewhat critical at the trial of the
drafting of both Issues 1 and 3. He was not involved in the drafting of the Horizon
Issues, as the Post Office had used different leading counsel. However, that criticism
overlooked that the Post Office had agreed to the wording of all the Horizon Issues
through its other leading counsel, and the wording had also been approved by the court.
Although there have been a total of three leading counsel altogether instructed for the
Post Office thus far at first instance, with a fourth leading counsel used by the Post
Office to try and appeal the Common Issues to the Court of Appeal, simply because
different counsel are used does not mean that the issues ordered to be tried become
different. The Horizon Issues themselves were appended to the Case Management
Order itself.
Lists of issues, whether in group litigation or generally, are very important. I can do no
better than quote Longmore LJ in Scicluna v Zippy Stitch Ltd [2018] EWCA Civ 1320,
who said at [14] “ever since the Woolf reforms, parties in the High Court have been
required to agree lists of issues formulating the points which need to be determined by
the judge. That list of issues then constitutes the road map by which the judge is to
navigate his or her way to a just determination of the case.” In this litigation, the
Horizon Issues are not only important, but are vitally important. The whole of the
proceedings concerns the operation and reliability of the Horizon system. It could quite
easily be called the Horizon Post Office Case. Although there are a great number of
different causes of action pleaded in both directions, both by the claimants and by the
Post Office, against one another, the central core of the case is about Horizon. I consider
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that the wording of both Horizon Issues I and 3 — indeed, all the Horizon Issues — to be
clear and had they not been, I would not have approved the agreed wording.
However, some explanation is necessary given the disagreement to which I have
referred.
The phrase “bugs, errors or defects” is sufficiently wide to capture the many different
faults or characteristics by which a computer system might not work correctly. The
parties in this litigation, usually but not always for convenience, would often refer
simply to “bugs”, and one part of the 24 Experts’ Joint Statement became known as
“the Bug Table”. Computer professionals will often refer simply to “code”, and a
software bug can refer to errors within a system’s source code, but “software bugs” has
become more of a general term and is not restricted, in my judgment, to meaning an
error or defect specifically within source code, or even code in an operating system.
Source code is not the only type of software used in a system, particularly in a complex
system such as Horizon which uses numerous applications or programmes too.
Reference data is part of the software of most modern systems, and this can be changed
without the underlying code necessarily being changed. Indeed, that is one of the
attractions of reference data. Software bug means something within a system that causes
it to cause an incorrect or unexpected result. During Mr de Garr Robinson’s cross-
examination of Mr Roll, he concentrated on “code” very specifically and carefully.
There is more to the criticisms levelled at Horizon by the claimants than complaints
merely about bugs within the Horizon source code.
The wording of Horizon Issue 1, “to what extent was it possible or likely for bugs,
errors or defects.....” is therefore very wide. Although that wording was proposed and
agreed by the parties, I considered at the case management stage when the Horizon
Issues were ordered, and still consider now, that these words clearly cover the whole
range of criticisms levelled at Horizon by the claimants, and the matters that could
potentially be wrong with the Horizon system without restriction. Bugs, errors or
defects is not a phrase restricted solely to something contained in the source code, or
any code. It includes, for example, data errors, data packet errors, data corruption,
duplication of entries, errors in reference data and/or the operation of the system, as
well as a very wide type of different problems or defects within the system. “Bugs,
errors or defects” is wide enough wording to include a wide range of alleged problems
with the system.
L also consider that the words “possible or likely” are also wide enough to cover both
ends of the spectrum of what the parties would have the court decide. In other words, it
is a neutrally worded issue of wide effect which does not, by its phrasing, indicate any
particular starting point or end point. “Possible” means something potentially could
happen; or whether it could happen or not. “Likely” means that something is, on the
balance of probabilities, more likely to have happened than not. The issue uses both
terms, and therefore poses a wide question so that the answer provided by the court will
be of maximum utility in the group litigation.
Finally, the word “potential”, in the clause “have the potential to (a) cause apparent or
alleged discrepancies or shortfalls relating to Subpostmasters’ branch accounts or
transactions, or (b) undermine the reliability of Horizon.....” clearly means, on its
express terms, that this issue is dealing with possible or prospective effects, rather than
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whether bugs, errors or defects have in fact caused actual or alleged discrepancies or
shortfalls. The way the wording of this issue was dealt with in the expert evidence will
be dealt with below.
If there were any ambiguity in Issue 1, and I do not consider that there is, the issue
specifically refers to certain passages in the pleadings. It would therefore be of
assistance to consider the pleadings. The relevant passages from the Particulars of
Claim as amended are as follows:
“23. However, the Claimants aver that there were a large number of software coding
errors, bugs or defects which required fixes to be developed and implemented. There
were also data or data packet errors. There was a frequent need for Fujitsu to rebuild
branch transaction data from backups, giving rise to the further risk of error being
introduced into the branch transaction records. The Claimants understand that Fujitsu
maintained a 'Known Error Log' relating to some or all of these issues which was
provided to the Defendant but which has not been disclosed.
24. Further, the Claimants aver and rely upon the following:
24.1. Insufficient error repellency in the system (including sufficient prevention,
detection, identification and reporting of errors), both at the data entry level and at the
data packet or system level (including data processing, effecting and reconciling
transactions, and recording the same);
24.1A bugs and/or errors and/or defects in Horizon and any data or data packet errors
had the potential to produce apparent shortfalls which did not represent a real loss to
the Defendant;
24.2. Horizon is imperfect and has the potential for creating errors (as the Defendant
has admitted in pre-action correspondence, in the Letter of Response, dated 28 July
2016, at paragraph 1.3);
24.3. bugs and/or errors have on some occasions produced discrepancies and/or
apparent shortfalls (as the Defendant has admitted in pre-action correspondence, in the
Letter of Response, Schedule 6) and such shortfalls may also have arisen from data or
data packet errors; and, further
24.4. the Defendant sought and/or recovered such alleged shortfalls from
Subpostmasters (as is presently understood to be admitted by the Defendant in the
Letter of Response, Schedule 6, paragraphs 4.1 to 4.5).”
The passages in the Defence which are identified in the Issue are paragraphs 49 to 56.
This is a lengthy series of paragraphs but as all are referred to expressly within Issue 1,
I will reproduce them all. These state the following:
“Bugs, errors or defects in Horizon
49. As to paragraph 22:
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(1) If and to the extent that the Claimants wish to assert that any of the shortfalls for
which they were held responsible were Horizon-generated shortfalls, it is for them to
make that distinct allegation and seek to prove it. Post Office notes that they do not
make the allegation in the GPoC. It further notes that, in paragraph 20 of their solicitors’
letter to Post Office's solicitors dated 27 October 2016, the Claimants make it clear that
they do not allege that there is a systematic flaw in Horizon or indeed any flaw which
has caused any Claimant to be wrongly held responsible for any shortfall.
(2) It is denied that Post Office has unreasonably or otherwise failed to provide
“obviously relevant disclosure" in relation to bugs, errors or defects in Horizon. There
has been no order or application for disclosure and, in the premises set out above, there
appears to be no basis for providing such disclosure.
50. Paragraph 23 is embarrassing for its lack of particularity, in that (amongst other
things) it does not identify the errors, bugs or defects on which the Claimants rely or
how "large" their number was or the period in which they are said to have occurred and
nor does it identify the transaction data that Fujitsu is alleged to have rebuilt, how
“frequent” was the need to rebuild it or the extent of the “risk of error" which is said to
have been introduced. In the premises, Post Office cannot plead to the first three
sentences of this paragraph. However:
(1) AI IT systems experience software coding errors or bugs which require fixes to be
developed and implemented. As is noted in paragraph 53 and 54 below, there are robust
measures in place in Horizon for their detection, correction and remediation.
(2) AIL IT systems involving the transmission of data over the internet experience data
or data packet errors during transmission and such systems routinely have protective
measures in place to prevent such errors creating any difference between the data
transmitted and the data received and retained by the recipient. Horizon has robust
controls making it extremely unlikely that transaction data input in a branch would be
corrupted when being transferred to, and stored in, Post Office's data centre in a manner
that would not be detected and remedied.
(3) Like all IT systems, Horizon has backups to guard against any loss of data due to
local hardware failure. Where hardware fails, the data on that hardware is recovered
from the backup. Post Office takes the term "rebuild" to refer to the situation before the
introduction of Horizon Online where a new terminal was introduced to a branch and
the data stored on the other branch terminals (or on a disc where it was a single counter
branch) was restored to the new terminal. In this context, Post Office does not accept
that there was a "frequent" need to "rebuild" data from back-ups.
(4) It is admitted that Fujitsu maintain a "Known Error Log". This is not used by Post
Office and nor is it in Post Office's control. To the best of Post Office's information and
belief, the Known Error Log is a knowledge base document used by Fujitsu which
explains how to deal with, or work around, minor issues that can sometimes arise in
Horizon for which (often because of their triviality) system-wide fixes have not been
developed and implemented. It is not a record of software coding errors or bugs for
which system-wide fixes have been developed and implemented. To the best of Post
Office's knowledge and belief, there is no issue in the Known Error Log that could
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affect the accuracy of a branch's accounts or the secure transmission and storage of
transaction data.
51. In paragraph 24, the Claimants again bundle many ambiguous and/ or misleading
allegations together. Post Office separates out and addresses those allegations in
paragraphs 52 to 56 below.
52. As paragraph 24.1 does not explain what is meant by "error repellency", what sorts
of errors are referred to, what is meant by "data entry level", what would constitute
"sufficient" prevention, detection, identification or reporting of these errors, or in what
respects the error repellency of Horizon was insufficient, Post Office cannot plead to
this paragraph. However, the general thrust of paragraph 24.1 is denied and the robust
controls, procedures and practices pleaded in paragraphs 53 and 54 below are noted.
53. As to paragraph 24.1A, it is a truism that errors or bugs in an IT system and data or
data packet errors have the potential to create errors in the data held in that system.
However, Horizon has at all material times included technical contro! measures to
reduce to an extremely low level the risk of an error in the transmission, replication and
storage of the transaction record data. These have varied from time to time and they
currently include the following:
(1) Horizon creates, transmits and stores trans action data in the form of "baskets". A
basket is a complete transactional session between a customer and Post Office and may
include one, several or many individual transactions taking place within the same
session. Horizon will not accept a basket of transactions that does not net to zero (i.e.
the value of any sales is set off by the value of any payment made or received). This
reduces greatly the risk of any error in the data entered within any given basket.
(2) If a basket of transactions fails properly to complete its transmission to the central
database (because, for example, of a power loss), the system rejects any partial
transmission and requests the full basket from the branch terminal. This reduces greatly
the possibility of baskets of transactions failing to be recorded.
(3) At the point of a basket being accepted by Horizon, it is assigned a unique sequential
number (a "JSN") that allows it to be identified relative to the other baskets transmitted
by that branch. This reduces greatly the risk of recording duplicate baskets or there
being a missing basket.
(4) Each basket is also given a digital signature, i.e. a unique code calculated by using
industry standard cryptography. If the data in the basket were to change after the digital
signature was generated, this would be apparent upon checking the digital signature.
(5) Initial data integrity checks are undertaken when baskets are received at the Post
Office data centre from a branch. Baskets are then copied from the central database to
the Audit Store where a digital seal is then applied (the "Audit Store Seal"). If the
baskets and/ or the data within the baskets were altered after the application of the Audit
Store Seal, this would be apparent when the baskets are extracted from the Audit Store.
(6) Horizon and the above controls are themselves subject to various audits and checks
including audits carried out by third parties.
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54. Further as to paragraph 24.1A, in addition to the technical controls referred to
above, there are several operational procedures and practices conducted by Post Office
and Subpostmasters that serve to increase the reliability of the data stored in the central
data centre as an accurate record of the transactions entered on branch terminals. These
currently include the following:
(1) For many transaction types, Post Office compares its own transaction record against
the corresponding records held by Post Office clients. If an error in Horizon were to
result in the corruption of transaction data, this should be revealed by the comparison.
(2) There are detailed procedures in place to address the risk of data loss resulting from
interrupted sessions, power outages or telecommunications failures in branches. These
are set out in the "Recovery - Horizon Online Quick Reference Guide" and Horizon
guides the system user through the recovery process (which include completing any
transactions that are cut short). These procedures should prevent any data errors arising
from interrupted sessions, power outages and telecommunications failures.
(3) The display of the transactions being effected on-screen at the branch terminal
allows the user of the system to identify any inconsistency between the information
shown on the screen and the transaction that the user has keyed into the system. If, for
example, a hypothetical bug in the terminal were to cause a key-strike on number $ to
be recorded as an input of number 6, this would be detected rapidly by system users,
given the large number of system users and the huge number of transactions effected
on Horizon.
(4) The accounting and record-keeping obligations placed on Subpostmasters reduce
the risk of any errors going undetected. For example, there is an obligation for each
branch to count and declare to Post Office the cash it holds on a daily basis, which
increases the likelihood of promptly detecting any overstatement or understatement of
the cash position on Horizon. If a Subpostmaster detects that an error has been made at
an early stage, its cause is more likely to be identified.
(5) Fujitsu operates industry standard processes for developing and updating Horizon
and for investigating and resolving any identified potential system errors.
55. As to paragraph 24.2, Post Office admits that, like all other IT systems, Horizon is
not a perfect system which has never had any errors or bugs. However, as indicated in
paragraphs 53 and 54 above, it has robust systems in place to identify them, fix them
and correct their consequences (if any).
56. As to paragraphs 24.3 and 24.4:
(1) There have been occasions on which bugs or errors in Horizon have resulted in
discrepancies and thus shortfalls or net gains in some branch accounts, as outlined in
Schedule 6 of the Letter of Response. It is denied (if it be alleged) that such bugs or
errors have affected any of the Claimants.
(2) On each occasion, both the bugs or errors and the resulting discrepancies in the
relevant branch accounts were corrected. Post Office took steps to ensure that it had
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identified all branches affected by the bugs or errors and that no Subpostmaster was
ultimately held responsible for any resultant shortfalls.
(3) Paragraphs 4.1 to 4.5 of Schedule 6 to the Letter of Response relate to the so-called
Suspense Account Bug. Without prejudice to the burden of proof, none of the branches
affected by the Suspense Account Bug are branches for which the Claimants were
responsible.
(4) None of the Subpostmasters whose branches were affected by the Suspense Account
Bug were ultimately held responsible for the shortfalls that it generated. The Claimants
are therefore wrong to understand Post Office as having admitted that it "recovered
such alleged shortfalls from Subpostmasters". Where Subpostmasters in the affected
branches had made good or settled centrally shortfalls that were later corrected, those
Subpostmasters received a payment or credit in the amount of the shortfall.”
It can be seen that the word “robust” is used throughout these passages of the Defence,
and “robust systems” in paragraph 55. Given “robustness” forms part of Issue 3 there
is no need separately to consider it at this stage when analysing the differences between
the parties about what Issue 1 means.
The passages in both parties’ pleadings which I have reproduced above show that it is
the potential, in general terms, of the Horizon system to have the effect complained of
that is the subject matter of Horizon Issue 1. In order to read Issue I in the manner
contended for by the Post Office, one would have to delete entirely the phrase “to have
the potential” from the issue. One would also have to substitute the term
“Subpostmasters’ branch accounts or transactions” with “the claimants’ branch
accounts or transactions”. That is not what Issue I states, it is not what the parties agreed
the issue would be, and it is not the issue that the court approved and ordered. In my
judgment, the approach of the Post Office to what Horizon Issue 1 actually means is
too narrow.
In my judgment, the correct construction of Horizon Issue I is that contended for by
the claimants. In other words, it involves a two-stage process. Firstly, consideration of
whether there were, or are, bugs, errors or defects in the Horizon system as alleged by
the claimants. Secondly, if the answer is that there were, or are, such bugs, errors or
defects, the second stage is to consider whether these have (or did have previously) the
potential to cause apparent or alleged discrepancies in SPMs’ branch accounts
generally. The issue is not whether such bugs, errors or defects did in fact cause such
discrepancies or shortfalls in the claimants’ accounts specifically. That separate or
different issue — the effect upon claimants” branch accounts - is a more claimant specific
one. It will have to be determined at some stage, for any of the claimants whose
individual claims come to trial in the future. It may require expert forensic accountancy
evidence. It was not ordered to be dealt with in the Horizon Issues trial. The Horizon
Issues were intended to be, and in my judgment on their wording are, generic issues
relating to Horizon and its operation. However, if a bug, error or defect is shown to
have had an actual impact on any SPM’s accounts, then by definition it has had the
potential to have such an impact. Actual impact on branch accounts can therefore be of
assistance in considering Issue 1 as ordered, namely including potential.
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The passages in the pleadings quoted above do show that the Post Office had, in
Schedule 6 to its Letter of Response, accepted the existence of two bugs or errors in
Horizon, one of which was called the Suspense Account Bug, but denied that the latter
had affected any branch accounts of any of the claimants. The passages in paragraph
56 of the Defence that explained that no SPMs had been “ultimately held responsible
for the shortfalls that it generated” reads a little differently with the hindsight provided
from evidence in two lengthy trials. This is because the Post Office’s Defence
effectively accepts that “Subpostmasters in the affected branches had made good or
settled centrally” the sums in question — that is the shortfalls in their branch accounts
that Horizon showed — but states that these were /ater corrected. Both the expressions
“making good” and “settled centrally” means that the Post Office had originally held
the SPM responsible for the losses, as the shortfalls formed part of their branch
accounts. These terms mean that the SPMs had either paid the money (making good)
or been given time to pay sums which the Post Office treated as a debt, even if they
were disputed sums (settling centrally), meanings given to these terms that were
confirmed by Ms Van Den Bogerd in her evidence for the Common Issues trial.
However, the pleading means that the Post Office had then, on the Post Office’s case,
subsequently corrected this impact on branch accounts which was why it pleaded no
SPMs were “ultimately held responsible”. Therefore there might prove not to be as
much between the parties on this point in reality, as the group litigation unfolds, as there
appears to be on the pleaded case. The Suspense Account Bug undoubtedly had actual
impact upon SPMs’ branch accounts.
The meaning of “robustness”
36.
37.
Turning to the disagreement about Issue 3, given the parties disagreed about whether
the Horizon system is (or was) “robust”, it is a fairly elementary step to consider the
meaning of that term, and how it is being used by the parties. Context is important so
far as the meaning of the word “robust” is concerned. If someone is in robust health, it
usually is taken to mean that they are healthy, or even very healthy. A robust exchange
of views can be a polite way of referring to an argument. Given the importance of the
concept to the Horizon system, its prominence in the Post Office’s defence of the
system, and its express inclusion (admittedly in inverted commas) in the Horizon
Issues, I asked each side in the litigation during oral closing submissions for a reference
from their pleadings or submissions for the meaning which they ascribed to the word. I
referred to this as their benchmark definition. Robustness was referred to by both sides
in the litigation in numerous places, but not always in the same precise terms, and clarity
is to be welcomed.
The claimants answered this by reference to the remainder of Issue 3, namely
“extremely unlikely to be the cause of shortfalls in branches” and explained that the
claimants had found the word robust “difficult to define” other than by reference to this.
This would mean therefore that it had no separate independent meaning other than as a
summary of the longer second part of Issue 3. In other words, a robust system would
be one that is extremely unlikely to be the cause of shortfalls in branches. The claimants
also implicitly, if not expressly, criticised use of the term both by the Post Office in its
pleadings and written submissions as being more aligned to public relations than as a
performance standard.
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40.
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The Post Office asked for some time to provide the reference that I requested. Given
the meaning of “robust” is so central in the Post Office’s defence of the Horizon system,
I granted the Post Office the time that was requested.
The Post Office subsequently, after the trial ended, submitted a short document entitled
“the Post Office’s case on the meaning of robustness”. This was not what was intended
when I sought a reference from the Post Office to their definition, and the document
submitted went rather further and made wider ranging submissions. The document did
state, so far as the meaning of the word is concerned, the following:
“In Post Office’s submission, the meaning of robustness is a matter for expert opinion.
Robustness is a well-established concept in the IT industry and is the subject of
academic study: see para. 361 of Post Office’s written closing”.
1 do not consider that the meaning of words is a matter for expert opinion. The two
experts in this case are IT experts, not experts in linguistics or the meaning of language.
However, the meaning of robustness within the field of IT is, arguably, a matter upon
which the experts’ opinions should be considered, not least because they were applying
that term to their expert exercise. The Post Office also relied upon the 1° Experts’ Joint
Statement which in respect of Issue 3 stated the following as agreed:
“There are different dimensions of robustness, such as robustness against hardware
failure, software defects and user error. The robustness of the system also depends on
the processes around it.
Robustness does not mean perfection; but that the consequences of imperfection must
be managed appropriately. If the extent of imperfection is too high, this would be very
difficult to do which would imply less robustness.
Horizon has evolved since its inception. Therefore, its robustness may have varied
throughout its lifetime. The level of robustness may have increased or decreased as the
system was changed.
‘The existence of branch shortfalls is agreed. The experts do not agree at this point as to
whether this indicates any lack of robustness.”
In the areas of disagreement in this Joint Statement, each expert provided the following.
Mr Coyne stated (inter alia):
“For the purposes of addressing the robustness of Horizon, I have applied the following
definition of robustness:
‘The ability to withstand or overcome adverse conditions, namely, the ability of a
system to perform correctly in any scenario, including where invalid inputs are
introduced, with effective error handling.’ ”
In consideration of the likelihood of Horizon to be the cause of shortfalls in branches,
Horizon is not determined to be robust in this regard because:
(a) it contained high levels of bugs, errors and defects as set out under Issue 1 above
which created discrepancies in the branch accounts of Subpostmasters;
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(0) it suffered failures of internal mechanisms which were intended to ensure integrity
of data;
(c) the system did not enable such discrepancies to be detected, accurately identified
and/or recorded either reliably, consistently or at all;
(d) the system did not reliably identify ‘Mis-keying’, which is inevitable in any system
with user input, and did not reliably have in place functionality to restrict users from
progressing a mis-key;
(e) it required numerous processes and workarounds to be in place to allow Fujitsu to
modify data already recorded by Horizon, which would not be required in a “robust”
system; and/or
(f) there were weaknesses and risks of errors and other sources of unreliability within
Horizon.”
(italics present in original)
Dr Worden stated in the same Joint Statement:
“The definition of ‘robust’ proposed above by Mr Coyne is not adequate, for reasons
given below. The term ‘robust’ is not, as implied in para 3.1 of the outline, either ill-
defined or a piece of IT public relations. Robustness (which is closely related to
resilience) is an engineering objective, and large parts of project budgets are devoted to
achieving it. It receives its meaning in the phrase 'robust against... [some risk or threat]',
and there are a large number of risks that business IT systems need to be robust against
~ such as hardware failures, communications failures, power cuts, disasters, user errors
or fraud. These are the dimensions of robustness.
In all these dimensions, robustness does not mean 'be perfect’; it means ‘address the
risks of being imperfect’. The extent of robustness is to be interpreted as: in how many
dimensions was Horizon robust? and: in each dimension, how large were the remaining
risks?
In my report I shall survey the evidence I have found that Fujitsu paid sufficient
attention to the dimensions of robustness, and that they did so successfully. I shall also
address evidence from Mr Coyne implying that Horizon fell short of its robustness
objectives.
In my current preliminary opinion, Horizon is a highly robust system, and this has
important implications for the other Horizon issues, notably issue 1.”
It can be seen therefore that Dr Worden in the Joint Statement did not agree Mr Coyne’s
definition, and expressly said it was not adequate. In any event, the meaning of any
word — even “robust”, or “robustness” — ought to be capable of description by the parties
themselves. Although on its face it did not appear that Dr Worden agreed with Mr
Coyne’s definition, a footnote in the Post Office first set of post-hearing submissions
suggested that Dr Worden was not disagreeing with the first part of Mr Coyne’s text,
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45.
46.
47.
48.
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in other words that part of the text that contained his definition of robustness (which
was in italics in the 1% Joint Statement). Obviously if the parties (or their experts) could
agree the definition to be applied so far as the Horizon System is concerned, that ought
to be identified. I therefore asked the Post Office via email whether it agreed with the
definition adopted by Mr Coyne, and if not, what its alternative definition was.
This led to a further document being received from the Post Office dated 18 July 2019.
It referred to the passage in the 1* Joint Statement (which is quoted at [40] above) as
“the agreed definition”. That rather overlooks that Mr Coyne identified the definition
of robustness which he was applying, and Dr Worden expressly disagreed with this in
the same Joint Statement under the heading “Areas of Disagreement”, and stated “the
definition of ‘robust’ proposed above by Mr Coyne is not adequate, for the reasons
given below”. It also overlooks that in the 3 Joint Statement, paragraph 3.1 had an
agreed entry which stated the following:
“Irrespective of how you define the detail of robustness, in line with most other large-
scale computer systems, Horizon's robustness has generally improved.
From our experience of other computer systems, Horizon is relatively robust. We agree
that 'robust' does not mean infallible and therefore Horizon has and will continue to
suffer faults. Robustness limits the impact of those faults and other adverse events.
This increase in robustness has. in part, developed from Post Office discovering
bugs/errors and defects in live use and then applying fixes and improving monitoring.”
(emphasis added)
Later in the same document of 18 July 2019 the submission was made by the Post Office
that “the robustness of a system is the effectiveness of the system in managing the risks
of imperfections (which are inevitable in any system) and their consequences”. It was
also submitted that “As Post Office understands it, this is what Mr Coyne meant when
in his comments in [the 1* Joint Statement] he defined robustness as “the ability to
withstand or overcome adverse conditions, namely, the ability of a system to perform
correctly in any scenario, including where invalid inputs are introduced, with effective
error handling”.
This was precisely the definition which Dr Worden, in his areas of disagreement on the
1* Joint Statement, described as “inadequate”. The end position therefore is as follows.
The claimants found “robustness” difficult to define in the abstract and tied it in with
the other wording of Horizon Issue 3; a robust system would be “extremely unlikely to
be the cause of shortfalls in branches”. That however is a consequence of how a robust
system would operate, not a definition of what robustness means.
The Post Office defined it as follows: “the robustness of a system is the effectiveness
of the system in managing the risks of imperfections (which are inevitable in any
system) and their consequences”. The Post Office was also prepared to accept Mr
Coyne’s italicised definition in the 1* Joint Statement, namely ‘The ability to withstand
or overcome adverse conditions, namely, the ability of a system to perform correctly in
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53.
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any scenario, including where invalid inputs are introduced, with effective error
handling”.
Mr Coyne applied the definition he set out in italics in the 1° Joint Statement, quoted
in the immediately preceding paragraph of this judgment and at [41] above.
Dr Worden’s definition was as follows:
“Robustness (which is closely related to resilience) is an engineering objective, and
large parts of project budgets are devoted to achieving it. It receives its meaning in the
phrase ‘robust against... [some risk or threat]', and there are a large number of risks that
business IT systems need to be robust against - such as hardware failures,
communications failures, power cuts, disasters, user errors or fraud. These are the
dimensions of robustness.
In all these dimensions, robustness does not mean ‘be perfect'; it means ‘address the
risks of being imperfect’. The extent of robustness is to be interpreted as: in how many
dimensions was Horizon robust? and: in each dimension, how large were the remaining
risks?”
The Post Office also submitted that Mr Coyne’s definition was not “materially
different” to that of Dr Worden.
The Post Office made submissions in paragraph 3(b) of the written submissions dated
18 July 2019 on robustness that stated that Mr Coyne cannot have intended to exclude
the effect of countermeasures when he considered the concept of robustness. I shall
return to this topic when dealing with countermeasures. This is because some of the
countermeasures considered by Dr Worden are not parts of the Horizon System at all,
such as SPMs noticing adverse entries in their branch accounts, and the manual issuing
of Transaction Corrections (TCs) by the Post Office (which both parties agree are
outside of the Horizon System).
I do however accept the Post Office’s submissions that there is not a great or material
difference in the definitions of robustness adopted by the parties’ experts. I do not
accept the claimants’ submission that robustness is difficult to define. Dr Worden
defined robustness by using what he termed as “the dimensions of robustness”. It is
rather circular to describe the meaning of robustness as being “robust against” some
particular risk. Although Mr Coyne provided his definition in the 1% Joint Statement,
the statement by Dr Worden that this was “inadequate” may only have been aimed at
the entirety of Mr Coyne’s entry in the areas of disagreement, as effectively accepted
by the Post Office in their most recent written submissions on the subject. Whether that
is an explanation of the lack of agreement in the Joint Statement, I also agree with the
Post Office that Mr Coyne’s definition is not materially different to that used by Dr
Worden.
Robustness is indeed an engineering concept. It means the ability of any system to
withstand or overcome adverse conditions. A robust system is strong and effective in
all or most conditions. The robustness of a system is the effectiveness of the system in
managing the risks of imperfections (which are inevitable in any system) and their
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56.
57.
58.
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consequences; this is the same meaning as how robustness was described in the Post
Office’s written submissions dated 18 July 19. Robustness does not mean perfection.
The exercise necessary above, to arrive at the definition of robustness in [54] above, is
not judicial pedantry. Given the central importance of robustness to the disputes about
the Horizon System, and the Horizon Issues, it is in my judgment essential. It is mildly
surprising, given how central the assertion of robustness has been to the Post Office’s
defence of the Horizon System, that Dr Worden’s interpretation of the term has been
relied upon so heavily by the Post Office, given the term was used by the Post Office
for some years prior to his involvement.
However, regardless of that passing observation, I find that both experts correctly
understood what robustness in fact means, and applied the definition at [54] above in
considering their expert evidence. I will return to the expert evidence in some detail
later in the judgment, including in the Technical Appendix.
Features of this Group Litigation
There are many different ways of managing group litigation. The subject matter of such
litigation is different from group to group, and what is appropriate in one set of
proceedings will not necessarily be the best approach in another set. Group litigation
may involve many claimants — even tens of thousands, in some cases — all with what is
essentially the same type of claim, governed by a number of common issues that apply
across all or most of the cases. Some group litigation may involve similar numbers of
claimants, all with similar claims that are factually different. In this case, there are 584
claimants, which in the context of some group litigation, is not very many, although it
is still in the many hundreds, and the period of time over which the relevant events are
said to have taken place is about 16 or 17 years. There are different aspects to each
individual case, but to deal with the litigation efficiently, cost-effectively and
proportionately it is simply not feasible for the same judge to try all the claims, one
after the other, in full on all of their respective merits. Such a process would take several
years. It is not what group litigation is intended to achieve.
The concept of group litigation is that the Managing Judge, whoever he or she may be,
with the assistance of the parties insofar as that may be available, selects the most
suitable mechanism for that particular set of proceedings in order to achieve compliance
with the overriding objective. That will — or should — lead to cost and time saving. That
does however require a high degree of co-operation from the litigants. Here, my
intention of holding a substantive trial each judicial term onwards to resolve as much
of this group litigation as possible, as quickly as practicable, became simply
unachievable as a result of the issuing of the recusal application by the Post Office,
explained at [5] above. A further trial in the autumn of 2019 also became undesirable
as a result of the parties wishing to have time to consider mediation, and to find out
whether the Court of Appeal would grant the Post Office permission to appeal on the
contractual issues in Judgment (No.3). Over the numerous hearings and two full
substantive trials that I have conducted, I have gained the distinct impression that the
Post Office is less committed to speedy resolution of the entire group litigation than are
the claimants, but it is not possible to state with finality whether that is correct.
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60.
61.
62.
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All litigation is important to those involved in it. In this group litigation, all the
claimants are of the view summarised at [10] in Judgment (No.3) in terms of the
behaviour of the Post Office. Recitation that the claimants are of that view does not
mean that any similar views are held by the court, or that any decisions have yet been
made by the court on that point one way or the other. The total sums claimed by way
of liquidated sums (excluding heads of general damages not yet quantified) are
approximately £18.7 million. The Post Office counterclaims for certain sums against
the claimants and also alleges fraud. Reputations are plainly at stake on both sides, That
is the case in many types of proceedings, particularly high-profile ones that attract press
interest. However, that sum of money is not large, in the context of large scale and
protracted litigation. The parties’ joint costs are approximately now £27 million, and
because of the notification provisions in one of the earlier Case Management Orders I
made, regular notifications of the total sum of costs are made to the court. The Post
Office alone spent over one million pounds in little more than a month earlier this year;
the notification letter of 13 May 2019 from its solicitors stated that its costs were in
excess of £12,800,000; by the time of its letter of 25 June 2019, the Post Office’s costs
were in excess of £13,900,000. Both this level, and rate, of expenditure is very high,
even by the standards of commercial litigation between very high value blue chip
companies.
I have already explained that the Post Office has now used four different leading
counsel, and it also engaged a second commercial firm of solicitors to act for it on its
appeal. The claimants are funded by means of litigation funding, explained in Judgment
No.3 so far as it is relevant. The claimants are ordinary individuals who ran branch Post
Offices, and the Post Office is publicly funded, so none of the parties are high value
FTSE 100 companies. Not all of the Post Office’s costs will be recoverable costs
regardless of the outcome, not least due to the existence of two Costs Management
Orders which are in smaller amounts than the Post Office’s rapidly growing grand total,
but the total figures still represent real expenditure of actual money.
These proceedings also have the additional feature of criminal convictions on the part
of some SPMs. As explained at [10] in Judgment (No.3), there is a Criminal Cases
Review Commission (“CCRC”) review underway in respect of the convictions of some
claimants. I have been told that these are subject to a stay pending judgment upon the
Horizon Issues. I have explained this before in open court, but matters such as criminal
convictions are no part of this group litigation. This court has no jurisdiction over such
matters.
Although criminal convictions are no part of these proceedings, examples of alleged
software bugs, errors and/or defects affecting branch accounts, which led to certain
adverse consequences for SPMs, did form part of the subject matter of the Horizon
Issues trial. Given the impact (actual or potential) upon branch accounts, with the
potentially adverse implications for SPMs generally in the background, and given the
way that the SPM witnesses in this trial were cross-examined (as with the Common
Issues trial, some being accused expressly of criminal offences), criminal convictions
were not part of the trial, but were part of the background. In the claimants’ oral closing
submissions, Mr Green QC for the claimants identified a high level chronology of what
he called “doubling up”, by which he meant bugs, errors and/or defects that led to
certain entries in branch accounts being “doubled” incorrectly. He did so by specific
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reference to allegations by a particular SPM who had been convicted of a criminal
offence.
Mr de Garr Robinson QC for the Post Office objected to this, complaining of what he
said was jury advocacy. In the course of what became an increasingly vigorous
exchange between counsel at the very end of the trial he stated, by reference to what he
said were the rules of commercial litigation, that “one of those rules is that one doesn't
say things incautiously that might have an impact on evaluations being done in another
place in relation to different proceedings.”
Prior to considering the “rule” to which he was referring — it is not one of the Civil
Procedure Rules, so far as I am aware — it was therefore necessary to identify exactly
what “different proceedings” were being referred to in this disagreement between the
parties. There are five elements to this matter.
(1) Firstly, it had never been raised by any party at any stage during this group litigation
that there were any criminal prosecutions currently underway such that it was necessary
to consider any reporting restrictions for the group litigation. I expressly raised this with
the Post Office on the occasion referred to at [62] and [63] above, who confirmed there
were no such prosecutions underway. The “different proceedings” to which Mr de Garr
Robinson referred were the proceedings already before the CCRC.
(2) Secondly, the possibility of future (as opposed to current) criminal prosecutions, or
the potentially criminal impact upon individual SPMs, did more than hover in the
background to the Horizon Issues trial. Some claimants who gave evidence in this trial
were expressly accused by the Post Office of criminal offences in cross-examination in
this trial, something which had also occurred in the Common Issues trial. It should be
clearly understood that any findings I make in respect of any witnesses do not determine
with finality any issues to be tried in any particular trial to follow, including the trial(s)
of their individual claims.
(3) Thirdly, the rule to which leading counsel for the Post Office referred was not
identified. Journalists must be alive to the risk of serious prejudice when criminal
proceedings are live, as a result of the Contempt of Court Act 1981, and are thereby
restricted in reporting matters generally in that respect. That statutory provision
replaced what had been referred to as the sub judice rule, but this did not relate to
statements made in evidence in open court. The principle of open justice is a most
important one and there were no restrictions imposed on any reporting of the Horizon
Issues trial (nor the Common Issues trial) at all, nor were any sought by the claimants
or by the Post Office.
(4) Fourthly, there was no specific restrictions imposed on the parties by the court in
terms of the evidence they could adduce and what could be said by way of submissions
(written or oral), due to potential impact upon any “different proceedings”. I have not
heard any argument on the matter, but I do not consider it would be proper to do so in
any event. It was also not argued before me that the CCRC proceedings, which are
subject in any event to a stay pending at least part of the outcome of the group litigation,
are in any way of such a character that reporting of the Horizon Issues trial ought to be
restricted in any way, or such that they could be prejudiced by the group litigation.
Indeed, the presence of a stay of those proceedings pending the outcome of some of the
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group litigation issues would suggest directly to the contrary. The objection therefore
by the Post Office to the way in which the claimants sought to make closing
submissions on the actual impact upon different SPMs of what were said to be bugs,
errors and defects in the Horizon System was, so far as it could be understood, not a
well-founded one.
(5) Finally, the claimants by their counsel were trying to draw parallels between what
had happened to one particular SPM regarding “doubling up”, and numerous entries in
internal Fujitsu and Post Office documents prior to that of similar “doubling”
occurrences being caused by bugs, errors or defects. Those parallels are obvious on the
face of the documents. The degree to which the CCRC find such parallels of assistance,
if at all, is a matter entirely for them. The Post Office submitted most strongly that these
different references were not to one single bug, but were references to a number of
different issues or bugs that had been experienced in Horizon over the years. Whether
that makes the claimants’ point for them or not, it is important to remind all the parties
that the issues in this litigation are not going to be decided with sympathy, or lack of it,
coming into account in the analysis in any respect whatsoever.
Mr Green for the claimants submitted that the Post Office was “trying to distract from
the stinging nature of the underlying documents by objecting” to the submissions and
that the Post Office may be finding it “uncomfortable” to have its own documents, in a
particular date range, highlighted by reference to particular criminal cases, prosecutions
mounted by the Post Office, and the experiences of SPMs in those cases. Certainly the
Post Office and Fujitsu have been exposed to a degree of scrutiny in this litigation which
does not appear to have occurred before; however, there has not been litigation of this
type on these issues before.
The claimants and the Post Office doubtless know this already — certainly their legal
representatives will - but given the high profile nature of this dispute and the fact that
this judgment may be read by those other than the parties themselves, I will make the
position very clear:
1, The Senior Courts of England and Wales (who acquired this name by reason of the
Constitutional Reform Act 2005) comprises the Court of Appeal, the High Court and
the Crown Court.
2. The Court of Appeal has two divisions, Criminal and Civil. Appeals from the High
Court are to the Civil Division. Appeals from the Crown Court are to the Court of
Appeal Criminal Division, also known as the CACD.
3. The High Court is the highest court of first instance in civil cases.
4. The: Crown Court is the highest court of first instance in criminal cases. Some
criminal matters are dealt with by the High Court (by way of Divisional Court) but these
are narrow in scope and do not arise in any respect concerning the group litigation. All
appeals against both convictions and sentence from the Crown Court are dealt with by
the CACD.
5. The Criminal Cases Review Commission, or CCRC, is a statutory body responsible
for investigating alleged miscarriages of justice in England, Wales and Northern
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Ireland. It was established by section 8 of the Criminal Appeal Act 1995. It is an
independent non-departmental government body, and has the power to refer cases to
the CACD.
6. This group litigation is concerned only with the issues arising in the civil claims
being brought against the Post Office by the claimants, and the Post Office’s
counterclaims. It will result in a series of judgments on those issues which are public.
What, if anything, the CCRC do in any respect following any of the judgments is
entirely a matter for the CCRC and forms absolutely no part whatsoever of the group
litigation.
7. This court has no jurisdiction in respect of any of the convictions of those SPMs who
were successfully prosecuted by the Post Office. Although the presence of criminal
convictions does have evidential effect in respect of individual claims by individual
claimants who have been convicted of false accounting, these have not arisen in either
of the two substantive trials held to date (Common Issues and Horizon Issues) nor will
they arise in either of the next two (the principles governing Heads of Loss, and then
some individual claims).
There has been no restriction imposed on any party, or any witness, in this group
litigation by the court in terms of the evidence that could be adduced, or submissions
that could be made, with one exception. Mr Henderson of Second Sight was subject to
a restriction upon his evidence by reason of the terms of an agreement that he had
entered into with the Post Office when Second Sight were engaged in what was
originally intended to be consensual resolution of the claims. This was called the
Second Sight Mediation Scheme. This feature of the evidence of Mr Henderson is a
matter which is dealt with in more detail in Part D of this judgment. It was a restriction
imposed upon him, or agreed, by the parties, and the court was not involved in that
restriction in any way.
Turning to a different matter, I have already made certain criticisms of the Post Office
in Judgment (No.3) in terms of how it had conducted itself in the litigation, and I had
also made criticisms of some of its senior witnesses. One of those witnesses, Ms Van
Den Bogerd, was also called as a witness in the Horizon Issues trial. So far as I am
concerned, she came to the court for the Horizon Issues trial with a clean slate in terms
of whether her evidence on the Horizon Issues would be accepted or not. A different
way of putting the same point is that simply because certain adverse findings had been
made concerning the evidence she had given in the Common Issues trial, this did not
mean that I adopted any particular starting position so far as her factual evidence was
concerned for this trial. The court was entirely neutral in terms of starting position.
Although it was certainly not a point that went to her credit that I had already made
adverse findings of the accuracy of her evidence in the Common Issues trial, that did
not mean that I started with any fixed view of the likely accuracy of her evidence in the
Horizon Issues trial. Her evidence in the Horizon Issues trial is dealt with at [203]
below.
Further, before turning to the detail of each side’s evidence, an approach was adopted
by the Post Office on occasion of seeking to adduce what was (or should have been) in
reality evidence of fact, but by way of submission, or points made “on instruction”.
Sometimes, depending upon the nature of the subject matter, such an approach is
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understandable or unavoidable, and may be unobjectionable. It is not therefore sensible
to state that this should never be done in any conceivable circumstance in any trial.
However, on important points that have been dealt with by a particular witness in their
evidence of fact, it is not a suitable device to adopt. This was particularly done in terms
of the cross-examination of Mr Coyne concerning evidence already given by Mr
Godeseth in his cross-examination, about alteration by Fujitsu of a particular branch
account. I deal with that in detail at [376] to [379] below.
This was also done in Appendix 2 of the Post Office’s Closing Submissions, where
(sometimes detailed) factual explanations were given in respect of bugs in the Bug
Table. That appendix was compiled by different teams of solicitors and counsel,
something explained by the Post Office when, some months after it was submitted, they
discovered that three pages were missing and sought permission to serve them rather
late. I granted permission for them to be added, as they had been prepared before the
deadline for service and omitted due to an administrative oversight.
Submissions should not contain evidence, or positive evidential assertions, that are not
present in the evidence served in the trial. This is a fundamental point. I provide some
examples in the Technical Appendix by reference to specific entries for specific bugs.
Blurring (or ignoring) the lines between submission and evidence is entirely unhelpful.
Evidence is something that comes from a witness (lay or expert) and which the
opposing side is entitled to test by way of cross-examination. It is not appropriate for
detailed factual assertions to be made in closing submissions that are not directly
referable to evidence in the case. There is no way such factual assertions can be tested;
if they come in closing submissions, there is no way that the opposing party can deal
with those assertions in their own evidence, or even put relevant points to witnesses for
the other party in cross-examination.
Further, this is not a case that is being tried in a Specialist List, such as the Technology
and Construction Court — it is a general Queen’s Bench Division case — but it readily
could have been tried in such a list. It contains a great deal of technical subject matter,
particularly in this trial dealing with the Horizon Issues. The two IT experts have each
given evidence in other computer litigation before. Such subject matter, and such expert
evidence, is readily suited to analysis by the parties and precision, which is the usual
approach of courts generally. In my judgment, this is particularly important in technical
matters such as these. Bluster, unfounded assertion in cross-examination, detailed
technical explanations of fact given “on instruction” and submission are rarely helpful.
Finally, there has been a vast amount of highly detailed material deployed by both sides,
not simply evidence of fact, and expert evidence, but also reference to a great many
documents. The use of an electronic bundle has made this easier to manage than
otherwise, but written submissions alone were in excess of 1100 pages in total from
both sides. It is neither possible nor desirable to recite in this judgment, or in the
Technical Appendix, or resolve, every single disputed item, or every single disputed
fact, no matter how minor. I only make findings in this judgment that are necessary to
enable me to resolve the Horizon Issues themselves. Simply because I do not
specifically refer to a particular submission or piece of evidence, it should not be
thought that I have not had regard to it. I have considered all the material, evidence
(both factual and expert), submissions, and passages in contemporaneous documents,
multiple times. The experts’ agreements in particular have been of great assistance, but
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everything has been considered. This judgment, together with the Technical Appendix,
will be of substantial length, and to recite everything would very probably make it of
unmanageable proportions. It is in any event far longer than is ideal, but that is partly
explained by the fact it deals with the life of a complex computer system that spans
some 18 years.
In adopting this approach, I have borne very much in mind the overriding objective in
the Civil Procedure Rules, the need for proportionality, but also the obvious need to
provide a reasoned judgment. I have also taken specific account of the dicta of Males
LJ in Simetra Global Assets Ltd and another v Ikon Finance Ltd and another [2019]
EWCA Civ 1413. That case concerned foreign exchange trading, and claims for
dishonest assistance and damages for deceit and conspiracy against a total of 12
different defendants, both personal and corporate. Although it concerns those matters,
plainly very different to the Horizon Issues, it does state generally what ought to be
included in a judgment. The requirement for a judge to give adequate reasons in a
judgment is analysed at [37] to [46], with the expression “the building blocks of the
reasoned judicial process” (used by Henry LJ in Glicksman v Redbridge Healthcare
NHS Trust [2001] EWCA Civ 1097) approved at [42] by Males LJ. Four points are
summarised at [46] of Simetra:
“Without attempting to be comprehensive or prescriptive, not least because it has been
said many times that what is required will depend on the nature of the case and that no
universal template is possible, I would make four points which appear from the
authorities and which are particularly relevant in this case. First, succinctness is as
desirable in a judgment as it is in counsel's submissions, but short judgments must be
careful judgments. Second, it is not necessary to deal expressly with every point, but a
judge must say enough to show that care has been taken and that the evidence as a
whole has been properly considered. Which points need to be dealt with and which can
be omitted itself requires an exercise of judgment. Third, the best way to demonstrate
the exercise of the necessary care is to make use of "the building blocks of the reasoned
judicial process" by identifying the issues which need to be decided, marshalling
(however briefly and without needing to recite every point) the evidence which bears
on those issues, and giving reasons why the principally relevant evidence is either
accepted or rejected as unreliable. Fourth, and in particular, fairness requires that a
judge should deal with apparently compelling evidence, where it exists, which is
contrary to the conclusion which he proposes to reach and explain why he does not
accept it.”
I am acutely conscious that the first of those points, succinctness, is not likely to be
achieved in this judgment. This is not only due to the nature of the subject matter, the
Horizon Issues, but also the fact that both Legacy Horizon and Horizon Online are
involved, and the system was brought in some time ago, namely the year 2000. Due to
the nature of the claims brought (and the limitation issues certain to arise), the
functionality of the Horizon system(s), robustness, and the other Horizon Issues had to
be dealt with at an early stage in the group litigation. I will return to the other three of
Males LJ’s four points after my review of the evidence, as well as his comments on the
importance of contemporaneous documents at [48] and [49] of Simetra. 1 do this at
[937] and following below.
Evidence of Fact: The Claimants
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The claimants originally served statements from a greater number of witnesses of fact
than were in fact called at the trial. This was because, just before the Pre-Trial Review
on 14 February 2019, the Post Office objected to the evidence of two particular
individuals. Very shortly before the Common Issues trial, the Post Office had issued an
application to strike out a significant number of passages in the six Lead Claimants’
witness statements, and that application had been dismissed in Judgment (No.2) “Strike
Out”. On this occasion, although no application to strike out was issued, the Post Office
sought a ruling at the PTR in respect of the evidence of Mr McLachlan and Mr
Henderson.
Mr McLachlan had been called as an expert witness in the criminal trial of Mrs Seema
Misra, a SPM at West Byfleet in Surrey who was charged both with theft from her
branch, and also false accounting. He was called for the defence. The sums in question
were approximately £74,000. Mrs Misra pleaded not guilty, and her defence was that
the Horizon system was to blame. She was convicted by a jury after a trial in late 2010
at Guildford Crown Court, and was sentenced to a term of imprisonment of 15 months.
She was pregnant at the time of her conviction and imprisonment. Expert evidence was
called by the Post Office at her trial from Mr Gareth Jenkins from Fujitsu. Mr Jenkins
was not called as a witness by the Post Office in the Horizon Issues trial before me, but
a large amount of the evidence from the Fujitsu witnesses was attributed to information
directly given to them by Mr Jenkins. This was a controversial matter between the
parties at the Horizon trial. The Post Office did not proffer an explanation for Mr
Jenkins’ non-appearance as a witness; they were not obliged to do so. However, in their
closing submissions and after all the evidence had been called by both parties, they did
so. The explanation provided was by way of submission and not evidence. This is a
matter with which I deal with further at [509] to [5 13] below. Prior to the PTR, the Post
Office objected to Mr McLachlan’s evidence on the basis that it contained opinion
evidence and the claimants did not have permission for it, which is something required
under the CPR. This was resolved by the claimants deciding not to call Mr McLachlan,
and explaining at the PTR itself that they would not call him. On the face of it, the
claimants were wise to concede this point as if his statement had included opinion
evidence, the Post Office would have had a valid point of. objection. I have not therefore
considered the evidence of Mr McLachlan which forms no part of the case.
The other witness whose statement was subject to objection was Mr Henderson. Mr
Henderson is a Director of a company called Second Sight Support Services Limited
(“Second Sight”). Second Sight was appointed by the Post Office to conduct a review
into problems with the Horizon system in July 2012. A number of reports were
produced by Second Sight, and the Post Office responded to these. These reports were
as follows:
1. Interim Report dated 8 July 2013;
2. Briefing Report Part One dated 25 July 2014;
3. Briefing Report Part Two version 1 dated 21 August 2014;
4. Briefing Report Part Two version 2 dated 9 April 2015.
The Post Office submitted at the PTR that I should give a ruling concerning those parts
of Mr Henderson’s witness statement upon which the Post Office was required to cross-
examine, and those parts upon which it was not. This was said to be justified by a
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concern the Post Office had, namely that if it were required to cross-examine upon the
correctness or accuracy of the contents of the Second Sight reports themselves, the
Horizon Issues evidence would not be capable of being completed within the time
estimate for the trial, which at that stage was 16 days. Mr de Garr Robinson also
expressed concern that any failure by the Post Office specifically to cross-examine upon
any particular point in any of the accompanying Second Sight material, rather than the
actual witness statement of Mr Henderson, would lead to the claimants submitting that
such a point was not challenged, and that any such point would therefore be taken by
the court as being formally agreed by the Post Office. I declined to give a ruling
directing the Post Office upon those parts of Mr Henderson’s statement which should
be subject to cross-examination. This was for three reasons.
Firstly, the answers to the different Horizon Issues would not be determined based on
the accuracy or correctness of the contents of the Second Sight reports themselves. The
court was to hear detailed expert evidence from two IT experts whose evidence would
go directly to the Horizon Issues. Whether the Second Sight reports were, or were not,
correct in their conclusions (which were generally critical of Horizon) would not form
part of that process, and would not even qualify as a sideshow. Certainly their contents
would not be determinative of the Horizon Issues in the group litigation. I have had no
regard to the contents of the different Second Sight reports, nor to the Second Sight
conclusions, in arriving at the answers to the Horizon Issues. I am aware that all of the
Second Sight conclusions were challenged by the Post Office.
Secondly, it is not for the court in civil litigation to identify in advance to any litigant
that it need not cross-examine upon particular evidence of fact of the opposing party.
This is particularly so in a time-limited trial such as this one, but in my judgment is a
general point of principle. The court was effectively being asked to direct the Post
Office as to how it should conduct its case, and also consequentially, about how much
of its time at the trial should be used for particular witnesses. This is not the function
of the court. I was aware that Mr Henderson’s evidence was challenged by the Post
Office. It is for this reason that he was to be cross-examined. How the Post Office chose
to do that, the trial time its advisers chose to allocate to that exercise, and which (if any)
parts of the statement were to be challenged and how, were all matters for the Post
Office to decide.
Thirdly, it would in any event be wholly unconventional in a time-limited trial dealing
with the subject matter of this group litigation for the court to give any weight to any
submissions by the claimants that particular points of criticism or detail in such detailed
documentation as the Second Sight reports were essentially “accepted” by the Post
Office because they had not been specifically challenged in cross-examination. There
is never sufficient time, in any time limited trial, to cross-examine upon everything. A
time limited trial in the 21 century is not conducted in the same manner as a trial would
have been many years ago, particularly in a detailed technical dispute such as this one.
There was no forensic route available to the claimants whereby a failure to cross-
examine upon the Second Sight conclusions or reports, whether due to the length of the
trial or otherwise, would or could lead to a conclusion by the court that some aspect of
the Second Sight reports was agreed or admitted by the Post Office, when it plainly was
not. The period in question in the group litigation spans some 18 years. If attention is
to be paid to other court users, the overriding objective and the Civil Procedure Rules,
it is simply not possible (nor desirable) for any trial judge to permit the parties to have
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unlimited time to cross examine upon everything. The quid pro quo of that is a party
cannot be expected to cross examine upon everything. There should have been no
concern on the part of the Post Office that the Second Sight report(s) would be taken as
not challenged by the Post Office unless their contents were subject to cross
examination. Given there appeared to be such a concern, I explained the position at the
PTR. The claimants also expressly said at the PTR that no such point would be taken.
That latter element was unnecessary, as whether the point was taken by the claimants
or not, it would not have been accepted.
The position was therefore clarified or explained at the PTR and the Post Office,
notwithstanding that no formal ruling was made on those specific parts of Mr
Henderson’s statement that it had to challenge in cross-examination, appeared to be
content. A transcript of this hearing is available. The contents of the Second Sight
reports were not cross-examined upon when Mr Henderson gave evidence, but in my
judgment there was no need for them to be. As it happened, Mr Henderson was not
cross-examined for very long, but that does not matter. I have not taken any account of
the contents of the Second Sight reports in deciding the Horizon Issues.
The claimants therefore called the following witnesses of fact. For the reasons that I
explain below in relation to Mr Roll for the claimants, and Mr Godeseth for the Post
Office, I consider these two witnesses in particular to have been of the greatest
assistance in resolving the Horizon Issues. However, all of the factual witnesses
contributed to my understanding of the system over the years, both generally and
specifically. The specific experiences of the claimant witnesses who gave evidence
about what occurred in their branches are, if I accept them, specific examples of the
working of the Horizon system at the branch Post Office end in practice. I will deal
with each of the witnesses in turn.
Mr Latif
85.
86.
Mr Adrees Latif was the SPM at Caddington Post Office in Caddington, Bedfordshire,
since 2001 until late September 2018. His appointment with the Post Office therefore
ended after the litigation commenced, and he was subjected to an audit in September
2018. He was cross-examined by video link from Islamabad, as it had been necessary
for him to travel to Pakistan as a result of a family bereavement. He left the UK on 19
February 2019, and he travelled from Kashmir to Islamabad to give his evidence by
video.
He gave evidence about two specific incidents. One occurred in July 2015 and related
to the transfer of £2,000 from the AA stock unit to the stock unit designated SP1.
Originally his statement had said it was the SJ1 stock unit but this was a typographical
error which he readily accepted. He successfully transferred the £2,000 from AA, but
when he went to the SPI unit, the same sum had not transferred into that unit
successfully. There was no explanation for this that he could come up with, including
having checked his own CCTV, and he was sure he had carried out the transaction
correctly — it was not an unusual transaction. He described the sum of £2,000 as having
“simply disappeared from Horizon” and explained that this would lead to a shortfall in
the branch account for that sum.
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The second incident occurred in January 2018 in relation to Camelot and scratch cards.
His heading for this he corrected to “Transaction Acknowledgement Issue”. He
explained that certain information was sent by Camelot to Horizon twice, and the Post
Office sent out a notice stating that due to this mistake by Camelot, a Transaction
Correction or TC would be issued. The correction occurred and he accepted it, but the
stock figure for scratch cards in his branch on Horizon remained unchanged. This
therefore showed his branch as having £1,000 more in scratch cards than was actually
present in the branch. This issue was still outstanding as at the date of his amended
statement which was 1 March 2019, and remained outstanding as at the date of his
cross-examination which was 12 March 2019. This is, obviously, a period well in
excess of one year.
The Post Office’s case on the £2,000 was put methodically to Mr Latif. That regarding
the stock transfer is best summed up in the evidence of Ms Van Den Bogerd, who stated
that provided certain steps or action were carried out correctly, what Mr Latif had said
happened simply would not occur. She said, inter alia “providing these two actions are
completed, the stock unit from where the cash is transferred should not show a
discrepancy" (emphasis added). As she put it, her “strong belief is that Mr Latif has
recalled these events incorrectly”. She also said that “the records that Post Office has
reviewed do not support what Mr Latif has said and I believe that he may have mis-
recollected events from 3 years ago”. The Post Office’s case was essentially that Mr
Latif had not done the steps correctly, because had he done so, what he said happened
could not have happened.
Mr Latif’s response to that was both consistent, considered and credible, and was best
summarised in one of his answers:
“A. I'm experienced -- I have been running a post office for 17 years, sir. I have also
worked for the Post Office on training other offices how to run a post office. I was also
involved in running and introducing the new Horizon software changes in 2006
onwards, where I went to several offices on behalf of the Post Office to give them
training. So I'm an experienced, trained subpostmaster and I ran my business
successfully for 17 years. So I may have been a bit brief in the statement but obviously
I can run through those -- exactly those steps that we would take to make sure that there
is no operator error on our behalf.”
The conflicting evidence on this particular point is a good illustration of the “poles
apart” position to Horizon by the Post Office and the claimant SPMs in this litigation,
Because of the Post Office’s position on Horizon, almost all and any of the criticisms
or accounts of factual events which the claimants made, or make, about how this system
worked in practice are attributed to fault or carelessness by the SPM or their assistants.
Indeed, without fault or carelessness by an SPM, the Post Office simply cannot explain
these occurrences. The Post Office’s position is therefore to challenge the factual
account — which it is entitled to do — because if the factual account by an SPM is
accepted as truthful and accurate, then the Post Office would have to accept that there
must be a fault or faults within Horizon. Therefore, the Post Office cannot accept that
the factual account is truthful and/or accurate. Thus the dispute goes around and around
in endless circles. This litigation is aimed at breaking that deadlock.
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91.
92.
93.
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It is also the case that Mr Latif had the following point positively put to him about why
he had checked the CCTV that he had within his branch. “So you now say you looked
at the CCTV because your colleagues were concerned that you hadn't done the
transaction properly?” even though Mr Latif had said no such thing. Mr Latif was
subject to a fairly robust attack, not only on his account, how it matched up with other
records which the Post Office said contradicted it, what he and his assistants had or had
not been doing, and indeed upon the full scope of his evidence and his credibility — as
shown by the question I have reproduced. That question was framed as though even his
own colleagues had concerns about what he had done. It was positively put to him by
the Post Office that he had not even complained to the Post Office, although he provided
the name of his Area Manager Mr Navjot Jando and said he had complained to him
many times. The Post Office did not call Mr Jando to rebut this. One exchange will
suffice as an example of the type of attack upon Mr Latif:
“Q. You don't say anywhere in your witness statement that the £2,000 physical cash
also somehow disappeared, but that seems to be what you are now saying, is that right?
A. Well, the system gave a shortfall of £2,000 and that's been my statement all the way
through, sir, so I don't know what you're trying to confuse me, but there's a shortfall of
£2,000 in stock unit AA and there should not be a stock shortfall. The money is
physically there.”
Mr Latif’s evidence had never been, so far as his witness statement and evidence orally
before the court, that £2,000 in cash had physically disappeared. His evidence was that
there was a shortfall of that amount shown in Horizon as a result of what he had done.
There were some aspects of the cross-examination of Mr Latif which were simply
unhelpful. Firstly, extensive spreadsheets were put to Mr Latif which he had not seen
before. They are plainly not in chronological order, and had in any event been what was
called “filtered” by the Post Office legal team; they were not agreed by the claimants,
nor was the “filtering” process explained at any point. There is a limitation on the degree
of assistance to be obtained by such an exercise. Further, there was no agreed exercise
by the experts whereby the two of them had gone through all the records directly
relating to this specific instance and agreed what the records did, or did not, show. The
Post Office’s case amounted, literally, to a pure challenge of fact that what Mr Latif
said had occurred, simply did not occur in fact.
“Q. On the basis of that, Mr Latif, Post Office says there was no failed transfer such as
that described in your witness statement and that you are simply wrong about that, it
never happened.
A. So you are calling me a liar?
Q. Mr Latif, you may be mistaken or you may be lying. I put the question that it didn't
happen.
A. Well, I state that they did.”
So far as the other issue experienced by Mr Latif in January 2018 was concerned, the
Post Office accepted, as Ms Van Den Bogerd’s original written evidence (prior to later
correction) put it, that its data showed “that the branch received two TAs (meaning
Transaction Acknowledgement) on 18 January 2018. However, due to an error by Post
Office, instead of increasing the scratch-card stock, the TAs decreased the stock. To be
clear, this was a data entry error by Post Office and not an issue with Horizon. Horizon
processed the TAs accurately. I note that the TAs were accepted by the branch, which
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94.
95.
96.
97.
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could have been challenged at that point if the user had noticed that the TAs were not
for a positive number, as they should have been.”
(emphasis added)
However, this is notable for the following reasons. The first was that the blame is shifted
back to Mr Latif for not spotting the mistake and challenging the TA. His evidence was
that it was not possible to challenge a TA. They simply have to be accepted. This was
accepted by Ms Van Den Bogerd when she came to give evidence orally. Therefore the
notable point made by Ms Van Den Bogerd, a director of the Post Office, in her written
evidence, to shift the blame back onto Mr Latif, is simply wrong in fact. TAs cannot be
challenged, they have to be accepted.
The second is that the Post Office evidence entirely omits any reference to the “memo
view” — a type of communication used by the Post Office on Horizon which leads to a
“pop up” on the terminal the next time each user logs on. There was simply no reference
to this at all by Ms Van Den Bogerd, and Mr Latif said that this was sent out by the
Post Office “to everyone” saying the error on the Lottery would be corrected by means
of the issuing of a TC. Finally, Ms Van Den Bogerd corrected this passage in her
evidence in chief by way of printed corrections prepared before she was called. She
said that these corrections had been handed to her solicitors prior to the trial. If that is
correct, it is surprising that Mr Latif was cross-examined on the basis of the original
evidence in her statement, as that was not going to be her evidence in chief. However,
regardless of that, she readily agreed that there is no choice regarding the acceptance of
TAs — they simply have to be accepted by the SPM. In those circumstances, there is no
explanation as to how the emphasised sentence in [93] above came to be in her
statement at all, and it was plainly incorrect. Also, the call logs (about which Ms Van
Den Bogerd was cross-examined) concerning this incident entirely support Mr Latif’s
evidence.
Finally, although this is a minor point compared to the ones in the preceding paragraph,
the tenor of her witness evidence that Horizon processed the TAs in this respect gave
the impression that there were no problems with the Lottery and TAs so far as Horizon
were concerned.
Not only did the steps taken by the Post Office — the TAs — not correct the issue that
occurred in Mr Latif’s branch, but in cross-examination Mr Latif explained further:
“A. Can I just confirm, there was an audit done in September of this year, an audit by
a Post Office trained auditor, and my stockholding was still showing negative. And a
Jane Lawrence is the auditor and she has — still could not resolve this matter, so the
problem hasn't gone away, the problem is still there. And there have been a number of
calls to the helpline to resolve that negative stock and it hasn't worked. They haven't
come back with a response.”
Mt Latif was very clear about this:
“A. I still state that an independent audit was done by the Post Office, a Mrs Jane
Lawrence, in September 2018 the stockholding was still negative and as the branch was
handed over to another subpostmaster that is going to be investigated, it's going to be
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98.
99.
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investigated. If you are now coming back with this evidence, I still say that there is a
problem somewhere and I don't know what's happened but we have still got a negative
stock figure within our branch.”
He returned to this again, in the light of being pressed yet further on the point that it
was human error at the branch that had caused the discrepancy or shortfall.
“So the fact remains there was an independent audit happened by your Post Office --
by Post Office's auditor, her recommendation was that they look into it as is (inaudible)
the strategy is still there. And there were a number of calls to the helpline pleading
with them to resolve this issue before the audit and there will be a complete trail of that,
sir.
He also referred to the what had happened as being “a glitch”.
I accept the evidence of Mr Latif, who struck me as a reliable and careful person, and
who had personally been the one who had tried to perform the transfer from one stock
unit to another. He had personally experienced what he explained to the court in this
respect. I accept his direct evidence on this in preference to that of the Post Office,
which effectively was from people who were not there, who maintained, more or less,
that it simply could not have happened, and who had nothing to substantiate or
corroborate the challenge made to Mr Latif’s primary evidence. I find as a fact that it
did happen as Mr Latif explained. I find that Mr Latif performed the required steps
correctly in respect of the stock transfer between units, as one would expect of someone
who had 17 years of experience, and was sufficiently skilled at his role such that the
Post Office had, prior to the litigation, been sufficiently satisfied of his competence that
he was used by the Post Office as a trainer for training other SPMs. I also accept his
evidence, which is direct primary evidence of the state of the accounts at this branch,
that neither he nor the auditor for the Post Office whom he named, have resolved the
issue concerning the Lottery, the incorrect TAs and the effect of the TC, which remains
an unexplained shortfall or discrepancy. Ms Van Den Bogerd’s evidence is a number
of steps removed from the branch, and is little more sophisticated than assertions that
there must have been other matters to blame, alternatively reliance upon records which
did not, due either to their contents or to the way that they were deployed in cross-
examination of Mr Latif, demonstrate the points that the Post Office maintained they
demonstrated. I make further findings in respect of Ms Van Den Bogerd’s evidence in
the section below dealing with the Defendant’s Evidence in Part E. Mr Latif’s branch
was subject to an audit, and his appointment as a SPM ended then or shortly afterwards.
In due course Mr Latif will have his own individual claim, and the Post Office with
have its individual counterclaim against him, tried. The only findings I am making in
respect of his evidence are those necessary for me to resolve the Horizon Issues. All
other issues remain to be tried in those later proceedings. Those later proceedings may
explore in some detail not only the two specific matters in respect of which he gave
evidence in the Horizon Issues trial, but any others which are relevant to both claim and
counterclaim. They will do so by reference to other documents, as explained in the
section of this judgment Part K, Audit Data. The degree to which the findings of fact
that I make affect my conclusions on the expert evidence will be dealt with in Part L,
Overall Conclusions.
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Mr Tank
100.
101.
102.
103.
104.
Mr Jayesh Tank was the SPM at Fleckney Post Office, in Fleckney Leicestershire, from
4 May 2006 to 15 March 2017 when it was closed as part of the Network
Transformation Programme. He gave evidence regarding certain issues with Horizon
that he had experienced, which included the effects of a complete power failure to the
building, which occurred mid-transaction. This occurred whilst a customer was making
a withdrawal in the branch from her Post Office card account. On his evidence, this led
to a shortfall in his accounts of about £600. Mr Tank paid this sum to the Post Office,
and the letter from the Post Office stating how it came to be owed described it as a
“branch discrepancy”; it was in fact £660. He paid it by way of a deduction from his
remuneration.
The second issue was one concerning mail labels, when Horizon would (as he put it)
“jump ahead” to the end of the transaction and no label (which is what would or should
be affixed to the packet to be posted) would be printed. This would cause a loss in the
branch accounts.
Ms Van Den Bogerd again gave evidence about these specific instances. Her witness
statement led Mr Tank to correct the date when he remembered the power failure
occurring (he accepted it was 2014, not earlier in 2010 or 2011 as he had initially
thought), and he corrected this in a supplemental statement. Her statement had helped
him pin down the date. This incident became the subject of a PEAK at Fujitsu, although
Mr Tank did not know this at the time. This supplementary statement also exhibited to
it old “posts” he had made contemporaneously on an internet forum on the website
Yahoo in respect of another loss, £195, which he had suffered in 2011.
Mr Tank had been interviewed by the Post Office investigators in 2015 and in the
Horizon Issues trial it became clear that certain matters extremely critical of his conduct
were going to be put to him in cross-examination. He was therefore given the warning
against self-incrimination under the Civil Evidence Act in the same way that the two
claimants in the Common Issues trial, who were accused in cross-examination of
criminal offences, were given it. Mr Tank answered all the questions that were put to
him. Mr Tank had, eventually, used the icon on Horizon in his branch for “Official
Postage” incorrectly, and his explanation for this was that this was deliberate and was
done in order to get the attention of the Post Office. He said at his 2015 interview that
all his attempts by way of phoning the helpline and contact with his area manager had
simply not resolved the numerous complaints he had made. He frankly accepted that he
had not sent the post by official means which he had entered on the Horizon system as
official postage, doing what he did by way of protest. It was put to him in cross-
examination that he had “helped himself” to official postage, which on the evidence
available was a suggestion that did not seem to have any basis in fact, if he had been
doing what he said he was doing. There was certainly no evidence before the court to
substantiate this assertion.
In his interview on 5 November 2015 by the Post Office investigator Mr Bridges, it had
been accepted by Mr Bridges (who interviewed him) that Mr Tank had reversed the
entries for official postage in any event. This acceptance at the time by the Post Office
investigator was directly contrary to the way that the points were put to Mr Tank in his
cross-examination, which were that he had “helped himself” to postage and “improved
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105.
106.
107.
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his financial position” by acting as he did. Detailed findings on this will have to wait
for the full trial of his claim and counterclaim, but it is notable, in my judgment, that
the attack on the credibility of this witness in the Horizon Issues trial, and positive
allegations to him of criminality, were not consistent with the contemporaneous record
of the acceptance by Mr Bridges for the Post Office in the investigation interview in
2015. Mr Bridge clearly accepted that the entries had been reversed. Indeed, Mr Bridges
introduced this subject in that interview as follows:
“Okay thank you. Let's move on to the postage claims for the moment. So in my letter
I gave details of the claims and the reversals that you completed since 25 August. I
think my first question would be that I know that you reversed them but why undertake
them in the first place bearing in mind these are, in effect you are stating the transactions
which took, well say the transactions have taken place which you have used official
postage for which in effect did not take place.”
The questions in cross-examination to Mr Tank, which must have been put on
instruction, did not take account of what the Post Office had accepted at that time in the
interview. Another feature of the interview is that Mr Tank was told by the interviewer
“there are no issues with Horizon”. That exchange is as follows:
“KB (Mr Bridges) I can confirm that there are no issues with Horizon and as my letter
stated there is no issue with the production of labels.
Jay (Mr Tank) Then obviously you conducted your investigation into my concerns
without asking me for my evidence. I've got the evidence here to show you. I'm happy
for you to take copies but I'm going to hang on to it but how can you say something is
fully investigated if you've not looked at all of the evidence.”
On the face of it, that is a valid point that Mr Tank made. Had there been an
investigation, his evidence would plainly be something that ought to have been taken
into account by any investigator.
The Post Office relied, again, upon evidence from Ms Van Den Bogerd. Mr Tank was
cross-examined by reference to this and also by reference to a technical explanation
concerning the fact, it was said in cross-examination, that the power outage must have
occurred at a particular point in time. The cross-examination was as follows:
“MR HENDERSON: So what appears to have happened was a transaction from the
Post Office card account was in the middle of being processed and so it was in the
stack presumably.
A. Yes.
Q. But had not yet been posted to Horizon. So you hadn't cashed out on that
transaction, you hadn't completed everything to do with that transaction?
A. On the stack —
Q. It's on the stack.
A. It's on the stack, but the stack has a balance of zero, so to clear the stack you just
press "enter" and it goes straight —
Q. But you hadn't got to the point of clearing the stack?
A. I'm not sure.
108.
109.
Q. Okay. My suggestion is that there was probably an outage at just the point where
the money had been taken from Post Office card account but had not been processed
onto Horizon. That's my suggestion to you.
A. Okay.
Mr Justice Fraser: Well, is the witness going to be in a position to agree or disagree?
Mr Henderson: Well, he might be if he recalled.
Mr Justice Fraser: Do you recall that happening when there were outages?
A. No. I cannot recall.
Mr Justice Fraser: Were you aware of when outages would occur like that?
A. Not all the time.
Mr Justice Fraser: Do you want to put the question again?
Mr Henderson: Yes. What I'm suggesting is that the cause of this problem was that
an outage occurred at a particular point in time.
A. Yes.
Q. You were in the process of effecting a transaction from POCA?
A. Yes.
Q. It was in the stack and it had cleared from POCA?
A. Actually you mentioned the word "outage". I'm not -- was there a power outage?
Q. I'm not sure if it was a power outage, but I think it may have been a problem with
the system.
A. Ah, okay.
Q. The system went down in some way.
A. So -- yes, because you said that if there's a power outage then there's evidence
when you have to log back in, so did that happen on this occasion?
Q. Okay, I want to come to all this and I'm doing this clumsily. What I'm suggesting
is that what may have happened -- and if you don't recall, you don't recall, but what
may have happened is that the transaction was in the stack, the money had been taken
from the Post Office card account and before you cleared the stack there was an
outage.
A. Possibly.
Q. Okay.”
(emphasis added)
I have reproduced this passage because it demonstrates the following. The Post Office
put a possible explanation, based on technical grounds, to the witness who did not have
either at the time, or at the trial, the technical expertise, or the relevant technical records,
or the data, to enable him to agree or disagree. Even that explanation itself accepted
“there may have been a problem with the system” and “the system went down in some
way”. The witness’ answer, which in my judgment is the only sensible answer that
could sensibly be given in these circumstances, was “possibly”.
This type of evidence obtained on cross-examination is of no assistance in resolving
the Horizon Issues, other than an implicit acceptance by the Post Office (on this
occasion) that outages could, potentially, in technically terms lead to what Mr Tank
experienced. In any event, the Post Office’s explanation accepted that “there may have
been a problem with the system” which is equally consistent with the claimants’ case,
as it is with the Post Office’s case, if not more consistent with the claimants’ case than
with that of the Post Office. Power outages do happen, and there is a process to be
followed. Given Mr Tank was using Horizon Online, he was then in his cross-
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110.
Wi.
112.
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examination taken to Version 5 of a HOL quick reference guide. The version to which
he was taken was not, however, the version available to him at the time, as that was a
single A4 double-sided version in his branch, and the one put to him at the trial was
longer than two pages and available online. The date attributed in the electronic trial
bundle to Version 5, the version put to him in cross-examination, is 30 July 2015. His
forum posts and his supplementary witness statement made it clear that the incident
occurred in September 2014, a later date admittedly than given in his first statement,
but still somewhat earlier than July 2015. This was however the version of the guide
that Ms Van Den Bogerd relied upon in paragraph 78 of her 2"? witness statement to
challenge Mr Tank’s account. I find the version that he would have had available at the
time was not Version 5, and was the single A4 version that he had available to him in
his branch in September 2014. However, and regardless of this, Mr Tank accepted that
recovery receipts would or should be generated and set out the procedure. He also
accepted that giving all the receipts to the customer was not the proper procedure.
In the PEAK dealing with the shortfall of his accounts of £195, which is PEAK
PC0214226 and is headed “Failed Recovery Transaction(s)” Fujitsu recorded:
“Date:14-Dec-2011 10:43:53 User: Wayne Bragg
Summary:
The banking transaction had completed (A3 rec'd and authorised @ 13:33:37),
including the receipt print (13:33:42), and money should have changed hands,
The basket settlement failed from 13:35 with ‘No response received from data centre’,
and the two retries also failed, and the attempt CANCELLED at 13:37.
The Disconnected Session receipts show "Cash TO CUSTOMER 195.04" so the
customer's account should be correct but the branch will have a shortage (for a
withdrawal) because the session hasn't been recorded.”
(emphasis added)
In my judgment this entry clearly supports Mr Tank’s evidence about how Horizon
operated on the occasion to which he referred. The heading of the PEAK was “failed
recovery transactions”. The PEAK clearly states that the customer’s account would be
correct — they were given the cash of £195.04 as they expected, but “the branch will
have a shortage (for a withdrawal)” as the session was not recorded. A transaction
correction was issued. There were related PEAKs, and also there was an entry “KEL
acha959T may be relevant” on the PEAK, and Anne Chambers was referred to. The
PEAK also recorded “Sending to SSC for investigation.” That KEL was raised by Anne
Chambers on 28 February 2010, and the title was “HNGX banking reconciliation —state
4”. This is an important KEL, and I deal with its further detail in the Technical
Appendix.
There was a dispute between Mr Tank and counsel for the Post Office about whether
this was an example of “Horizon working as it is supposed to”, which Mr Tank did not
accept, and also whether he would have been refunded the sums (which he accepted
had occurred) had he not phoned in and reported the problem. It was put to him that he
would have been refunded even had he not called in to report, although how this would
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113.
114.
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have occurred given the way PEAKs are initiated was not explained to him. In any
event, the PEAK demonstrated that what Mr Tank had said occurred, had indeed
occurred. Transaction Corrections are issued outside the scope of the Horizon system.
The position regarding the procedure for spoiled labels was, again, a situation whereby
the Post Office’s explanation was this simply could not have happened. Ms Van Den
Bogerd’s evidence was that there was a procedure available that Mr Tank should have
used, yet the document put to Mr Tank that was said to support this stated expressly in
terms that “the label could only be spoiled if the label was on hand” and Mr Tank’s
point was that no label was “on hand”, given the problem he had was that the label did
not print at all. Using the procedure in the document therefore would not be possible,
and indeed would be contrary to the Post Office instructions that it could only be used
if the label was on hand. These instructions also required the SPM to write “spoilt” on
the label and keep it with the Horizon receipt for two years. This could not be done if
the label had never printed. The explanation by Ms Van Den Bogerd, put to Mr Tank,
was also directly contrary to the contents of a letter dated 7 September 2015 from the
Post Office to Mr Tank which stated:
“Your enquiry has been investigated and I can confirm there are no issues with Horizon
online or the production of postage labels which would cause the situation you
described. However if a user either pressed the yes or return key quickly before screen
messages appear this can lead to a user confirming a postage print has happened when
in rare circumstances it may have failed and put the cost of the failed print into the
basket. In this circumstance Subpostmasters should contact Network Business Support
Centre to arrange a credit for the spoiled postage.”
This means that the Post Office in that letter accepted that in some circumstances,
depending upon how quickly a key was pressed, the printing of a postage label could
fail and cause an impact to branch accounts. The SPM must make a telephone call to
the helpline, to correct the fact that the branch account would show a charge for the
postage even though no label had been printed and hence could not be provided to the
customer. This letter suggests not that Mr Tank had not followed a particular procedure
for dealing with spoiled (rather than non-existent labels) but that the system would,
depending upon how quickly a user pressed a particular key, not print a label, even
though the cost of the failed print would go in the basket. By going “in the basket” this
means the branch accounts would include the cost of that label as a debit to those
accounts. In other words, this letter supported Mr Tank’s direct evidence.
The Post Office in cross-examination put the following to Mr Tank:
“Q: There were procedures built into Horizon to cater for the situation that you
explained -- I have to say in the vaguest of terms, but as I understand what you are
saying, there were procedures in place which ensured you could deal with the
situation, weren't there?
A. No.
Q. We will have to differ.”
I would express this rather differently. If the speed of pressing a key could lead to the
cost of a printed label being added to the basket (and hence branch accounts) even
though that label had not printed, it is difficult to see that there is a “procedure built
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115.
116.
117.
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into Horizon” as defined to cater for this. On the contrary, it appears from the Post
Office’s own letter in 2015 that there was no such procedure. For the avoidance of
doubt, I find that there was no such procedure built into Horizon. The evidence
demonstrates to the contrary. Phoning the helpline and asking for a refund is not “a
procedure built into Horizon”.
Further, it is difficult to see how the explanation proffered by Ms Van Den Bogerd
regarding how to deal with a spoiled label could apply to Mr Tank for two reasons.
Firstly, I accept that as a matter of common sense interpretation and language, a label
cannot be “on hand” if it was never printed. Mr Tank did not consider he could properly
use the procedure in the guide for the problems he experienced, and J agree with him.
Secondly, the Post Office’s own explanation to him in 2015 was very different to what
he was told in cross-examination in 2019 that he should have been doing. Even were I
to assume (in the Post Office’s favour) that there must have been instructions from the
Post Office somewhere regarding how a SPM should behave when a label failed
entirely to print, as print failures (which would not produce a label “on hand”) were
plainly not unheard of, it remains to be seen what those instructions were, and whether
those instructions conflicted with what he was told in the letter in 2015. No such
instructions have been produced by the Post Office in any event.
I consider Mr Tank to have been a credible witness. I find that Mr Tank’s experience
in branch was not an example of Horizon working “as it was supposed to”. I find that
the creation both of a PEAK, and reference to a KEL within that PEAK, to be consistent
with my conclusion. The proposition that Horizon worked as it was supposed to is an
obviously flawed one. Indeed, that proposition is also inconsistent with common sense.
PEAKs and KELs are not created for situations where Horizon is working “as it is
supposed to”. They are created to deal with errors. The acronym KEL is for Known
Error Log. Nor are matters referred to the SSC for investigation when Horizon is
working correctly. Whether what occurred afterwards was an example of Horizon
working correctly depends on the categorisation of Transaction Corrections and
whether they are part of the Horizon system or not. I explain later in this judgment that
they are not, therefore the issuing of a TC cannot be Horizon working as it should. Mr
Tank also gave evidence, which I accept — and this is made out in the contemporaneous
documents — that he had some difficulty in advancing this matter through the correct
channels. The helpline operator with whom he was dealing initially refused to “pass
up” the matter to a more senior person. Whether this was an isolated instance of
unhelpfulness in this single case, or a more generally obstructive approach across the
helpline, will have to wait for future trials in this litigation, and I recite it for
completeness only in respect of Mr Tank’s experience. Jt does not form part of my
consideration of the Horizon Issues.
Mr Tank was accused of criminal offences and it was said that he had “helped himself”
to official postage and had “taken official postage”. These accusations were not put to
him at his interview in 2015 and indeed the text of that interview shows that the Post
Office interviewer expressly accepted that he had reversed the transactions, which is
not consistent with Mr Tank “helping himself”. There are 10 pages of detailed closing
submissions by the Post Office about Mr Tank’s evidence, and although he is criticised
for being vague, confused, imprecise and for not having prepared his evidence with
care, the allegation of criminality is not raised. However, the point was positively put
to him in open court, and Mr Tank is entitled to a finding on it. In my judgment, it
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118.
119.
120.
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would be quite wrong to leave such an accusation hanging in the air, unresolved in this
way. I find that on the material before the court in this trial and on the evidence available
and put to him, these serious accusations are not made out. That is not to say I have
made binding findings on the full details of his claim which remains to be tried in due
course. The Post Office submitted, both in respect of Mr Tank and other of the
claimants’ witnesses, that they confined their evidence to what was described as “a
small sub-set of his complaints, presumably because it was felt that this threw light on
the Horizon issues — and Post Office’s evidence was similarly confined”.
However, there are two important points that must be borne in mind about that
submission, both as it is made in respect of Mr Tank, and indeed the other witnesses
called for the claimants. This has not been a trial of their individual claims. There may
be other issues about Mr Tank’s branch accounts, raised both by him and by the Post
Office, at the full trial of his claim and the Post Office’s counterclaim. That does not
mean that this specific evidence, about specific incidents experienced on Horizon,
should be discounted. Indeed, this specific evidence is not only directly relevant to the
Horizon Issues, but is, in my judgment, very important evidence going to those issues.
The second point is the parties’ agreed wording of the Horizon Issues does not allow
for any wider issues going to Mr Tank’s branch accounts to be considered in this trial.
All the other issues between Mr Tank and the Post Office remain to be tried in the later
proceedings. The only point of difference between them on one of his two issues
concerning Horizon was whether what occurred when a transaction correction was
issued could properly be described as “Horizon working as it is supposed to”, and
certainly the KEL referred to in the PEAK appeared during the Horizon Issues trial
more than once. The creation of a PEAK, and the KEL to which reference was made
within it, in my judgment demonstrates that this is not Horizon working as it should, as
does the issue of a TC. The wider consideration of these matters that are dealt with both
by the experts and later in this judgment. I reject the suggestion that Horizon was
working as it was supposed to on this occasion. So far as Mr Tank’s experience with
the £195 shortfall is concerned, there was a Horizon Online failure; three identical
receipts were printed, which should not have happened; the receipts all showed a
disconnected session; and there was a loss in the branch accounts that evening for the
amount paid out to the customer. This was even though Mr Tank had settled with the
customer for the amount specified on the receipt. There was no record of the transaction
at all on the transaction log that was produced for the period of the Horizon Online
failure. None of these, in my judgment, are examples of “Horizon working as it was
supposed to”.
The operation of the helpline is not part of the Horizon Issues, so it is not necessary to
consider and make findings on what Mr Tank said the helpline told him, which he
explained in his posts was “that the loss is mine unless J can sort out with customer
directly.”
The later proceedings concerning Mr Tank’s claims (and any counterclaim) will
probably hear further evidence which are relevant to both claim and counterclaim. They
will do so by reference to other documents, as explained in the section of this judgment
Part K, Audit Data. The degree to which the evidence of fact affects my conclusions on
the expert evidence will be dealt with in Part L, Overall Conclusions.
Mr Anup Patny
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122.
123.
124.
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Mr Anup Patny became the SPM of Spencefield Post Office in Leicester in October
2014. He is currently suspended by the Post Office, having been suspended on 17
August 2016. His son, Mr Aakash Patny, also gave evidence. I shall refer to Mr Anup
Patny as Mr Patny Senior for this reason. I shall also deal with his evidence, and that of
his son, together for reasons that will become apparent.
There was what he described as a “major system outage” on 9 May 2016 in his branch,
which was a single counter branch run in conjunction with his retail business in the
same premises. This was just a few months before he was suspended. This outage led
to the closure of his branch and he believed that this had affected the whole network.
At the end of the next trading period, which was on 11 May 2016, there was a shortfall
of almost £17,000, predominantly made up of a shortage of 16,000 coins of £1
denomination. This was a very large number and he said that he knew he would never
have such a large amount of £1 coins in his branch. He was also the person in the branch
who had dealt with the cash delivery that took place on the relevant morning, which is
called “remming in” the cash. This means accepting cash into the branch from the cash
delivery that Post Office makes to the branch, and entering the cash received into
Horizon. His son, who also gave evidence, followed this matter up with the Post Office.
On 19 May 2016 the Post Office contacted him about a discrepancy in respect of
stamps, which so far as he was concerned related to the £16,000 regarding coins.
The Post Office accepted that there had been an outage but disputed that this either did,
or could have, resulted in the discrepancy which Mr Patny said occurred at his branch.
Ms Van Den Bogerd gave evidence about this, and the Post Office’s position is best
summarised in the explanation put to Mr Patny Senior in his cross-examination:
“Q. Well, what I'm suggesting is that the most natural explanation for this, whatever
adjustments were made, is that at some point on 11 May someone hadn't counted a big
pile of £10 notes. They had been put in a safe and forgotten about, which is
understandable, and that they were found the next day, or located, and there was an
accurate cash declaration on 12 May.
A. I don't know about that, sir.
Q. It's perfectly plausible, isn't it?
A. I can't say anything to that.”
This suggestion by the Post Office is, in my judgment, somewhat fanciful. A “big pile
of £10 notes” is not the sort of thing that ordinarily gets “put in a safe and forgotten
about”, and then suddenly “found”. It was also put to the witness that “things were
pretty chaotic in your branch when it comes to these sorts of things” and “the cash
declarations look like they are all over the place”. Mr Patny Senior did not agree with
this characterisation of the way his branch was run. He certainly did not agree with the
“big pile of £10 notes” theory the Post Office put forward. His evidence was also that
it was his son who had contacted the helpline, and who had made the adjustments to
Horizon that he was advised to do by the helpline. Initially the Post Office sought to
challenge this account through cross-examination of Mr Patny Senior only. Counsel for
the Post Office did not initially intend to put questions on this to his son, even though
his son was plainly the correct witness to answer the detailed questions, as he was the
person who said he had done certain things, and he was about to be called as a witness.
The reluctance of the Post Office to put questions to the person who was plainly the
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relevant person to ask about this was said to be because “the records are the records”
and the Post Office did not intend to repeat cross-examination that had already been
done. I was not prepared to permit this. I required questions about what Mr Patny had,
or had not, done, to be put to him directly, and not have the cross-examination
conducted by proxy through his father. Mr Patny Senior’s son had given a witness
statement in respect of these matters, and was plainly the correct witness to whom the
questions should be put. He was the next witness listed on the trial timetable, and was
going to be called next for the claimants. The notion that questions challenging what he
had done, or not done, should more properly be directed to his father is contrary to how
cross-examination should be conducted.
Mr Aakash Patny
125.
126.
127.
128.
Mr Aakash Patny is the son of Mr Patny Senior, and worked in the branch and retail
premises with him, as did Mrs Patny, the wife of Mr Patny Senior and mother of Mr
Patny. He is not a claimant. He was given the warning against self-incrimination under
the Civil Evidence Act. He did however answer all the questions put to him.
Mr Patny assisted his father, particularly with balancing. He would usually arrive at
lunch time, and so was not present when the national outage occurred on the morning
of 9 May 2016, which had been resolved by the time he arrived that date. He gave
evidence concerning the same amount of money, which both he and his father
considered a shortfall, and which the Post Office had claimed was due to it and was a
branch discrepancy for which the branch was responsible. It had been settled centrally
but had not been paid to the Post Office.
So far as 11 May 2016 was concerned, when Mr Aakash Patny had arrived at the branch
he became aware of the shortfall of over £17,000, which was a “complete surprise” to
him and which he considered could not be explained. He had contacted the helpline,
and had followed the steps he was advised to take, which he thought had resolved the
issue. These steps were things he did on the Horizon terminal, and sequences of entries
he was talked through over the phone. The documents available supported his evidence
that he had made such a call, although some of the entries did not match what he said
he had told them. There was no record of what he was told to do, nor was there any
record put to him showing what key strokes had been inputted at the branch.
The Post Office’s case on the shortfall was that the outage on 9 May 2016 did not lead
to any discrepancy. It was not put to Mr Patny that he had not made key strokes as
advised over the telephone, or that he made different keystrokes to those advised. All
that was put, somewhat unclearly, was that “the problem” was resolved, cash had been
physically “found” that had been missed at the time of the previous cash declaration,
and also that a figure showed on a cash declaration of “plus £17,000 odd” had the effect
of “cancelling out” the previous discrepancy and showed that “there was no longer a
cash problem”. Mr Patny denied any money had been found that had been lost; denied
that if a discrepancy had been cancelled out the figure would have been plus £17,000,
rather than zero; and said that although he thought following the key strokes he was
told to input had resolved the issue, it had not. He was told to “readjust” the cash stock
figure, something he had never done before, and relied upon the instructions he was
given by the helpline. The Post Office’s cross-examination was done by reference to
the cash management report, not the audit data. I will return to audit data later in this
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130.
131,
132.
133.
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judgment in Part K, but the audit data would have showed what keys were pressed, in
what sequence and when. Such data would have been of great assistance, but was not
produced by the Post Office.
On 19 May 2016 the branch was contacted by the Post Office, in respect of an over-
declaration of stamps. The amount of this was approximately the same value as the
amount of the discrepancy of cash had been a few days earlier. He had done the
declaration for stamps. A person called Debra Lambley phoned the branch. He was
struck by the co-incidence in the amount of the stamp discrepancy, and told Ms
Lambley the stamp declaration was impossible due to the number of stamps this
represented. To assist a reader of this judgment on that latter point, but something that
was not explored in the evidence, to obtain a broad idea of how many stamps that would
represent, the following points are relevant. On 28 March 2016 the Royal Mail
announced an increase to take effect that week in the price of stamps. 1* class stamps
became 64p each, and 24 class stamps became 55p each. This shortfall would therefore
haye represented 25,000 1* class stamps, or over 29,000 2” class stamps. It goes
without saying that this is a great deal of stamps.
He was instructed to re-adjust the stamp stock figure, followed her instructions as to
how to do this, and the system then showed the £16,000 shortage. It was by now past
7.00pm, he phoned the helpline, they contradicted Ms Lambley and he then had to re-
declare the following day, being unable to do so that day as it was after the 7.00pm cut
off.
The Post Office’s case on this, as it was put to Mr Patny, was firstly that he had made
a mistake in declaring the stamps. He denied this. The circularity of the Post Office’s
case can be seen from a lengthy passage of evidence, which I will not reproduce, from
page 26 on that day’s transcript to page 35. Mr Patny explained, basically, that the
helpline gave instructions to resolve the cash discrepancy; this resulted in the figure for
stamps being wrong by the same amount; Ms Lambley was not prepared to have this,
and following her instructions this resolved the stamps situation, but the cash
discrepancy reappeared. Then the sequence happened a second time. Mr Patny was
prepared to accept he may have made a mistake once, but denied he could have made
exactly the same mistake the same way a second time.
It was also then positively put to him that one way of disguising a shortfall in cash
would be to over-declare the number of stamps. A positive allegation of dishonesty was
put to him, which he rejected.
The premise behind this suggestion of dishonesty was that it was said by the Post Office
that if the stamps figure went up, the cash figure would automatically go down by the
same amount. He did not agree with this. It was put as a positive statement in the
following terms:
“Q. I suggest finally, Mr Patny, it is rather surprising, given that you do all the
balancing, or did all the balancing in the branch, that you don’t understand that the effect
of increasing the declaration of stamps is to have a corresponding effect on the
declaration of cash?
A. I wasn't aware of that, no.”
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withdrawal, a transaction correction was issued to bring the branch.” She makes it clear,
in my judgment, that it was the work that Mrs Burke did personally that had led to the
issuing of the TC. She also makes it clear that she believes that what happened occurred
as a result of what Mrs Burke did:
“Following Mrs Burke's investigation, Post Office generated a transaction correction
for the £150 withdrawal that had not been recovered at the time. If Mrs Burke had not
done this herself, there is a process built into Horizon for flagging non-recovered
transactions which would have prompted an investigation and I'm sure would have led
to the same outcome.”
She explains that had this not been done, more would have been required from the Post
Office — namely an investigation — before the Post Office would have reached the
decision to refund the £150, although she does say that she is sure the same outcome
would have been reached. This is rather different to the way the case was put to Mrs
Burke, which did not include the requirement for any such further investigation by the
Post Office being required. The impression sought to be given was that on the Fujitsu
documents already available, a TC would have been issued anyway to Mrs Burke a few
days later. I do not accept that. Something more at the Post Office end would have been
plainly required, as Ms Van Den Bogerd explains. Mrs Burke was the person who had
in fact provided proof of payment out, and so no investigation was undertaken.
It is in my judgment likely, on the basis of all the evidence in the litigation to date, that
the sum of £150 would have showed up as a shortfall at the end of the next branch
trading period, as any further investigation was not likely to have been completed by
the end of that period. However, if Mrs Burke had not acted as she had, and if an
investigation had been done by the Post Office, if that had been resolved in her favour,
and if that had led to a TC being issued, then the shortfall in the branch accounts would
have been corrected in a later branch trading period, namely the period during which
the TC was issued. No loss flowed to Mrs Burke in respect of this incident, as a result
of her own investigation. In any event, this is not a point of difference between the
parties that it is necessary to resolve in order to resolve the Horizon Issues. There was
plainly a potential impact to her branch accounts in any event, and that potential impact
was caused by the Horizon system.
Mr Roll
153.
Mr Richard Roll had worked at Fujitsu between 2001 and 2004. This was during the
days of Legacy Horizon and he had no experience of Horizon Online. He provided two
witness statements, the first of which was dated 11 July 2016. This was obviously very
much in the early days of the group litigation. The second statement addressed certain
factual matters in Dr Worden’s first expert report. I consider Mr Roll to be an important
factual witness in this group litigation. He has no personal interest in the litigation and
is not a claimant. He has never worked for the Post Office, although whilst at Fujitsu
working on Legacy Horizon he obviously had a great amount of involvement in the
Horizon system. However, given the expert evidence and particularly the degree of
agreement between Mr Coyne and Dr Worden on the number of accepted bugs in
Horizon, which even on Dr Worden’s position was 11 different ones, in addition to Mr
Roll’s evidence there was ample other evidence in relation to my findings on the
Horizon Issues. Mr Roll’s career has started in the Royal Air Force, which he joined in
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155.
156.
157.
158.
1976 and left in 1989. Whilst in the RAF, which he had joined as an avionics engineer,
he worked on mainframe computer systems and was selected for a software
development team working on aircraft control and attack systems. After he left the
RAF, he worked in various roles in development and support, and joined Fujitsu in
January 2001. There, he worked in the Software Support Centre, or SSC, in Fujitsu at
Bracknell in 3 line support.
After he left Fujitsu he changed career direction entirely and attended the University of
Southampton, from where he obtained a BSc in Podiatry. He worked in the NHS until
2011 and then went into private practice, where he remains, now with his own clinic.
The claimants described Mr Roll as a “whistleblower”, effectively making public
allegations about how Fujitsu dealt with Legacy Horizon and the access which was
available to Fujitsu to SPMs’ branch accounts. This was access of a far wider nature
than admitted to by the Post Office or Fujitsu publicly.
It was Mr Roll’s evidence that was substantially behind the eventual acceptance by
Fujitsu witnesses of the ability to obtain remote access without SPM knowledge or
permission, and the injection of messages into the counter. In particular Mr Parker had,
in his first statement, described that Fujitsu lacked this “power” and had said that Mr
Roll’s evidence was inaccurate and misleading. Mr Parker later corrected his 1*
statement, and I deal with his explanation about this change — and what he said he meant
in his 1 statement — in my summary of Mr Parker’s evidence below at [464] to [498].
Mr Roll described himself as an IT specialist, a description with which I agree, and one
which is demonstrably correct given the number of years he performed his role at
Fujitsu in the SSC in 3 line support. Problems or issues would only reach 3" line
support if 1* or 2" line support did not resolve them. His IT experience includes, inmy
judgment, a considerable degree of expertise in software. Indeed, although I am critical
of Fujitsu elsewhere in this judgment, that criticism does not extend to any suggestion
that they employed personnel within SSC who were not experienced and sufficiently
expert in software matters to perform that role. Had Mr Roll not been sufficiently
qualified to work in 3 line support, he would not have been there for the period that
he was.
The Post Office in cross-examination attacked both his recollection, and seemed also
to challenge his expertise. This the Post Office is entitled to do. Given he was 3" line
support, in my judgment he obviously had a high degree of expertise. There was a
debate at one stage about whether he was “elite” or “super elite”, and he put himself in
the former category. The Post Office also concentrated on a narrower band, or sub-set,
of the issues regarding which he gave evidence, focussing more on potential problems
with code and Mr Roll’s experience of those, rather than the wider issues generally in
respect of Horizon of which he gave evidence. He had made clear very early in his
cross-examination that, so far as he was concerned, data corruption was an issue in
Legacy Horizon as well as software issues which were related to the code.
Mr Roll had left Fujitsu in 2004 and there will inevitably be difficulties in recollection
by any witness of detailed points after such a passage of time. He was willing to indicate
when he could not remember something, and would agree with points put to him by the
Post Office when relevant. These were often on the basis of hypotheses which he was
asked to accept, often in relation to a spreadsheet which Mr Parker had prepared
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160.
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showing how relatively few software issues Mr Roll was said to have worked upon. Mr
Roll also, again inevitably, was not submerged in the fine details of the subject matter
of the litigation, in the same way as some of the Fujitsu witnesses such as, for example,
Mr Parker himself, who is the Head of Post Office Application Support and the SSC,
and who has worked on the Post Office account at Fujitsu since 1997, before Horizon
was even introduced. Given Mr Roll left Fujitsu in 2004, it is 15 years since he worked
on Horizon.
His two statements were fairly short (4 and 8 pages respectively) and given at a high
level. One example can be provided from his cross-examination. He was of the view
that problems referred to 3“ line support, which by definition would mean that 1“ and
2" line support had not been able to deal with them, would not include problems caused
by mistakes by SPMs. Mr Parker disagreed with this and this was put to Mr Roll.
“Q: Then the next unnumbered paragraph, Mr Parker says:
"If NBSC were unable to identify the cause of a discrepancy they would often fall back
on a default statement along the lines of ‘this looks like a software issue' so that the SSC
would investigate it. However, Mr Roll's statement that ‘if an error was referred to us
then it was extremely unlikely to be due to a mistake made by a postmaster’ is not
correct, The vast majority of discrepancies investigated by the SSC as pseudo ‘software
issues’ were (and are) not caused by software issues.”
I would like to suggest to you, Mr Roll, that that's true, isn't it?
A. The way that I remember it, it was issues to do with the software that were causing
the problems. Whether that was the programme that had been written or data
corruption, that's what I remember as our problems being.
Q. You remember there being problems with data corruption?
A. Yes.
Q. I'm not asking you about data corruption, Mr Roll, I'm asking you about software
issues. The claim I would like to put to you again is the last sentence of that paragraph:
“The vast majority of discrepancies investigated by the SSC as pseudo 'software issues’
were (and are) not caused by software issues."
Are you in a position to agree to that?
A. From my recollection I would disagree with that, but it was a long time ago.
Q. I'm grateful.”
This passage of cross-examination, and there are a number of other similar examples,
shows the following:
1. Mr Roll’s conclusion was a general one, with which Mr Parker disagreed. Assertion
and counter-assertion are not, of themselves, of assistance to resolving the Horizon
Issues. His conclusion, as with that of Mr Parker, is simply their point of view.
2. Ifa problem made it to 3 line support, then by definition it had not been capable of
being resolved by 1* and 2" line support.
3. Fujitsu would, even at the 3“ line support level, attribute some problems which they
could not understand or resolve to SPM error, and Mr Parker’s evidence is consistent
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with this approach by Fujitsu. This is made clear in the text of PEAKs put to Mr Parker.
There is a very stark example in one of the PEAKs where the Post Office’s own auditors
have specifically ruled out user error, yet Anne Chambers chose to close the PEAK
with the defect cause being user error.
4. The Post Office would try to keep the evidence in cross-examination of Mr Roll
within very narrow bounds. This passage shows that Mr Roll expressly gave data
corruption as one of the problems of which he had experience. Horizon Issue I included
the expression “bugs, errors and defects”. In my judgment data corruption is included
within that phrase. Mr Roll was kept very close in his cross-examination to evidence
concerning code alone. Bugs, errors and defects are far wider than simply code. The
Horizon Issues were not specifically restricted to software issues as narrowly re-defined
by the Post Office, nor are they restricted to code.
5. Mr Roll would sensibly concede that the events of which he gave evidence were a
long time ago.
6. As shown by the answer “the way that I remember it, it was issues to do with the
software that were causing the problems”, even at this remove of time, Mr Roll had a
specific recollection that there were “issues with the software” that were “causing the
problems”. This is as long ago as 2001 to 2004.
Some of the cross-examination was of no assistance in resolving the Horizon Issues,
for example an exercise with a spreadsheet which Mr Parker had been involved in
preparing, showing the percentage of calls to 3“ line support and the broad categories
into which they had been placed (by Mr Parker, as it turned out, and inaccurately at
that). Mr Roll was in no position to give any helpful evidence in respect of this, and the
categories were in any event misleading as headline descriptive terms. A witness who
had left Fujitsu’s employment some 15 years ago would not, sensibly, be in a position
to agree or disagree with such detailed points or collation of data in such a detailed
spreadsheet in any way that would provide the court with useful evidence, particularly
when it emerged (as it later did when Mr Parker was cross-examined) how misleading
the Fujitsu headings were.
Mr Roll had looked at Mr Parker’s statements, although he said only briefly, and he did
not know how many statements Mr Parker had made. He could not remember some of
the details, such as the detailed descriptions of 1% and 2™ line support at SSC, and was
frank about this. He could not recall the split between I“ line support by Fujitsu and the
Post Office’s own 1* line help desk called the National Business Support Centre (or
NBSC). He acknowledged that he worked in 3" line support, rather than “third/fourth
line support” as he had put it in his witness statement. He did not however over-state
his abilities; for example he said some members of 3 line support were “super elite”,
but he would not count himself as falling within that description. Part of his cross-
examination which I consider fairly encompasses his approach to giving evidence is the
following, where parts of Mr Parker’s witness statements were being put to him.
“Q. And if we can pick it up at paragraph 28 of Mr Parker's witness statement, you
worked in third line for between -- well:
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“Between I January 2001 and 31 December 2014 ...” and those are the years that you
worked for Fujitsu "... the SSC received a total of 27,005 calls, meaning that on average
563 calls per month were deait with over this 4-year period."
And he refers to a spreadsheet setting that out and he then analyses the data in that
spreadsheet. Would you accept that that is a fair reflection of the amount of calls
coming in, the amount of incidents coming in to SSC when you were there, third line?
A. I can't really remember. I know there were periods when it was very busy and
periods when it wasn't so busy. Sometimes we had three or four jobs on the go at once,
other times we were given other work to do from the manager.
Q. And paragraph 29, Mr Parker says:
"Transferred calls (ie those not resolved by the SSC) are of interest." He says:
“A very small proportion of calls transferred to 4th line support would have concerned
software errors requiring resolution ..."
Stopping there, Mr Roll, that's true, isn't it?
A. Yes.
Q. So he then says:
"... it would be interesting [therefore] to know the number of calls transferred to fourth
line."
Would you agree to that? It would give some indication of the extent to which incidents
coming into the SSC properly, genuinely represented software areas that required
fixing? That would be a useful way of -- a touchstone of trying to work out --?
A. Yes.
Q. Thank you. He then says that, unfortunately:
"... while the SSC have records of the volume of transferred calls, we do not retain
records of where they are transferred to and it is not the case that all of these would
have been transferred to 4th line support. For example incidents would often arrive at
SSC from internal teams for routing back to help desks."
Do you remember that?
A. I don't remember that particular ...
Q. But would it be right to say that of the calls coming into third line support, a
significant proportion would go -- of calls that would then be transferred out, would go
to places other than fourth line support? Would that be fair? Does that accord with
your recollection?
A. The way I recollect it is that calls would come in and we would work on them, either
fix them, in which case they would go back to the originator, or we would pass them
on.
Q. To other people?
A. To other people.
Q. Depending on the nature of the problem?
A. Yes.
Q. So if there was an infrastructure problem you would probably pass the call on to the
infrastructure team, it wouldn't go to fourth line support, would it?
A. Probably.
Q. And there are a number of other teams that calls coming into third line would be
passed to who would not be fourth line support?
A. Probably. I can't remember the full details.”
This can be seen all to be at a very high level. Mr Roll is not likely to have known the
total number of calls that came into SSC during a 4 year (or indeed any) period; the
average number of calls per month; or of how these were dealt with. Hewould also not
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be likely to be able to recall these details, even had he known them at the time. The
analysis which was put to him would have been “useful to know” — the percentage, or
even total number, of calls transferred from 3" line support to 4"" line support — would
not have been something he would have known at the time either. Interestingly, not
only would such information have been something that Fujitsu could have readily
recorded at the time, as both 3 and 4" line support at SSC are both Fujitsu functions,
and not only was this plainly accepted as something that would be of assistance, but
Fujitsu “did not retain records of where they are transferred to”. Thus the absence of a
useful record in this respect is a result of how Fujitsu retained its records.
Mr Roll was then taken to an analysis of calls coming in, and calls going out, which
had been done by Mr Parker. This related to some 3,764 calls. Mr Roll was never going
to be in a position to dispute that figure; to dispute or agree the percentages given for
how the calls were dealt with; or provide any meaningful evidence about Mr Parker’s
analysis at all. It was presented to him for the first time in the witness box. Sometimes
unreasonable or unhelpful witnesses take issue with matters of which they have no
knowledge; Mr Roll did not do so. If he did not know, or was not in a position to answer
substantively, he would simply say so.
Another passage of his evidence was as follows, when a passage of Mr Parker’s
evidence was put to him that stated "From the SSC, only a tiny proportion of incidents
were escalated to the 4th line support team. It follows that only a tiny fraction of
incidents raised actually needed to be looked at by the only team who might potentially
effect changes in software." He was asked if he accepted the conclusion:
“A. When you take it as an average then yes I suppose so, but the system evolved from
-- I started there in 2000 I think it was and left in August 2004. The nature of the work
changed over time and the ones that stick in my mind are the ones where there was sort
of the fire-fighting efforts where it was -- there were difficult periods where there were
software issues, so ...
Q. Yes, Mr Roll. We could by all means go back to the graphs because you will have
seen from the live PEAKs into and out of the SSC it actually gave monthly figures, but
what I'm suggesting to you, Mr Roll, is that -- although you may well have been busy
on all sorts of things, the fact of the matter is that software problems requiring a
software fix represented a tiny fraction of the work that was handled by the SSC third
line support.
A. Yes.”
This theme of the way that the Post Office put its case carried on into the evidence of
Dr Worden and his Section 8 statistical exercise, which I address below. The
expressions “tiny proportion”, “tiny fraction” and other terms used sought to
demonstrate, basically, that Horizon worked very well most, if not all, of the time.
Given the use to which the Horizon system was put by the Post Office, namely monthly
balances which governed the branch accounts of SPMs, with shortfalls and
discrepancies being “made good” — which means paid — by the SPMs in question, this
approach can be seen to have limited utility. Firstly, these are subjective terms.
Secondly, given the PEAKs show that a SPM may report a single unexplained
discrepancy for (say) £25,000, or even £1,000 or £500, the fact that this may be only a
tiny fraction of the number of calls the SSC worked on that month might come as cold
comfort to that specific SPM. The number of calls, and how they were dealt with, is of
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168.
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some relevance to robustness, but such high level and subjective points were not likely
to be of enormous assistance, one way or the other, in challenging Mr Roll’s evidence.
It was put to Mr Roll that his role, which he described as “product specialist”, was “the
junior level of people working” in SSC, which he disputed. He explained that most
people in SSC were “product specialists”. 25 of the 30 or so total number of people
were, according to Mr Roll, all product specialists.
“Q. -- the SSC? Of that 30 people how many people were at your level?
A. When I worked there I -- it was two or three people were senior levels, I think Mr
Parker was one, a couple of others, then there was Mike Peach and I believe the rest of
us -- 25 or so.
Q. The figures I would like to ask suggest to you, Mr Roll, are about 25 people had the
junior level and there were about five people who were true specialists who I think you
fairly described as specialist earlier on in your evidence. Would you accept that that
might be the case?
A. Junior level seems to -- it doesn't fully explain the complexity of the system or the
knowledge of the system required, but yes, I suppose ...
Q. Well, let's agree on ordinary -- I'm not seeking to cast any imputations and it is right
that you should — words do have implications. So the ordinary level was your level —
A. Base level.
Q. -- and there was this perhaps five or so people above -- the senior people above you
and what did they do? Did they do the more challenging work?”
An interesting post script to this line of questioning is that later in the trial it emerged
that all of the SSC personnel had the very powerful APPSUP privileges at this time. It
is highly unlikely that this was given to those at the “junior level”.
The Post Office attempted at the trial to dilute Mr Roll’s experience and cast him as
someone who was not sufficiently skilful to understand, or give evidence about, the
matters he explained in his witness statement. It is clear to me, and this was effectively
confirmed by the documents put to Mr Parker later in the trial, that everyone at 3 level
support in SSC was a specialist. The notion that these 30 people, in a department
separate from the normal Fujitsu work areas, to which access was security restricted,
were all at “the junior level” or “ordinary” with 5 people managing them who were “the
true specialists” is simply misleading. There were a handful of people at the senior
level, and the rest of 3 line support were product specialists. A Fujitsu internal
document, put to Mr Parker by the claimants (but not to Mr Roll by the Post Office)
explained it rather more comprehensively. This is from a 2011 document but there was
no evidence to suggest that there was a wholesale reorganisation of SSC 3“ and 4" line
support between Mr Roll’s time there and this document.
“3'4 line support
3 fine support groups within RMGA include:
SSC — 3" line support for RGMA written application code.
MSS — 3" line support for software distribution and event management
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170.
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3 line support staff apply analytical skills to the symptoms and evidence gathered by
1 and 2" line and undertake in-depth investigation into incidents. They have detailed
knowledge of the system based on documentation and source code inspection,
Trained on operating systems, COTS packages that underlie the application and the
coding languages used within the application. They are also expected to self train by
examination of support guides, design documentation written for the components of the
end user application. They will also have access to development_and package
management tools to allow the production of specialised diagnostic code, scripts and
support tools.
It is incumbent upon the 3“ Jine support unit to produce a work around and on 4" line
to produce the final code solution to any software problem. This does not preclude the
production of a workaround by other units or negate the requirement for 4" line to
provide assistance in the generation of a workaround.
The SSC are responsible for the implementation of any workarounds that require data
changes to the live system. They are the only unit with authorisation and sufficient
physical security controls to perform this function.”
(emphasis added)
This gives a more comprehensive picture of the type of expertise required to be in 3"
line support, which is where Mr Roll worked whilst he was at Fujitsu. This is of more
assistance than the terms deployed, such as “‘the five true specialists” (for the senior
managers) and “the junior level” for Mr Roll. It shows that 3“ level support have a high
level of necessary expertise. They are the only unit with the necessary authorisation and
security controls to be permitted to implement workarounds that require data changes
to the live system. This is not the role of junior personnel.
This area of questioning also focused on code, and introduced another concept, the
“core specialist team”.
“Q. I'm really trying to grope towards what the five true specialists, what kind of work
they were doing. They were doing the more challenging kind of work, weren't they?
A. I find it difficult to answer that from what I remember of the way we worked. There
were some areas where some of the senior people where I would perhaps have been
more -- had more experience because of previous work and previous programming that
I would have been better off and had more knowledge than they would have done, but
in other areas then they would be far superior to me.
Q. Well, let me suggest one area where they would have been far superior to you, Mr
Roll, or at least it was perceived within the organisation -- I'm not trying to have a
debate with you about your own perceptions of yourself, that would be completely
unfair, but the perception at the SSC was that were there software errors or potential
software errors that required large amounts of code to be examined, the people who
would generally do that examination would be those five people, people like Mr Parker.
Would you accept that?
A. Generally I suppose, yes, although —
Q. And it would be relatively rare for someone outside that core specialist team to be
doing that kind of work -- not impossible but relatively rare, yes?
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A. Several of us looked at the code on occasions. I was a C programmer in that and
other languages before I moved to Fujitsu so there were areas of knowledge we had
from previous areas, but I suppose most of it would then be passed on to those people.
Q. Isee. So would you accept from me then that generally it would be them that would
look at lots of code but occasionally there might be occasions when someone else would
look at lots of code?
A. From a PinICL perspective yes, but some of us looked at code more often, just out
of interest.”
This series of questions introduced another subjective variable, “large amounts of
code”. Mr Roll, in his answer above, explained that he had been a C programmer before
he moved to Fujitsu. C is a general purpose programming language which is widely
used. Mr Roll, as someone who had been a programmer both in C and other languages
before he went to Fujitsu, had both written code himself (as a C programmer), and I
find would have been very familiar with code in its different guises. Indeed, given the
Fujitsu documentation describing the expertise of 3“ line support in [168] above, which
stated 3% line support would have “detailed knowledge of the system based on
documentation and source code inspection”, it is clear to me, and I find, that Mr Roll
was amply experienced to give evidence to this court on the matters that he did
concerning the Horizon system (which was at that point Legacy Horizon), the problems
that were experienced with it, and what occurred at SSC. Source code is a term used to
describe a version of software, or a description, as it is originally written. There are
different definitions of source code in different computer authorities (such as the Linux
Information Project) but the precise definition is not important for the purposes of the
Horizon Issues trial. The Horizon Issues do not concentrate solely on problems either
with code, or source code. The phrase is “bugs, errors and defects” and the Horizon
System is defined in the Horizon Issues.
What is important, in my judgment, is that Mr Roll used to programme in C programme
language and other languages before he went to Fujitsu; he was required to understand
and have “detailed knowledge of the system based on documentation and source code
inspection” by virtue of being a member of 3 line support at SSC; all the evidence
demonstrates that he did his job effectively and competently; and he did not leave
Fujitsu under any sort of a cloud. It was effectively accepted by the Post Office that he
had a responsible position and a responsible role, and was well trained. The Post Office
also sought to draw the following conclusion from Mr Roll’s evidence in favour of
Fujitsu: namely that “....a clear picture emerged of Fujitsu as an organisation which
was thorough, professional and conscientious and which took considerable care to
ensure that matters were properly investigated and dealt with.” I do not accept that this
picture emerged from Mr Roll’s evidence, but there was a considerable amount of other
evidence in respect of Fujitsu in the trial other than that of Mr Roll. I will return to this
claim by the Post Office at the end of my review of all the evidence, factual and expert,
which is in Part L “Overall Conclusions”. That section of the judgment begins at [925]
below.
Mr Roll’s evidence was that errors made by SPMs were relatively easy to pick up at 1*
and 2" jine support level; that most errors he dealt with were coding errors or data
corruption; that issues were identified that required software “fixes” to be written by
Development; and — importantly in my judgment - that the type of issues that were
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175.
176.
177.
178.
179.
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routinely encountered at SSC could and did cause financial discrepancies to branch
accounts. He also stated that:
“If we were unable to find the cause of the discrepancy then this was reported up the
chain and it was assumed that the postmaster was to blame.”
He said that even if software fixes were developed the problem would sometimes
reappear several weeks later. He also stated that remote access to branch systems was
possible; the ability was extensive; that this was done without the SPMs being aware;
that data and transaction information could be changed by Fujitsu; and that sometimes
SSC would log into a branch system whilst it was switched on but not in use.
The final paragraph of his 1“ statement said:
“In summary, the issues with coding in the Horizon system were extensive.
Furthermore, the coding issues impacted on transaction data and caused financial
discrepancies on the Horizon system at Branch level. It was those issues that I, and
other colleagues at Fujitsu, were routinely working on daily. Furthermore, remote
access to the Horizon system at Branch level was extensive, as was the ability to change
data and change transaction information, even while the postmaster was working,
without the postmaster being aware of this.”
He had also said that “during the course of resolving the software issues, we would
frequently access a Post Office counter IT system remotely”.
His use of “frequently” and “routine” are, in my judgment, subjective, and as explained
above in terms of “tiny fraction”, subjective terms are not entirely helpful. What he
meant by this is it was not unusual for this to occur. It is difficult to judge, at the remove
of 15 years from when Mr Roll left Fujitsu, just how often something that he remembers
as frequently or routine in fact occurred. He sensibly accepted that the more regular or
mundane matters in which one is involved tend not to be remembered, with rather more
unusual events sticking in the memory. In terms therefore of how often this occurred
whilst he was there, it is not possible to come to a concluded view. However, I consider
it important that the occasions to which Mr Roll refers were not isolated incidents on
his evidence, nor were they unusual, and that financial discrepancies on the Horizon
system at branch level was something which he recalls working on daily. It is also
important that he gave evidence that if Fujitsu could not track down the cause then it
was assumed the SPM was responsible, in other words user error would be used as a
default setting for investigations. This matches the evidence of an enormous number of.
PEAKs in the Technical Appendix.
He also gave evidence about hardware failures, and gave specific responsive evidence
in respect of Dr Worden’s expert report.
I accept Mr Roll’s evidence, which is supported by the contemporaneous documents.
The Post Office in its closing submissions accepted that he was a careful and precise
witness, and also that “he was at pains to assist the court and to give accurate answers”.
It also, however, submitted that his evidence “was, unsurprisingly, hazy in many
respects”.
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181.
182.
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Notwithstanding the limitations on his evidence due to the passage of time, I found Mr
Roll to be a reliable and helpful witness. I do not consider it was hazy in any important
respects. I also found his evidence to be very important. The Post Office set out in cross-
examination to demonstrate that he did not have the expertise that he claimed to have;
that he was at too low a level in 3" line support to have been involved in the matters
which he described, certainly so far as software issues were concerned; and that Mr
Parker’s evidence in particular about what he had been doing should be preferred. On
those two former points the Post Office failed, in my judgment. The success or failure
of the latter point also, but not exclusively, depended upon the evidence of Mr Parker.
After Mr Parker was cross-examined, it was clear to me that Mr Parker’s exercises that
were put to Mr Roll could not be relied upon to demonstrate what they sought to
demonstrate. I prefer and accept the evidence of Mr Roll to that of Mr Parker and the
other Fujitsu witnesses (with the exception of Mr Godeseth) by some considerable
margin. I find that during the years when Mr Roll worked at Fujitsu, 2001 to December
2004, SSC were not infrequently involved in attempting to remedy unexplained
shortfalls and discrepancies in branch accounts reported by SPMs. If they were unable
to find the cause of the discrepancy then the assumption would be made that it must be
the SPM to blame. This is clearly shown in my analysis in the Technical Appendix
particularly on the different entries in the Bug Table, and my findings on the number
of bugs present in the system.
There is one area of Mr Roll’s evidence, again a wholly subjective one, to which I do
not attribute any weight, not that I disbelieve him. This was concerning the pressure of
work within the SSC and the fact that members of the SSC were under pressure to
“close calls”, which basically means record them as having been completed. The
relevant passages are as follows:
“15. During my time at Fujitsu I know that there were budget pressures and
redundancies which impacted system development and testing. The test team felt they
were under enormous pressure to complete the testing within certain timescales which
negatively affected the test regime. Meanwhile, the development team had to balance
time spent on fixes, with time spent on developing new features for Legacy Horizon
and time spent developing a new system which I believe later became Horizon Online.
16. In my first statement, I refer to the pressure that the SSC team and Fujitsu were
under generally due to an awareness of the financial penalties imposed by the service
level agreements between Post Office and Fujitsu (paragraph 12 of my first statement).
1 believe that although individual penalties were quite modest, when applied across
multiple counters/post offices the cumulative figures involved were very high,
potentially amounting to tens of millions or more. I disagree with Stephen Parker’s
statement that these potential financial penalties were not a factor for the SSC
(paragraph 43 of Stephen Parker’s witness statement) as we were aware of them and
often commented on them, e.g. “That’s saved Fujitsu another £25 million”.”
Ido not attach much weight to this as pressure in the workplace is such a subjective
matter. Some members of SSC may have felt under great pressure; others less so. This
is a subjective account of what it was to work at SSC at that time from the point of view
of Mr Roll. The type of statement to which Mr Roll refers in terms of millions of pounds
saved does not advance matters one way or the other. Given the type of problems that
3 level support was involved in attempting to resolve, there would have been an
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184.
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inevitable pressure involved in attempting to resolve such issues speedily. Mr Roll
chose to leave Fujitsu, and therefore he left those pressures behind. Putting it at its
mildest, it would be extraordinarily disappointing if PEAKs were closed, attributing
fault to a SPM, simply because that was the easiest and quickest way for a SSC product
specialist to keep on top of their workload. Without separate cross-examination of each
product specialist who chose to close PEAKs where prior entries suggested user error
had been ruled out, it is not possible to determine the degree to which this was their
motivation in any individual case. However, it is not relevant. It is no part of the
Horizon Issues to determine why, or whether, individual personnel at SSC acted in a
particular way — budgetary concerns for their employer; exercises of judgement; even
laziness; or any of the other many possibilities. Mr Parker gave evidence that “the
possibility of financial penalties was never a factor for the SSC”, and Mr Roll said that
it was. Mr Parker’s evidence on this suffers from a wholesale attribution of this lack of
motive to every member of SSC, as indeed does Mr Roll’s, in the other direction.
Everyone is different, and there will have been a range of different reasons operating
on each member of SSC each day. Any sensible business will, in any event, always
have at least part of its attention on financial performance and this is understandable.
The Horizon Issues trial is not an inquiry into how Fujitsu manages its personnel, or its
business. I do question the allocation of Category A, B or C to some of the PEAKs that
were used in the trial, but this is something that was pursued (though not very far) with
Mr Parker and I deal with it there.
The way that Dr Worden was simply not prepared to accept Mr Roll’s evidence at face
value, and set out to disprove his factual evidence, something which in my judgment
an independent expert should never do, is dealt with in the section of this judgment
where I deal with Dr Worden’s evidence. The degree to which the evidence of Mr Roll,
and his experience of Legacy Horizon between 2001 and 2004, affects my conclusions
on the expert evidence will be dealt with in Part L, Overall Conclusions.
The fact that I find Mr Roll reliable does not mean that I automatically accept all his
conclusions. I have given a specific example at [181] about financial pressures.
However, Mr Roll’s evidence was supportive of the claimants’ case and it was
necessary for the Post Office to render his evidence unreliable, insofar as they could, in
order to damage the claimants’ case and bolster their own. In my judgment, this the
Post Office failed to do. Mr Roll’s evidence was also what directly led to the true picture
emerging of remote access. However, of itself this does not provide an entire answer to
the Horizon Issues.
Mr Henderson
185.
As explained in [78] and [79] above, Mr Henderson is a director of a company called
Second Sight which was involved in a mediation scheme, until the Post Office withdrew
from it. Initially Second Sight was engaged to perform an investigation, but after its
interim report its scope of involvement changed. It ran from 2012 to 2015, when Second
Sight’s appointment was terminated. The investigation and subsequent mediation
scheme were set up in the light of disquiet about the complaints of various SPMs, the
operation of Horizon, and concerns that were publicly discussed, not least by Members
of Parliament. All of the documents and emails which Second Sight had at that time
were returned to the Post Office. Mr Henderson estimates these as 16,500 emails and
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187.
188.
189.
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18,500 other documents, which he said were sensibly organised in 1,700 folders. They
were in good order.
The documents in that set that were provided by the Post Office to the claimants for
this litigation were not, according to Mr Henderson, provided in the same way. He
criticised them for having no folder structure, having had metadata removed, and
lacking the original date and time stamps which were present on the original documents
with which Second Sight had been provided by the Post Office. Some important
documents, such as the Fujitsu XML transaction reports, were described by the Post
Office as “unreadable”. He had however reviewed some, but not all, of the KML data
when inspection was provided of some of the unreadable documents. He did not believe
that the documents provided in the Horizon litigation were the complete set of data
provided to Second Sight, which he had returned. [ accept his evidence on this. He was
clear in his recollection about how the documents were organised, and approximately
how many there were and their type. I do not know why the claimants were not given,
in disclosure, the same documents, prepared and collated in the same way, as the Post
Office themselves had received them from Second Sight.
He described Mr Jenkins, whom he had met, as the Fujitsu lead engineer on the Post
Office contract. He had met him in September 2012. He explained in his witness
statement that he had been given sample XML data by Mr Jenkins, and had used this to
see a level of detail that neither SPMs nor, interestingly, the Post Office, had available
to them to view. He had also been told at the same meeting that remote access was
“occasionally used” by Fujitsu. He asked for complete email records for 2008 for the 7
employees known to be working at Bracknell at the time, so he could satisfy himself as
to whether such remote access was done without the SPM’s permission or knowledge.
He was not given these, and the partial records he was given were inconclusive. His
reverse engineering of the XML data he was given gave him grounds for concern but
Second Sight’s engagement was terminated before he could reach any concluded view.
He had also identified what he considered to be particular difficulties that Horizon had
with foreign currency ~ it is (or was) a single currency system and only used pounds
sterling — and also the National Lottery. In view of the evidence of Ms Van Den Bogerd
in the Common Issues trial and the Ping fix, that latter point may not be particularly
controversial in any event as this litigation progresses. Foreign exchange is the subject
matter of bugs 14 and 23 in the bug table. Bug 14 is now accepted by the Post Office
in Appendix 2 of its Closing Submissions as one of a number of “bugs with lasting
impact (although they were resolved)”. I find in the Technical Appendix that Bug 23 is
a bug. The contents of the Technical Appendix are therefore consistent with Mr
Henderson’s views on this.
A working group was involved in the Second Sight scheme, and the progress of cases
all the way through the mediation scheme was slower than the working group wanted.
Second Sight’s appointment was terminated before Mr Henderson could reach finalised
conclusions on most of the issues that he said had been uncovered. I have already stated
the approach that I adopt in relation to the technical nature of the Horizon Issues, and
how the evidence of the experts in IT who gave evidence before me effectively takes
precedence over observations by other witnesses on technical issues, which must
include Mr Henderson.
~387-
190.
191.
192.
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Mr Henderson explained in his oral evidence that he considered his evidence to the
court not to be entirely unrestricted. He considered it was subject to a restriction that
had been imposed upon him. There was a letter of engagement in this respect, which
was dated 1 July 2014 and accompanied by a document which was signed by someone
called Chris Aujard for the Post Office. The letter of engagement set out several pages
of terms governing Second Sight’s engagement. Clauses 2.1 onwards set out what
Second Sight were to do:
“2.1 The Scheme has been set up to try to achieve the mutual and final resolution of a
Subpostmaster's concerns about Horizon and any associated issues.
2.2. Second Sight Support Services Limited ("Second Sight" or "you") has agreed to be
a member of the "Working Group" whose role it is to oversee the Scheme and to assist
in investigating individual Subpostmaster complaints.
2.3. This letter and its schedules will form the basis of the terms of Second Sight's
engagement by Post Office Limited ("Post Office") to provide Services to the Working
Group in relation to the Scheme.”
Clause 6.2 stated:
“6.2 Second Sight will not, and will ensure that the SS Directors and any SS Personnel
will not, act, directly or indirectly, in any capacity (whether for any former or current
Subpostmaster or a competitor of Post Office or otherwise) against Post Office or any
of its officers, directors or employees save to the extent a) that it is expressly agreed in
writing by Post Office that the work proposed to be undertaken will not have a material
adverse effect on Post Office's commercial or financial interests or reputation, or b) as
required by applicable law or by the mandatory rules or requirements of any regulatory
authority, government department or agency to which Second Sight is subject or c) as
required by an order of a court of competent jurisdiction.”
Clause 6.3 imposed this for a period of 15 months.
The shorter one page document which Mr Henderson and his co-director were asked to
sign and return contained different terms. The letter of engagement set out the terms
upon which Second Sight would act in the mediation scheme. The shorter document
stated the following:
“T will not act, directly or indirectly, in any capacity (whether for any former or current
Subpostinaster or a competitor of Post Office or otherwise) against Post Office or any
of its officers, directors or employees save to the extent a) that it is expressly agreed, in
writing by Post Office that the work proposed to be undertaken will not have a material
adverse effect on Post Office's commercial or financial interests or reputation, or b) as
required by applicable law or by the mandatory rules or requirements of any regulatory
authority, government department or agency to which Second Sight is subject or c) as
required by an order of a court of competent jurisdiction.”
The period of that was stated to be 15 months, corrected by hand from the period
initially typed in of 12 months. This obviously therefore, as signed, represented if not
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194,
195.
196.
197.
198.
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the same then almost identical terms as those contained in paragraph 6.2 of the letter of
engagement.
It is a curiosity that the detailed terms in the letter of engagement were produced by the
Post Office — as Mr Henderson explained — about half way through the process. It is
also the case that the services to be provided by Second Sight were to be provided to
the Working Group, which also included members of the Justice for Subpostmasters
Alliance or JFSA, although the services were to be paid for by the Post Office. I have
outlined these terms above to make it clear, on a transparent basis, what restrictions
were imposed upon Second Sight. The Post Office’s wish to avoid any “material
adverse effect on Post Office's commercial or financial interests or reputation” is
expressed in very wide terms. Its concern about its reputation is similar to a provision
included in its funding agreement with the National Federation of Subpostmasters
which is referred to in Judgment (No.3).
The restriction to which Mr Henderson referred in his oral evidence, which he
considered limited his evidence, was an agreement between the Post Office and the
claimants about what Mr Henderson could state in evidence in this litigation, which he
referred to as the “protocol agreement”. The Post Office was therefore in the position
that it could, to a certain extent, control the scope and extent of Mr Henderson’s
evidence. He also thought that there was a restriction on the length of the witness
statement he could provide. For clarity, there was no such restriction imposed by the
court.
The Post Office, in its closing submissions, submitted the following:
“Mr Henderson was asked whether confidentiality restrictions had caused him any
inhibition in answering the questions put to him in cross-examination. He said that he
had the issue in the back of his mind and that he had tried to make sure that his answers
did not infringe the protocol. It is understandable that Mr Henderson would wish to be
careful, but the idea that he was restricted in answering Post Office’s questions is
bizarre.”
The submissions then went on to deal with the questions put to Mr Henderson, and how
there was no restriction that could have impacted upon his answers.
The actual question posed to Mr Henderson was not as set out in the above extract of
the submissions at [195] above, it was rather wider. It was posed by me and it was at
the end of his cross-examination. It was in the following terms:
“I just want to be clear: is it your evidence therefore that because of that protocol
agreement your evidence of fact to this court is narrower in scope than it would be
absent the protocol agreement?”
His answer was “yes, it is”. He was then asked by counsel for the Post Office whether
it had inhibited him in answering questions, and he said it did not. I do not consider that
the closing submissions are an accurate summary of both questions put to him about
this, or the restrictions he considers had an impact upon his evidence. The restriction
was wider than impacting upon the questions he was asked, and his answer showed that
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his evidence as a whole had been affected. In any event, those questions were posed to
him by the Post Office, as he was called as a witness for the claimants.
The mediation scheme was brought to an end by way of notice given by the Post Office
to Second Sight on 10 March 2015. The cross-examination on this was as follows:
“Q:.... If we could just look at it very briefly, the termination letter to which you have
just referred is at {F/13/24.1}. That's the termination letter I think to which you at least
indirectly referred.
A. That's correct.
Q. If we could look then to {F/1324.2}. This is a much longer letter from Post Office
that came to you on the same day. Do you recall this longer letter? If I maybe tell you
broadly what it is to do with. It's a letter in which Post Office sets out a plan for how
Second Sight could finish its outstanding work. Do you remember that letter?
A. Yes, I do.
Q. And the second paragraph makes clear that Second Sight was expected to continue
working during the notice period and that even beyond the notice period there would
be a proposed future role for Second Sight. That's what this document dealt with, isn't
it? It's a fairly long document.
A. It is, but there's another document of that date or very close to that date which you
haven't mentioned which was the press release from Post Office announcing the
winding up with immediate effect of the mediation scheme itself. That I understand
was the primary decision and our termination was a consequence of that, not a separate
issue.
Q. Well, Ithink when you say mediation scheme it's fair to say, isn't it, that this winding
up process, as you describe it, did not put an end to mediations; in fact —
A. It put an end to the mediation working group with, as I understand it, no consultation
and the announcement was made I think the day immediately before the next planned
meeting of the working group, so it was a considerable sort of shock to everybody.”
The following points can be made in respect of the evidence from Mr Henderson:
1. Second Sight was engaged to act in a mediation process. Mediation is consensual
dispute resolution, and such processes require a high degree of confidentiality within
them if they are to be effective.
2. The termination of that process unilaterally by the Post Office, with or without
consultation, is, so far as this group litigation is concerned, something that may or may
not in the future call for further consideration in terms of costs. It is not at this stage
relevant to the answers to the Horizon Issues.
3. Reasonable and conventional terms of confidentiality were to be expected in any
terms of engagement agreed between the Post Office and Second Sight, given the
scheme was a mediation scheme.
4. Terms seeking to protect the “Post Office's commercial or financial interests or
reputation”, which were included, whether justified or not in all the circumstances of
the role being performed by Second Sight, are not relevant to the answers to the Horizon
Issues.
-390-
200.
201.
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5. In Farm Assist Ltd (in liquidation) v Secretary of State for the Environment, Food
and Rural Affairs [2009] EWHC 1102 (TCC) a mediator, who had been issued with a
witness summons compelling her attendance to give evidence, failed in her bid to have
the summons set aside. Ramsey J gave a judgment refusing to do so, having considered
the position on confidentiality, without prejudice privilege and other privilege. He
stated, in his conclusions at [44]:
“The court will generally uphold that confidentiality [of mediation proceedings] but
where it is necessary in the interests of justice for evidence to be given of confidential
matters, the Courts will order or permit that evidence to be given or produced.”
The point has not, however, been argued in this case in any respect, and it may never
arise.
6. In this case the restriction has been imposed by the Post Office and agreed by the
claimants. It is regrettable, in my judgment, that any witness of fact feels their evidence
to be restricted by any existing agreement with a party to that litigation. Apart from
anything else, it is something of a contradiction for a witness, who swears or affirms
that their evidence is “the truth, the whole truth and nothing but the truth” to then add
that there is such a restriction. This appears to contradict the requirement to tell the
whole truth. However, the court has never been asked to become involved in resolving
any dispute between the parties in this respect.
7. I do not consider that any such restriction — the scope of which I am in any case
unaware — will have had any effect upon my consideration of the correct answers to the
Horizon Issues, or the answers themselves.
Mr Henderson seemed to me to be a careful and honest witness. Although his
involvement in the Second Sight scheme may have led to his having particular personal
views about Horizon, he was measured about how he expressed these. His views about
concerns over issues in particular affecting the National Lottery and foreign currency
exchange are, to a certain extent, corroborated both by the Ping fix and the position of
the Post Office on bug 14 in the bug table. However, whether they are corroborated or
not, it is not necessary to come to a concluded view on Mr Henderson’s evidence about
these, as it is the two IT experts whose evidence will be of most assistance in this
respect.
The degree to which the evidence of fact by the claimants affects my conclusions on
the expert evidence will be dealt with in Part L, Overall Conclusions.
-39]-
202.
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Evidence of Fact: The Post Office
The Post Office called the following witnesses. For the reasons explained further below,
I consider Mrs Van Den Bogerd and Mr Godeseth to be the most important witnesses
called by the Post Office.
Mrs Van Den Bogerd
203.
204.
205.
206.
207.
Mrs Van Den Bogerd gave evidence in the Common Issues trial, and indeed her witness
statement for the Horizon Issues trial was served during that trial in November 2018,
and shortly before she was called as a witness. She had become the Business
Improvement Director of the Post Office shortly before the Common Issues trial. She
is a senior director at the Post Office and is, so far, the most senior member of Post
Office personnel to have given evidence in the group litigation. I had made certain
adverse findings about her evidence in Judgment (No.3) on the Common Issues, which
was sent out to the parties in draft form under the usual embargo shortly before the
Horizon Issues trial started, and was formally handed down at the end of the first week
in the that trial, just after the claimants’ evidence of fact had been completed.
I have already explained that Ms Van Den Bogerd’s evidence was considered
completely afresh in this trial, and that simply because I had made the findings that I
had about her previously, did not mean that I would adopt the same conclusions in this
trial. Her written evidence for the Horizon Issues trial was still substantially of the same
tenor in relation to individual SPMs, in terms of widespread attribution of fault to SPMs
as a default setting, but I did detect a change of approach in Ms Van Den Bogerd in this
trial, compared to the Common Issues trial.
Originally, for example, in her statement Mrs Van Den Bogerd had specifically
attributed Mr Patny’s loss on MoneyGram to user error, based on what she said the data
showed. This passage, in paragraph 72, was corrected by her on a sheet of corrections
of a number of the Post Office’s witnesses, and in that correction (there were a number
of others) she explained that Mr Patny had cancelled the transaction but had not
reversed it. She therefore accepted that the transaction had been cancelled.
She generally demonstrated in her cross-examination a more realistic approach to the
accuracy of her evidence than she originally demonstrated in the Common Issues trial.
By the time she was cross-examined she would have had the benefit of reading
Judgment (No.3), and that might explain her new approach.
She had also amended, in her sheet of corrections, certain statements that had been
included in her Horizon Issues witness statement that were simply not sustainable on
the facts. One example of this was in relation to Mrs Stubbs (a claimant and witness in
the Common Issues trial, though not in the Horizon Issues trial) whom Mrs, Van Den
Bogerd had said “chose to settle centrally” items that were, in fact, obviously and
plainly disputed by Mrs Stubbs; and in respect of which no SPM had any real “choice”.
Their choice, such as it was, was either paying immediately or settling centrally, which
meant not paying immediately, but seeking time to pay. Mrs Van Den Bogerd’s
explanation for this was that she had not known these sums were disputed by Mrs
Stubbs. Quite how that could be, given the extended saga in relation to these sums, the
involvement of Mrs Stubbs’ MP on her behalf (Sir John Redwood, a former Cabinet
-392-
208.
209.
210.
211.
212.
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Minister), the Post Office’s promises both to Mrs Stubbs and her MP of an investigation
(the results of which, if one was ever done, have still not emerged, so far as I know),
and indeed Mrs Stubbs’ own evidence in the Common Issues trial, is entirely unclear.
She also explained that in relation to Mrs Burke “I have looked at other evidence in
relation to Mrs Burke and what was very clear to me is that Mrs Burke had done
absolutely nothing wrong in that situation.” This was not at all how Mrs Burke had been
cross-examined. Mrs Van Den Bogerd said that the corrections she had made to her
statement had been communicated to the Post Office’s solicitors before the Horizon
Issues trial had started. If that is true, I do not see how counsel for the Post Office would
have cross-examined on the basis of her un-corrected statement.
She gave evidence about out of hours transactions and so-called phantom sales, the
latter of which she explained (in her written evidence) as follows. “I am informed by
Post Office’s solicitors that in the course of investigating this matter, Fujitsu have
advised that ‘phantom sales’ were reported in around 2000 which appeared to be caused
by hardware issues”. There is a master PEAK in relation to this from 2001, and even
though Mrs Van Den Bogerd was very closely involved in the issues on Horizon, she
had not known about this until some time later. Indeed, she could not remember even
the approximate year when she had become aware of it. She did not even recall, in the
witness box, having seen the master PEAK before.
Iam most surprised that Mrs Van Den Bogerd could not remember seeing this PEAK
before she was shown it in cross-examination. It is a very important PEAK. It is PEAK
number PC0065021, dated 17 April 2001. The reason it is important is as follows. It
relates to multiple branches. It concerns phantom transactions. It identifies
dissatisfaction from more than one SPM as to how phantom transactions are being
investigated and resolved, or more accurately, how they are not being. It shows calls
being “closed” — ie brought to an end - without the permission of the SPM, even though
that should not be done. It also shows at least one SPM threatening not to comply with
their contractual obligations due to lack of confidence in the system, and also threats of
legal action. Further, in one branch, where items had been the subject of phantom
transactions (according to the SPM) ROMEC, the Royal Mail’s own engineers,
attended that branch to fit suppressors and other equipment in an effort to rectify this.
The PEAK plainly records the involvement of ROMEC, the Royal Mail’s own
engineering personnel, as follows. “ROMEC have been to site and state that they have
actually seen the phantom transactions, so it is not just the PM's word now.” (emphasis
added). The significance of this entry is obvious, and notable. Mrs Van Den Bogerd
agreed that this was “independent site visit corroboration of the problem by Royal
Mail’s own engineers at the branch”, and she also agreed that this was “clearly not user
error any more”. I do not understand how the master PEAK containing such important
information could not have been at the forefront of Mrs Van Den Bogerd’s mind. It is,
in my judgment, important corroboration from those with experience of Horizon (the
Royal Mail’s own engineers) who stated they had actually seen the phantom
transactions.
However, the conclusion reached by Fujitsu and recorded in the PEAK was as follows:
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213.
214.
215,
216.
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"Phantom transactions have not been proven in circumstances which preclude user
error. In all cases where these have occurred a user error related cause can be
attributed to the phenomenon"
The PEAK also concludes “No fault in product".
This conclusion by Fujitsu is only not made out on the factual evidence, including the
contemporaneous entries in the PEAK itself, but it is, in my judgment, simply and
entirely unsupportable. It wholly ignores the independent support of the ROMEC
engineers, who have reported that “they have actually seen the phantom transactions”
and it arrives at a conclusion that, in my judgment, entirely contradicts the evidence
available to Fujitsu at the time, and indeed contradicts common sense. Given the entry
that “it is not just the PM’s word now”, this conclusion ignores two entirely different
sources of actual evidence. One, what the SPM reported. Two, what the ROMEC
engineers visiting the branch actually saw.
Another PEAK Mrs Van Den Bogerd was asked about demonstrated the lack of
accuracy in Fujitsu’s characterisation of the type of problems that made their way to
the SSC (and which formed the basis of the Post Office’s cross-examination of Mr Roll
based on the Fujitsu/Parker spreadsheet). This was PEAK PC0208335 of 14 February
2011, also headed “Phantom Stock Declaration”. This related to withdrawn stock
discrepancies, and was summarised as "Branches will be forced to declare stock when
they don't want to. Apparent reappearance of withdrawn stock may cause spurious
discrepancies.” It was recorded in the PEAK that this could affect 10 branches per week
over the next few months. The PEAK showed that a SPM was told to declare the correct
stock, which that SPM disagreed with, and which Mrs Van Den Bogerd agreed would
mean the SPM entering an account into the Horizon system with which the SPM
disagreed. Mrs Van Den Bogerd had not seen this PEAK either, before she was asked
about it in the witness box. She agreed that this PEAK appeared to be a software
problem, and also that it was in a sense easier for the SPM because the phantom
transaction related to stock that was not even any longer in use. The SPM in question
simply could not have dealt in that stock.
In any event, I found this PEAK of great assistance, not only due to the content I have
summarised above. A fix was developed by Fujitsu but Anne Chambers, a Fujitsu
employee who had also given evidence in legal proceedings in court before (in at least
one case, the Castleton case) had entered the following in the PEAK which stated that
“this fix and the MSC already applied doesn't remove all old declarations”. Further,
Fujitsu chose to categorise this PEAK as “Administrative Response”. That term does
not begin, in my judgment, properly to describe or summarise the problems to which
the body of the PEAK referred. I find that this PEAK clearly related to a software
problem, regardless of the misleading way that Fujitsu chose to categorise it as
“Administrative Response”. I consider that anyone reading this PEAK at the time could
only sensibly conclude that this was a software problem.
Mrs Van Den Bogerd was taken through a number of examples of real-world situations,
recorded in a variety of contemporaneous documents, where a wide variety of SPMs
reported a very wide range of problems. In one an internal Post Office email reported
that a SPM had “found sensitive issue with Horizon when the system put a phantom
cheque on the cheque line in July 2013. Claims to have evidence to support his claim.
-394-
217.
218.
219.
220.
221.
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Although he himself did not suffer a loss, thinks that Horizon is flawed. Did not ask to
be contacted about this. Just wanted to say that he had this information and threatened
to go to MP as a result.”
The question was posed internally at the Post Office:
"Given the current media and in particular the BBC's attention on Horizon, do you
think it is worthwhile looking into this ‘alleged flaw' with Horizon that this SPMR has
highlighted to pre-empt any enquiries from his MP?"
The ultimate response from Andrew Winn of the Post Office was that the claim could
not be investigated without further details and Fujitsu involvement, that Mr Winn did
not understand the purpose of the call by the SPM, and also stated:
“My instinct is that we have enough on with people asking us to look at things.”
Mrs Van Den Bogerd agreed that this was an inadequate response. She said it would
have been very easy for Mr Winn to have contacted the branch and obtained further
details, and he should have done so. In my judgment, the stance taken by the Post Office
at the time in 2013 demonstrates the most dreadful complacency, and total lack of
interest in investigating these serious issues, bordering on fearfulness of what might be
found if they were properly investigated. This SPM, whose branch was known to the
Post Office, should obviously have been asked for further details (if further details were
required for an investigation), and the Post Office and/or Fujitsu should plainly have
investigated the matter as a matter of some importance. 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. This is particularly
reprehensible given that an internal Post Office document in August 2013 showed that
Mr Winn’s involvement in this was because his area of responsibility was as follows:
“also responsible for resolving specific branch accounting issues.” It was his specific
job to resolve specific branch accounting issues, yet he decided at the time that “we
have enough on”. I agree with Mrs Van Den Bogerd that this is inadequate — that is
putting it at its most favourable for the Post Office. Somewhat stronger terms are also
justified.
Mrs Van Den Bogerd had only learned of the ability of Fujitsu in terms of remote
access, namely the insertion of transactions at the counter under Legacy Horizon
“within the last year or so”, which given she is central to the Post Office’s position in
the group litigation shows, in my judgment, a remarkable situation. It is not necessary,
in order to resolve the Horizon Issues, to go further into why she has found this out so
belatedly, or why that might be.
Mrs Van Den Bogerd would accept changes to her evidence in cross-examination where
these were justified. One example was in relation to Mr Latif and corrections issued in
respect of the lottery. Her written statement had said:
“However, due to an error by Post Office, instead of increasing the scratch card stock,
the TAs decreased the stock. To be clear, this was a data entry error by Post Office and
not an issue with Horizon.”
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222.
223.
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Actually, given the process of issuing TAs for the lottery was entirely automated, and
done in conjunction with the Camelot system and by Horizon, she accepted that the
passage should be corrected. The cross-examination was as follows:
“Q: So would it be fair to correct that part of your statement —
A. It would be actually, yes.
Q. -- to say "To be clear, this is an issue with Horizon and not a data entry error by
Post Office"; is that a fair correction to make?
A. Ihave made a mistake in that the way I have worded that, absolutely, yes. So,
yes, it is fair.
Q. Would you agree with the formulation I have given, or would you prefer
something slightly different? What would you want the court to note as your
evidence?
A. So the automated -- my understanding is the transaction -- the TA is the
information that comes from Camelot to us and then it is passed through into
Horizon, so in that respect Horizon just conveys it, is my understanding, and the
information that's come from Camelot in that respect would be incorrect.
Q. So the point is that either way, it is not a manual data entry by Post Office?
A. No, it's not.
Q. Whatever it is, it's definitely not that, you agree with that?
A. Yes, absolutely not. Agree, yes.
Q. What it could be is some problem with the information somewhere between the
terminal in the branch —
A. The lottery terminal, yes.
Q. The lottery terminal in the branch and the matters showing up on the face of the
Horizon terminal in the branch?
A. Yes, I agree that.
Q. Somewhere there?
A. Yes.
Q. So it's definitely not a user error, is it?
A. No, that's not user error.
Q. Right. And on the face of it, it at least suggests some doubt as to the robustness
and integrity of the Camelot data coming through in that automated system, doesn't
it?
A. [would say yes.”
It can therefore be seen that her written evidence — “To be clear, this was a data entry
error by Post Office and not an issue with Horizon” — could more accurately be stated,
after she answered these questions, as “to be clear, this was not a data entry error by
Post Office and was an issue with Horizon”. There is a world of difference between
those two statements, which are, in my judgment, poles apart both in their content and
effect. Indeed, the accurate statement is the exact opposite of how it had been put in her
witness statement.
She also accepted that whereas her written evidence relied, so far as Mr Latif’s
experience was concerned, upon the fact that TAs had been “accepted by the branch,
which could have been challenged at that point”, in fact a branch had no choice but to
accept TAs. They simply had to be accepted by the SPM, and could not be challenged.
She also accepted that there were problems with TAs not just for the Lottery, but for
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228.
given that the Credence data was used by the Post Office in any investigations. An
extract from the report was put to her in her cross-examination (because she had given
the evidence above about Mr Coyne, the Rose Report) together with a quotation from
an email exchange with Mr Jenkins:
"Q:
“Just one question from my part - if the reversal is system created but
shows as an existing reversal, could this not be reflected with a
different code ie SR (system reversed) to clear up any initial challenges.
My feelings at the moment are not questioning what Horizon does as I
fully believe that it is working as it should, it is just that I don't think
that some of the system based correction and adjustment transactions
are clear to us on either Credence or ARQ logs.”
That's what she is saying, yes?
Yes.
And that was a fair observation, wasn't it, by her?
. That was a fair observation, yes.
. About the shortcomings of Credence and ARQ logs, yes?
Yes.
. And Gareth Jenkins' answer:
OPOre>
"[ understand your concerns. It would be relatively simple to add an
extra column into the existing ARQ report spreadsheet, that would make
it clear whether the reversal basket was generated by recovery or not.
I think this would address your concern. I'm not sure what the formal
process is for changing the report layout. Penny, can you advise as to
the process: is this done through a CR?"
Do you know what a CR is?
A. Change request.
Q. Change request, okay. Then at the bottom:
"T do believe that the system has behaved as it should and I do not see
this scenario occurring regularly and creating large losses. However, my
concerns are that we cannot clearly see what has happened on the data
available to us and this in itself may be misinterpreted when giving
evidence and using the same data for prosecutions.
My recommendation is that a change request is submitted so that all
system created reversals are clearly identifiable on both Fujitsu and
Credence."
Do you know if that change request was acted on after that?
A. I don't believe it has been acted on.
Q. You don't believe it has been?
A. I don't believe so.”
(emphasis added)
Another express passage or conclusion in the report was also put to her:
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229.
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Q. “The reversal was due to recovery (Counter Mode Id= 8 118) so this was not an
explicit reversal by the clerk. This scenario is fairly rare so it is certainly quite easy for
the clerk to have made a mistake and either he or the customer could be in pocket/out-
of-pocket (depending on exactly what happened!).”
Then this:
"The system is behaving as it should."
So there were issues, weren't there, where a problem could arise for a subpostmaster by
design of the system; were you aware of that? There was a whole category of PEAK
codes for faults which are agreed between Fujitsu and Post Office to just stay like that
as part of the design?
A. Okay.”
These two questions were then put individually:
“Let's take it in stages. You can see there it says "The system is behaving as it should"?
A. Yes.
Q. That would be problematic for a subpostmaster, wouldn't it?
A. The way Gareth [Jenkins] describes it here would be, yes, because what he says is
that it would have printed the session receipt but it doesn't seem as if it did, when
actually disconnection transaction receipts were actually printed in this example and a
recovery receipt was printed. But that's not referred to in here.
Q. Well, let's just have a look at that. Let me just ask you my second question and then
we will go on to probe that with more care. The second point is are you aware of a
closure code for Fujitsu for PEAKs which refers to faults which are known in the
Horizon system but agreed between Post Office and Fujitsu to stay there?
A. I'm not aware of a closure code.
Q. You didn't know about that?
A. No, I don't know about that.”
The following important points arise in respect of this:
1. Mr Jenkins thought that “the system had behaved as it should”. Given Mrs Van Den
Bogerd accepted that this situation could lead either to an SPM, or a customer, either
being in pocket or out of pocket, I disagree that an accounting system should work in
that way. This is not only an optimistic description, it is in my judgment entirely wrong.
2. The conclusion was that the scenario might not occur regularly and create “large
losses”. The size of the potential losses was plainly relevant to Fujitsu. Given how the
Post Office used the Horizon system vis 4 vis its SPMs, sums that were not “large” to
Fujitsu does not mean that smaller losses would not still be appreciable sums to
individual SPMs, who would have to pay for them if there were branch shortfalls. There
is also no way of discerning what Mr Jenkins meant by “regularly” in terms of the risk
of re-occurrence. Both regularity, and whether potential losses were large, are
subjective. The Lepton incident showed that the Post Office required the SPM initially
to pay the shortfall, which he did.
3. The Credence data was inadequate to show what had actually happened. Indeed, not
only was this data inadequate, it made it look as though the SPM had done something
that he or she had not done, and which the system had done.
4. It was expressly accepted that more was required in terms of the required accuracy
for “giving evidence and using the same data for prosecutions”. It was concluded that
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230.
231.
232.
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system created reversals had to be identifiable, which they were not as at the date of the
Rose Report and these emails.
5. A change required a formal Change Request, and that was neither initiated nor acted
upon.
6. Finally, and in my judgment also importantly, any risks that Fujitsu and/or the Post
Office “cannot clearly see what has happened on the data available to” them and “this
in itself may be misinterpreted when giving evidence and using the same data for
prosecutions” is a serious matter. I do not understand how a report containing such a
reference to such a serious matter could be mis-summarised by Mrs Van Den Bogerd
in her witness statement dealing with Mr Coyne’s analysis of this.
A large number of documents, including operational documents, were put to her, many
of which it appeared she had not seen before. For example, she was shown documents
in respect of MoneyGram dealing with a software release in January 2016 which
showed, to use the IT speak of the document, “multiple instances of system latency” —
or, to use more normal language, problems in the operation of the system. These
persisted through 2016 until nearly the end of that year. The internal summary of the
problem was:
"For the last several months Post Office has experienced a live operational issue with
MoneyGram transactions across the branch network. In the event of a transaction
timing out at the counter, a system error message is displayed to the user ... and the
transaction is aborted. This leaves no record of the transaction at the counter and the
transactions and funds may or may not have been committed in the MoneyGram
domain. This causes significant issues for Post Office and MoneyGram and for
customers.”
(emphasis added)
Mrs Van Den Bogerd said that she had not seen the internal document setting all this
out until she gave evidence in the witness box. One of Mr Patny’s issues in his evidence
was about MoneyGram.
She had also been involved in a meeting on 17 May 2010 with James Arbuthnot MP,
Oliver Letwin MP, and others from the Post Office, including the Chairman and the
Chief Executive of the Post Office. The documents, including the briefing pack,
demonstrate that the MPs were told that the Post Office wished to be “open and
transparent”. This was not accurate. The MPs were told that the Horizon system had
undergone an upgrade in 2010 and had the full support of the NFSP. In reality, its
functionality for SPMs had not been upgraded, and the NFSP had privately expressed
its concern to the Post Office about Horizon. There is nothing open and transparent
about telling these MPs information to the contrary. James, now Lord, Arbuthnot had
been the Minister for Defence Procurement under the Conservative government of Sir
John Major. Oliver, now Sir Oliver, Letwin was Minister of State for Government
Policy under the Coalition government, which had come to power on 11 May 2010.
These gentlemen had become involved in this matter on behalf of their constituents.
They were entitled to expect accurate information from the Post Office. They did not
receive it.
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233.
234,
235.
236.
237.
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A large number of different issues with both Horizon Legacy and Horizon Online were
also put to Mrs Van Den Bogerd, only some of which she knew about. She has been
closely involved with the defence of Horizon for some years. To be fair to Mrs Van
Den Bogerd, she has also been responsible for some changes over time which have
made Horizon easier to use, more reliable and (to use the wording of Horizon Issue 4),
more robust. Horizon as at the date the experts were looking at it is a more robust system
than it was, say, 5 or even 3 years ago. A great deal of this is likely to be due to the
efforts of Mrs Van Den Bogerd.
Equally, however, the contents of some of the internal Post Office documents that were
put to her were, in my judgment, very damaging to the Post Office’s case on the Horizon
Issues. In an “Extracts from Lessons Learned Log” document of 11 November 2015,
which was heavily redacted (including the redaction of single words), one entry under
“issues identified” was as follows regarding the Post Office:
"Failure to be open and honest when issues arise eg roll out of Horizon, HNGx
migration issues/issues affecting few branches not seemingly publicised."
(emphasis added)
This frank expression in a document authored by Mrs Van Den Bogerd herself as
recently as 2015 is consistent with the general tenor of the claimants’ case and their
criticism of the Post Office. This entry in this contemporaneous internal Post Office
document is, in my judgment, inconsistent with the picture which the Post Office
continually seeks to portray, namely that it wishes to be open and transparent about
issues with Horizon, and is as interested in getting to the bottom of any problems with
Horizon as anyone else. It is an internal recognition of a “failure to be open and honest
when issues arise.”
There were two periods that she was asked about which clearly showed the problems
experienced by Horizon almost from the outset. These were the introduction of Legacy
Horizon, in late 1999 and 2000 (the national roll-out); and the migration to Horizon
Online in 2010 (including the pilot scheme in 2009). Mrs Van Den Bogerd gave some
evidence in her statements about both of these, in terms complimentary of Horizon,
although she was far more involved in the latter than the former. At the time of the
introduction of Legacy Horizon she was only responsible for a smaller number of
branches in her then role.
In PEAK PC0033128 an entry in November 1999 shows that the branch at Dungannon
experienced a discrepancy of £43,000. The PEAK states:
“PM - Dugannon PO £43k discrepancy
Outlet has a discrepancy of £43,000 after balancing SUs and doing office snapshot.
Phil Turnock POCL BSM has advised outlet on this week’s balance. Steve Warwick
development is investigating why this mis-balance occurred.
Immediate impact of this week’s balance has been addressed but POCL are concerned
that the cause is still unknown and this will affect this and other outlets.”
After some investigation the following entry appears:
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238.
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"L have talked with development ref this problem. It is seen as a one-off. No fault can
be found and developments do not expect to be able to find a fault with the evidence
available. There is no additional information available as evidence. I suggest this call
be placed on monitor for 1 month."
The approach to this discrepancy mirrors so much of the case. A discrepancy occurs;
Fujitsu cannot find a fault; and say they do not expect to be able be find one “with the
evidence available.”
By February 2000 Fujitsu stated “counter 5 looks suspect” and continued:
“Further examination of the event logs for these two counters indicate that counter 5
looks suspect (C drive nearly full and big gap of no messages).
Calls from PO into HSH for period between 30-Oct and 10-Nov indicate a reboot
(counter not specified, but would tie in with counter 5 event log) on Saturday 30-Oct-
1999.
The evidence in the message store was that messages continued to be written to the
message store but that all the ‘Payment’ transactions which should have been recorded
in the rollover trailer messages failed to appear (although others did, such as the Rem
OUT and Transfer OUT totals).
This indicates that the problem was not one of running out of Disk space but of failing
either to retrieve, or write out, transaction totals for one particular node in the node
hierarchy.
Given that there were known problems with corrupted Persistent Object indexes at
about this time, it is possible that an update to an EPOSSNodes object failed to be
registered correctly at the outlet, causing the node accumulation to fail.
It was decided to prove this out by deleting the ‘Payments’ node in the node Hierarchy
and then running the SU balance, to attempt to identify the root cause of the problem.
Call passed to testing to be scheduled.
Update 18th Feb 2000
The test was carried out on 16th February as follows: delete the Payments EPOSSNodes
object before producing a SU balance, on a version of the current live system (CI2_2R).
When trying to print the Payments part of the SU balance, the missing node is detected
by the system and an error tablet with message "A system error has occurred whilst
printing. Please ring the helpdesk. Error at 67640." is generated. So the balance could
not be finished.
This type of error trapping error trapping was introduced at the end of last year when
resolving AI298 issues and we are investigating if the outlet did not have such error
handling when the problem occurred.
Certainly, with the current system, a missing Payments node now would not go
undetected.
The problem is currently back with development for further investigation.”
On 17 March 2000 there is another entry that says there has been another incident “of
a very similar nature” at another office. This can therefore be seen to be something that
was not, as recorded initially, a “one-off”, even if that were acceptable given the
discrepancy of £43,000. Mrs Van Den Bogerd agreed that this showed that the
underlying information was not checked until February 2000, even though the
discrepancy occurred in November 1999. She was asked about a later entry in April
2000 that referred to another occurrence, this time in Appleby for £9,000
approximately. The cause for this was recorded in July 2000 as “data trees failing to
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239.
240.
241.
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build” and that entry states “there have been a number of calls relating to this kind of
issue. A fix has been put in at C14 which will prevent this happening”. Mrs Van Den
Bogerd accepted that this was an example of an error occurring, and the system itself
failing to spot that the error had occurred.
She was shown PEAK PC0027887 which was dated July 1999 and related to “receipts
and payments misbalance”. This showed an escalating misbalance that increased, in my
judgment dramatically, in steps up to over one million pounds:
“On week 9 receipts and payments misbalance of £1337.05, week 10 misbalance of
£24000, week 11 misbalance of £12000, week 12 misbalance of £1051111.48 and week
13 misbalance of £17426.05, she has a difference on week 11 of balance due to post
office and balance brought fwd on week 12 of £1082544.32
Overall these weeks net out a difference of £27343.84. she needs business support
(reconciliation) to look into this.”
Mrs Van Den Bogerd agreed that £1.05 million was a large amount for any branch and
could not be a “real amount of cash” that “the SPM has put in her pocket”. A later entry
in the same PEAK of 27 July 1999 was:
“Balance brought forward was multiplied twice due the known software error. The
initial balance brought forward for this CAP was £1196622.72. This was multiplied
twice to give a total BBF of £2279189.04.
The discrepancy was therefore £1082540.28. This was due a known software error
which has no been resolved.”
She did not know if “no resolved” meant “now resolved” or “not resolved”. That PEAK
was not closed until 31 August 2000, and was categorised as “Administrative
Response”. One of the latest entries in this PEAK, which was not put to Mrs Van Den
Bogerd but in my judgment is relevant to Fujitsu’s approach generally, in particular to
categorisation of PEAKs (as this had already stated there was a “known software
error”), was dated 31 August 2000 (one year after the original issue occurred) and it is
most convenient to reproduce here in this judgment. This stated:
“T have now taken over analysing this problem from Steve Warwick who requested
additional information on 13/10/1999 17:49:21. I have looked at the information and I
am not convinced it can possibly be complete.
For example he said he wanted information from 20th May until 26th May. I opened
the spreadsheet mc20may.xls and observed it only had 6 counter 32 transactions in - is
this correct?
In any case my team is not used to dealing with data in this form (spreadsheets). We
have developed techniques to look at problems using a full message store plus audit
and event logs from the failing counter. Even if all the relevant spreadsheets could be
obtained I do not think it would be worthwhile me getting to grips with this new method
of analysing problems.
I see this is a very old problem (21/07/1999) and there have been many software updates
since then.
402-
242.
243.
244,
245.
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May I suggest we discontinue investigation of this particular problem but that if a
similar problem occurs again you send full message store plus audit and event logs from
the failing counter.”
And
“Closing call on basis of insufficient evidence. As this is such an old call I have not
contacted the call originator. I suggest that this call remains closed!
INSUFFICIENT EVIDENCE - ADVICE GIVEN”
(block capitals present in original)
To close such a PEAK as “Administrative Response” is, in my judgment, remarkable.
The number of different incidents recorded in the monthly incident review increased in
November and December 2000, which is shortly after (for example) the date when
Horizon was installed in Mr Bates’ branch office at Craig-y-Don, as set out at [105] of
Judgment (No.3). By then the Horizon System had been rolled out nationally. As the
ICL Management Summary that was put to Mrs Van Den Bogerd states:
“The most frequently occurring incidents in November were both types of Receipts and
Payments Incidents (Migration and Post Migration), with 31 incidents per category.
The Migration incidents have remained at the same level, whereby the Post Migration
occurrences have increased. This was followed by 17 Transactions Polled by TIP but
not by HAPS, these were due to delayed transactions as reported on APSS 2133c. These
transactions are added back into normal processing.”
Mrs Van Den Bogerd was not aware of these problems going on at the time; she was a
Regional Network Manager and did not have a national role then. No background
information was provided to her then about problems that branches other than her own
were experiencing, which were being passed back to ICL at the time. She therefore had
no knowledge of the type of problem experienced by Mr Bates in June 2001, which was
recorded in a Post Office audit document of his branch that was put to her which stated
“A correct assessment of cash holdings could not be made because the Horizon system
intermittently adds the previous days cash holdings to the daily declaration.”
By 2010 and the introduction of Horizon Online, she did have a national role and
broader responsibility. She agreed that Horizon Online did not upgrade functionality,
and documents were put to her that showed, as Mr Green put it “a litany of issues” with
Horizon. The pilot scheme went sufficiently badly that Fujitsu put it on “red alert” and
the high volume pilot was suspended in April 2010. Mrs Van Den Bogerd had not even
mentioned this in her witness statements, and said she did not know this had occurred.
The NFSP are recorded as “raised concerns but remain supportive”. All migrations were
suspended as from 25 March 2010. There were database errors recorded in a Post Office
document at F/614 called “Horizon Online Programme Update” which required an
Oracle patch set to be supplied by Oracle, and on one occasion for a limited period 50%
of MoneyGram transactions failed.
A Network Functional Report of May 2010 was put to her. Over 5 pages of the 6 pages
are redacted. Mrs Van Den Bogerd could not recall if she had seen this document, and
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246.
247.
248.
249,
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said that given the extent of redactions, it would be hard for her to recognise it, an
observation with which I agree. She said that she was not aware of there being issues
with Horizon over Easter 2010, which the document recorded.
Redactions had been incorrectly applied by the Post Office and/or its solicitors to some
of the relevant documents. This can be seen from the following example. I asked
leading counsel for the Post Office to review certain redactions and having done so, an
unredacted version was disclosed of a document dated 25 June 2014 entitled “Branch
Support Programme”. This had been co-authored by Mrs Van Den Bogerd. The purpose
of the paper was to “Update the Post Office Executive Committee on the progress of
the Branch Support Programme.” Each one of the 6 key performance indicators against
which the programme would be tracked had initially been redacted by the Post Office,
and following the review by counsel as requested by the court they were unredacted.
They were as follows:
“* Reduction of operating costs by £3m per annum
* Reduction in net agent debt by £1m
* Reduction in subpostmaster suspensions as a result of audit shortages to a level of 60
per year
* Reduction of calls into NBSC by 25%
* Reduction of audit losses of £10k of over by 50%
* Satisfaction with on-line training models of 95%”
Apart from the first bullet point, three of the other five are consistent with an aim by
the Post Office to make improvements to reduce the amount of debt incurred by, and
suspensions, of SPMs, and reduce the audit losses. The other two are related to training.
This is not consistent with a view that the debt/suspensions/audit losses are incurred by
carelessness on the part of SPMs or criminal activity. It is also hard to see how it could
be justified that these had been redacted originally.
So far as her evidence about Mr Latif was concerned, after Mrs Van Den Bogerd had
been taken through the features of his experience with the failed stock transfer and the
similarities with accepted bugs in Horizon, namely the printing out of two receipts very
close to one another (in his case, 4 seconds apart), and asked if this worried her, she
said she “would want to go back and have a look at” it. In my judgment, part of the way
through the Horizon Issues trial in 2019 is rather too late for that. I conclude that there
was no real answer available to Mrs Van Den Bogerd to the points put to her concerning
Mr Latif’s experience. Had there been, I have no doubt she would have provided that
answer in evidence.
Mrs Van Den Bogerd was in the witness box for in excess of one day, the longest period
of any of the witnesses of fact for either the claimants or the Post Office. Her cross
examination led to a far greater understanding of the Horizon Issues on the part of the
court, although her written evidence was, as originally drafted, extraordinarily one-
sided. She minimised any reference to problems or issues with Horizon, and reverted
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250.
251.
252.
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to potential user error whenever possible as a potential explanation, an approach which
she explained in her written statement as providing “plausible” explanations. Her
witness statement also stated, in terms, the exact opposite of what the reality of the
situation was, and I have given examples at [221], [223] and [226] above. Witness
statements are supposed to be factually accurate, and care must be taken in future
rounds of this group litigation that they are drafted in accordance with the rules. Making
statements that are the exact opposite of the facts is never helpful, to put it at its mildest.
It is also the opposite of what witness statements are supposed to be.
However, during her cross-examination Mrs Van Den Bogerd readily conceded a
number of points which were put to her. Her accuracy in her oral evidence was also
more satisfactory than it had been during the Common Issues trial. She accepted her
written evidence suggesting a causative user error by Mr Tank was not correct, for
example. I do not consider that her written evidence had provided plausible
explanations. It provided explanations that the Post Office wished to advance, as these
explanations would, if accepted, provide a defence to the claimants’ factual case. These
explanations were not based on the facts.
There were no evident attempts on this occasion to mislead me in her oral evidence, or
avoid uncomfortable points through a claim of ignorance (with the possible exception
of the PEAK referred to at [210] above) or of not having seen a document before. When
she told me that she had not seen a particular document before, I accept that. However,
she also told me that she had been assisted in preparing her evidence by a team of ten
people, and the Post Office had devoted “high level resources” to her evidence, as one
would expect. It is therefore very surprising that she had not seen many of the important
documents that Mr Green put to her in cross-examination. Some, such as the master
PEAK on phantom sales, one of the recurring issues on Horizon, would have been the
obvious place for anyone, still less a team of ten, to start when considering preparation
of evidence for a witness statement. She explained that there was some pressure of time
in terms of how long was available to her to prepare the statement, and this was further
explained in supplementary re-examination, but I do not accept insufficient time as a
valid explanation for her lack of knowledge on such important points. For example, she
told me that at the time of preparing her witness statement, she had not even heard of
the Callendar Square bug, one of two bugs that the Post Office accepted some time ago
had been present in the Horizon system. This is an extraordinary gap in her knowledge.
She did not know that there was a KEL dealing with failed recoveries, originally raised
by Anne Chambers in Fujitsu as long ago as 2010, which is called KEL acha959T and
which was updated most recently in 2017. This described failed recoveries, and seemed
on its face to accept that these would recur, and was very close to the experience of
both Mr Tank and also Mrs Burke. J do not see how Mrs Van Den Bogerd (assisted by
her team of ten, and with the benefit of the Post Office’s considerable resources) could
seck to give accurate evidence in the Horizon Issues trial without referring to this KEL,
still less without even knowing about it. I am also somewhat disappointed — putting it
at its very best for the Post Office — that a team of ten could have assisted Mrs Van Den
Bogerd in preparing a witness statement that was so inaccurate on such important points
as I have identified above.
Although my findings on her evidence in the Common Issues trial cannot be ignored, I
am of the view that her approach in the Horizon Issues trial to answering questions was
far more constructive and aligned to what is expected of any witness giving evidence
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253.
254.
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in court, particularly a senior witness of an organisation such as the Post Office. I do
however consider that this litigation, and indeed her cross-examination, is a very
expensive way for a senior director at the Post Office to become educated about the
myriad issues contained in the documents that were put to her. Either the team of ten
people assisting her with her evidence had the aim of producing entirely one-sided
evidence in chief, or they were unaware of all the documents relied upon by the
claimants. Either alternative is highly regrettable.
Finally, and this is a point in Mrs Van Den Bogerd’s favour, there is no doubt that the
Post Office is not as sufficiently close to the detail of what has occurred over the years
on Legacy Horizon and Horizon Online, as Fujitsu. As will be seen from my analysis
of the Fujitsu evidence of fact, I have certain views about the lack of accuracy on the
part of Fujitsu witnesses in their evidence. If that lack of accuracy has also been
included in reporting to the Post Office by Fujitsu, then that goes some way to
explaining the Post Office’s lack of grasp of so much material that is consistent with
the claimants’ case. As at late 2019, the date of this judgment, the Post Office also has
the added benefit of the views of both the IT experts in the litigation, their four joint
statements, the agreed number of bugs in the bug table (12, if one takes the number
accepted by Dr Worden), the total number of bugs Mr Coyne says he has discovered
(which so far as Horizon Issue 1 is concerned became 21), and collectively my findings
on the Horizon Issues. These are not restricted solely to the number of bugs which I
have found to exist which relate to Horizon Issue 1, but also those that relate to Horizon
Issue 4. There are multiple bugs, errors and defects in both Legacy Horizon and Horizon
Online in its HNG-X form.
The degree to which the evidence of Mrs Van Den Bogerd sits with my conclusions on
the expert evidence will be dealt with in Part L, Overall Conclusions.
Ms Phillips
255.
256.
Ms Phillips is a Team Leader at the Post Office for Agent Accounting and Santander
Banking. She was originally engaged by the Post Office in 1999 through an
employment agency, and has worked in a number of roles since then. In her current
role, she oversees the processes of recovering losses from SPMs that they have declared
in their branches. The department used to have “debt” rather than “accounting” in the
name, but its function remained the same.
Ms Philips confirmed what had been in dispute for so long during the Common Issues
trial, namely that SPMs had no option but to accept the figures provided to them, even
though they may have been “settled centrally”. This is notwithstanding that her
terminology in her witness statement was that SPMs “chose to accept”. This
terminology was used throughout the witness statements for the Post Office, and it has
already been seen that Mrs Van Den Bogerd accepted TAs had to be accepted, and there
was no choice in this respect, as Mr Latif had explained. SPMs clearly did not have a
choice, and the wording “chose to accept” is not an accurate description. It obviously
states or suggests that SPMs had a choice, when no such choice was available to them.
The only choice they had was whether to pay the amount immediately, or settle
centrally which means obtaining time to pay. It had been necessary for me to make
findings on what “settling centrally” meant in the Common Issues trial, and the Lead
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257.
258.
259.
260.
261.
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Claimants in that trial had been directly challenged on this very point in their cross-
examination.
There is no reference in the letters sent to the SPMs in question relating to any ability
to dispute the sums which the Post Office treated as debts. Ms Phillips’ evidence went
to the way that the Post Office seek to collect sums from SPMs who have settled
centrally, even though they may have earlier raised a dispute (or sought to raise a
dispute) with the helpline. Sometimes amounts above £5,000 would be checked by
reference to the helpline call logs, but the amount was not a set threshold and it
depended upon how many sums had been settled centrally as to whether this happened.
This checking did not therefore always occur, even above that figure.
Her evidence demonstrated that there was no dispute function within Horizon.
Essentially, her task was debt collecting, as the Post Office saw amounts “settled
centrally” as debts. Her concern was to obtain payment, or agreements to pay, and if
not, then to escalate the matter to a SPM’s contract adviser. Usually, she said, the first
or even second letter would lead to payment by an SPM. Neither of those standard
letters referred to disputes. Mr Godeseth confirmed that the lack of any dispute button
or function on Horizon was, as he put it, “by design”. This shows that the Post Office
had been advancing a case, at least for a substantial part of the Common Issues trial,
which was directly contrary to the evidence of its own witnesses of fact in the later
Horizon Issues trial. I find this difficult to understand or explain. However, Ms Phillips’
role was fairly clear and she explained the process of branch dispute forms which would
be used when a SPM raised a dispute directly with her team. This elementary system
seems sensible, but it was only introduced in early 2018, and it would lead to a seven
day period after which (if the form was not returned) the “block” placed on the amount
would be lifted. She estimates that it would be used at least 5 times a month.
Ms Phillips gave useful evidence on the system used by her team, and I found her
credible. The evidence did however go more to the Post Office’s accounting functions,
and how it pursued sums that it considered to be due from SPMs. The reforms
introduced in 2018 in terms of the branch dispute form are part of that process, but are
not part of the Horizon system.
She had also provided some evidence to Mr Smith (who was also called as a Post Office
witness) in terms of the number of Santander TCs that were issued, which had not been
described correctly in his witness statement and which had been misunderstood by both
the experts. This was clarified, and also she explained that of the number of TCs issued
in one year in her particular area, 2016-2017, which was 3,968, the Post Office could
not say how many were disputed because that data was not kept. This would appear to
bea fairly elementary piece of information for the Post Office to monitor or record. The
failure to do so is surprising.
Ms Phillips’ evidence in her witness statement did not directly impact upon the Horizon
Issues to any appreciable degree. Her evidence went to wider issues in the group
litigation. Her figures for Santander TCs, which had been given in evidence (for some
reason) by Mr Smith and not by her, were considered by the experts.
Mrs Mather
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262.
263.
264.
265.
266.
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Mrs Tracy Mather is a Team Leader of the Finance Service Centre or FSC. She started
working for the Post Office in 1987 and has been in the FSC throughout, becoming a
team leader in 1999. She has managed teams in Cheques, Postal Order, Pay-out and
MoneyGram. Her witness statement was served in response to Mr Coyne’s 1“ Expert
Report, and explained why the Post Office used Credence to investigate discrepancies.
She explained the difference between Credence, which records the transactional data,
and POLSAP, which is what is called a “back end” accounting system. She explained
the latter is on a higher level. Credence is used by her team to investigate differences
between what a branch says has happened to a transaction through Horizon, and as she
put it, what a different source of information might say. Credence was adopted in 2009.
She confirmed that Credence does not record key strokes, it records “transactional data
as in sales and non-sales”. Mrs Van Den Bogerd had stated that Credence records actual
key strokes by stating in her written evidence that Credence “records all key stroke
activity performed in that branch by the user ID, date and time.” This was not correct,
and was corrected by Mrs Mather in chief. Her team does not have access to the ARQ
data, which has to be obtained from Fujitsu. This is also called audit data. Credence is
not used for MoneyGram. I accept her evidence on this point and find that Credence
does not record all key stroke activity.
Doubts expressed in the Ernst & Young Management Letter for the year ended 27
March 2011 about the integrity of data in Credence were put to her, but she was unaware
of any such doubts having been expressed and did not know about them. She had not
been in a team that had requested audit data, and said that would be the fraud or security
team who would do this. Passages from internal documents suggesting the audit data
came at a high cost to the Post Office were not something of which she seemed to be
aware. She started using Credence in 2016.
She gave written evidence about what was called the Rose Report, although she did not
actually know about it herself, and she also was unaware of anyone being deterred from
making ARQ requests due to the cost to the Post Office (charged by Fujitsu), which
was a point Mr Coyne had raised. Given her team did not make ARQ requests, her
evidence on this was unsurprising. She was aware that a certain amount of requests
were allowed, and above that amount a charge was raised by Fujitsu; however she did
not know what the charge was.
There was one passage of her witness statement which went plainly beyond any direct
evidence she could usefully give. It was in paragraph 20 and gave vague evidence about
her understanding of some confirmation given by Fujitsu to the Post Office’s solicitors
about the contractual limit on ARQ requests, when or if that had been exceeded, a “new
commercial term” between Fujitsu and the Post Office about what was agreed and the
cost of these. Her conclusion was “any requests above the agreed limit are chargeable
but I understand that the terms depend on the details of the requirement.” She was not
cross examined about this, and given her answers in cross examination about her
understanding of ARQ requests (which was minimal) and her experience of having
made such requests (which was never), that is understandable. However, in terms of.
providing guidance to the parties on the contents of witness statements, to assist the
efficient conduct of these proceedings going forwards, witnesses should not have
paragraphs of this nature in their witness statements about matters in which they have
had no involvement at all. Mrs Mather — and there is no criticism of her in this — has
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simply never been involved either in making ARQ requests, or in the contractual
arrangements between Fujitsu and the Post Office, or the “new commercial term”
between those two entities in relation to the extra data required for the litigation. She
stated that she had “no idea” about the charges that would be raised.
I found Mrs Mather to be a credible and helpful witness. Her evidence was very useful
regarding Credence, and otherwise of less than central relevance to the Horizon Issues.
The degree to which the evidence of fact supports my conclusions on the expert
evidence will be dealt with in Part L, Overall Conclusions.
Mr Smith
268.
269.
270.
271.
Mr Paul Smith is the Operations Support Manager at the FSC and has been since
November 2016, having started at the Post Office in 1996. Originally he started in
pensions and then moved to human resources and payroll, until in 1999 he moved to
the Network Business Support Centre helpline, or NBSC. In 2000 he moved to work as
a Problem Manager, dealing with problems that came through the helpline. He led the
team that updated the knowledge base for the helpline, and was Lottery Manager in
2004. After performing different roles he became a Change Analyst in 2011, and then
the Santander manager. He returned to Lottery within the Post Office in 2013 and
worked there as a Team Leader. His existing role has a number of different activities
including handling specific product based problems. His evidence dealt with volume of
TCs and a suggestion made in Mr Coyne’s report that TCs for a branch in Potters Bar
were initially made in error.
One passage in his statement is of particular importance in resolving the Horizon Issues.
It states:
“TCs are issued by FSC. I understand from Post Office’s solicitors that the processes
by which FSC determines whether a TC is required is outside the scope of the Horizon
Issues trial.”
The reason that this is important is as follows. Dr Worden relies upon TCs as one of his
“countermeasures” that goes to the robustness of the Horizon system. Mr Coyne does
not, and the claimants submit that the whole process of TCs is entirely outside the scope
of the Horizon system. This evidence from one of the Post Office’s own witnesses
makes it clear that the claimants’ point of view is shared (or at least was when Mr
Smith’s statement was prepared) by the Post Office’s solicitors, and the decisions
regarding whether TCs are issued are outside the scope of the Horizon Issues. This
evidence by Mr Smith supports the claimants’ position on this, and also supports the
approach of the expert evidence of Mr Coyne, and is contrary to the position adopted
by Dr Worden.
A case management system was introduced by the Post Office in September 2018 to
record each individual challenge to a TC. This is called the Dynamics System, and is
still in what is called “roll out”. Individual challenges to TCs were not recorded prior
to that. Further information about how this system was working was obtained in cross-
examination, and leads me to the conclusion that the way that TCs are recorded now is
far improved from what it was before the Dynamics System was introduced. That does
not however take one very far. Mr Smith knew of reports that were available from that
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272.
273.
274,
275.
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system but he had not produced any. Those reports would be the best evidence of the
type of points Mr Smith was seeking to make for the most recent periods at least, but
given he had not used them, it is not possible to speculate on what they might show.
Mr Smith had obtained almost all the data contained in his statement from others, and
some was plainly incorrect, and other data so vague as to be wholly unhelpful. For
example, for Santander, originally he had provided a table with a column stating that
2,890 disputes were received from branches in the 2016/2017 financial year. In fact,
that column should have been disputes received by Santander from the Post Office.
This was corrected in his second witness statement, but Mr Smith was unnecessarily
combative, in my judgment, about the need for the correction, maintaining that “the
facts and figures were correct” in the first statement when they plainly were not. The
figures were correct as figures but the descriptions of what the figures were, were
plainly wrong.
Even after the correction, the various figures extracted by him from information
provided by others was not particularly useful. For example, the figures for the numbers
of TCs disputed, and for compensating TCs, for BOI Retracts and the Lottery, were
both estimated at 1,500 and 500, for both line entries. This estimate was plainly of the
most vague type, and even Mr Smith could not comment on the reliability of either of
those estimated figures for either line entry, although he maintained the figure for issued
TCs would be reliable. This evidence from him, was of the most general type, and was
not of great, or indeed any, assistance. For example, in respect of MoneyGram his
evidence was that one or two disputes a month were received but they were rarely if
ever accepted. Given he had no idea at all of the overall total, this evidence does not
assist me in resolving the Horizon Issues one way or the other.
His explanation for the TCs at Potters Bar was that a cheque that was deposited for
£90,000 was mis-keyed, and entered for £900,000. Accordingly TCs were required to
correct this at the branch, and the need for two was because the payment was made by
cheque.
I found Mr Smith’s evidence, with three exceptions, to be of no assistance whatsoever.
The two exceptions are his evidence I have summarised in [269] which is relevant to
the scope of the Horizon Issues and Dr Worden’s countermeasures, and his explanation
about Potters Bar and the two TCs. I accept his explanation about the Potters Bar TCs.
Both of those exceptions are relevant to the Horizon Issues. The third exception is his
evidence about the Dynamics System. This goes to the robustness of Horizon as of 2019
and is therefore relevant. However, the absence of such a system also goes to robustness
prior to its introduction in 2018, and is also therefore relevant. However, his wider
evidence is of limited relevance at best. His knowledge of the figures contained in his
statement, and the vagueness of his evidence generally, were such that the utility of the
exercise which he presented in his statement is de minimis. In any event, the substance
of that evidence went to an attempt to demonstrate that some TCs are challenged by
branches, and fewer challenges are upheld than are made. The figures vary inevitably
from year to year, and this case is not about general statistical trends in any event. In
some areas of business TCs have fallen to a very low level, for example the DVLA,
which Mr Smith explained was only 4 in the last year, none of which have been upheld.
However, the records that were put to him show that there were 2,717 in the period
2010/2011. All this evidence does is show that far fewer TCs are now issued by the
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Post Office in relation to the DVLA business, which as Mr Smith explained, has fallen
considerably in any event. None of these points are of particular relevance to resolving
the Horizon Issues. The experts are agreed that Horizon as it is in mid-2019 is more
robust than it was in the past. One would expect, therefore, fewer TCs to be issued now.
Mr Johnson
276.
277.
278.
279.
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Mr David Johnson is a Training and Audit Advisor at the Post Office. He started his
career at the Post Office in 1984 as a counter clerk in a Crown Branch, and worked his
way up until he was the Branch Manager at the Barry Crown Office. He was in that
post when Horizon Online was introduced in 2010. He moved to his current role in
2012, and his role used to be called Field Support Adviser. Two thirds of his time is
spent training SPMs; the other third is spent auditing them. He had also been involved
in training some of the legal representatives for both sides involved in the group
litigation, and the experts, on the Horizon system. As well as his first witness statement,
he had provided a supplementary one dealing with some points in Mr Henderson’s
witness statement which was served for the claimants.
He was cross-examined about screen layout and design, the risk of mis-keying (which
did not seem to concern him, although there were internal Post Office documents
showing it was a known problem) and also the reports and functions available to SPMs
to investigate shortfalls and discrepancies, rather than those which the Post Office itself
used such as Credence. He agreed that the ways available to SPMs to investigate in
branch were “not the most user-friendly way of investigating”.
He agreed with a statement in a 2016 internal Post Office document entitled “Network
Development Programme Operation Simplification” that stated:
“There are a number of branch operations processes, especially around branch
accounting and reconciliation, which operate using legacy processes. They are
unnecessarily complex and detract Post Office branch resources from serving
customers. Stock Unit Management and accountability is very poorly controlled and is
operated on very complex business rules. The lack of accountability and visibility of
cash and stock transfers between Stock Units can lead to errors. rework and provides
opportunities for fraud."
(emphasis added)
He also stated that the following entry was “not completely unreasonable” although he
said that his experience of suspense accounts in branches was that they worked and did
what they were supposed to do:
"Similarly, Suspense Accounting is based upon legacy cash accounting practices, ill-
defined and out of date processes. Inefficiencies lead to poor utilisation of resources
both in Post Office branches and Support Services."
Mr Johnson is a highly experienced person, as one would expect given that the Post
Office chose him to train the legal teams and experts on Horizon. All his experience,
so far as using Horizon is concerned, is in Crown Offices, which are not the same as
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branch Post Offices, in that the Post Office operates Crown Offices itself. This means
that a SPM in a branch Post Office is personally responsible for any losses in that
branch; whereas a Crown Office manager is an employee of the Post Office. This
therefore gives him a somewhat different angle of approach to the use of Horizon, but
I accept him as an accurate and helpful witness.
His evidence was very useful in terms of how Horizon works. The Horizon Issues are
not about the actual design of the Horizon terminals in branch, and whether (say) this
could be improved by having larger buttons or the screen layout adapted differently. In
some of Mr Johnson’s evidence, the claimants’ counsel strayed into the areas of
potential improvements to functionality in branch and design. These are not part of the
Horizon Issues. The degree to which the evidence of fact affects my conclusions on the
expert evidence will be dealt with in Part L, Overall Conclusions.
Mr Dunks
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Mr Andy Dunks is at IT Security Analyst at Fujitsu Services Ltd, and was the first
Fujitsu witness to be called for the Post Office. He has been employed at Fujitsu on the
Post Office account since 2002. He has working knowledge of the Horizon System. His
evidence went to audit data extraction and the integrity of the data during that process.
His evidence related to the process as it was when he made his statement, although
given he had been involved for some 17 years his experience also related to Legacy
Horizon and his evidence about data extraction covered that period too. As emerged in
his cross-examination, he had also given a witness statement in the criminal trial of Mrs
Seema Misra.
He agreed with the definition of data integrity put to him, which is that data integrity is
the overall completeness, accuracy and consistency of that data which you can measure
by comparing between sources. He said the 12 controls that he had listed in his
statement explaining these he had compiled as a list from his recollection, and that he
had not worked off a document to come up with the list in his statement.
Mr Dunks gave every indication, in the first part of his cross-examination, of being
helpful and frank, and explained the process of data extraction and answered questions
put to him openly. However, this encouraging start came to an end when he was asked
about two curiously worded paragraphs in his statement. These stated as follows:
“8. There is no reason to believe that the information in this statement is inaccurate
because of the improper use of the system. To the best of my knowledge and belief at
all material times the system was operating properly, or if not, any respect in which it
was not operating properly, or was out of operation was not such as to effect the
information held within it.
9. Any records to which I refer in my statement form part of the records relating to the
business of Fujitsu Services Limited. These were compiled during the ordinary course
of business from information supplied by persons who have, or may reasonably be
supposed to have, personal knowledge of the matter dealt with in the information
supplied, but are unlikely to have any recollection of the information or cannot be
traced. As part of my duties, I have access to these records.”
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Before I come to his evidence about this, it is obvious that the wording of paragraph 8
is almost that of a legal disclaimer (or a legally worded claim of accuracy, to be more
precise), rather than a witness’ actual evidence. It would be very curious for a witness
of fact to decide to put such a formally (and rather clumsily) worded paragraph in their
witness statement. However, he was asked about these passages. He was asked what he
meant by “the system”. The transcript records the following:
“Q: What is the "system" there? Is that the system of the process of extracting audit
data, or is it something else?
(Pause).
A. Good question. There's no -- I'm not sure what I was meaning by that, "There is no
reason to believe ..."”
He was asked if, in relation to the part which states “the system was working properly
or, if not, any respect in which it was not operating properly, or was out of operation”
the following:
“Q: Again, pausing there, it is slightly confusing. Are you aware or not aware of any
instances where that system was not operating properly?
A. No, not really, no.”
He was asked if that part of the statement had been written for him by someone else,
and he said he could not remember. He was also asked if it was a “Fujitsu party line”
to put this in statements when it comes to extracting data and he said no, and that he
was not aware of a Fujitsu party line. He accepted that gaps and duplicates in audit data
were problematic, and he explained that they had to be investigated by audit support. It
was clear to me that Mr Dunks considered audit data that had gaps and duplicates should
not, in that form, be used. He said he would contact audit support if these occurred.
However, some of Mr Dunks’ evidence, in particular what he had to say about
paragraph 8 of his own statement, proved in my judgment to be somewhat misleading.
He was shown a witness statement from Mr Gareth Jenkins from the Misra criminal
trial in 2010, He said he had not seen this statement before. The statement put to him is
some 8 years older, approximately, than his own statement. Mr Jenkins’ statement
stated at the end:
“There is no reason to believe that the information in this statement is inaccurate
because of the improper use of the computer. To the best of my knowledge and belief
at all material times the computer was operating properly, or if not, any respect in which
it was not operating properly, or was out of operation was not such as to effect the
information held on it. [ hold a responsible position in relation to the working of the
computer.”
The similarities between this passage, and the one in paragraph 8 of Mr Dunks’ witness
statement almost 9 years later, are somewhat striking. Given he had not seen the
statement before, there was no obvious explanation. His answer was as follows:
“Q. And you're not sure why it would largely replicate your paragraph 8?
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A. No, I mean, we do have a standard witness statement that we produce for ARQs.
When we supply ARQs we are sometimes asked for a witness statement to go through
the process and verify as far as I'm aware that the data I supplied is accurate. Now, we
use that quite a lot and it may actually be in that statement.
Q. Isee. So when I asked you earlier whether it was something of a Fujitsu party line
you said you didn't think it was, but actually it looks as though it is on the basis of what
you have just told me and on this document as well.
A. It could be. It may be part of our standard witness statement that we supply.”
Mr Jenkins had given evidence in his witness statement from 2010 about duplicate
entries in the audit data that had had to be removed. Mr Dunks was then taken to the
witness statement of another Fujitsu witness in the Misra trial, called Penelope Thomas.
She had given evidence about data extraction and listed a number of controls, which
were remarkably similar to the ones that Mr Dunks gave evidence about (although Ms
Thomas had omitted one). This is hardly likely to be a co-incidence, if Mr Dunks really
had compiled his list of controls from memory or experience. She also had the identical
passage in her witness statement as Mr Dunks’ paragraph 8.
Mr Dunks also said in respect of this, which in my judgment painted a rather different
picture to that portrayed in his witness statement, the following:
“A. The statement again is to verify the integrity of the data once extracted and given.
We don't control what's in the data. Our process is about extracting it and securely
passing it over to the Post Office. It's not our concern of what's in the data.
Q. It's not your concern what's in the data?
A. No, it's what we're -- we're process-driven to extract certain types of data for certain
requests.
Q. And so whether or not that might match another record or not, or replicate or
duplicate or have gaps, that's not part of your remit, that's not really part of your
concern?
A. No, it's not.
Q. I see. So reading that and reading the paragraph 8 as it was in your witness
statement, it doesn't give much comfort to somebody that's then trying to rely on ARQ
data as being a gold standard to compare and investigate anomalies, does it?
A. Possibly not.”
The reference to “gold standard” was the expression that had been used by Dr Worden
in his report to describe the quality of the audit data that was held by Fujitsu. It should
be a very great concern to anyone tasked with extracting audit data, should that data
prove to have gaps and duplicates in it. This is because gaps and duplicates in the data
affects the accuracy of that data. I consider that such a cavalier approach to whether
audit data has gaps and duplicates, as evidenced by Mr Dunks’ saying that such things
were not part of his concern, to be entirely contradictory to a statement verifying the
accuracy of such audit data.
My findings in relation to this are as follows:
1. Mr Dunks expressly sought to mislead me by stating that there was no “Fujitsu party
line” when it came to the contents of drafting witness statements about audit records
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for legal proceedings. There plainly is; it was used in the Fujitsu statements in 2010 and
it was used by him in his statement for the Horizon Issues trial.
2. The passage included in paragraph 8 of his statement is plainly a standard form of
words, and reads as though it is a legally drafted assertion of accuracy. The witness’
assertion that the system was at all material times working properly, or if it wasn’t, this
did not affect accuracy, does not sit consistently with Mr Dunk’s acceptance of gaps
and duplicates in audit data.
3. That Mr Dunks did not really know very much about paragraph 8 of his own witness
statement was confirmed by the way he was puzzled when he was asked about it.
4. However, Mr Dunks’ acceptance of standard wording provided by others (probably
within Fujitsu) is less important than the fact that he originally tried to mislead the court.
5. I do not accept that he identified the 12 controls in his statement from his recollection.
He must have been working off another document, which he was not prepared to
identify. I draw this conclusion because of the marked similarity with the controls
included in Mrs Thomas’ statement from 2010; the wording of the controls themselves;
and the fact he was prepared to mislead me about the paragraph 8 point.
6. In re-examination he asserted that the statements in his paragraph 8 were true, and
that he would not have signed his statement had this not been the case. I find that he
cannot have known whether those statements were true or not. There is no evidence of
any steps he took to check whether or not they were true or not. I find they were simply
standard sentences supplied to him, and I find that he signed his statement without any
independent knowledge of whether they were true or not.
7.1 find that passage in his witness statement simply to be meaningless assertion.
He said that he was unaware of Post Office internal concerns that there was “a lack of
system audit trail” in a document of 22 October 2016. I find his lack of knowledge
about this surprising, given his role.
I found Mr Dunks very unsatisfactory as a witness. He was both plainly aware of the
Fujitsu “party line”, or corporate position, regarding the words asserting accuracy of
audit data, and he was very anxious to keep to it, whilst initially denying that there was
one. He sought to mislead me about both his paragraph 8 wording, and the way he had
compiled his list of controls. The degree to which the evidence of fact affects my
conclusions on the expert evidence will be dealt with in Part L, Overall Conclusions.
Mr Godeseth
297.
Mr Torstein Godeseth is employed by Fujitsu and is the Chief Architect on the Post
Office account. He had provided three witness statements, as had Mr Parker. After
graduating from Oxford with a degree in physics in 1974, he worked for Rolls Royce
as a combustion engineer and then joined the Royal Navy in 1977 as an Instructor
Officer. Whilst in the Royal Navy, he started his career in IT working in systems
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programming. It will be remembered that in the 1970s computing and IT was a
relatively young field, and Mr Godeseth has therefore been involved in that industry
since its relative infancy. He left the Royal Navy in 1981 and worked in systems
programming and technical support for the IT at Forward Trust Ltd. He joined the Post
Office IT department in November 1987. Initially this was to work on a project to
introduce technology into Post Office branches.
He was working with the Post Office as a technical advisor when the Post Office and
Benefits Agency procured the Horizon system originally. He remained involved in
different roles, including being outsourced from the Royal Mail IT department to Xansa
in 2003, and contracted to the Post Office to act as the technical adviser interfacing with
Fujitsu amongst others, Although an independent contractor, he worked between 2005
and 2010 with the Post Office as the technical advisor on IT projects including the
change from Legacy Horizon to Horizon Online. He joined Fujitsu as a full employee
in 2010. He described himself in cross-examination as the designer of Horizon.
He had a greater knowledge of Horizon Online than of Legacy Horizon, although given
his involvement in Horizon ftom its early days he had significant knowledge about
both. Horizon was initially, in the late 1990s, called the Pathway project and was a joint
effort between the Post Office and the Benefits Agency, including a way to computerise
the payment of benefits to those entitled to them, through payments to benefits
claimants which were to be made through the Post Office by means of a swipe card
method. This project ran from approximately 1996 to 1999 and was to be provided by
ICL (which Fujitsu partly owned and later fully acquired). At some point during the
development of this project the Benefits Agency withdrew, and what had been the
Pathway project, essentially a tri-partite venture (the parties being ICL, the Post Office
and the Benefits Agency) became Horizon, now called Legacy Horizon.
Although this litigation is not about the way that the Horizon system was designed, it
is about its functionality and robustness in use, Mr Godeseth said that it was a specific
Post Office decision not to have any dispute button/function for SPMs built into the
Horizon system.
He said:
“I think the basic argument was that disputes -- we wanted the flow of data through the
system as quickly as possible because that keeps our books tidy and it was an inference
that there was always the -- you had to press a button to take things through, but then
you would pick up the phone to NBSC and say that wasn't right.”
(emphasis added)
I accept this factual evidence. It is, however, directly contrary to a major part of the
Post Office’s case in the Common Issues trial, namely that by reason of an SPM
accepting items at the end of a branch trading period, that gave the branch trading
statement the effect in law of being what is called a “settled account”. I rejected that
argument by the Post Office then, unaware when I did so of later evidence of fact that
would emerge of the specific decision taken at the time by the Post Office that expressly
did not include any feature within the Horizon system for a SPM to dispute items with
which they disagreed. My finding in the Common Issues trial is consistent with Mr
Godeseth’s evidence on this point.
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I deal with Mr Godeseth’s evidence within this judgment in more detail than any of the
other witnesses of fact from either the claimants or the Post Office. This is because his
evidence was considerably more detailed, and of more direct assistance in resolving the
Horizon Issues, than any other witness of fact. He has been involved in Horizon in both
its iterations for 20 years and has a vast amount of knowledge of its operation. I found
the majority of his evidence reliable. 1 provide my conclusions regarding him as a
witness at the end of this section below at [453] to [463].
In Legacy Horizon, a messaging system was responsible for storing all data in Post
Office branches and replicating it to data centres. This was called Riposte. Mr Godeseth
decribed himself as being “on the other side of the fence” during this period and he had
consulted Mr Jenkins for the section of his evidence dealing with when Riposte was in
use. However, Mr Godeseth did describe himself as “having a pretty good knowledge
of Riposte”.
When it was brought in, Horizon Online was aimed, not at improving functionality of
Horizon, but at reducing cost, and re-used (the term put to Mr Godeseth was “recycled”)
many application components of Legacy Horizon. The data was no longer to be held at
the branches (on the counters), it was to be held centrally in the branch database, or
BDRB. Accordingly, harvesters were required to extract transactions from the BDRB.
The branch database receives information from different sources. Data in Horizon
Online is obtained from different sources.
As an example with the lottery, if a person buys some lottery tickets in their branch
Post Office, the information about a particular transaction starts at the lottery terminal
in a branch; goes directly from there to Camelot; from Camelot it goes to Credence;
and then from Credence it goes to the branch database, which is effectively that
information arriving in Horizon. It is then transmitted to the terminals (in the branch)
and the SPM would see a series of TAs on the terminal in the branch, which that SPM
would have to accept; these TAs would relate to the lottery tickets sold at the beginning
of this short history. The transaction of the purchase of the lottery tickets by this route
enters the branch accounts when the TAs are accepted, and the data is captured by the
audit system. This is how lottery transactions work after what was called the Ping fix.
Prior to that it was somewhat less streamlined, although given the process I have
described is the post-Ping fix streamlined version, it is obvious that pre-Ping fix, the
route for the data was even more convoluted.
Other data for other transactions for other products goes into the branch accounts from
what is called the basket. That basket is compiled by, as an example, a customer at the
counter purchasing various Post Office and other client products; the SPM or assistant
serving that customer and pressing an icon on the screen (for example for stamps, and
other purchases); or for other products, from a PIN pad, scanning a barcode or weigh
scales. The cost of a book. of stamps is taken from the reference data table and the
terminal shows the SPM or assistant how much money the total number of transactions
are worth and what the cost to the customer is to be. It is basically the shopping basket
which is put together by the SPM (or assistant) serving the customer and adding, by
means of pressing buttons on the screen, different items to the basket as the customer
goes through the items or products they wish to buy. At the end of this hypothetical
transaction, if the cost of the basket is (say) £21.98, the customer will pay that amount
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(say by cash) which will be taken by the SPM and put into the cash amount held in the
branch.
In Legacy Horizon, the data was held in the branch on the counters in a message store.
The message system called Riposte was how the replicating of the data to data centres
occurred. The data was then stored on the correspondence server message store. This
was explained by Mr Godeseth in the following way.
All counter data was held in a bespoke message store (which was part of the Riposte
product supplied by another company called Escher Inc.). This data was replicated
within each branch to all counter positions and from each branch to the data centres
where it was held in the correspondence server message stores. Similarly, any data
inserted into the message store at the data centre (for example reference data or
authorisations for banking transactions) would be replicated back to the branch
counters. Selected data was then extracted from the correspondence servers to update
Post Office's back end systems.
Users with sufficient access permissions could inject additional messages (i.e. data) at
the correspondence server. Any additional messages injected at the correspondence
server by users with sufficient access permissions included information including the
identity of the user. That information would not be visible in the standard audit extracts,
but it would be visible in a detailed examination of the raw audit data. An SPM did not
have access to audit extracts.
There was some disagreement between Mr Godeseth and internal Post Office
documents about whether the audit data from Riposte was held in Riposte attributable
language (his view) or whether an audit conversion tool was required to convert existing
audit data from Riposte to another readable/searchable format. This ultimately may not
matter, and it may be that the author of the internal document suggesting otherwise did
not understand that Riposte attributable language was a readable/searchable format.
This difference in view does not matter for the purpose of resolving the Horizon Issues.
The Riposte software was provided by another entity called Escher. There was no
evidence about the contractual relationship between Fujitsu and Escher, and that does
not matter for the purpose of resolving the Horizon Issues.
Mr Godeseth had studied a number of problems in Horizon, and knew there were
problems with Riposte, having seen numerous PEAKs referring to this. He had also
been responsible for some testing (for example potential failures of controls, such as a
basket not balancing to zero). He was not aware of items with the same Journal
Sequence Number (or JSN) having been committed to the BRDB, and agreed that this
should not be possible. This is because the whole way the BRDB works (or one of the
principles of it, at least) is that each item committed there should be given a unique
JSN. It should not be possible for two different items to be given the same JSN.
Mr Godeseth explained that “the legacy version of Horizon was far more susceptible to
communication glitches” and agreed that there were two improvements made when
Horizon Online was introduced in that respect. These were that the susceptibility to
communication glitches was reduced; and also the quality of the communications
infrastructure was improved. It should also be added that because the storage of data
was moved to somewhere not in branch (somewhere which had not existed in Legacy
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Horizon, namely the BRDB), and because Horizon Online was an online system, the
communications infrastructure had to change substantially in any event.
One internal document from as long ago as 2008 stated: “In addition, in common with
many elderly systems that have been subjected to a succession of major changes, it [ie
Legacy Horizon] has become increasingly difficult to make those changes, and
expensive to operate." This was put to Mr Godeseth:
“Q: Now, that's a fair description of how the system originally was perhaps designed
jointly with the DSS at the beginning and launched and then over the years, between
then and 2008, there have been lots of sort of bolt-ons and additional things that have
been changed on the system, haven't there?
A. Yes, I think that's fair. The major one probably in my mind would be banking.”
The reference to the DSS meant the Benefits Agency. In other places this was referred
to as DWP (or Department of Work and Pensions) but all three references — DSS,
Benefits Agency, DWP — meant the department involved in paying welfare benefits.
Different documents and references would use different acronyms to refer to the same
entity.
He explained that a small group of Fujitsu users from the SSC (about 30 users) had the
ability to inject additional transactions into a branch's accounts in Horizon Online, using
a designed piece of functionality called a Balancing Transaction. This was
approximately the whole number of personnel who worked in SSC.
He had given information in his first witness statement, namely that in Legacy Horizon,
any transactions injected by SSC would have used the computer server address as the
counter position which would be a number greater than 32, so it would be clear that a
transaction had been injected in this way by someone other than the SPM. This is
important because it would be consistent with the case originally advanced by the Post
Office that any such injections would be entirely visible as having been done externally
(ie, not within the branch) due to the counter number used.
However, this important information was simply incorrect, and was corrected both by
Mr Godeseth and Mr Parker in subsequent statements before they were called, and as a
direct result of Mr Roll’s evidence. The information that was incorrect, and therefore
had to be corrected, had come directly from Mr Jenkins. This shows that Mr Jenkins
did, in at least one very important respect, give Mr Godeseth directly incorrect
information about the visibility of injected transactions, which not only could have an
effect on branch accounts, and whether this would show (or rather, not show) that the
impact on those accounts had come from injections made outside the branch. Mr
Godeseth only found out the true position when Mr Parker was preparing his subsequent
witness statement in the weeks prior to the commencement of the Horizon Issues trial,
in other words in 2019. He had not known that before. His explanation about this was
as follows.
“Q. You were finding out a detail that you didn't know before in quite a controversial
area, weren't you?
A. It was clearly an area that was going to be of interest because of the fact that we
were inserting transactions into Riposte. It was an operational necessity and it was done
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in a controlled way. I had believed that the way that transactions were being injected
would give them a counter position greater than 32 because the correspondence servers
basically had nodes or addresses which were above 32, there was a special address for
the gateway server, there was a special address for the extra disc in a single position
branch and [had basically expected messages to be introduced using a different counter
position and having read a whole number of PEAKs, I can quite clearly see that the
standard practice in Fujitsu was to label something which was being inserted into
Riposte so as to make it as clear as possible that it was not being done -- it was being
done as something out of the ordinary, it was being inserted because of a problem.
So we had techniques for doing that. You could put in an attribute because this wouldn't
be visible to a subpostmaster, I fully understand that, but it would be visible in the audit
trail, when you ever come back to pull out the audit trail, you could put in an attribute
to say "This was done under PEAK 75". Subpostmasters would never see that. They
would not see it in their account in their branches and I'm fully aware that that is the
case. It was a better audit than Mr Roll was alluding to when he said that it was left in
a PINICL, because that would have been an audit which is separate from the actual data
that we would be looking at should we ever need to pull stuff out of the audit trail and
the intention was always to make it as clear as possible that this had been done under
exceptional circumstances.
The techniques used to make it as visible to the subpostmaster as possible would be to
put in references which referred to a counter that didn't exist in the branch, such as -- I
saw a technique described in a number of cases which said put in a -- you know, if you
are correcting something for counter 1, call it counter 11; if you're correcting something
for counter 2, call it counter 12, These things would have been visible to a
subpostmaster and the reason that you had to do it that way was to make sure that these
transactions also got picked up and dealt with because these were legitimate counter
numbers.
If I start to put in data with a number which is not a legitimate counter number then it's
going to be ignored by systems further down the track.
Q. So which were legitimate counter numbers?
A. Up to 32.”
(emphasis added)
He also said in relation to Riposte that “Riposte was responsible for actually wrapping
the message that we were looking to insert at the counter, and in doing that, Riposte
will tell you the counter ID, or technically it was a stream, it would pick up the user ID,
it would pick up the time, so this was effectively the envelope which wrapped the
payload that we were looking to inject. If there was no user logged on at the counter
then Riposte would introduce a blank user ID and that would be picked up in later
processing.” This therefore meant that if, say, a SPM (or an assistant) was logged on at
the time that the message was inserted at the counter, it would appear next to that SPM’s
user ID (or that of the assistant). It would look as though the SPM had been responsible.
This was made crystal clear in different passages of cross-examination:
“Q: You realised for the first time that it was possible to inject or insert a transaction
with a counter position less than 32 when Mr Parker was preparing his second
statement?
A. Correct.
Q. And you knew that that was a contentious issue in this litigation, yes?
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A. Yes.”
And further:
“Q. Now, it would be possible, would it not, to use a counter number of 1, or 2, or 3?
A. It would.
Q. And if that counter number was a counter number actually in use by the SPM, it
would appear to the SPM, from the records they could see, that it was a transaction
which had been done in their branch, by them or their assistants?
‘A. Yes.”
(emphasis added)
I consider this to be extremely important evidence, both in resolving the Horizon Issues,
and indeed in the whole group litigation. Its import is obvious. It means that Fujitsu
could remotely insert a transaction into the accounts of a branch using a counter number
which was the same as a counter number actually in use by the SPM (or an assistant).
This would appear to the SPM from the records that they could see (and anyone else
looking at those records) as though the inserted transaction had been performed in the
branch itself. This information was only disclosed by Fujitsu (and therefore the Post
Office) in this group litigation in January and February 2019. Even Mr Godeseth, a very
senior person in Fujitsu so far as Horizon is concerned, said that he did not know this
before.
Mr Godeseth was also shown a Fujitsu document which was "Fujitsu restricted" and
“Copyright Fujitsu Limited 2017". The title of the document was "Post Office Account
— Customer service problem management procedure" and its purpose is described as
"To describe and document the customer service problem management process." He
was not sure he had seen the document before, and he was certainly not familiar with
its contents. Both experts had seen the document and proceeded on the basis that what
it recorded had in fact been adopted. “The customer” for the purpose of the document
was the Post Office.
He sensibly accepted that to have a robust system it was important to make informed
assessments of where problems lie, based on the relevant information that was
available, and also that it was important to capture and track that information in a way
that could be readily analysed. Indeed, Mr Godeseth’s role included awareness that
changes being made to the system were implemented without prejudicing the continued
operation of the system. The document itself expressly defined “problem” as the
unknown underlying root cause of one or more incidents. That, to me, seems a sensible
definition. An unknown root cause of even one incident is a problem in a system such
as this one. This is accepted by the document’s definition of “problem”.
The document identified the metrics that were to be used within Fujitsu to measure this.
Mr Godeseth agreed that they were professional and sensible metrics. They are stated
as follows:
“The following metrics, to be reported monthly, will be used to measure effectiveness
of the process and drive performance of the process and overall service in general:
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O Number and impacts of incidents occurring before root problem is identified and
resolved
O Number of repeat incidents following corrective action
0 Number of problem records arising from pro-active actions and trend analysis
O Number of changes arising from proactive actions
Gi Percentage of problem records without an action plan
O Average length of time to resolve problems
O Number of incidents closed without a KEL
O The number of Problem Records arising from Managed Changed (MSC, CP)
activities
O The number of Problem Records arising from the implementation of new
services/major releases.”
However, when the claimants had sought to obtain reports that would be expected to
exist, which included or demonstrated the reporting against these bullet points which
Fujitsu’s own document stated were required, and which were supposed to be prepared
every month, Fujitsu stated (through the Post Office’s solicitors) that “Fujitsu believes
that it does not record problems in such a way that would allow this to be determined
without retrospectively carrying out detailed analyses” and that it would require “a
disproportionate effort and cost” to provide these. Mr Godeseth also gave written
evidence that the reporting system identified in Fujitsu’s own document had not been
implemented and that the records did not even exist. The passage in his statement said:
"Ihave spoken to my colleague Steve Bansal, Fujitsu's senior service delivery manager,
who has informed me that the Post Office account customer service problem
management procedure document was introduced by Saheed Salawy, Fujitsu's former
Horizon lead service delivery manager and that Saheed Salawu left the Fujitsu Post
Office account in around February 2013, before the new procedure had been
implemented. I understand from Steve that Saheed Salawu's replacement did not wish
to_implement the changes and therefore the records referred to by Mr Coyne in
paragraphs 5.157 to 5.159 of his report do not exist, as we continued to follow the
previous existing reporting methodology.”
(emphasis added)
Mr Godeseth did not know who Saheed Salawu’s replacement was, although he thought
it might be a Mr Wicks. He did not know what the “previous existing reporting
methodology” to which he referred in his own witness statement in fact was. He could
not explain why the report which was said to have been abandoned, or at least not
pursued after February 2013 when Saheed Salawu had left Fujitsu, was issued for
approval in July 2014, over one year later. Indeed, he could not really explain why the
records sought by the claimants did not exist at all. He thought the reporting might be
done at meetings with ATOS, but he could not remember going to one. In fact, his
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evidence on this was so very vague as to be somewhat alarming, given his role within
Fujitsu. He did not know if there were any records of the particular type apart from
between the years 2014 to 2017, and he only knew that because Mr Bansal had told
him.
In another document, he was shown an entry which recorded that First Rate, a joint
venture between the Post Office and the Bank of Ireland dealing with foreign exchange
(also called bureau de change or bureau services), had identified an anomaly over the
way that Horizon reversed transactions that were recorded and polled through to them.
This was fixed in something called counter release 9, but although he said this happened
“on his watch” this had not been brought to his attention.
In the 2015 Problem Management Problem Review, the Dallmellington bug (which is
an acknowledged and agreed software bug) was referred to, but without identifying how
many branches were affected, for how long they were affected, or the amounts by which
their branch accounts were impacted. He accepted that it was fair to describe the report
as “not a particularly rigorous or robust treatment of recording the problem, its extent
and duration and effect.”
The following conclusions can be drawn from this evidence by Mr Godeseth. Fujitsu
should, had it been interested in providing a robust system to the Post Office, been
collating and reporting problems, which should obviously have included software bugs,
errors and defects, against the metrics contained in the Customer service problem
management procedure document, or very similar ones. On the Fujitsu evidence before
the court, it did not do so. The discrepancies in the dates of distribution and issue of the
document entitled “Post Office Account — Customer service problem management
procedure" and its "Copyright Fujitsu Limited 2017" do not tally with the account in
Mr Godeseth’s witness statement that this process was abandoned or not pursued when
Mr Salawu left Fujitsu in 2013. The dates just do not match up. The document was
issued for approval one year after that gentleman left Fujitsu. Even the evidence that it
was not pursued or implemented after Mr Salawu left was second hand from Mr Bansal,
the source of Mr Godeseth’s knowledge.
Had Fujitsu done what its own document, copyrighted in 2017, states was required, the
experts in this litigation could, and probably would, have used those reports. Those
reports would have included comprehensive records of precisely the sort of matters both
experts had to investigate in order to provide their evidence to the court on the Horizon
Issues. It is, in my judgment, a stark deficiency in the robustness both of Legacy
Horizon and Horizon Online that such records were not kept by Fujitsu. This deficiency
must inevitably also have an adverse impact upon the quality of information that the
Post Office itself would have had.
In the. Post Office’s closing submissions, an explanation was given in submission in
relation to the explanation given by Mr Godeseth in his witness statement which I have
set out in [325] above about why the records did not exist, that explanation being that
the procedure was not implemented. The Post Office submitted that it was only section
1.4 of the document that was not implemented, and not the whole document. This was
in paragraph 147 of its written closing submissions, which dealt with what the Post
Office submitted were “errors” made by Mr Godeseth which it submitted (and which
the Post Office accepted) were “significant” and which it also stated had taken the Post
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Office “by surprise”. It sought to correct these errors, by way of submission rather than
evidence, and one of those corrections was in relation to the implementation of the
document in question. The claimants objected to this, and said the explanation that was
provided was nowhere in the evidence, and the Post Office should not be permitted to
give evidence by way of submissions.
Leading counsel for the Post Office was asked about this specific part of the
submissions at the end of oral closing submissions and said that the explanation in
paragraph 147.4 of the closing was “my instructions but, my Lord, it is based upon a
previous version of the document and then an amended version of the document. And
1 will undertake to give your Lordship the two references.” In an email of 10 July 2019,
which provided some references, further explanation was given which were said to
support the submission that it was only section 1.4 of the document that was not
implemented. The Post Office relied upon the following four points in support of that
submission:
1. The passage in Mr Godeseth’s witness statement I have reproduced at [325] above.
2. That there were different versions of the document that were disclosed, but only one
had been put in the trial bundle. The first version containing section 1.4 was dated 6
June 2010 and was authored by Mr Salawu.
3. This indicated therefore that the change was introduced by him. Most of the
procedure document had been in existence for a number of years before that.
4. Earlier versions had been disclosed, none of which contained section 1.4, and none
included section 1.4 and none were distributed to or even mentioned Mr Salawu.
The following points can be made about this.
1. Witness statements are expected to be factually correct.
2. Each party in this litigation who has submitted witness statements had ample
opportunity to ensure those statements contain accurate evidence before they were
served. Further, each witness is asked, at the beginning of their evidence when they
confirm the contents of their statements in their evidence in chief. Apart from
qualifications that were sometimes made, in this case (and in the great majority) the
statements are usually stated to be true to the best of that witness’ knowledge and belief.
3. Ifa witness’ written evidence is shown to be incorrect (as Mr Godeseth’s, along with
other of the Fujitsu witnesses, was) then the appropriate way to correct this is either in
re-examination or by way of supplementary evidence. Here, Mr Godeseth was asked
about this document and gave evidence in respect thereof on 20 March 2019. Mr Parker,
also a senior witness from Fujitsu, was not called to give evidence until 11 April 2019.
That was, again, ample time for this self-contained point to have been dealt with by
supplementary evidence from Mr Parker, if that was thought by the Post Office to be
important. In any event, there is no reason for it having been incorrect in the first place.
Whether a procedure was, or was not, adopted by Fujitsu internally, is not something
that ought to be capable of misinterpretation in any event, let alone on a subject as
important as recording problems in the Horizon system.
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4. I do not accept a matter such as this is suitable to be corrected by submission “on
instruction” in any event.
5. However, even if it were, I am aftaid that my view of information emanating from
Fujitsu is, based on numerous other instances of such information being wrong in the
actual evidence, to be somewhat sceptical of its reliability. It would also be potentially
unfair to the claimants to allow this type of “correction” as they would be deprived of
the opportunity of testing the new explanation. Absent some corroboration of this type
of information coming from Fujitsu that supported it, I would not accept it in this case
on this issue.
6. Further, and even if I were to take a contrary view of the points at I to 5 above, and
accept that the Post Office should be given the opportunity of correcting Mr Godeseth’s
evidence in this way, the explanation given by way of closing submissions does not
assist the Post Office, for the reasons explained in the following paragraphs, [334] and
[335] below.
This is for the following reasons. Mr Coyne’s point, to which Mr Godeseth was
responding, was that the Fujitsu document identified metrics and KPIs to
measure/control and reduce the risk of failure to detect, correct and remedy Horizon
errors and bugs. He was basing this on section 1.4 of the document. His conclusion was
that “From the above, it is my opinion that Post Office should be aware of all recorded
bugs/errors/defects in addition to those previously acknowledged by them, from the
process metrics compiled above.” These records were sought by the claimants and the
Post Office explained that Fujitsu’s position was that the records did not exist. They
were not therefore provided to the experts. Mr Godeseth’s cross-examination showed
that the Fujitsu explanation was wrong (and the Post Office’s closing submissions
accepted it was wrong). The records however were not produced.
Finally on this, after receiving the email of 10 July 2019 to which I refer at [332] above,
J asked in an email of 12 July 2019 for hard copies of the documents referred to in the
relevant paragraph of that email (and hence relied upon by the Post Office in this
respect) to be delivered to me. This was done, and a file served on the court containing
four versions of the Post Office’s Customer Service Problem Management Procedure.
They are version 0.1 dated 13 November 2007; version 2.0 dated 22 April 2008; version
2.1 dated 6 June 2010; and the version put to Mr Godeseth which was in the trial bundle,
dated 5 September 2017. Given the additional versions produced all pre-date Mr Salawu
leaving Fujitsu in 2013, this means that the points I have identified at [329] and [330]
are still valid ones, and are still in the claimants’ favour.
Even on Dr Worden’s evidence and his views on the lower number of bugs in the Bug
Table (he accepts that there are 11, although Mr Coyne’s figure is somewhat higher),
there are plainly more bugs in Horizon than Fujitsu itself was aware of. Over the years
of both Legacy Horizon and Horizon Online, the total number of software bugs, defects
and errors in Horizon considered by the experts is far greater than the number to which
Fujitsu have admitted. This is shown in the appendix to this judgment summarising the
number of bugs, errors and defects, and their years of operation. The total number of
software bugs, defects and errors in both versions of Horizon is very important
information. Why Fujitsu chose not to collate and report these in the manner that even
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a Fujitsu internal document stated would (or should) be done, is wholly unclear. A
comprehensive record, whether using the metrics identified by Mr Salawu or other
similar ones, would surely only assist both Fujitsu and the Post Office in its
administration of Horizon. Given that such a comprehensive record has not been
produced to the experts for their consideration, notwithstanding the express request
made on behalf of Mr Coyne, the court is entitled to conclude that no such
comprehensive record exists.
Mr Godeseth was also asked about the BRDB transaction correction tool. This applies
to Horizon Online. The original design document for this stated that it was to allow the
SSC to correct transactions by inserting balancing records to transactional/accounting
or stock tables directly into the BRDB system, and also to audit the changes made. It
was not designed to delete or update the records, However, in cross-examination the
claimants’ leading counsel analysed, and put to him, some careful points on how this
tool had been used in practice.
The tool works by means of an SQL insert into a variety of tables in the BRDB. SQL
is an abbreviation for Structure Query Language, and is a domain-specific language
used in programming and designed for managing data. It is very widely used. Although
Mr Godeseth would refer simply to “Oracle” as the programme, Oracle Database or
Oracle is a database management system which is produced and marketed by the US
corporation which is also called Oracle. Although that is the name of the company, and
SQL was developed (or invented) before the Oracle Corporation was founded, in this
trial the terminology sometimes became a little shorthand on the part of those IT
professionals very experienced in such matters. The Oracle Corporation is very well
known, not only in the computing field, but through its co-founder Mr Larry Ellison
who, amongst other achievements, has backed and competed in various America’s Cup
races, including winning the 33 America’s Cup in 2010 in the trimaran USA 17 with
Oracle BMW Racing. Mr Godeseth, and the experts, are all highly experienced in the
field and shorthand references to well-known languages or applications such as SQL
and Oracle are to be expected. This use of shorthand did not lead to any lack of clarity
in the evidence, and I refer to it only for completeness.
Information provided by the Post Office’s solicitors prior to the trial stated that the
transaction correction tool had been used 2,297 times. However, all save one of these
usages were said to be “Type 1” which were for the most part used to unlock stock units
and which had no impact on branch accounts. There was one admitted instance of what
was called “Type 2”, which was where a Balancing Transaction was inserted where it
changed transaction data in the main transactional tables. This will have affected branch
accounts. Mr Godeseth had not been involved in drafting that information supplied by
the Post Office’s solicitors, but he knew about it and it matched his view of the intended
use of the transaction correction tool. The 10 database objects, or tables, and sequences
into which the tool was permitted to write are identified in a table-at 2.4.1 of the low
level design document for the tool. They are identified in terms of their object names,
and were the BRDB operational exceptions table; the system parameters table; the FAD
hash outlet mapping table; the process audit table; the process audit sequence; the
transaction correction tool journal table; the FAD hash current instance table; the
transaction correction tool control table; the branch information table; and finally the
branch operators (or operational) exception sequence.
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The design document made clear that:
“The following transaction tables have been granted INSERT privileges to
OPS$SUPPORTTOOLUSER.
The transaction correction statement is only allowed to insert into these tables.”
These 9 tables were then listed. The process would use a "Transaction file containing
an SQL INSERT statement that creates the required balancing transaction.", which is
an Oracle command, and the SQL INSERT statement would provide a missing half of
a transaction, where only one half was present. As it was put to Mr Godeseth, “the "SQL
INSERT" statement effectively goes in and puts in the missing other side of that
transaction?”, a point with which he agreed. The SQL INSERT command would put
that missing other side into the records.
The SSC members would log into their own UNIX user, and then change directory and
place their transaction file into the sub-directory. The document then records “They [ie
the SSC member using the tool] will then invoke BRDBX015 manually. The shell
script module will be owned by the UNIX user ‘supporttooluser’."
However, the explanation that was provided by the Post Office’s solicitors, of which
Mr Godeseth said he was fully aware, about the use of the tool was as follows:
"Each document is associated with a single SQL statement which made a database
correction. There are two different types of correction shown in the files - the SQL
statements for each are of the form:
"1, Update OPS$BRDB.brdb_rx_recovery_transactionsSET_ settlement_complete
_time stamp =..." And then the "INSERT INTO" command.
The explanation of Type 1 was "Type 1 reflects the action taken to reset the recovery
flag on a transaction. This will have no effect on branch accounts. ...”. It was also stated
expressly that "Type 2 reflects the action taken to insert a Balancing Transaction where
it changes transaction data in the main transactional tables. This will affect branch
accounts.”
Mr Godeseth expressly accepted, however, that this showed that the command used for
what was being called Type 1 was nof an insert command, it was an update command.
Mr Godeseth described himself as not expert on Oracle, but he had a working
knowledge of it, and he is plainly more experienced with using Oracle than most people.
I find his experience in Oracle more than sufficient for him to be able to answer
questions on this subject. Mr Godeseth’s evidence shows that Type 1 was an update —
something which the low level design document expressly said the tool would not be
used for. The design document did not contain the necessary database object fields table
for performing the unlocking function, which the Post Office’s solicitors said
represented all of the occasions, save one, when the tool had been used. This was all
put carefully and clearly to Mr Godeseth in his cross-examination, and he agreed with
all the points put.
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This was further confirmed — the mandatory use of insert, and the fact that an update
command was not included in the design intent of the tool — elsewhere in the design
document where it stated under method “The module will read the contents of the input
transaction file, which will be in the form of an SQL insert statement. Only a single
insert statement is allowed and (after an optional introductory comment) it must start
with the ‘insert into! clause." The insert would be in the SQL script, and Mr Godeseth
expressly confirmed this. This is another example of Fujitsu failing to observe its own
design intent for the use of a tool that can have an impact upon branch accounts, and in
my judgment is a factor that goes to the robustness of Horizon as well as the accuracy
of data. As was put to Mr Godeseth, the use of the tool had gone “way beyond” the
intent in the design document, and he agreed. He said that “there is tooling which is
based on this” — by which he meant based on the transaction correction tool - “which
has two aspects to it, certainly, so I think I’m agreeing with you”. It is agreed that there
was only one occasion when what was called Type 2 was used. This evidence goes to
the wider point that I have explained, namely Fujitsu failing to observe its own design
intent.
Mr Godeseth was taken, very carefully, through a specific use of the transaction
correction tool in 2010. In PEAK 0195561, a problem was reported to the SSC on 4
March 2010 where a SPM had tried, on 2 March 2010, to transfer out £4,000 (referred
to in the PEAK as 4,000 pds, which means either pounds (plural) or pounds sterling)
from an individual stock unit into the shared main stock unit when the system crashed.
The SPM was then issued with 2 x £4,000 receipts. These two receipts had the same
session number. The PEAK, as one would expect, records various matters in note form
and also uses informal shorthand. However, the main thrust is that when the SPM did
the cash declaration, although the main stock unit (into which the £4,000 was being
transferred) “was fine”, the unit from which the cash was taken “was out by 4000
pounds (a loss of 4000 pds)”. This is very similar to what Mr Latif said had happened
to him, although the transfer in July 2015 to which he referred was £2,000. The PEAK
related to Horizon Online and was the admitted occasion when the Balancing
Transaction tool had been used.
Mr Godeseth had obtained the information in his witness statement dealing with this
from Mr Parker. He also said he thought it was puzzling, and he was not sure that the
PEAK “would be a totally accurate reflection of what happened” and was “an
interpretation put together by a developer who is investigating the problems.” He
suggested the original log files would be better (by which he meant better sources of
information) and still exist, but they were not before the court. These log files would be
held by Fujitsu, so any failure to have them before the court was no fault of the parties
in this litigation, and that can only be laid at the door of Fujitsu. If a senior Fujitsu
witness thought they would be better records, they should have been accessed and
evidence about them could have been given directly. Certainly Fujitsu witnesses could
have given evidence that relied upon them, had they so wished.
The PEAK records the following:
“After discussion with Gareth Jenkins, the suggested correction is to negate the
duplicate transfer out by writing 2 lines to the BRDB_RX_REP_SESSION and
BRDB_RX_EPOSS_TRANSACTIONS tables, with:
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1) Product 1, Quantity 1, Amount 4000.00, Counter mode id 7 (TI)
2) Product 6276, Quantity -1, Amount -4000.00, Counter mode id 7 (TD
This should be done using the Transaction Correction tool. An OCP approved by POL
will be needed.”
This concerns Horizon Online, due to the references to OCP and OSR, and shows
extensive efforts being made at Fujitsu to try to understand why this has occurred, and
general doubt that the efforts to reproduce the fault in testing has worked. Some at
Fujitsu wanted the priority to be downgraded; other entries resisted this, shown by some
of the entries such as:
“What is missing from this Peak is an explanation of the events in terms of the requests,
how they were ordered and when any was committed. Only then can we qualify the
priority. The assumption is that we have a fix. The facts are —
1: A settlement request to timed.
2: A retry of request timeout occurred.
3: According to the DB entries both later succeeded.
Now unlike other reconciliation Peaks this stands out.....
We can’t reduce the priority unless we understand what is going on.”
The PEAK is lengthy and demonstrates a degree of frustration within Fujitsu at their
own failure to get to the root cause. One entry on 24 March 2010 states inter alia
“....this shouldn’t have happened”. One might observe that this is stating the obvious.
A later one on 25 March 2010 states “advised on the latest update in the call she states
she was going to check if it was the same thing that happened before. [The Post Office]
are want to know why this has happened? - why does it keep happening? - can you
advise on this.”
(emphasis added)
One of the reasons or concerns expressed in the PEAK is that JSN entries — which
should be unique and in respect of which no duplicates should be permitted in the
journal table - appear to have occurred. Mr Godeseth confirmed that this should not
have happened. Duplicate entries should not be permitted in the database. The
documents showed that this did occur. Mr Godeseth said that the “JSN is part of the
primary key into the message table, I cannot see how an Oracle database would allow
that to happen” and “that would have to be a bug in Oracle, and it was certainly not the
bug that I was looking — it was not the bug that I was looking at for the red alert”. He
also said: “If this in fact happened as written down here [ie in the PEAK] then it would
have had to have been a bug in Oracle and I certainly don't remember any such bug.”
The PEAK also shows computer script being used, both in an attempt to correct, and
understand and analyse, what occurred. On 23 April 2010 an entry states:
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“T think we have done as much as we can on this one. In conclusion although we haven’t
been able to totally explain the behaviour, the risk of this type of PEAK occurring again
has been minimised in live due to a change of behaviour in the BAL with respect to
transactions.....This may now be marked as a duplicate of PC0194893”.
Rather concerningly ~ but entirely consistently with what I consider to be Fujitsu’s
general approach to closure codes - the following entry appears that same day in another
entry stating that the “Defect cause” is “updated to 40 — General — User”.
However, later the same day the following entry is made:
“I am sending this call back with Response Rejected.
Closing a call as ‘Duplicate Call’ results in a black mark against me. It basically means
that I should not have sent the call over since the same problem has already been sent
over in a previous call.
PCO195561 (duplicate transfer of 4000.00 cash) may have been caused by the same
underlying fault as PCO194893 (banking reconciliation), however I could not have been
reasonably expected to link the 2 calls and take the decision that it was not necessary
to send PC0195561 over for further investigation.
Please close this call with category 'Advice After Investigation’
[End of Response]
Response code to call type L as Category 52 -- Pending -- Response Rejected
Response was delivered to Consumer.”
Eventually KEL cardc262s was updated with the information in the PEAK on 4 May
2010 and the call was closed. One of the final entries states that day “Category 60 —
Final — S/W Fix Released to Call Logger”. “S/W fix” means software fix. The call is
closed the same day. This is 2 months after the incident. The PEAK also referred to
other PEAKs. Mr Godeseth was asked about those too. PEAK 0195962 records that the
transaction tool has “been used in live”. That led to an Operational Change Process or
OCP 25882 and stated:
“Due to a system fault, the branch did a Transfer Out of £4000 and a corresponding
Transfer In of £8000
Justification: Correct a loss of £4000 at the branch due to a system fault
When: Planned for 10/03/2010 16:00 with a duration of 30 minutes
Extra detail: The Transfer In details were incorrectly doubled up when they were
written to the BRDB. This needs to be corrected using the Transaction Correction tool.”
(emphasis added)
The actual printed address of the OCP document is as follows:
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http://deathstar/SSC2/SSC_OCP/viewoep.jsp?0CPRef=25882&S1D=630 192836137
This may show that the folder in which the document was kept was named by someone
with an interest in a particular series of well-known films, or it may not, and this does
not matter. It does, however, show that it was plainly generated or kept by the SSC.
Mr Godeseth agreed that the OCP showed at least one use of the transaction correction
tool for one balancing transaction. Part of Mr Godeseth’s explanation for what had
occurred, even though there had been two duplicate JSN entries, was as follows:
“In this situation the symptoms, as I'm reading them, are that because there was a bug
in Horizon and this is in the new system, it was pretty early days of the Horizon Online,
because there was a problem, we had something coming through which got through the
journal filter but then failed at the branch database and so therefore, as far as the branch
database is concerned, it has not happened.
MR JUSTICE FRASER: I understand that. I think what Mr Green is putting to you is
that this shouldn't have got past the journal filter.
A. It's a bug, so certainly the way that the system should have worked, a JSN -- the
same JSN coming up would be just a simple repeat of the message for -- because there
was some sort of glitch.”
(emphasis added)
His final evidence in cross-examination on this was the following:
“A. Somebody may have been trying to look for a duplicate JSN entry. I can't really
comment on what the guy was doing at the time who was trying to investigate. I am
simply asserting that barring an Oracle bug, which would have been huge, you cannot
have two entries with the same JSN.”
In my judgment, the Horizon Issues are sufficiently wide and costly to resolve
concerning the Horizon System, both Legacy and Online, without widening them to
include some attempt at including specific bugs within Oracle too. The Oracle
Corporation is not even a party, and has had no opportunity to provide evidence or
submissions. I simply recount Mr Godeseth’s evidence as he attempted to explain the
PEAK. He did, as can be seen, refer to potential bugs in Oracle as an explanation for
something that he believed to be puzzling. He accepted it was a bug and/or “a glitch”.
In any event, other than Mr Godeseth’s evidence expanded in re-examination that he
was involved in 2010 when establishing himself in Fujitsu (and in this he referred to an
Oracle bug, which involved nodes in the database going down) there is no evidence
before me that there were any bugs in Oracle in respect of this doubling up, and I reject
the suggestion that this can be laid at the door of Oracle. What this PEAK shows, in my
judgment, is that Fujitsu itself, with a great deal of time to prepare for the Horizon
Issues trial, simply could not explain then, and cannot explain now, what caused this
event to occur. That is relevant to my consideration of the Horizon Issues, and in my
judgment shows that there was in that respect a bug, error or defect within Horizon. It
also shows that there were those in Fujitsu who wished to close the call with the error
put down to the user, as shown by the “Defect cause” being “updated to 40 — General
-431-
360.
361.
362.
363.
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— User”. There is nothing in any of the material on this incident to suggest it was in any
way caused by the user.
He was taken to another PEAK, PC0175821 which was dated 19 February 2009. This
is during the period of Legacy Horizon.
PEAK 01320275 was in relation to an incident on 21 December 2005 which showed a
SPM, at a five counter site with seven stock units, had rolled over a particular stock unit
called BB. He rolled it over in what was calied “an effectively empty state” but having
declared the correct amount of cash, and also adjusting the stock levels to the correct
volumes, his branch account showed “a gain of approximately £18,000”. This was an
obvious impact upon his branch account, and it was investigated. One entry in the
PEAK stated:
“We are unable to correct the system figures safely. We can however provide accurate
figures for what should have been in the Final Balance for BB, to enable POL [ie the
Post Office] to make the correction perhaps by using a Transaction Correction.
POL need to make a decision on whether they are able to correct the problem in this
way, however we do not see any other alternative. Corrective action should be taken
before 11th January when the branch is due to roll into TP10.
The cause of the problem is unknown and is under investigation.”
(emphasis added)
This accepts in terms that there is a problem, and accepts that its cause is unknown. The
suggestion by Fujitsu later in the PEAK on 3 January 2006 was to generate a negative
figure effectively by changing the relevant data in the messagestore to try and cancel
out the £18,000 which the SPM had showing as a positive figure in his branch accounts.
It is obvious to me that this would only remedy the effect of the problem, rather than
identify what had caused the discrepancy in the branch accounts in the first place.
However, the entry is illuminating in any event:
“If we get to the problem before the office is rolled we are able to change objects in the
messagestore to reset the stockunit back to the CAP (TP) rollover trailer. The PM can
then rollover. PM should get a large shortage which cancels out the large gain.
We don't want to be having to do this as making manual changes to the messagestore
is open to error and each time we have to seek authorisation from POL to make the
changes.
If we get to the problem after the office is rolled (as in this call) then we are unable to
correct the system figures safely. Its not been decided how we get the-PM sorted out.
All in all, we want this fixed asap.”
(emphasis added)
Mr Godeseth accepted that generating the artificial negative figure in the message store
could be done, but said he was “not involved interfacing with Horizon” at the time and
was not at the operational level shown in the PEAK. He was not involved in obtaining
-432-
364.
365.
366.
367.
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authority from the Post Office for such matters. In my judgment, the way that Fujitsu
anticipated resolving this, by artificially seeking to engineer “a large shortage which
cancels out the large gain” is not exactly grasping the nettle. It would have the effect of
disguising why the large gain had occurred in the first place, in other words a bug, error
or defect.
Another PEAK 0152014 dated 10 December 2007 showed a problem that was
described in the PEAK as “POLFS Incomplete Summaries Report” which related to a
foreign currency transaction. At this time, £484 sterling could buy $1,000 (the PEAK
did not specify US or Canadian, but the associated OCP identified US$ specifically)
and the PEAK recorded that:
“This is due to a single SC line written for $1000 (£484) with no settlement in the
middle of two RISP transactions.
On call PCO151718 the harvester exception was corrected and now the transaction for
the day don't zero, hence this issue with the incomplete summaries report.
Am currently retrieving the messagestore for this branch, we will then be inserting a
new message on the counter to remove the effects of this. OCP 17510 has been raised.”
Again, this was being done to correct the effect of what had occurred, rather than
discovering what had led to the issue in the first place. In two places in the PEAK, the
following entry appeared:
“**Again, this may also have caused a receipts and payments error, can EDSC please
confirm whether this is a gain or loss at the counter and the amount.**”
Mr Godeseth had been asked to look at this PEAK in advance (his evidence went over
two days and this was agreed by the parties), and therefore he had been given a chance
to familiarise himself with its contents, and those of an associated KEL. The PEAK
stated "Worth noting that the branch did not have any issues with the mismatched
transactions because this was fixed before they did the roll. The branch is not aware of
this and it's best that the branch is not advised." (emphasis added)
When it was put to Mr Godeseth that this showed that on not all occasions were SPMs
advised of impacts on their branch accounts of particular problems, he said that was “a
fair inference”. An inference is a common sense conclusion, and I agree with Mr
Godeseth that it is indeed fair to draw that inference. He did however then add “I think
I would say that Post Office were well aware of this and I would argue that it's a Post
Office decision whether or not to tell a subpostmaster.” This shows that Mr Godeseth
was not immune from arguing the case or making suggestions not supported by the
evidence. Nothing was produced by either side to show that the SPM in this’ case was
told. Certainly the person at Fujitsu who wrote “....it’s best that the branch is not
advised” cannot have shared Mr Godeseth’s view at the time. Mr Godeseth did however
also say, in my judgment again importantly, that “in the background to this there was a
dialogue with [the] Post Office” and he agreed with counsel who put to him that the
“Post Office would have been aware of what was being done by Fujitsu”.
-433-
368.
369.
370.
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The associated OCP however, whose subject was “write corrective bureau message for
FAD 183227” — bureau meaning foreign currency — gave a great amount more detail.
It stated:
“A single SC message 183227-7-1101211 was written in error on 26th November at
12:43:17, selling 1000 US dollars, with no corresponding settlement line. To remove
the effects of this message at both the branch and on POLFS, we will insert a new
message to negate the effects of the original message.
Justification: If the change is not made in the counter messagestore (before the stock
unit is balanced on Wednesday), the branch will have an unexpected gain of £484 (or
thereabouts - depends on exchange rate), and a receipts and payments mismatch. This
gain would have to be resolved at the branch. There would also be an inconsistency
between the branch and POLFS to be resolved. By correcting the problem locally. the
branch may not be aware of the problem, and there will be no inconsistency between
the branch and POLFS.”
And:
“The message will include a comment to show it has been inserted to resolve this
problem (this will not be visible to the branch).
This change will first be applied to a copy of the messagestore within the SSC
environment, and the stock unit then rolled over to make sure there are no unexpected
consequences.
Neither the new nor the old message will be included in data sent to POLFS.
Gary Blackburn (POL) is already aware of this issue.”
(emphasis added)
This shows that the Post Office did know, as Mr Godeseth had said. It also shows that
the branch would not be able to see what was done. It also showed that the intention
was to reverse, by means of a specific insert into the messagestore by Fujitsu, an entry
or data in order to correct a discrepancy in the branch accounts caused by an error or
problem within Horizon Legacy. This was approved by the Post Office as shown by a
later entry. The OCP had been raised by Anne Chambers. The “extra detail” —
effectively what the message needed to contain or achieve — was:
“Extra detail: The original message had ProductNo:5129, Qty:1, SaleValue:484,
PQty:1000. The new message will have Qty:-1, SaleValue:-484, PQty:-1000, with other
attributes (including exchange rate) as before.”
The specific message that was inserted into POL FS, as shown in the OCR, was as
follows:
“Extra detail: This OCR is being raised so that EDSC is authorised to amend the txn
details for branch 183227 and insert these into tps_pol_fs_summaries_incomp table on
the host.
~434-
371.
372.
AMCLO000013
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Comments
Andy Keil (POA SSC Support) wrote at 12/12/2007 15:07: Updated POLFS feed for
branch 183227 product 5129 mode SC with SaleValue=1014.73 and PQty=2080”
Mr Godeseth agreed that this showed “just over $2,000 being inserted in the Post Office
system”.
However, the PEAK clearly demonstrated that the fix or corrective action that had been
applied had simply made matters worse. This is because it stated for 14 December 2007,
two days after the message had been inserted by Andy Keil of Fujitsu, the following:
“The counter problem which caused the first issue has been corrected by inserting a
message into the messagestore, for equal but opposite values/quantities, as agreed with
POL (OCP 17510).
Asa result of this corrective action, the net effect on POLFS is zero, and POLFS figures
are in line with the branch. POLMIS received both the original message and the
corrective message.
Once the problem was corrected, there should have been no impact on the branch.
However it has been noted that the stock unit BDC had a loss of $1000, which was
generated after the correction was made. We have already notified Gary Blackburn at
POL (email attached). This appears to be a genuine loss at the branch. not a
consequence of the problem or correction.”
(emphasis added)
On 17 December Anne Chambers also stated in the PEAK:
“Summary for development:
A single SC line was written for $1000 (£484), with no settlement, in the middle of two
RISP transactions.
The line was missing some AdditionalData so it wasn't harvested properly, but the main
problem was the lack of settlement. POL authorised us to insert an equal but opposite
message, to prevent a discrepancy (in theory anyway) and to avoid problems on POLFS.
Please note that this is exceptional and must not be seen as a convenient avoidance in
place of a fix.
Subsequent investigations showed that a second packed pouch barcode had been
scanned, before the receipt for the first had finished processing. See the audit log /
messages on counter 7 26th Nov at 12:43 / 12:44.
PC0147357 is already with development for what IJ think is a similar problem - Mode
reverts to what it was prior to RISP.
Please also see update on that call.
Routing to EPOSS-Dev via QFP.
-435-
373.
374,
375.
376.
377.
AMCLO000013
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[End of Response]
Response code to call type L as Category 40 -- Pending -- Incident Under
Investigation.”
{emphasis added)
The PEAK was finally closed on 17 April 2008, the same day that the “defect cause”
was “updated to 14: Development — Code”.
There are two important points to make in relation to the entry in this PEAK which 1
have quoted at [371] above. Firstly, the discrepancy in the branch accounts, which was,
after the “corrective action”, in deficit, was broadly in the amount of the difference
between the two corrections that were made, namely the one by the OCP and the OCR.
These corrections should, in my judgment, have been in the same amount, as one relates
to “front end” (or the branch messagestore) and the other “back end” of the accounts so
far as Horizon is concerned. The statement in the PEAK that “this appears to be a
genuine loss at the branch, not a consequence of the problem or correction” is simply
insupportable. That is a statement made by Anne Chambers, which in my judgment
flies in the face of the documents. J am supported in my conclusion by two things.
Firstly, Mr Godeseth’s evidence, when it was put to him that this was a fair possibility
when he said “having read this PEAK in more detail overnight then yes, clearly that is
what appears to have been the case.” I accept that evidence. It is supported by the
documents and by the text of the two different corrections. Secondly, plain and obvious
common sense.
The second important point is that the PEAK makes it clear this, or something very
similar, has happened before. It states “PC0147357 is already with development for
what I think is a similar problem - Mode reverts to what it was prior to RISP.” The
reference to “development” is the department within Fujitsu where software is written
to correct issues with the system. This is supported by the closure of the PEAK and
defect cause stating “Development — Code”.
There is an associated issue that arises on this PEAK, the number of which I will again
recite for clarity, PEAK PC0152014. I will deal with this here, rather than in the section
dealing with Mr Coyne’s evidence or within the Technical Appendix (although the
latter place could be a more suitable home for it). This is because it goes to the weight
to be given to Mr Godeseth’s evidence.
A detailed explanation was put to Mr Coyne on this very matter, which occurred on the
third day of his evidence on 6 June 2019 and went from page 103 of the transcript, ran
until page 115 when the OCP was then put (which went to page 120) and then the OCR
which was put between page 120 and 126. Leading counsel for the Post Office stated
“T can tell you on instruction what that figure means”; “So on instructions I can tell you
than the sale value of £1,0114.73 and the quantity of 2,080 -” and “I appreciate that
I'm telling you this on instructions because I have to say nobody knew that this
suggestion was going to be made until it was put to Mr Godeseth....” It was made clear
that there was what was being put to Mr Coyne as a detailed explanation of what had
occurred, was “on instruction”, and it was nowhere in the evidence.
-436-
378.
379.
380.
381.
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Mr Godeseth was cross-examined on 20 and 21 March 2019. When Mr Coyne was
cross examined, about 2 % months later, a great deal was put to him “on instruction”,
as I have identified. It was a detailed factual explanation that was not included in any
evidence at all. Firstly, the OCR that went with it showed that “This OCR is being
raised so that EDSC is authorised to amend the txn details for branch 183227 and insert
these into tps_pol_fs_summaries_incomp table on the host.” This was required
precisely because Mr Godeseth was correct, in my judgment, in his understanding of
what had occurred. I accept his evidence on this. Secondly, the explanation put to Mr
Coyne “on instruction” was (broadly) that there were two problems. A careful attempt
was made to explain to Mr Coyne how (basically) Mr Godeseth had misunderstood,
and to downplay the effect of what had occurred.
I do not accept that this subject was capable of being corrected — even if that is what
the documents showed, which in my judgment they plainly did not — in the way adopted
by the Post Office by attempting to give evidence by way of submissions from counsel
“on instruction”. This deprived the claimants of any ability to challenge the explanation,
if explanation it was, by cross-examination. Further and in any event, there was ample
time for the Post Office to have provided a short witness statement from a Fujitsu
witness, such as Mr Parker (who was not called until 11 April 2019) dealing with this,
if that was the evidential explanation. If that had been done, permission for that
statement would have been required, but given the matter arose from something Mr
Godeseth was asked about, that application could have been dealt with at the time and
if this genuinely was evidence that the Post Office could not have known in advance
would be required, it would have been allowed in. Even supplementary questions in
chief could have been used as a method of obtaining actual evidence on this point. It
simply is not procedurally acceptable, or fair, for evidence of this nature to be given by
way of submission “on instruction”. However, and in any case, I have considered the
Post Office’s case on this notwithstanding these points, and I find that the documents
do not substantiate the explanation given on Day 16 to Mr Coyne when he was being
cross-examined.
The explanation did not make sense on the face of the documents, and they did not
support the points that were being put “on instruction”. Firstly, as Mr Coyne pointed
out, the PEAK identified that a message was to be inserted into the messagestore. None
of the documents put to Mr Coyne “on instruction” identified what that message was.
This point was made by Mr Coyne during the cross-examination:
“Q. Yes. So what they are talking about here, what this change here is, is a change
being made by using the TIP repair tool into the TPS, correct?
A. Right, so this doesn't relate to the creation of the message then.
Q. It doesn't relate to the branch accounts, Mr Coyne, does it? This is an OCR which
involves an exercise -- well, the use of the TIP repair tool to change data that is in the
TPS system, yes?
A. Yes, but the PEAK refers to the insertion of a message into the messagestore.”
The critical point, that the explanation skipped over, was what the message that was
inserted in fact was, in actual terms. Had that message been produced, it could have
been looked at, and deciphered. Understanding such a message is not an insuperable
task beyond mortals. The second point is that the PEAK refers to a KEL, namely KEL
obenge3120K. At the beginning of the trial, I asked for hard copies of all PEAKs and
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KELs put to witnesses to be prepared in hard copy too, so that I had a working file that
I could use during the trial for PEAKs and KELs already referred to (in addition to the
three OPUS trial bundle screens that I had to work from). This was done. That KEL is
at tab 21 of volume 2 of the file entitled “PEAKs and KELs referred to in Days 5-8 and
12”. The KEL states the following, and I will reproduce the text in full, including the
relevant table references.
“KEL obenge3120K
Title:
Not harvested: Could not update database: Updating table TMS_RX_BDC_
TRANSACTIONS, ORA-02290: check constraint
(OPS$TPS.BT23B_BUREAU_REGION_CHK) violated.
Summary:
Harvesterd did not harvest message: Could not update database: Updating table
TMS_RX_BDC_ TRANSACTIONS, ORA-02290: check constraint
(OPS$TPS.BT23B_BUREAU_REGION_CHK) violated
Symptoms
The Harvester tried to insert into the BdC table TMS_RX_BDC_TRANSACTIONS a
message with missing ‘Blackbox’ data. This caused Oracle [ORA-02290] to detect a
check constraint (OPS$TPS.BT23B_BUREAU_REGION_CHK) violation, hence the
appearance in the TPSC254.<br><br>Harvester exceptions do not normally cause
entries on TPSC250, but this one seems to. <br><br>TPSC257 displays the contents of
the TPS Incomplete Summary table where the summarisation program detects that the
total harvested transactions for the day don’t NET to zero.
Problem
Due to some data in the ‘Blackbox’ or AdditionalData of the messagestore not being
populated, the bureau product was missing key data
including<br>BUREAU_REGION<br>MARGIN<br>MARGIN_PRODUCT<br>EF
FECTIVE_EXCHANGE_RATE<br>and so when the Harvester attempted to insert the
message into the BdC table TMS_RX_BDC_TRANSACTIONS, however Oracle
[ORA-02290} detected a check constraint
(OPS$TPS.BT23B_BUREAU_REGION_CHK) being violated.
Solution — ATOS
Warning: Check the AMOUNT (or sum of AMOUNTS) for the branch on the TPSC254
report.<br><br>If the total AMOUNT is NOT ZERO, and the branch is NOT on
TPSC257 (same day), <br>or the total AMOUNT IS zero and the branch IS on
TPSC257 (same day) then there is probably a problem with the messages written on the
counter — a bureau SC_message with no corresponding settlement. Use KEL
<ahref=kel._view_kel.jsp?K ELRef=acha3 159Q>acha3 159Q</a>.<br><br>Check the
messages anyway, just to be on the safe side. If the session was settled
properly....<br><br>MSU must raise an OCR so that SSC can use the TIP Repair Tool
to populate the missing columns, using values from another transaction for the same
-438-
382.
383.
384.
385.
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currency, same branch, same day if possible.<br><br>NOTE: By repairing the txn, the
TPS_POL_FS_SUMMARIES_INCOMP will be corrected automatically after that txn
has been successfully harvested. <br><br>*** In the past, we have just repaired these,
on the assumption that they are genuine SC transactions which have been corrupted.
However I think it may not be a genuine sale, but is related to an attempted pouch
reversal (this is certainly the case for the more extreme instances where the settlement
is missing). If the Sale Value and the PQty have opposite signs, and there is no reversal
(mode ER) for the transaction, this may have caused a loss or gain at the branch which
they can’t resolve themselves. Let Anne know if there is another occurrence like this.
(emphasis added)
This KEL shows that there was a potential impact on branch accounts — it states “this
may have caused a loss or gain at the branch which they can’t resolve themselves”,
which is very clear. It shows that the explanation put to Mr Coyne “on instruction” is,
in my judgment, completely wrong. It also shows that it has happened before, as “in the
past we have just repaired these”. I would also note for completeness that this KEL is
not dealt with at all by Mr Parker in the table accompanying his 1° witness statement.
Two KELs from Ms Obeng are, namely CObeng!123 at number 24 in the table at
E2/11/40; and obengc5933K at number 31 in the table at E2/11/43. However, this one
is not.
I accept Mr Godeseth’s evidence on this point, which is wholly consistent with the
documents, in particular the PEAK and the KEL. The text of those documents shows
that a message was intended to be written into the messagestore; the actual message
used is nowhere available; the effects of all this clearly being an impact on branch
accounts,
A further PEAK was PC0175821, which was dated 22 February 2009. This also related
to foreign currency transactions. This PEAK related to two problems, or a problem with
two elements to it. It is at F/485/1 in the trial bundle, and it clearly and expressly refers
to the same KEL, obengc3120K.
The two aspects were explained by Mr Godeseth as a change using the transaction
repair tool to “get the feed into POLFS correct” and also “a change to the messagestore
to get the branch aligned.” The repair “had to go two ways” because the branch and the
POLFS had to be aligned. If they were not, there would be a discrepancy in branch
accounts. This showed the two problems, or two sides to the same problem. It was stated
as follows in the PEAK:
“The first is where all five SC transactions missing core data as described in the above-
mentioned KEL." This means obengc3120K, referred to at the beginning of the PEAK.
And the “Second is absence of equal but opposite 2 (ie settlement) lines. See
PC0152014 for a similar problem and how problem was resolved."
“There are two sides to the problem relating to these txns. The first is where all five SC
txns missing core data as described in the above mentioned KEL. Second is absence of
equal but opposite [i.e. settlement] lines. See PC0152014 for a similar problem and how
problem was resolved.
-439-
386.
387.
388.
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For the first problem, I have used the TRT [the transaction repair tool] to insert the
missing data i.e. Region, Margin, Margin Product and EffectiveExRate.”
The reference to “txns” means transactions. PC0152014 is the very PEAK referred to
in [376] above.
Mr Godeseth agreed with both of those points in the PEAK as they were put to him by
the claimants. Basically, half the data was missing. The transaction repair tool or TRT
was used for the first problem.
Numerous other PEAKs and some KELs were put to him with very specific details.
Both Gareth Jenkins and Anne Chambers were involved in raising, or investigating, a
great many of them and they are referred to in the text of both classes of documents. In
all of them, Mr Godeseth’s answers to questions were, in my judgment, consistent with
the entries within the documents, and also consistent with the claimants’ case on the
Horizon Issues. In particular, those in the PEAKs dealing with foreign currency which
I have explained above was clear, and settlement lines were missing, which Fujitsu
sought to correct by injecting lines into both the messagestore and into POLFS.
Finally, a series of questions were put to him demonstrating what are called APPSUP
permissions. This is a very powerful permission (which really means level of access)
and PEAK PC02081 19, which runs from February 2011 onwards into 2012 and beyond
(the final entry being in 2015), made the following relevant comment:
“As per the previous PEAK comments, the role 'APPSUP' is extremely powerful and
should only be used under extreme circumstances and under MSC supervision. As such
the Branch Database design was that 3rd line support users should be given the ‘SSC’
role, which is effectively read access, ie. 'select_any_table + select_catalogue'. SSC
team members should only have to [access] BRSS for normal support investigations,
unless the information has not replicated in time. SSC should only given the optional
role 'APPSUP' temporarily (by Security Ops authorisation/emergency MSC) if required
to make emergency data amendments in BRDB Live.
It is a security breach if any user write access is not audited on Branch Database, hence
the emergency MSC for any APPSUP role activity must have session logs attached
under the MSC. Host-Dev previously provided scripts, such as the Transaction
Correction Tool, are written to run under the SSC role and also write to the audit logs.
SSC users created on BRDB should only have the SSC role, and the user creation script
should be amended by Host-Dev to reflect this. A separate script giving/revoking
emergency MSC access via APPSUP can be delivered, logging this to the hostaudit
directory. In parallel Host-Dev should investigate any Host-Dev delivered script to
ensure they are all executable by the SSC role. SSC should investigate any of their own
scripts to ensure they have sufficient permissions under the SSC role, taking into
account they should primarily perform their work on BRSS.
Any day to day scripts should not access BRDB directly. Any scripts needing more
than the SSC role should be questioned, except those that would run under MSC
-440-
389.
390.
391.
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APPSUP. Once the investigation is complete, all BRDB SSC users with APPSUP
should have the role removed by ISD (via MSC) and ensure they do have the SSC role.
If anyone is in disagreement with the above course of action, then I'll set up a meeting
with yourselves and Security when I'm down in BRAO! next week.”
(emphasis added)
This entry was from Andy Beardmore, Senior Software and Solution Design Architect
Application Services. The experts are agreed that the APPSUP role would, effectively,
permit anyone who had that permission to do almost anything on Horizon. It was
available to 3 line support at SSC, the level at which Mr Roll was employed by Fujitsu.
This PEAK further substantiates the evidence of Mr Roll and is consistent with it.
APPSUP was described by Mr Parker as “the more technically correct name for a type
of privileged access to the BRDB”. It is a very powerful permission.
A later entry in the same PEAK states:
“The Business Impact has been updated:
1. Cost: There is currently no "cost" to this issue. The users affected have more access
than is required.
2. Perceived Impact: The customer is not aware of this problem or change.
3. Scope: No actual impact/incidents of problems relating to this issue have been
experienced yet (and not expected)”.
(emphasis added)
The customer was the Post Office. The “issue” referred to was Fujitsu SSC users having
had far greater access, namely the powerful APPSUP permissions, on more than the
intended basis, which was supposed to be in extreme circumstances only and
temporarily. This is shown in an entry for I February 2011 by Mark Wright who stated
“....SSC users have the APPSUP role” and “When we created SSC users for BDB/BRS
etc. we used “appsup” as that is what SSC have always been and what they migrated as
on Horizon databases.” (emphasis added)
It is clear that all the members SSC had always APPSUP, but were not supposed to
have this powerful role all the time.
Anne Chambers said, in an entry on I February 2011:
“Unfortunately development write their scripts explicitly to use SSC. So I think we're
stuck with it unless they deliver new scripts (which would not be a popular or quick
option).
When we go off piste we use appsup. Can we have both??”
(emphasis added)
-441-
392.
393.
394,
395.
396.
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Mr Godeseth said that by “off piste” he was very confident that she meant “having to
fix a problem that was not catered for by a script that is available to these people” by
which he meant SSC. It was clear that SSC were using APPSUP and wished to continue
to do so. It was equally clear that all the members of SSC were not supposed to have it.
The Post Office’s auditors for the year ended 27 March 2011 were Ernst & Young
(“E&Y”) a very well-known global firm. In the Management Letter for that year, E&Y
had identified the following:
“The main area we would encourage management focus on in the current year is
improving the IT governance and control environment.
Within the IT environment our audit work has again identified weaknesses mainly
relating to the contro] environment operated by POL’s third party IT suppliers.
Our key recommendations can be summarised into the following four areas:
O Improve governance of outsourcing application management
O Improve segregation of duties within the manage change process
G Strengthen the change management process
O Strengthen the review of privileged access”
(emphasis added)
The “third party IT suppliers” referred to were Fujitsu. Whether it was the work
performed by E&Y that had led to the decision at Fujitsu that the APPSUP permissions
were not being sufficiently restricted or controlled, or something else, does not much
matter. A company such as E&Y would not lightly refer to “again identified
weaknesses” in the Management Letter for a particular year unless that conclusion had
been reached after a high degree of professional and in depth investigation, of a type
that even a lengthy adversarial trial such as this one cannot hope to replicate.
Indeed, the Post Office’s solicitors confirmed in a letter in this litigation dated 11
February 2019 that Fujitsu SSC users who were identified as PERSON-POA UNIX
(also sometimes referred to as POA Unix users) had a range of privileges and were
granted the UNXADM role. This may be a descriptor for Unix (hence UNX)
Administrator (hence ADM) but this does not matter. The UNXADM role contains, to
quote from the letter of 11 February 2019 itself, the “DBA role” which is stated to be:
“This is an Oracle supplied role for use by database administrators (DBAs). Lots of
privileges are granted to this role so users have the ability to update/delete/insert into
any of the Branch database tables.”
(emphasis added)
POA Unix users also are:
“Granted the ability to execute the following executable functions:
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399.
400.
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(a) OPS$SUPPORTTOOLUSER.PKG BRDB TXN_CORRECTION —framework to
allow the user to insert fully audited balancing records into a BRDB transaction table
(made against node ID 99).”
Both of these are powerful roles. Mr Godeseth was asked specifically about the DBA
role explained in [395] above. His specific answers merit quotation verbatim:
“Q. You would agree that those people have the role which allows them privileges to
update, delete, or insert into branch database tables whether they are using the
correction tool or not?
A. Those people could log on to the database and do an awful lot of damage.
Q. And the only audit of that that we have prior to 2015 was log on and log off: that's
correct, isn't it?
A. Correct.”
(emphasis added)
Mr Coyne had given evidence that he had identified 2,175 occasions when it had been
used. Mr Parker in his 3 witness statement had said that figure was wrong, but also
said:
“I have not examined the privileged user logs, but based on my experience my
expectation is that these uses of APPSUP, or at least the vast majority, are for support
work that does not involve changes to transaction data. I cannot recall any cases in
which it has been used to change transaction data, but I cannot state unequivocally that
there are no circumstances in which it has ever happened.”
Mr Godeseth said in his written evidence that “Privileged users can, theoretically,
inject, edit or delete transaction data in Horizon Online. As far as I am aware, this has
never happened.” His evidence above about prior to 2015 makes it clear that he could
not work out the number of times this may have happened in any event. Therefore the
fact that he was not aware it had ever happened is neither here nor there, and does not
assist the Post Office.
In his re-examination Mr Godeseth was asked about an entry in an OCP in relation to a
fix that stated UNIX user brdb. He said he did not know the detail, it meant logging on
to the database, and the “UNIX user” referred to “would be one of the guys in Ireland”.
These were not members of the SSC. When asked to clarify “who are the ‘guys in
Ireland’ exactly?” he said “the people who support the hardware, so UNIX is an
operating system so they work at a pretty low level on the systems” and by “low level”
he meant “they have pretty powerful user rights but they are very much driven by
process as to how they use them”. He also said there was complete and utter control on
the process they go through before they did any of this type of activity, which in that
re-examination example was "Logon to BRDB Node I as UNIX user 'brdb'."
He was also cross-examined about some of the bugs, which appear in the Bug Table
considered and partly agreed by the experts. The main admitted bug by the Post Office
(in distinction to other bugs admitted by its expert, Dr Worden) is called the Callendar
Square bug. Mr Godeseth gave evidence in his witness statement about this, partly in
response to a statement that had been given by Mr McLachlan, who was not in the event
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called by the claimants. However, Mr Godeseth’s evidence about Callendar Square on
this was still called by the Post Office. It is a Legacy Horizon issue. Mr Godeseth had
no first hand knowledge of this but had reviewed documents and spoken to Mr Jenkins.
One of the KELs to which he was taken, with the reference JSimpkins338Q, related to
problems with Riposte and what was sometimes called the Riposte lock or unlock
problem. This was when an unexpected error occurred in Riposte while attempting to
insert a message. The KEL shows it ran from 2002, with other events occurring in 2003,
2004 and 2005. The entry for September 2005 expressly states that “this problem is
occurring every week, in one case at the same site on 2 consecutive weeks”. A PEAK.
was sent to development. Under “solution” in the KEL the following entry appears:
“SMC: If the event is seen at a multi-counter office during the working hours of the
PO, or up to 18:00 on a weekday (in case they are balancing out-of-hours), RING THE
OFFICE AND GET THEM TO REBOOT the eventing counter. If they are in the
process of balancing, it is strongly advised that they reboot before continuing with
balancing as they are at risk of producing an incorrect balance. Warn the PM that if
transactions appear to be missing, they should not be re-entered - they will become
visible after the counter has been rebooted.
If a reboot/Cleardesk does not resolve this problem, send the call over for further
investigation - SSC can rebuild the messagestore on the affected counter.”
(Block capitals in original; emphasis by underlining added)
The risk of a branch producing an incorrect balance as a result of this problem with
Riposte is clearly recorded. An incorrect balance is another way of referring to
discrepancies in branch accounts, a central issue in this litigation.
The Callendar Square issue or consequences (now admitted by the Post Office to be a
bug) were discovered in 2005 at the Callendar Square branch (hence the name). It is
also sometimes called the Falkirk bug, but J shall refer to it as Callendar Square. It
undoubtedly caused discrepancies in the accounts. The SPM in question had support
from their Area Manager and the documents demonstrate the following, from the Area
Intervention Manager Visit Log:
“This office had severe problems balancing on Wk 25, resulting in a shortage of
£6,414.46. After checking various reports I am satisfied that the error is made up of:
£3,489.69 — Transfers
£2,870 — Giro Deposits
£54.52 — unidentified (however due to all the coming and going with re- keying entries,
then this could come back as an error).
The Spmr claims that there was a Horizon software problem on 14.09.05 from 15.30
onwards. This was picked up when a member of staff noticed that a transaction, which
had been taken by another member of staff, had not been entered onto the system, so
therefore she put the transaction through. She checked at the time with her colleague
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who said that she thought she had put it through already however she accepted that she
could have made a mistake. Following on from that, it was picked up that other giro
business deposits that had been entered had not come up on the system, so they were
re-keyed.
There was also a problem with transfers from one stock to another. in that they had
doubled up. The Spmr made several telephone calls to the NBSC, telling them about
his problems and he was advised to carry on with balancing and produce his Cash
Account. Whilst doing this a warning came up, however the NBSC told the staff to
continue to roll over. The result was that the office balanced £6.414.46 short.
The Spmr spoke to the Horizon Support Centre (ref E0509150123) who investigated
and agreed that there had been a navigation problem that had now been rectified. They
told the Spmr that they would report to NBSC that they had identified and rectified the
problem and that the amount could be held in the suspense account. However, as part
of the shortage relates to transfers, and no error notice will be issued, then the Suspense
Account Team are not prepared to authorise the entry.
I telephoned The Suspense Account Team (Ann Wilde), who told me that checks could
be made with Girobank after next Wednesday, and if that shows that duplications have
been made, then they will authorise the amount to be moved to the suspense account,
until the office receives an error notice. However, Ann stands by what she said about
the transfer problems. and that they would not move this amount to The Suspense
Account.
I went back to the Horizon Support Centre and spoke to a supervisor (Ken). He said
that the call had now been closed as the problem had been rectified. I asked what was
to happen about the resulting shortage and he referred me back to NBSC, who they said
would do various checks. I then contacted NBSC, spoke to Rob Hughes and told him
the story — he said he would put a call through to Service Support. No follow up was
received from Service Support regarding this call.”
(emphasis added)
The important points from this are as follows. This problem turned out to be an admitted
bug. At the time, the SPM noticed the problem — and could only identify it as a “problem
with Horizon” and reported it. The branch accounts were plainly affected by a sizeable
amount, over £6,400. Horizon Support Centre, after investigation, agreed that there was
a “navigation problem” — this is a problem with the Horizon system, and was caused
by a bug. The Suspense Account Team would not authorise the shortfall in the branch
accounts being moved to the Suspense Account; in other words, they were not prepared
not to hold the SPM responsible. Mr Godeseth also accepted that “the genesis of it
appears to go back to February 2003 and similar lock agent problems back in November
2000”, a point that he accepted as “that’s fair”. The history of the problem was therefore
somewhat longer than something that just occurred in 2005 for the first time. During
that five year period, branch accounts were usually being produced every four weeks.
Mr Godeseth admitted that it was “a horrible position” for the SPM to have been in. He
said “Service Support” was not Fujitsu, it was the Post Office. The story at [404] and
[405] read like a mini-summary of many of the factual issues in the litigation generally,
with the exception that this is an admitted bug by the Post Office.
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The subsequent documents in this respect show that the matter went on for some
considerable time. In November 2005 the following is stated:
“I/ This problem is the root cause of the reconciliation error closed in PC0126042
2/ Presumably the root cause is deemed to be software not hardware
3/ The Postmaster has a workaround in place which is not to duplicate transactions (e.g.
Transfer In) just because the original attempts were successful but not showing on all
nodes
4/ POA CS MSU have a workaround in place which is that if 3/ above is not followed
& PC0126042 reoccurs, a BIMS will be issued advising POL to issue a Transaction
Correction
5/ There is no SLT for software fixes as they are delivered based upon the priority or
severity of the issue and could remain open until both businesses decide a fix is
necessary or the work around is adequate.”
This shows that the entry in the PEAK identifies this as a software problem; that is
effectively now accepted, but this entry from 2005 did not lead to any public acceptance
of a bug in Legacy Horizon either then, shortly afterwards, or for some years after that.
The acronym SLT means Service Level Target. What this entry means is that this
problem had occurred before, and was known to have occurred before; there was
something called “a workaround” in place, but that required the SPM physically
deciding not to duplicate transactions if the original transaction did not show up as
successful on all the nodes; if that were not done, TCs would be required; both Fujitsu
and the Post Office had to decide a software fix was required in order for this to be
corrected by fixing the software. No such decision had been taken at this point.
At Callendar Square itself, in January 2006 the SPM phoned one of his superiors. The
record of that call in the log states the following:
“Issue Raised: PM WANTS TO SPEAK TO SANDRA MCKAY URGENTLY
REGARDING SERIOUS PROBLEMS WITH HORIZON IT IS REPEAT
PERFORMANCE AS TO WHAT WAS HAPPENING BEFORE AND HSH FAILING
TO PICK IT UP
Response by SPM: Telephoned the office and Allan said that he was having problems
again with transfers. He has contacted the Horizon helpdesk who have subsequently
come back to him to say that there is no system problem and that he should contact
NBSC. He did this and from what I can understand the NBSC have told him that he is
trying to balance on two different terminals. Allan disputes this and is adamant that
there is a system error.”
(Block capitals in original; emphasis by underlining added)
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411.
412.
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The statement that “there is no system problem” which is told to the SPM evidently
conflicts with what the PEAK at [407] had recorded, that “presumably the root cause”
was the software.
Emails in February 2006 to and from Anne Chambers stated expressly the following:
“.,.. [notice that in the early guise of this problem in the call it states the PM as Female:
Wed 12 October 2005 17:39 by UK956078 / HSHI Saved: Wed 12 October 2005 17:39
Pm was trying to transfer £2490 from node 7 onto node 2. She states that she has
accepted the transfer on node 2 but the system is not showing this. On node 7 it is
showing pending transfer but it is not showing on node 2. It appears on her transfer
sheet as completed.
At the bottom of this email re a magical £43k appearing and disappearing the PM is
Male He reports:
You may recall that in September the above office had major problems with their
Horizon system relating to transfers between stock units.
The Spmr has reported that he is again experiencing problems with transfers, (05.01.06)
which resulted in a loss of around £43k which has subsequently rectified itself. ] know
that the Spmr has reported this to Horizon Support. who have come back to him stating
that they cannot find any problem.
Clearly the Spmr is concerned as we have just spent a number of months trying to sort
out the first instance and he doesn't want a repeat performance. He is convinced that
there is something wrong with his Horizon kit. I would be grateful if you could
investigate this and give him any support that you can. I'm due to visit the office
tomorrow to have a look at his paperwork and discuss the situation with him.
So apologies for the long windedness but I have been given this by Liz as a problem
so:
1. Is there a problem at this branch? is it Horizon kit or is there an issue with staff there?
2. If there is an issue is this S90 release the cure? how confident are you/we it will fix
the problem?
3. $90 counter release due week 4th March. Getting Sarah to check if this site is in the
pilot 24th or just part of the general release 4th March.
Appreciate your comments please.”
(emphasis added)
In the answer to this question posed in February 2006, Anne Chambers stated the
following:
“Haven't looked at the recent evidence, but I know in the past this site had hit this
Riposte lock problem 2 or 3 times within a few weeks. This problem has been around
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for years and affects a number of sites most weeks, and finally Escher say they have
done something about it. I am interested in whether they really have fixed it which it
why I left the call open - to remind me to check over the whole estate once $90 is live
- call me cynical but I do not just accept a 3rd party's word that they have fixed
something!
What I never got to the bottom of, having usually had more pressing things to do, was
why this outlet was particularly prone to the problem. Possibly because they follow
some particular procedure/sequence which makes it more likely to happen? This could
still be worth investigating, especially if they have continuing problems, but I don't
think it is worthwhile until we know the $90 position.
Please note that KELs tell SMC that they must contact sites and warn them of balancing
problems if they notice the event storms caused by the held lock, and advise them to
reboot the affected counter before continuing with the balance. Unfortunately in
practice it seems to take SMC several hours to notice these storms by which time the
damage may have been done.”
(emphasis added)
This shows the following important points. At least Anne Chambers in early 2006, and
all those with whom she was corresponding, knew that this problem — now admitted to
be a software bug — had been around “for years”. Horizon Support were telling the
SPM, whose branch accounts were affected by discrepancies, that “they cannot find
any problem”. The SMC — the part within Fujitsu responsible for providing corrective
action for the “event storms” ~ would not always notice these had occurred in time and
by then “the damage may have been done”. I find that by “the damage” this can only
mean impact upon branch accounts.
Mr Godeseth gave evidence about S90, the software release intended to remedy this,
which was distributed in March 2006. This was 6 years after Legacy Horizon became
in use. His evidence was that this release was one year before what he called “the
relevant period” for Ms Misra’s branch, one of the SPMs convicted of criminal
offences, which he was asked about. He also gave evidence that the Callendar Square
bug affected 30 branches, and had caused mismatches in the branch accounts at 19
(corrected in supplementary evidence in chief from 20) of them. He said in his witness
statement that this information had come from Matthew Lenton, Fujitsu’s Post Office
Account Document Manager and that “Fujitsu has established this for the purposes of
this statement using the event logs described above.” He accepted that this part of his
witness statement was not correct. The figures that he had provided had nof come from
an exercise specifically for the purposes of his evidence, or for the Horizon Issues trial.
It had actually come from “the spreadsheet [which] is something that was done at the
time, as I understand it by Anne Chambers, to actually investigate what had happened
when we had had these locks.”
This was an important correction by Mr Godeseth, for reasons that I will now explain.
[t is a matter of public record that Anne Chambers gave evidence before the High Court
in the case of Post Office Ltd v Castleton [2007] EWHC 5 (QB) before HHJ Havery
QC. Her evidence in that case is summarised at [23] of that judgment. Callendar Square
is referred to, but as a single branch affected. The reason that I have referred to this case
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is because it was specifically referred to by Mr Jenkins in an email of 8 March 2010
which was referred to by Mr Godeseth in paragraph 14 of his witness statement. Mr
Godeseth said that he agreed with that email, which stated:
“I’ve been asked about the issue at Callender Square, Falkirk (I’m not quite sure about
the spelling) that came up at the Castleton Trial.
I thought I'd better keep you in the loop on this.
I’ve now dug back into the archives to provide the following summary:
1. The problem occurred when transferring Cash or Stock between Stock Units. Note
that West Byfleet does operate multiple Stock Units so the issue could have occurred.
2. It manifests itself by the Receiving Stock Unit not being able to “see” the Transfer
made by the “sending” Stock Unit and is compounded by attempting to make a further
transfer. Note that such transactions usually reappear the next day.
3. It is clearly visible to the User as a “Receipts and Payments mismatch” at the time
that one of the Stock Units is Balanced. This usually results in the Branch raising a call.
There are no such calls in Andy Dunks’ Witness Statement which summarises the calls
raised by West Byfleet. Also this can be checked on any Balance Reports or Branch
Trading Statements that are available from the Branch which should show that Receipts
and Payments do match and that the Trading Position is zero.
4. The problem is also visible when looking at system events associated with the
Branch. The System events from 30/06/2005 to 31/12/2009 for West Byfleet have been
checked and no such events have been found.
5. The problem was fixed in the S90 Release which went live in March 2006 and so
would not have been relevant at the time of the detailed Transaction Logs obtained for
West Byfleet between December 2006 and December 2007.
Therefore I can conclude that the problems identified in Calendar Square, Falkirk are
not relevant to West Byfleet.”
This email does not provide anywhere near the same degree of information about the
Callendar Square bug as was available at the time of the Horizon Issues trial, or as
recorded in the PEAKs above. There has obviously been further investigation at Fujitsu
into this specific issue since then, as made clear by Mr Godeseth’s evidence about the
information coming from Mr Lenton and Ms Anne Chambers. The email does not use
the term “software bug”. It does not refer to the fact that it is accepted by Fujitsu,
following an investigation, that the admitted bug had affected at least 30 branches, Nor
does it refer to the fact that the Callendar Square bug caused mismatches at 19 of those
30 branches.
The spreadsheet to which Mr Godeseth referred as having been “prepared at the time”
by Anne Chambers was also put to him. It included textual notes and a list of call
references and branches affected by approximate date, which were all in 2004 and 2005.
The notes were:
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“NB many other branches had multiple events. preventing replication, but these are the
majority of those which came to Peak, having either reported a problem or it caused a
reconciliation report entry.
From Sept 2005, cash accounts were replaced by branch trading statements and the
TPSC256 report was no longer populated. J can't remember how we then knew about
receipts and payments mismatches and if we would have picked up on further issues.”
(emphasis added)
These notes make clear that there were other branches potentially affected, and the list
of 30 branches compiled in the spreadsheet were “the majority”. It does not state that it
is an exhaustive list and the notes suggest it is not. The summary for each branch listed
gives a variety of consequences or effects. They include:
1. Receipts and Payments Mismatch.
2. Receipts and Payments Error.
3. Host Generated Cash Account Line.
4. Unable to roll Stock Units.
5. Reconciliation Report.
6. Slow running counter.
7. Pension and Allowance Report printouts.
8. Screen freezes.
9. Problems with declarations.
10. Unable to create AA.
11. Loss due to double transfer.
12. Transfers not showing on nodes.
13. CAC Lines not matching.
The spreadsheet was disclosed to the claimants on 27 February 2019, or very shortly
before the Horizon Issues trial, and the properties shown on the electronic document
identify Anne Chambers as the author, with a date of 22 December 2015.
Mr Godeseth also, entirely accurately in my judgment, accepted that the Callendar
Square bug had been present for a considerable amount of time prior to 2005. He said
“I would agree that the underlying bug had been there for a considerable time, probably
since the Horizon went in”. This is made clear by, amongst other documents, Anne
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Chambers’ entry in February 2006 stating that the problem had “been around for years”.
In another of the many PEAKs that dealt with this issue, the entry for 22 September
2005 states “Note - a few of these errors seem to occur every week at different sites.”
Mr Godeseth was taken to the contents of two letters from the Post Office’s solicitors
to the claimants’ solicitors. The first was dated 28 July 2016. This was the Post Office’s
solicitors’ substantive response to the claimants’ letter of claim, is very lengthy (as was
the letter of claim itself) and ran to 99 pages. The second letter was dated 11 January
2019. He agreed that certain important elements of the paragraphs in those letters
explaining Callendar Square were incorrect. They were:
1. That the bug was only discovered in 2005.
2. That the bug had only affected one branch. The second letter stated in very clear
terms that “The Falkirk/Callendar Square issue was only known to have affected that
one branch.”
Not only were both those statements in the Post Office’s solicitors’ correspondence
completely wrong, but the numerous documents at [398] to [421] above demonstrate
that there were a great number of references, including in both KELs and PEAKs
(documents of a type that had been at one stage claimed to be wholly irrelevant to the
issues in this litigation) to the direct contrary.
Mr Godeseth’s witness statement about this, prior to his cross-examination, presented
a very different picture to the one that eventually emerged. Indeed, I would go further,
and I find that his witness statements omitted some very important headline points in
respect of the Callendar Square bug, presented a chronology very different to the real
one, and had the effect (whether intended or accidental) of giving a misleading
impression of the Callendar Square bug and its impact.
I find that the headline points omitted by Mr Godeseth are as follows:
1. The Callendar Square bug had existed “probably” (Mr Godeseth’s word in cross-
examination) since the inception of Horizon in 2000. There were numerous incidents
of it occurring prior to 2005.
2. By February 2006, Anne Chambers and others at Fujitsu knew that this bug “had
been around for years”.
3. It had an impact “most weeks”. Preparing a software fix was not seen as a priority.
4. The bug had directly impacted the branch accounts of at least 19 branches, and
possibly more, as the Anne Chambers’ spreadsheet listed the 30 branches as “these are
the majority”.
5. There were numerous effects of this bug, and at least 13 different ones identified in
the spreadsheet.
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427.
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6. Even in 2006, Horizon Support was telling at least one SPM that they “could not find
any problem” with Horizon when the bug’s impacts were reported to it, and this was
recorded in documents linked by Fujitsu directly with the Callendar Square bug.
7. Fujitsu had not established the total number of branches affected by consulting the
events logs for the purposes of preparing Mr Godeseth’s witness statement, or
otherwise. To represent the spreadsheet prepared by Anne Chambers as being the
totality of branches affected by the bug is to ignore the text of the notes.
Finally on this point, the Post Office’s solicitors’ letters were obviously not factually
inaccurate. Nor can the Post Office’s own legal team have known about the Anne
Chambers’ spreadsheet until very early 2019, otherwise disclosure of such an important
document would surely not have been given only on 27 February 2019, only seven
working days before the Horizon Issues trial began. I do not know why the Anne
Chambers’ spreadsheet of 22 December 2015 was only disclosed to the claimants a
mere 7 working days before the start of the Horizon Issues trial, and it is not necessary
to speculate.
Although the Callendar Square bug in Legacy Horizon could, amongst other effects,
cause a receipts and payments mismatch, there is another bug in Horizon Online that
also had the same effect. This was called the Receipts and Payments Mismatch bug and
is the first entry in the Bug Table, Bug 1.
Mr Godeseth gave evidence about the Receipts and Payments Mismatch bug. This was
a problem at the cache. His information came both from Mr Jenkins and his own
investigations. He did not know about it at the time in 2010, and he did not in his witness
statement refer to what is in my judgment a very important document concerning this
bug, namely the Receipts/Payments Mismatch issue notes dated in the trial bundle index
17 October 2012, although it is likely to be a 2010 document as an associated document
from Mr Jenkins (trial bundle reference F/1000/1 and F/1001/1) is dated 29 September
2010. I will reproduce certain parts of the issue notes, as I consider them to be highly
relevant to the Horizon Issues. There were 10 attendees, including Mr Jenkins. The
document was marked Commercial in Confidence and is, according to the trial bundle
index, a memo of a meeting. Another document with the same date is headed
“Correcting Accounts for “lost” Discrepancies” and states “any branch encountering
the problem will have corrupted accounts”. The issues notes document stated:
“What is the issue?
Discrepancies showing at the Horizon counter disappear when the branch follows
certain process steps, but will still show within the back end branch account. This is
currently impacting circa 40 Branches since migration onto Horizon Online, with an
overall cash value of circa £20k loss. This issue will only occur if a branch cancels the
completion of the trading period, but within the same session continues to roll into a
new balance period.
At this time we have not communicated with branches affected and we do not believe
they are exploiting this bug intentionally. (emphasis added)
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The problem occurs as part of the process when moving discrepancies on the Horizon
System into Local Suspense.
When Discrepancies are found during Stock Unit rollover into a new Transaction
Period, then the User is asked if the discrepancy should be moved to Local Suspense.
If the branch presses cancel at this point the Discrepancy is zeroed on the Horizon
System.
Note at this point nothing into feeds POLSAP and Credence, so in effect the
POLSAP and Credence shows the discrepancy whereas the Horizon system in the
branch doesn't. So the branch will then believe they have balanced.
Ifat the next screen the rollover is completely cancelled, then no harm is done. However
if the Rollover is re-attempted at this point, the rollover will continue without any
discrepancy meaning Horizon doesn't match POLSAP or Credence.
This has the following consequences:
+ There will be a Receipts and Payment mismatch corresponding to the value of
Discrepancies that were "lost"
Note the Branch will not get a prompt from the system to say there is Receipts and
Payment mismatch, therefore the branch will believe they have balanced
correctly.
+ When the Branch begins the new Branch Trading period the discrepancies will show
at Zero, however the Receipts and Payment mismatch will carry over into the next
period.
Impact
* The branch has appeared to have balanced, whereas in fact they could have a loss or
a gain.
+ Our accounting systems will be out of sync with what is recorded at the branch
+ If widely known could cause a loss of confident in the Horizon System by branches
+ Potential impact upon ongoing legal cases where branches are disputing the integrity
of Horizon Data
+ It could provide branches ammunition to blame Horizon for future discrepancies.
Identifying the issue and forward resolution
The Receipts and Payment mismatch will result in an error code being generated which
will allow Fujitsu to isolate branches affected this by this problem, although this is not
seen by the branches. We have asked Fujitsu why it has taken so long to react to and
escalate an issue which began in May. They will provide feedback in due course.
Fujitsu are writing a code fix which stop the discrepancy disappearing from Horizon in
the future. They are aiming to deliver this into test week commencing 4" October. With
live proving at the model office week commencing 11" October. With full roll out to
the network completed by the 21* of October. We have explored moving this forward
and this is the earliest it can be released into live.
-453-
429.
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The code fix will on stop the issue occurring in the future, but it will not fix any current
mismatch at branch.
Proposal for affected Branches
There are three potential solutions to apply to the impacted branches, the groups
recommendation is that solution two should be progressed.
SOLUTION ONE - Alter the Horizon Branch figure at the counter to show the
discrepancy. Fujitsu would have to manually write an entry value to the local branch
account.
IMPACT - When the branch comes to complete next Trading Period they would have
a discrepancy, which they would have to bring to account.
RISK- This has significant data integrity concerns and could lead to questions of
"tampering" with the branch system and could generate questions around how the
discrepancy was caused. This solution could have moral implications of Post Office
changing branch data without informing the branch.
SOLUTION TWO - P&BA will journal values from the discrepancy account into the
Customer Account and recover/refund via normal processes. This will need to be
supported by an approved POL communication. Unlike the branch "POLSAP" remains
in balance albeit with an account (discrepancies) that should be cleared.
IMPACT - Post Office will be required to explain the reason for a debt recovery/ refund
even though there is no discrepancy at the branch.
RISK - Could potentially highlight to branches that Horizon can lose data.
SOLUTION THREE - It is decided not to correct the data in the branches (ie Post Office
would prefer to write off the "lost"
IMPACT - Post office must absorb circa £20K loss
RISK - Huge moral implications to the integrity of the business, as there are agents that
were potentially due a cash gain on their system.”
(bold present in original)
I find this to be a most disturbing document in the context of this group litigation. It is
a 2010 document and issues between the Post Office and many SPMs concerning the
accuracy of Horizon had, for Legacy Horizon, gone on for a decade (2000 to 2010) and
these continued under Horizon Online (introduced in 2010). Under “Impact”, some of
the bullet points incorporate a summary of these issues.
“e The branch has appeared to have balanced, whereas in fact they could have a loss or
a gain.
+ Our accounting systems [ie Horizon or the Post Office’s] will be out of sync with what
is recorded at the branch
+ If widely known could cause a loss of confident in the Horizon System by branches
+ Potential impact upon ongoing legal cases where branches are disputing the integrity
of Horizon Data
+ It could provide branches ammunition to blame Horizon for future discrepancies.”
(emphasis added)
-454-
430.
431.
432.
433.
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The attendees at this meeting included at least one member of Post Office (rather than
Fujitsu) personnel, Andrew Winn of POL Finance. There were obviously legal cases
going on at the time, hence the reference in the underlined bullet point to “ongoing legal
cases”. If these were criminal cases, the Post Office would be the prosecuting authority,
with certain important duties. If these were civil cases, the Post Office would be a party
with disclosure obligations. An affected branch would believe it had balanced its
accounts correctly; it would not have done so. There is an evident concern amongst
those at the meeting which is recorded in this document that this issue should not
become “widely known” in order to avoid causing “a loss of confidence in the Horizon
System”. Fujitsu do not seem to have been particularly prompt in either identifying the
problem or reacting to it.
Of the three solutions considered, the one that was adopted was issuing a debt
recovery/refund even though there would be no discrepancy at the branch. Given one
of the Common Issues was the status of a Branch Trading Statement, which the Post
Office argued should legally have the status of a settled account with the SPM as agent,
I note the suggestion adopted with more than passing interest. The solution explains
“even though there is no discrepancy at the branch”. This means the Branch Trading
Statement would be correct, or in balance. The discrepancy would not be in the Branch
Trading Statement, it would be in POLSAP or Credence. That this is correct is shown
in an associated document from Mr Jenkins (trial bundle reference F/777/2) where he
stated that “the data used for the BTS will also have a zero value for Discrepancies at
the end of the period.” BTS means Branch Trading Statement. A similar entry is in the
document at F/1000/1 which states at /2 “Note that if the bug was not present, then the
Discrepancy would have been transferred to Local Suspense and that would have been
cleared, so there are a number of things wrong with the BTS.” (emphasis added). In
other words, the Post Office itself was not considering the BTS as having the status of
a settled account, based on these entries.
Further, an associated document entitled “Receipts and Payments Mismatch” states:
“1. The purpose of this note is to document a request that we have had from Post Office
in terms of presenting details of what happened as a result of a bug in HNG-X in
September 2010 which caused a Receipts and Payments mismatch and also resulted in
Discrepancies being lost.
The background to this is the fact that there was a BBC documentary broadcast on
Monday 7'* February 2011 reporting on postmasters being unhappy about being
pursued for losses by Postmasters on Horizon.
It should be noted that the issues described here relates to HNG-X (Horizon Online)
and that the implementation of the accounting mechanisms in the two systems is totally
different (but they do produce the same reports and support the same business
process).”
(emphasis added)
The two references — one to “ongoing legal cases”, the second to a BBC documentary
— show that there was a distinct sensitivity within both the Post Office and Fujitsu about
keeping this information to themselves in order to avoid a “loss of confidence” in
Horizon and the integrity of its data. A less complimentary (though accurate) way of
-455-
434.
435,
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putting it would be to enable the Post Office to continue to assert the integrity of
Horizon, and avoid publicly acknowledging the presence of a software bug. The
solution adopted was the issuing of TCs to the relevant branches. There was no publicity
given to the SPMs at the time about the presence of this software bug in Horizon. An
entry at F/1000/3 states:
“It should be noted that as Discrepancies are normally Losses, then a Lost Discrepancy
would normally work in the Branches favour and so there is no incentive for the branch
to report the problem. Also if we do amend the data to re-introduce the Discrepancy,
this will need to be carefully communicated to the Branches to avoid questions about
the system integrity.”
(emphasis added)
Mr Godeseth was asked about the lack of communication of this.
“Q. Are you surprised that this had not been communicated so people would just be
warned about it?
A. There was obviously a fear that subpostmasters may be looking to exploit this
because it gave -- there was a fear that people could see this as a way of defrauding the
Post Office.
Q. So concealing it from SPMs who were honest was justified because of the
expectation of dishonesty of subpostmasters in the network, in a nutshell?
A. In my view, this was a decision made by Post Office on how to manage this
particular bug. You could interpret it the way that you have put it.
Q. Do you agree with the way that I have put it to you?
A. I think I'm agnostic. I can see the -- I can see a rationale for not broadcasting this,
but equally, if the objective is to be totally open and honest and take the risk of causing
more chaos in the network then yes, I would have to agree with that.”
Indeed, the approach of the Post Office to notification of the existence of bugs to SPMs
is an illuminating one. The Post Office communicates with SPMs generally in a number
of ways. Methods that have been referred to in both of the Common Issues trial and
also the Horizon Issues trial include “Branch News”, a type of newspaper that was used,
and also “Memo View”, a pop up message that appears on Horizon terminals. During
the preparation of this judgment, in view of the fact that judgments are required to be
factually accurate, because dates can sometimes become lost in the midst of huge trial
bundles and very detailed submissions, and also because the simplest way to arrive at
a date when something has been done is (sometimes) simply to ask the parties for a date
or a reference, on 7 October 2019 the parties were jointly asked the following:
“For each of the Dalmellington and Callendar Square bugs, could the parties please
indicate (by means of an agreed fact but only if that is possible, if not each party’s
contended for answer) their answers to the following two questions:
1. The date when the existence of each of these was communicated by the Post Office
to SPMs;
2. A trial bundle reference to a contemporaneous document, email or communication
from the Post Office demonstrating question 1.”
-456-
436.
437,
438.
439.
440.
441.
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The parties could not agree on a date when the existence of these two bugs — Callendar
Square being an acknowledged bug in the Bug Table dealt with below (from the 2"
Joint Statement of the two experts) and Dalmellington, which is now accepted to be a
bug — was communicated to SPMs. The claimants’ answer to the two questions was the
same for each bug, namely that there was “no date in any contemporaneous document
from the Post Office in the trial bundle showing that such communication in fact took
place and identifying the actual content of any such communication.” The Post Office’s
answer was as follows:
For Callendar Square: “It has never been Post Office’s case that, once it was discovered,
the existence of the Callendar Square bug was communicated by Post Office to all
SPMs or communicated to SPMs who had been affected. Post Office's case is that it
was unnecessary and would have been inappropriate to do so.” A number of references
and further explanation then followed, stating that when “an SPM was affected by the
bug, this was detected and corrected in the ordinary course” and also that “In some
cases, SPMs who were affected by the Callendar Square bug may have been made
aware that there was a problem in Horizon which had caused an etror in their accounts
which required correction.”
For Dalmellington: “It has never been Post Office’s case that, once it was discovered,
the existence of the Dalmellington bug was communicated by Post Office to all SPMs
or communicated to the SPMs who had been affected. Post Office's position is that it
was unnecessary and would have been inappropriate to do so.” The Post Office also
stated that “when an SPM was affected by the bug this was detected and corrected in
the ordinary course” and that the Dalmellington bug “was prevented, by effective
counter-measures, from causing even a single impact on branch accounts”.
The Post Office also stated that there were real disadvantages to notifying SPMs of this.
The Post Office relied upon passages in Dr Worden’s report that summarise reasons
why users of an IT system should not be given information about parts of that system
which they did not encounter in their daily work; that there was “no point in trying to
educate all the users in details and terminology of the system which will never concern
them”; that the best thing to do is try and fix a bug or defect, rather than “create some
new error message to the users”; that “automated messages from the system are only of
limited help to users”; and other points in similar vein. The Post Office also provided
documentary references to instances where “an SPM might have been made aware”,
although these documents were not deployed in the evidence.
I will reproduce two entries from one of these documents, a PEAK with reference
PC0103864. This shows that on 3 June 2004 an SPM reported “that he had a problem
with some transfers yesterday, he was transferring stock and cash between the aa main
stock unit and the bb shared stock unit and although only one transaction shows for the
transfer out the transactions were transferred into the bb stock unit twice giving the pm
a discrepancy.”
The discrepancy in the cash account was £22,290 in total (shown in the entry for 8 June
2004) although the reconciliation error reported by the Host was £44,580. This was
finally resolved on 5 August 2004 with the issue of an error notice. There is nothing to
suggest that the SPM was told that this had been caused by a software bug.
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442. The Post Office’s approach to this, in my judgment, entirely misses the point. In my
judgment, the above passages are simply extraordinary. Two of the documents above
are dated 2010, some 9 years ago. The PEAK is from 2004, 15 years ago. Their contents
support the claimants’ case on the Horizon Issues. Fujitsu knew, to take Callendar
Square as an example, that this bug existed in Horizon. They knew that it had affected
branch accounts. It was not, as the Post Office puts it “unnecessary and inappropriate”
to notify SPMs of this. I have listed the points on this bug at [425] above omitted by
Mr Godeseth from his written evidence. Those same points all lead to the same
conclusion in my judgment, namely that the Post Office ought to have notified, at the
very least, all those SPMs whose branch accounts had been impacted by this bug that
this had occurred, and that it had occurred as a result of a software bug. The fact that
the integrity of Horizon data was a live issue at this time should not have influenced the
decision to notify SPMs of a software bug. Further, the Post Office’s explanation in its
submissions that SPMs had their accounts “corrected in the ordinary course” is not a
suitable phrase, unless by “ordinary course” one means keeping the cause or reason for
the correction secret and therefore hidden from the other party in the accounting
transaction, namely the SPM. Also, one is not educating users in the details and
terminology of the system (as suggested by Dr Worden) if one informs them that there
is a software bug in the system and its symptoms are as follows. This is relevant to
Horizon Issue 2, namely whether the Horizon IT system itself alerted SPMs of such
bugs, errors or defects as described in Issue 1 above and if so how, and also Horizon
Issue 9, which concerns transaction data and reporting functions available to SPMs. It
is also relevant to Dr Worden’s consideration of countermeasures, which he considers
includes vigilance by users (which means SPMs).
443. Mr Godeseth gave express evidence in his witness statement that the Receipts and
Payments mismatch bug occurred in September 2010. That date too was factually
incorrect. The issue notes refer to Fujitsu knowing about it far earlier, and Mr Godeseth
accepted he had seen this document before his cross-examination. That document even
records Fujitsu being taken to task by the Post Office about how long it had taken to
react, as in “We have asked Fujitsu why it has taken so long to react to and escalate an
issue which began in May. They will provide feedback in due course.” Not just the
impression, but the express text in Mr Godeseth’s witness statement, was to the effect
that the bug was discovered in September 2010 and almost immediately dealt with. That
was far from the case, and that written evidence was simply wrong.
444. Mr Godeseth gave evidence about another bug, called the Local Suspense Bug, also in
Horizon Online. His witness statement quoted almost word for word from a
contemporaneous document prepared by Mr Jenkins. Almost all his information on this
bug had come from Mr Jenkins. The bug caused entries from local suspense accounts
in 2010 to be reproduced in Horizon in two successive years. What was supposed to be
only temporary data was retained, not deleted as it ought to have been, and the system
then used it again. It affected certain tables in the branch database and the archiving
strategy of deleted Stock Units. This affected 15 branches. The effects of the bug were
brought to the attention of the Post Office by two SPMs “with the largest discrepancies”
and Fujitsu became aware of it in January 2013. However, the note by Mr Jenkins of
15 May 2013 summarising it states that the problem was known about far earlier than
that:
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445.
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“In April 2011 a problem was found with the archiving strategy related to Stock Units
that have been deleted in a Branch. A consequence of this is that some changes were
made to the archiving strategy on 3“ July 2011. An unintended consequence of this
change was that any Branch that deleted a Stock Unit at the end of 2010 which had
local suspense transaction in that Stock Unit before it was deleted were left in the table
used for constructing the BTS. This meant that as Trading Periods cycle around each
year, these BTS records became visible in 2011 when the same Trading Period was
reached.
The effect of these old records was that after the BTS was produced an incorrect figure
was generated for the Opening Balance of the Local Suspense Account for the
following period. This amount corresponded to the value of the historical record. These
orphaned records were created between 16" November 2010 and 9 December 2010.
When the next Trading Period was balanced, then this incorrect Opening Figure would
result in the total value for Local Suspense being calculated incorrectly and the SPMR
being asked to make good an incorrect amount. It is at this point that transactions would
be generated into the audit trail reflecting the fact that the SPMR had cleared the Local
Suspense account for an incorrect amount, The audit trail operated correctly in the sense
that it accurately recorded the transaction on the system.
This problem was not reported to Fujitsu in 2011/12 and only affected a smal! number
of Branches and only for a single Trading Period. However the two branches with the
largest discrepancies did report the issue to Post Office Ltd who could see the impact
of the problem in their back end system and wrote off the loss or gain for the branch
but did not ask Fujitsu to investigate further.
At the same Trading Period in 2012/13, the problem re-occurred and this time one of
the affect Branches reported the problem to Fujitsu on 25“ February 2013 (PEAK
223870) resulting in a detailed analysis of this issue and finding the orphaned BTS
records. The root cause was determined by 28" February 2013 and a preliminary report
was sent to Post Office Ltd. A further update was sent on 14" March 2013 with a full
analysis of the issue and all the affected branches.”
(emphasis added)
Another software bug which Mr Godeseth gave evidence about was called the
Dalmellington Bug. This is also known as the Branch Outreach Issue or Bug, as it
affected what are called Outreach branches, which are those that have a core branch
(such as a rural or small branch post office) and an outreach branch, such as a mobile
post office van, or village hall somewhere else (where post office services would be
provided, say, one day a week). This “outreach” element is used, particularly in very
rural areas, to provide post office services to remote communities. A SPM needs to scan
or record a pouch from one branch (the core) into the outreach branch (the van or village
hall) to record that the contents of the pouch are not in the core branch, but are in the
outreach branch instead. This is a branch to branch cash remittance, if the pouch
contains cash. Mr Godeseth had no first hand knowledge of this bug. As the claimants
put it in opening submissions, this is a useful way of examining certain features in
Horizon as the same person, the SPM, controls “both ends” of the transactions.
-459-
446.
447.
448.
449.
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The Dalmellington Bug related to Horizon Online and actually included two potentially
separate issues, and the combination of these. One related to what is called Forced Log
Out, when the Post Log On script was not correctly closed down and was left on the
stack of incomplete processes. The other related to the way the Pouch Delivery script
operated; because the Post Log On script had not correctly closed down meaning the
stack was not empty, the Pouch Delivery script thought it had not finished and
attempted to repeat the last part of the script. This had the effect of recording the
remittance transactions and printing of receipts. This would lead to duplicate pouch
IDs. Pouches have bar codes that are scanned and each is supposed to have a unique
ID. The duplicate pouch ID would have a value attached to it — the sum in the original
pouch. It would however be recorded twice as a result of this.
What happened at Dalmellington was the SPM scanned £8,000 from her core branch
into her outreach branch. She was lucky in this sense, in my judgment, in that she
“controlled” both ends of the transaction. The transfer replicated four times. She had
Horizon receipts in her outreach branch of £32,000 (4 times £8,000) and therefore a
discrepancy of £24,000, as she had only transferred £8,000 in cash out of her core
branch into it. This was investigated by SSC and she was issued with a TC a few weeks
after it had occurred. This was caused by a software bug, and the bug is now admitted
by the Post Office, although it describes it as having “transient impact”. That simply
means it was corrected.
When investigating this Fujitsu found 112 occurrences affecting 88 different branches
in the previous 5 years. They were as follows, taken from an internal Fujitsu
presentation dealing with this:
Feb 2010 to Jan 2011 65 incidents
2011 6 incidents
2012 9 incidents
2013 7 incidents
2014 9 incidents
2015 16 incidents
The same document showed fixes applied in April 2010, January 2011 and January
2016. It also showed only one call to SSC at Fujitsu in 2015, and none for any of the
years 2010 to 2014. The presentation also showed that some branches that were affected
were so-called “mediation branches” — in other words the SPMs would have been in
the Second Sight mediation scheme that was brought to an end — but that none of the
dates when those branches were affected matched the “mediation dates”, which means
the periods for which ARQ data was to be used in the mediations to analyse exactly
what had happened at each branch. There is nothing in the Fujitsu document used by
Mr Godeseth for his evidence, to suggest that this analysis led to each branch being told
of these software bug occurrences outside the mediation date range, and the items were
usually corrected by means of TCs.
-460-
450.
451.
452.
453.
454,
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Mr Godeseth said that “Unfortunately this particular error is not subject to receipts and
payments problems because it could be -- it could be the user doing something twice,
it's -- the bug had the effect of making it look as though a user was simply doing
something multiple times.” (emphasis added) He said that “the issue was not raised
with Fujitsu until 2013”, it was put to him it was 2015 (based on the slides) but
regardless of which of these dates is right, the Fujitsu slides show only one call to
Fujitsu in 2015, none for the other years, although the reference to fixes in 2010 and
2011 suggests it was reported to Fujitsu earlier. If those fixes were intended to correct
the bug they cannot have worked. Fujitsu maintained that they investigated and found
all occurrences, and the Post Office maintained that they had corrected any financial
impact of this bug. Whether this is correct or not in all cases, the evidence demonstrated
that the effects of this bug were experienced for the period from 2010 until 2016.
In his re-examination, some of which I have already referred to in the context of UNIX
user and privileges above, Mr Godeseth also said that having seen the OCPs and OCRs
in cross-examination, he accepted data had been deleted but did not consider it to be
transaction data. Initially he described it as “operational data” but said that was too wide
a term, and:
“There possibly ought to be a different definition for it because equally data in the
database which is telling you which stock unit, you know, what -- which TP [ie trading
period] you're in, whether a stock unit is in use, all of those are operational data which
do not go down and impact the transaction data, so for me, the definition of transaction
data -- I should be able to get from one opening -- one set of opening figures to the end
opening figures by going back to the transaction data in its absolutely raw form.”
He said it was what one went through to bring different totals together “to get to your
end position in a trading statement.” Regardless therefore of whether the data which he
accepted was being deleted is, or is not, properly described as “transaction data”, it
would feed into the end position in a branch trading statement. It would therefore, in
my judgment, have an impact upon branch accounts, regardless of the term used to
categorise it.
By the end of Mr Godeseth’s evidence, and by virtue of the way he answered questions,
the reality of the development and operation of both Legacy Horizon and Horizon
Online was far clearer than it had been before the Horizon Issues trial. I found Mr
Godeseth to be a truthful, credible and helpful witness in his oral evidence. His evidence
was of considerable assistance; he did not always answer questions the first time he was
asked, but the final answer would be reached. Given his role throughout the whole of
the life both of Legacy Horizon and Horizon Online, I found his evidence in cross-
examination to be of central relevance to the Horizon Issues. His evidence in cross-
examination was also, in my judgment, broadly supportive of the claimants’ general
case,
There are, however, two aspects of Mr Godeseth’s evidence — though not his
performance as a witness in the witness box - that were highly unsatisfactory and cannot
pass without comment. The first aspect relates to his written evidence. The totality of
his evidence, after his cross-examination, bore very little semblance to the picture that
had been portrayed in his written witness statements. On some extremely important
factual matters, such as the dates when Fujitsu had become aware of a particular bug,
-461-
455.
456.
457.
458.
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or the spreadsheet exercise by Anne Chambers prepared in 2015 (and disclosed in
2019), his written evidence was simply directly wrong. On others, such as the headline
points omitted on the Callendar Square Bug that have been set out in [425] above, very
important central elements detrimental to Fujitsu were simply omitted.
Legacy Horizon had, as has been explained, started life originally as something rather
different to what it became, having initially been intended as a tri-partite project
involving payment of benefits. It did not unfold in this way and became rather different.
Horizon Online also did not have a happy birth. The pilot for it had to be stopped, and
Fujitsu put it on what was called “red alert”. Mr Godeseth described this as “very
serious”. The biggest issue was with Oracle, which was what Mr Godeseth was working
on and hence knew the most about, but he explained that there were other problems
going on at the same time. Some of these problems were put to him — and it must be
remembered that this was a pilot scheme, with some problems to be expected — and
they included cash being short on one day by £1,000 because a transaction for £1,000
did not show up on the online report facility; cash withdrawals being authorised on
screen yet the printed receipt being declined (the customer very honestly brought the
cash back next day having noticed the receipt wording); a similar problem with a cash
deposit; and remming in figures all being doubled up. These are all somewhat — and
indeed markedly - similar to some of the problems alleged by the different claimants”
witnesses in this litigation. These all occurred during the pilot scheme.
Not one of these different problems was referred to in Mr Godeseth’s witness
statements, of which there were three. Witness statements are supposed to be accurate,
and in a case such as this one with such centrally important issues, accuracy is clearly
important. Quoting only selectively from, or wholly ignoring, contemporaneous
documents prepared by (say) Mr Jenkins, who was the extensive source of much of the
evidence, is not only unhelpful, it presents an entirely misleading evidential picture. It
is not necessary to consider further how many personnel at Fujitsu may have assisted
Mr Godeseth in producing such documents. Their content was wholly misleading in
their original written form. Fortunately the cross-examination of Mr Godeseth led to a
far clearer picture in so far as his evidence is concerned.
The second unsatisfactory aspect which arose from his evidence is the approach of
Fujitsu as demonstrated in various documents, including the PEAKs and KELs, but also
in particular in the Receipts/Payments Mismatch issue notes. To see a concern
expressed that if a software bug in Horizon were to become widely known about it
might have a potential impact upon “ongoing legal cases” where the integrity of
Horizon Data was a central issue, is a very concerning entry to read in a
contemporaneous document. Whether these were legal cases concerning civil claims,
or criminal cases, there are obligations upon parties in terms of disclosure. So far as
criminal cases are concerned, these concern the liberty of the person, and disclosure
duties are rightly high. I do not understand the motivation in keeping this type of matter,
recorded in these documents, hidden from view; regardless of the motivation, doing so
was wholly wrong. There can be no proper explanation for keeping the existence of a
software bug in Horizon secret in these circumstances.
The degree to which either, or both of, Fujitsu and/or the Post Office, expressly or
constructively, knew exactly what and when, is for future trials in this litigation, and I
-462-
459.
460.
461.
462.
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make no findings in that respect in this judgment. They are not necessary in order to
resolve the Horizon Issues and I do not speculate.
In my judgment, however, there are sufficient entries in the contemporaneous
documents to demonstrate not only that Fujitsu has been less than forthcoming in
identifying the problems that have been experienced over the years, but rather the
opposite. The majority of problems and defects which counsel put to Mr Godeseth, and
which were effectively admitted by him, simply would not have seen the light of day
without this group litigation.
I do not know if this is because of concerns about the future of Horizon going forwards;
or for Fujitsu to protect its corporate reputation; or for some other reason. It is
unnecessary to speculate, and I do not do so. An internal Post Office IT risk
management document from 2017 stated that “the HNG-X platform is end of life and
is running on unsupported Windows software”, that it needs replacing, and also that the
"Branch counter technology is aged and unreliable, with frequent hardware failures,
resulting in branch disruptions." Mr Godeseth agreed with all of this. The unsupported
platform is Windows NT4. As Mr Godeseth put it, “any technologist would tell you
that was too old”. Windows NT4 is an operating system that was released in 1996, and
Microsoft ended mainstream support for it in 2002 and extended support in 2004.
Horizon now runs, not on NT4, but on Windows 10 and it is called HNG-A rather than
HNG-X. This change to Windows 10 occurred in February 2017 and the roll out was
administered by Computacentre, with Fujitsu providing the software. The Horizon
system of 2019 is therefore a very different system than both Legacy Horizon and the
earlier version of Horizon Online, HNG-X.
The original Horizon Online system was introduced in 2010, and was even then
substantially based on the existing system, Legacy Horizon, itself by then at least 10
years old. That had been introduced in 2000, and therefore it should not be controversial
to describe Horizon Online in its HNG-X form as old technology. There have of course
been upgrades and other improvements since 2010, and other software additions and
add-ons, but Horizon will by necessity require replacement at some point. I detected a
degree of sensitivity in the litigation generally about any plans for replacing Horizon
Online, as though the Post Office feared that any hint that it might be replaced would
be seized upon by the claimants (and/or assumed by the court) as accepting that the
criticisms of Horizon Online by the claimants would be corroborated by any Post Office
plans for its replacement. Such fears, if there are any, are groundless, at least from the
court’s point of view. It is inevitable that technology systems, particularly complex
systems from as long ago (in technology terms) as 2010 will need replacing at some
point. Technology moves at an increasingly rapid pace. There is reference in some of
the documents in the trial bundle, but not in the evidence, to something called “Thin
Client”, about which Dr Worden said he had no knowledge. He thought it was a cloud
based system. It is unnecessary to speculate about this either. It is sufficient to state
that, in my judgment, any plans there may be for replacement of Horizon Online in the
ordinary course of the Post Office’s wishes to improve its business are not something
that I need to consider in order to resolve the Horizon Issues.
The degree to which Mr Godeseth’s evidence affects my conclusions on the expert
evidence will be dealt with in Part L, Overall Conclusions.
~463-
463.
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Very slightly before the end of Mr Godeseth’s cross-examination — about 30 minutes
or so — the Post Office sought to bring the Horizon Issues trial to an end by issuing their
recusal application seeking to remove me as the Managing Judge, and to have the trial
re-started at some indeterminate point in the future before another judge. There was
therefore a substantial interruption in the trial, and a period of 22 days before the
Horizon Issues trial resumed and the next factual witness for the Post Office, Mr Parker,
was called.
Mr Parker
464.
465.
466.
Mr Stephen Parker is also a Fujitsu employee, and is now the Head of Post Office
Application Support. He is therefore a very senior person. He first started work on what
was then called the Royal Mail Group Account in 1997, which was before the
introduction of Horizon. He has continued to provide support to the Post Office
Account in the various roles he has occupied at Fujitsu throughout the whole of
Horizon’s life, by which he meant both Legacy Horizon and Horizon Online.
He was originally a support consultant within the SSC, and stated that he was
effectively the deputy manager of the SSC, providing 3“ line support. He was lead
designer and part of development team for the internal website providing the support
knowledge database (which is also called KEL), technical documentation management
and operational change control. He assisted the SSC manager in the provision of the
support service and operational management. He became the Manager of the SSC in
March 2010, The SSC later expanded and provided support services to other Fujitsu
customers, but the Post Office Horizon system is still the largest. He has between 25
and 40 staff in the SSC whom he manages. He said that he was deputy manager of the
SSC when Mr Roll worked there, although he did not have that title formally, and that
people in the SSC would know this because he would stand in for the manager in his
absence, and make decisions on approving actions for him.
He had provided three different witness statements for the Horizon Issues trial, and his
24 and 3" statements were further to, and ultimately corrected, his earlier evidence,
which arose in respect of what Mr Roll said had been done whilst he had been at the
SSC, including injecting transactions during the time of Legacy Horizon. These were
done using Riposte, the language then in use. During the Horizon Issues trial and just
before the issuing of the recusal application, the Post Office’s solicitors wrote a letter
to the claimants which stated the following. This letter was dated 20 March 2019, and
was sent the night before Mr Parker was originally due to be cross-examined, his
evidence then becoming delayed due to the recusal application:
“We understand from Fujitsu that the SSC has been carrying out further work to identify
any PEAKs that show transactions being injected at the counter in Legacy Horizon in
addition to those referred to in paragraphs 29 and 30 of Mr Parker's second statement.
On Monday {ie the 6" day of the Horizon Issues trial] we learned that an SSC technician
has:-
* searched for all KELs that mentioned "RiposteMessageFile", "Ripostelmport" and
"RiposteMessage';
+ collated the responsive KEL references (AChambers2226M, CObeng1029162824,
DSeddon822M, MyYoung5043M, RColemani250R, acha2340K, ballantj498J,
-464-
467.
468.
469.
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dsed344J, AHolmes3343J, DSeddon1753N, GMaxwell46141, PCarroll12541,
RKingS135L, 81111, pear847S, wbra716s);
+ re-searched the Peak system for any PEAKs which contained those KEL references;
and
+ identified the following PEAKs: PC0105560, PC0106885, PC0063599, PC0063871,
PC0065796, PC0066061 and PC0083998 (which cross refers to PC0076029).
We understand that the PEAKs referred to above relate to either:-
+ correcting configuration data after a PinPad change; or
+ reference data.
We also learned that during this exercise the SSC technician has also identified three
examples of the marooned transaction scenario described in paragraph 38.2 of Mr
Parker's second statement: PC0068495, PC0099141 and PC0079196.”
The search terms identified in the letter were different to the ones that Mr Parker had
used in his 2% witness statement. These were "RiposteMessageFile",
"RiposteMessage", "LPO Delete", "Marooned" and “RiposteObject put". The reason
this is important is the command “RiposteImport”, used by the SSC as a search term
during the week commencing 18 March 2019, but not used for the purposes of Mr
Parker’s 2" witness statement in January 2019, is actually one of the commands that
was in fact used to inject transactions. In other words, the exercise carried out for the
purposes of the witness statement was wholly deficient, in that it did not search for one
of the specific terms used to inject transactions.
When asked to explain this in his cross-examination, and the corrections that he made,
Mr Parker stated the following:
“A I notified the legal team that Mr Simpkins had done some more work and as a
result of that we changed -- we -- this letter was actually generated.
Q And you didn't think it was important to correct paragraph 29 of your second witness
statement accurately to reflect the situation as it would have been on the day you were
due to give evidence, or indeed today?
A_ That wasn't a choice I made personally. I was advised that we generated this letter.”
(emphasis added)
He did not say who made the choice to which he referred, namely not to correct his
witness statement.
It certainly seems to me highly curious — at best - that the exercise performed for Mr
Parker’s 2"4 statement, by personnel at SSC who are expert in such things, should have
omitted using the search term “Ripostelmport”. Given the purpose of paragraph 29 and
30 of Mr Parker’s 2"4 witness statement was to identify how many times data had been
in fact injected, a search exercise that did not use “Ripostelmport” was never going to
give the full picture. That initial search exercise was plainly inadequate. It is also rather
curious that, having done that, the exercise that was described in the letter of 20 March
2019 from the Post Office’s solicitors that correctly used “Ripostelmport” as a search
term should have been done so very closely before Mr Parker was originally due to be
called as a witness, namely 21 March 2019. In re-examination, Mr Parker said that “the
thought occurred to him that he could add some other search terms into the work that
-465-
470.
471.
472.
473.
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he had done previously” and “he came to me with the data”. Why this thought should
have suddenly occurred to the person it occurred to, who was not a witness, and at the
time that it did, could not be pursued. Mr Parker denied that he was trying to conceal
anything, and said he was just trying “to get the right data for the court which can be
difficult sometimes when you are going back fifteen years.” This explanation overlooks
that the decision not to use “RiposteImport” was one taken for his witness statements.
His first witness statement was dated 16 November 2018; his second was dated 29
January 2019, and his third was 28 February 2019. None of these are “going back fifteen
years”.
Mr Parker had also given evidence in his 1 witness statement in respect of Mr Roll’s
written evidence that Fujitsu could inject and affect branch transaction data without the
knowledge of the SPM. He had originally said the following:
"As I explain below, those suggestions are incorrect and Mr Roll's account of Fujitsu's
actions and powers is inaccurate and misleading".
He explained this paragraph as follows in his cross-examination.
“A. In that paragraph I am trying to make the point that the suggestion that we
frequently changed branch transaction data without informing the branches that such
actions were being actually taken is not correct. "Frequently" is a subjective term but I
would not have described the rate at which we were changing branch transaction data
as "frequently".”
One has only to read the original paragraphs as drafted to see that Mr Parker was not
originally taking issue with frequency, or how often such actions were taken; he was
stating in express terms that this could not be done by Fujitsu at all. For someone who
has effectively spent the best part of 20 years in SSC, rising to a very senior post, such
evidence must have been — and I find that it was - quite obviously incorrect. His
explanation of this was as follows:
“Q > Now, given the change of your evidence in your later statements about the ability
remotely to access and inject transaction data, can you explain to the court what you
were saying you believed about that sentence? What should the court now read for those
words in the light of the three statements that it has before it?
A. If I take the last sentence in isolation, which is what I think you are asking me to
do, then I don't understand how I apply it, because I am -- I have been simply trying to
say there that the frequency was not high, and that we would always involve the
Subpostmaster wherever possible if that sort of action was actually being taken. That's
what I'm trying to say by that.”
This was a very poor attempt by Mr Parker at explaining away quite directly incorrect
factual evidence in a witness statement on a very important area in the litigation, namely
Fujitsu’s ability to inject transactions remotely. Mr Parker’s only recourse was to claim
he had not been saying what he plainly had been saying in his 1* witness statement —
that Fujitsu did not have the power to do it, and that Mr Roll’s evidence to the contrary
was inaccurate and misleading. The power to do something cannot be equated with
frequency.
-466-
474.
475.
476.
477.
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Mr Parker also accepted that at the time he signed his 1* witness statement he had
known that Fujitsu had the power to insert transactions into individual branch counters
by using the correspondence server, a process Mr Roll described as “to piggy back
through the gateway”. It was put to him that he had been giving his evidence initially
from a position of not being very well informed about what could or could not be done.
He denied that; he said “that would be wrong” and that in general terms he was
confident of the information he gave. The obvious conclusion that J draw from this is
that Mr Parker chose specifically to give the impression in his 1* witness statement that
Fujitsu did not have the power (the word Mr Parker expressly chose) to inject
transactions into the counter at branches, even though he knew that it did. This paints
him in a very poor light as a credible witness. There is also no adequate explanation for
why Mr Parker’s colleague should have decided, in the middle of the trial, to use the
“Ripostelmport” search term; equally, there is no adequate explanation for why this
search term was not used for the exercise for Mr Parker’s witness statement. Injection
of messages into the counter has been an extremely central issue in the long running
dispute between the Post Office and its SPMs for a long time, and Mr Parker’s reliance
in his re-examination upon the passage of time and the difficulty of “getting the right
data” for the court is, in my judgment, a poor excuse. In reality, he had no credible
explanation.
A series of propositions was put to him about the degree of expertise expected of all the
members of SSC 3” line support. He did not agree with all of the points put, and in
particular did not agree that all those in the 3 line support role would be expected to
have detailed knowledge of the system, based on both documentation and the inspection
of source code; or that they would be trained in the coding languages used within the
application. He was, however, left rather exposed in terms of the accuracy of this
evidence when it was shown that the points that he had been addressing in this part of
the cross-examination — some of which he would not accept - were taken from a Fujitsu
internal document, entitled “End to End Application Support Strategy” marked Fujitsu
Restricted and Commercial in Confidence which he had himself drafted. Indeed, it is
page I of that document that specifically identifies Mr Parker himself as the author of
the document, and it was approved by the Head of Application Services at Fujitsu, an
obviously very senior role. This refusal by Mr Parker to accept his own previously
drafted points in what I consider to be an important contemporaneous document also
paints him in a very poor light as a credible witness.
He accepted that Mr Roll was conscientious, skilled and experienced, and that he had
given Mr Roll a reference when he left Fujitsu.
He, and others not identified in his statement (although he said who they were when he
was asked, Mr John Simpkins and Mr Mark Wright), had prepared a spreadsheet that
had been put to Mr Roll showing the total number of calls to SSC between 2001 and
2004. Mr Simpkins, for what it is worth, appears to have been the person behind the
exercise referred to in the letter at [466] above, so he was obviously involved both in
preparing evidence and doing searches. Mr Parker agreed that SSC during Mr Roll’s
time needed to address coding issues, even if they did not necessarily have an estate
wide impact, and he also agreed that the list of PEAKs that had been identified as
involving Mr Roll was only those where he had been the person who put the final
response on the PEAK, rather than where he had worked on the PEAK at all.
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478. He also accepted that in categorising “software errors” he had excluded from the count
those that were categorised as Avoidance Action, Administrative Response and
Solicited Known Error.
479. He was taken to a PEAK in 1999 where an initial balance was multiplied twice “due to
a known software error” in the amount of a discrepancy of over one million pounds -
£1,082,544,32 to be exact. The PEAK ran to 14 pages. 10 people worked on it including
those in Development as well as the SSC. He accepted that this would have involved
people looking into code. It was, however, categorised as “Administrative Response”.
That PEAK alone demonstrates to my satisfaction the lack of inaccuracy in the Fujitsu
closure codes, but there were many others. Other PEAKs to which he was taken showed
reconciliation errors, and a note by the developer identifying that what were “up to 10
unnecessary reconciliation errors each week” and that the PEAK was a regression of
another PEAK; the investigation into it led to the conclusion that a subsequent software
release had not caught a fix. It stated "Risks (of releasing and of not releasing proposed
fix): Without this fix, there will be possibilities of system errors at counter and while
doing reversal transaction". This software fix was “released to live”, which means the
fix was actually written and introduced into the system. Mr Parker had not included this
in his software category either, because the final person working on it had categorised
this as Administrative Response.
480. In another PEAK, it was recorded that “the system is still playing up in that the screen
is hanging in the middle of transactions -- PM did transaction ... but left office for 1
hour -- when he came back the monitor had 141 first-class stamps on screen totalling
£38.07". Mr Parker accepted that this was not how the system was supposed to work,
but the same PEAK also recorded the SPM becoming upset because the SSC were
advising it was user error. The SPM wished to make a complaint about the person at
SSC and the PEAK records “we both feel that this PM is complaining unjustly”.
481. The same PEAK recorded that ROMEC engineers had been to the site, and had actually
seen the problem themselves, which were phantom transactions. It recorded “it’s not
just the PM’s word now”. Indeed, this PEAK is particularly concerning, in terms of the
accuracy of PEAK closures by Fujitsu. It records in one of the Fujitsu entries the
following:
“I now have pressing evidence to suggest that unwanted peripheral input is occurring,
the likely source being the screen. This has been seen at Old Isleworth ... When the PM
has been asked to leave the screen on overnight I have observed system activity
corresponding to screen presses happening with no corresponding evidence of either
routine system activity or human interference. The way forward now is to correlate this
with Microtouch complied monitoring software and to this ends Wendy is arranging for
installation of the kit on Friday..."
However, notwithstanding this, the subsequent entries include “Phantom transactions
have not been proven in circumstances which preclude user error" and “In all cases
where these have occurred a user error related cause can be attributed to the
phenomenon?”
482. The use of the phrase “in all cases” in respect of attributing user error wholly ignores
that the ROMEC engineer is said to have seen the problem themselves, and it is not
483.
484,
485.
486.
487.
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simply the word of the SPM in this instance. It ignores the activity observed overnight
by the Fujitsu employee who made the entry in the PEAK, when the branch was not
even open. Also, there is no reason, given the lengthy entries and studying the text
throughout the PEAK in detail, why user error should be reached as a conclusion at all.
This appears to be been used simply as an excuse to avoid an adverse conclusion to
Fujitsu.
Notwithstanding the detailed entries in the PEAK itself that in my judgment plainly
point to the contrary, the PEAK was still categorised as No Fault in Product.
In another, dealing with phantom transactions, one branch was described as “a problem
office” that was accordingly being “monitored”. The PEAK recorded that “there have
been incidents which showed a possible correlation between system activity and
phantom transactions. These pointed to a touch screen problem and as a result the
screen was replaced with a resistive model. As this produced no measurable
improvement it has to be assumed that the problems were user related". This was also
closed as No Fault in Product.
AKEL on phantom transactions stated "There have been several calls over the last few
months where Postmasters have reported phantom sales. Items appear by themselves
for which the PM has not pressed an Icon. These may be individual items or several of
the same item. Sometimes when no one has been near the screen items may appear".
These are similar problems being reported by a number of different SPMs. That alone
should have suggested, not as a matter of computer expert evidence but simply basic
common sense, that something was amiss. If a number of different and unconnected
people all report the same symptom, then that could well suggest a common problem
to them all. However, the KEL, which ran from 2000 to 2004, suggested that the cable
between the screen and the base unit was the root cause. The dates on this KEL show
that, even on the face of the document, the problem was manifested for some years.
Another PEAK that showed a problem described as “non-zero trading position on office
rollover” was put to Mr Parker. This had been given a priority C status by Fujitsu, a
status he accepted meant it was not taken account in the Service Level Agreement with
the Post Office in liquidated damages thresholds (a type of financial penalty), which
was a feature of those software PEAKs given higher priority status A and B. Status C
also was non-critical. The description of the problem was described as “PM states that
he has rolled over but the system is telling him that he hasn't -- PM states that he is in
balance period 7 and he states he is getting the message ‘wrong trading period MSG
31318 office balancing error" and "Non-zero trading position ... on rollover of branch
by user WMC002 to trading period 8".
Mr Parker described himself as “hesitant” to describe this as a payments mismatch
issue, and said it was an “office balancing error”, even though later in the PEAK senior
personnel at SSC recorded “NBSC have ruled out user error” and also that "The
problem occurred on 15/09/10 when stock unit 02 rolled over. This was originally
reported, as per KEL, BALLANTJL759Q, in call PC0204537 ... but for some reason
the call was closed without being investigated. There is a known problem with the use
of the Cancel button during the stock unit rollover. This is fully described in KEL
WRIGHTM33145J".
-469-
488.
489.
490.
491.
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(emphasis added)
He said he had not recognised the KEL number as being the payments mismatch KEL.
He accepted that in another entry in the PEAK the matter was stated to be “Severity:
Critical” — which meant it could not be status C, defined as non-critical — and also
included the entry “the branch accounts will need to be corrected.” This PEAK was
however, on 1 November 2010, closed as category “Avoidance Action Supplied”. Mr
Parker’s spreadsheet did not include “Avoidance Action Supplied” as constituting a
software issue. He claimed that he had used “the definition my experience dictated
rather than that in the document” and that “I forgot that that was exactly what I had
done in that circumstance when I prepared that a few months ago.” Finally, after the
question was put a third time, he accepted that it was a deliberate decision on his part
to depart from the definition in Fujitsu’s own documentation.
Another PEAK also identified as category C, non-critical, related to pouches being
remmed in twice, the duplicate pouch being £25,000 in value. The PEAK stated “this
might be a software issue” but also “PM is unsure if this is user error if it is a software
fault. NBSC have not confirmed if it was user error or if they can reverse it.” One entry
stated "POL have been informed of the error. Hopefully they'll issue a TC to correct
loss at the branch. The underlying problem caused by using previous button during or
just after scanning pouch barcodes, is still under investigation". This was closed as a
Solicited Known Error.
One PEAK which I found most illuminating, in terms of Mr Parker’s response to it
when he was asked questions, is PEAK PC0229446. This is dated 17 November 2013,
hence is Horizon Online, not in the period of the pilot project and sufficiently after the
introduction of it, in 2010, for it not to be put down as the sort of issue that might occur
in very early days of a system whilst minor issues were ironed out. The problem was
described in the PEAK as “PM doing cash declarations every now and again has major
loss.” Entries in the PEAK included "PM has had cash declaration problem throughout
the year and is losing a lot every now and again"; “He phoned up helpline told him can't
[have] declared properly. He states that he loses £2,000 then jumps suddenly to £4,000,
one point they lost £8,000 and is always losing money. PM stated that he has three post
offices, only happens on this site"; and then "Done a declaration this morning and had
a £6,000 also. It shows no error message when doing it. No report prints out only print-
out of cash declarations". This passage of his cross-examination followed this:
“Q. Pausing there, if the PM is correctly reporting that, then that would be very serious
for the Postmistress or Postmaster, wouldn't it?
A. If it is being correctly reported, yes.
Q And it would not be the system working as it should.
A If we attribute it as a system fault, yes.”
This again was categorised by Fujitsu as Category C, non-critical. In a sense, those two
questions and answers sum up a large part of the case. The reason that this plainly, in
my judgment, does demonstrate a system fault is Fujitsu’s own PEAK recorded:
“Voiced NBSC quoted ref H18174172 to see what checks they have done themselves
before transferring call to Horizon.
-470-
492.
493.
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They stated they had trainers come into the office and ruled out user error.”
And
“NBSC states the user error checks were carried out by Auditors at the site and not over
the phone.”
(emphasis added)
This matter was assigned to Anne Chambers, whose name appears very often in many
of the documents. The final part of her conclusion was (having said that “there were no
known issues that would result in the variance being incorrect”):
“T can't tell why the declared cash doesn't match the expected cash figure, the branch
need to make sure that what they have recorded on the system is correct, and investigate
(emphasis added)
This is simply passing the buck back to a SPM in a branch. How an SPM could
“investigate the anomalies” given they appeared to be generated by the Horizon system
is not explained, nor could it sensibly be.
She also closed the response with the category “Final — no fault in product” and closed
the call by defect cause “General — User”. I consider this PEAK to be an ideal
illustration of what I consider to be the most extraordinary situation at SSC, and one
which on the face of it is difficult to explain, given the function of SSC was to
investigate faults:
1. Fujitsu routinely assigned non-critical Category C to matters that were really very
important in their own right in any event, but of extreme importance to SPMs whose
branch accounts were being directly affected. Mr Parker accepted that only Category A
or B attracted financial penalties. It is not possible, on the evidence before the court, to
conclude one way or the other whether it was this that affected the categorisation
adopted by Fujitsu personnel.
2. Fujitsu would ignore information directly from the Post Office itself that
demonstrated that a SPM was not at fault. ROMEC engineers observing specific matters
occurring, or in this case the Post Office’s own auditors ruling out user error, were
simply ignored. This effectively amounted to the Fujitsu SSC personnel positively over-
ruling the Post Office’s own non-SPM personnel, who were giving them essential
information about failures in the Horizon system.
3. Fujitsu would also close PEAKs in a variety of ways that entirely mischaracterised
the issue. This particular one was “no fault in product” and defect cause “general —
user”, in other words, it was caused by the SPM. This had been specifically ruled out
by the Post Office’s own auditors who had visited the branch.
4. On the PEAKs that were used in the Horizon Issues trial, Fujitsu would routinely
assign lower categories of importance to reported matters that were directly impacting
SPMs’ branch accounts. They would also routinely assign user error to reported
matters, not because they had uncovered user error, but because they could not explain
-471-
494,
495.
496.
497.
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what had occurred. It seems to have been used as a default setting. Given my findings
in the Technical Appendix, this approach by Fujitsu simply cannot be justified in
technical terms.
Fujitsu do not, on the face of these documents shown to Mr Parker, appear to me to
have properly and fully investigated these myriad problems, nor did Fujitsu categorise
such incidents correctly. They also seem to have moved away, in their investigations,
from concluding that there were any issues with the software wherever it was possible
for them to do so, regardless of evidence to the contrary, an approach that has been
carried into the Fujitsu evidence for the Horizon Issues trial. In re-examination Mr
Parker was asked about the way he had done his exercise, and also the point was put to
him that the PEAKs to which he was taken were outwith the period when Mr Roll was
employed at SSC. The implication of this was that Fujitsu may, or would, have been
more accurate in the period in question rather than in later periods. Mr Parker said he
could not possibly read all the PEAKs, that he considered his data to be accurate, and
although “you may find a few PEAKs where the response code does not tally with the
document” given the number of PEAKs involved “human beings will make those
errors”.
I reject that explanation, such as it is. I do not consider that Mr Parker was interested in
accuracy in any of his evidential exercises, and I do not consider that he was objective
in the way he presented his evidence, although he sought to give the impression that he
was. I consider that Mr Parker, and the team who assisted him, sought to portray the
Horizon system — Legacy Horizon and Horizon Online — in a light as favourable as
possible to Fujitsu, regardless of its own internal evidence to the contrary, and
regardless of the facts. Mr Parker’s spreadsheet plainly did not calculate all the
categories that were used by Fujitsu for problems with the system, and sought to give
the impression that Mr Roll had been involved in far fewer incidents of this type than
were the case.
My conclusion about Mr Parker's lack of accuracy, is supported by the changing story
of Fujitsu about remote injection of messages; the need for correcting supplementary
statements, including from Mr Parker himself; his admission that he knew Fujitsu had
the power to do this, even though his 1‘ statement expressly said otherwise; the attempt
to shift the blame for this on to Mr Roll; the assertions in his subsequent statement that
Mr Roll had been unclear; and also by his attempt to portray his original evidence as
dealing with frequency, not power or ability. My conclusions are also supported by his
“deliberate decision” to depart from Fujitsu’s definition in its own internal document,
which I have explained at [488] above. I also consider that the fact that someone such
as Mr Parker had been on the Post Office Account for such a very long time, in his case
throughout the whole life of Horizon, means he was hardly best placed to be objective
in this type of evidence. But even making allowance for the natural reaction of an
employee to wish to protect his employer's interests, which many people may have sub-
consciously, I find that Mr Parker’s evidence to the court was inaccurate to a significant
degree.
In my judgment, the exercise done by Mr Parker to demonstrate the number of PEAKs
that Mr Roll worked on involving software, included in the spreadsheet of
categorisation he and others prepared, is of no evidential value whatsoever. It relies
upon the categorisation of the PEAKs performed by the Fujitsu personnel themselves,
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498.
499.
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which in the vast majority of documents used in the trial were simply wrong and/or
misleading; and it also used a different definition to the one included in Fujitsu’s own
documents such as the PEAKs above. He accepted that he had made a deliberate
decision to use a definition other than the one in the Fujitsu documents, which he
justified by saying was based on his experience. That deliberate decision alone is
remarkable. I find that he was, by means of the exercise he was involved in, trying to
downplay the extent of Mr Roll’s involvement in software issues, and also trying to
downplay the extent of software problems that were experienced on Legacy Horizon
during Mr Roll’s employment at SSC.
Although Mr Parker agreed, as it was put to him more than once, that accuracy is
important, I do not consider his evidence in his witness statements to have been
remotely accurate, even though he stoutly maintained that it was. He continued to
maintain this in his re-examination, even though by then he can have been in no doubt
that he had departed from Fujitsu’s own definition — which he had said he had forgot
about. I found him a very unsatisfactory witness, who presented in his witness
statements a misleading and one-sided sanitised version of actual problems and events
that Fujitsu had experienced throughout his time at SSC. Although he provided tables
with one of his witness statements that provided a detailed commentary on a large
number of PEAKs and KELs, that commentary appearing in a column headed “Fujistu’s
Comments” with two columns, “Response to Mr Coyne” and “Financial Impact on
branch accounts” — that latter almost always “no impact”. The entries in those columns
are almost entirely self-serving by Fujitsu and I find them to be of no evidential value.
The text of the actual PEAKs and KELs themselves are far more useful, obviously
entered at a time when the Fujitsu/Post Office position in the litigation was not at the
forefront of the different authors’ minds, and these are what for the most part the experts
have considered. Mr Parker’s table is of no assistance.
The degree to which the evidence of fact affects my conclusions on the expert evidence
will be dealt with in Part L, Overall Conclusions.
Mr Membury
500.
501.
Mr William Membury is another Fujitsu employee, namely a Fujitsu Central Quality
Partner and he is specifically focused on the Post Office account. He was taken ill
during the early part of the Horizon Issues trial, and when (after dismissal of the recusal
application) the trial resumed with outstanding factual evidence on 11 April 2019, he
was not well enough to be called in person. His witness statement was dealt with as
hearsay evidence and given the circumstances the claimants agreed to extend time for
the relevant notice to be given under CPR Part 33.2.
Mr Membury has worked for Fujitsu since 1998 and became the Quality Risk and
Compliance Manager for the Post Office account in 2011. He has overseen multiple
audits of the Horizon system. Given the timing of this, these would have all been on
Horizon Online. In 2014 he became a Central Quality Partner specifically focusing on
the Post Office as well as the Payment Card Industry (PCI) Security Standards Subject
Matter Expert (SME) for Fujitsu UK and Ireland. In 2015 he became the PCI SME for
the Europe, Middle East, India and Africa regions. He returned to the Fujitsu Post
Office Account as Head of Quality and Compliance in October 2018.
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503.
504.
505.
506.
507.
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He described his statement as an overview of the auditing and development regimes in
place in relation to Horizon to the extent that those points were not covered by the
disclosed technical documents. The statement was said to provide a high-level overview
of the audits to which Horizon had been subject since 2000; Fujitsu’s audit
methodology and his role in the audits; and to describe the development of changes to
Horizon and how that tied in with or into the audit process.
Mr Membury’s statement was very brief; it ran to only 5 pages of text. It also omitted
some highly material matters. For example, he stated that the Post Office and Fujitsu
agreed in 2010 that Horizon Online would be audited against the International Standard
on Assurance Engagements (ISAE) No. 3402 assurance standard (Horizon ISAE 3402
Audit), entitled "Assurance Reports on Controls at a Service Organization", which was
issued in December 2009. This was developed to provide an international assurance
standard for allowing public accountants to issue a report for use by user organisations
and their auditors (user auditors) on the controls at a service organisation that are likely
to impact or be a part of the user organisation's system of internal control over financial
reporting. It provides assurance that the solutions in place to manage financial
transactions are appropriate.
However, he completely omitted any reference to the Ernst & Young Management
Letter for the year ending 27 March 2011 which has been referred to in [264], [393]
and [524], which included concerns about privileges and other critical matters in
relation to IT. Indeed, he made only two references to Ernst & Young. One was to state
that:
“Ernst & Young have carried out the Horizon ISAE 3402 Audit since the 2012/2013
financial year (preparations for the audit began with Post Office in 2011)”
The second was a reference to how Ernst & Young performed the ISAE 3402 audit for
the period 1 April 2014 to 31 December 2014. His failure to mention the 2011
Management Letter is, in my judgment, a serious omission.
He could not be asked any questions about his evidence; although that was not his fault,
this goes to the weight which I attach to his evidence in any event.
I consider that Mr Membury’s evidence is of limited, if any, assistance in resolving the
Horizon Issues. It does however continue the very one-sided picture presented by all
the Fujitsu witness statements, which was to omit any reference to important
contemporaneous documents that criticise or demonstrate any deficiencies with
Horizon.
The absence of Mr Gareth Jenkins
508.
It is entirely a decision of the parties which witnesses they choose to call in any
proceedings in respect of any evidence. The position of one person, however, who did
not appear in the Horizon Issues trial, must be considered in more detail than would be
usual, as the claimants make considerable complaint about this. The person in question
is Gareth Jenkins, a senior Fujitsu employee who, although he retired recently, was
obviously widely available to the Post Office and the source of a great amount of
information both to the Post Office’s witnesses of fact, and also to Dr Worden (although
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he was not separately identified in Dr Worden’s “sources of information” paragraphs
in his 1* Report). The fact that he provided information to Dr Worden emerged during
the latter’s cross-examination. Mr Jenkins had previously given expert evidence for the
Post Office in some of the criminal prosecutions of SPMs, in particular that of Ms
Misra, to whom I have referred above, who was convicted of criminal offences in
Guildford Crown Court in 2010.
When the Post Office served its evidence of fact, there was no witness statement from
Mr Jenkins, although many of their witnesses relied upon him as their source of
information, he was referred to very often, and he obviously knew a great deal about
Horizon. The extent and way in which Mr Jenkins had been closely involved was
explained by Mr Godeseth in his cross-examination. Mr Godeseth had, in respect of the
receipts and payments mismatch, originally stated in paragraph 42 of his 24 witness
statement that 60 branches were affected. He had corrected this to 62, a factual
correction that was specifically made by him. The following passage of evidence is
relevant to Mr Jenkins’ involvement in this.
“A. No, no, I didn't do a calculation to come up with the 60. I was quoting from other
people.
Mr Justice Fraser: Someone just gave you the 60, did they?
A. I thought I was quoting from other people. I -- Gareth even said to me that in my
statement I had said "approximately 60", so I was not -- clearly I didn't because the
statement here doesn't contain that word. I had rather hoped it had when this was first
brought to my attention, but no, I certainly did not do any specific calculation to come
up with the 60 that I put into my original statement.
Mr Green: Did Gareth explain the change to you from 60 to 62?
A. No.
Q. But how did he come to tell you what was in your original statement? What was
that conversation?
A. I picked up the number -- to be -- my objective in this was to explain to the court
the symptoms of the bug and how -- the technical aspect of it. I did not pay particular
attention to getting the detail on how many branches were affected, correct.
Q. Okay. So you have spoken to Gareth since your statement?
A. I don't think I have spoken to him about this in particular. I was -- as I say, when
Gareth had said I had originally said "approximately 60" I was thinking that was quite
neat, but that's not the case.
Q. Well, you said "Gareth even said to me that in my statement I had said
‘approximately 60", so he must have said that to you after your statement had been
filed?
. It was a comment in a document that we were exchanging.
. But you hadn't spoken to him about remote access since your first statement?
No.
. Why have you stayed off that topic with him?
. Oh, sorry, this was just a comment. We have been exchanging documents, we have
been commenting on documents, so it was not a particular conversation. It is merely a
case of Gareth had commented on this when it was pushed back to us that 1 had
originally said 60 and actually the answer was different.”
>PO>O>
There is nothing wrong with Mr Godeseth correcting the number of affected branches
from 60 to 62. There is also nothing wrong with him reproducing a number given to
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him by someone else, as long as it was properly identified that the information came
from someone else, who ought to be identified (which it wasn’t in his statement, but
was, in at least outline terms, in his cross-examination). The reason for reproducing
these passages is simply to identify the extent to which Mr Jenkins was so closely
involved in the litigation, a point relied upon by the claimants. There were a great many
references throughout Mr Godeseth’s evidence, written and oral, about information he
had obtained from Mr Jenkins.
When the Post Office served their evidence of fact, the claimants had asked the Post
Office why there was no statement from Jenkins, whether Mr Jenkins was available to
give evidence, and also whether he was involved as one of a team of what the claimants
referred to as the “shadow experts”. This description was challenged by the Post Office,
and the question of shadow experts is addressed further at [556] below. No explanation
was given for Mr Jenkins’ absence in response to these requests, or in evidence in the
trial, although it was confirmed that Mr Jenkins was not one of the team of so-called
“shadow experts”.
There the matter might have rested. However, in the Post Office’s written closing
submissions, an explanation of sorts was for the first time provided. This was in the
context of two matters: firstly, by way of explanation of Mr Godeseth’s evidence, and
potentially to downplay its impact; secondly, in relation to the claimants’ complaints
about the second hand nature of some of the Post Office’s factual evidence because in
large part this had emanated from Mr Jenkins. This explanation by the Post Office
included the following passages in its written submissions:
“144, [The claimants] understandably complain that Mr Jenkins and the other source of
Mr Godeseth’s information could have given some of this evidence first hand.
However:
144.1 Taking into account that Mr McLachlan’s evidence specifically addressed things
said or done by Mr Jenkins in relation to the Misra trial, Post Office was
concerned that the Horizon Issues trial could become an investigation of his role
in this and other criminal cases.
144.2 Moreover, Post Office was conscious that if it only adduced first hand evidence
in the trial, it would end up having to call more witnesses than could be
accommodated within the trial timetable.
144.3 Furthermore, so far as Post Office was aware, the relevant parts of Godeseth 2
were most unlikely to be controversial. For example, the Misra trial was a matter
of public record, the four bugs were covered by contemporaneous
documentation and Post Office had no reason to doubt Fujitsu’s account of the
documents it held.”
In a footnote to paragraph 144.2 of the closing submissions, the Post Office added
“....As noted above, had its witnesses only given first hand evidence, Post Office
estimates that some 34 additional witnesses would have been required.”
The following are relevant in my judgment:
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1. Of primary importance is the principle that it is for each party to decide whom to call
as a witness, and what evidence they may seek to obtain from any particular witness.
2. Mr Jenkins is an important and central person so far as the operation, efficacy and
robustness of Horizon is concerned, and also in respect of the number of incidents over
the years that have led to PEAKs, KELs, problems and fixes. That is reinforced by the
Post Office’s own closing submissions that stated, at paragraph 138, that there were
two possible candidates for the witness giving the overview of Horizon, namely Mr
Godeseth and Mr Jenkins. It also stated that taking into account Mr Jenkins’
involvement in cases before the CCRC (including the Misra case) the decision was
taken to use Mr Godeseth. For that decision to have been taken, it is implicit that Mr
Godeseth must know enough about the system to give the evidence that he did.
3. The point in the footnote about a potential further 34 witnesses is not relevant to
whether Mr Jenkins was, or was not, called by the Post Office. The Post Office did not
at any stage apply to the court and explain that further time was required for the length
of the Horizon Issues trial for the specific reason that relevant evidence of fact from the
Post Office would require a particular minimum number of witnesses. However, given
the primacy of point (1) above, it was entirely for the Post Office to decide whether to
call Mr Jenkins or not, how many witnesses to call, whom those witnesses were to be
and what the content of their evidence should include.
4. The Post Office chose to proffer a reason for Mr Jenkins’ absence in closing
submissions. They were not obliged to explain. However, the reason in paragraph 144.1
quoted above is not a valid reason for his absence. The claimants would have been
entitled, in cross-examination, to put to Mr Jenkins any previous inconsistent
statements he had made on the same subject, but obviously only if there were any. These
could, potentially, have included previous statements he may have made in earlier
proceedings, but in order to be allowed to do that, such statements would have had to
be inconsistent with his evidence in the Horizon Issues trial. Putting a previously
inconsistent statement on a particular fact is permitted as part of cross-examination if a
witness’ evidence on that fact is in issue. However, the Horizon Issues trial would not
have become “an investigation of his role in this and other criminal cases” — the Horizon
trial was about the Horizon Issues. Also, this type of cross-examination would only
have arisen if any statement(s) in the Horizon Issues trial was or were not consistent
with those he had made in previous cases in which he had been involved.
5. Regardless of the validity of the explanation given by the Post Office, Mr Jenkins
was not called as a witness, and it merits repetition that it is entirely a matter for the
Post Office which witnesses it called, and which it did not. No speculation is permitted
as to what evidence he might have given in the Horizon Issues trial. It ought to be
recorded however that no limit on the number of witnesses was imposed by the court
on any party, and the Post Office could (had it wished) have called both Mr Godeseth
and Mr Jenkins. Nobody forced the Post Office to choose one or the other.
6. There is established authority that in certain circumstances the court can draw
adverse inferences from the absence of a witness. The claimants do not invite me to
draw any adverse inferences from the absence of Mr Jenkins, and J do not do so.
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7. The fact that the Post Office chose to advance certain evidence in the Horizon trial,
that emanated from Mr Jenkins, by means of another witness saying “Mr Jenkins told
me that.....” means that the claimants were deprived of the opportunity properly to test
that evidence by asking Mr Jenkins about it. It also emerged in cross-examination,
although not in his written report, that Dr Worden has also obtained certain information
directly from Mr Jenkins. By dealing with the material in this way, and having deprived
the claimants of the opportunity to cross-examine Mr Jenkins, the weight to be given to
evidence emanating from Mr Jenkins is less than it would be otherwise.
There are two consequences of the Post Office choosing to adduce such evidence in
this way. The first is that Mr Jenkins did not have to undergo any cross-examination on
such evidence; the second is that such evidence would not be given the same weight by
the court as though Mr Jenkins had given it himself. The Post Office would have known
this in advance, as this is wholly conventional. How these different factors were
weighed by the Post Office and its legal advisers in deciding whether or not to call him,
is solely a matter for the Post Office. The end result is that Mr Jenkins did not appear
and was not cross-examined.
However, J reject the suggestion that Mr Godeseth was insufficiently knowledgeable of
the matters upon which he was cross-examined for his evidence to be of significant
evidential weight. The Post Office’s Closing Submissions sought to dilute the effect of
Mr Godeseth’s cross-examination by, at the same time, implicitly suggesting that Mr
Jenkins (or someone else, but not Mr Godeseth) would have been a far better person to
have answered those questions; yet explaining why Mr Jenkins had not been called.
These submissions, though understandable from the Post Office’s point of view in
forensic terms only, have little force. A clear choice was made by the Post Office not
to call Mr Jenkins as a witness; that was their right. A clear choice was also made to
call Mr Godeseth. The Post Office was are entitled to call such evidence as deemed
necessary by both the Post Office and its advisers. They cannot, however, have matters
both ways, and try to downplay Mr Godeseth’s evidence because he was called to deal
with certain matters, and Mr Jenkins was not. The Post Office has to abide by the
consequences of their choice of witnesses, in terms of the evidence now before the court
to resolve the Horizon Issues trial. I have already explained my view of Mr Godeseth’s
evidence in Part E above, and it need not be repeated.
Inaccurate Statements by the Post Office
517.
518.
Litigation in this jurisdiction is adversarial. What that means is each side advances their
own case, and challenges or rebuts the case of the other side, and the court assesses the
evidence before it adduced by the parties, makes necessary findings on the facts and
applies the law. Parties in civil litigation will usually advance their own evidence of
fact, and although mechanisms are available for compelling other witnesses to attend
and answer questions, there can be some pitfalls in doing so and issuing a witness
summons (what used to be called a subpoena) is a relatively rare step. The court can
only therefore resolve the case on the evidence before it, although it can draw
inferences, that is to say common sense conclusions, on the evidence it does have.
The Post Office has no obligation to assist the claimants in advancing their case against
it. The Post Office has, however, maintained publicly that it was seeking to be
“transparent” about Horizon, and prior to the litigation it made certain public statements
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in relation to the increasing disquiet on the part both of SPMs, and others who became
involved either on their behalf (such as some Members of Parliament) or in an
investigative way (such as the BBC Panorama programme and other journalists). These
statements by the Post Office routinely and strongly insisted that there was nothing in
the criticisms being levelled at the accuracy of Horizon, and that losses that were shown
in SPMs’ branch accounts were caused either by carelessness or dishonesty on the part
of the different SPMs who experienced what they considered to be unexplained
discrepancies and losses. In 2015 a Parliamentary Select Committee held hearings into
the mediation scheme that had been set up to attempt to address the claims by SPMs in
respect of Horizon. I have not considered any evidence submitted to the Select
Committee, or any details of the mediation scheme (which was being conducted by
Second Sight) and refer to them here simply as a matter of chronological record.
The claimants rely upon a public statement released by the Post Office in 2015 after the
BCC Panorama programme. Part of the statement was headed “The Horizon System”
and stated:
“The Horizon Computer System
Horizon is robust and effective in dealing with the six million transactions put through
the system every day by our postmasters and employees at 11,500 Post Office branches.
It is independently audited and meets or exceeds industry accreditations. There have
been 500,000 users of the system since it was introduced.
Nevertheless, rigorous re-investigations were undertaken into claims made by 136
mainly former postmasters that the system caused losses in their branches.
There is overwhelming evidence that the losses complained of were caused by user
actions, including in some cases deliberate dishonest conduct. The investigations have
not identified any transaction caused by a technical fault in Horizon which resulted in
a postmaster wrongly being held responsible for a loss of money.
There is also no evidence of transactions recorded by branches being altered through
‘remote access’ to the system. Transactions as they are recorded by branches cannot be
edited and the Panorama programme did not show anything that contradicts this.”
(emphasis added)
Another document from 2015 upon which the claimants rely is an internal email chain,
which originated from Paula Vennells, then the Chief Executive of the Post Office, on
30 January 2015. This was prior to her appearance before the House of Commons Select
Committee in February 2015. She posed the following question in an email sent
internally to Mark Davies and Lesley Sewell, both of the Post Office:
“Dear both, your help please in answers and in phrasing those answers, in prep for the
SC:
1) "is it possible to access the system remotely? We are told it is."
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522.
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What is the true answer? I hope it is that we know this is not possible and that we are
able to explain why that is. I need to say no it is not possible and that we are sure of this
because of xxx and that we know this because we have had the system assured.”
(emphasis added)
Ms Vennells obviously needed to know whether the answer matched her understanding,
which was — as she put it, both “I hope” and “I need” -- that it was not possible to access
the system remotely. This query was passed on through various people, including at
one stage from James Davidson who has both a Fujitsu and Post Office email address,
who answered to Mark Underwood:
“As discussed, can you hook up with Kevin to review what answers have already been
provided to second sight as this should form the Post Office response.”
The answer was provided by Mark Underwood on 30 January 2015 in an email which
is part of the same email chain or string:
“Can Post Office or Fujitsu edit transaction data without the knowledge of a
Subpostmaster?”
Post Office confirms that neither it nor Fujitsu can edit transaction data without
the knowledge of a Subpostmaster.
There is no functionality in Horizon for either a branch, Post Office or Fujitsu to edit,
manipulate or remove a transaction once it has been recorded in a branch's accounts.
The following safeguards are in place to prevent such occurrences:”
(various matters are then listed in the remainder of the email)
(bold present in original)
This then was subject, in the email chain, to a degree of refinement. Kevin Lenihan
forwarded the email onwards to Mark Underwood and others, and stated:
“Mark / Mel,
James has had a look at your answer to Q1. And thinks there’s too much detail for Paula
— this was written for a different type of audience. He has captured the same points but
in a more appropriate format :-
He states:-
Having looked again at the request from Paula, it appears that the fundamentals around
this question (remote access) are not understood. I suggest that Paula is briefed along
the lines of the following.
1) No transaction data is held locally in any branch. Transactions are completed and
stored in a central database and copies of all data is sent to a secure audit database.
2) Sub-postmasters directly manage user access and password setting locally so system
access (to create transactions) are limited to approved local personnel only who are
responsible for setting their own passwords. User’ are only created following an
approval process which requires authorisation by the sub-postmaster. All subsequent
transactions are recorded against the id used to log on to the system.
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3) Once a transaction has been completed, there is no functionality (by design) for
transactions to be edited or amended. Each transaction is given a unique number and
‘wrapped’ in a digital encryption seal to protect its integrity. All transactions are then
posted to a secure and segregated audit server.
4) On approval, there is the functionality to add additional transactions which will be
visible and have a unique identifier in the audit trail. This is extremely rare and only
been used once since go live of the system in 2010 (March 2010)
5) Support staff have the ability to review event logs and monitor, in real time, the
availability of the system infrastructure as part of standard service management
processes.
6) Overall system access is tightly controlled via industry standard ‘role based access’
protocols and assured independently in annual audits for ISO 27001, Ernst and Young
for IAS 3402 and as part of PCI audits.”
{emphasis added)
I do not see how the statement that “I do not know how the fundamentals around this
question (remote access) are not understood” can sensibly be made. Nor do I know what
the expression “the fundamentals around this question” in fact means, in plain English.
The question from Ms Vennells was very straightforward. It was as follows, using her
words, and separating out each clause of the enquiry:
1. “Is it possible to access the system remotely? We are told it is.”
2. “What is the true answer?”
Both of these are really very simple questions. Question 1. means can it be done,
because Ms Vennells is being told it can be done. Question 2, “what is the true answer?”
means she is seeking the true answer to question 1. This is not complicated, either in
linguistic, computing or even business terms, nor is it difficult to understand. She then
expressed her aspirations in terms of what the true answer might be. “I hope it is that
we know this is not possible and that we are able to explain why that is. ] need to say
no it is not possible.” (emphasis added)
This trial has shown that the true answer to the enquiry she made in early 2015 was
“yes, it is possible.” It has taken some years, and many tens of millions of pounds in
costs, to reach that answer. Kevin Lenihan, who wrote that he did not understand “the
fundamentals around this question (remote access)”, seems to me to have avoided
providing a simple answer to a simple question. It is not necessary to consider why that
was, whether from a lack of understanding on his part, or otherwise.
Jam unaware of whether there is any other final answer to Ms Vennells internally to
her very straightforward question, or of what she in fact told the Select Committee.
None of the people through whom this email chain passed were called as witnesses in
the Horizon Issues trial. However, the point in bold in the email quoted at [522] above
is now known, as a result of this litigation, simply to be incorrect. Such editing can take
place without the knowledge of the SPM. All and any previous statements by the Post
Office stating that this cannot be done are simply factually wrong. The more detailed
points at (1) to (6) of the email quoted at [523] provide only selected information and,
in my judgment, are entirely off the point. They have the effect of obscuring what ought
to be a simple answer, with a level of detail which makes the actual answer highly
unclear. The answer at (1) applies only to Horizon Online. For Legacy Horizon,
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transaction data was held locally in the first instance, on what was called the counter.
This was explained very clearly by the Post Office in its opening, including in its oral
opening submissions. The first sentence of (3) in the list in the email is not correct. The
statement in (4) — which may refer to the Transaction Correction tool — is correct (or at
least, not incorrect) but only so far as it goes, and in my judgment crucially omits the
ability to edit transactions without visibility to the SPM. It also fails to consider the
existence of APPSUP permissions at all, which every member of SSC had. The experts
are agreed that the APPSUP permission was very powerful and enabled an SSC
employee to do pretty much whatever they wanted, to paraphrase the Post Office’s own
expert. It can also be seen, particularly by the evidence that emerged in the cross-
examination of Mr Godeseth, that in a great many cases the PEAKs show that user error
was attributed to problems that were not user error at all, and that others within the Post
Office (for example its own auditors and ROMEC engineers) had either witnessed for
themselves and/or satisfied themselves that user error was not the cause of specific
issues, but Fujitsu decided they were user error in any event.
The extent of permissions enjoyed by SSC was the subject of some express concern by
Ernst and Young (the Post Office’s own auditors) in 2011, and although the position
may have been regularised by 2015, certainly prior to 2011 (which covers the Legacy
Horizon years) the situation was very different. The email also states “he has captured
the same points” yet the most important point to which an answer is given, or certainly
the answer given in bold in the answer at [522] above, is not corrected, even though it
is plainly wrong. The overall tenor of what Ms Vennells received, if it reflected the full
content of this email chain, would have been that the Post Office and Fujitsu could not
edit transaction data without the knowledge of the SPM. The evidence in this trial is
directly to the contrary, and Fujitsu could do so. It is important to bear in mind the
distinction between the way Legacy Horizon, and Horizon Online, work. Referring to
keeping data on the “counters” is a Legacy Horizon expression. This refers to the way
the data was held at the branch; these were discs (including mirror discs) at the branch
which contained the data. The discs were contained in terminals on the counter. In
Horizon Online, the data was held at a central database or server (the phrase used by
the Post Office in its oral opening).
This tenor of these public statements made by the Post Office was maintained into, and
as part of, the group litigation. For example, certain statements were made in the
Generic Defence in these proceedings. A party’s Defence is the formal pleading
document which sets out a party’s legal position in the litigation. Since the reforms in
civil litigation adopted after what are called the Woolf Reforms, which led to the
introduction of the Civil Procedure Rules in 1998 which govern all civil litigation in
the jurisdiction, such pleadings must be accompanied by a Statement of Truth. These
are, for larger companies, usually signed by directors or very senior personnel, which
occurred in this case. That statement attests to the truth of the matters stated in the
pleading.
This issue was dealt with in the pleadings in the following way. By this point the Post
Office had accepted that there was some limited ability to do that which it had
previously stated was not possible. In the Generic Statement of Case, the claimants set
out the following part of their case:
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“25. Further, the Defendant was, by itself and/or via its agent Fujitsu, able to alter
branch transaction data directly and carry out changes to Horizon and/or transaction
data which could affect branch accounts.
26. However, the Defendant has made public statements in the following terms:
26.1. "Horizon does not have functionality that allows Post Office or Fujitsu to edit or
delete the transactions as recorded by branches" (Defendant's published reply to Second
Sight's Briefing Report Part Two, concerning a review of the Horizon system); and
26.2. “Transactions as they are recorded by branches cannot be edited" (Defendant's
published reply to the BBC Panorama documentary in relation to Horizon).
27. These statements were untrue, as the Defendant now admits.”
These paragraphs were pleaded to by the Post Office in its Generic Defence in the
following terms:
“57, Paragraph 25 appears to be concerned with the editing or deletion of transaction
data input by or on behalf of a Subpostmaster without his or her consent. Accordingly,
Post Office assumes that it is not concerned with transactions such as Transaction
Corrections which are sent to branches but must be accepted by or on behalf of the
Subpostmaster before forming part of his or her branch account. As to the
circumstances in which such transaction data can be edited or deleted without the
consent of the Subpostmaster:
1) Neither Post Office nor Fujitsu has the ability to log on remotely to a Horizon
terminal in a branch so as to conduct transactions.
(2) A Post Office employee with "global user" authorisation can, when physically
present at a branch, use a terminal within the branch to add a transaction into the
branch's accounts. The purpose of "Global User" authorization is to allow access to the
systems for during training and/ or audits. Any transactions effected by a Global User
are recorded against a Global User ID and are readily identifiable as such.
(3) Eujitsu_(and_not Post Office) has the ability to inject transactions into branch
accounts (since the introduction of Horizon Online in 2010, transactions of this sort
have been called "Balancing Transactions"), These transactions do not_involve any
removal or amendment of the transactions entered at the branch. Their intended purpose
is to allow Fujitsu to correct errors or bugs in Horizon by cancelling the effect of an
error or bug on a branch's data. They may be conducted only by a small number of
specialists at Fujitsu and only in accordance with specific authorisation requirements.
They are rarely used. To the best of Post Office's information and belief, only one
Balancing Transaction has ever been made so as to affect a branch's transaction data,
and this was not ina branch operated by a Claimant. A Balancing Transaction is readily
identifiable as such.
(4) There are a small number of Fujitsu specialists who have certain privileged user
access rights which they could in theory use to amend or delete the transaction data for
a branch. The intended purpose of privileged user rights is system support, not the
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alteration of branch transaction data. To have abused those rights so as to alter branch
transaction data and conceal that this has happened would be an extraordinarily difficult
thing to do, involving complex steps (including the writing of sophisticated computer
programmes and circumvention of sophisticated control measures) which would
require months of planning and an exceptional level of technical expertise. Post Office
has never consented to the use of privileged user rights to alter branch data and, to the
best of its information and belief, these rights have never been used for this purpose.
(5) Post Office cannot conceive of a reason why any Fujitsu personnel would have
sought to add, inject, amend or delete any transactions in any branch accounts so as to
create a false shortfall. It would for all practical purposes be impossible for any of them
to generate significant shortfalls without detection and, even if they were able to do so,
they would be unable to take the benefit of such shortfalls for themselves.”
(emphasis added)
This stance was maintained by the Post Office in the evidence served on its behalf for
the Horizon Issues trial, until service of Mr Roll’s 2" witness statement. To be fair to
the Post Office, its origin was the witness statements served by Fujitsu employees,
rather than Post Office employees. The position within the Fujitsu witness evidence,
prior to its correction by the later statements from Mr Parker, was that what Mr Roll
said was possible on Legacy Horizon, and what he had himself done, was simply not
possible. Indeed, Dr Worden considered it sufficiently clear that as an IT expert he felt
able confidently to assert in his 1' Expert Report that he, Dr Worden, had “established”
that Mr Roll’s evidence of fact in this respect was wrong. After service of Mr Roll’s 2"
witness statement, Fujitsu finally came clean and confirmed (via Mr Parker) that what
Mr Roll said was correct. Data could be altered by Fujitsu on Horizon as if at the branch;
under Legacy Horizon, transactions could be inserted at the counter in the way Mr Roll
described. This could be done without the SPM knowing about this. Mr Godeseth also
confirmed that it would appear as though the SPM themselves had performed the
transaction. This is directly contrary to what the Post Office had been saying publicly
for many years.
Therefore some of the earlier public statements made by the Post Office, and the
important one contained in the Post Office’s pleaded Defence to which I have referred
above, were factually untrue in at least one highly important respect. This concerns the
ability of Fujitsu to insert transactions into a branch’s accounts remotely, without the
SPM being aware of this, and without the transaction being identifiable in the
transaction data as having been inserted remotely in this way. The term “remotely”
means from a location elsewhere than within the branch itself.
Although the phrase “remote access” was used during the Horizon Issues trial, the
parties did not always use the expression in the same way as one another. The Post
Office’s definition was explained in oral opening in the following way:
“When I talk about remote access I'm talking about action taken remotely to either
inject new transactions or to edit existing transactions or to delete existing
transactions in a way that could change the accounting position of the relevant
branch.”
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535.
536.
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For the purposes of this judgment, J too use the term “remote access” in this way. The
true picture is now that, following the Horizon Issues trial, there is evidence of
transactions recorded by branches being altered through remote access by Fujitsu; and
transactions as they are recorded by branches being edited; that this can be done without
a SPM’s knowledge or permission; and without being identifiable as having been done
remotely. Dr Worden was asked about the 2015 Post Office statement in response to
Panorama, which he said he had not read, and he explained that it was the audit records
in the audit store that could not be edited. He was not prepared to say the 2015 statement
was factually wrong. The BRDB records could be edited, and he also referred to the
joint statement in which the two experts had agreed that they could not say that anything
could not be done. He was very hesitant, if not reluctant, to state that the 2015 statement
was wrong.
In my judgment the 2015 Post Office statement plainly is wrong. I find that the 2015
statement was not true. Again, to be fair to the Post Office, this was accepted in the
litigation and at the hearing before Senior Master Fontaine. The quotation from the
transcript of that hearing when this was addressed by the Post Office in oral submissions
is as follows:
“Master, first of all, could I just deal with the remote access point? The letter to which
my learned friend took you was, as you might expect, written by people who thought it
was correct. The Horizon system is a very complicated system. It involves lots of
departments in ... both in Fujitsu and in the Post Office. And the people who are
responsible for the correspondence didn't know that, in fact, there were these two other
routes. Very few people at Post Office knew that there were these two other routes.
They were ... they were routes that are under ... essentially under the control of Fujitsu
who's the expert independent contractor that is involved in the operation of the system.
And it is a matter of enormous regret that the people who wrote that correspondence
and made those submissions weren't aware of that but, you know, we are where we are;
the point is that, the point having been discovered, the Post Office wasted no time in ...
in bringing the truth ... the accurate ... and accurate set of facts to the knowledge of the
claimants.”
(emphasis added)
The claimants rely upon the way this sequence unfolded, and the admission by the Post
Office that its previously public statements were untrue, as making it particularly
important that the true and accurate position was then provided by the Post Office.
Indeed, the submissions I have quoted at [535] above make it clear that the court and
the claimants were being told that the Post Office had wasted no time in bringing the
truth, “the accurate set of facts”, to the knowledge of the claimants. As the analysis of
the Defence and the evolution of the Fujitsu evidence of fact on remote access for the
Horizon Issues trial demonstrates, the accurate set of facts did not emerge at that time
either. The truth, the accurate set of facts, has only emerged as a result of the final
supplementary statements for the Horizon Issues trial that were served, and only finally
(so far as Fujitsu is concerned) after their witnesses had initially stated clearly in their
witness statements that Mr Roll was wrong. Eventually these witnesses accepted that
he was right. The supplementary witness statements that accepted this were dated 29
January 2019. Prior to that date, the opposite position had been maintained by the Post
Office.
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537.
538.
539.
540.
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The Post Office in its opening submissions stated the following:
“Taking remote access as an example, the need for remote intervention affecting branch
accounts will obviously be rare. On any view, the occasions on which privileged users
at Fujitsu have exercised their ability to remotely inject, edit or delete branch
transactions or accounting entries will representa tiny percentage of the relevant
transactions/accounting enti And the occasions on which they have done so
negligently or dishonestly will. in turn, represent_a very small percentage of those
occasions. So, compared with the volume of business recorded in branch accounts, the
number of cases in which false data will have been remotely introduced will be
extremely small (multiplying a small chance by a small chance). This is a “second order
effect” (a small proportion of a small proportion) which is, by definition, extremely
unlikely to have any significant impact on the robustness of Horizon.”
(emphasis added)
That submission misses the point, in my judgment. It elides two matters, namely
whether something is technically possible, and the number of times that it has in fact
been done. The former, whether it was possible, had been expressly denied, and that
denial is now shown to be wrong. The latter, the number of times it was done and with
what effect, is a different matter. There is also very little, if any, evidence that is relied
upon by the Post Office to justify the assertion that it was a “tiny percentage” of times.
That is a subjective assertion of very limited weight.
I consider the significance of the previously factually untrue statements to be
considerable. The statement was made publicly by the Post Office, turned out not to be
factually correct, and the Post Office gave an explanation and said the full set of facts
was now available. The situation was pleaded to by the Post Office in its Generic
Defence, with a statement of truth. That too turned out not to be correct, and the true
position has only emerged in the Horizon Issues stage of the litigation as a result of the
evidence of Mr Roll, which I have dealt with above. It was only following his written
evidence that Mr Parker, and Mr Godeseth — both senior Fujitsu employees — prepared
their supplementary witness statements correcting their first statements. These first
statements, as I have explained above, were simply untrue in that important respect.
These witnesses had previously stated that this was not possible. Mr Parker said Fujitsu
did not have the power to do this.
I find as a fact that Fujitsu do have the ability to insert transactions into branch accounts
on a remote basis (in other words, remote access as the Post Office defined it in opening
submissions existed) and this could be done without these being visible to the SPM in
that branch in question, either at the time or subsequently. It also follows that this could
be done without an SPM in this position having knowledge of this, and therefore
without consenting to it. Someone who does not know something is happening cannot
give permission for it to happen. Mr Godeseth also gave important evidence about how
such transactions would appear. It is not possible to say, in blanket terms, that
permission was not sought and/or given in some cases. Indeed, Dr Worden accepted
that the APPSUP permissions meant that — as he put it — Fujitsu personnel could do
“pretty much anything”. On Day 18 he said in cross-examination the following:
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541.
542.
543.
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“Q. Dr Worden, you knew that a central issue, not only a central issue legally but a
very high-profile issue in the case, was the extent to which Post Office had remote
access to the counters, didn't you? You knew that?
A. Yes, and what I'm talking about, what I was talking about was the extent to which
this could happen without the knowledge of the subpostmaster.
Q. And that's the —
A. And we agreed in the joint statement that more or less Fujitsu or Post Office could
do anything.”
He was asked about this answer two days later.
“Q. It is Day 18, page 67. I think it is lines 5 and 6 actually. It says: "Answer: And
we agreed in the joint statement that more or less Fujitsu or Post Office could do
anything.”
A. Yes. We can see precisely what we agreed in a minute, obviously.
Q. In relation to the —
A. We agreed the experts couldn't demonstrate that they couldn't do everything. I
mean, that's sloppy wording by me there. I think the joint expert statement says it
better.”
The exact wording in the joint statement in respect of repairing transactions is as
follows at 10.2 of the 4"* Joint Statement:
“Certain facilities and procedures used by Fujitsu to repair the more common issues
which arose in Horizon were standardised, and evidence of them persists. However, to
repair less common issues which arose from time to time, standard tools and procedures
might not have been sufficient, and evidence might not persist of what was done at the
time. Even when evidence does persist, it may be extremely difficult for the experts to
interpret it today, because of the scale and complexity of Horizon.
Therefore, it is usually difficult for the experts to make categorical negative statements
of the form: ‘X or Y never happened’.”
This litigation is between the claimants and the Post Office. Fujitsu is not a party.
Although one of the contracts between the Post Office and Fujitsu was uploaded to the
electronic trial bundle on the penultimate day of evidence (by the Post Office’s
solicitors) the litigation is not concerned with the details of that contractual relationship,
other than (tangentially only) the cost to the Post Office of making ARQ requests, as
the ARQ data is maintained by Fujitsu and charges are raised to the Post Office in this
respect. However, Fujitsu’s involvement does cast something of a shadow. That
contract has been addressed in terms of whether certain documents were, or were not,
in the control of the Post Office. I have already dealt with the issue of PEAKs and
KELs, and how the Post Office maintained initially it was not obliged to disclose these.
Fujitsu personnel who were not witnesses were involved in providing information to
the Post Office’s expert, Dr Worden. It was the Fujitsu witnesses who originally, and
in my judgment unequivocally and directly, flatly contradicted what Mr Roll said could
be done on the subject of remote access. I have also identified that in my judgment, the
majority of the Fujitsu witnesses were more interested in following some sort of Fujitsu
party line than they were in answering questions in cross-examination wholly frankly,
although I exempt Mr Godeseth from that criticism. From what was said by the Post
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544,
545.
546.
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Office’s leading counsel to Master Fontaine at the very first case management hearing,
those within the Post Office had relied upon Fujitsu in obtaining relevant information
for its earlier public statements, and it plainly relied upon Fujitsu in terms of evidence
of fact in the Horizon Issues trial, because it called a number of Fujitsu witnesses. I am
unaware of the degree to which the Post Office has depended upon Fujitsu in the
background to the Horizon Issues trial, and there is no reason why I should be, and I
make it clear that I do not speculate on this. This information must have originated from
Fujitsu at some point, but the Post Office must bear some responsibility for such
incorrect statements having been made before, both publicly and in its pleadings.
Nor could it be said, in the Post Office’s and/or Fujitsu’s defence, that remote access
was a side issue. It has been a very important central element of the whole dispute
between SPMs and the Post Office over the Horizon system for many years. Mr Green
for the claimants adopted a non-computing analogy, namely that of “a back door”. The
origin of this was a phrase of Mr Roll, who referred to the back door to the system. The
branch accounts can be likened to a locked room, to which the SPM has the key. This
development in the case is comparable, after many years of the Post Office and Fujitsu
maintaining that only the SPM has the key, that only the SPM could perform anything
within the locked room, and if the Post Office and/or Fujitsu needed access to the room
the SPM would know because they would have to borrow the key, to now being an
admission by the Post Office (and Fujitsu) (and a finding of fact by the court) that there
is a back door which they could, and did, use without the SPM even knowing such a
door existed. This analogy is not entirely apt, because software and remote access to
edit transactions is not completely the same as physical access through a door, but it is
an attempt to capture the general idea in lay terms.
The truth concerning remote access has now emerged in 2019, in group litigation that
started in 2017. I find it notable that the truth did not emerge in the first Fujitsu witness
statements that were originally served for the Horizon Issues trial. Such statements
stand as the evidence in chief of witnesses of fact. They are supposed to be accurate.
Minor corrections are not unusual and indeed are almost expected, as a trial approaches,
as witnesses either research further or remember (when preparing for trial) other minor
details. This topic, however, did not undergo that type of correction, and is a subject far
more central and important than that. The truth only finally emerged in later statements,
which were required to correct what I find were directly inaccurate statements in the
first witness statements of Mr Godeseth and Mr Parker. There has been no adequate
explanation for the contents of those first statements, which not only omitted this
important fact, but contained evidence directly to the contrary. Those first witness
statements were misleading. The statement in the Defence was misleading too. It ought
also to be noted that the truth did not emerge internally within the Post Office in the
email answers provided to internal inquiries in 2015 by senior Post Office personnel,
such as the Chief Executive, who posed the specific question in preparation for
providing evidence to a Select Committee and asked: “What is the true answer?”
She also said in the same email “I hope it is that we know this is not possible and that
we are able to explain why that is”. The true answer is that, contrary to her aspiration,
it was possible.
-488-
547.
548.
549,
550.
551.
552.
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She also stated “I need to say no it is not possible and that we are sure of this because
of xxx and that we know this because we have had the system assured.” The true answer
to that was also “yes, it is possible”.
It is also difficult to believe that the signatory of the Statement of Truth in the Generic
Defence would have signed that statement if she did not believe the contents of that
pleading to be true. There is another relevant feature in this case, which is that the
Generic Defence also includes a counterclaim seeking damages against the SPM
claimants, including damages for fraud. Fraud is the most serious allegation that can be
brought in civil litigation and there are special rules in relation to pleading it, which
means that a pleading containing a fraud allegation should be subject to particular
scrutiny before it is served.
It may therefore be that the Post Office itself fell into error as a result of information
provided to it by Fujitsu on this important matter. It may be that some within the Post
Office were themselves surprised by these revelations prior to, and during, the Horizon
Issues trial. There is no need for me to speculate on this, and I do not do so. Certainly
Mr Godeseth did not appear to have known about this for very long. Whatever the origin
of this, and whether it came from Fujitsu, internally, being less than frank with the Post
Office or not, the effect is that the Post Office has made specific and factually incorrect
statements about what could be done with, or to, branch accounts in terms of remote
access without the knowledge of the SPM. The evidence in this trial has made it clear
that such remote access to branch accounts does exist; such remote access is possible
by employees within Fujitsu; it does exist specifically by design; and it has been used
in the past.
It follows that the previously stated public position of the Post Office to the contrary,
in the statements to which I have referred above, is specifically wrong in fact.
Further, and as part of the Post Office serving supplementary witness statements from
both Mr Godeseth and Mr Parker in respect of Mr Roll’s evidence, the Fujitsu witnesses
adopted a position in the litigation, the rationale of which is somewhat difficult to
understand. Responsibility for the incorrect and potentially misleading evidence of Mr
Godeseth and Mr Parker (in their first statements) was effectively laid at the door of Mr
Roll for giving what was said to be vague evidence, or evidence that, it was said, had
not been fully understood by Fujitsu. Infallibility is a rare commodity, and everyone is
capable of making mistakes. However, it is how one reacts to mistakes that is telling.
In this instance, the initial reaction of the Fujitsu witnesses was to seek to shift the
blame for their own misleading written evidence upon someone else. In this case, that
“someone else” was their former Fujitsu colleague whose very evidence was
responsible for exposing the full picture. This is not something that could have been
arrived at lightly. To be fair to Mr de Garr Robinson, it was not a point he adopted on
the Post Office’s behalf during the Horizon Issues trial. In my judgment, he was entirely
sensible in not doing so. That it was done at all in the written Fujitsu statements speaks
volumes, in my judgment, about Fujitsu’s reaction to being caught out.
Mr Parker’s supplementary statement blaming Mr Roll said the following:
“In paragraph 20 of Roll 2, Mr Roll describes a process by which transactions could be
inserted via individual branch counters by using the correspondence server to piggy
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553.
554.
555.
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back through the gateway. He has not previously made this point clear. Now that he
has, following a discussion with colleagues who performed such actions J can confirm
that this was possible. I did not mention it in my first witness statement because, when
faced with a less clear account in Mr Roll's first statement, my recollection was that if
it was necessary for the SSC to inject a transaction data into a branch's accounts, it
would have been injected into the correspondence server (injecting via the server was
the default option which was followed in the vast majority of cases).”
The recusal application was issued the day after Mr Godeseth’s cross-examination had
made it clear, not only that this remote access existed, but after he was taken in careful
cross-examination through specific examples of Fujitsu personnel manipulating branch
accounts, and leading to discrepancies in branch accounts. I am aware that criticism of
the Post Office and Fujitsu in this respect may prove to be controversial, as earlier
criticism of certain aspects of the Post Office’s case in Judgment (No.3) was not well
received by it. However, if criticism is justified, I consider it would be detrimental to
proper resolution of the group litigation if that criticism were to be withheld simply
because it might lead to a further negative reaction by the Post Office. It is also an
inherent part of the judicial function in any litigation to make findings, which may
include criticisms where justified, that may be contrary to a litigant’s own view of the
merits of their case. Some litigants are so convinced of the righteousness of their own
position that they consistently refuse to accept any possible view of the litigation other
than their own. Such a blinkered view is rarely helpful, and would be particularly
unhelpful from a publicly owned institution.
I consider that criticism is justified of the Post Office’s incorrect previous statements —
which included public and high profile statements such as the response to the BBC
Panorama programme, whatever may have been said on the subject to the Select
Committee, as well as in its own pleadings - about remote access without the knowledge
of SPMs. The Post Office should have done its best to discern whether such remote
access was possible when this subject first arose, and whether it had occurred, before
these statements were made. Fujitsu should have been frank and unequivocal,
internally, with the Post Office, so that there could be no possibility of incorrect
statements on this important point being made publicly by the Post Office. The Fujitsu
witnesses should not, in their first witness statements, have made the incorrect
statements that they did. Had those initial statements been factually accurate, there
would have been no need for the supplementary statements from them that eventually
led to the true position being accepted by Fujitsu, and therefore by the Post Office. It is
highly regrettable that such a situation as this should have developed. I am not making
any findings on any future issues, whether of fact or law, yet to be tried.
There is however considerably more to resolving the Horizon Issues than simply
making findings about remote access to branch accounts.
So-called “shadow experts” instructed by the Post Office
556.
I return to the issue of so-called “shadow experts.” The parties in this case agreed that
costs management would apply, and the Post Office in its costs budget for the Horizon
Issues trial included, for the costs management hearing on 5 June 2018, an item for
incurred expert costs in its costs budget in the sizeable amount of approximately
£800,000. This was in addition to the amount incurred by that point in terms of the fees
of Dr Worden. His costs at that stage were only £58,000. The sum of £800,000 broke
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557.
558.
559.
560.
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down to about £300,000 paid to Fujitsu, and £500,000 paid to other experts, who were
not being instructed to give expert evidence. Dr Worden was the expert who would be
giving evidence to the court, which meant he would owe the relevant duties of
independence to the court under the CPR. The description of these other experts was
given in a skeleton argument for the Post Office in the following terms:
“The Defendant has spent around £500,000 on investigations by internally appointed
experts for the purposes of determining its litigation strategy. The resulting material -
which is privileged - has not been provided to the Defendant's expert for the purposes
of this litigation.”
The claimants adopted the term “shadow experts” for these, a term with which the Post
Office did not agree. At the cost management hearings, the claimants pointed out that
by “internally instructed” this meant these experts were not instructed by the Post
Office’s solicitors. It was also pointed out that there was no corresponding entry in the
budget for any conference with any of their counsel, and this meant that this was “an
entirely ring-fenced operation”. The Post Office did, however, reserve the right to
recover their costs as costs in the litigation, and therefore this item was included in its
costs budget. All of the material produced by these other experts was said to be
privileged.
It is a highly unusual situation that entirely separate experts, instructed directly by a
party, without the involvement either of that party’s solicitors or their counsel (all the
more so when those experts are not even identified), are instructed on such a task,
whatever that task might actually be. I recorded an adverse comment in the costs
management order of 23 July 2018 stating that the Post Office’s incurred costs for
experts were extraordinarily high, unreasonable and disproportionate; and that Fujitsu’s
costs of assisting with the litigation, and the costs of these internally appointed experts
did not, on the face of it, appear to be properly recoverable sums in the litigation. I
should clarify that this adverse comment should not be taken as applying to Dr
Worden’s costs that had been incurred at that stage, which were modest. It is not
necessary to deal with this matter any further to resolve the Horizon Issues.
Documents and Available Information
There are certain categories or descriptions of classes of documents that have featured
heavily in the evidence at the Horizon Issues trial. The path to disclosing them has not
always been smooth. The majority, if not all, of the technical documents that relate to
how Horizon was actually operating in fact in IT terms are in the possession of either
the Post Office or (more usually) Fujitsu. The two most important categories, in my
judgment, are Known Error Logs (also known as “KELs”) and PEAKs. The first of
these records or logs known errors, which means errors with the Horizon system. The
latter is a browser-based software incident and problem management system used by
Fujitsu for the Post Office account, in other words for incidents and problems associated
with Horizon that occur.
Disclosure had previously been a troublesome topic between these patties. I had in
Judgment (No.3) on the Common Issues, been somewhat critical of certain aspects of
the Post Office’s approach to the disclosure of some documents. These observations
were not well received by the Post Office and some had been categorised, incorrectly,
by Mr Parsons in his 14" witness statement supporting the recusal application as
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561.
562.
563.
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“critical invective”. Whether the contents of Judgment (No.3) encouraged the claimants
to mount, or continue to advance, criticisms of the Post Office’s disclosure in the
Horizon Issues trial (in the sense that they may have felt they had a “following wind”)
is not clear. The Post Office, in the Horizon Issues trial (predominantly in solicitors’
correspondence, but also in some submissions), also criticised the claimants’
disclosure. For the sake of clarity, I wish to make it clear that the claimants had no such
following wind.
The Horizon Issues are decided in this judgment based on all the evidence and the
submissions. I deal with disclosure in the subsequent paragraphs of this judgment in
order to assist and guide the parties concerning the future conduct of the group
litigation. Some issues, such as whether certain Fujitsu documents were within the Post
Office’s control, are likely to crop up again in respect of other types of documents in
the future. The court’s interest in disclosure is to promote compliance with the rules,
and also to ensure cost effective progress of the litigation. The answers to the
substantive Horizon Issues are no different because, for example, the experts were not
given particular documents relating to the specific bugs in good time. For the most part,
large numbers of KELs and PEAKs were provided to them, and the experts had an
abundance of material. Some 5,000 KELs emerged from Fujitsu well after the trial
ended, in October 2019. The experts did not consider these as they were not given them.
Mr Parker had given evidence (at paragraph 61.9 of his 1* witness statement) that 1,491
KELs had been deleted at the time of writing that statement, but there was no reference
to the existence of this far greater number that emerged after the trial was over.
The Post Office’s written closing submissions also included a separate section on
disclosure as follows, which I will quote verbatim:
“16. The Court’s interventions on disclosure
1145. Post Office is concerned that the Court may have lost sight of the nature of the
Orders made and of the approach which the Court ordered. It is striking that Cs have
not themselves made any applications for specific disclosure nor have they advanced
any complaint that particular disclosure orders have not been complied with.
1146. The recent judgment of the Court of Appeal in Serafin v Malkiewicz & ors [2019]
EWCA Civ 852 @ para 118 is relevant:
“We are also highly troubled by the repeated demands and criticisms by the Judge
regarding the Claimant’s disclosure, in circumstances where pre-trial disclosure had
been completed by both sides at a time when both the Claimant and Defendants had
been represented by solicitors and counsel, and no application for further disclosure had
been made by the Defendants...” ”
These submissions identified what were said to have been “the Court’s interventions on
disclosure” in the Horizon Issues trial. The authority identified by the Post Office, and
stated to be relevant to that submission, concerned a defamation case in which the judge
had demanded disclosure ofa litigant in person, and made criticisms of him, both during
the trial of that litigant’s libel claim, and in the judgment itself. In some instances the
court in that case had, of its own volition, demanded production of certain documents
from the litigant in person, and within a very short timescale. This had been part of
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findings made by the Court of Appeal in respect of procedural irregularity and the
successful appeal against the judgment.
There were no “interventions on disclosure” by the court during the Horizon Issues
trial, nor were there “demands and criticisms”. When asked during oral closing
submissions about this passage in the Post Office’s written submissions citing Serafin,
Mr de Garr Robinson did not demonstrate a great deal, if any, enthusiasm in advancing
any claims of procedural irregularity having occurred during the Horizon Issues trial.
He submitted that “this is not that case” — which does raise the question of why the
passages from Serafin were included in the Post Office’s submissions in the first place.
There were, however the following matters that arose in this litigation during the
Horizon Issues trial, which given paragraphs 1145 and 1146 of the Post Office’s closing
submissions, should be recorded:
1, Redactions. In Judgment (No.3) I had identified the issue of unjustified redactions
made by the Post Office of some contemporaneous documents that were used in the
Common Issues trial. During the early part of the Horizon Issues trial some documents
were referred to which again had redactions, which due to their non-redacted parts did
not seem to me to be of a type that would necessarily attract privilege. In view of the
previous history of this subject, I asked leading counsel for the Post Office to perform
his own review of the redactions that had at that point been made of documents
deployed in the Horizon Issues trial. This review resulted in some of the redactions in
some of the documents being removed, and unredacted versions of those documents
becoming available to the claimants, some of which were then used in cross-
examination. Redactions of 2 documents were maintained on the grounds of legal
professional privilege, which is entirely conventional. He also provided a helpful two
page note explaining the approach that had been adopted. Asking counsel to do a review
of this nature in these circumstances is entirely conventional. There was no short
timescale imposed for this to be done. J asked for a summary of the position on 4 June
2019, which was after the interval which occurred as a result of the recusal application,
and about 2 4 months after I had asked him to perform the review. It was an outstanding
matter, of a type sometimes referred to in a trial as “housekeeping”, which had not been
entirely forgotten, but which had been overtaken in the latter weeks of March when the
trial was temporarily halted.
2. A witness statement was ordered from the Post Office to explain the express, and
factually incorrect, submissions made to the court by the Post Office about the Royal
Mail’s refusal to produce, at the Post Office’s request, audit documents. The Royal Mail
had, contrary to what the court had expressly been told by the Post Office, not even
been asked by the Post Office for these. The Post Office’s leading counsel accepted that
he had, entirely unwittingly, and on instruction, provided misleading information to the
court and explained and apologised as soon as he discovered this. A witness statement
from the Post Office, which was provided by Mr Parsons, was entirely justified in these
circumstances.
3. A witness statement was also ordered from the Post Office in respect of the
production of over 2,000 documents in disclosure by the Post Office in the interval in
the trial period between 11 April 2019 (completion of the factual evidence), and the
experts commencing their oral evidence on 4 June 2019. Given the timing and quantity
-493-
566.
567.
568.
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of these, in the circumstances a witness statement (again, being provided by Mr
Parsons) was justified. The first explanation given to the court, again on instruction,
again proved to be wrong. These documents were originally said to have all been of
some age (ten years or so) and discovered at Fujitsu on a “long-forgotten” server. One
deployed the day after this explanation in cross-examination turned out to be dated 21
August 2018. A witness statement was again called for.
None of the above, in my judgment, fall into the category of the court losing sight of
the nature of the orders that had been made concerning disclosure, or of demands or
criticisms by the court, unjustified or otherwise. Further, the claimants made numerous
complaints of the Post Office about disclosure. Indeed, the factually incorrect
submissions made to the court about the audit documents and the Royal Mail came at
the end of a court day when the claimants, by their leading counsel, expressly attempted
to make a specific disclosure application. I was not prepared to hear that application at
that point. Royal Mail was the correct respondent to such an application, not the Post
Office. Royal Mail was not represented, nor even present in court, nor had any notice
been given by the claimants to the Royal Mail of such an application. Each of these
features is a far from promising start. I did however make directions for the making of
a third party disclosure application against the Royal Mail, but this did not ultimately
prove to be required. Once those at the Royal Mail were actually asked for these
documents, the Royal Mail readily produced them. The claimants also made regular
complaints about disclosure and would often point out that documents had been
produced during the hearing. This is because documents were often produced during
the hearing. This is something that had also occurred during the Common Issues trial.
The Post Office is, however, correct to point out that there have been no specific
disclosure applications mounted by the claimants, with the exception of the one to
which I refer in [566] above in respect of the Royal Mail. General complaints about
disclosure only take a party so far, and that is not very far, if deficiencies are known
about in advance of a trial, and no applications are made.
The parties had also voluntarily adopted Model C of the Disclosure Pilot, which I
approved. This was done prior to the coming into force of the Pilot, the full title of
which is Disclosure Pilot for the Business and Property Courts (“BPC”) which became
mandatory in all BPC cases where the first CMC is held after ] January 2019. This
group litigation is not a BPC case and the first CMC was held before that date in any
event. The Pilot is designed to run for a two year period. The Pilot is found at Practice
Direction 51U, which is made under CPR Part 51.2. The features of the Pilot that are
particularly relevant here are the Principles included in paragraph 2 of the Pilot. These
state:
2. Principles, “document”, “adverse” and “known adverse documents”
2.7 Disclosure extends to “adverse” documents. A document is “adverse” if it or any
information it contains contradicts or materially damages the disclosing party’s
contention or version of events on an issue in dispute, or supports the contention or
version of events of an opposing party on an issue in dispute.
-494-
569.
570.
571.
572.
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2.8 “Known adverse documents” are documents (other than privileged documents) that
a party is actually aware (without undertaking any further search for documents than it
has already undertaken or caused to be undertaken) both
(a) are or were previously within its control and (b) are adverse.”
3.4 A person who knows that it is or may become a party to proceedings that have been
commenced or who knows that it may become a party to proceedings that may be
commenced is under the following duties (“the Disclosure Duties”) to the court-—
(1) to take reasonable steps to preserve documents in its control that may be relevant to
any issue in the proceedings;
(2) once proceedings have commenced against it or by it and in accordance with the
provisions of this pilot scheme, to disclose. regardless of any order for disclosure made.
known adverse documents, unless they are privileged;”
(emphasis added)
The fact that the parties chose Model C does not go to answer the complaints that the
claimants have made about the Post Office’s disclosure. The Post Office had an
obligation to disclose known adverse documents, as do the claimants as well. “Adverse”
as defined plainly includes any documents that refer to bugs, errors or defects, or the
operation of the Horizon system that led to potential impact upon branch accounts. This
obligation is “regardless of any order for disclosure made”, in other words it exists
whether any specific classes of documents are, or are not, already the subject of any
order. The rational for this is obvious. Reliance upon the adoption of Model C is not
therefore the answer to the claimants’ complaints in this respect. However, the fact that
the claimants did not make applications for disclosure is relevant to the criticisms made
at the Horizon Issues trial.
The Post Office has, essentially, submitted that the breadth of disclosure requests has
been too wide. Particular criticism is that “Freeths’ [the claimants’ solicitors] did not
control Mr Coyne’s requests”. I am not persuaded that it is the correct approach to
matters of independent expert evidence to seek to “control” the documents that an
independent expert wishes to see. The claimants did not issue any opposed applications
for disclosure of documents which their expert wished to see, so a filter of some sort
was applied in that sense to the documents Mr Coyne wished to see, and was not given.
Finally, disclosure is a particular feature of litigation in this jurisdiction. However, there
was a clear perception in commercial litigation generally that the then-current
disclosure regime had become inadequate and also that standard disclosure was often
excessive in scale, cost and complexity. This is why the Disclosure Working Group was
created in May 2016 at the initiative of Sir Terence Etherton, then the Chancellor of the
High Court and now the Master of the Rolls. This led to the Disclosure Pilot.
It would be highly regrettable if disclosure in this case were to become yet another
battleground between the parties. There are more than enough points in issue between
the parties without adding endless disagreements about disclosure to that list. There are
the following areas, however, of disclosure which should be recorded. In my judgment,
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the background to the evolution of the following categories does throw light on the
parties’ different approaches to the litigation.
The Known Error Log or KELs
573.
574.
575.
576.
577.
KELs are sometimes referred to in the singular — for example, in some places reference
is made to the Known Error Log, as though it were a single Log. In practice, the Log as
a whole includes multiple KELs, as they were referred to during the trial. If an incident
or problem occurs, a PEAK is raised, and if the problem or incident refers to an existing
issue which is known to have occurred before, reference will be made to that KEL entry,
or more usually, it is said that the PEAK will refer to the KEL. Both PEAKs and KELs
have reference numbers; the former are usually all numbers after the prefix PC, whereas
KELs have letters (taken from the identity of the employee who raised the KEL
followed by four digits and a letter). Therefore, when a problem (which I shall refer to
generally as an example as problem x) occurs for the first time, a KEL will be raised
which will be given a reference. Subsequent PEAKs which identify the same problem
x again, over time, afterwards will all refer to the same KEL. Sometimes a PEAK will
be identified as including a problem which is similar to problems identified in more
than one KEL, in which case both the KELs will be referred to within that PEAK. Any
creation of a new KEL, or updating of an existing KEL, must be authorised by SSC
before it can be seen by all users.
The experts agreed the following in the 2"¢ Joint Statement about both PEAKs and
KELs: “KELs and PEAKs together form a useful source of information about bugs in
Horizon but are a limited window on what happened. It is sometimes necessary to use
evidence from both to try to understand, but even so they are not a comprehensive
picture. It is to be expected that both KELs and PEAKs are incomplete in various
respects.” It is also agreed that KELs will often give information about the impact of a
bug or user error and they may also provide information about causes. There are other
documents referred to as OCPs and OCRs. They are Operational Change Proposals and
Operational Change Requests.
The subject matter of this litigation spans many years, starting from the first
implementation of the Horizon system (what is now being called Legacy Horizon) in
2000. In the Letter of Claim from the claimants dated 28 April 2016, the Known Error
Log was sought from the Post Office, that letter stating:
“We understand that Fujitsu maintained a ‘Known Error Log' for Horizon and that such
reports will have been provided to Post Office. Please see the list of the categories of
documents relating to Fujitsu referred to below, that we request disclosure of.” Item 22
in the list of documents sought was “The 'known error log' kept by Fujitsu and provided
to Post Office as referred to above, and all correspondence relating to the same.”
The answer in a letter from the Post Office’s solicitors against the specific item 22 was:
“In circumstances where you have not particularised any factual basis on which
Horizon is defective, disclosure of these documents (if they exist) is not relevant,
reasonable or proportionate.”
The suggestion in that letter that the Known Error Log was not relevant, is simply
wrong, and in my judgment, entirely without any rational basis. The further suggestion,
-496-
578.
579.
580.
582.
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viewed with the hindsight now available, that the “known error log” may not exist, is
disturbing. The claimants’ request used the precise title — “known error log” — and this
clearly did exist. To suggest in an answer “if they exist” is somewhat misleading.
Item 23 in the same list of documents sought was “Internal memoranda from Fujitsu
and POL referred to by Second Sight as identifying a ‘Horizon bug' within Horizon
Online.”
The answer against that item was:
“We do not recognise the document to which you refer. Please provide further details.”
In my judgment, the documents sought in that entry must clearly include any PEAKs
that identified a bug within Horizon Online. “Internal memoranda” is a plural reference,
yet it was interpreted by the Post Office’s solicitors as though it were singular, and the
request was for a single document, or a document with the title “internal memoranda”.
This is, in my judgment, obstructive.
The claimants were not to be dissuaded, and sought the Known Error Log or KELs
again. A reply from the Post Office’s solicitors on 13 October 2016 is relied upon by
the claimants as showing that the Post Office was denying the relevance of the Known
Error Log. This reply stated:
“The claims which you have particularised concern errors with the Core Audit Log.
Following a review of the Known Error Log, Fujitsu have confirmed that there have
been no logs in respect of Core Audit Log. The remainder of the Known Error Log does
not relate to the claim which you have particularised and_as such disclosure of this
document is not relevant.”
(emphasis added)
Existence of the Known Error Log was at that stage accepted, but its relevance to the
proceedings was now challenged. The Post Office’s solicitors stated that its contents
“did not relate to the claim” and that “disclosure of this document is not relevant”.
Disclosure of it was plainly resisted. The claimants did not therefore have it when the
Generic Particulars of Claim was pleaded on 6 July 2017. In the Generic Defence,
which is dated 18 July 2017, the Post Office changed its position, and now pleaded that
the Known Error Log was not in its control. At paragraph 50(4) of the Generic Defence,
the Post Office stated:
“It_is admitted that Fujitsu maintain a "Known Error Log". This is not used by Post
Office and nor is it in Post Office's control. To the best of Post Office's information and
belief, the Known Error Log is a knowledge base document used by Fujitsu which
explains how to deal with. or work around, minor issues that can sometimes arise in
Horizon for which (often because of their triviality) system-wide fixes have not been
developed and implemented. It is not a record of software coding errors or bugs for
which system-wide fixes have been developed and implemented. To the best of Post
Office's knowledge and belief, there is no issue in the Known Error Log that could
affect the accuracy of a branch's accounts or the secure transmission and storage of
transaction data.”
(emphasis added)
-497-
583.
584.
585.
586.
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This was expressly challenged in paragraphs 3 and 4 of the Generic Reply.
The two main points to consider within that passage in the Defence are that the Post
Office stated that it did not have control of the Known Error Log, and that entries within
it related to minor/trivial matters and could not affect the accuracy of a branch’s
accounts. This position was maintained, notwithstanding the terms of the Post Office’s
skeleton argument for the first case management hearing on 19 October 2017. That had
stated:
“Cs’ response to the criticism of their case on Horizon is to argue that they do not have
the access to information and documents that would allow them to plead any properly
articulated case as to the “bugs” that they wish to blame for the shortfalls in their
branches. Without prejudice to its position that the case is not properly pleadable, even
at a generic level, Post Office is prepared to take steps to help Cs investigate Horizon.
take an informed view as to whether they really wish to maintain their claims and, if
so, decide how to proceed with them. Post Office wishes to put an end to the speculative
attacks on Horizon and the related allegations as to its own conduct. It puts forward its
proposals in paragraphs 2 to 8 of the Draft Order as a pragmatic compromise between
the parties’ competing interests and concerns.”
(italics present in original, emphasis by underlining added)
At the first case management hearing itself, upon specific enquiry by the court, this
position was further maintained.
Disclosure of the Known Error Log was resisted by the Post Office on the grounds both
of control, and content. So far as control is concerned, Mr Parsons had provided his 4th
witness statement for that hearing, the first before me as the managing judge, which
expressly stated at paragraph 35 “Despite Post Office explaining the irrelevance of the
Known Error Log and that it was not within Post Office’s control...” and also at
paragraph 37 “Due to the large amount of information involved and the fact that the
Known Error Log is not in Post Office's control....”. This position was confirmed by
the Post Office through its leading counsel in the following exchange with the court at
that hearing, the transcript of that showing the following exchange.
“Mr Justice Fraser: Do you still maintain it is not in your control?
A: My Lord, yes. It’s a Fujitsu document.
Mr Justice Fraser: No. Just because it’s a Fujitsu document doesn’t mean it’s not in
your control,
A: That’s right. At no point has Post Office ever suggested that it’s in its control so far
as I’m aware in any of the letters that I —
Mr Justice Fraser: Okay.
A: (Reading from pleading)
“To the best of Post Office's information and belief the known error log is a knowledge
based document used by Fujitsu which explains how to deal with or workaround minor
issues that can sometimes arise in Horizon for which often because of their triviality
system-wide fixes have not been developed and implemented. It is not a record of
software coding errors or bugs for which system-wide fixes have been developed and
implemented. To the best of Post Office's knowledge and belief there is no issue in the
known error log that could affect the accuracy of branch accounts or the secure
transmission and storage of transaction data."
-498-
587.
588.
589.
590.
591.
592.
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This was the relevant passage in the Generic Defence that was read out and Post
Office’s leading counsel then continued:
“Jt will be clear from what I've just read to your Lordship that Post Office thinks that
this is a complete red herring.”
The position was then, again, expressly confirmed as follows.
“Mr Justice Fraser: I think it's going to be useful for me, certainly, for you to define all
the different grounds upon which you currently resist disclosure of the known error log.
Number (1) is you say it's not in your control.
A: Control.
Mr Justice Fraser: Number (2) you say the subject matter is not relevant. Is that right?
A: My Lord, yes. An order that Post Office disclose documents relating to bugs and
errors causing the branch account errors, if Post Office had control of the document and
it dutifully complied with that order it would not be disclosing the known error log
because, as far as it is aware, the known error log is not that kind of document.”
So far as the content of the Known Error Log is concerned, when asked by the court
“does it contain any errors at all?” the following answer was given by the Post Office’s
leading counsel:
“Tt contains things like there's a problem with printers. There's a printer. You have to
kick it on the left-hand side to make the printer work. I mean there's a vast range of
hardware problems of that sort and maybe some software problems .... but not the kind
of bugs, errors and defects that the claimants are wishing to pursue in their particulars
of claim so far as Post Office is aware.”
This exchange with the court then continued.
“Mr Justice Fraser: Well, that's the rider which slightly might concern---
A: Well, my Lord, unfortunately, that's all that Post Office can say because it's not Post
Office's document. It's Fujitsu's document. Fujitsu are the experts.”
Given there was no witness statement from anyone at Fujitsu available on the subject
at that hearing, that was as far as the matter could be taken on that occasion in terms of
making any specific order relating to the Known Error Log. The Post Office had made
clear that any order for disclosure that did not specify the Known Error Log, but was
more general requiring disclosure of documents in relation to bugs and errors causing
branch account errors, would not lead to disclosure of the Known Error Log in any
event. A practical way forward, without requiring a fully argued separate application
which would have included Fujitsu, was adopted whereby the IT experts were permitted
to inspect the Known Error Log. The status of the Known Error Log as a disclosable
document was resisted both on the grounds of control and relevance. It has to be
acknowledged that this practical solution was one suggested by Mr de Garr Robinson.
It must therefore have come as a surprise to the Post Office, given the contents of its
pleadings and the express submissions that it had made to the court, that both experts
considered the Known Error Log to be highly relevant. This should also have led to the
Post Office beginning to doubt what it was being told by Fujitsu, given the source of
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593.
594.
595.
596.
597.
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what the court was told about this was what Fujitsu had told the Post Office, as set out
above. The explanation of what the Known Error Log was, what it contained, and its
lack of relevance, was not remotely accurate.
Although a certain number of entries in the Known Error Log, which led to a significant
number of different entries which are each called KELs being deployed in the trial and
examined closely, were thereafter available, the issue of control of the Known Error
Log and the Post Office’s earlier position resisting disclosure of this, did not go away.
An entire appendix to the claimants’ opening submissions was devoted to criticism of
the Post Office on disclosure, including its shifting position on the Known Error Log.
In closing submissions, at the very end of the final day of the Horizon Issues trial, the
claimants handed up a document entitled “Claimants’ Points in Reply”. Part F of that
was a short document headed “KELs said not to be in the Post Office’s control” together
with a variety of references. It ought also to be recorded here that some 5,000 KELs
were later disclosed by the Post Office in October 2019, well after the trial ended, once
the Post Office was told by Fujitsu that previous entries, which Fujitsu had previously
told the Post Office were not retained, were in fact retained.
The subject of whether the Post Office had control of the Known Error Log therefore
remained somewhat live. It simply was not, therefore, going to go away. The Post
Office’s legal team had loaded version 12 of its contract with Fujitsu (“the Fujitsu
contract”) onto the electronic bundle database on the last day of evidence, Day 20, for
re-examination of its expert witness, Dr Worden. The contractual situation between the
Post Office and Fujitsu was therefore before the court, which it had not been for the
first case management hearing on 19 October 2017. It is also the case that “control” of
documents (other than the KELs) held by Fujitsu could potentially crop up again in this
litigation going forwards. It is cost effective and efficient to resolve that now, for the
assistance of the parties.
I therefore gave both parties the opportunity to lodge further written post-hearing
submissions restricted to whether the Known Error Log was in the Post Office’s control.
It was a point relied upon by the claimants and it has to be resolved, There were two
reasons for this. One is that in group litigation of this type, the parties’ approach to
disclosure goes beyond a single document, or type of document. Guidance as to the
court’s general approach will be of assistance in the litigation going forwards. There
may well be other documents held by Fujitsu that need to be disclosed later, and the
issue of control needs resolving. Secondly, the court is entitled to expect accurate
evidence from parties on interlocutory matters, and accurate submissions.
The Fujitsu contract that was loaded onto the electronic bundle was a recent one. This
document has a version history at the front which shows that it runs, with amendments
therein identified, from 31 August 2006 to version 12 on 3 July 2017. Version 12 pre-
dates the date of the Generic Defence, but in any event, clause 25 (which appears below
at [602]) does not appear against any of the later version numbers in the version history
of the Fujitsu contract. It is likely therefore that clause 25 in substantially the same (if
not identical) form appeared in all the earlier versions of the Fujitsu contract prior to
Version 12.
The claimants made the requested post-hearing written submissions based on the
meaning of ‘control’, for the purposes of CPR Part 31.8, which is uncontroversial.
-500-
598.
599.
600.
601.
602.
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That rule provides as follows:
“(1) A party’s duty to disclose documents is limited to documents which are or have
been in his control.
(2) For this purpose a party has or has had a document in his control if —
(a) it is or was in his physical possession;
(b) he has or has had a right to possession of it; or
(c) he has or has had a right to inspect or take copies of it.”
Sub-paragraphs (a) to (c) are not exhaustive, but collectively those two sub-paragraphs
mean, in this case concerning this document or documents, that if the Post Office has,
or had, a right to possession of the Known Error Log, and/or a right to inspect or take
or be provided with copies of it, it is within the Post Office’s control. Control will be
established if a party has a contractual right to inspect or take copies of the document
or documents in question. Given the terms of the Fujitsu contract, the claimants
submitted that the Known Error Log is in the Post Office’s control and has been at all
material times.
The Post Office’s written submissions on this were also received. These conceded, as
it was put in paragraph 3, that the KEL was in its control. That paragraph stated at sub-
paragraph (1):
“As at July 2017, Post Office understood the KEL to be a relatively unimportant internal
working document produced and used by Fujitsu to assist in the performance of some
services under the contract. On that basis. the KEL would not properly have been
characterised as a “record. ..relating to the performance” of Fujitsu’s services under the
Fujitsu Contract and would thus not have been within Post Office’s control. But, on the
facts now known to Post Office, it would not contend the KEL to be outside its control.”
(emphasis added)
The title of the log — the Known Error Log, or known error log — includes rather
obviously the two words “known” and “errors”. The Horizon Issues use the expression
“bugs, errors and defects”. The presence of the word “error” in both might give an early
indication of likely relevance of the log. Further, as shown in [603] below, in the Fujitsu
contract the term records includes the phrase “full and accurate records” (emphasis
added). Although records is used in the definition of Records — a point correctly
identified by the Post Office, which it says is largely circular — it is clear that “full and
accurate records” are included.
Clause 25 in version 12 of the Fujitsu contract states the following:
“25.8 In addition to its obligations under Clauses 25.2 and 25.3. Fujitsu Services shall
provide the Court Case Support Services to Post Office in relation to prosecutions and
other disputes (whether civil or criminal) with any third party including but not limited
to any fraud, theft, breach of contract or impropriety (the “Court Case Support
Services”). The Court Case Support Services shall include any matters whether they
relate to Horizon, HNG-X or any other system provided by or on behalf of Fujitsu
Services to Post Office, its agents or its subcontractors (including Post Office Service
Integrator and any Tower Contractor). Fujitsu Services shall provide the Court Case
-501-
603.
604,
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Support Services within the timeframes required by Post Office or the relevant court or
other authority.
25.9 Without prejudice to Clause 25.3, the Court Case Support Services shall comprise:
25.9.1 the provision of copy reports;
25.9.2 the provision of data (including transaction data. event logs. helpdesk call logs.
non-polled data and remuneration data) where such data is held by or in the control of
Fujitsu Services;
25.9.3 the compilation of data (including transaction data. event logs, helpdesk call
logs, non-polled data and remuneration data);
25.9.4 the interpretation of data (including transaction data. event logs. helpdesk call
logs. non-polled data and remuneration data);
25.9.5 the provision of technical reports regarding technical aspects of any system
(whether Horizon, HNG-X or otherwise);
25.9.6 live witness evidence at Court if any of the information provided (including
without limitation that provided pursuant to Clauses 25.9.1 to 25.9.5) is challenged to
the extent to which Fujitsu Services provided said information; and
25.9.7 the right of access to Records, including but not limited to information, reports
and data, held by or in the control of Fujitsu Services, and the assistance of Fujitsu
Services’ personnel with appropriate knowledge of the applicable Records (to the extent
any such personnel remain employed or contracted to Fujitsu Services) for any
independent experts and/or legal advisors instructed by Post Office and/or any other
claimant(s) or defendant(s) and the Prosecution in any mediation, arbitration tribunal,
court case or dispute in which Post Office is involved in relation to the Horizon and
HNG-X or any other system provided by or on behalf of Fujitsu Services to Post
Office.”
(emphasis added)
Records is defined in the Fujitsu contract in Schedule I “Interpretation”, in the
following way:
“Records: means the full and accurate records relating to the performance of the
Services.”
I consider that this term plainly includes the Known Error Log, as that relates to the
performance of the Services, and in any event this contains data and hence also falls
within clauses 25.9.2 and 3. I reject the lengthy analysis in the Post Office’s
submissions on this point that the KEL is not properly characterised as being a record.
It plainly is.
In my judgment the Post Office clearly has, and had, a contractual right to be provided
with the Known Error Log by Fujitsu, given these are civil proceedings for (inter alia)
damages sought by the claimants for breach of contract, and also fraud being alleged
against the claimants by the Post Office by way of counterclaim. I do not accept that
the KEL is a type of document covered by the authority cited by the Post Office at
-502-
605.
606.
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paragraph 11 of its submissions on this point, namely working papers prepared by
professionals for their own assistance in carrying out expert work for their clients;
Hanley v JC & A Solicitors [2018] EWHC 2592 (QB) at [42]. That point is , in my
judgment, plainly wrong. Given the terms of the contract between the Post Office and
Fujitsu, it is not necessary to consider that point further.
I consider it verging on entirely unarguable, given the express terms of the Fujitsu
contract which is now available to the court, that the Known Error Log was not in the
control of the Post Office. Mr Parson’s witness statement had merely stated “it was not
within Post Office’s control” and I simply cannot understand the basis for that
statement, given the express terms of the contract that the Post Office had with Fujitsu.
It plainly is in the Post Office’s control, given the terms I have reproduced above, and
that point is now conceded.
The fact that the Post Office has submitted that in July 2017, on its understanding then,
the KEL was not a “record” that “related to the performance” of the Fujitsu services
demonstrates a worrying lack of knowledge on the part of the Post Office, about both
Horizon, and Fujitsu’s record keeping. It also means, when this is put together with
what the Post Office, by its leading counsel, submitted to the court at the 1° case
management conference, that Fujitsu were extraordinarily inaccurate about the
information it provided to the Post Office at that stage of these proceedings. As at 2017,
the Horizon system (both Legacy Horizon and Horizon Online) had been in use for
about 17 years. KEL appears in a table of Abbreviations/Definitions at F/87/3 in a
document entitled “CS Support Services Operations Manual” that is dated 29 January
2001. That document is referred to in footnote 34 of Mr Coyne’s 1* report, and three
passages within it state the following:
“4.5.1 Maintaining the Known Error Log on the SSC intranet site
The SSC generates and maintains a Known Error Log (KEL) system that uses
searchable documents in HTML format. The mechanism for searching is a query entry
in an intranet site. The KEL system is available to first, second, third and fourth line
support units as well as SSC staff.
4.5.2 Transferring knowledge between support units
The SSC intranet site has KEL search facilities and other useful diagnostic data,
documents and tools.
SSC and SMC staff raise KELs based on customer-observed symptoms.
KELs are further maintained once the fault has been resolved.”
“4.7.1 Known Error Logs (KELs)
The intranet site holds known error details in Microsoft Word format, the contents of
which may be searched for, in full text form. Documents are created to a defined
template wherever possible. An application has been generated which limits the
properties of the document to a subset of possible values, for clarity and ease of search.
This application is made available to all support units.
-503-
607.
608.
609.
610.
611.
612.
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The process for creating KEL entries outside of the SSC has not yet been formulated,
but it is expected that no KEL will be allowed onto the system before it has been
authorised by SSC staff.”
(bold present in original)
The Post Office plainly did not know this when making the submissions that were made
in 2017. The Services Operation Manual had been in existence for 16 years by then,
and this ignorance about the Known Error Log, which is clearly explained within that
document, is most surprising.
Even without such an express obligation in the Fujitsu contract itself, I find it very
difficult to believe that Fujitsu could mount any sort of coherent or legitimate objection
to producing it at the request of the Post Office. The assertion that the Log was not in
the control of the Post Office is, in my judgment, not a valid one.
Similarly unsustainable is the submission that was made to the court in 2017 that its
contents were not relevant to the Horizon Issues, and that it did not contain references
to bugs and errors having an impact on branch accounts. On that latter point, the Post
Office’s submissions were based upon what the Post Office had been told by Fujitsu.
Fujitsu were, again, being clearly inaccurate about what they had told the Post Office
was actually contained in the Known Error Log.
Nor is the passage quoted above in the Generic Defence an accurate description of the
Known Error Log. The Known Error Log does far more than “explain how to deal with,
or work around, minor issues that can sometimes arise in Horizon for which (often
because of their triviality) system-wide fixes have not been developed and
implemented”. The Known Error Log appears to be a comprehensive record of all the
errors and defects of which Fujitsu have become aware over the life of Horizon. On the
basis of the evidence that has been heard in the Horizon Issues trial, there are many
issues in the Known Error Log that could affect the accuracy of a branch's accounts or
the secure transmission and storage of transaction data, contrary to what is pleaded by
the Post Office. Some KELs led to software fixes too. Indeed, Mr Coyne has used it in
order to discover the existence of, and then investigate, the numerous different bugs
from what was called “the Bug Table” in the 2™ Joint Statement, 11 of which Dr
Worden agrees in his written evidence. Dr Worden himself has discovered some of
these bugs, from the sample of the entries in the KELs that he had inspected. It is the
KELs that are the origin of these expert conclusions, due to the text in the entries that
they contain.
This discovery of these different bugs by both experts has directly flowed from the
entries in the Known Error Log by Fujitsu, together with the associated PEAKs.
It is only fair to record that after contested disclosure had been considered at the first
hearing before me on 19 October 2017 (dealt with in detail above), the Post Office’s
leading counsel suggested the “pragmatic solution” that was giving Mr Coyne the
opportunity to inspect it. It was because of this that the matter of control was not
resolved at that point, as disclosure was permitted. Mr Coyne inspected the Known
Error Log at Fujitsu’s premises. He found it highly relevant. The claimants received
most of the KELs they had for the trial on 10 May 2018, with further KELs in respect
of particular bugs disclosed on 16 November 2018, one month after the first expert
-504-
613.
614.
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reports of Mr Coyne and Dr Worden had been served. Further KELs were provided in
2019, and a very substantial quantity of 5,000, weil after the trial in October 2019.
There has been no detailed explanation for that very late post-trial disclosure in any
form of any witness statement from anyone at the Post Office or Fujitsu.
The KELs provided to the experts prior to their reports featured centrally not only in
Mr Coyne’s two reports, but those of Dr Worden too. They were also the subject of a
great deal of cross-examination by both sides. I consider that disclosure of the KELs to
the experts — the pragmatic solution suggested by leading counsel for the Post Office -
has been central in the discovery and investigation of the bugs, errors and defects that
the experts agree were, or are, present in the Horizon system, and also of the bugs,
errors and defects that are not agreed, but upon which both experts opine and in respect
of which I make findings in the Technical Appendix. Dr Worden has also analysed
them extensively, and devoted a separate appendix of his report to them. The best
description of the KELs is taken from Dr Worden, who stated that they were “a rich
source of evidence”. The notion that they were not relevant, or did not contain relevant
material, is extremely difficult to fathom, and I do not understand why, or how, Fujitsu
would or could sensibly choose to inform its own customer of many years, the Post
Office, directly to the contrary. If Fujitsu’s description of the contents of the KELs had
been taken at face value and not challenged, then the knowledge now available to the
two experts and to the court about the extent of bugs, errors and defects would not have
been available, with the obvious detrimental impact upon the fair resolution of the
Horizon Issues.
The further developments, after the trial, that led to disclosure of another 5,000 KELs
by the Post Office after the trial in October 2019 are dealt with at [627] below and
following under the heading “Further post trial disclosure”.
PEAKs
615.
616.
Turning to PEAKs, upon inspecting the KELs at Fujitsu’s premises in 2018, Mr Coyne
discovered the existence of a different category of documents called PEAKs, as these
were referred to within different KELs. These documents were requested from the Post
Office in July 2018. The claimants maintain that the Post Office were obstructive over
this, but whether that is correct or not, over 218,000 different PEAKs were disclosed
by the Post Office’s solicitors on 27 September 2018. This was two weeks before the
date for exchange of experts’ reports. A further 3,866 were disclosed on 25 October
2018 — two weeks after the experts’ first reports. OCP documents (which are mentioned
in PEAKs) were disclosed on 24 January 2019, and a number of PEAKs were identified
by Mr Coyne in his supplementary report which he had identified but which had not
been disclosed. These were provided (or extracts of them) on 18 February 2019, which
is only three weeks before the Horizon Issues trial started.
A large quantity of further documentation was then disclosed by the Post Office, on
dates that were not only well after the dates ordered for expert evidence to be served,
but on dates that were even after the intended end date of the Horizon Issues trial itself.
2,590 OCRs were disclosed on 18 April 2019, and other PEAKs were disclosed on 31
May 2019, literally one working day before Mr Coyne was called to give evidence on
4 June 2019. This highly unsatisfactory situation led to my seeking an explanation. I
consider an explanation was plainly required given the timescales. This is a large
-505-
617.
618.
619.
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quantity of documents, dealing with central elements of the Horizon Issues, and the
stage at which they had been provided was very late. PEAKs are important documents.
I was told in submissions that Fujitsu had discovered an old database that had been
copied more than ten years previously, and as soon as Fujitsu had told the Post Office
this, matters had moved speedily and the Post Office had provided the contents of this
old database to the claimants.
However, the day after this explanation was given, and during cross-examination, a
PEAK dated 21 August 2018 was put to Dr Worden and the court was told this was one
of the documents that had been disclosed on 31 May 2019. This plainly could not have
come from “an old database” in excess of ten years of age which Fujitsu had only
recently discovered. A further and more accurate explanation was plainly called for.
Thad already ordered another witness statement to be provided by the Post Office’s
solicitors, this one being the 18" witness statement of Mr Parsons, which was served
on 19 June 2019. The contents of that witness statement were highly unsatisfactory.
Firstly, it showed that the existence of the forgotten Fujitsu database came about
because of questions raised by the Post Office’s solicitors “during preparation for the
Horizon Issues trial at the beginning of April 2019”, The Horizon Issues trial in fact
had an enforced interlude, from 21 March 2019 when the recusal application was
issued, until that application was dismissed on 9 April 2019. In other words, those
questions were asked very late in the trial process. Further, Mr Parsons’ witness
statement stated, so far as the latter disclosure of PEAKs on 31 May 2019 is concerned,
the following:
“20. In the course of investigations into the bugs referred to by Mr Coyne and/or Dr
Worden, including in the Second Joint Statement, on 29 March 2019 Mr Lenton
identified PCO273234 to Ms Simmonds as being a document relating to the Drop and
Go Bug. For the next couple of months my firm continued to investigate these bugs and
a number of further documents relating to these bugs came to light. PCO273234, along
with 17 other documents (excluding redundant image files) that had come to my firm's
attention when preparing for the Horizon Issues trial were disclosed in a single batch
on 31 May 2019.”
(emphasis added)
Mr Lenton is a member of Fujitsu personnel. The 2" Joint Statement was signed by the
two experts on 25 February 2019. This passage means that one month after that
document, Mr Lenton identified the specific document relating to the Drop and Go Bug.
This is one week after Mr Godeseth had completed his evidence. I find the rather
glossed-over reference in the witness statement to “continuing investigations” that went
on “for the next couple of months” extraordinarily opaque, in the context of a trial that
commenced on 11 March 2019, and a document identified on 29 March 2019. I also
find the wholesale lack of any explanation of when the “further documents relating to
these bugs came to light” ~ and indeed how — puzzling, again in a witness statement
ordered specifically to explain what was already a highly unusual situation. Further, the
PEAK relating to the Drop and Go bug was plainly identified by Mr Lenton, a Fujitsu
employee, on 29 March 2019. It is in my judgment verging on the extraordinary, in the
context of any trial that was actually underway, that it took two months more for this
PEAK to be disclosed to the claimants. This is particularly concerning in the context of
this trial between these parties on these issues. It is also obvious from the witness
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620.
621.
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statement that the PEAK in question dealing with the Drop and Go bug was not
disclosed immediately, until “for the next couple of months my firm [ie the Post
Office’s solicitors] continued to investigate these bugs.” There is no reason that
investigations, whether ongoing or not, should delay disclosing a document of this
nature to the other side, particularly in the middle of such a trial as this.
The conclusion to be drawn from this is that disclosure was given in a manner that could
only have disrupted and delayed proper investigation of the issues contained in the
documents. In this specific case, that includes the Drop and Go bug. That document
should have been provided to the claimants very rapidly once it came to the attention
of the Post Office’s solicitors, not kept “for the next couple of months”, as Mr Parsons
puts it. In subsequent trials, if relevant documents of this nature are discovered by either
side or their legal advisers, it is a matter of some importance that disclosure is given
very rapidly. This is particularly important whilst the trial is underway. A failure to do
so risks disruption, delay and increased costs.
The experts agreed the following about PEAKs and their content. “PEAKs record a
timeline of activities to fix a bug or a problem. They sometimes contain information
not found in KELs about specific impact on branches or root causes — what needs to be
fixed, They are written, by people who know Horizon very well. They do not contain
design detail for any change. They are generally about development activities and
timeline rather than about potential impact. PEAKs typically stop when development
has done its job, so they are not likely to contain information about follow-on activities,
such as compensating branches for any losses.” It is also agreed, and indeed can be seen
from the actual PEAKs themselves, that some of them record observations of financial
impact. PEAKs do not however always use the symbol “£”, which was a search item
used by Dr Worden to create a set of 259 KELs that contained that symbol. Even where
they referred to a financial discrepancy, PEAKs sometimes just recorded the figure, or
sometimes used “pds”, and did not use the symbol “£”.
Release Notes
622.
A spreadsheet listing the Release Notes was produced which shows that there have been
a great number of changes and updates both to Legacy Horizon and Horizon Online
over the years. The total number of Release Notes is 19,842 at final version. Each expert
provided an estimate of how many changes per week there have been to Horizon. Mr
Coyne’s estimate is approximately 19 changes per week. Dr Worden’s estimate is 5
changes per working day. Given the number of working days per week, these figures
are broadly the same. No details of the actual Release Notes were provided. The
spreadsheet was not, in my judgment, complete, nor was it in useful usable form. No
Release Notes detrimental to the Post Office’s case have been produced. The Post
Office adopted an unhelpful approach to Release Notes, requiring the claimants to
identify from the very difficult spreadsheet which Release Notes they would like to see,
with an offer to provide those. On 14 February 2019 the claimants’ solicitors indicated
which ones they did want to see. On 20 February 2019, the Post Office’s solicitors
stated “we are currently taking instructions in relation to the requests”. Both the request
from the claimants, and the response, are wholly unhelpful and far too late. To be fair
to the Post Office, a late request will undoubtedly lead to a late response. Further, the
spreadsheet itself is almost wholly unusable.
-507-
623.
624,
625.
626.
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Thave commented upon the approach of the Post Office to disclosure in this litigation
before, and not in favourable terms. At the first CMC in October 2017, I said in a short
ruling on disclosure that the Post Office had been “obstructive” in its pre-action
behaviour in this respect, and that its attitude to disclosure up to that point had been
somewhat less than ideal. In Judgment (No.3) I made some further criticisms, which it
is not necessary to repeat. It is regrettable that the Post Office’s approach to disclosure,
admittedly this time in conjunction with Fujitsu, has continued in different respects to
fall short of what is required. However, it does seem to be improving and it is to be
hoped that such improvement will continue. Particularly in litigation such as this, with
enormous distrust and suspicion on both sides, it is simply counter-productive to have
that atmosphere added to by an unnecessarily combative stance on disclosure.
The claimants submitted in their opening that the Post Office’s approach to disclosure
had the effect of impeding the claimants from obtaining a full view of the documents
and the totality of the Horizon system. I agree with that submission. However, balanced
against this, it does have to be remembered that the claimants did not issue any
applications for disclosure, as I have already explained.
The Post Office’s case in this litigation will be subject to exactly the same degree of
measured and independent assessment, and weighed in the same objective way, as the
claimants’ case, and as it would be were these failures not present. However, there must
be a change in approach to this group litigation. Disclosing documents late, and in the
middle of trials, in such sizeable numbers, and failing (as clearly identified from the
passage of Mr Parsons’ own witness statement referred to in [618] above) to act with
expedition when clearly relevant documents are unearthed actually during a trial, has
two distinct effects. It is disruptive to the proceedings, and it leads to an increase in the
costs and/or causes delay. It is the antithesis of co-operation, which the Civil Procedure
Rules expressly require. I consider that these passages within this judgment should
provide sufficient encouragement to a more constructive approach to prompt disclosure
of obviously relevant documents when (or if) they are discovered shortly before, or
even during the course of, forthcoming trials.
A PEAK discovered on 29 March 2019 relating to the Drop and Go bug ought to have
been disclosed to the claimants within a period of about 48 to 72 hours, not two months.
With modern electronic communication, that is a readily achievable timescale.
Further post-trial disclosure
627.
There was then yet further post-trial disclosure given by the Post Office during
September 2019. However, the solicitors for the Post Office also notified the court in a
letter of 3 October 2019 that further previous information given to the claimants and to
the court in the Post Office’s e-disclosure questionnaire was, again, wrong. The letter
to the court stated inter alia:
“We write further to the email sent by the Claimants’ solicitors to the Managing Judge's
clerk on 27 September 2019 at 12:29, which brought to the Managing Judge's attention
that 32 documents relating to the Horizon Issues Trial were disclosed by Post Office on
25 September 2019.
During the course of responding to a number of queries that the Claimants’ solicitors
had raised in relation to the disclosure of these documents (which can be located at
[H/358] of the Horizon Issues Trial Bundle), it has come to Post Office's attention that
a statement within its EDQ is incorrect and that there may be previous versions of the
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628.
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Known Error Log that have not been disclosed to the Claimants. Please find enclosed
a letter which was sent to the Claimants' solicitors today explaining the background to
these documents coming to light and the proposals which have been made in respect of
providing any disclosure which may be sought by the Claimants.”
(emphasis added)
The actual statement that was wrong was further explained in the accompanying letter
to the claimants, which stated:
“In respect of your query regarding the fact that intervening changes to KELs are not
captured on the face of the KELs disclosed, we have made further enquires with Fujitsu
to confirm our understanding that previous versions of the KELs are no longer held.
We regret to say that these enquiries have revealed that our understanding was wrong.
As you will be aware, Post Office's EDQ stated that "[t]he KEL only contains the
current database entries and is constantly updated and so the current version will not
necessarily reflect the version that was in place at the relevant time. The previous entries
/versions of the current entries are no longer available".
This statement was based on info provided by Fujitsu. In response to our recent
enquiries, however, we were informed by Fujitsu on 30 September 2019 that this is
incorrect and that previous versions of KELs are available.
This takes Post Office greatly by surprise. It relied on the information provided by
Fujitsu_at the time of filing its EDQ that such documents were not available. It is
extremely sorry that this information was incorrect.
Regardless of whether these documents may or may not be "adverse", Post Office has
taken immediate steps towards arranging for the previous versions of these KELs to be
extracted and has instructed Fujitsu to begin producing a script to extract the documents
into a readable HTML format. Unless you disagree, once this script has been produced
we will ask Fujitsu to extract all of these versions.
When this has been done, again unless you disagree, we propose to take immediate
steps to disclose previous versions of the KELs which were referred to by either Dr
Worden or Mr Coyne in their expert reports or the joint statements or the bug table, or
were for any other reason included in the trial bundle.
Disclosure of the previous versions of these KELs (where there are previous versions)
will be given as a matter of urgency.
We invite you to tell us whether the Claimants also wish to be provided with disclosure
of previous versions of the KELs which were not referred to by the experts or included
in the trial bundle.
Given the seriousness of this matter, we propose to notify the Managing Judge of this
development immediately and will send a copy of this letter under cover of an
explanatory email.”
(emphasis added)
-509-
629.
630.
631.
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This was correctly characterised by the Post Office’s solicitors as a serious matter.
Further, when these KELs were produced and disclosed, it turned out that there were
approximately 5,000 of them. This is an extraordinary number, and far more than were
available to the experts for the trial.
There was no explanation of the way that what was obviously now incorrect
information — that previous versions/entries of KELs were not retained by Fujitsu — had
been communicated to the Post Office’s solicitors, or by whom, and there was no
explanatory witness statement provided on a voluntary basis. I did not order one, nor
did this disclosure interrupt preparation of the draft judgment, or lead to any application
for further evidence or cross-examination.
T include it therefore for completeness. There are two points that arise from this.
1. It would have been a matter for argument, and an exercise in discretion, as to whether
any further submissions or evidence (including cross-examination) would be permitted,
had such an application been made. The Post Office were pragmatic and sensible, and
essentially left this decision to the claimants. The claimants made no such application.
However, had they done so, my preliminary view (without hearing any argument) is
that I would not have permitted the Horizon Issues trial to be resumed and further
evidence adduced. This is for three reasons. Firstly, there has to come a point when the
parties are given a decision on the Horizon Issues. The trial had already been interrupted
to a substantial degree by the recusal application. This trial was supposed to be
completed in April 2019. Resuming it would have led to that date becoming sometime
in early 2020. The over-riding objective requires consideration of other court users in
other cases. Secondly, subsequent stages of the group litigation would, once again,
become consequentially delayed. It is with a sense of wistfulness that I recall a
statement at [16] in Judgment No.3 that this litigation would be speedily progressed.
Thirdly, the parties have told me that they wish to mediate before Christmas 2019 and
would like to know the outcome of the Horizon Issues trial to assist in that process. This
would not be possible if the trial were resumed.
2. This extensive further disclosure does, however, rather reinforce the criticism which
the claimants level at the Post Office and Fujitsu. The Post Office are the party in the
litigation, and they are the party with the disclosure obligations. They obviously rely
upon Fujitsu in this respect. Quite how Fujitsu, a reputable company with a worldwide
reputation who have been involved in Horizon for nearly 20 years, could be so wrong
on yet another important point going to Horizon is not explained, and will remain
unclear. Given the statements made by Fujitsu, relied upon by leading counsel for the
Post Office at an earlier hearing and repeated to the court, that the KELs did not contain
any material relevant to bugs, errors and defects, a pattern has emerged on the part of
Fujitsu. This is that its statements about KELs have been shown to be clearly wrong on
more than one occasion, and in important respects.
Criticisms of the disclosure of the claimants
632.
I turn therefore to the criticism that the Post Office has levelled at the claimants. It
should be borne in mind that the bulk of the disclosure burden fell upon the Post Office,
simply because of the nature of the Horizon Issues. However, that does not mean that
the claimants were not themselves obliged to give relevant disclosure to the Post Office.
This disparity is obvious in the number of documents disclosed by each party, which
the Post Office in its Closing Submissions stated was some 517,965 documents by the
Post Office, and only 1,525 by the claimants. Obviously that previous number does not
-510-
633.
634.
635.
636.
637.
638.
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include the 5,000 KELs disclosed by the Post Office in September and October 2019,
after the submissions. The comparison in the figures demonstrates the different burden
upon the claimants and the Post Office. It is also correct to identify that for many
categories of very important documents, the Post Office is reliant upon Fujitsu. The
claimants are not.
The Post Office submitted that despite it making appropriate and narrow requests for
Model C disclosure of documents held by those claimants who were witnesses in the
Horizon Issues Trial, the claimants have not engaged in discussions concerning the
scope of the claimants’ disclosure nor provided disclosure of the documents sought by
the Post Office.
The Post Office, in the context of its complaints about the claimants’ disclosure,
submitted that “it was therefore not appropriate for claimants to serve claimant-specific
evidence from current or former SPMs” because of the nature of the Horizon Issues and
the terms of the Order that ordered witness statements, and that the Post Office sought
to avoid making disclosure requests nearer to the trial. However, once the claimants did
so, and served their nine witness statements in evidence in September 2018, the Post
Office’s solicitors wrote to the claimants on 22 October 2018, 7 November 2018, 30
November 2018 and 20 December 2018 and did not receive any response. Even though
the Common Issues trial was underway for part of this time, I do not see why such
letters should have gone unanswered by the claimants’ solicitors. When the response
did come, it was to the effect that there would be no further disclosure as this was not
envisaged by existing orders.
The Post Office contrast this with the disclosure it was prepared to give in respect of
specific witnesses, and also stated that “given that claimants had flouted that Order,
Post Office sought to understand what searches (if any) had been conducted by
claimants so that it could understand whether further disclosure would be required in
light of claimants’ evidence. A further request for details by claimants was made by
Post Office on 17 January 2019.”
I am invited to contrast this lack of response by the claimants, which it is said should
be viewed in light of the approach adopted by the Post Office. One example of the
further disclosure that Post Office had agreed to give which was outside that ordered
by the Court was disclosure made in respect of the “operation of branches by Angela
Burke, Akash Patny, Anup Patny, Jayesh Tank, Setpal Singh and Adrees Latif...”
The Post Office complains that the claimants “clearly intended disclosure to be a one-
sided exercise”, seeking disclosure of this nature but refusing to provide their own
claimant-specific exercise. Mr Tank did search, in February 2019, within an archived
Subpostmasters “Yahoo Groups” forum where he used to post (which means to make
comments on the site) and after doing so, Mr Tank identified a post he made on 13
December 2011 relating to the £195.04 shortfall referred to by Ms Van Den Bogerd,
and also a post he made on 29 September 2014 relating to the £600 shortfall that he
refers to in paragraphs 6-11 of his witness statement.
Mr Tank has also found a letter he received from Post Office’s Agents Accounting
Team in Chesterfield dated 13 October 2014 which related to this shortfall (and which
Mr Tank referred to in his forum post).
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639.
640.
641.
642.
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Mr Tank was cross-examined about this, and explained that at the time of his first
witness statement he “hadn’t fully researched the whole background” and he did not
realise at that time that the post he had made previously was as important as it had
subsequently become, by which he meant in the trial. He also said he had only become
aware of the £195 loss to which it related once he had read Mrs Van Den Bogerd’s
witness statement. He also explained that he kept a box file and that was where he found
the documents. Complaint is made of the fact that the documents that were disclosed
should have been disclosed on 17 July 2018, the date for disclosure. ] accept that, and
even if one makes the assumption in the claimants’ favour that they did not know at
that date that Mr Tank was to be a witness, certainly no later than the date of his first
statement (which was 28 September 2018) disclosure ought to have been given. Mr
Tank’s lack of understanding of relevance and disclosure should not have arisen, and
the existence of his box file should have become known to the claimants’ solicitors far
earlier than it was.
Further disclosure was also necessary in relation to Mr Latif. This came about because
he served an amended witness statement on 1 March 2019, which came about following
enquires with Mr Latif's former branch manager, who consulted the documents within
the branch to confirm the date on which particular transaction corrections had been
issued.
He explained this in his cross-examination:
"Q. First question about that: by amendment to your statement you now say that this
was in around January 2018 rather than March 2018.
A. Correct.
Q. What caused you to make that correction?
A. [had a look at the - we hold the records for the information in the office, so I had
my assistants look at the records, transaction logs and that's when I confirmed that it
was January rather than March. (Inaudible) was logs in March as well. We made calls
effectively every month to Horizon help desk concerning this issue.
. When do you say you asked your assistants to check about the date?
Yes.
. Sorry, when do you say that happened?
. It was after I made the initial statement, I was checking.
. Roughly when, Mr Latif?
. It would have been a few weeks ago, sir.
. So is it right that you didn't check those records from the branch before making your
witness statement?
A. No, I thought I was correct but I double checked and made sure that actually in fact
they were correct, those (inaudible), so I was right but initial incident happened in
January when TA (inaudible) transaction acknowledgement, the TC, the corrections,
they came in March.
Q. Okay. So you say, do you, that the TCs in relation to these transaction
acknowledgements came in March 2018?
A. Yes.
Q. And you say that's something you have checked from your records?
A. Yes."
OPLPOPO
The Post Office made requests for disclosure during the trial, on 15 March 2019 (which
was the end of the first hearing week) requesting disclosure of various documents
-512-
643.
644.
645.
646.
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relating to Mr Latif and Mr Tank and their answers in cross-examination. This also
included requests of CCTV recordings which Mr Tank said he had looked at. These
requests were refused on 27 March 2019, and the claimants stated that this refusal was
on the basis that they were either outside their control, no longer existed or were not
relevant to the claimants’ evidence and were not relied upon at trial.
Documents that were held in Mr Latif's former branch were plainly outside of his
control, even though his former branch manager had accessed them previously.
However, that does not mean that the former branch manager could not at least have
been asked for them. Neither the claimants did that, nor indeed did the Post Office (so
far as I can tell). I consider the claimants’ attitude in this respect unhelpful, although it
should be noted that for at least the documents in respect of Mr Latif, the Post Office
could have taken its own steps in this regard.
There are some unsatisfactory aspects to the Post Office’s submissions about the CCTV
footage. Mr Latif clearly said in his first witness statement at paragraph 7 “I also
checked the CCTV to make sure that I had performed the transaction correctly.”
Secondly, the Post Office’s closing submissions refer to requests for “the CCTV
recordings which were consulted by Mr Tank for the purposes of drafting his witness
statement”. He was asked about the CCTV during his evidence and did not say that he
had consulted it for the drafting of his witness statement, he said that he had checked it
at the time. Had the Post Office wished, it could have asked for that footage shortly
after receiving that statement. It is also the case that the event in respect of which he
referred to the CCTV occurred in July 2015. It may be that the CCTV images do not
still survive, so long after the event in question, but this point was not pursued in cross-
examination.
There is, however, one major difference between the claimants and the Post Office in
this respect. The Post Office were entitled to, and did, explore with specific witnesses
certain issues in respect of disclosure by asking the relevant person (in the above
example, Mr Latif) questions about it. The claimants did not have this opportunity for
the following reason. The majority of complaints made about the Post Office’s
disclosure arise as a result of Fujitsu. Save for rare circumstances, such as Mr Parson’s
specific witness statement about the Royal Mail issue, all that the claimants and the
court are usually told is “Fujitsu say X” or “Fujitsu told the Post Office” such and such.
Specific individuals are not identified, and they are certainly not called as witnesses to
be asked questions about their approach, or (for example in respect of KELs) how they
could have been so factually wrong in their explanation of the KELs’ contents. I have
formed a dim view of the accuracy of information of this nature coming from Fujitsu,
regardless of the person in that organisation responsible for communicating it.
Notwithstanding this, I wish to make one matter completely clear. If a witness refers to
a particular document in their oral evidence, and the other party in this litigation wishes
to see a copy of that document, then (absent issues of privilege) that ought to be
disclosed, even more so if a specific request is made. This is by far the most sensible
and proportionate way forward. It is in no party’s interests to engage in squabbling
about relevance of a specific document in those circumstances. It costs far more to argue
back and forth in solicitors’ letters than it does simply to give disclosure. In any event,
the relevance of the document is made clear by the fact that it has been referred to orally
in evidence.
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It is also correct to say that notwithstanding the different burden upon the different sides
in terms of disclosure in the Horizon Issues trial, which has undoubtedly been far
heavier for the Post Office, this burden will not always be borne in these proportions.
The Post Office also has the benefit of a far higher number of legal advisers. As at the
date of this draft judgment, simply in terms of the total number of leading counsel
engaged in the group litigation, the Post Office outnumbers the claimants by 4:1. In
terms of the number of solicitors’ firms, the Post Office currently outnumbers the
claimants by 2:1; although only one firm was acting for the Post Office on the Horizon
Issues, and the second firm acted for the Post Office on its unsuccessful attempt to
appeal the Common Issues.
Summary on disclosure
648.
649.
650.
The Post Office is, in my judgment, somewhat at risk of downplaying certain
unsatisfactory aspects of its own disclosure that have emerged during the Horizon
Issues trial. For example, the incident concerning the incorrect statements made to the
court about the Royal Mail refusing disclosure without an order of the court was
described in the Post Office’s closing submissions as a “mix up” which was “regrettable
but should not be the subject of criticism of Post Office.” I do not consider telling the
court something in express terms which is factually wrong can properly or correctly be
identified as merely a “mix up”. Two points that were expressly explained by its leading
counsel were simply not factually accurate. The Royal Mail was not refusing disclosure,
and it did not require an order of the court before it would provide certain documents.
It had not even been asked for them.
Similarly, in its closing submissions the Post Office referred to the interlocutory
discussions about the Known Error Log as a “debate about relevance”. That again
downplays what had happened, including the positive submissions made, that the Log
was specifically not relevant and even if an order were made in respect of documents
showing bugs, errors and defects, the Log would not be disclosed (even if it were in the
Post Office’s control, which it was stoutly maintained it was not). The submissions
made by the Post Office on the adequacy of its own disclosure have been rather
undermined, since the trial ended, by the production (emanating from Fujitsu, once
again) of over 5,000 KELs, something rightly described by the Post Office’s solicitors
as “a serious matter”.
The claimants have not been entirely co-operative on their own disclosure, however. I
consider that the criticisms of the claimants for serving what was described as “claimant
specific” evidence are unjustified. At least one of the experts, Mr Coyne, adopted a
specific approach and investigated specific issues or occurrences, and there is no reason
that both of the experts could not have done so. Dr Worden did not, but that does not
mean that the claimants were wrong to do so. Some of the criticisms made by the Post
Office regarding the claimants are unjustified, therefore, but not all of them are.
Although I do harbour the suspicion that the Post Office may have decided that, on
disclosure at least, attack may be the best form of defence, some of the criticisms made
in the Post Office’s closing submissions are justified. For example, for the claimants’
solicitors simply to state that “at present, it is not the Claimants’ intention to make
another round of disclosure in relation to the Horizon Issues trial” as was done in July
2018, is not co-operative. Further, the reason that documents which Mr Tank had in his
box, that were plainly relevant, were not disclosed was because Mr Tank had not been
asked for them. Had he been asked — which is something that the claimants’ solicitors
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652.
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should have done, once it was known he would be a witness — these could and would
have been disclosed. They certainly should have been.
The following points are of general application to both parties in this litigation. At some
point a party who seeks to complain to the court about disclosure ought either to shelve
its general disquiet on this subject, or make an application.
It is important to identify, so that the parties in this group litigation are aware, the court’s
approach to disclosure. This is given for the purposes of guidance, and cost-effective
and efficient progress of the group litigation going forwards.
1. Care must be taken when explanations or submissions are made to the court. If further
time is needed in order for accuracy to be achieved, that time should be sought. Those
giving instructions to counsel must be astute to ensure that they are giving correct
information.
2. All the substantive issues will be resolved on the evidence, the applicable law, and
taking account of submissions. A party does not obtain a preliminary advantage or
“head start” on the substantive issues because of any criticisms about disclosure.
3. Criticisms about the other party’s disclosure should be proportionate. Depending
upon the circumstances and the nature of the document, the fact that disclosure is given
late might be relevant, but simply because continuing disclosure is given by one party
does not mean that there is anything sinister lurking in the background.
4. The court can always be asked to resolve disputes about documents. Mr Coyne
sought a large number of different types of documents, but no applications were made
by the claimants even though these were not provided. Criticisms of the Post Office’s
disclosure by the claimants has to be seen in the light that the claimants did not consider
it sufficiently important at the time to make any applications to the court. This is not to
encourage applications. Sensible and well-advised parties who co-operate will usually
deal with almost all disclosure issues consensually.
5. The parties are expected to comply with their disclosure obligations. If a document
comes to light that should have been disclosed but has not been, it should be provided
promptly. If this is discovered actually during a trial, it must be disclosed very rapidly
indeed. As happened with the document referred to at [618] above, a document
concerning the Drop and Go bug was discovered actually during the Horizon Issues
trial, then (as Mr Parsons put it in his explanatory witness statement) “for the next
couple of months” kept by the Post Office’s solicitors while “research” was done. It
was then disclosed just before resumption of the trial “in a batch”. This is not working
to the time scale either required, or expected, by the court, and it is not the correct way
to deal with disclosure during a trial. This is a laissez-faire approach to disclosure of an
important document during the trial itself, and the document should have been disclosed
very promptly.
6. Both parties will be held to the same standards. The Post Office has, so far, and given
the issues that have been tried, borne the bulk of the disclosure burden. The claimants
are expected to observe their disclosure obligations in the same way, and will be
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658.
659.
660.
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c) To provide the court with a clear foundation for understanding the design and
operation of Horizon; then, building on that foundation, to provide a balanced
assessment of the ways in which Horizon succeeded, whilst addressing any disclosed
issues where Horizon may have fallen short.”
This was the first area of disagreement. Mr Coyne stated in the section immediately
following, entitled Areas of Disagreement:
“In my opinion the technical issues can be answered without reference to the Claimants
high level allegations document. The issues are about how Horizon and its interactive
components operated and the processes employed by Post Office and Fujitsu in
supporting these systems and the data within.
Whilst my report will take a balanced approach, it is the case that many of the issues
require a deep focus on the occurrences of bugs, errors and defects as well as the
potential for modification of transactional data. Whilst context will be provided as to
how Horizon should work in typical circumstances, it is the non-typical operation where
focus will be placed.”
This approach was not agreed by Dr Worden. He stated:
“] intend to take the balanced approach (c).
To provide a joint statement at this stage which will be useful to the court, under each
Horizon issue the experts need first to agree what is worth agreeing having regard to
the case which is being alleged. For instance, it would not help the court for the experts
to list a number of detailed points as agreed, if one or the other expert thinks that those
points are irrelevant or unimportant to the case alleged; or if collectively the points
imply a view which, in the opinion of either expert, is not a balanced view. Therefore,
the areas of agreement may at this stage be limited and more high level.
My approach will also focus on the Horizon system. It will consider Horizon within its
wider business context, but I do not believe that the Horizon issues extend to offering
any opinion on the wider business practices of Post Office.”
I consider that the balanced approach, which both experts stated they would be
adopting, was the correct one. However, I do not find the following statement by Dr
Worden in this 1% Joint Statement as helpful:
“under each Horizon issue the experts need first to agree what is worth agreeing having
regard to the case which is being alleged. For instance, it would not help the court for
the experts to list a number of detailed points as agreed, if one or the other expert thinks
that those points are irrelevant or unimportant to the case alleged.”
It is a matter for the court to consider how helpful a particular point of detail, agreed by
the experts, is or is not to the issues to be decided. Obviously the parties can make
submissions about that, but it is not for an expert to decide that a point of detail, upon
which he may be agreed with his opposite number, should however not be agreed
because that point will not be helpful to the court; or that it should not be included in a
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joint statement. It is also not for experts to direct the court in any particular direction.
The Horizon Issues were carefully drafted by the parties, approved by the court, and
specifically included in an Order. They were the issues that the experts were to agree,
and detailed points of an IT nature that arose within those Horizon Issues should, where
possible, have been agreed.
661. Because Mr Coyne and Dr Worden approached their tasks so differently, the former
inspecting a number of PEAKs and KELs about 10 times greater in number than the
latter, this meant that a great amount of very detailed matters shown within those
documents were not agreed by Dr Worden. He approached his expert exercise from
what he described as “a top down” approach, a methodology that found its most stark
manifestation in his statistical analysis of likelihood in his Section 8.
662. I will include within this judgment, not the full text of all four of the different Joint
Statements, but some lengthy passages. This is to identify the large degree of agreement
between the experts. I will however omit (with some isolated exceptions) the passages
where the experts set out their separate, not-agreed, views.
The I* Joint Statement
663. [also quote at this stage from the 1° Joint Statement, signed on 4 September 2018, and
the points of agreement and disagreement in respect of Horizon Issue 1. This is because
in my judgment it is an important point of agreement, in respect of an important Horizon
Issue, but also it is useful to set out the approach within the Joint Statements.
“2. Issues and Position
2.1 Issue I
Issue 1 — To what extent was it possible or likely for bugs, errors or defects of the nature
alleged at §§23 and 24 of the GPOC and referred to in §§ 49 to 56 of the Generic
Defence to have the potential to (a) cause apparent or alleged discrepancies or shortfalls
relating to Subpostmasters’ branch accounts or transactions, or (b) undermine the
reliability of Horizon accurately to process and to record transactions as alleged at §24.1
GPOC?
Areas of Agreement:
Evidence exists that bugs/errors/defects have caused actual discrepancies or shortfalls
relating to Subpostmasters’ branch accounts/transactions.
Each time any IT system (including Horizon) is changed there is the potential to
introduce new bugs/errors/defects.
Once bugs/errors/defects are discovered, they take time to resolve and therefore
systems such as Horizon often continue to operate with bugs/errors/defects with or
without workarounds in place.
Theoretically, bugs/errors/defects that existed within Horizon have the potential to
cause apparent or alleged discrepancies or shortfalls in relating to Subpostmasters’
branch accounts/transactions.
In the event that any specific bug/error/defect had such an effect, the experts have
differing views as to the ‘extent’ of the impact that such bugs/errors/defects may have
had on branch accounts.”
(Emphasis added)
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The statement continues:
“Areas of Disagreement:
Jason Coyne: As identified by select Known Error Logs (KELs), many thousands of
bugs/errors and defects occurred and many of these known errors had impacts that
recurred in different circumstances, therefore the reliability of Horizon to accurately
process and record transactions is questionable.
Such facts undermine the reliability of Horizon to accurately process and record
transactions.
Examples:
(i) the Calendar Square/Falkirk bug — which led to Horizon failing to recognise transfers
between different stock units, thereby affecting Branch accounts;
(ii) the Payments Mismatch defect — which affected at least 62 branches and was related
to the process of moving discrepancies into the local suspense account, thereby
affecting Branch accounts. This defect was not capable of being identified by
Subpostmasters, who would have believed from Horizon that their account was
balanced when it was not; and
(iii) the Suspense Account bug — which erroneously replicated suspense account items
for 14 branches from 2010 in the same monthly trading periods in 2011 and 2012,
thereby affecting Branch accounts.
In my opinion there is possibility of bugs/errors/defects existing in Horizon that have
not yet been discovered. Further, most bugs/errors/defects that exist in Horizon have
existed for extended periods of time before they were discovered.
I understand that Horizon had at least 19,842 ‘releases’ of new software, each one of
these could have introduced new bugs/errors/defects.
Dr Worden:
My current preliminary view is that undetected bugs/errors/defects in Horizon were
very unlikely to be the cause of permanent shortfalls or discrepancies in a branch's
accounts.
It is necessary to define measures for the 'extent' of issue 1. At least two measures are
possible: the number of such bugs and errors, and their net expected financial impact
on claimants’ branch accounts, compared to the total shortfall experienced by all
claimants, which is of the order of £18 million. I intend to assess both measures. The
latter measure may be more useful, because if any set of bugs has expected financial
impact much less than £18M, it can do little to account for the claimants’ shortfalls,
either collectively or individually.
I propose to assess these measures from a number of different sources of information:
(a) the defects of Horizon cited by the claimants in para 1.3 of the outline; (b) the KELs
identified by the claimants in para 1.4 of the outline; (c) other KELs; (d) data on their
shortfalls provided by the claimants in their schedules of information; and (e) data from
other sources (if available).
Tam still scoping the data needed for (e). If it is available, I will provide it to Mr Coyne
as soon as I have it.
My preliminary analyses of the data on (a) - (d) imply that:
+ For the majority of KELs, (which record known bugs), it can be shown, from an
understanding of the robustness measures built into Horizon or otherwise, that they
would have no permanent impact on branch accounts.
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664.
665.
666.
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* The net financial impact on claimants' branch accounts of any other bugs, including
undiscovered bugs, is very small compared to the claimants' total shortfalls. I am not
yet able to quantify this, but I intend to do so.”
In my judgment, this presages Dr Worden’s statistical analysis of likelihood, which I
deal with as part of Section I. The following text used by Dr Worden should be
considered:
“...if any set of bugs has expected financial impact much less than £18M, it can do
little to account for the claimants' shortfalls, either collectively or individually”
The phrase “much less than £18M” could, potentially, direct expert consideration of
Horizon Issue I away from what it is in fact asking, towards a different issue entirely.
The experts were not tasked only with investigating bugs, errors and defects that had a
proven financial impact of (say) £18M, £10M, or any financial figure at all, and
certainly not one in the millions of pounds. This was for the following reasons. It was
never part of the Post Office’s position at the case management stage when the Horizon
Issues were discussed and considered, that there should be any sort of threshold for
financial impact, above which the experts should investigate, and below which they
should not. The wording of Horizon Issue I has already been addressed above, and this
uses the terms “possible or likely”. This notion of imposing a financial threshold must
have come from Dr Worden.
Nor is the litigation intended to be a wide-ranging enquiry into al! of the Post Office’s
accounts with all of its SPMs over the 15 or 16 year period in question. The Post
Office’s position is that Horizon is sufficiently robust such that it cannot be the cause
of the different shortfalls complained of by the hundreds of different claimants. The
counter-position to that by the claimants is nor that particular discrete sets of bugs had,
individually, an impact of millions of pounds upon their branch accounts. If that were
the claimants’ case, then Dr Worden’s approach as set out in this joint statement might
be understandable. Rather, the claimants’ case is that there are a large number of
different bugs, errors and defects that each affected each of their branch accounts over
time, with the end result being that each of them was (in accounting terms) identified
as owing the Post Office sums in the tens of thousands, or thousands of pounds (or less)
with the consequences which are well known. Some discrepancies were only a few
pounds, but are said to have occurred many times. Some were said to be tens of
thousands of pounds cumulatively. Some occurred many times; others less often, but
with greater individual effect. One bug — of which more later — is said to “double up”,
which would mean an exponential effect as a loss doubles, then quadruples and so on.
If one imposes, at the beginning of the expert investigation process, a filter or threshold
that looks for a “set of bugs” causing losses of “millions of pounds” that will have the
effect of restricting the field of investigation. There is no reason for such a restriction,
in my judgment.
On Horizon Issue 2, the experts were agreed, so far as that issue was concerned, that
the extent to which any IT system can automatically alert its users to bugs within the
system itself is necessarily limited, and while Horizon has automated checks which
would detect certain bugs, there are types of bugs which would not be detected by such
checks. The experts were also agreed, in respect of Horizon Issue 6, that whilst Horizon
contains measures and controls for detecting system integrity concerns, the automatic
mechanisms have failed in the past. The experts did not agree as to the ‘extent’ of
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668.
669.
670.
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prevention, detection, identification, reporting or risk reduction that the automatic and
manual control measures delivered; however, the agreement that automatic
mechanisms have failed in the past, which was contained in the 1 Joint Statement, is
in my judgment important. It means that the Post Office cannot rely upon the presence
of automatic mechanisms or processes as being an answer to the consequences of
failures in system integrity.
It was also agreed by the experts that the causes of some types of apparent or alleged
discrepancies and shortfalls may be identified from reports or transaction data available
to the SPMs, but that other causes of apparent or alleged discrepancies and shortfalls
may be more difficult or impossible to identify from reports or transaction data
available to the SPMs in question, because of their limited knowledge of the complex
back-end systems. Identification required the cooperation of PO staff and the SPMs.
Again, I consider this expert agreement to be important. This was, essentially, the
essence of the complaints raised by Mr Bates himself in the very earliest days of Legacy
Horizon, namely that there was or were insufficient information or reports available to
him to enable him to identify the causes of apparent or alleged discrepancies. The
experts are agreed that, for some causes of apparent or alleged discrepancies this is
indeed the case, due to the complexity of the back-end systems (back-end means not at
the branch) and the limited knowledge a SPM would have.
The experts agreed that Horizon had evolved, and its robustness may have varied
throughout its lifetime. They also agreed that the level of robustness may have increased
or decreased as the system was changed. The existence of branch shortfalls was agreed,
but they were not agreed at the stage of the first joint statement that this indicated any
lack of robustness. They were also agreed, as at the date of their 3 Joint Statement,
that Horizon as it is in 2019 is relatively robust. However, given the span of the years
under consideration is 2000 to 2010 for Legacy Horizon, and 2010 to date for Horizon
Online, and given the agreement to which I have just referred that robustness may have
increased or decreased, this only takes one so far.
On Horizon Issue 4, the experts agreed that there are a number of actual reported errors
in data recorded within Horizon arising from (a) data entry, (b) transfer or (c) processing
of data. Therefore, the potential exists. The experts do not agree as to “its “extent”.” Dr
Worden saw this issue as a subset of Horizon Issue 3. He felt that because of the
measures “built into Horizon”, errors of data entry, transfer and processing were very
unlikely to affect branch accounts. The experts agreed on Horizon Issue 6 that the
automatic measures and controls for detecting system integrity within Horizon had
failed in the past; they could not agree as to the extent that the automatic and manual
control measures delivered. Dr Worden also made the point that bugs, when discovered,
could not be fixed instantly and what he called “trade offs” were required when dealing
with practical release management.
So far as remote access and Horizon Issue 7 was concerned, at the time of the 1 Joint
Statement Dr Worden was unclear about this and the technical document provided to
him by Mr Coyne had not been received in sufficiently timely manner such that he
could consider it. By the time the Horizon Issues trial had started, the Fujitsu witnesses
such as Mr Parker had corrected their earlier incorrect witness statements and accepted
that this could be done. However, those statements were not served until November
2018 so would not have been in existence as at the time of the 1“ Joint Statement.
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671.
672.
673.
674,
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On Horizon Issue 9, the experts agreed that the causes of some types of apparent or
alleged discrepancies and shortfalls may be identified from reports or transaction data
available to SPMs. Other causes of apparent or alleged discrepancies and shortfalls may
be more difficult or impossible to identify from reports or transaction data available to
SPMs, because of their limited knowledge of the complex back-end systems.
Identification required the cooperation of PO staff and SPMs.
On Horizon Issue 10, it was agreed that by the very nature of rolling out fixes in any IT
system, including those implemented by Fujitsu, these had the potential to affect
transaction data or data in branch accounts. This could be seen as. stating the obvious,
but at least the experts agreed it. The experts were also agreed that the use of tools and
facilities to do this should be auditable, however the maintenance of logs recording this
would be dependent upon retention periods and the size of the logs in question. Again,
this could be seen as stating the obvious. The experts were not agreed on Issue 12, how
many times the ability to do this was used, if at all. Nor was there any agreement on
Issue 13, the extent to which such facilities had the potential to affect the reliability of
branch accounts; Issue 14, a detailed issue with 7 sub-issues concerning functionality;
or Issue 15, which concerned Transaction Corrections or TCs.
The experts agreed, so far as the existence and use of permission controls is concerned,
which is the essence of Horizon Issue 11, that the usage of tools and platforms which
existed specifically for the purpose of accessing and modifying transaction data, should
be auditable. It was agreed however that the maintenance of logs would be dependent
upon retention periods and size. Such tools which were identified initially in the 1*
Joint Statement under Horizon Issue 10 areas of disagreement by Mr Coyne, were at
that stage split into the following:
1, Global Branches which would enable the input of transactions within Horizon as
though it had come from an actual Branch;
2, the Branch Transaction Correctional tool;
3. the Transaction Information Processing repair tool.
The best description of “Global Branch” or “Global User” is contained in a Post Office
document headed “Global User Process Management” which said that it allowed people
such as auditors “to be able to go out to any branch and use the same log on to access
any Horizon kit in Branch without having to request a single use password at each
branch. The individual requiring a Global Use account has to be approved by a Manager
showing on the Global User requester and approver list”. However, the document also
identified that PWC had discovered that “the current Global User list inherited from
Fujitsu contained employees who had left the Business. This raised concerns over the
security of access to Horizon. Although this is a low risk in terms of Horizon access
(the individual would have to gain access into a Branch first) it is still a risk and needed
to be mitigated.” There were 32 such former employees. It was in respect of the
permission contro! procedures concerning these tools that the documented authorisation
process was identified, using documents called the “Master Service Change” or MSC
documents and “Operational Control Procedures” or OCPs. These documents were
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requested by Mr Coyne but no actual disclosure application was issued. The document
to which I have referred explaining Global User was in the trial bundle.
The 2"4 Joint Statement
675. The 2" Joint Statement is dated 25 February 2019 and identified and collated the
676.
677.
678.
different bugs, most of which were given actual names, which had either been identified
and agreed, or which Mr Coyne maintained were bugs. This statement was in landscape
form and lengthy, and included what became to be referred to as “the bug table”, I adopt
the terms used by the experts for the descriptions of the different bugs, or alleged bugs.
The number of different bugs that were agreed by Dr Worden, by the time the trial
ended, was 11. The description of this in the joint statement itself was
“The structure of the document captures i) A table of bugs/errors/defects containing
evidence of financial impact upon branch accounts that both experts agree (or indicate
if they do not), ii) all expert agreements grouped by Horizon issue, and iii) additional
comments and observations input by the respective expert.”
Prior to the commencement of this litigation, the Post Office had acknowledged the
existence of only two bugs in Horizon. Mr Coyne’s evidence was that there were 29
relevant to Horizon Issues I and 4, and he clarified in his cross-examination that the
number that he considered had lasting impact upon branch accounts was 21. I deal with
that cross-examination at [794] to [798] below.
The 2 Joint Statement also said in its Introduction that:
“Because of time pressures and the complexity of the issues, we have not been able to
address ail the Horizon issues in this joint statement. We will issue a subsequent joint
statement addressing those issues we have not yet addressed. For those issues we have
addressed in this statement (issues 1, 2, 9, 14 and 15), the layout and references are not
as polished as we would have wished.”
It is extremely useful for the court to have Joint Statements from experts, and J am
grateful to the experts for producing these statements, in particular what was called “the
bug table” in the 2"! Joint Statement, in what is a very complex case, and when they
were under considerable time pressure. The bug table was very widely used in both
cross-examination by the parties and indeed in their submissions.
The so-called “Bug Table”
679.
The bug table, and my findings upon the bugs within it, are in my judgment central to
the Horizon Issues. Evidence concerning bugs in the Bug Table formed a large part of
the expert evidence that was tested in cross-examination. The different bugs, or alleged
bugs, identified in the Bug Table were as follows. I have added to the following the
summary of the position of the Post Office in Appendix 2 of its Closing Submissions,
which in some cases accepted there was such a bug, and qualified that acceptance in
most instances by references to what was said to be the impact of the bug. I deal with
detailed findings on those bugs that are in issue in the Technical Appendix to this
judgment. For the detailed submissions by the Post Office for each bug, the paragraph
numbering in Appendix 2 started again at 1 for each bug. This did not cause particular
difficulty, and because the Post Office explained that Appendix 2 had been put together
by different parts having been drafted by different counsel/solicitor teams, this is
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understandable. I refer to it here, because otherwise a reader of the passages below
might become confused as to why there seem to be so many paragraphs all (for
example) numbered 2 in Appendix 2. The following summary of the Bug Table is
intended to be a useful summary for this judgment, and is not restricted solely to the
entries within the 24 Joint Statement.
1, Receipts and Payments Mis-match bug.
This was agreed in the bug table as an “acknowledged bug” which had an impact on
branch accounts. Dr Worden added in his comments that “Therefore, the extent of this
bug is well established, in the GJ analysis.” GJ is Gareth Jenkins. The identified year
of its effect was 2010. It is accepted by the Post Office in paragraph 7 of Appendix 2
as one of a number of “bugs with lasting impact (although they were resolved)”. In the
summary in Appendix 2, the Post Office stated that “In the event, however, this bug
resulted in transient impact only.”
2. Callendar Square/Falkirk bug.
This too was agreed in the bug table as an “acknowledged bug” which had an impact
on branch accounts. Its identified years of effect were 2000 — 2006. It is accepted asa
bug by the Post Office in paragraph 6 of Appendix 2, but is said to have had “transient
impact”. Dr Worden added different comments, including that “the bug arose from a
fault in the underlying Riposte software, so it is not surprising that it took Fujitsu some
time to understand it, or that they had to rely on the suppliers to fix it. It does not show
poor system design or support by Fujitsu”. That latter sentence is a little surprising, and
seemingly very defensive on Fujitsu’s behalf. This is because the Horizon Issues are all
about the operability and functionality of Horizon, not who is to blame for the presence
of any bugs, errors or defects. Riposte software was part of Legacy Horizon. The fact
that it is a product designed and supplied by Escher, and not Fujitsu, is not relevant to
the dispute between the Post Office and the claimants. In any event, and as accepted
and recited in paragraph 2 of the Summary of Appendix 2 dealing with this bug, “Mr
Coyne asserts that Bug 2: Callendar Square is a bug with lasting financial impact and
in JS2, Dr Worden appears to agree that there is strong evidence of this...”
3. Suspense Account bug.
This was agreed in the bug table as an “acknowledged bug” and its identified years are
2010 to 2013. It is accepted by the Post Office in paragraph 7 of Appendix 2 as one of
a number of “bugs with lasting impact (although they were resolved)”. Dr Worden’s
comments do not include that it had an agreed impact upon branch accounts. This is
because of a concept he introduced (expanded in his reports) of “transient effect”. What
this meant was that if there was an impact on branch accounts by something within
Horizon, but that was then corrected by a TC, he concluded it had a “transient effect”
upon branch accounts and dealt with it differently. I address this concept below. Other
comments of his in relation to this acknowledged bug are:
“Tt was a transient effect arising not from a fault in the software, but from a change in
database archiving policy in 2010. The delay in correcting it arose from a failure of
communication between PO and Fujitsu. Because the bug would only manifest itself
annually for any affected branch, the effects of this delay were not widespread.
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Peak PC0223870 shows that Fujitsu were able to identify the branches affected, even
when Subpostmasters did not report it. There is evidence that the branches were
compensated, as I would expect from the normal error correction processes.”
4. Dalmellington bug/Branch Outreach Issue.
This was not acknowledged as a bug in the bug table, but is effectively accepted by the
Post Office as a bug. It is accepted as a bug by the Post Office in paragraph 6 of
Appendix 2, but is said to have had “transient impact”. Indeed, for some time during
the trial the Post Office would refer to this as “an issue”. I find that it is a bug — that
much does not seem to be controversial, as paragraph 2 of the detailed part of Appendix
2 relating to this bug states the following:
“This is a bug which Mr Coyne states has lasting impact on branch accounts. Post Office
submits that there was no lasting impact on branch accounts.”
The years of its effect were 2010 to 2015. It is named in respect of the branch where it
was “discovered” in 2015, although the investigation undertaken by Fujitsu in that year
identified previous occurrences. There were over 110 occurrences of it over this 5 year
period (the actual number is probably 116, but at least 1 14) with 88 branches affected.
Some were impacted multiple times. It is what is called a “cash remming error” and
only happened in certain circumstances. It was explained further by Mr Godeseth in his
evidence at [445] onwards above. It would, in my judgment, have an impact upon
branch accounts ~ it is the extent of that impact that is in issue, whether it was lasting
or transient. Dr Worden relied upon what he described as “a well-tested process of
reconciliation and TCs to detect and correct errors in cash remming (used 20,000 times
per year)” and said it was “straightforward for Horizon to detect any discrepancy
between a “rem out” and the corresponding “rem in” (a mismatch arising either froma
miscount, or a multiple count of a pouch) and then a TC can be issued.” He also added
that “this process catches and corrects remming errors, whatever their cause - including
if they arise from, or are provoked by, software faults.” He therefore implicitly accepted
that the Dalmellington bug was a software fault, although he did not say so in terms. I
find that it was plainly was. He was also reliant upon the process of TCs to correct it.
Further, the bug was there for 5 years and was not discovered, although its effects
doubtless were. J find that this was a software bug that impacted upon branch accounts
and I will come to the nature of its effect in my findings on the bugs that are not agreed.
5. Remming In bug.
This was not acknowledged as a bug in the bug table. However, Dr Worden accepted it
was a bug or defect in his cross examination and it is accepted as a bug by the Post
Office in paragraph 6 of Appendix 2, but is again said to have had transient impact. The
years it was said to have been present in terms of effect were “March — August 2010
and recorded as fixed approx. 2011”. Mr Coyne said there were 14 branches affected.
Dr Worden’s entry in the Joint Statement relied upon TCs, and stated “As for the
Dalmellington bug, above — PO had a robust process for detecting and correcting
remming errors, whatever their origin. So, there were no lasting effects on branch
accounts.” In paragraph 2 of the detailed part of Appendix 2 relating to this bug, the
Post Office submitted that “any discrepancy would be transient as instances of this bug
are caught by automatic reporting.”
(emphasis added)
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The answer to this is therefore dependent upon my answer to the point concerning lasting
and transient impact.
6. Remming Out bug.
This was split into two in the bug table, 6(i) which was identified in KEL achaS08S and
6(ii) which was identified in KEL GMaxwell3853P. The former was identified in
February/April 2007, recorded as fixed approx. 2007, with Mr Coyne identified 57
branches affected; and the latter was in May 2005 with one branch being affected. They
were both remming out issues, hence the grouping by the experts in the bug table. It
was not acknowledged as a bug in the bug table. However, it is now accepted as a bug
by the Post Office in paragraph 6 of Appendix 2, but is said to have had transient impact.
Again, for both of these iterations, 6(i) and 6(ii), Dr Worden used the same wording as
he had in the entry for bug 5, the Remming In bug, namely “As for the Dalmellington
bug, above — PO had a robust process for detecting and correcting remming errors,
whatever their origin. So, there were no lasting effects on branch accounts” (emphasis
added). In paragraph 2 of the detailed part of Appendix 2 dealing with this bug, the Post
Office stated that this “comprises two separate issues, only one of which was a bug. Any
discrepancy caused by either issue would be transient as instances of both issues were
caught by automatic reporting.” It was also said that Mr Coyne had conflated two unrelated
issues under the heading “Remming Out”. Given this was an entry in the 2™ Joint Statement
agreed by the experts, it is a little unfair to state that Mr Coyne had done this, as the entry
was obviously agreed by Dr Worden. However, it was split into 6(i) and 6(ii) and I will
consider each separately.
7. Local Suspense Account issue, not the same as 3. Suspense Account bug.
This was reported in 2010 and recorded as fixed in September 2010. It was not
acknowledged in the bug table, but is now accepted as a bug by the Post Office in
paragraph 6 of Appendix 2, although it is one of those bugs said to have had transient
impact. Mr Parker had identified 33 branches affected. Mr Coyne recorded what he said
were four associated KELs, namely acha5259Q (for which there were 6 PEAKs)(this
KEL is mistakenly recorded twice in column 3, with acha5838T only mentioned in the
text in that column); carde2043L (10 PEAKs); PorterS199P (3 PEAKs); and acha5838T
(which states there are “two different but similar problems” and appears in the text, but
not in the list of KELs at the end of the text by Mr Coyne). Dr Worden’s comments
were that
“The KEL acha5259Q implies that PO and Fujitsu were able to identify all occurrences
of the problem, without being notified by any Subpostmaster. I would therefore expect
them to have corrected any impact on branch accounts as part of normal error correction
processes.
I would not expect evidence of all corrections to accounts to have survived to the
present day. PEAKs and KELs are not used to record corrections of financial impact.”
He also relied upon a statement by Mr Parker that there was ‘Temporary financial
impact which would have been cancelled out in the following period by a corresponding
discrepancy’.
This introduces another concept, similar if not identical to Dr Worden’s “transient
impact”, and that is “temporary financial impact”. Dr Worden is correct that PEAKs
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and KELs do not record corrections of financial impact; they do however record
financial impact, because when an SPM reaches SSC (which raises the PEAK) they
often start by recording “SPM says he/she has a problem in that...... ” and financial
impact is often then recorded. The Post Office in paragraph 2 of the detailed part of
Appendix 2 dealing with this bug states that “any discrepancy would not be lasting”.
This does therefore accept, albeit implicitly, that it would have an impact upon branch
accounts. It is also submitted that it was a “teething problem” from the early days of
the Horizon Online pilot scheme.
8. Recovery Issues.
The Post Office does not accept these are bugs at all. These are not agreed as bugs by
the experts, and there are four different types included in the table, with years of effect
from 2010 to 2018. Mr Coyne’s entry stated that “The text within the PEAKs and KELs
suggests that in each case a branch account discrepancy would be evident and would
require correction by the Post Office.” Dr Worden stated that:
“The KELs and PEAKs cited by Mr Coyne are not indicative of errors in Horizon, They
provide guidance on how to correct discrepancies caused by human errors or other
errors in transaction recovery (‘recoverable transactions’)
Because there were many such errors, there were many calls to the help desk and many
PEAKs and KELs. Normally, correction of errors involved back office reconciliation
and issuing TCs. This was accurate and effective; I have derived an upper limit of £2
per branch per month on the mean impact of erroneous TCs.
One important KEL acha959T was guidance to the back office MSU, not for
Subpostmasters”
There was a minor typographic error in the submissions in paragraph 4 of the detailed
part of Appendix 2 which referred to bug 9. However, the four different types of
recovery issues are addressed in the subsequent paragraphs and the conclusion
paragraphs deal with bug 8. This was later corrected in a sheet of corrections, which
clarified that paragraph 4 of the detailed part of Appendix 2 should have stated "Mr
Coyne states that Bug 8: Recovery Issues is a bug with lasting financial impact. Post
Office submits that it is not a bug at all". The relevant findings on these issues are dealt
with in the Technical Appendix.
9. Reversals.
This was not acknowledged as a bug in the bug table but is now accepted as a bug by
the Post Office in paragraph 6 of Appendix 2, but is said to have had transient impact.
Indeed, Dr Worden’s entry in the 2™ Joint Statement in relation to this stated
“Transaction reversals are a complex area which, like recoverable transactions, are less
familiar to Subpostmasters and are more prone to human error. They lead to many calls
to the help line and to many KELs and PEAKs - not necessarily related to any fault in
Horizon.” This can be seen as yet another example of attributing fault to the SPMs
where possible, but given it is now accepted as a bug it is not necessary to consider that
any further. Mr Coyne’s entry in the 2" Joint Statement stated “In April 2003 due toa
failure in regression testing, Horizon version S30 was released by Fujitsu and this
introduced a bug where the value of transactions reversed by Subpostmasters was
shown twice in the amount of the reversal in branch accounts.”
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10. Data Tree Build Failure discrepancies,
This is accepted by the Post Office in paragraph 7 of. Appendix 2 as one of a number of
“bugs with lasting impact (although they were resolved)”. The PEAK dealing with this
reads “Data trees have been failing to build fully, and the system has not been detecting
this.” Data trees were part of Legacy Horizon, and is used to build a summary (or
picture, the word used by the Post Office in its Appendix 2) of the accounts. The
building of data trees is a software function, and given “the system” is Horizon and is
supposed to detect failures of this nature, it is difficult to see how it could ever have
been in issue that this was a bug. Mr Coyne’s entry in the bug table recites that
“Dugannon branch suffered a £43,000 discrepancy but the cause was not immediately
known. £52,814.29 at the Yate Sodbury Branch. £9,368.40 at the Appleby
Westmoreland branch.” These are sizeable sums and arose in the branch accounts. That
this is a bug was de facto accepted by Dr Worden in the bug table due to the text of his
entry which states:
“There was a bug which has potential impact on branch accounts, early in the lifetime
of Horizon. Soon after it arose, the error was trapped and detected by DEP and was then
soon fixed.
The fault was easily noticeable at branches before the error trapping which was soon
introduced and would be even more noticeable after that. Only three branches appear
to have been affected, as described by Mr Coyne.
Because it was so noticeable at the branch, and the Peak is concerned with a software
error rather than any other cause, I would expect any discrepancies in branch accounts
to have been corrected.”
(emphasis added)
This is therefore undoubtedly a bug, but findings in respect of this therefore depend
upon the nature of its impact on branch accounts, which are made in the Technical
Appendix.
11. Girobank discrepancies.
Mr Coyne considered this was a bug. Dr Worden did not and stated that “the first fault
concerns reports. A fault in a report is not a discrepancy in branch accounts, and only
causes one if it causes a person to make a mistake.” This is now essentially accepted as
a bug by the Post Office, but it is submitted it had no branch impact. It is included in
paragraph 5 of Appendix 2 under the heading “the following bugs had no branch
impact.” The detailed part of Appendix 2 dealing with this submits that there is no
evidence of any financial impact upon branch accounts, let alone a lasting impact. This
was in the early days of Legacy Horizon. There are said to be six distinct issues arising
under this heading, and further detail on this is included within the Technical Appendix.
I do not know if what are called “giros” are still in use in 2019.
12. Counter-replacement issues.
There were two KELs associated with this dealt within the bug table. It is now accepted
as a bug by the Post Office in paragraph 6 of Appendix 2, but is said to have had
transient impact. Mr Coyne considered that when replacing a counter within a branch,
the process could result in “the total loss of a transaction”. Dr Worden stated that the
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cause, recorded in the first KEL (which was created in December 2000 and last updated
in July 2007) was that Riposte was coming online from the Recovery mode too early,
and causing messages to be overwritten. The nature of the correction was stated as being
“to find the overwritten transactions for reconciliation we need to look at the
Ripostemirror messagestore’ followed by detailed instructions”. Riposte, as has been
explained, was part of Legacy Horizon and was a product provided by another
company, Escher, but it is plainly part of Horizon. Dr Worden also stated that “the
incident arose from a hardware replacement (probably from a hardware fault) not from
a fault in Horizon. It is a different kind of recovery issue.” In my jud gment the hardware
is part of Horizon. Findings in respect of this are made in the Technical Appendix.
13. Withdrawn stock discrepancies.
The Post Office does not accept these as a bug. Mr Coyne maintains that it is, and in
the bug table he extracted part of a PEAK that stated these “Can cause confusion and
unexpected (though hopefully temporary) discrepancies at branches by allowing them
to declare stock which has already been withdrawn.” Dr Worden stated that “some
impact on branch accounts cannot be ruled out, although it is small”. The Post Office
detailed submissions in Appendix 2 of its Closing Submissions concentrated on the fact
that withdrawn stock — which of course is part of the way that the Post Office manages
its business, adding and removing types of products from time to time — this removal
of products is done by means of an update to reference data, “and not a change to the
core code in the system.” This again is concentrating on the code, rather than the way
the system operates. Findings on this are made in the Technical Appendix.
14. Bureau discrepancies.
These relate to foreign exchange, hence the name. It must be differentiated from bug
23 (also foreign currency, but entitled Bureau de Change). This one arose in 2017. Mr
Coyne considered it to be a bug, and Dr Worden effectively agreed in that his entry
stated “This appears to be a system error with impact on branch accounts. Although it
is possible that a subsequent discrepancy between branch accounting and POLSAP
would reveal the problem, leading to a correction (e.g. see Peak PC0265443, and Mr
Coyne's para 3.146), I cannot be certain of this.” It is now accepted by the Post Office
in paragraph 7 of Appendix 2 as one of a number of “bugs with lasting impact (although
they were resolved)”. The detailed part of Appendix 2 states that Mr Coyne has drawn
together two distinct issues, Paragraph 4 of the detailed part also states the following:
“Bug 14: Bureau Discrepancies is a bug with the potential for lasting financial impact.
There are two distinct issues which fall under this heading. With regards to the first issue
the branch was made good and a fix was implemented. The second issue was not a bug in
Horizon nor an issue which could have impacted branch accounts; it created what was
essentially a cash flow problem for the branch.”
Findings on this are made in the Technical Appendix, but so far as the first issue, given a
software fix was required, it is undoubtedly a bug, and it is correct to record (as the Post
Office do) that there was the potential for lasting financial impact, as without that, there
would be no need for the “branch to be made good” because that means the Post Office
corrected the branch account discrepancy caused by the bug.
15. Phantom Transactions.
There are three different issues grouped under this heading. The Post Office does not
accept these as a bug. Mr Coyne in his cross-examination stated that this was referable
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to Horizon Issue 4. He also accepted that some of the issues were not bugs in Horizon.
Dr Worden relied upon the fact that what he called “the master PEAK” was closed as
“no fault in product”; however, the evidence of fact on this is dealt with above at [209]
to [213] when the PEAK was put to Mrs Van Den Bogerd. Dr Worden stated that “There
is no evidence for bugs in Horizon with impact on branch accounts.” That entry was
obviously before the cross-examination, which in my judgment provided greater factual
information. I do not consider reliance can be placed upon the Fujitsu conclusion in the
PEAK. Findings on this are dealt with in the Technical Appendix.
16. Reconciliation issues.
The Post Office does not accept these as a bug. There are a number of different issues
grouped together in this heading. The issue was that the SPM was shown a discrepancy
on his or her screen. Mr Coyne accepted that the discrepancy would not be shown in
the branch accounts; Dr Worden stated that “‘as it concerns an issue in reporting, the
software fault (which was fixed after 5 months) had no direct impact on branch
accounts. The only effect of an error in this report would be to mislead or confuse the
Subpostmaster - probably leading him to check his figures more carefully and costing
him some time.” That accepts a software fault; the fault was in fact a miscounting of
the number of files by the system. However, there are six different issues grouped under
this heading and the process of reconciliation, which is effectively the comparison by
Horizon of two different sets of data, is part of its design function. Mr Coyne in his
cross-examination also stated that this was referable to Horizon Issue 4, rather than
Horizon Issue 1. The recovery messages were held in the branch messagestore.
Findings on this are dealt with in the Technical Appendix.
17. Branch Customer discrepancies.
This was an entry in respect of Horizon Issue 4 and recorded as such in the bug table.
The Post Office does not accept these as a bug. Mr Coyne accepted in his cross-
examination that the entry in the PEAK did not suggest any impact upon branch
accounts. The entry in the bug table originated in a single PEAK, although there were
two PEAKs that relate to the same issue, which was a discrepancy between the financial
records held by the Post Office (from Horizon) and a bank’s records, after a counter
crashed whilst a transaction was being processed. Findings on this are dealt with in the
Technical Appendix.
18. Concurrent logins.
It is accepted by the Post Office in paragraph 7 of Appendix 2 as one of a number of
“bugs with lasting impact (although they were resolved)”. In paragraph 2 of the detailed
part of Appendix 2 dealing with this bug, the following is stated by the Post Office:
“Post Office accepts that Bug 18: Concurrent Logins had a potentially lasting financial
impact. There is no evidence of any discrepancy in the PEAKs referred to by the
experts.” The problem was in the early days of Legacy Horizon when it was possible
for users to log in to two terminals at once. Dr Worden in the bug table made the
following useful summary statement:
“discrepancies could occur - manifesting themselves as a receipts/payments mismatch.
This had the potential to affect branch accounts. The mismatch would bring it to the
attention of the Subpostmaster, who would require it to be investigated, except possibly
in the case of small mismatches, which he might pass off as an error in the branch (eg.
of counting stock).
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“....Fujitsu believed it was a problem with the underlying Riposte software, and passed
it to Escher. In September 2000, the problem was ‘Now formally fixed in Build 223
update 19 which was released overnight.’ However, the new release from Escher did
not, as it was expected to, fix the problem. Escher denied that is was a bug in Riposte,
but Fujitsu believed in July 2001 that 'This is clearly a bug in the Supplier's code'.”
Dr Worden considered that “these faults had to the potential to produce discrepancies
in branch accounts, of small amounts, for a short period of time”. How the bug is
therefore characterised depends upon my findings in relation to lasting and transient
impact, which is dealt with below. There is no doubt, in my judgment, that this was a
bug, and Fujitsu clearly recognised and recorded that in 2001. The fact that the bug was
in the code supplied by Escher, as part of Riposte, and not that of Fujitsu is wholly
irrelevant for the purposes of the Horizon Issues.
19. Post & Go/TA discrepancies in POLSAP.
It is accepted as a bug by the Post Office in paragraph 6 of Appendix 2, but is said to
have had transient impact. The entry relates to Horizon Issue 4 rather than 1. “Post &
Go” are self-service terminals, that are no longer available in branch Post Offices, and
are only available in Crown and WH Smith main branches. They are basically self-
service kiosks, designed to avoid queuing, and a customer can weigh a letter or parcel,
the terminal will print the relevant stamps/labels, and the item is then posted. The Post
Office submitted that this issue was irrelevant to the Horizon Issues trial as this issue
does not relate to branches that are the focus of this trial”. Findings on this are dealt
with in the Technical Appendix.
20. Recovery Failures.
The entry in the bug table identifies this as relating to Horizon Issue 4. Post Office does
not accept these as a bug and states that there is no evidence of a bug in Horizon. There
are three different PEAKs. Mr Coyne accepted in his cross-examination that this (or
these) should be removed from the table that he used as the originator for his list of
bugs (which was Mr Coyne’s Table 1). Dr Worden stated in the bug table that “there
was some implication of hardware faults, with a replacement of a base unit, but the
PEAK has no evidence of software faults in Horizon.” In one of the PEAKs, he
concluded that there was no evidence of any fault in Horizon. Findings on this are dealt
with in the Technical Appendix.
21, Transaction Correction Issues.
This is de facto accepted as a bug by the Post Office, but it is submitted it had no branch
impact. Mr Coyne’s entry was that “Transaction Correction bugs/errors and defects do
not cause discrepancies with branch accounts but” and he then listed various
consequences. In his report he referred to “technical flaws”. Dr Worden, in respect of
some PEAKs, accepted they were a bug, such as PEAK PC0129587 where he stated
“In my opinion this bug would result in an inconvenience to the Subpostmaster
(inability to rollover to the next TP) but would not result in inaccurate processing of
any TC, or any impact on branch accounts”. The bug is included in the list of paragraph
5 of Appendix 2 under the heading “the following bugs had no branch impact.”
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These are submitted by the Post Office as there being “no evidence of any financial
impact upon branch accounts”. Findings on this are dealt with in the Technical
Appendix.
22. Bugs/errors/defects introduced by previously applied PEAK. fixes.
This is de facto accepted as a bug by the Post Office, but it is submitted it had no branch
impact. It is included in paragraph 5 of Appendix 2 under the heading “the following
bugs had no branch impact”. It is also submitted by the Post Office that “a number of
PEAKs arose in testing. The PEAKs that arose in the live environment do not indicate
evidence of branch impact.” It is listed in the bug table as concerning Horizon Issue 4.
Mr Coyne stated in the Joint Statement that “Branch accounts would be affected by this
bug which would cause a discrepancy when handling cheques where the value of the
cheque would be doubled” although he accepted that the SPM in question was
processing a cheque in a different manner to that recommended. Dr Worden used the
term “a fault” in his entries, maintained that there was no impact on branch accounts if
the SPM followed correct procedures, and also in respect of another branch relied upon
the fact that the effect was an error of 2p only. Findings on this are dealt with in the
Technical Appendix.
23. Bureau de change.
These arose in 2005, 2006 and 2010, and should be differentiated from bug 14, which
arose in 2017, was during Horizon Online and is referred to as Bureau Discrepancies.
The Post Office does not accept this as a bug. The Post Office also states that Mr Coyne
has identified three issues with the same heading, and submits that they all relate to user
error. Dr Worden’s entry in the bug table in relation to one of them states “Analysing
the second KEL (2010) I noted: ‘Impact small until bug fixed - rounding errors 10° in
exchange rates.’ The Post Office submitting that this is not a bug is a somewhat bold
submission, given the KEL to which Dr Worden refers expressly states that the problem
is a different exchange rate appearing on the HNG-X rateboard and the Horizon
rateboard, It states “Problem — there is a bug in the code” (emphasis added). Findings
on this are dealt with in the Technical Appendix.
24. Wrong branch customer change displayed.
Mr Coyne concluded this was a bug and part of his entry in the 2™ Joint Statement was
“the KEL explains that “the cash amount entered is multiplied by the Qty and hence the
new stack total is wrong”, this Horizon bug was due to incorrect reference data and led
to an incorrect amount of change being displayed on the branch screen leading to the
operator to provide the branch customer with the wrong amount of money thereby
leaving a discrepancy in Branch Accounts. It is possible that the amount of change
shown on screen is more than the actual money tendered by the customer.” Dr Worden’s
entry was “When analysing this KEL I noted ‘Sounds like a genuine problem which
may have led to giving the customer the wrong amount - i.e. not recoverable.’ It is now
accepted by the Post Office in paragraph 7 of Appendix 2 as one of-a number of “bugs
with lasting impact (although they were resolved)”. It is also said that it is a reference
data bug, and that therefore once discovered could be quickly fixed by changing the
relevant reference data. Findings on this are dealt with in the Technical Appendix.
25. Lyca top up.
It is accepted as a bug by the Post Office in paragraph 6 of Appendix 2, but is said to
have had transient impact. It is also a reference data bug, and paragraph 2 of the detailed
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part of the submissions on this in Appendix 2 states “Lyca Top Up is a bug with the
potential for lasting financial impact. This is also [a] reference data bug. As set out above,
the experts have agreed that that while reference data bugs may be a significant proportion
of the bugs with financial impact, once discovered, they could be quickly fixed (by a change
to the reference data) once the bug is correctly identified.” It is also submitted that it was
identified through Fujitsu’s automatic reporting. Findings on this are dealt with in the
Technical Appendix.
26. TPSC250 Report.
It is accepted by the Post Office in paragraph 7 of Appendix 2 as one of a number of
“bugs with lasting impact (although they were resolved)”. The origin of the experts
discovering this bug is a KEL raised by Anne Chambers in February 2005, and last
updated in April 2008. Findings on this are dealt with in the Technical Appendix. I do
however find it notable that although Dr Worden says the amounts involved are what
he calls “small”, he accepts it is as a “back end reporting problem” — which is nothing
to do with the SPM, by definition — and also the KEL states that “the accounting tree
has not handled this properly when calculating the daily recon figures and it has resulted
in a mismatch...” The mismatch in that case was 66p. The accounting tree is part of
Horizon. The KEL also appears to be incomplete because only the first page is present.
The section that follows the heading “Evidence” is entirely missing. There is also
nothing in terms of the text available that demonstrates what occurred in 2008, even
though it is plain for the page that is available that the KEL was updated then. The Post
Office submits that there are five separate issues drawn together within this bug.
Findings on this are dealt with in the Technical Appendix.
27. TPS.
It is accepted by the Post Office in paragraph 7 of Appendix 2 as one of a number of
“bugs with lasting impact (although they were resolved)”. One of the F ‘ujitsu documents
referenced in the 2" Joint Statement states that the Transaction Repair Tool or TRT is
being used “to repair 1 harvester exceptions for” a particular branch and “There is no
correction to be performed and hence no call for confirmtiprepair - this is just an oddity
performed by that very flaky mails code.” (emphasis added) There were 40 associated
PEAKs, and Mr Coyne observed that both the credit and debit sides of a transaction
were doubled, so the net impact of the bug was zero, although he drew attention to the
entry in two PEAKs that suggested that SSC requested confirmation of any gain or loss
at the counter. Dr Worden believed it was a back-end reporting problem, although the
chances of impact upon branch accounts were small. Findings on this are dealt with in
the Technical Appendix.
28. Drop and Go.
It is accepted by the Post Office in paragraph 7 of Appendix 2 as one of a number of
“bugs with lasting impact (although they were resolved)”. This occurred in July 2017
and related to a duplicate “Drop and Go” transaction for £100. This was performed
twice; the branch was debited with £200, but the customer credited with only £100
(which had been the amount “topped up” by the customer). Mr Coyne considered it a
bug with impact upon branch accounts; Dr Worden stated in his entry “My analysis of
this KEL was ‘Possible financial impact. Seems very visible on the counter. Script =
reference data - therefore fixed easily’. Paragraph 2 of the detailed part of Appendix 2
on this bug states “Peak PC0260269 relates to an issue involving a Drop and Go
transaction (a £100 mobile phone top up) that timed out on Horizon” (emphasis added).
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680.
681.
682.
This does not appear to be correct, and I do not believe that the transaction relates to a
mobile phone. However, I deal with this further in the findings in the Technical
Appendix.
29. Network Banking Bug.
This related to a KEL which was raised in 2004 and updated in 2005, with 12 associated
PEAKs in the range 2004 to 2010. The Post Office does not accept this as a bug. Mr
Coyne stated that “Horizon appears to mis-handle communications, leading to errors
within network banking and in turn causing the potential for branch account
discrepancies.” One of these was pension transactions being declined yet the customer's
bank account being debited; when the customer complained, the SPM refunded the £50
in question. Dr Worden considered it was “mainly about a communication problem
from BT, outside Horizon” but also wanted to investigate further due to an entry that
referred to a “CNIM own goal”. The Post Office maintained there were two separate
issues and the £50 was paid out due to “user error”. Findings on this are dealt with in
the Technical Appendix.
The names given to the different bugs above came, sometimes, from the names applied
to the bugs by the Fujitsu personnel who knew about these bugs and worked upon them.
over the years. These names would sometimes appear in the PEAKs themselves that
identified the bugs or which represented the views reached by different personnel
within Fujitsu who investigated the background, sometimes identifying that previous
incidents had similar, or sometimes even identical, characteristics to earlier occurrences
of the bug, and who worked to provide fixes or solutions to some of them, or came to
conclusions that there was nothing wrong with Horizon and attributed blame, fault or
responsibility to the SPM. Some of the names are self-explanatory. Some, such as
Callendar Square or Dalmellington, are the names of places where that bug was first
identified by Fujitsu.
Certain terms were used, dependent upon whether a particular bug was agreed as being
a bug (such as the Callendar Square bug), or something else, such as “issues” or
“discrepancies.” However, as at the end of the trial, it can be seen from the above entries
that the experts’ agreements, the clarification provided by each during cross-
examination, and the other developments in the trial such as (one assumes) some
reflection by the Post Office on the actual text of PEAKs and KELs, lead to the
following situation. Of the 29 different entries in the bug table, eight were alleged by
the Post Office not to be bugs at all. They are those numbered 8, 13, 15, 16, 17, 20, 23
and 29. This is set out in paragraph 4 on the first page of Appendix 2 to the Post Office’s
Closing Submissions. This careful terminology therefore became a little clearer, The
remaining number can properly therefore be described as bugs, even on the Post
Office’s own case, although their effect was challenged.
This means that the remainder of what is, in my judgment, a lengthy list, were accepted
to be bugs. In my judgment, that number of accepted bugs, even on the Post Office’s
own case about their effect, and the non-acceptance of the eight others, is a sizeable
number. It is approximately a ten-fold increase in the number admitted by the Post
Office prior to the Horizon Issues. It is correct that the Post Office did not accept lasting
impact on a number —a point I deal with below under “Lasting and transient impact” —
and maintained that only 9 “had the potential to cause lasting impact, but were resolved
by the Post Office and Fujitsu” but, in my judgment, that is rather to miss the point. The
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683.
684,
685.
686.
wording of Horizon Issue 1, agreed by the parties, and (one assumes) a major issue that
both parties wished to have resolved in order sensibly to progress this group litigation
(and omitting the references to the pleadings) is:
“To what extent was it possible or likely for bugs, errors or defects of the nature
alleged... to have the potential to (a) cause apparent or alleged discrepancies or
shortfalls relating to Subpostmasters’ branch accounts or transactions, or (b) undermine
the reliability of Horizon accurately to process and to record transactions.”
The use of the words “possible” and “potential” in this issue makes it clear, in my
judgment, that the number of “bugs, errors or defects” that fall to be considered is, even
on the Post Office’s own submissions, 21 different bugs. I find that to be a significant
total.
Part only of Appendix 2 to the Post Office’s Closing Submissions dealing with bug 16,
Reconciliation Issues, was, by administrative error, not submitted by the date for
closing submissions, or until some time after oral submissions were delivered. The Post
Office’s solicitors realised this in September 2019. There were three missing pages. I
am satisfied that these were drafted prior to the date for service, and I allowed these to
be submitted late, together with a clarification document, and short responsive written
submissions by the claimants (as the claimants had been deprived of the opportunity to
address these three missing pages orally in July). I consider that I am permitted to do
this under the court’s general case management powers, and that to do this was to adopt
a reasonable and proportionate course. The Post Office’s Closing Submissions was a
very substantial document, and it was in my judgment sensible to admit the 3 pages
only that had been omitted from one of the appendices.
Other elements of the 2™ Joint Statement were also agreed. These included that Horizon
had produced over 3 million sets of monthly branch accounts (a point relevant to Dr
Worden’s Section 8 statistical exercise), and also that the experts had different views
on “branch impact”, The relevant passages in the Joint Statement were that:
“Mr Coyne refers to any discrepancy that caused a loss (or gain) within branch accounts
that needed corrective action as an “impact to branch accounts”. Dr Worden only
considers an effect or impact on branch accounts where a discrepancy loss (or gain)
was not rectified by a correction such as a Transaction Correction.”
This in particular demonstrates an important difference in the approach of the experts,
Given, as I have explained above, that the Horizon Issues do not refer to Transaction
Corrections, which even the Post Office’s own witnesses explained had not been
addressed because the Post Office’s solicitors said these were outside the scope of the
Horizon Issues trial, 1 consider Mr Coyne’s approach to “impact on branch accounts”
to be the correct one. Dr Worden’s approach minimises or avoids impact on branch
accounts that have been caused by bugs, errors or defects, even where those that are (or
have been) present in the Horizon system have in fact affected the branch accounts of
SPMs. It is a feature that I take into account when I consider which of the two experts’
approaches and evidence I prefer. J also explain this further in “Lasting and Transient
Impact” below.
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687.
The 3 Joint Statement continued the process of setting out the experts’ agreed position
by working through the remaining Horizon Issues. This statement dealt with Horizon
Issues 3 to 8 and was dated 1 March 2019. The experts agreed the following points in
respect of each. The numbering is mine. One entry below relates to one passage of Dr
Worden’s separate and not agreed view under Horizon Issue 3. It was not the only such
entry — in different places the experts would record their own separate views.
The 3"! Joint Statement
Horizon Issue 3
“1, Irrespective of how you define the detail of robustness, in line with most other
large-scale computer systems, Horizon's robustness has generally improved. From our
experience of other computer systems, Horizon is relatively robust. We agree that
‘robust’ does not mean infallible and therefore Horizon has and will continue to suffer
faults. Robustness limits the impact of those faults and other adverse events, This
increase in robustness has, in part, developed from Post Office discovering bugs/errors
and defects in live use and then applying fixes and improving monitoring.
2. Computer systems are considered more robust if access to the back-end
databases is restricted tightly.
3. It was possible for some of the Horizon support staff working at Fujitsu to
modify the Horizon back-end branch database. In 2012, Post Office's auditors observed
that there were inappropriate system privileges assigned to the APPSUP role (which
allowed amendments to the BRDB).
4. Post Office does not consult the full audit data (unfiltered ARQ Data) before
deciding how to handle discrepancies and issuing Transaction Corrections.
5. PEAKs show that some defects have lain undetected in Horizon for extended
periods without being diagnosed and fixed.
6. During the life of Horizon there have been 19,842 changes made to it via the
Fujitsu/Post Office release mechanism.
7. It is common modern IT development practice to make frequent incremental
builds and releases of software.
8. Specific release note detail has not been provided. Of the 19,842 changes, we
would expect that many were minor changes. It is likely that others contained changes
to improve the system or to fix bugs and defects.
9. The effectiveness of various countermeasures changed throughout the life of
Horizon.
10. Countermeasures are basic elements of practical IT system design
11. Countermeasures work by limiting the impact of Horizon bugs/error and defects
on branch accounts. Countermeasures do not always eliminate the effects of adverse
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events (they are not perfect) but they are often effective in the area where they are
deployed; that is why they have become basic elements of practical IT systems design.
12. It is difficult to measure the extent of the robustness of Horizon, apart from how
it might limit the extent of impact on branch accounts, as in Issue 1.
13. There are indications that in its first year of operation, and in the first year after
the introduction of Horizon Online, the system suffered from more problems than in
other years. One might expect a higher level of problems in these early periods. The
extent to which these problems were serious, or evaded countermeasures, or caused
discrepancies in branch accounts, is not agreed.”
14. Dr Worden stated the following, which was not agreed, following the entry
immediately above. “The main way in which the experts have assessed the extent of
robustness of Horizon is to ask to what extent failures of its robustness impacted branch
accounts. I have addressed this in Horizon Issue 1. In answering this question,
fluctuations over the years are of less importance than the sum over all years, if the sum
over all years is small. I have found the sum of impacts on branch accounts over all
years to be very small”. (emphasis added). This approach is considered further by me
when I address Dr Worden’s Section 8 statistical analysis.
15. The agreed passages continued. “The users of any IT system play a role in
assuring its robustness. The designers of a system should not make unrealistic
assumptions about the users of the system. Unrealistic assumptions would lead to
inappropriate design, making the system less usable.
16. As Horizon has changed throughout its lifetime, the existence and effectiveness
of any countermeasures has too. To have considered the time dependence of all
robustness countermeasures over 20 years, would have made the expert reports
impossibly lengthy. There was not the time to do so.
17. Many software bugs can have the same effects as a user error (as illustrated, for
instance. by the Dalmellington bug, which produced a remming error)”.
(emphasis added)
Horizon Issue 4
“1. Bugs, errors and defects identified in relation to Horizon Issue I are often
relevant to Issue 4 in that they are ultimately errors arising from the processing of data
in Horizon.
2. There is evidence within the PEAKs and KELs of bugs/errors/defects within
Horizon arising from parts (2), (b) and (c) of this issue that occurred. without causing
financial discrepancies as well as some that occurred causing financial discrepancies.
3. Reference data is critical to the operation of Horizon and errors in reference data
have led to discrepancies in branch accounts.
(emphasis added)
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4. Of the bugs which in the experts’ opinion had the potential to produce
discrepancies in branch accounts there may be some involvement of reference data in
Bureau Discrepancies, Bureau de Change, Wrong branch customer change displayed,
Lyca top-up, and Drop and Go. (Rows 14, 23, 24, 25, and 28 of the bugs table in the
second expert joint statement). It is notable that these bugs all concerned specific
products (arising from the reference data defining those products).
So, while reference data bugs may be a significant proportion of the bugs with financial
impact, once discovered, they could be quickly fixed (by a change to the reference data)
once the bug is correctly identified.
5. Reconciliation between transactions recorded on Horizon and transactions
recorded by Post Office's clients is largely automated. Detected discrepancies were
subject to manual corrective fixes and/or the issue of Transaction Corrections/Enor
Notices to the Subpostmasters.
6. The adequacy of Post Office back office processes to prevent discrepancies in
branch accounts can be measured by the quality of the TC process. This quality
includes:
+ The processes of consideration of available data
+ The level of errors observed in the process
+ The level of complaints or disputes raised following a TC
+ The level of upheld complaints following a TC
+ The level of financial impact of erroneous TCs
7. Errors in third-party data have led to discrepancies in branch accounts. through
erroneous TCs being issued on Subpostmasters.
8. PO does not control the level_of errors made by its third-party client
organisations (which may lead to errors in TCs). or the delays in their processes (which
may lead to delays in TCs).
(emphasis added)
9. PO can and should ensure, by careful investigation of disputed TCs, that only a
small proportion of errors by PO clients lead to losses for Subpostmasters, provided
that the Subpostmasters are in good control of their branches and have the required
information available.”
Horizon Issue 6
“I. It is agreed that there are many measures and controls within Horizon that
existed to prevent, detect, identify report or reduce the risk of varying errors.”
Horizon Issue 7
“1. Fujitsu could access all transaction data recorded by Horizon.
2. Both Post Office and Fujitsu can read data remotely, and FJ needs remote access
for support purposes.”
Horizon Issue 8
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688.
“1. Post Office had access to data which would not have been available to
Subpostmasters.
2. The descriptions of facilities for PO in the two expert reports are consistent and
can be taken together as a description of those facilities.
3. Post Office were reliant upon Fujitsu for diagnosis of whether the occurrence of
shortfalls was caused by bugs/errors or defects within the Horizon system.”
(emphasis added)
It can therefore be seen from the passages of agreement reached by the two IT experts
in the 3" Joint Statement, that a great amount of relevant material directly relevant to
the Horizon Issues was not in issue. It was agreed that errors in reference data have led
to discrepancies in branch accounts, and also that errors in third-party data have led to
discrepancies in branch accounts too. Further, the Post Office has no control over the
level of errors made by the third-party clients of the Post Office, and this is agreed. The
point also ought to be made that SPMs have no contro! over that either. Both errors in
reference data, and also errors in third party data, being agreed to have led to
discrepancies in branch accounts, are points consistent with the claimants’ case in
respect of the Horizon system generally.
The 4" Joint Statement
689.
This dealt with Horizon Issues 10 to 12, and was the last joint statement agreed by the
experts. It was dated 4 March 2019 and was agreed just before the trial commenced.
Again, the numbering is mine, and I also reproduce one passage from each expert that
was not agreed. One entry below in relation to Horizon Issue 11 was agreed with the
word “whenever”. Both experts agreed that this should be worded “usually when” and
this latter agreement on that wording was reached during the expert evidence phase of
the trial.
Horizon Issue 10
1. Dr Worden stated the following, which was not agreed, in relation to privileged
user access, and as one of a number of passages at the beginning of the Joint Statement
that were not agreed concerning remote and privileged access. “The Privileged User
Access logs are not a useful source of evidence about remote access, including
Balancing Transactions.”
The following were agreed:
“2. Within Horizon Online, a Balancing Transaction can be created using the
BRDB Transaction Correction Tool (called BRDBX015).
3. In the one acknowledged Balancing Transaction which has been disclosed, there
were SQL INSERTS into only two tables of the BRDB. These tables were
ops$brdb.brdbb_rx_eposs_transactions
and
ops$brdb.brdb_rx_rep_session_data”
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4. Mr Coyne stated the following, as one of a number of passages that were not
agreed. “Outside of the Transaction Correction Tool other methods were available in
Horizon Online.
The APPSUP role used by Fujitsu has elevated privilege and could be used “for un-
envisaged ad-hoc live amendment not covered by BRDBXO15” as outlined in the
referenced document.
Fujitsu also has the ability to perform balancing transactions via direct SQL operations
(using a command line interface) to perform corrective transactions in Horizon Online
(including deletions of operational data).
Such modifications may or may not be visible to the Subpostmaster and they could be
done without their consent.”
The following were agreed:
5. ““Fixes’ implemented by Fujitsu had the potential to affect transaction data for
branch accounts, for transactions which occurred after the fix was deployed.
6. We have not been provided with logs or audits from the Transaction Repair Tool
(TRT).
7. Certain facilities and procedures used by Fujitsu to repair the more common
issues which arose in Horizon were standardised, and evidence of them persists.
However, to repair less common issues which arose from time to time, standard tools
and procedures might not have been sufficient, and evidence might not persist of what
was done at the time. Even when evidence does persist, it may be extremely difficult
for the experts to interpret it today, because of the scale and complexity of Horizon.
Therefore, it is usually difficult for the experts to make categorical negative statements
of the form: ‘X or Y never happened’”.
Horizon Issue 11
All of the following are agreed entries:
“1. Evidence from several PEAKs indicates that usually when [corrected from
whenever] Fujitsu needed to make any change to data which impacted branch accounts,
they were concerned to seek permission from PO to do so, and to ensure that PO took
responsibility for the resulting change.
2. For any large commercial IT system, it is necessary for some technical users to
have privileged access to databases, with wide-ranging capabilities, for system
maintenance and problem-solving purposes rather than application-related purposes.
It is important to keep the number of these users down to a minimum possible and for
each action that they take whilst logged in to be recorded and audited.”
(emphasis added)
3. The logging of Privileged User Access (in PAU logs) commenced October
2009.
Between 2009 and 2015 these logs only displayed the fact that a Privileged User had
logged on or off but not what actions they had taken whilst the Privileged User was
logged in.
The use of the Transaction Correction Tool cannot be seen in these logs.
-§39-
4, At all times, any privileged user access log only shows what tables of BRDB
were accessed for a very small minority of accesses.
There are no privileged user access logs which show access to the two tables of BRDB
used to insert the one acknowledged balancing transaction.
5. The authorisation for the use of the Transaction Correction Tool for the
acknowledged Balancing Transaction can be seen in one OCP within the OCP
disclosure of 25th January 2019.
The record of the uses of the Transaction Correction Tool, including the one
acknowledged Balancing Transaction, can be seen in the .aud files, disclosed 22nd
February 2019.”
Horizon Issue 12
690.
The following are all agreed entries:
“y. Post Office report that there have been 2,297 uses of the Transaction Correction
Tool. For each of these, the usage was logged and the SQL used to alter BRDB has
been disclosed.
Only one of these uses (POL-0512131) changed transaction data in two transaction
tables, in March 2010.
This Balancing Transaction consists of about 500 lines of SQL, in a pre-defined
template.
None of the other disclosed uses of the Transaction Correction tool contain the relevant
SQL INSERT commands such as: ‘INSERT INTO ops$brdb.brdb 1X_rep_session_data
2. Usage of the Transaction Correction Tool is recorded in the
BRDB_TXN_CORR_TOOL_JOURNAL table within the BRDB.
The tools Low Level Design sets out that it has the capability to insert entries into the
following tables:
BRDB_RX_BUREAU_TRANSACTIONS
BRDB_RX_EPOSS_TRANSACTIONS
BRDB_RX_APS_TRANSACTIONS
BRDB_RX_EPOSS_EVENTS
BRDB_RX_NWB_TRANSACTIONS.
BRDB_RX_REP_SESSION_DATA
BRDB_RX_DCS_TRANSACTIONS
BRDB_RX_REP_EVENT_DATA
BRDB_RX_CUT_OFF_SUMMARIES"
Of the agreed entries in relation to Horizon Issue 11, I find the following of very great
relevance. The experts are agreed that for any large commercial IT system, which
Horizon obviously is, it is necessary for some technical users to have privileged access
to databases with wide-ranging capabilities. This however, is not for application related
purposes, but is for system maintenance and problem-solving purposes. It is also agreed
by both IT experts that it is important that the number of users with these abilities is
kept down to the minimum possible, AND for each action that they take whilst logged
in to be recorded and audited (my use of block capitals).
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691.
692.
693.
694.
695.
I consider that to be entirely conventional, obviously agreed by both the experts, and
also to be technically justified, particularly in a system such as Horizon which deals
with accounting. It is also not requiring an unrealistic level of perfection; it is simply a
matter of having properly controlled access to a system such as this one.
However, when one then considers the subsequent passages of the 4" experts statement,
it can be seen how far from this joint agreed (and technically justified) position the
Horizon system was. The logging of Privileged User Access (in PUA logs) commenced
in October 2009. For the period 2009 to 2015 ~ obviously a 6 year period - these logs
only displayed the fact that a Privileged User had logged on or off, “but not what
actions they had taken whilst the Privileged User was logged in”, Therefore the actions
they were taking when logged in were being neither recorded nor audited. All that could
be seen is they were logged in. Further, it has already been seen that the number of users
with the relevant privileges was not, in my judgment, restricted to a minimum. Further,
the use of the Transaction Correction Tool cannot be seen in these logs. Yet further, the
experts are agreed that at all times, any privileged user access log only shows what
tables of BRDB were accessed for a very small minority of accesses.
Yet further, it is agreed by the experts that there are no privileged user access logs which
show access to the two tables of BRDB used to insert the one acknowledged balancing
transaction. Indeed, one of Dr Worden’s entries in the experts’ joint statements was
“The Privileged User Access logs are not a useful source of evidence about remote
access, including Balancing Transactions.”
What this amounts to, in my judgment, is a serious deficiency both in the required level
of controls in Horizon, in the recording of what privileged users were actually doing
(other than that they were simply logged on) and also a corresponding absence of
recording and auditing of those activities.
In my judgment, and based upon the experts’ agreement in this respect, this serious
deficiency lasted up to 2015. It also means, because of the extent (or rather the power)
of the APPSUP privilege, the Transaction Correction Tool is but a small subset of the
way that records in the BRDB can be affected or changed by Fujitsu. It also means that
the tool’s Low Level Design document that was available in the trial bundle, and
considered by the experts, has been overtaken by use of the Transaction Correction
Tool, because the SQL INSERT command is not present in 2,296 acknowledged uses
of the tool. Both the number of uses, and the non-use of the SQL INSERT command,
are in agreed passages by the experts in the 4"" Joint Statement. This is also a point that
was put to Mr Godeseth in his cross-examination (and accepted) and is dealt with at
[339] to [344] above.
Lasting and transient impact
696.
Of the total number of bugs accepted by the Post Office, the Post Office submits that
nine of them had, or potentially had, only transient impact. These are the following:
Bug 2: Callendar Square;
Bug 4: Dalmellington;
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697.
698.
699,
700.
Bug 5: Remming In;
Bug 6: Remming Out;
Bug 7: Local Suspense (not to be confused with Bug 3. Suspense Account bug)
Bug 9: Reversals;
Bug 12: Counter Replacement;
Bug 19: Post & Go/TA Discrepancies in POLSAP; and
Bug 25: Lyca top up.
Transient impact is a concept introduced by Dr Worden. It does not form any part of
the Horizon Issues as formulated, agreed and ordered. Dr Worden agreed, in his cross
examination, that he had added in the word “lasting” to Horizon Issue 1. He also said:
“...for better or worse I took my role to be concerned with lasting effects on branch
accounts rather than transient ones.”
This is a plain and obvious departure from the wording of Horizon Issue I, and indeed
in my judgment represents a narrowing of it. I consider this departure unjustified. It is
not the issue that was drafted and agreed by the parties, approved by the court and
ordered to be tried.
Dr Worden also said in the 2 Joint Statement (in one of the passages that was not
agreed) that “transient inaccuracies in branch accounts, which needed some form of
correction, have arisen so frequently and from so many causes that to list them is not
useful; and that evidence of each correction being carried out is unlikely to persist to
this day.”
He stated that “not rectified” means lasting, whereas “rectified” means transient. He
also stated that if a bug caused something that required correcting with a Transaction
Correction or TC, then that would mean (if the TC were issued) that it were a transient
effect; but if the TC was never issued, that would be a lasting effect. The passages were:
“Q. So if the TC process takes a long time, then you might say something was lasting,
even notwithstanding years later it might be corrected?
A. That is not how I understood lasting —
Q. How did you understand lasting?
A. There were delays in the TC process which might be due to client organisations or
might be due to all sorts of things, and they could be at the outside, I believe, several
months. My definition of lasting did not depend on TCs coming in within a certain
timeframe. If TC never came in, that would be lasting, but if TC took several months
to come in that is not what I would call a lasting effect. A lasting effect is permanent;
it is at the end of the day. you know, he has lost money forever.”
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701.
702.
703.
The use of the phrase “lost money forever” demonstrates the artificiality, in my
judgment, of this distinction. Whether this was the intended purpose or not, applying
such a concept is to minimise as much as possible the impact on branch accounts of
bugs, errors and defects that otherwise exist. He also stated that “the branch accounts
would look wrong” for the period prior a TC being issued. That is undoubtedly correct;
the accounts would not only “look wrong”, they would be wrong. This makes it even
more clear that Dr Worden’s approach is at odds with the wording of the Horizon Issues,
as well as with the way which the Horizon System was operated.
His approach is, in my judgment, wholly artificial, for at least five reasons.
1. It ignores the express wording of Horizon Issue 1 itself.
2. It ignores the very function of Horizon, which was used as the branch accounting
mechanism between SPMs and the Post Office. A SPM would “roll over” their branch
each trading period, usually a 4 week period (sometimes a 5 week period). At the end
of each trading period, the SPM would produce a Branch Trading Statement (or “BTS”)
using Horizon, which was the accounting statement of the branch for that period. Any
shortfall or discrepancy in the accounts as demonstrated by the BTS would have to be
made good by the SPM (which means the amount of the loss would have to be paid) or
“settled centrally” (which means the SPM would seek time to pay). Therefore, any
occurrence of any bug, error or defect within that trading period would have an impact
on the branch accounts (by reason of the regular production of the BTS) at the end of
that particular 4 week trading period.
3. The issuing of TCs is done by the Post Office outside of Horizon in any event.
4, It pays no attention to whether a TC is issued within a branch trading period (and
hence before the creation of the Branch Trading Statement for that period) or
afterwards, in the next or any subsequent trading period. The fact that (for example) a
TC might be issued some months later does not mean that the branch accounts have not
been impacted. The branch accounts specifically have been impacted by the occurrence
of the bug, error or defect,
5. The correct characterisation of a bug, error or defect within Horizon, and its impact,
cannot sensibly depend upon an act (the issuing of a TC) that is done outside Horizon.
If a SPM were to find themselves reporting, for the first time, an incident to SSC in
relation to a hypothetical bug, bug H, and upon investigation SSC eventually were to
accept that there was a bug and a software fix was required, then the nature of bug H
should not depend upon how the PO chooses to correct it. If, say, a SPM had retired,
closed their branch, been suspended or in any other way ceased to be a SPM, then a TC
could not sensibly be used to them. One assumes that in this hypothetical scenario, the
PO would refund the SPM (or their estate, if they had died) but that step should not
affect the characterisation of bug H.
The point at (2) above is consistent with the way that branch accounting works. This
was the subject of a considerable amount of evidence at the Common Issues trial which
is dealt with in Judgment (No.3). I do not know if Dr Worden had read this judgment,
and he was not asked about it. However, I do not consider that any aspect of the outline
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704.
705.
706.
707.
708.
709.
accounting process operated by the SPM using Horizon at the end of each Branch
Trading Period is controversial,
In my judgment, if any bug, error or defect within Horizon could have an impact upon
branch accounts in any particular trading period, then unless a TC were issued within
the same trading period, it would have had an actual impact upon branch accounts.
Similarly, if any bug, error or defect within Horizon could have an impact upon branch
accounts in any particular trading period, then — regardless of the issuing of any TC in
respect of that occurrence — it would have the potential to impact upon branch accounts.
This can be tested by considering the Callendar Square bug, number 2 in the bug table
list. The evidence I have identified at [401] to [414] above makes it clear that this bug
was discovered in 2005, and Mr Godeseth accepted that it had probably been present in
Horizon since its inception in 2000. It affected at least 30 branches, and was recorded
in one of the contemporaneous documents as “this problem has been around for years
and affects a number of sites most weeks.” Yet on Dr Worden’s somewhat artificial
constraining of impact on branch accounts, it would be categorised as only having a
transient impact. The dictionary meaning of transient is fleeting, passing, brief,
temporary, momentary, transitory, short-lived or ephemeral, and plainly does not apply
to the effect of this admitted bug. In my judgment the use of this word by Dr Worden
and the Post Office is unjustified. The use of it by Dr Worden was unnecessarily to
restrict his analysis.
The Period 21 March 2019 to 4 June 2019
During this period two matters of note occurred in the group litigation (in addition to
hearing the recusal application and handing down of Judgment (No.4), which it is not
necessary to address in this judgment).
The first was the further disclosure of documentation by the Post Office, which is
explained further at [616] above.
The second was service of a further supplementary expert’s report by Dr Worden
directly upon the court. This occurred on 22 May 2019. It came under cover of an email
from Dr Worden, copied only to the Post Office’s solicitors. It is extremely unusual, if
not verging upon unheard of, for an expert witness to communicate directly with the
trial judge, and directly serve material upon him or her. It is also the case that no party
(whether by itself or its solicitors) in ongoing litigation should communicate with the
court without copying in the other parties to the case. The only very narrow exception
to this is ex parte proceedings, in respect of which there are special rules, and which is
not the case here.
In the interests of transparency, I reproduce the whole email from Dr Worden here. It
was accompanied by some attachments: “Third Report Open”; and three appendices.
The email stated:
“Dear Judge,
As was explained by Mr de Garr Robinson in court on I1 April, I have made some
further analyses of Horizon Issues 1, 12, and 13. This work was done at my own
instigation, and was not prompted by the Post Office or its lawyers. In my opinion this
work has led to a material change to my opinions, and I am therefore obliged to inform
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710.
711.
the court of those changes in a report. With this email I am sending you the report and
its Appendices, in completion of the action. I am doing this on the basis that the trial
will re-convene on 4th June, and so the court may need to be aware of it then. The report
is 13 pages long.
As the court is aware from my first expert report, I have interpreted ‘extent’ in Horizon
issue I as requiring a number - the maximum proportion of the claimed losses which is
attributable to bugs in Horizon. My first estimate of that number, in my first report and
revised in the second expert joint statement. is 0.4%. This estimate was adjusted in a
direction to favour the claimants, so that the court may better rely on it.
In my opinion, that estimate is still sound. The enclosed report contains an independent
estimate of the same number, which is 0.6%. Because that estimate is based ona simpler
analysis, and relies on evidence that in my view can be checked over a weekend, I
believe it can be of assistance to the court. That is why I started this analysis, and why
1am now sending it to the court.
Similarly, for Horizon Issues 12 and 13, the analysis in the attached report is in my
opinion simple, easy to check, and leads to results which I was not able to derive before.
Therefore I believe it can be of assistance to the court.
A draft version of this report was first provided to Mr Coyne on 25th April, and a final
version was sent to him on 16 May. I have not yet been able to have a substantive
discussion of this report with him, other than my explaining points in the report to him.
T understand that when cross examined on the Horizon issues, this report is now a part
of my opinion and J may need to refer to it. It is also my understanding that Post Office
does not intend to make any application to the court in relation to this report.
Yours Sincerely,
Robert Worden”
(emphasis added)
The reference to what had occurred on 11 Apri! 2019 is as follows. Following dismissal
of the recusal application on 9 April 2019, the trial resumed on 11 April 2019 with the
resumption of the Post Office’s final evidence of fact. This involved the Post Office
calling Mr Parker to be cross-examined, and explaining that Mr Membury (another of
the Fujitsu witnesses) was unable to be called, and the relevant Civil Evidence Act
notice being given under CPR Part 33.2. The position of the claimants on that latter
point was explained as their consenting to the necessary extension of time (rather than
a waiver by them under section 2(3) of the Act, a difference that is immaterial in the
circumstances). Mr Membury’s witness statement was therefore not cross-examined
upon, but Mr Parker was called and was cross-examined.
Upon conclusion of Mr Parker’s evidence, Mr de Garr Robinson, leading counsel for
the Post Office, explained that, as he put it, “a matter of some awkwardness” had arisen.
He submitted the following:
“Dr Worden has recently realised that there is a new way of looking at the evidence in
this case which, in his view, could greatly assist your Lordship, assist. the court, in
deciding Horizon issues 1, 12 and 13.
This approach involves focusing on those PEAKs, OCRs, OCPs and MSCs which
actually mention the FAD codes of one or more of the claimant branches. Just to
explain, when Fujitsu did any authorised remote handling of data, to put it neutrally,
which might affect branch accounts, they raised an OCP, OCR or MSC whose text was
likely to include the six digit FAD code of the relevant branch. So it's therefore possible
to search all the OCPs, OCRs and MSCs with a view to finding all of those which
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712.
713.
mention the claimant branches during the relevant claimant's period of tenure. This
search yields a limited number of OCPs, OCRs and MSCs, and it's therefore possible
to assess expert issues 12 and 13, which is how often was remote access facility
exercised and what effect did it have. It is possible to assess those questions as they
affect the claimants by examining that much smaller document set. My Lord, that is
the first exercise that he would like to undertake, and indeed he has embarked work on
-- I think this week he has embarked work on that.
Second, if a detected bug affected the accounts of any branch the Peak relating to that
bug was likely to mention that branch's FAD code. Typically, it will also -- it may also
mention a sum of money. It's therefore possible to search all the PEAKs in the same
way that I have just outlined, looking for PEAKs which mention any claimant's FAD
code during the relevant claimant's period of tenure, and again, this document could
shed some light on Horizon Issue 1 to which extent is it likely that bugs have affected
the relevant branches.
Now, Dr Worden has specifically asked me to offer his apologies to the parties and to
the court that he didn't think of this before. In fact, frankly, he is kicking himself that
he didn't do so. He believes that he and Mr Coyne would only need a short time to
consider the relevant documents and to consider how it affects their views on those
issues. He wishes to discuss the documents with Mr Coyne with a view to agreeing
what they do or do not show.
My Lord, in the days since the recusal application was issued he started to consider how
the new approach affects his views. He believes on Issue 1 it allows the parties to make
a much simpler analysis of the point, and he takes a similar view in relation to the
remote access issues. It makes, in his view, it possible for the experts to form a view
as to how often remote access was exercised and what its likely effect was.
It is Dr Worden's view that it is his duty under CPR Part 35 to inform the court of this
change of view and to allow the court to consider whether or not it wishes to see it
considered. That belief is based, as your Lordship will be aware, on CPR35.3 which
imposes a duty on experts to help the court on the matters within their expertise,
whether or not they are instructed so to do. My Lord, it's also based on CPR35 -- I
should say the practice direction CPR35, paragraph 2.5, which requires experts to
inform the court of any change of views.
I should emphasise this -- none of this comes at the request or instigation of my client.
This has come from Dr Worden. This is his idea. My Lord, he wishes to discuss it with
Mr Coyne in a further meeting between the experts, but of course it's -- it's only right
that your Lordship should be aware of that. I'm not making any application for
permission to put in supplemental expert reports —
Mr Justice Fraser: I don't think you have any supplemental experts’ reports to apply for
permission for, do you?
Mr de Garr Robinson: I'm not making any kind of application, I'm simply sharing with
your Lordship the view that has been expressed to me by Dr Worden.”
The Post Office, in continuing this explanation of what was happening, referred to
another case which had concerned late expert evidence, the judgment in which had been
referred to in the opening submissions for the Horizon Issues trial. That case is Imperial
Chemical Industries Ltd v Merit Merrell Technology Ltd (No.2 Quantum) [2018]
EWHC 1577 (TCC).
The exchange with the court continued:
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714.
715.
“Mr Justice Fraser: ...In order to apply for permission to adduce extra expert evidence
you would have to have a draft of the report for which you would be seeking
permission, wouldn't you?
Mr de Garr Robinson: My Lord not necessarily.
Mr Justice Fraser: You don't think so?
Mr de Garr Robinson: My Lord, I would submit not. It would depend on the
circumstances. Often one would have such a report. I'm conscious that in the JCI case
your Lordship cited as a reason for not giving the relevant party permission to put ina
report which they had prepared, that the experts hadn't gone through that collaborative
process and I'm quite anxious to ensure that my expert doesn't fall into the same trap, if
Ican put it that way.
Mr Justice Fraser: Well, depending on whichever point one reaches in terms of your
actually make an application to put in a supplementary expert's report, that application
will be dealt with as and when it's made, so I'm not dealing with that either positively
or negatively at the moment.
Mr de Garr Robinson: Thank you.”
It is not necessary to dwell upon the point, but any party seeking to obtain permission
to rely upon a very late additional expert’s report should ordinarily expect to have at
least a draft of such a report available. It is difficult to see how permission could be
given in general terms for late expert evidence, the content of which was not available.
However, no such application was made by the Post Office in any event. The trial had
commenced on I] March 2019. Dr Worden’s first expert report was dated 7 December
2018 and his supplementary report was dated 1 February 2019. This notification to the
court on 11 April 2019 of Dr Worden having “recently realised that there is a new way
of looking at the evidence in this case” came over four months after the date of his first
teport, over two months after the date of his supplementary report, and exactly one
month after the Horizon Issues trial itself had actually started. I requested a witness
statement from the solicitors for the Post Office setting out the chronology of this
realisation by Dr Worden.
The case to which reference was made on behalf of the Post Office, ICT’ v Merit Merrell,
concerned a supplementary report by a quantum expert, instructed on behalf of ICI,
which was produced on the first day of trial without warning. This was based on an
analysis of documents the expert had only recently been provided with by ICI, which it
turned out had been in ICI’s possession for over three years, but which the expert had
not previously been given. The application for permission to adduce that supplementary
report in that case was refused. Points relevant to the application in that different case
on those facts were set out in [158] of the judgment, which stated:
“Two other points relevant to the application should also be identified. Firstly, Mr Kitt
embarked upon this exercise with no notice at all to his opposite number, Mr Linnett.
This is not co-operative behaviour. Mr Linnett should have been told that this was being
done, and the documents could have even been studied together by both experts so that
an agreed position could be produced by them on what the documents did or did not
show, and the use to which they could or could not be put. I conclude that the only
reason for keeping the fact that this exercise was underway, until after it was ready to
be served after the trial had actually started, was to cause maximum disruption to MMT.
This is a much discredited approach to civil litigation. I conclude that this can be the
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716.
717.
718.
719.
only explanation for giving Mr Kitt the documents in a more usable (and searchable)
format than Mr Mills, MMT's solicitors.”
Giving permission for late expert evidence is a matter of discretion, and each case will
be different. At [237] in ICI v Merit Merrell I had stated the following, as one of a
number of principles that relate to expert evidence:
“5. Where late material emerges close to a trial, and if any expert considers that is going
to lead to further analysis, consideration or testing, notice of this should be given to that
expert's opposite number as soon as possible. Save in exceptional circumstances where
it is unavoidable, no expert should produce a further report actually during a trial that
takes the opposing party completely by surprise.”
Here, the following distinct matters fall to be considered. Firstly, just because in the
ICI case that expert performed a new exercise without telling his opposite number he
was doing so (which led to criticism), does not mean that all an expert has to do is to
inform his opposite number during a trial that he has decided to undertake a new
exercise, or produce a new report, and that by giving such advance notice this means
the new report will be admitted. The whole ethos of exchange of expert evidence well
in advance of trial is so that each party (and their respective experts) have advance
notice of the opposing point of view, so that evidence can be properly addressed and
surprise avoided. That is undermined by service of very late reports containing new
analyses. Sometimes this is unavoidable and late material emerges. It is not possible to
be entirely proscriptive, as each case is different. That is why permission of the court is
required. Secondly, the stage of the trial at which this 3rd Report was produced by Dr
Worden was very late indeed. It was weeks after the trial had started. Thirdly, the extent
to which the court needs to consider all the circumstances depends upon whether the
3°4 Report was sought to be relied upon by the Post Office. Finally, and of wider
application, is the way in which the Third Report was dealt with, namely by service by
the expert himself directly upon the court.
Dealing with those matters in turn, the first two are effectively bound up with one
another. I do not know the actual date when Dr Worden realised that this new way of
looking at things appeared to him to be useful. However, the court was told he had
started thinking about this on 11 April 2019, and the claimants’ solicitors had already
been told of his intention by the Post Office’s solicitors the previous day on 10 April
2019 (one day after the recusal application was dismissed, and the day before
resumption of the trial). Thereafter, a draft report was provided on a without prejudice
basis to Mr Coyne on 25 April 2019 by Dr Worden, his “current workings” having been
provided on the same basis on 11 April 2019 and the appendices, again on a without
prejudice basis on 25 April 2019. There was then a degree of to-ing and fro-ing between
the solicitors, which led to the actual report itself being sent on an open basis to Mr
Coyne on 16 May 2019 (after another experts’ meeting on 15 May 2019).
Regardless of the exact date when Dr Worden realised there was a different way of
looking at the evidence in the case, this 3" Report emerged at an extraordinarily late
stage in the proceedings. As can be seen in [721] below, it was in any case based on
material which Dr Worden accepted he had had for some time. It was not based on
material he had only received late, for whatever reason.
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720.
721.
722.
Turning to the third of the matters identified in [717] above, this can be readily dealt
with. The Post Office made it clear, both on 11 April 2019 in the passages which I have
quoted above, and subsequently, that it did not seek permission to adduce the contents
of Dr Worden’s 3 Report in evidence. It issued no application in this respect.
Therefore, it was not necessary for the court to consider the balancin ig exercise inherent
in resolving any application in this respect (on the basis that such an application was
resisted by the claimants, which was likely). It is inherent within this decision by the
Post Office not to issue an application to adduce it therefore, that there was no
explanation of when or how Dr Worden had experienced this “new way of looking at
the evidence”, other than what has been identified above. It also meant that this report
was not adduced as any part of his evidence-in-chief, and he was not cross-examined
about it. He referred to its existence only once, very much in passing, and given that
the contents of it had not been adduced in evidence, that was as far as it went.
Had I been faced with a contested application by the Post Office to be permitted to rely
upon the contents of the 3 Report in evidence, the matter would have been considered
in accordance with the principles in the CPR generally, CPR Part 35, the Practice
Direction that goes with it, as well as the Guidance for the Instruction of Experts to
Give Evidence in Civil Claims 2014 (“Guidance of Experts in Civil Claims”) which is
in the White Book with the Practice Direction. Doubtless such an application, had it
been made, would have been supported by a detailed explanation of all the relevant
matters, together with argument on both sides. I do not have the benefit of either a
detailed explanation or of any argument. On the material of which I am aware, but
without hearing any submissions on it for obvious reasons, a substantial hurdle to the
success of such an application would have been its lateness. This is because of the
enormous disruption and yet further delay that would have been the inevitable
consequence of permitting reliance upon such a late expert’s report. Severe disruption
and delay had already been caused to the Horizon Issues trial by the time this report
emerged, and by late May, the trial was shortly about to resume after an enforced
interval, in very unusual circumstances, of over two months. Had this new report been
admitted into the evidence, Mr Coyne would have required time to study it, and then
potentially produce a further expert’s report of his own, and none of that could have
been accommodated between late May (whenever such an application could have been
listed) and 4 June 2019. Calling him would either have been delayed, or he would have
had to be recalled later to deal with it. Further delay to the Horizon Issues trial would
have been undoubtedly caused. Delay is not always fatal to such applications, but the
later an application of this kind is made, the stronger the explanation for that delay has
to be.
The claimants had also made the point on 23 May 2019, the day after Dr Worden had
served his 3° Report upon the court, that it was based upon an analysis of documents,
namely OCPs, OCRs and MSCs, that Mr Coyne himself had expressly requested in J uly
. 2018 and which the Post Office’s solicitors had then said were irrelevant. In any event,
when I asked him at the end of his cross-examination, Dr Worden confirmed that he
had had the documents upon which he had based this 3" Report “for some months” and
that he had had the full set of PEAKs since, as he put it, “way back in 2018”. As the
Post Office’s own counsel explained on 11 April 2019, Dr Worden was “frankly,
kicking himself” that he “didn’t think of this before”. The lateness seems therefore to
have been the consequence of Dr Worden failing to consider this approach until very
late in the day, rather than only very recently being provided with the material. That is
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723.
724.
725.
726.
not promising ground for the making of such an application. It is also the case, in my
judgment, that there were no exceptional circumstances which made it unavoidable that
this new report was produced during the actual trial. Indeed, rather to the contrary. This
was entirely avoidable. Finally, the covering email from Dr Worden made it clear that
his estimate, included in his first report and revised in the 2"4 Joint Statement of 0.4%,
was “still sound”. This new exercise simply sought to bolster his conclusions. It was
not an explanation of a change of opinion by him.
Iturn therefore to the fourth matter, the issue of direct communication with, and service
upon, the trial judge of an expert’s report by the actual expert rather than through
solicitors.
When the email was received to which I have referred at [708] above, my clerk
immediately sent a copy of the email and attachments to all the legal advisers for both
parties in the litigation, stating that witnesses should not communicate directly with the
court, and also requesting that the claimants should not read any of the attachments
until the matter was addressed in court the next day (when the parties were attending in
any event to argue costs orders and other consequential matters following Judgment
(No.3)).
The legal advisers for the Post Office did not seem concerned at the hearing of 12 April
2019 that this direct service upon the court by the expert himself had occurred. An
analogy was drawn with an expert seeking directions under CPR 35.14, and it was dealt
with by the Post Office as though the direct service upon the court was simply the
actions of an expert seeking in the normal way to fulfil his duties to the court, and was
entirely usual. It is, however, not usual; it is highly unusual. Further, the covering email
from Dr Worden makes it clear that the new report was not a change of opinion; in
particular, the sentence that makes this entirely clear is “in my opinion, that estimate is
still sound” concerning the calculation in his earlier reports. His exercise was simply a
different way of reaching the same conclusion. Therefore, the provisions of paragraphs
64 to 66 in the Guidance of Experts in Civil Claims do not apply.
Ido not consider that any witness, lay or expert, should communicate directly with the
trial judge about the content of their evidence, or indeed about any subject at all. There
is a substantial risk that the efficient management of proceedings will be compromised
if this is done. Communications with the court should always be done by solicitors, if
they are on the record. Further, communications between an expert and those
instructing him, or her, are privileged. If, as here, an expert takes it upon himself to
inform the court of applications that his client may, or may not, be intending to make,
there is a real danger that privileged information might be divulged, both to the court
and also to the other side in the litigation. This is far less likely if communications are
performed by solicitors, who have specific qualifications in legal matters and will be
experienced in litigation. Finally, there is specific provision in the Guidance of Experts
in Civil Claims dealing with the situation where an expert wishes to exercise their right
to ask the court for directions. This is contained in paragraphs 28 and 29. These
proposed directions have to be sent to the party instructing the expert at least seven days
before the request is made, and to the other parties in the litigation at least four days
before. They are to be made by letter in the form prescribed at paragraph 29(a) to (e).
That gives the other parties the ability, firstly to have advance notice of what is
proposed, as well as providing advance notice that the court will be asked for directions
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727.
728.
729.
and what those directions are, and why; and also give the expert’s instructing solicitors
the ability to consider the communication in advance so that privileged information is
not included.
In this case, that process was not followed. Mr Parson’s 17% witness statement
explained the outline chronology, and made it clear that Dr Worden’s opposite number
Mr Coyne had a copy of the 3" Report, initially on a without prejudice basis, and then
on an open basis, and that Dr Worden told Mr Coyne on 16 May 2019 (when he sent it
on an open basis) that he would be sending the report to the court but not before 22 May
2019.
Finally on this subject, when I asked Dr Worden at the end of his evidence whether he
had ever preformed this type of direct service himself on the court before, he told me
he had not. He also said that he had sent the email direct to my clerk as this was what
he had been advised to do by the “Post Office’s lawyers”. He said that he had not given
his instructing solicitors the opportunity to check or approve the covering email, but
“had been given some advice as to what it should cover”. I assume that advice did not
include telling Dr Worden that he should inform the court of the Post Office’s potential
intentions on what applications it may, or may not, be minded to make in the litigation.
This is a highly unusual situation. In closing submissions the Post Office invited me to
provide guidance in this judgment as to what should be done for future cases, as though
the position was unclear. I do not know why it should be thought necessary to tell
witnesses — lay or expert - that they should not unilaterally communicate with the court.
However, if it is necessary, no witnesses should communicate with the court directly in
this way. Any communications from legal advisers should always be copied to the other
parties in litigation. No expert should inform the court directly what applications his or
her solicitors might be contemplating, or not contemplating, in the future conduct of
the litigation.
The points that I draw from this episode are as follows:
1. Experts should not serve their own material, particularly new material during a trial,
and whether or not accompanied by detailed covering emails, directly upon the court
themselves. Service should always be done by a party’s solicitors if solicitors are on
the record.
2. A party’s solicitors will know that all communications to the court must be copied to
the other parties in the litigation.
3. Experts should not notify the court directly of the intentions of their instructing
solicitors and/or ultimate client in the litigation in which they are instructed. Such
matters are privileged.
4. It is difficult to be critical of Dr Worden in this respect, given he told the court that
he was advised by the Post Office’s legal team to send his report directly to the court,
Advice of that type should not be given to experts.
5. Dr Worden must have considered that the documents upon which he relied were, at
least, relevant. These were documents of a type sought by Mr Coyne in July 2018,
whose relevance was disputed at that stage by the Post Office. Mr Coyne’s request
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730.
731.
732.
733.
734.
ought to have led to these documents being provided to both the experts in the middle
of last year, a reasonable period of time after Mr Coyne specifically asked for them.
I will now turn to each of the expert’s evidence, their reports and their approach to the
Horizon Issues.
The Expert Evidence
The subject matter of this group litigation spans a long period. Mr Bates was a SPM
before Horizon was introduced in 2000, and it is from Horizon’s introduction that year
that, on the claimants’ case, the problems and difficulties arose, and arose as a result of
the functionality of the computing system introduced by the Post Office, which in this
judgment is referred to as Legacy Horizon. As the Post Office pointed out regularly
during these proceedings, there are thousands of branches and millions of transactions
each year in all of those branches, which means that over such a lengthy period, there
is a vast amount of computing activity that had to be considered by the experts.
The expert evidence was therefore required to be substantial. The aspects of the
litigation that require expert evidence are not, however, of unheard of Proportions, so
far as the High Court is concerned. The High Court often deals with matters that span
a lengthy period; it also often deals with matters of great complexity that require expert
evidence. By comparison with many other cases, one expert discipline alone, with only
one IT expert per party, is not a particularly expert-heavy case. The experts’ reports,
though lengthy, were not of an unusual size. There were two reports from each expert
that were adduced in evidence, and each of them was of a type that would be expected
in a trial of medium complexity, which I consider the Horizon Issues trial to have been.
Nor was it necessary for the experts to examine every claimant SPM’s separate
experience; the whole purpose of having generic Horizon Issues was to avoid precisely
that. The Post Office would often concentrate on how vast the panorama was before the
court, but this may have been done simply to emphasise how few, in relative terms, the
claimants are; which also emphasised at the same time how well (so far as the Post
Office generally is concerned) the Post Office business operates day by day, week by
week, across so many branches. The experts agreed that Horizon has produced over
three million sets of monthly branch accounts.
At times, however, this focus on scale did seem to come close to an assertion that the
IT experts had an impossibly vast task; or that the court faced a significant challenge
even in understanding ail the expert evidence; or that the parties could not practically
deal with the other side’s expert evidence in the time allotted.
As has been set out in Part G of this judgment, the experts reached a great deal of
agreement in their different statements. Notwithstanding that, there remained large
areas of disagreement. Given the modern approach to trying cases generally, it was
neither possible, proportionate nor desirable to give the Post Office as much time as
their advisers maintained was necessary to conduct the Horizon Issues trial. As an
interesting comparison, in the case of The Ikarian Reefer dealt with further below,
which was before the implementation of the CPR and concerned the US$3 million loss
of a vessel, that trial took no fewer than 87 trial days. Such a lengthy trial, post the
introduction of the CPR, would be highly unusual in a case of the financial scale of this
one.
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Time limited trials and the approach to detailed evidence
735.
736.
737.
738.
Prior to the introduction of the Civil Procedure Rules, fewer trials were time-limited
and some trials dealing with a large number of complex issues could run for a great
many months, if not far longer. Since the introduction of the overriding objective, which
is contained in CPR Part 1.1(1), this states “These Rules are a new procedural code with
the overriding objective of enabling the court to deal with cases justly and at
proportionate cost”. That is explained further in Part 1.1(2), which states that:
“Dealing with a case justly and at proportionate cost includes, so far as is practicable:
(a) ensuring that the parties are on an equal footing;
(b) saving expense;
(c) dealing with the case in ways which are proportionate —
(i) to the amount of money involved;
(ii) to the importance of the case;
(iii) to the complexity of the issues; and
{iv) to the financial position of each party;
(d) ensuring that it is dealt with expeditiously and fairly;
(e) allotting to it an appropriate share of the court’s resources, while taking into account
the need to allot resources to other cases; and
(f} enforcing compliance with rules, practice directions and orders.”
Since the Civil Procedure Rules, trials are usually set down for a fixed time estimate
and are expected to be time-tabled to finish within that period. The court system does
not have the luxury (if luxury it is) of giving endless periods of time to litigants to argue
their cases to the n'" degree. This case, as with all litigation, is very important to those
involved jn it — to all of the claimants, but also to the Post Office, as an institution
generally, and also to its other directors, employees, SPMs who are not claimants and
its clients too. The issues and different causes of action in both claims and
counterclaims are of considerable importance, and the amount of money at stake is not
small. However, the amount of money is not large in terms of specialist litigation, for
example. It is not measured in the billions, or even many hundreds of millions. Ignoring
claims for general damages, the amount of damages that are specified in liquidated
sums are said to be about £18 million (although that is only an approximate figure
currently). There are, of course, also reputational issues at stake as well as money.
Judgment (No.5) [2019] EWHC 1373 (QB) made it clear at [78] that the total of the
parties’ reported costs as at the date of that judgment was over £25 million (£12.6
million for the claimants, and £12.8 million for the Post Office). Since then, on 25 June
2019 the Post Office notified the court that its costs had exceeded £13.9 million.
The reason for explaining this in detail is to put into context the following points about
the scope of expert evidence, and the number of trial days available for the experts to
be cross-examined. At the Pre-Trial Review, the Post Office submitted that at least four
days was needed for the cross-examination of Mr Coyne. It was realistically accepted
that longer than that was not likely to be permitted, although leading counsel for the
Post Office did submit that he would prefer longer. The claimants submitted that they
also wanted four days, but had trimmed that period to three days, for the cross-
examination of Dr Worden. Given there were further experts’ meetings to come, and
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739.
740.
741.
742.
given my view of the scope of the expert material and considering the overriding
objective, I set a trial timetable that permitted each side two and a half days to cross-
examine the other side’s expert. That would have given a total number of five days of
cross-examination for all the IT expert evidence. At that time, I considered that would
be sufficient, and also proportionate, taking account of the overriding objective.
However, the subsequent Joint Statements following the PTR did not reach as much
agreement as I had (perhaps naively) anticipated. I therefore adjusted the trial timetable
and set a new one, with the Post Office being given four days to cross-examine Mr
Coyne, and the claimants being given three days to cross-examine Dr Worden. That
trial timetable also allowed an interval of one non-sitting week, to follow the evidence
of fact, for each side properly to prepare their time-limited expert cross-examination in
detail.
In my judgment, the period of time I had allotted at the PTR of 2% days each was
sufficient in itself; but the increased period of time allowed was undoubtedly sufficient
for each party properly to cross-examine and test the expert evidence adduced by the
other side in the litigation. Seven court days for the total cross-examination of one
expert discipline in a case such as this is, given the Horizon Issues in this trial, generous.
Counsel might not have had time to put each and every single individual point to the
expert on the other side, but they had more than enough time to put the main ones (and
a considerable number of subsidiary ones too, for that matter). Each side had leading
counsel, well-versed in all of the issues, who have been involved in the case from at
least the making of the GLO itself in early 2017, as well as a team of other counsel
assisting too. Considerable pre-reading had been done by the court. As it turned out,
the issuing of the recusal application on 21 March 2019 led to an even longer period of
the trial not sitting, with only a half day (for Mr Parker) of the trial taking place between
21 March 2019 and 4 June 2019, a period of 75 days, or over ten weeks. The Post Office
had a different counsel team acting on the recusal application than the team acting on
the Horizon Issues trial. That 75 day period was a substantial period of time for each
side to prepare detailed cross-examination on all, and any, points that they considered
important, prior to the resumption of the trial and the commencement of the expert
evidence on 4 June 2019.
The amount of the costs burden explained in [737] above has been incurred on the basis
of the number of trial days made available. Obviously, further time for cross-
examination would have led to even higher cost figures. There was a sufficient and
proportionate amount of time at trial made available for the expert evidence to be
properly challenged and tested, and there was more than sufficient time available for
preparation of the time-limited cross-examination. J have set this out in detail in order
to make it clear that the time limited nature of the Horizon trial, and the number of days
allotted for cross-examination, has in my judgment had no effect on my findings on the
Horizon Issues, or restricted either party’s opportunity to put its own case and test the
case of the other party.
The other feature of time-limited cross-examination, given the depth of experience of
counsel, is that I permitted considerable latitude to the cross-examiners. If counsel
wanted to put the same point to an expert again and again; or spend an hour on one
specific sentence or detail, when the same point could have been accomplished in five
minutes; or devote significant time to high-level issues and avoid descending to
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743.
744,
TAS.
746.
747.
specifics; then that was a judgment call made by that counsel. With more junior counsel,
in another case, the court might discourage excessive time on less important or agreed
points, to encourage progress; but here both sides had highly experienced leading
counsel. I therefore intervened rarely, The amount of time made available in the trial
timetable for each side to cross-examine the other’s expert was set down in advance,
and if one side wished to devote (say) half a day to having an expert state, and then
restate, an agreed position on a particular point, then that was very much a matter for
them. Such an approach would lead to that period not being available to allocate to
other subjects, but in my judgment this case in particular benefitted from allowing the
parties to conduct their cross-examination, more or less, in the direction they wished.
I did, from time to time, seek either to have clarified what particular Horizon Issue was
the subject of the cross-examination, or to reference it to particular other subjects.
However, this did not occur very often, and the parties were permitted to use their
allocated time as they wished.
Each side, both in their cross-examination and closing submissions, criticised the other
side’s expert for not being sufficiently independent. This was done in different terms
and in different ways, but the upshot of it was broadly the same. It was that their expert’s
evidence should be preferred to that of the opposing side, for reasons of methodology
and approach, as well as for reasons of detail.
The court, when faced with opposing experts, might dismiss the views of one expert
entirely on the basis that they had not complied with their duties to the court. However,
it is not necessary to do that, in order to prefer the views of one expert over another.
There may, depending upon the subject matter, be room for opposing expert opinion,
and it is simply a case that the court accepts one opinion for a variety of reasons. Also,
in some cases, it might be that one expert’s view is accepted on some points, and the
opposing expert’s views on others.
It is also not necessary to resolve every single point of detail between experts to arrive
at the answers to the Horizon Issues. However, given these criticisms of the experts
have been made, it is necessary to address them. This is because it is only fair both to
the experts, and to the parties, to decide whether each expert has been sufficiently
impartial in the exercise upon which they have been engaged such that the court can
reliably base its answers to the Horizon Issues upon the conclusions reached by the
experts. Impartiality and independence of experts is also of considerable, if not central,
importance to the administration of justice generally.
The case that is most often stated in the context of the importance of independence on
the part of experts is National Justice Compania Naviera SA v Prudential Assurance
Co Ltd [1993] 2 Lloyd’s Rep 68 (Comm Ct), but it is almost always referred to by the
name of the ship involved in the case, The Ikarian Reefer, which ran aground off Sierra
Leone and then caught fire, becoming a total loss. Lord Woolf MR, the author of the
Civil Procedure Rules, made clear in Stevens v Gullis [2000] 1 All ER 527, 533 that
CPR Part 35.1 and its accompanying practice direction “did no more than reflect the
position as it had been well enunciated in the authorities prior to the CPR coming into
force”. The Ikarian Reefer remains central to the way that experts should perform their
role, including the separate duty owed to the court.
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748. In Imperial Chemicals Ltd v Merit Merrell Technology Ltd [2018] EWHC 1577
(TCC), a more recent case in which a number of experts all called for one party were
found to be partisan, at [237] the following was stated:
“The principles that govern expert evidence must be carefully adhered to, both by the
experts themselves, and the legal advisers who instruct them. If experts are unaware
of these principles, they must have them explained to them by their instructing
solicitors. This applies regardless of the amounts at stake in any particular case, and is
a foundation stone of expert evidence. There is a lengthy practice direction to CPR
Part 35, Practice Direction 35. Every expert should read it. In order to emphasise this
point to experts in future cases, the following points ought to be borne in mind. These
do not dilute, or change, the approach in The Ikarian Reefer. They are examples of
the application of those principles in practice.
1. Experts of like discipline should have access to the same material. No party should
provide its own independent expert with material which is not made available to his or
her opposite number.
2. Where there is an issue, or are issues, of fact which are relevant to the opinion of an
independent expert on any particular matter upon which they will be giving their
opinion, it is not the place of an independent expert to identify which version of the
facts they prefer. That is a matter for the court.
5. Where late material emerges close to a trial, and if any expert considers that is
going to lead to further analysis, consideration or testing, notice of this should be
given to that expert's opposite number as soon as possible. Save in exceptional
circumstances where it is unavoidable, no expert should produce a further report
actually during a trial that takes the opposing party completely by surprise.
6. No expert should allow the necessary adherence to the principles in The Ikarian
Reefer to be loosened.
It is to be hoped that expert evidence such as that called by ICI in this case, and also
in Bank of Ireland v Watts Group ple, does not become part of a worrying trend in
this respect. There are some jurisdictions where partisan expert evidence is the norm.
For the avoidance of any doubt, this jurisdiction is not one of them. Not only experts,
but the legal advisers who instruct them, should take very careful note of the
principles which govern expert evidence.”
749. The Ikarian Reefer, and the requirements of CPR Part 35, are the touchstones of expert
evidence in this jurisdiction. It is of the utmost importance that they are adhered to both
by experts themselves, and also by those who instruct such experts.
Mr Coyne
750. Mr Coyne is a Partner of IT Group UK Ltd, and has 30 years of experience in IT. He
has designed, programmed and supported Electronic Point of Sale (or EPOS) systems
for use in payment handling, stock control and distribution in addition to full business
accounting systems. He has also assisted public sector councils with revenue and
benefits processing systems, investigated failures within stock market trading systems,
European gambling and gaming networks and dealt with fraud in retail banking, point
of sale, cash in transit and electronic funds transfer systems.
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751.
752.
753.
754.
He is a member of the Academy of Experts, the British Computer Society and the
Society of Computers and Law. He has an Expert Witness Diploma from Cardiff
University Law School, achieving this in 2008. He has been instructed as an expert
witness in both civil and criminal cases over the last 19 years, including by both UK
and International firms of solicitors, in connection with technology project fault
analysis, software development and digital forensic investigations. He has appeared
before different tribunals both in the UK as well as overseas. He served two detailed
reports with numerous appendices. He also signed four Joint Statements with Dr
Worden.
Both the experts agreed in the 3“ Joint Statement that Horizon as it is now is relatively
robust. The passages in that Joint Statement are that:
“in line with most other large-scale computer systems, Horizon's robustness has
generally improved. From our experience of other computer systems, Horizon is
relatively robust. We agree that 'robust' does not mean infallible and therefore Horizon
has and will continue to suffer faults. Robustness limits the impact of those faults and
other adverse events. This increase in robustness has, in part, developed from Post
Office discovering bugs/errors and defects in live use and then applying fixes and
improving monitoring.”
I consider that this is an important passage of the experts’ agreement, and indeed
robustness is an important aspect of the Horizon Issues. It makes clear that, in part, it is
the discovery by the Post Office of bugs, errors and defects, the application of fixes
(which means changes to the software by means of a software fix) and the improvement
of monitoring that has led to the increase in robustness that has been achieved in the
system as it is at 2019. This inevitably means that in earlier times, Horizon was less
robust, or not as robust as it is now. This applies both to Legacy Horizon and also to
Horizon Online. There are undoubtedly more modem or recent bugs in Horizon, as can
be seen from the Technical Appendix. Drop and Go, for example, was not even a
product until about 2013, and the relevant bug in the Bug Table which is bug 28
occurred in July 2017. That caused an impact to the branch account in question of £100;
modest or tiny in comparison to the total Drop and Go business for that year, or even
that month, but still £100 which appeared as a deficit in the branch accounts, and still
£100 which the SPM had to deal with. Until it was discovered the bug could not have
been fixed. It would not have been present prior to 2013 (because Drop and Go did not
exist) and any fix cannot have occurred prior to July 2017, if not a month or two later.
The agreement that Horizon is relatively robust as at 2018 and 2019 is something that
is doubtless of great importance to the Post Office, as it affects how the Horizon system
as it is at the date of this judgment is both used by the Post Office, and perceived by the
SPMs who use it every day. The Horizon Issues however deal with Horizon from the
year 2000 onwards.
The other aspect of this part of the experts’ agreements that bears consideration is that
the Post Office have to know about bugs, defects and errors in order that they can agree
with Fujitsu that fixes have to be written and applied. This makes it particularly
important, in my judgment, that Fujitsu were open and transparent with the Post Office
about the presence of software bugs, errors and defects. Given Horizon was being used
by the Post Office as the accounting procedure between it and its SPMs, there is every
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755.
756.
757.
758.
reason that Fujitsu would (or should) have to make the Post Office aware of bugs, errors
and defects.
A point that was put to Mr Coyne (it was taken from the Post Office’s pleadings, but it
is a theme that runs through both its submissions and also the evidence of Dr Worden)
is that there are both what are called technical controls, and also operational procedures
and practices conducted both by the Post Office and by SPMs, to increase the reliability
of data. The passage of the Defence that was put was as follows:
“Q. So robustness -- we can move on to paragraph 54 on page {C3/3/23}:
" ,.. in addition to the technical controls referred to above, there are several operational
procedures and practices conducted by Post Office and subpostmasters that serve to
increase the reliability of the data stored in the central data centre as an accurate record
of the transactions entered on branch terminals.
Then there is a list of those. So you will see that what's being said is that the robustness
of the system is said to be affected both by technical measures and by human measures.
Do you see that?
A. Yes, Ican see that. That is what is said, yes.”
In my judgment it is correct to describe the second part of these, as the Post Office did
in its pleading, as “human measures”. They rely upon humans actually performing or
being aware of certain occurrences. Two of these rely upon SPMs, namely those at
paragraph 54(3) and 55(4) of the Defence. The second of these is that “the accounting
and record-keeping obligations placed on Subpostmasters reduce the risk of any errors
going undetected.” In my judgment, for SPMs to be an effective — or indeed any ~ part
of a “human measure” and to assist or contribute to the process of the Post Office
discovering bugs, errors and defects in live use (so that, where necessary, software fixes
can be initiated, developed and applied) the Post Office ought sensibly to be transparent
with SPMs too.
It does however need to be recognised that human measures are not part of the Horizon
system. They are not included in the definition of the Horizon system that forms part
of the Horizon Issues themselves.
It was also, in substance, put to Mr Coyne that Horizon Issue 1 should have been
addressed in the way that Dr Worden had approached it, by effectively looking at actual
(rather than potential) impact, although it was not put in exactly those terms.
“Q. Given it was admitted that there have been occasions when these things have
happened, to answer the question: is it possible or likely that these things have happened
by saying "yes" isn't a very helpful answer, is it?
A. Ifthe answer was just simply "yes" and with no further context then I agree that that
would ...
Q. The critical issue that's raised by the four issues that I have read to you is the word
“extent” and the word "likelihood" and the word "risk", isn't it?
A. They certainly are critical elements that would need to be reviewed, yes.
Q. What you were being asked to do by those issues is to give your opinion to the court
on the extent to which it was and is likely that bugs caused shortfalls in any particular
set of accounts?
A. Well. across the accounts of subpostmasters, yes.
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-§58-
759.
760.
761.
Q. The extent to which various measures in place reduce the risk faced by any given
subpostmaster when doing a transaction or when producing a particular set of accounts,
yes?
A. Yes.
Q. That's the critical question on which the court needs your assistance, would you
agree?
A. It is one of the critical questions, yes.
Q. Could you identify a question which you say is more critical than that in the context
of these proceedings?
A. I haven't taken a view on -- I have taken each of the Horizon Issues that's put to me
with equal priority. I haven't set out to decide a prioritisation for them.”
(emphasis added)
This approach by the Post Office was, in my judgment, an attempt effectively to re-
draft Horizon Issue 1 in terms more favourable to its case. I have already identified
above that the Horizon issues were drafted and agreed by the parties and approved by
the court. Horizon Issue 1 plainly states “to what extent was it possible or likely for
bugs, errors or defects of the nature alleged. ...to have the potential to (a) cause apparent
or alleged discrepancies or shortfalls relating to” SPMs’ accounts. The approach taken
by the Post Office (and also Dr Worden) was entirely to ignore the word “potential”.
Talso consider that it is a matter for the court to decide which issues are more important
than others. An expert might decide a particular issue is important in that it represents
a starting point for their opinion, which will then inform or guide their views on other
issues. But it is not for an expert to decide one issue in a list is more important to the
court than others, and concentrate upon that to the potential exclusion of consideration
of some or any of the others. Mr Coyne was therefore correct to treat all of the Horizon
Issues with equal priority.
Mr Coyne had not performed a similar statistical analysis to Dr Worden seeking to
demonstrate either the likelihood, or unlikelihood, of a bug impacting the claimants’
branch accounts. In my judgment such an exercise was not necessary in order properly
to give expert evidence to the court on the Horizon Issues. Dr Worden’s evidence, and
his alternative approach, was properly put to Mr Coyne. Mr Coyne accepted that he
could have approached his evidence in that way, but explained why he had not. He
described the approach adopted by Dr Worden as “a fundamentally flawed approach”.
“Q: You could, using your skills as an IT risk analyst, you could have, by reference to
the KELs and the PEAKs that you had identified, formed an assessment as to the likely
financial impact in each of the instances that you had identified?
A. Yes, I could. If I could please answer that by way of illustration to the problem
with that approach.
Q. Please do.
A. We will often see a bug, error or defect with a very wide range of impacts and the
impact is typically whatever the counter was doing at that point in time. So if the counter
was doing a foreign currency transaction for just £50 and something goes wrong, the
discrepancy may be £50.
By knowing that there is a bug, error or defect in the Horizon system that leads to
problems with foreign currencies, you can't then say it is only a £50 defect because that
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762.
763.
isn't incorrect. If another person was to be subject to that defect and they were doing a
£10,000 foreign currency transaction, they would likely have that same level of defect.
Now that's an illustration to say you can't value bugs and their potential impact by
looking at what has happened historically. You can't value it in that way.
Q. But what you can do is form an estimate having regard to the totality of the PEAKs
that you have seen, can't you?
A. But it is a fundamentally flawed approach. If you have seen three branches that
have had an impact because they were doing three foreign currency transactions, a £20,
a £50 and a £100, but then there is a fourth person that believes that they have been
subjected to that but that isn't recorded, you can't simply look at the three where it has
been recorded and say the fourth couldn't possibly have occurred because we know
there is a defect there.
Q. I'm not suggesting that you could arrive at a certain conclusion of an absolute cast
iron number, but I repeat my question. Can't you form an estimate having regard to the
totality of the PEAKs that you have seen?
A. Yes, but your estimate would have to be based on the three people where it has been
recorded to have occurred, so you would say £20, £30 and £50, and the best you could
possibly do is come up with an average of that, and you would say that the value of that
defect is whatever that is.
Q. There is another way that you could do it, isn't there, which is that you could look
at the three bugs, the receipts and payments mismatch, the suspense account bug and
Cailendar Square, the ones that have been thoroughly investigated, and you could form
inferences from the scale of those bugs, yes? Would that be reasonable?
A. For those types of bugs, potentially yes.
Q. Those are quite large bugs, aren't they? They are not small bugs in the scheme of
things. That's why they were identified in the letter, because these were major bugs of
which even Post Office was aware?
A. Yes. And carrying on from the one we were not told about until later, the
Dalmellington one, there were some which were only pounds, just a few pounds, and I
think there was at least one that was £25,000.
Q. But just fixing our attention for the moment on those three bugs, would you accept
that the evidence indicates that altogether the total financial impact of those three bugs
is no greater than £100,000. Do you agree with that?
A. No, [haven't done that so I would not know whether that was right or close to right”.
The documentary evidence showed that Dalmellington had over 100 branches with
some being impacted more than once. Using the Post Office’s definition of “lasting
impact”, which means the branch accounts were given TCs to correct the effect that the
bug had upon them, 114 of these impacts were made good. Of the other four, two turned
out not be the Dalmellington bug and the other two had only very small financial
discrepancies.
However, this bug, which had taken 5 years to be discovered, was put to Mr Coyne as
a good example of how countermeasures had to be considered.
“Q. In fact, Dalmellington is quite a good example of how countermeasures need to be
brought into account and how it is important to look at financial impact to make an
assessment of the extent question that's raised in Horizon Issue }, isn't it? Because it is
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764.
765.
766.
767.
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no good saying 118 branches were affected and some of them were affected by large
amounts, when in fact we all know that even before the bug was detected the branches
involved were in fact made whole anyway. yes?
A. It does suggest that. but it also suggests that there were deficiencies with the
countermeasures because I believe it was five years after the first occurrence of the bug
that the defect was finally discovered.
Q. Because, as you have already agreed, to an outside observer it looks exactly like a
human error because it was a human error. The bug wasn't causing losses, it was
causing errors to be made and those errors were picked up, would you agree with that?
A. No, it wasn't a human error, it was a defect of the system. It made it look like a
human error.”
(emphasis added)
The Dalmellington bug was not accepted as a bug in the Bug Table at the time of the
3 Joint Statement where it is Bug 4, but is now accepted as a bug by the Post Office
but said to have “transient impact”. I find that it is a bug, and it cannot properly be
described — as the Post Office did during the above cross examination- as human error.
As Mr Coyne pointed out in his answers, it was a defect of the system. It also did take
5 years for it to be discovered. One of the branches affected by it had its branch accounts
affected to the sum of approximately £25,000. The fact that a TC was issued does not
mean that it did not have an impact upon branch accounts. That impact may have been
later corrected by means of the issuing of a TC, but that cannot mask the fact that the
branch account was affected by that amount for the period of time until that correction
was made.
Mr Coyne accepted that Dr Worden’s arithmetic was correct, and also accepted that the
sum Dr Worden had calculated in respect of Dalmellington (£100,000) was “quite small
compared to the £19 million that’s claimed by the claimants in this case. It is less than
1%”. As Mr Coyne accepted, on the “pure numbers”, that was correct.
Mr Coyne did not accept Dr Worden’s basic logic as a starting point, nor did he accept
the logic that there was “no evidence that” the claimants’ branches were “more or less
likely to be hit by bugs than your average Post Office branch”. I deal with that point in
further detail below at [821] and [822] below, but this amounts to an assumption by Dr
Worden that a group of SPMs who specifically allege they have experienced the effects
of bugs are to be treated, in statistical terms, as though they are a random group of SPMs
of the same sample size drawn from the wider population of all SPMs. They plainly are
not a randomly drawn sample of nearly 600 SPMs. They are a very specific group (or
sample) of those who say their branch accounts have been impacted by, or have
experienced, such incidents. In statistical terms, the correct term for the group is that
they have a bias — they all allege that they have experienced the effects of bugs, errors
and defects.
An illuminating series of questions and answers highlighted the entirely different
approach of the two experts.
“Q. Are you aware of some special factor applying to the claimant branches which
marks them out as very different from the rest of the branch network making their
susceptibility to bugs very different from the wide range of branches in the rest of the
network?
-561-
768.
769.
770.
A. I'm not aware of it, no, but it would require -- in order to look at that it would require
a detailed understanding of the particular processes of the branches. And I think that's
illustrated by what we know of Dalmellington, that impacted -- I think one branch was
impacted five times, where there was only a handful of branches -- I think, was it 88
that was impacted in total?
Q. Mr Coyne, it is quite important not to get confused between particular instances of
things happening and the law of averages. What I'm asking you about is what's likely
to happen over a large number of cases, do you understand the difference? So of course
if people are all walking down the streets, some of them are going to get hit by lightning.
Everybody won't get hit by lightning in the same way. It will be a very small number
of people who will be hit by lightning and they'll usually be in particular situations
when it happens. But one can make a generalisation about the likelihood of people
being hit by lightning, do you understand, because of the law of averages?
A. Ido understand, but in that illustration it would be very unusual for one person to
be hit by lightning five times.”
This then continued with some discussion of instances where some people may have
been hit by lightning more than once.
There are some important points that arise out of this approach. Firstly, the terms of the
contracts between the Post Office and an SPM does not invoke the law of averages,
either as it was explained in this cross-examination, or at all. The terms of the contracts,
whether SPMC or NTC, have a very precise accounting process which is run by
Horizon. Secondly, the existence of a bug such as Dalmellington, which was present in
the Legacy Horizon system for 5 years prior to discovery, is of direct relevance to the
Horizon Issues. It does not support the proposition that a SPM with an outreach branch
in the 5 years before it was discovered was more likely (or equally likely) to be hit by
lightning as having their branch accounts impacted by the Dalmellington bug. Thirdly,
even if the “law of averages” approach were the correct one to adopt in terms of
individual SPM complaints that their branch accounts had been impacted by a bug,
error or defect in Horizon (and to be clear, I find that it is not) it is an exercise that could
only sensibly even be attempted by firstly using the total number of bugs present in the
system (which would require at least this judgment, if not more investigation too
following the judgment), a definitive total for the number of instances of each bug
occurring (again, which would require another judgment), a definitive total for the full
amount of losses caused by each incident of each bug (information again not yet
available, if ever) and some sort of probability calculation taking account of all those
matters, That calculation would only, in any event, lead to a figure for the probability
chances of any SPM in the period having their branch accounts impacted by a bug. So
many of the essential ingredients or pieces of data for such a calculation are not known,
that to try to attempt it in the way put by the Post Office, is to start from the end and
work backwards, and work backwards in a way wholly lacking in mathematical
precision. The “law of averages” approach cannot be used, in my judgment, in the way
contended for by the Post Office.
So far as Dr Worden’s “scaling factor” is concerned, and his approach to the claimants’
branches, Mr Coyne was entirely reasonable, in my judgment, in how he would
consider hypothetical situations put to him and also explain why they were not valid.
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771,
772.
“Q. At this point in the equation what Dr Worden is trying to do is to work out how
likely it is branches are going to be affected?
A. Yes.
Q. He reasons that branches with more transactions, doing more transactions, are
statistically over a large number of occasions more likely to be hit by a bug than a
branch doing fewer transactions and would you agree the principle underlying that
observation?
A. I think that's probably a reasonable principle. If we look at the defects we found
though, there is probably other factors that could be brought into that.
Q. But you are not aware of any, you are not ina position to suggest a single factor
which you have any evidence to think actually applies in relation to the claimants as
compared with the rest of the branch network?
A. I don't know the make up of the claimant, but one example might be, do they have
an outreach branch?
Q. You are aware. aren't you, how small the number of outreach branches there is. how
insignificant that is in the context of the Post Office network, aren't you?
A. Well, it wouldn't be insignificant to the people that are impacted by the defect and
I don't know whether any of the -- because I haven't studied the claimants, I don't know
whether any of the claimants have that or not.
Q. What you are doing is you are speculating that some of the claimants might have
outreach branches?
A. I'm not. I'm illustrating the potential problems with the approach that you are taking
just simply using the unit of number of transactions.”
(emphasis added)
Similar points can be made, in my judgment, to each of the bugs in the Bug Table, and
not simply Dalmellington and outreach branches. Some affect foreign currency
transactions. Bug 9 in the Bug Table, Reversals, only affected the value of transactions
that were sought to be reversed by a SPM, and were impacted by the bug actually
introduced into Horizon by version S30 which was released by Fujitsu, That this
occurred at all was due to a failure in regression testing by Fujitsu prior to release of
$30. This would, if the bug hit that branch, show the value of a reversal twice in branch
accounts. The impact on the branch accounts would be the value of the reversal; if it
were a large figure, the impact would be large, and vice versa. Something of that nature
cannot sensibly be dealt with by the law of averages. Concurrent log ins, in the early
days of Legacy Horizon, and numbered bug 18 in the Bug Table, would only occur ifa
user was logged in at the same time to two terminals. Again, that cannot sensibly be
dealt with by use of the law of averages.
As Mr Coyne put it when asked about Dalmellington above and reminded that there are
not many outreach branches in the Post Office network and how insignificant this was,
“well, it wouldn't be insignificant to the people that are impacted by the defect”. This
answer, which in my judgment is an entirely accurate one in the context of this group
litigation, is one that could apply to each of the instances or incidents of each of the
bugs, errors and defects impacting branch accounts that have now come to light in the
Horizon Issues trial. Individually and when considered across the whole of the 3 million
sets of branch accounts in the period from 2000 onwards, the amounts are individually
smal! amounts (although sometimes they are several thousand pounds). The same point
can be reached by simply taking the sum at stake in the group litigation in terms of
accounting losses for all the claimants (as opposed to other heads of claim not
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quantified) which is £18.7 million, and comparing it to the total amount of business
transacted in the Post Office branch network as a whole across the entire UK from the
year 2000 to date. No one has calculated that latter figure so far as I know (and if they
have, they have not brought it to my attention) but it will be an enormous sum. The fact
that £18.7 million is but a small proportion of that enormous figure for total transacted
business over 18 years is of no assistance whatsoever, and neither is the law of averages
approach.
Finally on this, in one of the answers to Mr Coyne’s requests for information (on
another point, discrepancies from external data sources), the solicitors acting for the
Post Office pointed out in the document dated 4 June 2018, the number of transactions
that Horizon deals with each day. This was done in order to give a sense of scale to the
request posed by Mr Coyne. The exact answer provided was “To give this a sense of
scale, it is noted that Horizon processes around 6,000,000 transactions per day.” The
reason for identifying this is that this figure for transactions per day, together with the
agreed figure for the number of monthly branch accounts over the period agreed by the
experts, namely 3 million, gives a sense of scale of the Post Office’s business conducted
by Horizon and the total number of transactions over the period. Given there are fewer
than 600 claimants, the number of impacts on branch accounts complained of by the
claimants is a very small fraction of this (whatever its precise total). The law of averages
approach does not assist the Post Office.
So far as countermeasures are concerned, Mr Coyne stated that “typically if you were
going to design a countermeasure you would want to have it finding the defect
straightaway. If it was only going to find it sometime later it would be of limited value.”
Not only do I agree with that in general IT terms, but also in terms of the Horizon
system and its accounting function between the Post Office and each SPM’s branch
trading period specifically. A “countermeasure” in this instance would be something
that would correct an impact to the branch accounts. If that is only going to occur, as
Mr Coyne put it “sometime later” then it would only be of limited utility, if any,
depending upon the period of time this takes, Further, the Post Office used the term
“countermeasure” as including “human measures and controls”, as made clear to Mr
Coyne during his cross-examination:
“T'm using it as a term to refer to measures and controls in existence, both technical and
human measures and controls, which are designed or have the effect of identifying bugs
in Horizon or identifying the consequences of bugs in Horizon so that they can be
looked at and fixed.”
This means therefore that the Post Office was relying upon matters outside the
definition of the Horizon System at the beginning of the Horizon Issues, which stated
“©The Horizon System” shall for the purposes of this list of issues mean the Horizon
computer system hardware and software, communications equipment in branch and
central data centres where records of transactions made in branch were processed, as
defined in GPOC, at §16 and as admitted by Post Office in its Defence at §37.”
As Mr Coyne explained, countermeasures in the system are addressed at the design
stage:
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“Typically countermeasures are a design aspiration. When you sit down to design a
computer system and what controls are in place, then you would consider what controls
are required, where to position them. Should it be the case that the controls fail do you
have a human aspect doing a secondary check? It could go all the way to employing
auditors to re-check figures. You could go on ad infinitum with —
Q. So you accept, then, that these controls or countermeasures, whatever you would
like to call them, some of them have the effect of stopping the bug in its track. Well,
some of them have the effect of stopping a bug arising in the first place?
A. The best way of dealing with defects is to ensure that they don't arise in the first
place ........80 what you would do is throughout your testing regimes you would flush
out all of the defects at that point in time, and you would put in controls to ensure that
if a defect does trigger, there is a way that you are alerted to it and it is fixed as soon as.
possible.
Q. Yes. So one of the objectives is to have a testing regime which picks up as many
bugs as possible?
A. Indeed.
Q. But I think you accept that it is impossible to have a testing regime that picks up all
of them?
A. It is impossible to have a testing regime that picks up all of them and that is why
you have a process of categorisation and you would allow a product to go live if -- one
of the terms that's used -- all severity 1 and severity 2 defects have been dealt with.
Severity 3 might be largely cosmetic and you would allow a system to go live with
cosmetic defects.
Q. That's not quite what I'm asking you. You accept there are going to be bugs which
arise in the operation of any IT system which would simply evade any test that any
human being can devise?
A. There's always going to be bugs that are unknown to be within the system at the
point that you go live and they are only discovered sometimes weeks afterwards,
sometimes years afterwards.”
Both defensive programming and impact management are part of, or are descriptive
terms concerning, countermeasures. In my judgment they are both more to be described
as “technical controls” (to use the language of the Post Office’s pleading) rather than
“human measures”. These matters were all effectively part of the 3" Joint Statement.
So far as countermeasures within the Horizon System itself are concerned, these plainly
affect the robustness of the system. The 3 Joint Statement agreed that (using different
numbering):
1. The effectiveness of various countermeasures changed throughout the life of
Horizon;
2. Countermeasures are basic elements of practical IT system design;
3. Countermeasures work by limiting the impact of Horizon bugs/error and defects on
branch accounts. Countermeasures do not always eliminate the effects of adverse events
(they are not perfect) but they are often effective in the area where they are deployed;
that is why they have become basic elements of practical IT systems design:
4. It is difficult to measure the extent of the robustness of Horizon, apart from how it
might limit the extent of impact on branch accounts, as in Issue 1.
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(emphasis added)
This shows that IT countermeasures are designed into systems. That is entirely to be
expected. However, it also means that the robustness of a system cannot be measured
by other measures (such as TCs, or a human complaints department as another example)
taken to correct the effect of the IT system. A ready way of illustrating this is as follows.
Consider a hypothetical IT accounting system that has 10 countermeasures designed
into it, as a matter of IT design. It also has a human operated complaints department.
All 10 of the countermeasures fail so a user has to contact the complaints department,
which upholds the complaint and issues a correction, that undoes the impact within the
accounts the IT system has allowed to occur. The efficiency of that department, and the
accuracy with which it deals with such matters, cannot be used to assess in IT terms the
robustness of the IT system itself. It is separate.
The Post Office also has an inconsistent approach to TCs. On the one hand they are
relied upon (through Dr Worden) as being an important countermeasure — even though
they are not part of the Horizon system as defined ~ yet on the other hand questions
about them were not dealt with as though they were relevant to the Horizon Issues. For
example, one of the requests raised by Mr Coyne in respect of a particular PEAK was
as follows:
“Regarding POL-0032919.pdf, the GoldenGate replication between Oracle 10g and
11g being aborted and resulting in a number of branches reporting cash declaration and
stock reporting discrepancies, were any transaction corrections sent to the 247 affected
branches as a result of the discrepancies and which branches were affected by the
incident?”
The answer that was given by the Post Office’s solicitors was as follows:
“The relevance of this request is not understood. Transaction Corrections are issued by
Post Office to correct transient discrepancies in branch accounts in order to restore the
correct position.”
This answer to a request by the claimants’ IT expert therefore — correctly in my
judgment — identifies that TCs are not part of the Horizon system. That is entirely at
odds with them being part of a countermeasure within the Horizon system. This is
effectively accepted in the Post Office’s opening submissions which expressly state at
paragraph 114 that the “Post Office’s reconciliation processes are outside the scope of
the Horizon Issues”. TCs are part of the Post Office’s reconciliation processes, and I
find that they are outside the scope of the Horizon Issues. Dr Worden therefore cannot
sensibly take them into account as a Horizon countermeasure. The Post Office cannot
have it both ways.
One of the matters that Mr Coyne relied upon was what he described as “the sheer
volume” of KELs and reconciliation reports (a statement, it should be noted, made prior
to discovery of the 5,000 KELs disclosed by the Post Office in October 2019). His
evidence was that this confirmed “the wide-ranging extent of the impact of such
bugs/errors/defects. This evidence demonstrates that such bugs/errors/defects would
undermine the reliability of the Horizon system to accurately process and record
transactions”. He accepted that there was the need for reconciliation reports, and that
this was part of the way that a system would check whether (say) the banking records
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at the Post Office transactions matched the corresponding records at (say) the Bank of
Ireland for the same transactions. In my judgment KELs are indeed part of the records
(or contemporaneous records) that can be considered in order to arrive at an overall
conclusion for the existence and potential impact of bugs errors and defects, but the
PEAKs need to be consulted too. This is because the PEAKs are the documents that
often have greater information within them, added to which one single KEL could relate
to a couple of short PEAKs, or alternatively to many a great many far lengthier PEAKs,
and it is only from the PEAKs themselves that one can gain a better view of the impact
of that particular bug. Indeed, some of the KELs simply have a start and end date, with
very little information on the number of impacts during the intervening period. It is
clear to me that if there is more than one PEAK referring to the same KEL, one would
only realise that there had been a re-occurrence of the same defect if one considered the
PEAKs; the KEL would not show this. Simply looking at the KEL could give the
erroneous impression that such a defect had only occurred once. It is also telling, inmy
judgment, that some PEAKs that are clearly related to errors, for example the PEAK
associated with the issue that the subject that “SSC Database users do not have correct
permissions”, namely PC0208119 dated 10 March 2012, expressly states in one of the
25 October 2011 entries the following “Have relevant KELs been created or updated?
No. None believed to be required”. This clearly demonstrates that Fujitsu would not
always even create a KEL for known errors (as SSC users having the incorrect
permissions, all having APPSUP when they were not supposed to have this, is clearly
a known error). SSC users were (as set out in the PEAK) only supposed to be given
“the optional role ‘APPSUP’ temporarily (by Security Ops authorisation) if required to
make emergency amendments in BRDB Live”. I find that the KELs alone do not
constitute a record of all bugs, errors and defects.
Reconciliation reports are only generated when the information the Post Office has
about a transaction or series of transactions is different from the information held by
the client. These are called exceptions. Mr Coyne was asked why he considered the
volume of these in the history of Horizon was confirmation of his conclusion relating
to the wide ranging extent of bugs, errors and defects having impact on branch accounts.
“Q. But I don't understand, Mr Coyne, why you think that the existence of
reconciliation reports confirms the wide-ranging extent of the impact of bugs in
Horizon which are having an impact on branch accounts?
A. Lhave worked and designed banking systems, stock broking systems. I have never
seen the need for tens of thousands of transactions per week to have a human
intervention. That suggests that something is going wrong. It is working outside of
Process on a larger scale than I would have expected.”
(emphasis added)
The origin of the number of reconciliation reports is as follows. Mr Coyne had asked,
in requests for information prior to the trial, what was the purpose of setting an NB102
exception to F99 by Fujitsu. The Post Office in the answer explained that this
explanation would have to come from Fujitsu, and the explanation was given:
“When there is an incident involving a reconciliation exception in Network Banking
which has been fully processed, then the transaction needs to be set to F99 to indicate
that processing is complete.
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784.
785.
786.
787.
Therefore, this is done for any transaction that appears in a reconciliation report, once
the resolution is complete.
The reconciliation process document is SVM/SDM/PRO/0012 RECONCILIATION
AND INCIDENT MANAGEMENT PROCESS and describes how reconciliation is
carried out.
SVM/SDM/SD/0020 END TO END RECONCILIATION REPORTING is the
specifications of the reports that are produced for the reconciliation service.
The CCD that describes the contracted service:
SVM/SDM/SD/0015 RECONCILIATION SERVICE: SERVICE DESCRIPTION.”
The next request was “How often has [setting an NB102 exception to F99] occurred?”
Initially the Post Office would not answer this, stating inter alia that it was very unlikely
that the information would have been pooled or collated. When Mr Coyne persisted,
and pointed out it would be very different if the answer was “it was an isolated incident
in 2003” or “it was 10,000 transactions each day for the last ten years”, an answer was
provided by the Post Office through its solicitors. I shall reproduce it in full:
“Fujitsu currently "F99" 10,000+ transactions per week across all NB102 associated
reports (DCP and NBS)”.
This was correctly understood by Mr de Garr Robinson for the Post Office who
(understandably) corrected Mr Coyne when he initially said he thought it was hundreds
of thousands per week.
“...L asked for the number of reconciliation problems that required manual intervention,
and the answer I was given was that it was hundreds of thousands per week, I think was
the —
Q. 10,000 a week that have to be F99ed, do you remember that?
A. Yes.”
So far as the next request, which was associated with this, is concerned, that paints the
same picture of the Horizon system in my judgment. The request was:
“What is the cause of an ‘Uncleared Transaction Corruptions’ and how often do
[Uncleared Transaction Corruptions] occur?”
The answer was, again from Fujitsu:
“The DCP report NB102 section 3 (Uncleared Corruptions) usually contains 100s if not
1000s of transactions per week (Kiosk transactions only).
This is where there is a discrepancy on banking and payment card transactions, To
determine the exact cause of any individual Uncleared Transaction Corruption, that
particular occurrence would have to be analysed. However, the most usual cause is for
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a banking request or authorisation failing to reach its destination, which is something
that can have a variety of causes. An example may be that a bank may authorise a
transaction, but that confirmation is not delivered to the counter so the SPM believes
that the transaction in fact failed due to some issue.”
This is a great number of transactions per week that require manual intervention — over
10,000, on the numbers provided by Fujitsu. I consider that Mr Coyne is correct when
he says “this suggests that something is going wrong”. I do not accept that on a properly
functioning and robust system there should be such a high number as that every week.
I accept Mr Coyne’s evidence in his answer at [782] above.
Mr Coyne also considered, in respect of the control environment, that the Emst &
Young management letter of 2011 had recommended changes to strengthen the change
management process. E&Y had noted that the Post Office was not usually involved in
testing fixes or maintenance changes to the in-scope applications (which includes
Horizon Online) and they were unable to identify an internal control with the third-
party service provider to authorise fixes and maintenance changes prior to development
for applications. The risks were outlined by E&Y in the following terms:
“There is an increased risk that unauthorised and inappropriate changes are deployed if
they are not adequately authorised, tested and approved prior to migration to the
production environment”
Mr Coyne also drew attention to a PEAK some years earlier than this (in 2003) that
provided evidence that Fujitsu did not even always follow the correct processes that
were in place in any event. In this instance a branch terminal was replaced, which
resulted in a number of bills which branch customers had paid (in terms of making
payment at the branch Post Office) not in fact being paid (to the ultimate payee, the
Post Office clients that had issued the bills). The PEAK stated that “something went
wrong and the marooned transaction did not find their way back to the office”,
something which had occurred because the mirror disc in the branch terminal was
replaced (when it should not have been). The PEAK also stated:
“I believe that we shall have to confess to POCL that we have not followed the correct
procedure and we should advise that POCL make manual payments.....”
POCL means the Post Office, under its earlier name of Post Office Counters Ltd.
Mr Coyne was of the opinion that the specific recommendations in the 2011 E&Y letter
directly impacted upon Dr Worden’s view of countermeasures. He also drew attention
to the fact that the non-acceptance of these recommendations by the Post Office was an
opportunity to impose or improve countermeasures in Horizon which the Post Office
chose not to take. The four areas, and the countermeasures they would impact, were:
“1. Improvements to outsourcing application management (Quality and Change
Control; managing non-functional requirements; testing good practice);
2. Improvement to segregation of duties within the “manage change” process (Quality
and Change Control, Security);
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3. Strengthen the change management process (Quality and Change Control);
4. Strengthen the review of privileged access (Security).”
Mr Coyne also relied upon the fact that although both Legacy Horizon and Horizon
Online did contain a number of measures and controls, these mechanisms had been
shown to have failed, and this was agreed by the experts. The minutes of the Post
Office’s own Risk Compliance Committee meeting of 18 September 2013 showed that
not all of the risks identified in the then-recent E&Y audit had been addressed. All four
pages of these minutes were heavily redacted, but one surviving entry shows that risk
not addressed was “relating to the communication by Fujitsu of changes made to the
Horizon system, was still outstanding. It was identified that it would cost over a £m to
implement the mitigation being suggested by the audit and that this was not
proportionate to the risk being managed.” Mr Coyne accepted in his cross-examination
that this did not relate to a bug being fixed, and I accept that evidence. In my judgment
it does go to the robustness of Horizon.
There was one area which was concentrated upon towards the end of his evidence, and
this was an entry in the 2 Joint Statement. This was dated 25 February 2019, and under
Horizon Issue 1, under the topic “the extent bugs were possible or likely” the experts
had agreed the following entries relevant to this:
“1.1 We agree that bugs were possible, and the table above displays a number which in
the opinion of either or both experts appeared to have impacted branch accounts.
1.2 Referring to the table of bugs above, the experts agree that the bugs in rows 1, 2,3,
10, 13, 14, 18, 23, 24, 25, 27 and 28 may have had financial impact on branch accounts.
Other rows, the impact is not agreed between the experts.”
And later on in the 24 Joint Statement:
“1.15 The number of distinct bugs, for which the experts have seen strong evidence of
the bug causing a lasting discrepancy in branch accounts, is between 12 and 29.”
Just before the short adjournment on the final day of his cross-examination, Mr Coyne
was asked about the figures in that range. He was also asked to “forget Horizon Issue
4”. Given that Horizon Issue 4 asked “to what extent has there been potential for errors
in data recorded within Horizon to arise in (a) data entry, (b) transfer or (c) processing
of data in Horizon?”, being asked to ignore it somewhat narrowed down the utility of
the exercise, but it is without doubt the case that Mr Coyne, when asked for a number
for the upper range in the Joint Statement, stated it should not be 29, it should be a
different figure. He initially stated that it should be 13. The court then rose for the short
adjournment. As soon as court resumed one hour later, he immediately sought to correct
the number 13 that he had given. He said the number should be 21. A complication in
this cross-examination exercise was that initially Mr Coyne was using what he called
his bug table in his 2™ report (which had been dated 1 February 2019, and amended on
6 March 2019) and the cross-examination was being done by reference to something
also referred to throughout the trial as “the Bug Table”, which was the one in the 2™
Joint Statement. The former in the report had a column headed “evidence of branch
impact” with the entry “yes” or “no”; the entry in the Joint Statement about which Mr
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795.
796.
797.
Coyne was being asked was item 1.15 and is as set out above. The questioning was
done solely by reference to Horizon Issue 1. Table 1 in Mr Coyne’s 2" report made it
clear that Phantom Transactions, Reconciliation Issues, Concurrent log-ins, Post &
Go/TA discrepancies in POLSAP, Recovery Failures and Transaction Correction Issues
were all listed under Horizon Issue 4, and not Horizon Issue 1, An associated difficulty
was the distinction that was being made by the Post Office between lasting and transient
effect.
The correct figure being supported by Mr Coyne in his evidence was explored
extensively in cross-examination. Mr Coyne did explain this as follows (in part only):
“Q. Are you suggesting that you have only ever suggested 21 and no one was
suggesting anything above 21?
A. No. There are 29 bugs, errors and defects in the list and in the table starting at
number 1, but some of those go to other Horizon Issues apart from Horizon Issue [and
they do say that clearly in the heading.”
There is no doubt that Mr Coyne made matters a little hard for himself during this
passage of questioning, and the Post Office seized upon his change of number (which
was, after all, an agreed number in an agreed statement by both experts) and made much
of it:
“Q. Mr Coyne, everybody on this side of the court, and I mean everybody on this side
of the court, believed that your view was that the evidence showed that there were 29
bugs with lasting financial impact. You are now saying that we made a mistake, are
you?
A. Yes.
Q. Could I ask you to explain where you made it clear what you were actually saying?
A. Well, as set out in my second report, there is a table there that quite clearly says
whether there is evidence of branch impact or not. And there is also a list of which
Horizon Issue it specifically relates to. The only addition to that is when you come to
the very last column, there's other bugs, errors and defects that are re-introduced and
they are only covered in the joint statements.”
Mr Coyne also said:
“A. Throughout the report I have set out next to every single defect whether it is relating
to the test of Horizon Issue I or a later Horizon Issue, and I have also set out whether I
believe there was impact on branch accounts all the way through report number 2.
Q. Let's not talk about report number 2 because the statement -- the most up to date
statement of the position, I think you agreed with me at the beginning of today, the
culmination of all your work, including work you did after your second report, is the
bug table in joint statement 2?
A. Yes, but when you put that to me I said that that can't be read in isolation, it must
be read with the second report.”
So far as the number is concerned, Mr Coyne settled on 22 different bugs, his
explanation of his earlier different numbers was as follows:
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800.
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“Q. And I would like to ask you why is it you thought there were 21 bugs at 2 o'clock,
whereas you thought -- was it 14 bugs at 1 o'clock? 13 bugs at I o'clock.
A. Because I was just counting down the table at number I in my report. In the pressure
of the situation I just tallied that column down, I didn't have enough time to consider it
fully.
Q. To go back to a question I asked you earlier, where do you make this clear in the
joint statement?
A. In the heading next to the -- in the bug, error or defect.”
T accept that explanation. Although Mr Coyne was criticised for certain entries in the
2" Joint Statement, including the headings, and it was put that the “joint statement was
seriously misleading” I do not consider this a valid criticism of him. It was a statement
the text of which had been agreed by both experts, and it appeared in an experts’ agreed
joint statement. There is no doubt that the upper figure of 29 would most likely have
come from Mr Coyne, with the lower figure of 12 having come from Dr Worden (and
the claimants’ legal team interpreted the figure of 29 in the same way as the Post Office,
as it appeared in their written opening) but there is a limit to how much can be put on
this point by the Post Office. Joint Statements are (or should be) reached by the parties”
independent experts between themselves.
It is the experts’ responsibility to agree the content of their Joint Statements, and this is
part of their duty to the court as independent experts. It is the basis on which the court
gives permission for expert evidence. No authority is required for these propositions as
this is wholly conventional, but to the extent that authority may assist, Males J (as he
then was) fully explained this in [3] of Mayr and others vy CMS Cameron McKenna
Nabarro Olswang LLP [2018] EWHC 3669 (Comm). The agreed text of the agreed
parts of a joint statement therefore cannot be approached as though it were a unilateral
passage in only one of the expert’s reports. It is an agreed passage. I do not consider
that Mr Coyne’s changes of the number he was asked about demonstrates any
unreliability on his part, or discredits him or his evidence.
I consider Mr Coyne to have been a helpful and constructive witness, and I find the
suggestions made to him that he was biased to the claimants and not independent are
criticisms that are not justified. He, and his small number of assistants, had done a great
amount of investigation into the very numerous PEAKs, and the smaller number of
KELs, and he had embarked upon a careful and sensible exercise necessary for him to
reach conclusions on the Horizon Issues, as drafted and agreed by the parties and as
approved by the court.
There were some fundamental methodological differences between him and Dr
Worden, but the agreements that the two of them reached were detailed notwithstanding
this. I found the contents of all of those agreements of great assistance.
Dr Worden
802.
Dr Worden was educated at the Université de Grenoble, Cambridge University and the
California Institute of Technology, better known as Cal Tech. He has a Ph.D in
Theoretical Particle Physics. He is currently a consultant with a practice called Charteris
Associates, having started there in 1997, but he has been a consultant since August
2010. Starting with the first entry on his CV in terms of his work experience, between
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1975 and 1986 he worked on the development of knowledge-based systems and
developed Logica’s proprietary relational database management system, and between
1986 and 1990 he was the Managing Director of Logical Cambridge. This is an
advanced technology subsidiary of Logica. Between 1991 and 1995 he acted as an
independent reviewer of many of Logica’s largest projects, the key projects that
constituted a large part of Logica’s commercial risks, and also a large part of its
commercial reputation. Between 1995 and 1997 he was a Business and Technical
Consultant in Logica, moving to Charteris in July 1997. He has given evidence in the
High Court before on several occasions, including in what was at that time the biggest
IT dispute tried, namely BSkyB Ltd v HP Enterprise Services UK Ltd (formerly EDS
Ltd) [2010] EWHC 86 (TCC). This case is notable for a range of reasons, not least that
the judgment (excluding quantum) runs to some 2350 paragraphs; and also that the
educational qualifications considered in the judgment included those of one main
factual witness who turned out to have fabricated the establishment from where he
claimed to have been awarded a MBA. This was a point demonstrated by counsel
enrolling his own dog (“Lulu”) in the same establishment, Lulu gaining an MBA with
higher marks than the witness. The hearing ran for 109 hearing days and Dr Worden
was cross-examined in that case for more than 35 hours, which is a very considerable
period of time for anyone to be in the witness box. In his CV he identifies that the
majority of his opinions referred to in the judgment of Ramsey J were accepted by him.
At [277] in that judgment he was described as “more of a generalist in the field of IT
with some experience dealing with CRM systems but with good general knowledge of
the estimating, systems integration and the types of problems which can arise on
projects such as” the project in that case.
He is a highly qualified person, both in IT generaily and specifically, and in statistics.
He has earlier experience with relational database management systems when he was
at Logica in the late 1970s and early 1980s, and from the dates it is possible to tell that
he has been involved in the IT field for many decades, and (in comparison with many
IT personnel today) from its infancy. He has also, whilst at Charteris, developed and
deployed software for data integration and migration. He described himself as having
done databases “since the year dot” at one point. He describes himself in his CV as
having strong practical experience of information technology and its business
applications. He has several years’ line management experience, has successfully
managed large IT projects, and acts as a trouble-shooter of major integration projects
and consultant in information strategy. He has particular expertise in XML, in large-
scale information architectures and tools, data integration and data migration, scientific
data processing, and in system performance. He explained that as he is trained as a
scientist and engineer, he has used mathematics all his life and part of that mathematics
is probability theory and statistics. Given the subject of his Ph.D, it will be no surprise
that he uses mathematics extensively. I doubt that there are any theoretical particle
physicists who are not extremely skilled and expert at mathematics at a very high level
indeed. He therefore has great experience in statistics, and at one point in his cross-
examination was described as a statistician, something with which he did not disagree.
He does not however, as he put it, have any formal qualification in statistics.
He is also a highly experienced expert witness, as demonstrated not simply from the
BSkyB case I have referred to above but many others, and he has given expert evidence
in different cases in the Technology and Construction Court, Chancery Division and
Queen’s Bench Division too. He served two detailed reports with numerous appendices
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805.
806.
(adding schedules of corrections in the usual way in supplementary evidence in chief),
and he also took part in the joint experts’ exercises and signed the four Joint Statements
with Mr Coyne. He also served a third report directly upon the court, but no application
to adduce this as part of his evidence in chief was made by the Post Office and it did
not form part of his evidence.
In the instant case, he was cross-examined for three days. One of his corrections in chief
was in respect of paragraph 761 of his 1* report where he had stated the following in
respect of his summary of what was called a statistical analysis of the likelihood of the
bugs that had been found by the experts being the cause of the claimants’ shortfalls and
discrepancies.
“759. In section 8.5, ‘Scaling of Financial Impact of Bugs’, I gave what I think is the
simplest analysis of why. in quantitative terms, bugs in Horizon cannot have accounted
for a large part of the Claimants’ shortfalls. I summarise it here.
760. Because Post Office has had an average of 13,560 branches over the lifetime of
Horizon, the total number of monthly branch accounts has been about 3 million.
761. Therefore, if a bug like the Suspense Account bug has occurred 16 times in the
lifetime of Horizon, the chance of it having occurred in any given branch in any given
month is about 16 in 3 million. Because the Claimants tended to have smaller branches
than the average, doing fewer monthly transactions (by a factor 0.37), the chances of
the bug occurring in a Claimant's branch would be about 2 in 10 million.
762. I have considered a bug similar to the suspense account bug, which occurred about
10 times, and had a mean financial impact of about £1000 per occurrence. How many
similar bugs would be needed, to give a one in ten chance of one such bug occurring,
with an impact of £1000, on a particular Claimant's branch in a particular month?
763. The answer, given by elementary arithmetic which I describe in section 8.5, is that
there would need to be 50,000 of these distinct bugs. If there were fewer than 50,000
similar bugs, if any Claimant were to assert that in a given month a shortfall of £1000
in his accounts was caused by bugs in Horizon, then the chances of his assertion being
correct are less than one in ten.
764. So the Claimants cannot credibly assert that their shortfalls were caused by bugs
in Horizon, unless there were something of the order of 50,000 such bugs.
765. Only three such bugs have been found. My own search of KELs has found only 8
other possible bugs. Mr Coyne's examination of over 5000 KELs has found no other
bugs which definitely caused shortfalls.
766. Thus the Claimants' case requires 50,000 bugs in Horizon - but only a handful
have been found by the experts. Neither expert can quantitatively support the Claimants’
case.”
(emphasis added)
His correction was that in respect of paragraph 761 the sentence that reads "the chances
of the bug occurring in a Claimant's branch would be about 2 in 10 million" should be
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807.
808.
"the chances of the bug occurring in a Claimant's branch would be about 2 in a million”.
He said that this was a typographical error. When he was asked if he had spotted any
other errors, he said:
“A. No, I didn't because there were quite a few statements of this "in a million" nature
in my report. I made careful checks of the main thread that led to my key result in
section 8.7, and that was my focus. And similarly on the transaction corrections I had
made checks to that spreadsheet and, you know, I included the spreadsheets with the
reports so that you can see how the arithmetic is done from the spreadsheets.
Q. And some of it you point out is basic arithmetic?
A. I think all of it is basic arithmetic.”
He said, in relation to a question as to whether Mr Emery, his assistant, had “checked
the maths” that “No, he didn't actually. The maths is there in the spreadsheets for
anybody to check. It is not advanced statistics, it is basic multiplication and division,
and it is laid out in the spreadsheets.”
(emphasis added)
His methodology in terms of his statistical analysis was explained by him in section 8.5
of his 1* report. This stated:
“617. I shall assess the financial impact of bugs in Horizon over three different scopes:
617.1. (a) Across all Post Office branches, during the lifetime of Horizon.
617.2. (b) Across all Claimant branches, while they held them.
617.3. (c) On a single Claimant branch in a single month.
618. It is possible to relate the financial impacts on these scopes, by numerical scaling
factors. I calculate those scaling factors in this sub-section.
619. Over the period 2000 — 2018, (i.e. 19 years) the Post Office network has consisted
of more than 11,000 branches. The mean number of branches in all years over the period
has been about 13,560. This figure is derived from the spreadsheet referred to at
paragraph 178 of Ms Van Den Bogerd's Second Witness Statement, assuming that the
spreadsheet is accepted. If this evidence is accepted, the number of ‘branch months' (a
single branch, trading for a single month) has been 13,560 * 12 * 19 = 3,091,680. This
is the number of monthly branch accounts that have been produced.
620. This means that for a typical Post Office branch, the scaling factor between scope
(a) and scope (c) for the impact of bugs in Horizon is a factor of 3 million.
621. For Claimants’ branches, rather than typical branches, the scaling factor of
approximately 3 million may need to be adjusted for two possible effects:
621.1. It might be asserted that Claimants' branches are more or less likely than other
branches to be hit by bugs in Horizon, because of some special property of Claimants.
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621.2. Claimants’ branches may, on average, be smaller or larger than typical branches
across Post Office network. If they are smaller, they handle fewer transactions in a
month, and so are less prone to Horizon bugs in those transactions.
622. It seems implausible to me that there is some special factor about Claimants’
branches. which makes them much more prone to bugs in Horizon - bugs which one
would expect to strike any branch at random. Nevertheless, I have considered the
possibility carefully in Appendix F. I have shown there that there is no significant
difference between Claimants' branches and other branches, in proneness to bugs in
Horizon.
623. It appears, from the spreadsheet attached at paragraph 179 of Ms Van Den
Bogerd's Second Witness Statement, that the Claimants' branches are, in terms of
customer transactions carried out per day, smaller than the average across the whole
Post Office branch network.
624. If this spreadsheet is accepted, it implies the following about Claimants’ branches:
624.1. From summing rows of the spreadsheet, the 561 Claimants' branches carried out
558,000 customer transactions per week in 2007.
624.2. This is 558,000/6 = 93,000 transactions per day, assuming a Post Office branch
is open for 6 days a week.
624.3. Across 561 Claimant branches, this is an average of 93,000/561 = 165 customer
transactions per branch per day.
625. For comparison with this figure, I need to estimate the average size of branches
across Post Office Network. I have done this using two pieces of evidence. Ms Van
Den Bogerd's Second Witness Statement says that, across the whole Post Office
network, there are approximately 48 million customer transactions per week, or 8
million per day in 2017 (assuming again that branches are open for 6 days in the week).
[626. I have omitted the table of EPOSS Transaction Rates, which are then
summarised in 627]
627. The best estimate J can make of the average daily volume in 2003 from this table
is to divide the peak month by 26 working days. This gives an estimate of
approximately 4 million transactions per day in 2003, compared with 8 million
transaction per day in 2017.
628. I therefore estimate that the average volume of transactions over the period 2000-
2018 has been approximately 6 million transactions per day, mid-way between the 2003
figure and the 2017 figure (assuming Mrs Van Den Bogerd's evidence is accepted. I
note that Mr Coyne quotes the same figure from her).
629. To estimate how much smaller the typical Claimant's branch is than the average
Post Office branch:
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629.1. The average transaction rate for all Post Office branches is 6,000,000/ 13,650 =
439 customer transactions per branch per day.
629.2. So, in terms of customer transactions per day, the typical Claimant branch was
smaller than the average Post Office branch by a factor 165/439 = 0.37.
630. So, Claimants’ branches, being generally smaller than Post Office average, have
fewer transactions per month and so are less likely to be hit by a Horizon bug ina given
month. (The calculation of the factor 0.37 contains some minor approximations that can
be improved with further effort. I intend to do so in my supplemental report.) The factor
0.37 increases the scaling factor above, between scopes (a) (see paragraph 617.1) and
(c) (617.3) from about 3 million to about 8 million.
631. I illustrate what the factor of 8 million means using a hypothetical example of a
bug which has occurred 16 times over the lifetime of Horizon, with mean financial
impact on these occasions of £1000. Call this Bug A. The financial impact of Bug A is
similar to that of the Suspense Account bug.
632. If I selected a Claimant's branch and a month at random, then the chances of Bug
A occurring at that branch in that month are only 16 in 8 million, or 2 in a million - an
extremely small probability.
633. Different types of bug occur independently of one another, so their probabilities
of occurring are additive. If there were a second bug similar to the hypothetical bug
above - call it Bug B - then the chances of either Bug A or Bug B happening to one
branch on one month are twice the previous figure - 32 parts in 8 million.
634. If there were 100 similar bugs - called Bug A, Bug B, Bug C,... Bug Zz - the
chances of any one of them happening to one branch on one month are stil! only 100 *
16 parts in 8 million, or one part in 5,000. This is still a very small probability.
635. It then follows that in order for one occurrence of a bug, of similar financial impact
to the Suspense Account bug, to have even a one-in-ten chance of occurring to one
branch on one month, there would need to be 50,000 such distinct bugs - because 50,000
* 16/ 8,000,000 = 800,000/8,000,000 = 1/10. There would have to be a Bug A, Bug B,
Bug C, and so on, in a list with 50,000 distinct bugs.
636. Even if there were some 'super-bug' - with financial impact ten times larger than
the suspense account bug - there would have to be approximately 5,000 such super-
bugs to give a one in ten chance of affecting a Claimant's branch accounts in a given
month. There is no evidence for even one such super-bug - let alone for 5,000 different
ones.”
[637 and 638 then provided a further table and calculation that I omit]
639. The Claimants have never asserted that there are as many as 50,000 distinct bugs
in Horizon, with each bug on the same scale of financial impact as the Suspense
Account bug. Their case rests on two or three known bugs of this scale, and on the
unproven assertion that there may be others.
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809.
810.
640. If any Claimant were to assert that, for instance, a deficit of £1000 had occurred
in his branch in a particular month, caused by a bug similar to the Suspense Account
bug, the chances of that assertion being correct are extremely small, because Horizon
bugs strike so rarely - unless Horizon contained of the order of 50,000 distinct bugs of
that kind (and even then, the chances are only one in ten).
641. Mr Coyne has examined more than 5,000 KELs, and not found definite evidence
for even one bug with impact similar to the Suspense Account bug - let alone 50,000 of
them.
642. The implication of this result - the very small probability of any error in one
months' accounts from a bug in Horizon - is that the accounts for any branch on any
month are overwhelmingly likely to be correct (apart from effects such as delayed TCs,
which are corrected after a variable delay).
643. In my experience, no commercial IT system could ever go live with as many as
50,000 serious bugs - and certainly could not have the good in-service record over 18
years that Horizon has had.”
(emphasis added)
I have reproduced extensive passages of Dr Worden’s explanation of his own
methodology in order to allow his explanation to be available to any reader of this
judgment. I consider this a wholly flawed methodology, and obviously so, and I reject
it.
There is another aspect to this which needs addressing at this point. It needs some
context in order properly to be understood. Sums recovered from SPMs for
discrepancies in branch accounts would be put into something called the suspense
account. The claimants pleaded in paragraph 38 of the Generic Particulars of Claim the
following:
“38. The Defendant operated one or more suspense accounts in which it held
unattributed surpluses including those generated from branch accounts. After a period
of 3 years, such unattributed surpluses were credited to the Defendant's profits and
reflected in its profit and loss accounts.
39. The Defendant thereby stood to benefit and/or did benefit from apparent shortfalls
wrongly attributed to the Claimants which did not represent real losses to the
Defendant.”
This was pleaded to by the Post Office in the Defence as follows:
“73. As to paragraph 38:
(1) Post Office does not have a clear understanding of what the Claimants mean by the
term "suspense account" or by the phrase "unattributed surpluses including those
generated from branch accounts".
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812.
* 813.
(2) In relation to its dealing with its clients, Post Office is almost always able to
reconcile its figures to those of its clients. However, as is inevitable given the nature
and scale of those dealings, occasionally Post Office is not able to do so. For example:
(a) A client, such as a bank, makes a payment to Post Office in respect of a particular
transaction undertaken in a branch but the payment exceeds the amount that Post Office
considers to be due.
(b) Post Office seeks but does not reach agreement with the client as to the amount due
and the client does not accept repayment of what Post Office considers to be the
overpayment. In parallel, Post Office also seeks to determine whether the overpayment
should be credited to a branch or to any other relevant part of its business.
(c) Where the proper beneficiary of a credit cannot be determined, Post Office
temporarily records the overpayment in its accounts. If the overpayment is not resolved
within 3 years, the overpayment may be credited to Post Office's profit and loss account.
(3) The existence of processes for recording and resolving credits of the type described
above are an ordinary business practice.”
This was then pleaded to by the claimants in their Reply and Defence to Counterclaim:
“29. The Defendant's professed lack of clear understanding of the term ‘suspense
account’ at paragraph 73(1), is noted at paragraph 2.1 above, and its response to the
Claimant's RFI is similarly evasive.
30. The effect of the Defendant's example pleaded at paragraph 73(2), is that the
Defendant admits the possibility that:
30.1. a sum of money may be received which the Defendant believes to be an
‘overpayment’ from a third party client (e.g. a bank) in respect of a transaction
undertaken in a branch: paragraph 73(a);
30.2. the Defendant would seek to determine whether the overpayment should be
credited to a branch, or to any other relevant part of its business: paragraph T3(b);
30.3 where the Defendant does not identify ‘the proper beneficiary’ of the credit, Post
Office ‘temporarily’ records the overpayment in its accounts and credits that to its
profits, if not resolved within 3 years.
31. This logic would apply where the Defendant’s internal records were wrong due to
a Horizon error or in the case of any failure to identify the relevant branch or
Subpostmaster”.
I find that there is no sensible basis for the professed lack of understanding by the Post
Office in its Defence of the term “suspense account”. That term is widely used by
witnesses for both sides in the evidence, and I will give two simple examples showing
its use. One of the Post Office’s own witnesses, Mr Johnson used it in his evidence, in
a passage quoted at [279] above. Further, in an internal document which was prepared
after the Calendar Square bug was discovered, it was widely used. An extract from that
document appears at [404] above. Not only is the term used in four separate places in
that document, there is even reference to the Suspense Account Team. The notion that
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814.
815.
816.
817.
818.
the Post Office did not understand the term used in the Particulars of Claim is wholly
fanciful. Further, there is an agreed bug (number 3 in the Bug Table) which the experts
call the Suspense Account bug.
Putting to one side the fact that the Post Office professed not to know what the term
suspense account meant, notwithstanding its use in internal documents, the Defence
makes it clear that unattributed sums within it, the correct destination for which the Post
Office could not work out, were credited to its own profit and loss account. I accept the
logic explained in the Reply in respect of the effect of this.
Dr Worden had wholly failed to consider this issue. The point was put to him, not by
reference to the pleadings, but by reference to another document which he admitted he
had read, namely a report by Second Sight. That report had stated what is basically the
same point but in slightly different terms, namely as follows:
“2.11 We note that Post Office's control and reconciliation procedures rely on correct
information being supplied by third party clients. It follows that, if incorrect
information is provided by any client company, this can give rise to a loss being charged
to a branch. We also note that, for most of the past five years, substantial credits have
been made to Post Office’s Profit and Loss Account as a result of unreconciled balances
held by Post Office in its Suspense Account.”
The question and answer are as follows, having read out the passage:
“Now I'm not asking you about that as evidence of itself, I'm just asking were you aware
that that was a concern that Second Sight had raised about substantial credits being
made to Post Office's profit and loss account as a result of unreconciled balances held
by Post Office in its suspense accounts?
A. I read the Second Sight reports and the Post Office's reply.
Q. But did you spot that?
A. I didn't spot that, no.”
This point was put in the context of evidence Dr Worden had given, namely the effect
of small bugs or what he called “micro bugs” being unlikely to have an effect.
“Q. Okay. Well, what about -- because elsewhere in your report, I don't want to stray
too much at the moment, but you also mention micro bugs, small bugs, being unlikely
because you would expect to see large sums of money somewhere --
A. Money that disappears somewhere has to pop up --
Q. It's got to come back somewhere else, it's got to pop up somewhere else.”
The above passage was then put to him. Dr Worden’s failure to spot what is, in my
judgment, a point directly relevant to the likelihood of Horizon bugs, errors and defects
having a potential impact upon branch accounts is a notable one. Whether the point is
taken from the pleadings, or from the Second Sight report (which Dr Worden accepted
he had read, together with the Post Office’s reply to that document) does not much
matter, in my judgment. I consider that this one omission alone - which I consider to be
a serious omission on his part — is sufficiently fundamental as to undermine his evidence
on this issue on its own.
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819.
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The following points are relevant in respect of Dr Worden’s statistical exercise:
1. Statistics is the branch of mathematics that concerns the collection, presentation and
analysis of data. There was no permission granted by the court for expert statistical
evidence in this case. The permission that was granted was for expert IT evidence.
2. Had either party sought permission to rely upon evidence from an expert statistician,
I would not have granted it. Statistical analysis does not assist in resolution of the
Horizon Issues, which required (in my judgment) detailed technical analysis and
consideration by IT experts of the detailed occurrences of what could, potentially, be
bugs, errors and defects. This was so that their expert opinion could be brought to bear,
firstly, upon the important issue of whether there were any, and also if there were, their
extent and the degree to which they potentially could impact branch accounts. This both
experts did in any event, and that evidence — based on contemporaneous records and
evidence about their occurrence - is of far greater assistance than this wholly theoretical
argument about why Horizon bugs cannot have affected the claimants’ branch accounts.
3. Dr Worden uses statistics, as he uses mathematics, as part of his professional life.
Any particle physicist would, and does, use mathematics every day. Dr Worden
accepted that this was not advanced statistics, and he was right to do so. It is a
combination of simple assumption together with basic multiplication and division. The
assumptions are not, in my judgment, valid.
4. None of the Horizon Issues required the experts to perform a mathematical or
statistical analysis of the likelihood of the claimants’ alleged shortfalls and
discrepancies being caused by bugs, errors and defects in Horizon. Horizon Issue 3 —
using as it does the term “extremely unlikely to be the cause of shortfalls in branches”
— does make this exercise by Dr Worden relevant if that was how he chose to address
that issue. That does not however make it either correct, or of any assistance.
5. The accepted correction to the figure of “2 in 10 million” — which he accepted before
his cross-examination started should be “2 in a million” — shows, in my judgment, how
very broad brush this exercise was. As he put it in his oral evidence, “...there were quite
a few statements of this "in a million" nature in my report”.
6. It is plain that Dr Worden’s own evidence accepts that there are two fundamental
assumptions that are central to this exercise. The first is that any bugs in Horizon strike
branches randomly (which is spelt out in his report). The second is that the claimants’
branches are a random sample. This can be seen, implicitly, from his statement at
paragraph 621.1 that “it might be asserted that Claimants' branches are more or less
likely than other branches to be hit by bugs in Horizon, because of some special
property of Claimants” and also at paragraph 632 “if I selected a Claimant's branch and
a month at random...” Neither of these assumptions are valid, and the reasons that they
are not valid are explained in this judgment.
7. His paragraph 636 makes it clear how fundamentally unsound this exercise it. He
stated “Even if there were some 'super-bug' - with financial impact ten times larger than
the suspense account bug - there would have to be approximately 5,000 such super-
bugs to give a one in ten chance of affecting a Claimant's branch accounts in a given
month.” However, the evidence shows, quite specifically, that even for bugs such as
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Dalmellington and Callendar Square, SPMs’ branch. accounts were specifically
affected, and some by quite significant amounts. This therefore demonstrates that some
SPMs as individuals could, and did, have their branch accounts affected by bugs. If the
evidence does not match a theory (which here it plainly does not) then that must mean
that the theory is flawed.
8. Of his four different ways of addressing financial impact, set out in his paragraph
614, the second assesses the net impact of all bugs referred to in KELs. However, KELs
do not invariably recite known financial impact. In some, known financial impact is
recited, but a conclusion in many KELs is that user error cannot be ruled out and
therefore a conclusion is reached that a bug is not responsible. I consider that Fojitsu
would regularly record user error simply as a “catch all” and, effectively, require
someone to rule it out to Fujitsu’s satisfaction, and unless this was done Fujitsu would
remain wedded to that as an explanation. Given the technical investigations were being
done by Fujitsu itself, Fujitsu rarely (if ever) ruled our user error by the SPM. This was
wholly in Fujitsu’s interests.
9. Dr Worden’s reasoning is entirely circular. By layering assumption upon assumption
{and in places routinely misdescribing these assumptions as estimates) he felt able to
conclude that there would have to be as many as 50,000 serious bugs for the claimants
to be correct (as set out in his paragraph 643) and that “no commercial IT system could
ever go live with as many as 50,000 serious bugs - and certainly could not have the
good in-service record over 18 years that Horizon has had”. The whole rationale of this
litigation is to work out, more or less, exactly what the “in-service record” of Horizon
in fact is. I do not consider reliance on an assertion that it has had “a good in-service
record over 18 years” can be used to underpin an exercise, the whole purpose of which
is to consider this very issue. I reject his exercise that led to his figure of 50,000 bugs -
it is wholly flawed. I also reject the circularity of his reasoning, which lacks logic.
10. Dr Worden also implicitly assumes that all known bugs have been both reported
and discovered, as he uses this (the total number of occurrences of the Suspense
Account bug) in his table at paragraph 637. It is his label F and the source is “evidence
on the Suspense Account bug”. Mr Coyne estimated that there may be as many as 40,
based on an extrapolation of the number of KELs and PEAKs inspected.
11. Dr Worden also misidentified the approach of the claimants, or certainly the
approach of Mr Coyne. He stated “Their [ie the claimants’) case rests on two or three
known bugs of this scale, and on the unproven assertion that there may be others.” That
is not correct. The approach of Mr Coyne has been to consider PEAKs and KELs; see
what is reported contemporaneously and what the conclusions were (or appeared to be)
within Fujitsu; and consider what that contemporaneous account shows. Mr Coyne then
uses that to draw conclusions. A great many of the bugs in the Bug Table use
contemporaneous entries by Fujitsu which records bugs, errors and defects, as part of
the consideration of whether there were such bugs, errors and defects. This is not mere
assertion.
12. However and in any event, by the end of the Horizon Issues trial, the Post Office
admitted the existence of far more bugs than the “two or three known bugs” that were
referred to by Dr Worden in the preceding sub-paragraph.
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820.
821.
822.
13. Finally, I consider that Dr Worden’s statistical exercise is nothing more than a
superficial short cut which avoids a detailed technical analysis of the history of the
Horizon system in the way undertaken by Mr Coyne. In this case, on these issues, with
all the detailed evidence available, it can be shown to be an unjustified way to resolve
any of the Horizon Issues.
Dr Worden also assumed that bugs in Horizon strike branches randomly. This too is not
borne out by the evidence. For example, the Dalmellington bug (bug 4 in the Bug Table)
appears to have affected only outreach branches. Relatively few of the Post Office’s
branches are outreach branches. Bug 14 in the Bug Table, which Mr Coyne said was a
bug but which Dr Worden described as “appears to be a system error with impact upon
branch accounts” is entitled in the bug table “bureau discrepancies” and relates to
foreign exchange transactions. Dr Worden’s exercise takes no account of what is,
effectively, an admitted bug, and one that has an effect only upon foreign exchange
transactions. If a branch conducted very few, if any, of these, it would not be affected
by this bug. The chances of a branch being impacted by the bureau discrepancies bug
depends upon whether it carries out foreign exchange transactions, and if so how many.
That is not a bug striking all branches randomly. Indeed, rather tellingly for Dr
Worden’s exercise, he assumes that any such bug would strike randomly across the
whole branch network and have an equivalent random effect upon the branch accounts
of branches that had performed foreign exchange transactions, and those that had not.
This is plainly invalid.
Dr Worden also assumed that the claimants are a random sample of SPMs. That this is
one of his assumptions can be identified in the following way. His analysis of likelihood
of any bug impacting any SPM’s branch accounts would apply equally to any group of
SPMs chosen at random from those SPMs with smaller branches. The only adjustment
or account taken of the claimant SPMs’ particular characteristics is that they are,
generally, from smaller branches, and for this Dr Worden applies what he calls a scaling
factor. However, the claimants are not a random sample of SPMs, nor are they evena
random sample of SPMs from smaller branches. As a sample, they have already been
filtered or selected in that these particular SPMs already complain of bugs, defects and
errors in Horizon having affected their branch accounts. This means that they are not a
random sample. The way this would be expressed in statistical terms is that the claimant
SPMs do not accurately represent the population of SPMs as a whole (or even the
population of SPMs who had smaller branches). The claimants are essentially self-
selected, from those who believe they have experienced shortfalls and discrepancies in
their accounts from the impact of bugs, errors and defects, and who have been prepared
to join the litigation. The group has a bias, in statistical terms. They plainly cannot be
treated, in statistical terms, as though they are a random group of 587 SPMs.
The adjustment made by him (or scaling factor, which was refined from that in his 1*
report) to take account of the particular characteristics of the claimants does not validate
what is, in my judgment, an entirely invalid base assumption. He attempts to deal with
this by considering whether there is any “special property” of the claimants’ branches
that makes them more susceptible to bugs, and concluded (at paragraph 622 of his
report) that there is not. This is to approach the matter somewhat backwards, in my
judgment. The experts are agreed that there were 3 million sets of branch accounts in
the life of Horizon. The number of sets of branch accounts of which complaint is made
in this litigation is a small (even perhaps tiny) proportion of that 3 million. However,
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823.
824.
825.
that basic arithmetical fact does not mean that bugs, errors and defects cannot on the
balance of probabilities be responsible for shortfalls and discrepancies.
The exercise also wholly ignores what branch accounts are, how they are supposed to
be created from the full list of transactions carried out in that particular branch in that
particular period, and how precise they are required to be. The analysis of the “lasting
and transient impact” approach taken by Dr Worden has already identified that this
ignores the effect on branch accounts of the impact of a bug if no transaction correction
has been issued before the end of the next trading period.
There is also another fundamental problem with Dr Worden’s exercise, which is that it
entirely ignores the specific purpose of Horizon, at least so far as the contractual
relationship between the Post Office and SPMs is concerned. The Horizon system is,
whether under Legacy Horizon or Horizon Online, the method by which the Branch
Trading Statement or BTS is produced for an individual SPM’s branch Post Office. The
BTS is the accounting mechanism under either the SPMC or NTC (the two different
types of contracts used by the Post Office for SPMs during the period from 2000
onwards, explained in detail in Judgment (No.3) on the Common Issues). It was the
common intention of the parties that the Horizon system would be used for the creation
and recording of accurate information regarding all transactions performed in the
branch which would be used for the production of the Branch Trading Statement for
that branch. This means that at the end of each branch trading period, the BTS will (or
should) provide a statement of the branch activity, which includes whether the accounts
are in balance (which is where the cash and stock in the branch matches the Horizon
system’s records of what should be there) or whether there is a discrepancy. If there is
a discrepancy and it is a shortfall, the contractual terms of the SPMC and the NTC
require the SPM to “make good” the shortfall, which means pay the money to the Post
Office. The other alternative for an SPM is to “settle centrally”, which means seek time
to pay. If the Post Office agrees, the shortfall can be paid over 12 months by deduction
from the SPM’s remuneration. This purpose of the Horizon system is entirely ignored
in Dr Worden’s statistical exercise across the whole branch network.
Consider a hypothetical bug, bug X. Also consider that bug X impacts upon branch
accounts in a single branch upon a single occasion leading to a shortfall in the branch
for that branch trading period. That shortfall would be treated as a debt by the Post
Office and the SPM either has to pay, seek time to pay, or may even end up in a dispute
with the Post Office and/or be suspended as a SPM and not pay. Analysis and resolution
of the correct and true situation of the branch accounts between the Post Office and the
SPM for the trading period in question does not depend upon whether, in all the other
millions of branch accounts, there was no such incidence of bug X. The correct
analytical approach in my judgment is to consider the branch activity for that branch
for that period; consider the evidence both for and against (1) the existence of bug X
and (2) the likely cause of the discrepancy, bearing in mind both the burden and
standard of proof; make findings on the cause of the discrepancy; and then apply those
findings. Expert IT evidence of most assistance in that exercise would be whether or
not bug X exists or existed, and what were its effects. It is of no assistance to have an
exercise that in effect says the statistical likelihood of any bug having an impact upon
the branch accounts of that branch in that period is very low.
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826.
827.
828.
829.
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The section 8 analysis is, in my judgment, so riddled with plainly insupportable
assumptions as to make it of no evidential value. It is the mathematical or arithmetic
equivalent of stating that, given there are 3 million sets of branch accounts, and given
there are so many sets of branch accounts of which no complaint is made, the Horizon
system is mostly right, most of the time. It is a little more sophisticated than that, but
not by very much.
The way that this can be further tested against the evidence is as follows. Mr Godeseth
accepted that the Dalmellington bug had probably been present in the system from 2010
until it was discovered in 2015. Dr Worden’s analysis would lead to the conclusion that
it was overwhelmingly unlikely that it had affected branch accounts during that period.
But all the evidence is that this bug did affect branch accounts. It is correct that the Post
Office relies upon the correction of known and identified discrepancies by means of the
later issuing of TCs — a human measure which in my judgment is outside the definition
of Horizon - but even putting that to one side, during this 5 year period branch accounts
were actually affected. The existence of the bug was not known about for 5 years before
it was even discovered. This round of the group litigation is to make findings on the
Horizon system and whether there are any, Or many, or no, other such bugs, errors and
defects in the Horizon system similar to this one, or with similar detrimental effects.
The conclusion of Dr Worden’s section 8 exercise is that it was overwhelmingly
unlikely that any of the claimants’ branch accounts were affected by any Horizon bugs.
This must include a conclusion that the Dalmellington bug cannot have affected any of
the claimants’ accounts. This means that he must assume that Fujitsu were 100%
successful in tracking down all incidents of the Dalmellington bug, and that any
claimant SPMs who report symptoms the same as the Dalmellington bug and who had
an outreach branch are either wrong, or making it up. These assumptions are ones that
cannot sensibly be made, in my judgment.
The whole section 8 exercise effectively is entirely theoretical, and is made in a vacuum
that must ignore real world evidence to the contrary from one of the Post Office’s own
witnesses, Mr Godeseth, as set out at [445] to [450] above. Even if] am wrong about
all of the above, and even if a statistical analysis of this nature is valid, then in my
judgment this would not assist the Post Office in its case on the Horizon Issues in any
event. There are agreed to have been over 3 million sets of branch accounts over the
life of Horizon, and approximately 6 million transactions every day across the whole
Post Office branch network. There are fewer than 600 individual claimants, with the
total value of accounting discrepancies over a 17 year period, amounting to only £18
million. As a proportion of the value of the Post Office network business over that
period, and as a proportion of the total number of transactions, the number of
transactions which underpin the claimants’ case is exceedingly small in percentage
terms.
Dr Worden’s probability calculation regarding two bugs, Bug A and Bug B, striking
independently, was expressed as follows:
“632. If I selected a Claimant's branch and a month at random, then the chances of Bug
A occurring at that branch in that month are only 16 in 8 million, or 2 in a million - an
extremely small probability.
~585-
830.
831.
832.
633. Different types of bug occur independently of one another, so their probabilities
of occurring are additive. If there were a second bug similar to the hypothetical bug
above - call it Bug B - then the chances of either Bug A or Bug B happening to one
branch on one month are twice the previous figure - 32 parts in 8 million.”
(emphasis added)
He described the probability of these two unconnected events both occurring, each with
a probability of 16 in 8 million (or 2:10), as being additive and he added 16 in 8 million,
to 16 in 8 million, to arrive at their sum, 32 in 8 million. In terms of basic probability
theory, the chances of two independent events occurring is usually seen as the product
of the two probabilities, not their addition. This was recognised, as a SPM would not
need both bugs to strike in order to experience an impact on branch accounts, only one
would be sufficient. The principle of additivity is a fundamental principle that if the
event whose probability is sought can be represented as the union of several other
events that have no outcomes in common, then the probability of the union is the sum
of the probabilities of the individual events making up the union. However, regardless
of this, the point was neither put nor explored in any detail, and the outcome in any
event depends upon how the events, and the union, are defined. The situation is further
complicated by the fact that depending upon the nature of how “the bug” was defined,
to impact upon branch accounts, this could be either Bug A or Bug B (in Dr Worden’s
example) independently, or in conjunction. The PEAKs show that sometimes branch
accounts would be impacted by a combination of rare circumstances. Such bugs may,
but would not necessarily, have to occur at the same time. If independently able to
impact branch accounts, they would simply have to occur at any time during the 4 week
branch trading period. I refer to this matter for three reasons. Firstly, to demonstrate
that probability theory only takes one so far in this case, and that is not very far;
secondly, to explain that depending upon how one defines “event” and the intersection
(or joint probability) of both or either occurrence, one can arrive at different results;
and thirdly, to demonstrate that there were numerous flaws and/or difficulties with Dr
Worden’s approach, not all of which were put, but which in my judgment undermine
the validity of his exercise. This point about the probability calculation of two bugs
striking a branch is not, however, not the main reason (or indeed, any reason) why I
have rejected his analysis. The probability calculation for two bugs occurring in one
month is not a central element of the statistical exercise he performed; only one bug
would be needed in any one branch trading period for it to affect those monthly branch
accounts. 1 have explained this in order to illustrate that it depends upon how one
defines the impact of a bug, and chooses to assess its probability, that one can end up
with an answer that rather suits the way the question is initially posed.
Dr Worden accepted so far as his evidence generally was concerned, that he had
assumed that the Fujitsu evidence was true, and in particular that of Mr Jenkins (whom
he had met, although Mr Jenkins was not listed as a source of information in his 1*
expert report, and from whom no witness statement was available) and that “generally,
if findings -- if things happen in oral evidence which go against witness statements then
I would need to come back and say what's the impact.”
This therefore means that his evidence is of limited assistance in any event. I have found
that the evidence of Mr Godeseth was somewhat different, at the end of his cross-
examination, than how it had been presented in his three witness statements. Litigation
cannot go on endlessly. For the Horizon Issues trial, evidence of fact and expert
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834.
835.
evidence were both ordered, and findings can only be made by the court in its judgments
that resolve the disputes of fact. Disputes of fact in the evidence for the Horizon Issues
will be resolved in the Horizon Issues judgment, namely this one. This is entirely
conventional. If an expert chooses to prepare his or her evidence on the basis that one
side’s evidence is true — which Dr Worden did in his reports, in respect of the party
instructing him, namely the Post Office ~ they are not entitled to serve further expert
evidence and wholly amend their opinions if that evidence is not accepted by the court.
Dr Worden must have known this. There was going to be no opportunity for him “to
come back and say what’s the impact”.
This was put to him in his cross-examination.
“Q. The content of this report in this respect, we will come to other examples later,
focuses on what the consequences would be if the defendant's factual evidence is
accepted?
A. Generally, if findings -- if things happen in oral evidence which go against witness
statements then I would need to come back and say what's the impact.
Q. Yes. You understand, don't you, that the moment at which everyone finds out
whether factual evidence is accepted or not is when the judgment is handed down?
A. Absolutely, yes.
Q. So you are proposing to revise your opinions after that, are you?
A. No. That's a good point. What I was saying there is if it becomes evident, all I can
do is make assumptions. The court will find findings and all I can do is make
assumptions and drive them through my opinions and try and assist the court that way.
So all of this is assumptions I have made based on the evidence I have seen, and the
court may find differently.
Q. Can I pause there. You were assuming there that Mr Godeseth's version was true?
A. Iwas assuming mainly Mr Jenkins' written analysis which Mr Godeseth's evidence
confirmed.”
(emphasis added)
The “evidence I have seen” to which Dr Worden referred was the Post Office’s
evidence, and what Mr Jenkins had said (which was not evidence in any event). He did
not take any account of the claimants’ evidence. This was notwithstanding that in his
expert’s declaration he had expressly stated “I have not assumed that any particular
version of events is true.....” when, indeed, he plainly had. It was also based on Mr
Godeseth’s written evidence, not on his oral evidence, which was markedly different.
He also said further on this same subject:
“A. Well, my analysis of the claimants’ evidence is mainly contained in my
supplemental report, and I explained there that individual claimants' evidence,
particularly individual subpostmaster evidence, I did not feel able to make strong use
of that and I gave the reasons in my supplemental report. So my opinions have little
dependence on that. And the core of my opinions, the numerical estimates I make,
those estimates have been designed -- or the process and the method has been designed
so that if -- so that to make my assumptions evident where those assumptions come in,
and if the court finds something different from my assumptions the court can go to the
spreadsheets and re-do the method for itself.”
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836.
837.
838.
839.
840.
(emphasis added)
This can therefore clearly be seen as his accepting the Post Office/Fujitsu evidence as
true, particularly that of Mr Jenkins (not even a witness, and in respect of whom no
witness statement was served); and also failing to base his opinions upon, or take
account of, any of the individual evidence of claimant SPMs served by the claimants.
Dr Worden is also under a misapprehension if he considers that the court’s function is
to “re-do the method for itself” if his assumptions were not made out in the factual
evidence. Firstly, he could have provided alternative expert evidence and opinion, were
the written evidence of Mr Godeseth and the information coming from Mr Jenkins to
be rejected. Secondly, he should have taken the claimants’ evidence into account,
because there is no basis for an assumption that it was not relevant to the Horizon Issues
which his expert evidence was the subject of. It is entirely normal for experts to provide
alternatives of their opinion, depending upon which party’s evidence is accepted.
Thirdly, the “method”, such as it is, demonstrated in the spreadsheets simply cannot be
“re-done” to take account of findings that the assumptions were incorrect. The invalid
and unjustified assumptions lead, in my judgment, to the inescapable conclusion that
the whole methodology is flawed. No amount of “te-doing” of the calculations by the
court can remedy that.
Dr Worden also accepted that although he had missed some days of the trial, he was
“pretty sure” that he had heard all of the Post Office’s evidence; he was then asked the
following:
“Q. Have you had any changes of heart about anything in your report having heard it?
A. Changes of heart?
Q. Anything you want to change about what you said?
A. Well, had there been some fundamental change I would have felt obliged to
communicate it to the court.
Q. Of course, because you take your duty very seriously?
A. Yes, Ido. I can't think of any major change of heart, but there may well be things
that you bring me to and I say there's an adjustment here. But to come back to the point
about precision, I am conscious of how precise my numerical results have to be in order
to be of assistance to the court.”
This effectively must mean that Dr Worden did not consider that any of the changes, in
the Fujitsu evidence in particular from the cross-examination, would impact upon his
expert opinion. This is notwithstanding that he had assumed that the Post Office’s
evidence would all be accepted, and anyone present for Mr Godeseth’s cross-
examination can only have concluded that the factual position presented by Fujitsu in
the written witness statements was very far from an accurate one. Indeed, the extent to
which the cross-examination did not have any effect — either appreciable or otherwise
—on Dr Worden’s expert opinions shows how very theoretical the whole exercise was.
Finally on this point, due to the disruption caused by the recusal application, and the
unavoidable re-arrangement of the trial timetable, the experts came to give their
evidence in June 2019, and all of the factual witnesses who were cross-examined (with
the sole exception of Mr Parker) had completed their evidence by 21 March 2019, many
weeks earlier. Even Mr Parker had completed his evidence by 11 April 2019. Dr
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841.
842.
843.
Worden was called on I! June 2019, two months after this. It is unusual for there to be
such an interval in a trial, but circumstances in this case led to extra time being
available. There was more than ample time for Dr Worden to have identified how, if at
all, the Post Office’s evidence of fact that emerged earlier in the trial (in particular from
Mr Godeseth, but also from Mr Parker too) impacted upon his opinions. It plainly did
not.
I will provide only one example of Dr Worden’s unsatisfactory approach to the
evidence, although there were many. In terms of whether transactions could be inserted
at the counter in Legacy Horizon, what is called “remote access”, Dr Worden had in his
first report concluded that Mr Roll (a witness of fact) was factually wrong. He expressly
stated that he, Dr Worden, had “established” that Mr Roll was wrong. He accepted that
use of the word was wrong but what he had done in his 2" report was equally telling,
in my judgment. This was after those witnesses who were to be called for the Post
Office, still employed at Fujtisu, had corrected (or partially corrected) their erroneous
first witness statements, and accepted that remote access without the knowledge of the
SPM was possible. He said (at paragraph 83) that he required:
“further factual information before I can comment on this evidence. Which ‘specific
person’? Under what circumstances? How frequently? Until I have that information, it
remains possible in my view that any transaction which ‘would appear to the
subpostmaster as though it had been carried out through the counter in branch’ might
only be a transaction that he had given his consent for, as the ‘specific person’ - and
which had in effect been made on his behalf.”
Dr Worden also then stated:
“84. Therefore, Mr Roll's new evidence does not cause me to alter the opinion expressed
at paragraph 1119 of my first report, when commenting on Mr Roll's first witness
statement, that he could not alter branch accounts without the Subpostmaster knowing.”
This approach by Dr Worden to the evidence for the claimants on the one hand (Mr
Roll) and the Post Office on the other (Mr Parker and Mr Godeseth in their statements)
was explored in cross-examination:
“Q. Yes, the one that we agreed was incorrect in approach and conclusion.
A. We agree now, but at the time I wrote the second report, on the basis of Mr Roll's
evidence and Mr Parker's evidence, I didn't see reason to change that opinion.
Q. I would suggest to you that you were inexplicably reticent to accept something that
was contrary to Post Office's interests.
A. No, I was reticent. Not inexplicable, I was reticent because I had not seen sufficient
evidence to convince me that these things could be done without the knowledge of the
subpostmaster. :
Q. But Dr Worden, would you accept that the approach you have taken there contrasts
very, very strikingly in how you approach Mr Roll's evidence with the approach you
took at 1119 in your first report when you accepted, effectively, Mr Godeseth's
evidence?
A. I have accepted that my approach at 1119, that use of the word "established" was
wrong and my approach was wrong, and we have established that -- you know we have
done that before the interval -
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844,
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Q. My question is: do you accept the contrast is very striking?
A. I think the court will have to -- I accept that my attempt to make my position clear
that I'm not trying to find findings of fact, I'm not trying to find one witness or the other,
Laccept that on this occasion I fell short of that.
Q. Do you mean only in your first report or also in your second report?
A. Not in the second report. I believe the second report was -- you know, I believe that
the evidence from Mr Parker and Mr Roll, and if we look again at Mr Roll's paragraph
20, I believe that the question that I asked in paragraph 83 that I want further evidence.
I believe that was a valid approach.
Q. When you say in paragraph 84 -- because we have dealt with what you accept about
your first report at paragraph 1119 several times, haven't we?
A. Yes.
Q. So in your second report, you say, notwithstanding what you have now accepted
about 1119, in your second report that you were right not to change that view.
A. Lhadn't seen sufficient evidence to change that view.
Q. But do you say you were right not to change that view when you revisited the entire
piece in your second —
A. At the time I believe it was right not to change that view because I hadn't seen
evidence that convinced me that this change could be made without the knowledge of
the subpostmaster. That's where I am.
Q. Dr Worden, do you accept that that betrays a complete failure to appreciate the need
to consider the situation both on the basis of whether the claimants’ evidence is tight as
well as on the basis that the defendant's evidence is right?
A. No, I don't accept that.”
(emphasis added)
Dr Worden had a further witness statement from Mr Roll saying effectively that Fujitsu
could perform, and had performed, remote access. Dr Worden wanted “further
evidence” and also referred to needing “sufficient evidence”. He said he “hadn’t seen
evidence that convinced” him. He accepted he was reticent to accept the claimants’
evidence. All of this plainly demonstrates that he was taking a partisan view on
evidence of fact. I find that this approach to disputed evidence of fact is simply not the
correct approach for any expert to adopt. By the time of Dr Worden’s 2" report he had
a responsive witness statement from Mr Roll saying that what Dr Worden had
“established” could not be done (a conclusion that was in any event directly contrary to
Mr Roll’s earlier witness statement), very specifically, could be done. Even then Dr
Worden would not accept it. As he stated in his cross-examination, “I hadn’t seen
evidence that convinced me” that this could be done. The evidence was, very plainly,
the witness statement saying that it could be done, and he chose to disregard it. This is
just a more sophisticated way of stating the witness statement was not true. He
described this as his being “balanced and fair”. I disagree with that description: it was
not balanced, and it was not fair. He also said that there were many, many occasions
when he had “tried not only to be fair to the claimants but to be biased in my numerical
estimates in favour of the claimants”. I disagree with that too. Firstly, it is no answer to
a criticism that an expert has taken a partisan view of evidence of fact and ignored one
side’s factual account, to say that this has been effectively cancelled out by numerical
assumptions elsewhere in different parts of the report. Secondly, I do not accept that Dr
Worden was performing numerical calculations assuming in the claimants’ favour in
any event, when one assesses the Section 8 exercise as a whole. The assumptions he
made were very much not in the claimants’ favour at all. Minor adjustments to
-§90-
845.
846.
847.
848.
numerical figures in an exercise based on assumptions specifically unfavourable to one
group does not either make the result “biased” in favour of that group, or cancel out the
unfavourable assumptions. Further, the court requires an independent approach from
an expert at all stages of their analysis, not a raft of slanted analyses, either one way
and/or the other, with the hope (or here, an assertion) that they will eventually cancel
each other out. For the avoidance of doubt, here they do not.
Another area of difference between Dr Worden and Mr Coyne is the issue of what Dr
Worden called “countermeasures”. Mr Coyne described these as “self-defined
countermeasures” and stated that many of them — Dr Worden had identified 18 different
ones — were basic elements of practical system design, and that such design aspirations
did not, in themselves, demonstrate that Horizon was particularly robust.
The 18 different ones are as follows, together with the acronyms adopted by Dr
Worden:
1. Reliable and redundant hardware — RHW;
2. Robust data communication and replication - ROC;
3. Transactional Integrity and database recovery — TIN;
4, Defensive programming — DEP;
5. Generic, data driven software — DDS;
6. Secure kernel hardware and software — SEK;
7. Redundant data storage and computing, with cross-checks — RDS;
8. Double entry accounting - DEA;
9. Early detection of user errors - DUE;
10. Later correction of user errors - UEC;
11. Manual workarounds —- WOR;
12. Testing good practice - TGP;
13. Manual Inspection of Data — MID;
14. Bug finding and correction — BFC;
15. Large scale IT architecture - ARC;
16. Quality and change control — QCC;
17. Managing non-functional requirements — NFR;
18. Security — SEC.
These acronyms are, for the most part, not used in the IT industry, and were adopted by
Dr Worden in this case. Some of them are, such as NFR and SEC. I use them in this
judgment for consistency, but their use should not be taken to be a suggestion or
acceptance that the acronyms are industry norms; the majority are not. The actual term
countermeasures suggests that these consist of measures present in the Horizon system
which have the effect of countering something else (bugs, errors or defects, issues that
would have an adverse impact on robustness) and thereby improving the robustness of
the Horizon system as defined. The Horizon system had an agreed definition for the
purpose of the list of Horizon Issues which was as follows:
“the Horizon System” shall for the purposes of this list of issues mean the Horizon
computer system hardware and software, communications equipment in branch and
central data centres where records of transactions made in branch were processed”.
However, it can be seen simply from the descriptions above, which are Dr Worden’s
own descriptions, that not all of the 18 are even part of the Horizon system. Some are
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849.
850.
851.
852.
simply manual checks. Some genuinely are countermeasures, but Dr Worden groups
both types together.
This can be seen from the following. Transactional Integrity and database recovery or
TIN is undoubtedly a countermeasure within the Horizon system. The explanation
given by Dr Worden in his summary table for this is “database management systems
provide many facilities so that numerous kinds of failure cannot leave the data in an
inconsistent, unusable state, or lose any data that have been previously stored.” This
means if there is a failure, which may happen in a variety of different ways, the data
should not be left in an inconsistent or unstable state, or be lost. The database
management system accomplishes this in a variety of ways. Indeed, Dr Worden himself,
with his extensive experience of database management, has particular familiarity with
this. He designed and developed one of the first relational database management
systems; it is an essential requirement in such a system that data should not be capable
of being left in an inconsistent or unstable state. The reliability of any database relies
upon reliability of the data within that database.
Transactional integrity is a fundamental facility built into all database management
software and this is made clear in, amongst others, published material such as An
Introduction to Database Systems 8" edition by CJ Pearson published in 2003 which
was one of Dr Worden’s appendices. As stated at 15.1 of that edition:
“Recovery in a database system means, primarily, recovering the database itself: that
is, restoring the database to a correct state after some failure has rendered the current
state incorrect, or at least suspect. (We will elaborate on what we mean by "a correct
state of the database" in the next section.) And the underlying principle on which such
recovery is based is quite simple, and can be summed up in one word: redundancy.
(Redundancy, that is, at the physical level; we do not want such redundancy to show
through to the logical level, naturally, for reasons discussed in detail elsewhere in this
book.) In other words, the way to make sure the database is recoverable is to make sure
that any piece of information it contains can be reconstructed from some other
information stored, redundantly, somewhere else in the system.
Before going any further, we should make it clear that the ideas of recovery (indeed,
the ideas of transaction processing in general) are largely independent of whether the
underlying system is relational or otherwise—though it is true that most of the
theoretical work on transaction processing has historically been done, and continues to
be done, in a relational context specifically.”
This is a countermeasure. Transactional integrity is intended to give protection against
a wide variety of conditions, such as hardware errors or communication failures,
software errors (which can lead to failures and cancellations) and operations being
cancelled when they have not been completed. Such cancellations can be made by what
Dr Worden calls the operator (the SPM or their assistant) but cancellations can — and
the factual evidence shows this occurred — be caused by outages, power cuts and other
incidents. A lay person might say that a system has “crashed", or one of the terms used
in the factual evidence in this trial was “system outage”.
Other measures are not strictly speaking countermeasures, they are sensible design
intentions (Mr Coyne used the term design aspirations). An example of this is defensive
programming or DEP. Since programming is at the heart of any software — indeed,
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853.
854.
855.
856.
programming creates the software itself — the way that programs are originally written
(what could be called the programming of the system) constitutes the very system itself.
DEP was described by Dr Worden in the following way in his table summary: “software
is divided into small self-contained modules, which do not assume that other modules
are correct, but defend themselves by checking their inputs and raising alerts early.” A
better description was given elsewhere in his report where he stated that DEP was
“where small parts of a program are written to assume that other parts of the program
may be in error and are written to always check their inputs for the presence of errors.”
In other words, part of a program does not start from the point of assuming that all
inputs are without error; they check for the presence of errors first (ina variety of ways)
before moving to other aspects of the program.
This could be described as a countermeasure, but a more accurate description of it isa
design feature that ensures subsequent steps are taken without repeating or carrying
through errors. It is a function of design.
However, Dr Worden included within his 18 separate countermeasures matters that are
not, in my judgment, countermeasures at all and include remedies. For instance, early
detection of user errors, later correction of user errors, manual workarounds, manual
inspection of data and bug finding and correction are not all countermeasures built into
the system. Just to use that latter item as an example, the many hundreds of PEAKs and
associated KELs show that 3 level of support in the SSC at Fujitsu would investigate
certain instances when SPMs reported certain matters. Often this would take many
months. Depending upon the outcome of the investigations, matters would sometimes
be reported onwards to Development for a software fix. The investigation by the
personnel at 3 level support (of whom, almost invariably, there would be more than
one) and also the software writer in the Development section, were done by personnel
who are plainly not part of the Horizon system as designed. They are human beings
who are undertaking certain tasks. In fact, a software fix designed to prevent a problem
re-occurring would change the Horizon system when that fix was introduced in live, a
term meaning added to the software within the system. It is, in my judgment, illogical
to treat such a process in the same way as either defensive programming (DEP) or
transactional integrity (TIN).
This approach is at its most extreme in Dr Worden’s view of transaction corrections,
which he considered to be a Horizon countermeasure. The issuing of transaction
corrections are plainly a remedy, or something done by the Post Office outside of
Horizon to correct issues that arise because of Horizon. As Dr Worden accepted, this is
not even done in a consistent way, depending upon the client in question. He stated:
“There are many differences of detail in how reconciliation is carried out for different
client organisations, or where it is carried out; sometimes the client organisation does
it from a file sent to it by Post Office, and sometimes Post Office does it. However it is
done, and wherever it is done, the result of reconciliation is always in principle the
same.”
The way that Dr Worden explained the process was as follows:
“285. When reconciliation finds a transaction for which Post Office's record and the
client record do not match, it is passed to a department in Post Office accounts which
handles reconciliation discrepancies. Each such discrepancy is, until it has been dealt
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-593-
857.
858.
with, an error in the accounts - and so it must be dealt with. The task of this department
is to determine how each discrepancy arose, which therefore determines how it needs
to be handled.
286. When the appropriate department in Post Office decides that responsibility for a
discrepancy lies with the branch. a request for a TC is issued and is passed from POL
FS to the BRDB in Horizon Online. At this point, there is no impact on branch accounts.
The request is passed on from the BRDB to the branch Horizon system, so that it will
show on the Subpostmaster's screen when he starts the Horizon system the next
morning. At this point, the Subpostmaster may either accept the correction or may
question it and ask for further investigation.”
(emphasis added)
This description makes it clear that there is a substantial link, or series of links, in that
chain that are entirely outside of Horizon. The discrepancy, which Dr Worden correctly
identifies as “an error in the accounts”, is passed to a Post Office department. That
department has to consider it, and determine how it arose. Then that department has to
decide responsibility, potentially issue a request for a TC, and that is then passed to the
BRDB (which is part of Horizon) and the request goes to the branch. A substantial
element of the whole process does not involve Horizon at all. To treat the issuing of
TCs as a countermeasure in the way that Dr Worden does is not logical. Even the Post
Office’s own witnesses of fact did not deal with the process of issuing transaction
corrections, because the Post Office’s solicitor correctly took the view that transaction
corrections were not part of the Horizon Issues and were outside the scope of the
Horizon Issues trial.
Further, the scope of the experts’ agreements in this respect under Horizon Issue 5 in
the 3" Joint Statement is relevant. That issue was “how, if at all, does the Horizon
system itself compare transaction data recorded by Horizon against transaction data
from_sources outside_of Horizon?” (emphasis added). Agreed entries include the
following:
1. Under sub-topic Reconciliation:
“5.1 Reconciliation between transactions recorded on Horizon and transactions
recorded by Post Office's clients is largely automated.
Detected discrepancies were subject to manual corrective fixes and/or the issue of
Transaction Corrections/Error Notices to the Subpostmasters.”
and:
“3.3 The adequacy of Post Office back office processes to prevent discrepancies in
branch accounts can be measured by the quality of the TC process. This quality
includes:
+ The processes of consideration of available data
+ The level of errors observed in the process
+ The level of complaints or disputes raised following a TC
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-594-
859.
860.
861.
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* The level of upheld complaints following a TC
+ The level of financial impact of erroneous TCs.”
3. Under sub-topic Third Party Data:
“5.4 Errors in third-party data have led to discrepancies in branch accounts, through
erroneous TCs being issued on Subpostmasters.
5.5a PO does not control the level of errors made by its third-party client organisations
(which may lead to errors in TCs), or the delays in their processes (which may lead to
delays in TCs).
5.5b PO can and should ensure, by careful investigation of disputed TCs, that only a
small proportion of errors by PO clients lead to losses for Subpostmasters, provided
that the Subpostmasters are in good control of their branches and have the required
information available.”
This shows that not only do the experts treat TCs as being outside Horizon in the Joint
Statement, and also agree that the SPMs must have available the required information,
but also agree that the level of upheld complaints in TCs (and the value of erroneously
issued ones) is an ingredient required in order to measure the quality of the process. I
find that the level of upheld complaints in TCs, and the value of erroneously issued
TCs, is necessary in order to assess the quality of the Post Office back office processes
to deal with discrepancies. That data was simply not kept, according to the Post Office
witnesses. Further, Mr Coyne’s analysis showed that 77% of disputed Santander TCS
were upheld. Entry 5.6 in this Joint Statement, not agreed by Mr Coyne, was an entry
by Dr Worden which stated:
“The figure quoted by Mr Coyne (77% of disputed Santander TCs upheld) illustrates
that this process worked well.”
This means that Dr Worden’s analysis of “working well” was 77% of TCs issued in
respect of Santander transactions which were challenged by SPMs was upheld. It is
obvious that if 77% upheld, this means that 23% of TCs were not upheld, in other words
were TCs that should not have been issued. I do not consider that a ratio of
approximately 1 in 4 TCs being incorrectly issued can be properly described as the
process “working well”, particularly as each TC would have a direct impact upon
branch accounts. In my judgment, for the process of issuing TCs to be “working well”,
the level of accuracy required would be far higher than 77%, and in excess of 90% (if
not in the high 90s as a percentage) at the very least. Nor do I consider that to be
unrealistically or unachievably high, given TCs impact upon branch accounts, the
accuracy of which is required to be very high, and expected by the Post Office to be
such that shortfalls in branch accounts have to be paid by the SPMs.
As put to Dr Worden in his cross-examination, if his approach to interventions by
human beings were to be extended to its logical conclusion, the group litigation itself
would be categorised as a Horizon countermeasure. In my judgment, that would be the
logical consequence of his approach. Plainly this litigation cannot properly be seen as
a countermeasure. His approach to countermeasures is not a sensible one; he mixed up
-595-
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-596-
862.
863.
864,
865.
both genuine countermeasures such as TIN; design functions such as DEP; and manual
corrections as well, and treated them all in the same way. He was wrong to do so.
It was also somewhat unhelpful for some of his countermeasures, such as later
correction of user errors or UEC, to be so widely defined as to include both manual
checks — including by the SPM themselves — and the Post Office and Fujitsu’s both
automated and manual processes. Another criticism of Dr Worden’s approach to
countermeasures relates to one which Dr Worden described in his paragraph 463 as
being “one of the most important countermeasures in Horizon”, and that is manual
inspection of data. I do not see how this can be a countermeasure in Horizon as defined
at all. Dr Worden’s summary states that “Any large business IT system is used by many
people, who view its outputs and check them against each other for consistency, and
against their own knowledge of the business. Subpostmasters, watching their branch
accounts, were a key component of this.”
(emphasis added)
The inherent illogicality in this is, in my judgment, obvious. SPMs, viewing their own
branch accounts, which are created or are part of the Horizon system, cannot in my
judgment be included as a countermeasure in the Horizon system (even if one ignores
entirely the definition of the Horizon system in the Horizon Issues). The fact that aSPM
can or may notice that (say) their accounts are (as the SPM sees it) wrong, or that there
is discrepancy of some thousands of pounds (or more, or less) in relation to a transaction
that they may not recognise, cannot sensibly be described as a countermeasure in
Horizon in the way that Dr Worden does. As Mr Coyne explained, this “assumes that
the person scrutinising the data is able to identify the correct source of data to be relied
upon, in order to rule out what may or may not be erroneous in the first instance.
Additionally, its utility as a countermeasure is heavily reliant upon the person
scrutinising the data already knowing there is an issue that requires data inspection.” It
also obviously relies upon a human element, which necessarily depends upon the skills
or knowledge of the person. When this is put with the lack of notification to SPMs
generally by Fujitsu and/or the Post Office of existing bugs (and what the effect of those
bugs was), which was a feature of the evidence, it can be seen that there is no basis for
including this in any list of such measures.
The effect of some, but not all, of the bugs might be susceptible to being noticed in this
way, for example if there were a “doubled up” transaction in the same financial figure
at the same time — the SPM might remember that a customer performed a single
transaction in the way that Mr Patny did with MoneyGram as set out at [135] above.
But that would depend both upon the type of bug, the type of transaction, the memory
of the SPM and also crucially the amount. Another bug, Dalmellington, had some
noticeable effects as the evidence in this case shows. Other impacts of other bugs would
not be noticed in the same way. This shows the random nature of what Dr Worden
describes as a countermeasure. In my judgment, Dr Worden was quite wrong to include
this as a countermeasure. I find that something that is a “manual corrective fix” cannot
sensibly be described as a Horizon countermeasure.
One of Dr Worden’s other countermeasures was “testing good practice”, what he
termed TGP. The purpose of testing any system is not to prove that it is correct; rather
it is to prove (or attempt to prove) that it is not, a point explained by Dr Worden.
Examples of this are regression testing, user testing and testing of edge cases. Dr
Worden relied upon what Mr Membury in particular had given evidence about in his
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-597-
866.
867.
868.
869.
statement. I have summarised Mr Membury’s evidence at [500] to [507] above,
including his serious omissions regarding E&Y and their concerns. Dr Worden included
what was essentially a caveat in his first report, namely at paragraph 315 where he said
in his section dealing with development and testing of Horizon, specifically in relation
to Mr Membury:
“His witness statement describes several different audit processes, designed to ensure
by independent external review that quality is managed effectively in Horizon (Witness
Statement of Mr William Membery, 28 September 2018). If these audits have taken
place as described in his witness statement, and if the results are broadly as he describes
them, then that would increase my confidence that the quality of Horizon has been
effectively managed.”
He also stated that “a large system such as Horizon can only be robust if sufficient
attention has been paid to issues of quality in its development, testing and support.” I
have already identified that the experts are agreed that Horizon as it is now is relatively
robust. The documents also show that the approach of Fujitsu seems to be an increase
in focus upon such issues since about 2016 onwards. Testing and evaluation is in three
stages (taking this from another of Dr Worden’s appendices):
1. Unit (or component) testing takes place once the product is developed or procured
and ensures that the product conforms to its requirements.
2. Link (or integration) testing verifies that the product interworks with other major
components. This level of testing is generally performed on a complete release.
3. Acceptance testing proves to the Post Office's client that the development meets its
functional requirements and to the Post Office that it may be brought into use without
impacting on the existing solution or other applications.
This is then followed by what is called release management, which may be either major
or incrementally using interdependent components. This approach to testing is entirely
standard in the IT industry. No sensible programmer — or company involved in a system
such as Horizon - would introduce changes without testing their impact. However, there
is a paucity of documentation that demonstrates the degree to which Fujitsu’s testing
regime was successful. Dr Worden, in both his report and appendices, identifies in
general terms what was done and why it was important; there is no document available
to the experts that demonstrates (for example) Fujitsu’s test-pass percentages, or how
specific failures were managed and re-tested.
I do not consider testing to be a countermeasure. I consider testing to be an essential
part of the foundation of any system. I would go further and say that comprehensive
testing is standard in the IT industry.
Finally, so far as security or SEC is concerned, Dr Worden explained that “any system
that could be easily subverted would not be robust. Horizon is secured mainly through
‘separation of duties’, user authentication, access control and audit.” The evidence of
fact made it clear that the degree of access available to the whole of 3 line support at
SSC was far wider than intended, and was subject to criticism by E&Y. Further, the
extent of the powerful APPSUP privileges was extraordinarily wide.
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-598-
870.
871.
872.
873.
874,
875.
Conclusion on Expert Evidence
I prefer the expert evidence and approach of Mr Coyne to that of Dr Worden. This is
for the following reasons.
Dr Worden took a partisan view of the evidence of fact, preferring that of the Post
Office’s witnesses (by which I mean in this instance predominantly Fujitsu) to that
adduced by the claimants. This was most obvious in respect of his treatment of Mr Roll,
but also occurred in respect of the claimants’ evidence of individual experiences of
events caused by Horizon. No independent expert should do this. One example of this
was the important issue of whether Fujitsu could inject transactions under Legacy
Horizon without the SPM in question being aware of this. Dr Worden stated that he had
“established” that these would be visible to SPMs. Mr Roll’s evidence of fact was
directly to the contrary. Dr Worden had dealt with this by stating “So, in my opinion,
Mr Roll could not have made these changes to branch accounts “without the
Subpostmaster knowing”. In other words, in this expert’s opinion, the evidence of a
witness of fact (and a very important one at that) was simply not correct in fact.
However, in this case, even the Fujitsu witnesses eventually accepted (but prior to the
trial, in their supplementary witness statements) that this had been possible, and that
Mr Roll had been correct. Dr Worden’ supplementary report dealt with this by stating
that there was a lack of understanding or clarity on this point. He stated that “it seems
to me that I require further factual information before I can comment on this evidence”
and also that “Mr Rolls new evidence does not cause me to alter the opinion expressed
at paragraph 1119 of my first report, when commenting on Mr Roll’s first witness
statement, that he could not alter branch accounts without the Subpostmaster knowing”.
His first opinion in paragraph 1119 was wrong, and in my judgment obviously wrong,
and this should have been unequivocally corrected both in his 2 report and also in his
cross-examination. The extract of this in [843] above makes it clear that he did not
accept that.
The sequence is therefore as follows. Mr Roll gave written evidence he had done
something, and Fujitsu gave written evidence this was not possible. Dr Worden
“established” that Mr Roll could not have done what he said he had done, and plainly
preferred the Fujitsu evidence. He therefore adopted a position of which party’s
evidence of fact was to be preferred. More factual evidence was then served and Fujitsu
witnesses accepted this could be done, in contradiction to their earlier evidence. Dr
Worden declined to “comment on this evidence” and remained of the view that Mr Roll
could not have done that which he said he had done — in other words, his factual
evidence was incorrect.
No independent expert giving evidence to the court should do this. It is an obvious
preferring of the evidence of fact of the party instructing him, added, in this case, to a
refusal or failure to accept further evidence of fact to the contrary which subsequently
emerged. This is even though the issue of remote access was accepted by the Fujitsu
witnesses in supplementary statements.
Mr Coyne did not do this. Indeed, he was fair and balanced in identifying where there
were such differences, and he was also clear that he did not prefer one side’s evidence
of fact to the other side. This is the correct approach for an expert to adopt.
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-599-
876.
877.
878.
879.
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I find Dr Worden’s approach to the factual evidence I have identified concerning Mr
Roll a particularly egregious failure to maintain the necessary standard of impartiality.
Injection of transactions remotely into Legacy Horizon was an important factual point
in this litigation, and indeed in the whole history of the ongoing lengthy dispute between
the Post Office and the claimant SPMs. Further, in his expert declaration, Dr Worden
went wider than the standard wording and specifically referred to an earlier decision in
another case. He stated at paragraph 1194 the following:
“T understand that my duty in providing this report and giving evidence is to help the
Court on matters within my expertise, and this duty overrides any obligation to the party
by whom I am engaged or the person who has paid or is liable to pay me. I confirm that
Thave complied and will continue to comply with this duty. I have not assumed that
any particular version of events is true and I have had regard to the case of Amperial
Chemicals Ltd v Merit Merrell Technology Ltd [2017] EWHC 1763 (TCC) in
producing my report”.
That particular case (of which there are a number of judgments, on liability and
quantum) concerned an expert and his preference for the evidence of fact of the party
who had instructed him. I had stated in that judgment at (74] that “An expert's role is
not to decide issues of fact themselves, and choose what facts to believe and what not
to believe”. Specific reference was made by Dr Worden to this judgment in his expert
declaration. It might therefore be thought that the requirement upon him as an
independent expert nof to take a view on which factual evidence he preferred was, or
should have been, at the forefront of his consideration. In any event, such an approach
by the court to how experts should approach evidence of fact is not particularly ground-
breaking. Independence requires an objective consideration by an expert of both sides
of the factual evidence. It is the court’s role, not that of an expert, to decide which
evidence of fact is accepted and which is not. Notwithstanding this, Dr Worden plainly
accepted the initial factual evidence of Fujitsu and rejected the factual evidence of Mr
Roll. Then when Mr Parker accepted Mr Roll’s account, Dr Worden still would not do
so. He was quite wrong to do this on both occasions.
Further guidance on the approach of an expert, if guidance be needed, is also provided
in [237] of a later judgment in the same ICI v Merit series, namely [2018] EWHC 1577
(TCC) in which J stated:
“I. Experts of like discipline should have access to the same material. No party should
provide its own independent expert with material which is not made available to his or
her opposite number.
2. Where there is an issue, or are issues, of fact which are relevant to the opinion of an
independent expert.on any particular matter upon which they will be giving their
opinion, it is not the place of an independent expert to identify which version of the
facts they prefer.”
Dr Worden went so far as to state, in respect of his consideration of the variations in
robustness of Horizon over time, that “in my opinion, as expressed in section 8, the
Claimants’ shortfalls are not caused by bugs in Horizon, or any lack of robustness in
Horizon.” The question of whether the claimants’ shortfalls was caused by bugs was
-600-
880.
881.
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not one of the Horizon Issues as I have explained above, but in any event, Dr Worden’s
conclusions that the specific losses were not caused by bugs/lack of robustness was
only reached by means of his statistical approach in section 8 of his first report. This
was so heavily based on assumptions that were either not valid, or conceptually flawed,
that his conclusions were not valid either. I would go further — the whole process he
adopted so far as his statistical exercise was concerned was both invalid and of no
evidential value.
He also relied — in my judgment heavily - upon information from Mr Jenkins. Mr
Jenkins was not even identified as one of his sources of information in section 1.3 of
his first report, headed “Sources of information”. This means that Dr Worden was given
access to information that was not made available to his opposite number, contrary to
the point at (1) above in [878] above. Although there were some references throughout
the text of the report to Mr Jenkins, Dr Worden did not routinely identify where he had
relied upon Mr Jenkins. He also provided a great deal more information about this
contact with Mr Jenkins in his oral evidence than he did in his written reports. In his
cross-examination, he identified, when asked about a passage, that he had obtained that
information from Mr Jenkins, which plainly took place before the first report was
served as he accepted on his first day in the witness box it was “a year ago”. This was
not clear in the report itself. One example of this was paragraph 654.2, where the report
was dealing with the effect of the Receipts/Payments Mismatch bug, and Dr Worden
stated “Because the operation involved was apparently not a double-entry operation on
the BRDB, the countermeasure of checking the double-entry constraint DEA did not
catch it”. This information came from Mr Jenkins, but until Dr Worden was asked this
in cross-examination, no reader would be able to tell this. The involvement of Mr
Jenkins in this explanation in his report was simply hidden. Nowhere was there a note
or summary of all the information that had been given to Dr Worden by Mr Jenkins. In
this litigation in particular, and given the involvement of and information provided by
Mr Jenkins, who knew so much about the Horizon system, such a note or summary
was, in my judgment, essential. This was particularly important given there was no
witness statement from Mr Jenkins. Dr Worden had been provided with, and had used,
information from Mr Jenkins in addition to the witness statements served by the parties.
Dr Worden also introduced the concept of “lasting” and “transient” effect of bugs or
defects on branch accounts. There was no such distinction in the Horizon Issues
themselves. A further difficulty with this approach is that Dr Worden confirmed that
even an impact on branch accounts that was corrected several months later by a TC
would, so far as he was concerned, be of “transient” impact. A different way of stating
the same concept is that, so far as he was concerned, “transient” could be of quite long
effect. Given TCs are corrections generated outwith the Horizon system and are
effectively corrective actions issued by the Post Office itself, this moved his
consideration away from the generic Horizon Issues into the realm of the efficacy of
the Post Office business systems as a whole, not only including Horizon but their human
processes too. That is not what the Horizon Issues were concerned with, and he frankly
admitted in his cross-examination that had he not done this, his opinion evidence would
have been rather different. Mr Coyne did not use lasting and transient effect, and
correctly addressed the actual Horizon Issues themselves, as drafted and agreed by the
parties and as approved by the court.
-601-
882.
883.
884.
885.
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Dr Worden also adopted this different approach to impact upon branch accounts. Dr
Worden only considered an effect or impact on branch accounts where a discrepancy
loss (or gain) was nof rectified by a correction such as a Transaction Correction, as set
out in the entry in the 2™ Joint Statement about the experts’ different approaches. This
ignored the word “potential” in the Horizon Issues themselves. In my judgment, that
was a wholly unhelpful approach, and also had the effect of I minimising or reducing the
number of bugs that have an impact upon branch accounts. This can be demonstrated
by considering the following hypothetical example.
Consider a situation where there is a software bug, which in this instance I shall call H.
The effects of H are such that they cause the branch accounts of a particular branch Post
Office to suffer an unexplained loss of £999.99. This occurs, and the SPM of that branch
contacts the helpline and goes through to SSC, who create a PEAK and identify this
and after a few weeks of investigation, work out that this is an unexplained software
bug which they have not come across before. A KEL is therefore also created
identifying H. Future incidents of H occurring would (or should) lead to new PEAKs
which will also (or should) link to the same KEL, and to the same bug. Fujitsu report
to the Post Office about the existence of H, which they have now discovered, and
understand is a software bug. The Post Office accept that the sum of £999.99 has arisen
in the branch accounts as a result of H and issue a TC to the branch in that sum, to
correct the unexplained loss in that sum in the branch accounts. If one were to use Dr
Worden’s interpretation of impact upon branch accounts, by reason of the issue of the
TC, H would not be a bug, error or defect with an impact upon branch accounts. Such
an approach is, in my judgment, wholly artificial and incorrect. It also defies the proper
meaning of the words.
Mr Coyne also considered substantially more PEAKs and KELs than Dr Worden, bya
factor of almost ten. Mr Coyne stated that he and his team had considered a broad total
of about 7,500. Dr Worden had only considered a far smaller sample. Mr Coyne’s far
more vigorous and thorough exercise relied far less on the process of extrapolation
inherent in Dr Worden’s approach, who was inevitably basing his opinion on a far
smaller sample than Mr Coyne. Given the breadth of the resources being deployed by
the Post Office in conducting this case, I find it difficult to understand why Dr Worden
restricted his consideration of PEAKs and KELs in this way. However, I consider that
the conclusions of Mr Coyne, based on the far more substantial consideration of these
important documents, are more reliable than those of Dr Worden.
To be fair to Dr Worden, he entirely accepted that he and Mr Coyne had approached
their evidence differently. He stated the following when explaining why he had not
supported Mr Coyne’s information requests.
“A. Well, basically I think it became evident, and it is evident now, that two experts
took very different approaches, and my approach was top down, understand the
architecture and work down through things like KEL. So as far as I was concerned, I
had plenty of information to go on. And Mr Coyne's information requests didn't strike
me as things that, yes, I have got to really see that because I was -- had a different
priority. I was trying to do a top down understanding of the architecture and top down
look at robustness, and so on and so forth. And so I had plenty of documents to look at,
basically. So I think it is the different approaches taken by the two experts that led to
lack of overlap.”
-602-
886.
887.
888.
889.
890.
This continued:
“Q. Sorry, not having supported the very many requests he had to make?
A. Yes, I felt his interests were different from mine and I really had plenty to do.
Q. And you initially only looked at KELs, didn't you, you didn't actually look at
PEAKs?
A. No, I looked at KELs and I looked at PEAKs where they were relevant. I felt that
KELs were a more distilled form of information. I felt they were sufficient in many
ways, especially when you go and look at the PEAKs.
Q. You looked at one or two PEAKs referred to in the KELs you looked at?
A. Yes. Look at some of them where you feel the KEL doesn't tell you enough.
Q. And Mr Coyne was looking at PEAKs and KELs?
A. I think in the first report he was looking mainly at KELs, like me, and in his second
report he turned on PEAKs.”
The reason that PEAKs are of great assistance is that there is a great amount of further
information contained in them than in the KELs, and they also give a far more complete
picture of the number of different occurrences of a bug. Both types of documents are
however useful. I do not know why Dr Worden should have seen Mr Coyne as having
“different interests” to him.
Dr Worden aiso entirely seemed either to misunderstand (or restrict his consideration
of) Horizon Issue 1, which concerned bugs, errors and defects having the potential to
cause apparent/alleged discrepancies or shortfalls in branch accounts or transactions, or
undermine the reliability of Horizon accurately to process and to record transactions.
When challenged about his approach to this, including the absence of the word “cause”
and the use of the word “potential” in the issue itself, he stated the following:
“A. What's the distinction between having the potential and actually doing? I mean, if
it doesn't actually do, then in some sense it didn't have the potential.”
This is not the correct, or conventional, use of the word “potential”. It also looks at the
matter in reverse, In the context of the Horizon system, whether bugs, errors or defects
in that system have, or had, the potential to impact branch accounts or transactions,
should focus one’s attention upon the possible effect of those bugs, errors or defects.
If, of course, a particular bug actually has had the effect of in fact impacting branch
accounts, then by definition it must also have had the potential to do so. Actual effect
is a sub-sct of potential effect. It means impact upon branch accounts must have actually
happened. However, potential effect does not require that impact to have actually
occurred. The two terms are not synonymous. Dr Worden therefore moved away from
the actual issues before the court, and approached a great deal of his evidence from the
point of rather different issues, which he seemed to have narrowed down himself. I
consider such narrowing of the issues to be unwarranted.
In their opening submissions, the claimants summarised this different approach as
follows:
“We respectfully will invite the court to adopt an approach more consistent with Mr
Coyne's approach which is to look at what actually happened with particular examples
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-603-
891.
892.
893.
894,
895.
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and trace them through to a reasoned and careful conclusion and then from the ground
up, as it were, draw inferences upwards rather than from an overarching hypothesis
downwards.”
The “overarching hypothesis” was that of Dr Worden. Because he had taken such an
overall view, and an overall view on the most recent performance and functionality of
the Horizon System (which is now HNG-A as of February 2017, and is no longer HNG-
X), the degree of assistance his evidence provided to the Horizon Issues across the
whole life of the system, both Legacy Horizon and Horizon Online, was more limited
than that of Mr Coyne.
In this group litigation, when the first individual claims are being tried out, further
analysis will be required of the actual branch accounts of individual claimants. That
stage of the litigation will deal with actual branch losses, if any, that are said by the
claimants to be due to the actual impact of the bugs, errors and defects which exist. It
is at that stage that findings will be made about actual impact upon the branch accounts
of the different claimants. Some of the bugs and defects are agreed by Dr Worden and
Mr Coyne, and those that are not agreed are resolved by me in the Technical Appendix.
It is against the background of those findings that individual claims will be resolved.
The purpose of the Horizon Issues trial was to resolve the generic issues, as the parties
were poles apart about even the existence of such bugs, errors and defects, and whether
they had the potential to act upon branch accounts and transactions in the way alleged
by the claimants. Dr Worden moved away from consideration of those specifically
drafted and agreed Horizon Issues and answered rather different ones.
I also consider that Dr Worden, in his approach to countermeasures, insufficiently
differentiated between measures which were part of the Horizon system and those that
were not. He also included items in his countermeasures that plainly ought not to have
been included as such, for example those the result of human intervention or
involvement, and manual inspection of data by SPMs.
In my judgment, Mr Coyne emerged more or less unscathed from his four days of cross-
examination by leading counsel for the Post Office. That is not to criticise the cross-
examination itself, which was very thorough and careful. It is just that what the Post
Office set out to demonstrate, including lack of impartiality on Mr Coyne’s part (if not
positive bias), lack of reliability in his conclusions, and the other detailed criticisms of
him, simply was not achieved. He was described as “evasive” in some of the Post
Office’s closing submissions, a term which I find is somewhat wide of the mark in
describing how he gave evidence in the case before me, and how he answered questions.
He was also criticised in the same submissions as adopting “an approach [that] was
simply to look for bugs without giving a proper sense of scale, context or even balance”.
In the Post Office’s closing submissions, there is a section headed “Judicial criticisms
of Mr Coyne’s approach” where reliance is placed on a judgment in Scotland, called
CGI IT UK Ltd v Agilisys [2018] CSOH 112 by Lord Bannatyne. In that case, Mr
Coyne had appeared as an expert and he was criticised by the judge for an unbalanced
view, amongst other things. The judgment was handed down on 4 December 2018. The
fact that he had been judicially criticised in that case was not specifically put to Mr
Coyne. However, the substantive criticisms of him, that he gave unbalanced and
selective evidence, and the other criticisms, were put to him, and he did not accept them.
-604-
896.
897.
898.
The point that he had been previously criticised in a judgment ought specifically to have
been put by reference to that case, so that he could answer this point. However, in any
event I have read (as invited in the Post Office’s submissions) the entire Scottish
judgment, in which the evidence of Dr Hunt, Mr Coyne’s opposite number, was
preferred to his evidence. I have done this with particular care, and J have also
considered all the criticisms made of him in that judgment, as well as the ones put to
him in his cross-examination before me. The Scottish judgment provides a full
explanation of the shortcomings of his approach in that case. I have also taken this prior
judicial criticism into account in weighing up his expert evidence in this trial.
The Post Office, amongst other things stated that “it is submitted that the examples set
out above [ie in the Lord Bannatyne judgment] show the same tendency to reverse and
switch in response to difficult points.” In other words, it is submitted that Mr Coyne
adopted the same approach in the Horizon Issues trial before me, as he had in the earlier
case in 2018. I have considered the criticisms of Mr Coyne with particular care in the
light of this previous judicial criticism, even though I do not have the benefit of Mr
Coyne’s explanation to the specific points arising out of that case. I do not find his
evidence in the Horizon Issues trial suffers from the same deficiencies as Lord
Bannatyne found in that earlier case. In particular, one of those criticisms in CGI, that
he had failed to consider material documents and matters, simply does not remotely
apply here. He and his team had done an extraordinarily thorough job of examining
many thousands of PEAKs and KELs, and many more than Dr Worden did. I do not
find that Mr Coyne reversed his evidence, or switched, or that any of the other criticisms
of him are made out. It may be that he has changed his approach as a result of his
experience in that case or judgment, or there may be other reasons for it. However, I do
not find the criticisms made of him to be made out in this case.
In my judgment, given the Horizon Issues, which expressly include “bugs, errors or
defects”, the approach of an IT expert to start by looking in detail at the large volume
of the Fujitsu PEAKs and KELs for bugs is not only entirely sensible, it is verging on
essential. I reject the criticism that Mr Coyne’s evidence was given without having any
sense of scale, context or balance. I conclude that Mr Coyne was impartial in his
evidence in the Horizon Issues trial, and was giving the court evidence that was entirely
uninfluenced by the exigencies of litigation or the interests of the party who called him.
I find that he was independent, and that his conclusions in this case on the Horizon
Issues are reliable.
There were some subjects upon which he became a little flustered in his cross-
examination, for example on the final afternoon when he was taken to task for the entry
in the 2" Joint Experts’ Statement on an agreed passage where he and Dr Worden had
agreed that “the number of distinct bugs, for which the experts have seen strong
evidence of the bug causing a lasting discrepancy in branch accounts, is between 12
and 29”. That latter number had come from Mr Coyne and he wished to reduce the
number, initially to 13 but then upon reflection to 21. Mr de Garr Robinson made a
great deal of this, as one would expect of a skilled cross-examiner, but in reality it is a
simple point, as I have explained above. It did show a change of position because the
number of bugs changed as I have explained. However, it is easy to overestimate the
degree to which making an error on figures in such circumstances does, or does not,
represent a lack of reliability on the part of an expert who has performed a substantial
body of work. It must be remembered that this was an agreed entry in an agreed Joint
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899.
900.
901.
902.
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Statement that was 44 pages in length (the experts agreed four separate statements,
running to 100 pages in total including appendix). I deal with the detailed analysis of
each alleged bug in more detail in the Technical Appendix, but the fact that the number
did not remain an immutable “29” in all circumstances is not, in my judgment, a point
against Mr Coyne. His attempts to ensure the final number was correct was not as
smooth as he might have liked, and it gave Mr de Garr Robinson an opportunity to
deploy his forensic skill, but in reality it did not impact upon Mr Coyne’s reliability.
Mr Coyne was widely attacked for a lack of partiality, and indeed, for positive bias in
favour of the claimants. I do not find those complaints or criticisms to be well founded.
They are not based on any real substantive instances that can be shown in any specific
respect to represent Mr Coyne demonstrating any lack of impartiality. They are not
made out. The points made are, in my judgment, insufficient grounds to dent his
credibility as an independent expert whose evidence can safely be relied upon in
resolving the Horizon Issues. He had not been previously instructed to undertake work
for either party, and he had no previous involvement in the history of the wider dispute
between the Post Office and SPMs concerning the Horizon system and its reliability. I
found his evidence before me to be neutral and independent, and not influenced by the
fact that he was instructed for the claimants.
Dr Worden’s decision, very late in the day, to prepare his 3 Report, appears - by
reason of the dates - to have coincided with the dismissal of the recusal application.
This matter was not explored at all in cross-examination and so it is not necessary to
consider the timing of Dr Worden’s realisation that he could perform a new exercise.
Given that his oral evidence to me was that he was advised to serve that 3 Report
directly upon the court, and effectively was left to draft the covering email to the court
himself, I am reluctant to criticise him for this unusual approach unduly. This is
therefore not something that I weigh in the scales to any appreciable degree in deciding
whether his opinion evidence and conclusions are more, or less, reliable than those of
Mr Coyne.
I do not wish it to be considered that I am being universally critical of Dr Worden in all
respects. He had done a substantial amount of detailed analysis in his two reports, and
the overall knowledge that the court had, at the conclusion of the cross-examination of
both experts, was very much greater than it had been prior to the commencement of the
Horizon Issues trial. Dr Worden discovered some bugs himself, bugs that neither the
Post Office and/or Fujitsu either knew about, or had admitted the existence of, prior to
Dr Worden’s involvement in the litigation. He also took a sensible and considered view
of some elements of the documentation, the importance or relevance of which had not
been admitted by the Post Office earlier in the litigation, such as the KELs. Some of the
matters that were agreed by Dr Worden with Mr Coyne in the 1* to 4" Experts’ Joint
Statements saved a considerable amount of court time. His entries in particular in
respect of the Bug Table, where he considered the detailed contents of a number of
PEAKs and KELs, were useful as well.
However, Dr Worden had become closely involved with the Post Office’s case in the
litigation. In my judgment he took a partisan view of the evidence of fact of Mr Roll,
which he should not have done, and he also seemed to be acutely aware of the Fujitsu
position. For example, if there was a problem in Horizon that originated with Riposte,
rather than part of the system written by Fujitsu, he was always enthusiastic to make
-606-
903.
clear this differentiation in Fujitsu’s favour. It was not relevant to the Horizon Issues
whether bugs, errors and defects in Horizon were caused by Fujitsu or Riposte
(provided by Escher, a separate company), or any other part of the system. These are
all points that lead to the same conclusion, namely that in my judgment his expert
evidence was not entirely independent of the Post Office’s and/or Fujitsu’s interests,
and his conclusions were substantially less reliable than those of Mr Coyne. I do not
know whether he had found himself subconsciously influenced by his discussion with
Mr Jenkins or not, but regardless of the reason, his conclusions were not reliable and I
reject them in favour of those of Mr Coyne.
In all the major respects therefore, and taking account of all the points made both in
cross-examination and submissions by both parties concerning their own, and the
opposing side’s, IT expert, I prefer the evidence and conclusions of Mr Coyne to those
of Dr Worden.
The number of established bugs, errors and defects in Horizon
904.
905.
906.
907.
These are included in summary form in Appendix 2, together with whether they were
present in Legacy Horizon or Horizon Online (or both) and their approximate years of
operation. For a detailed analysis, the Technical Appendix to this judgment (which is
Appendix 1) should be consulted.
Audit Data
The experts are agreed, in item 4 of the points of agreement referred to above in respect
of Horizon Issue 3 as part of the 3 Joint Statement, that the Post Office does not consult
the audit data. The actual text of that entry is the “Post Office does not consult the full
audit data (unfiltered ARQ Data) before deciding how to handle discrepancies and
issuing Transaction Corrections.” Regardless of this agreement, it is obvious on the
factual evidence that the Post Office does not do so. Indeed, throughout both the
Common Issues trial and the Horizon Issues trial, it has been increasingly obvious that
the Post Office uses sources other than the audit data when it is chal lenging SPMs about
what they have actually done in their branch Post Offices. Various terms are used for
the audit data. The 3“ Joint Statement uses “full audit data” and “unfiltered ARQ Data”.
In places the term “core audit data” and “core audit store” was used, which refers to the
same data and store. I shall refer to it as audit data.
The issue of audit data arises in the following way. Audit data is a complete and
accurate record of everything that has occurred, which in the context of Horizon means
including a full record of keystrokes used by a SPM (or assistant) in the branch. This
accurate record is kept in what is called the audit store. This is a secure place for the
keeping of such data. It is vital to the proper operation of a system such as Horizon that
such accurate audit data is kept.
In his evidence Mr Coyne referred to the concept of “Write Once Read Many”, which
has its own acronym, WORM. Dr Worden accepted that this was “pretty common” in
the industry. It means, effectively, that audit data is only written once — indeed, it must
be only written once. That is the whole point of audit data. However, it is written (or in
other words, recorded) so that it can subsequently be read, and the second part of this
concept, “Read Many”, means that it can be read many times. The audit data is there,
in my judgment, so that it can be consulted when required. The experts’ agreement
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908.
909.
makes it clear that the Post Office does not consult it before deciding how to handle
discrepancies and issue TCs.
The Post Office did not accept that it should access the audit store as suggested by the
claimants, or consult the audit data. The claimants’ case is that the audit data should be
used in circumstances where there was a dispute between the Post Office and the SPMs
about what had occurred in Horizon in a particular branch. Mr Coyne for the claimants
criticised the Post Office in his 2" expert report for not using audit or ARQ data, and
relying instead on what was called management data, which was said (by the Post
Office) to be sufficient to demonstrate what had occurred. I will reproduce part of Mr
Coyne’s cross-examination on this.
“Q. But did you see any documents of any sort indicating or referring to the stream of
data flowing on a continual basis out of the audit store into Post Office's management
systems?
A. No, but that's not how things would work. If Post Office wanted to get access to
the data in the audit store they would go to a screen or go to an application on their
computer and they would run the request for that data.
Q. Mr Coyne, I would like to suggest to you that it is completely unrealistic to think
that a separate sealed core audit store of the sort we're talking about should be cracked
open hundreds of times a day in preference to using management information systems
which are designed for that precise purpose?
A. I think the word "sealed" is misleading and the concept of cracking something open
to get access to it I think is misleading as well.
Things in an audit store are only -- can be written to and only written to once, and the
term that's often used is write once read many, WORM. So the process is written to
once. but people can read from that store on many occasions.
Q. But just to be absolutely clear, you had not and indeed you have not seen any
documents suggesting that Post Office had the ability to gain access to the audit store
on its own systems, had you? There was no design facility, there was no -- there were
no lines of communication between the audit store and Post Office in any document
you had ever seen, correct?
A. No, it looks as if the majority of the references to audit database access was from
Fujitsu personnel.
Q. And one final thing. Would I be right in thinking that now that you understand how
the audit store actually works and the costs and delays associated with extracting data
ona large basis from the audit store, would you accept that it would be disproportionate
to be using the audit store as a basis for making decisions on transaction corrections in
every single case?
A. Yes, it would seem that it would be very expensive and very slow to access the audit
store, and effectively for the number of transaction corrections you couldn't do that, and
therefore you accept that you make decisions on the management information systems
rather than the audit store.”
(emphasis added)
The Post Office therefore relied upon the fact that the audit data was effectively kept
by Fujitsu; that accessing it was akin to “cracking open” something that was a “separate
sealed” store; and that it would be disproportionate to use it to make decisions on
transaction corrections in every case.
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-608-
910.
911.
912.
The first and third of those points are accepted; the second one Mr Coyne described as
misleading. I agree with that response to all three of those points. I also find that the
concept of “cracking open” the “sealed store” is rather off the point of the very purpose
of audit data, and the uses to which it both can and should be put.
The following points are, in my judgment, important on this issue.
1. Audit data is necessary so that there is an accurate record of what has occurred on
the system, including what a SPM has done in branch, in terms of the keystrokes
actually used. The use of the word “audit” makes this clear, and also this is not a
controversial point.
2. The need to consult such an accurate record does not arise in every case where a
transaction correction is considered or issued. The management data is sufficient for a
large number of transaction corrections.
3. However, where there is a dispute between the Post Office and a SPM about branch
accounts, with the arguments on both sides about what or who is to blame, the audit
data should be consulted. That is one of the purposes of having it in the first place. I
can think of no sensible reason not to consult the audit data in such a scenario.
4. Doing so is not equivalent to “cracking open” a “sealed store”. The audit store is
sealed in the sense that data, once in the store, should not be capable of being changed,
or written to again. However, reading that data is not “cracking open” the store. It is
consulting or reading the audit data, one of the main (if not the only) purposes of having
such audit data in the first place.
5. The evidence in both this trial, and the Common Issues trial, where the Post Office
cross-examined a number of SPMs on events in their branch accounts by using a variety
of management information, other than the audit data, makes clear to me just how
important it is to use the audit data, rather than other sources including management
information. The management information is confusing, contradictory, has been shown
to be wrong and requires numerous assumptions or a “take it from me” type of approach
on the part of a questioner. It is rarely agreed what that management data shows. The
audit data, by its very nature, will be far superior and the best evidence available of
what has occurred on Horizon. It should be consulted in circumstances where there is a
dispute between the Post Office and a SPM.
6. Finally, even the Post Office’s own witnesses were not agreed on what the
management data would, or would not, show. At one point Mrs Van Den Bogerd said
that Credence (which is management data) would record keystrokes in branch. This was
then contradicted by another Post Office witness who said Credence did not do this.
Whether the lack of understanding on the part of Mrs Van Den Bogerd was widespread
or not within the Post Office is unclear to me. It is however clear to me that Credence
data does not in all circumstances record all keystrokes performed in branch by a SPM.
The audit data does.
Dr Worden explained audit data as being a central principle of the whole system in the
following terms:
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913.
914.
915.
916.
“It is a central principle of Horizon that the Core Audit Database acts as a secure ‘gold
standard’ for branch accounts (countermeasure SEK) and that the audit record can only
contain events which originated at the counter - either in customer transactions or
monthly balancing.”
That is an accurate description in my judgment. I can see no sensible or justifiable
reason for the Post Office’s reluctance to consult the audit data in cases of serious
dispute with SPMs, in particular the types of dispute which form the subject of this
case, and without doubt, any dispute that involves criminal proceedings against SPMs.
I also consider the same point applies in relation to internal Post Office proceedings
that lead to the suspension or termination of SPMs. Acceptance of that point does not
mean that that the audit data has to be consulted for every transaction correction issued
by the Post Office. As can be seen from the passage of cross-examination at [908]
above, the Post Office effectively jumped to the issue of whether audit data should be
consulted before issuing every single TC. Mr Coyne accepted it was not necessary to
do that. That is not the same as accepting it should not be consulted in circumstances
where there was a dispute between the Post Office and SPMs.
Mr Coyne had identified issues with using Credence data. There was a one-hour
difference in the time stamps used between Fujitsu and Credence, which can hardly
have helped sensible investigations when SPMs raised queries, but there is more to this
than that. The E&Y review in March 2011 identified various issues with Credence,
including weak change controls within the back-end of the systems which allowed
Logica developers (the third-party provider) to move their own uncontrolled changes
into the production environment, which included both Credence software code and the
data within Credence used for what was called “audit evidence” but which has to be
differentiated from what I am referring to audit records in the audit store. There was a
lack of further documentation to approve fixes and patches applied to Credence outside
of the release process, which meant that linking changes to issue tickets to record the
original request for the bug fix was not possible.
A concern was also noted by E&Y in respect of front end change process weakness.
The passage states:
“During our walkthrough of user administration of the front end of Credence we noted
several users with administrator rights, including some generic users (this is noted
below as a separate point). These users have the access rights to create and amend
reports, including those which may be relied upon for audit evidence. These users can
change report design, and processing without documented request, test or approval.
When users have the rights to change reports that are used by the business for
reconciliation, exception reporting or other processing, there is the risk that the reports
are manipulated either intentionally or accidentally.”
There is also at least one specific occasion, considered in the evidence during the trial,
which shows that the Credence data does not show the correct position. This was put to
Ms Van Den Bogerd. This was an occurrence at Lepton in October 2012. It led to
something that was referred to throughout the trial as the Helen Rose Report or Rose
Report, as the author of the report into it was called Helen Rose. I have dealt with it to
a degree at [227] above. That report records that:
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917.
918.
919.
920.
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“A transaction took place at Lepton SPSO 191320 on the 04/10/2012 at 10:42 for a
British Telecom bill payment for £76.09; this was paid for by a Lloyds TSB cash
withdrawal for £80.00 and change give for £3.91. At 10:37 on the same day the British
Telecom bill payment was reversed out to cash settlement,
The branch was issued with a Transaction Correction for £76.09, which they duly
settled; however the postmaster denied reversing this transaction and involved a
Forensic Accountant as he believed his reputation was in doubt.”
(“duly settled” means the SPM paid the Post Office that sum).
The Credence data showed that the SPM had reversed the transaction. By consulting
the audit data, Mr Jenkins discovered that he had not. This was expressly confirmed,
both in the Rose Report and also by Ms Van Den Bogerd in her cross-examination.
This shows that the management data is not entirely reliable. Had the SPM at Lepton
simply paid the approximately £80 and not engaged the forensic accountant — in other
words, had he not been prepared to pursue this matter — the Post Office would simply
have received that sum from the SPM to which it was not entitled, and the Rose Report
would not have emerged.
The issue of remote access also further complicates (or rather, weakens) the reliability
of management data. All of these concerns reinforce the view that I have in any event,
that audit data (as in, that stored in the audit store) is what should be used in the
circumstances that I have identified.
One point that occupied the parties a great deal in the Horizon Issues trial, upon which
there was some evidence, and upon which Mr Coyne formed a view based on his
analysis of some contemporaneous documents, is that Fujitsu raised a charge to the Post
Office for audit data requests (also called “ARQ requests”) above a certain number per
year. The numbers that were discussed were in the amount of hundreds of pounds per
request. The parties could not agree on what these charges were, although it was
accepted that there were a number each year that were either free, or the costs of which
were included in the contract sum (depending upon which way one looks at this matter).
The charging structure will, in terms of the amount per request above a particular
number, have changed over the years in any event.
That charges are raised by Fujitsu to the Post Office is not an adequate answer, in my
judgment, to the Post Office’s failure to consult or provide the audit data in cases such
as those in [912] above. There are some contemporaneous references within Post Office
documents suggesting this may have been a disincentive in some cases to raising ARQ
requests of Fujitsu. Further, there are numerous references within Post Office
documents (at a high level) of the very great cost to the Post Office of the Horizon
system generally, that cost being paid to Fujitsu. Fujitsu were said in one document to
see the contract with the Post Office as a “cash cow”. This entry came in a document
(parts of which were redacted, which I record simply for completeness) dated 17
January 2017 which were the minutes of the Post Office Group Executive Meeting of
that date. Ms Van Den Bogerd was “in attendance” for two items only, numbered 6 and
7, but not in the list of those “present” by which I assume she was not there for the
whole meeting. The Post Office Chief Executive and Group Legal counsel were there,
together with a number of others.
-611-
921.
922.
There is only one agenda item which is not redacted, namely item 5, IT Strategy. Parts
of the minutes relevant to the Horizon Issues are as follows:
“RISKS
+ Need to be clear for the Board what operational risks we are facing and how we are
mitigating those risks, are there any choices we can make to accelerate the solution to
get inside the risk appetite.
+ Already making these changes to the areas of risk, but will make this clearer. Need a
strategic discussion at GE on choices in the IT strategy
* Horizon - cannot accelerate work on the data centre refresh, getting under control. FJ
running this well, risk review & declaration every month. RH will kick again but doing
as much as we can.
+ Credence - Support and maintenance has moved to Accenture but on old hardware.
Single platform if goes, goes completely. Driving pressure into Accenture to get more
capability. Accenture picked up difficult pass and the additional costs at the moment.
Starting to see light at the end of the tunnel. RH having difficult conversations, flag up
any issues, assumptions and risks to GE. KPMG engaged to undertake a GAP analysis
to produce an IT control framework.
+ What are the risks of the ‘hop’ to thin client not working? RH - need to prove thin
client works and the ‘hop’ is a safe way to test we could revert to HNGA if the ‘hop!
fails. All nervous as we are dealing with legacy systems. More comfortable that we are
not changing Back & Front office at the same time. but still using Horizon. SSKs have
proven that thin client can work, it is the journey to implement that is vital.
+ Fujitsu - negotiations will be tough as POL do not hold the power. FJ see the contract
as a cash cow, so need to persuade them that working with POL to migrate to cloud
technology is to their benefit against a ‘too good’ contract. They may say make us whole
but we cannot give additional work because of the procurement risk. Only choice if
they will not work with us is to start building an alternative. Come back to GE with an
update on the FJ negotiations plan”
(emphasis added)
This document shows that Fujitsu, at least so far as the Post Office are concerned, are
seen by the Post Office as believing that the contract with the Post Office is “too good”
and a “cash cow”, such that Fujitsu may not even “work with us” [ie the Post Office]
in terms of improvement. Part of that very attractive commercial arrangement
(attractive for Fujitsu) may be charges that Fujitsu is entitled contractually to raise for
ARQ requests. Part of an attempt to reduce the expense of the contract by the Post
Office may be a reluctance to raise such requests. Dr Worden described this document
as “chiming” and said that “I have always had the impression from the governance
structure and the documentation and so on that Fujitsu were not short of budget, really”.
By that he meant Fujitsu were well-remunerated, and this remuneration was paid by the
Post Office.
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923.
924.
925.
926.
Such private commercial arrangements between the Post Office and Fujitsu are a matter
for the Post Office and Fujitsu. They do not, in any way, justify any failure to seek the
audit data — the best evidence — in cases where SPMs are being suspended and/or having
their appointments terminated, particularly in circumstances where there are so many
bugs acknowledged as existing, and also at a time (much earlier than this judgment in
2019) when Fujitsu knew there were bugs in Horizon such as Dalmellington and
Callendar Square, and also given the Credence data has been shown to have been wrong
on occasion. There is quite enough in issue in this litigation as it is, without widening
it to include the way the Post Office deals with its commercial arrangements with
Fujitsu.
Finally on this point, I am surprised that the desirability - if not the actual and basic
need - to consult the audit data is a controversial point. In my judgment it is not only
good practice to consult the audit data, given the very purpose of audit data within a
complex IT system such as this one, but it is also obvious common sense. There is little
point in having audit data if it is not consulted in the circumstances that I have identified
above. I appreciate that the audit data itself will not be immediately comprehensible to
some SPMs. There may also be charges raised by Fujitsu in respect of such requests.
However, neither of these are reasons for the failure to consult it. I also make no
findings on whether Fujitsu are, or are not, entitled to raise charges and if so how much.
Those latter two points were not fully argued before me, and Fujitsu were not
represented.
Overall Conclusions
My judgment concerning the two experts, which of their evidence I prefer and why, has
been reached on free-standing grounds. Because of the different way that the experts
went about their tasks, it was not possible to consider in detail and track in Dr Worden’s
reports any analysis and possible explanation of single incidents, and attribute that
either to a specific bug, error or defect, or something else which was none of these
things. The approach Dr Worden had adopted for his written evidence did not permit
that, as he was (in a sense) working from the other end (overall reliability) back towards
the beginning (individual experiences), in contrast to the approach of Mr Coyne. Dr
Worden himself described his approach as “top down”. Mr Coyne, on the other hand,
using PEAKs and KELs in particular, identified a great many specific incidents that
Fujitsu had recorded, which plainly demonstrated the existence of numerous bugs.
Indeed, some of the terms used by Fujitsu made it crystal clear that these were known
to be bugs. One notable example is the expression used by Anne Chambers — “this bug
has been around for years” — in February 2006. Dr Worden did engage with the detail
of PEAKs both in the joint expert meetings and also in his oral evidence, and the final
result is that by the end of the trial, the summary at the beginning of Appendix 2 of the
Post Office closing submissions, was forced to accept the existence of a great many
bugs in Horizon. The extent and nature of their impact was not agreed, but the Post
Office could no longer deny their existence.
Those claimants who gave examples of specific incidents specified them as well as they
could, and in my judgment truthfully and accurately. It was usually Ms Van Den Bogerd
who, for the Pot Office, attempted to demonstrate that this was not what had occurred,
often by means of assertions that if the SPMs had followed procedures properly, what
they said happened, simply could not have happened. The Fujitsu witnesses gave some
AMCLO000013
AMCLO000013
-613-
927.
928.
929.
limited evidence of fact in relation to specific instances and some specific PEAKs and
KELs. The Post Office’s counsel did their best to challenge the factual accounts that
were given by the claimants. I have provided the relevant findings in respect of those
matters above. I indicated at the Case Management Conference on 22 February 2018
that the Horizon Issues should be capable of resolution with limited, if any, evidence
of fact. Both parties chose to submit factual witness statements and called factual
evidence. The factual evidence submitted by both the parties was, in my judgment,
limited as expected and required. With the exception of the matter to which I have
already referred concerning the evidence of Mr McLachlan and Mr Henderson at the
PTR, the extent of each party’s evidence of fact was not subject to challenge prior to
commencement of the Horizon Issues trial.
The factual evidence of specific instances was of assistance in coming to conclusions
on the Horizon Issues. Indeed, I found some of the factual evidence to be of great
assistance, That of Mr Roll and Mr Godeseth was extremely useful. The latter, one of
the Post Office’s main witnesses and the Chief Architect of Horizon, was sufficiently
damaging to the Post Office’s case on the Horizon Issues that they were, essentially,
forced almost to disavow him, and the Post Office’s closing submissions were highly
critical of the accuracy of his evidence. As a further example only, Mr Latif gave
evidence that he had performed certain basic routine steps to transfer the sum of. £2,000
between terminals, and (in accounting terms) that sum had — to use his word —
“disappeared” from the Horizon system. The Post Office evidence challenging this was
from Mrs Van Den Bogerd, and essentially amounted to an assertion that if certain steps
had been followed by him, this should not, or could not, have happened. That would be
all well and good in an ideal theoretical world that did not Pay any attention to reality,
but it entirely ignores Mr Latif’s primary evidence of fact. I accept that primary
evidence from the claimants’ witnesses in this trial as I have explained in Part D. Mr
Latif had been a trainer trusted by the Post Office to train other SPMs, as explained at
[98] above. Other references in the documents show both Romec engineers, and even
Post Office auditors, being recorded in PEAKs as witnessing events supporting the type
of occurrences that underpin the claimants’ case. These were ignored by those at Fujitsu
tasked with completing these PEAKs, and conclusions are shown in those PEAKs being
drawn by Fujitsu that flew in the face of what had occurred. Mr Latif’s experience is
extraordinarily similar to the Dalmellington bug, which is numbered 4 in the Bug Table.
Mr Latif did not operate core and outreach branches, therefore his experience is slightly
different to what happened at Dalmellington. However, if one is to take an objective
and sensible view of the evidence of a previously trusted SPM, whom the Post Office
itself has used to train other SPMs for some years, who stated that he did something
correctly and X occurred, then meeting that with a bare assertion that X simply cannot
have happened is not particularly sensible, nor is it persuasive.
The approach by the Post Office to the evidence of someone such as Mr Latif
demonstrates a simple institutional obstinacy or refusal to consider any possible
alternatives to their view of Horizon, which was maintained regardless of the weight of
factual evidence to the contrary. That approach by the Post Office was continued, even
though now there is also considerable expert evidence to the contrary as well (and much
of it agreed expert evidence on the existence of numerous bugs).
This approach by the Post Office has amounted, in reality, to bare assertions and denials
that ignore what has actually occurred, at least so far as the witnesses called before me
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AMCLO000013
-614-
930.
931.
932.
933.
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in the Horizon Issues trial are concerned. It amounts to the 21* century equivalent of
maintaining that the earth is flat.
When real world examples such as Mr Latif’s are put together with the expert evidence
that I have accepted — or even with Dr Worden’s lower figure for accepted bugs of 11
different ones — it can be seen that this institutional obstinacy by the Post Office
amounts to little more than repeated assertions that the Horizon system (both Legacy
and Online) cannot be to blame for the claimants’ experiences, coupled with (for some)
challenges to the claimants’ witnesses because the Post Office simply cannot accept
their factual accounts. The findings that I have made, on the evidence in the Horizon
Issues trial, show that the reality is rather different, and the existence of the bugs, errors
and defects that I have found to exist do have the effect explained by Mr Coyne.
The approach that I have adopted to the evidence can be considered as follows. Firstly,
to consider the factual evidence, the relevant contemporaneous documents, and
applying the burden and standard of proof, reach evidential findings. I have considered
the challenges to that evidence, and if the specific instances of factual witnesses
explaining what they experienced could be explained (as the Post Office sought to do
with some of the SPMs) by them simply not being reliable, remembering incorrectly,
having been careless or even (for some) being criminal. I have also considered all of
the Post Office’s factual evidence in this trial, the explanations of the Post Office’s
witnesses, and reached my factual conclusions. I have considered the expert evidence
on its merits, and then tested my conclusions against the evidence of fact that was
adduced by both parties, and considered whether my judgment on the evidence of fact
matched and supported, or contradicted, or in any way affected or influenced my
conclusions on the expert evidence. In a sense this was to consider the factual evidence,
and the expert evidence that I accepted and preferred, separately, and see if they both
reached the same conclusion. Secondly, the evidence can also be approached in a
different sequence. This is by firstly considering the specific factual evidence, and then
considering the expert evidence, and only in the light of the conclusions on the factual
evidence. Alternatively, one could simply decide the Horizon Issues on the expert
evidence alone, although that would be far less preferable and would ignore entirely the
important factual evidence of the Fujitsu witnesses, in particular Mr Godeseth.
However, even if that third way were to be adopted, the same answers to the Horizon
Issues would, in my judgment, be reached.
Whichever way is adopted, it must be remembered that any claimant can only ever have
personal experience of one small element of the Horizon system on a number of
occasions. The overview and historical performance of Horizon, both Legacy Horizon
and Horizon Online, has to come from Fujitsu witnesses and the two experts. Dr
Worden and Mr Coyne had far more of an overview of the life of the system, as did Mr
Godeseth and Mr Parker. Mr Roll had experience of it in its early years, but his evidence
was what led to the correct picture on remote access finally emerging.
T have done all of these exercises. Regardless of whichever approach is adopted, the
same conclusions are reached. In this respect, all roads lead to Rome. In my judgment,
the evidence of the factual witnesses accepted by me entirely supports and corroborates
the conclusions reached by Mr Coyne. Indeed, I would go further than this, and state
that Mr Godeseth’s evidence alone is enough to support and corroborate Mr Coyne’s
conclusions. When that is put together with the evidence of Mr Roll, and the
-615-
934,
935.
936.
concessions that were obtained from the Fujitsu witnesses (in the circumstances of their
performance as witnesses, to which I have already referred) it is clear to me that the
correct conclusions to be drawn on the Horizon Issues are those drawn by Mr Coyne,
save and to the extent that I have modified them in any specific respect.
I consider that the evidence of the Fujitsu witnesses in particular, both former and
current, has been of considerable assistance to me in resolving the Horizon Issues. Mr
Roll, Mr Godeseth, and even in his own way Mr Parker (though not in the way that Mr
Parker himself would have intended) have all provided clear evidence of the problems
with the Horizon system, the bugs, errors and defects within both Legacy Horizon and
Horizon Online in its HNG-X form, the way that these problems were (or were not)
dealt with, and the way that Fujitsu had powers which, until shortly before the trial
started, Fujitsu sought to keep from the court, and may not even have fully disclosed to
the Post Office. Because the extent of these powers was kept secret in this way, the Post
Office finds itself now having made misleading public statements previously. If one
looks back to an earlier case management hearing and reconsiders how Fujitsu, through
the Post Office, sought to portray the contents and lack of importance and relevance of
PEAKs and KELs, then it can be seen that there has been a pattern of considerable
defensiveness over the Horizon System. There has certainly been a lack of
transparency, and a lack of accuracy in description.
T have explained above at [172] how the Post Office sought to draw a particularly
glowing reference in Fujitsu’s favour from the evidence of Mr Roll in their closing
submissions. The Post Office stated that from his evidence “....a clear picture emerged
of Fujitsu as an organisation which was thorough, professional and conscientious and
which took considerable care to ensure that matters were properly investigated and dealt
with.” I have already stated that this is not a conclusion that can be drawn from the
evidence of Mr Roll. Nor is it a conclusion that, in my judgment, can sensibly be drawn
from the totality of the evidence taken together, both factual and expert, in the Horizon
Issues trial. As an example, on too many occasions are there PEAKs that conclude at
one point that user error cannot be to blame, only for a misleading closure code to be
used for such a PEAK. Fujitsu personnel routinely refer in such documents to the known
existence of bugs, without this (so far as the documents deployed in the trial are
concerned) being communicated to the SPM in question in these terms. In places there
is even debate at Fujitsu shown in the documents about whether the Post Office and/or
SPMs should be told. I do not see how a thorough, professional and conscientious
organisation can have produced for disclosure in this litigation so many thousands of
KELs during 2019 itself, both during and even after the trial. I reject that description;
it is an inaccurate description of Fujitsu and/or its investigative motivation.
I consider, as explained in the Technical Appendix, that Legacy Horizon was not robust,
and that although Horizon Online in its HNG-X form was better than Legacy Horizon
(not least, I consider, because Riposte was no longer part of Horizon) its robustness was
questionable, and did not justify the confidence placed in it by the Post Office in terms
of its accuracy. HNG-A is a different matter, and the experts are agreed that it is far
more robust than Horizon in earlier times. On the face of the relevant KEL, it is not
possible to say whether the Drop and Go bug, number 28 in the Bug Table, which
occurred in June 2017, was HNG-X or HNG-A. However, if the latter, it is one of only
two such items in the Bug Table that relate to the existing version of the Horizon
system.
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AMCLO000013
-616-
937.
938.
939,
T turn therefore to the points identified by Males LJ in Simetra Global Assets Ltd and
another v Ikon Finance Ltd and another [2019] EWCA Civ 1413 to which I have
referred at [74] above. I have already dealt with the first point, succinctness (obviously
lacking in a judgment of this length). The second point is a requirement to consider all
the evidence. I have done this, both for and against each of the cases advanced by both
the claimants and the Post Office. I have not recited every single disputed fact as to do
so would lead to an even longer judgment, and substantially delay production of this
judgment well into 2020, and which would be contrary to the overriding objective. The
third point is to identify the issues, consider the evidence in respect of the issues, and
give reasons. For this trial, the Horizon Issues were agreed by the parties and approved
by the court; the review of the evidence has been longer than is ideal, but I have
considered it all, whether recited in this judgment, or the Technical Appendix, or not.
The fourth point is somewhat salutary, namely that fairness requires that a judge should
deal with apparently compelling evidence, where it exists, which is contrary to the
conclusion which he proposes to reach.
In my judgment, there is no such evidence advanced by the Post Office. It is pointless
to speculate on how such compelling evidence might have been presented, if there had
been any. The evidence that has been advanced for the individual occurrences, for
example by Mrs Van Den Bogerd, can be seen once tested in cross-examination to
amount to unfounded assertion and, sometimes, an expressed desire, even in 2019, to
go away and do more research. This is not apparently compelling evidence to the
contrary to my conclusions. Additionally, the time for further research by the Post
Office is long past. The Post Office’s approach to evidence, even despite their
considerable resources which are being liberally deployed at considerable cost,
amounts to attack and disparagement of the claimants individually and collectively,
together with the wholly unsatisfactory evidence of Fujitsu personnel such as Mr
Parker. The Post Office evidence also includes a very high level overview of Horizon
by its expert which amounts to little more than a claim that it has worked quite or very
well, most of the time. This is effectively what Dr Worden’s section 8 exercise consists
of. Counsel for the Post Office at one point put to Mr Coyne that there was more
likelihood of an SPM being hit by lightning than of having a bug, error or defect in
Horizon cause a branch account loss in their branch. Mr Coyne did not agree with that,
and neither do I. Indeed, such a point wholly ignores the enormous number of PEAKs
that show that branch accounts were potentially impacted on a great many occasions.
Also relevant are the other points which Males LJ went on to consider, namely the
importance of contemporaneous documents. He stated the following on this subject at
[48] and [49] of Simetra:
“[48] In this regard I would say something about the importance of contemporary
documents as a means of getting at the truth, not only of what was going on, but also
as to the motivation and state of mind of those concerned. That applies to documents
passing between the parties, but with even greater force to a party's internal documents
including emails and instant messaging. Those tend to be the documents where a
witness's guard is down and their true thoughts are plain to see. Indeed, it has become
a_commonplace of judgments in commercial cases where there is often extensive
disclosure to emphasise the importance of the contemporary documents. Although this
cannot be regarded as a rule of law. those documents are generally regarded as far more
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AMCLO000013
-617-
940.
941.
942.
reliable than the oral evidence of witnesses, still less their demeanour while giving
evidence.....
[49] It is therefore particularly important that, in a case where there are contemporary
documents which appear on their face to provide cogent evidence contrary to the
conclusion which the judge proposes to reach, he should explain why they are not to be
taken_at face value or are outweighed by other compelling considerations. It is,
however, striking that the judgment in this case contains virtually no analysis of the
contemporary documents many of which appear to shed considerable light on the nature
and purpose of the critical confirmations and the way in which they were understood.”
(emphasis added)
Ihave already explained that the subject matter of the Simetra case is very different to
this one, and [ emphasise here that my analysis of the contemporaneous documents is
in respect of the Horizon Issues in the context of this case, not the Simetra case which
concerned very different allegations. Here, the categories of documents that are most
illuminating in terms of specific incidents with Horizon over the years are the very
numerous PEAKs and KELs. These emanate from, and are created within, Fujitsu. They
are, in my judgment, a very good means of getting at the truth in this case. They show
what was going on and the type of unexplained problems that numerous SPMs were
experiencing in practice over the years, as they were reported to the SSC. They contain
statements made when Fujitsu personnel’s “guard is down and their true thoughts are
plain to see”. Some of them also record that Romec engineers, or the Post Office’s own
auditors, have seen what has occurred and ruled out user error. Notwithstanding this,
Fujitsu attribute user error to what has occurred.
They also contain some very telling expressions, not in the context of a Fujitsu
employee giving evidence as a Post Office witness in this trial, but at the time, with
such unguarded comments as Anne Chambers in February 2006 stating that “this
problem has been around for years and affects a number of sites most weeks” and “this
appears to be a genuine loss” on another occasion (as examples only). These entries are
at odds to the publicly stated position by Fujitsu both then and indeed later. In my
judgment, the PEAKs and KELs deployed in the Horizon Issues trial, and there were
very many, are consistent with my conclusions on the evidence and the answers that I
have arrived at to the Horizon Issues. Obviously no account was taken in any of the
evidence, and no account is taken by me in this judgment, of the 5,000 KELs that Fujitsu
only provided and disclosed in September 2019, months after the trial had ended.
The Post Office’s internal Horizon Online Induction Training slides and accompanying
notes dated 7 December 2009 form a useful snapshot of how Legacy Horizon was
viewed. The purpose of HNG-X was “to deliver a significant reduction in the total
annual cost of ownership of Horizon, whilst ensuring the system remains fit for purpose
in the 21st Century.” These materials make it clear that this programme had been
identified in 2005 and was "to deliver a significant reduction in the total annual cost of
ownership of Horizon". Legacy Horizon was seen within the Post Office as being very
expensive, although its overall cost is not relevant to the Horizon Issues. The notes to
these materials state:
“However, we need to continue to manage firmly any over-expectations of the frontline
that Horizon Online will deliver improved functionality - they may see this as a missed
AMCLO000013
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-618-
943.
944,
945.
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Opportunity so will not cure all the issues and problems that users have with Horizon
although where practical, and at no extra cost, we have smoothed away a number of
“rough edges".
(emphasis added)
There was no significant upgrade or improvement in functionality intended as part of
HNG-X.
Another type of document that is illuminating in terms of the Horizon Issues are internal
Fujitsu briefing documents, and to a lesser extent also some internal Post Office emails,
that show the same approach to, or view of, Horizon within those organisations as are
drawn by my conclusions. One example relates to the so-called Ping fix. After this was
brought in, the number and value of TCs fell dramatically so far as Camelot/the lottery
was concerned. This appears at [427] to [428] of the judgment on the Common Issues,
Judgment (No.3). In 2007 there had been the following value of TCs in respect of the
lottery: approximately (to I decimal point, which represents £100 thousand) £22.8
million; in 2008 there were £12.5 million; in 2009 there were £12.0 million; in 2010
this became £11.3 million; and in 2011 £4.5 million. In 2012, the year the Ping fix was
introduced, these fell below £1 million for that year.
The Introduction to a Post Office document of 2011 entitled “Transaction
Acknowledgements — End to End Incident Management and Data Flow” explains the
following purpose to the Ping fix:
“Introduction
The PING Project was part of the Back Office Efficiency Programme within Post Office
Ltd.
The objective of this project was to automate a process that converts Client transactional
data files (e.g. Paystation), into a data feed to the branch, ie. a Transaction
Acknowledgement file.
The branch will then process the data electronically on Horizon Online and thus avoid
non compliance issues and the resulting cost to the business to process queries as a
result.
Please note - The term PING is an internal Post Office Ltd term and branches and
helplines will know this new functionality as ‘Transaction Acknowledgements'.”
(emphasis added)
The compliance issues were caused by the fact that the lottery terminals were on one
computer system, namely that operated by Camelot, whereas Horizon was the system
operated by the branch that was selling the Camelot products, and there was no
electronic transfer of data in to Horizon in respect of Camelot sales. The “objective” in
the Post Office document makes it clear that the Ping fix is a required improvement to
the functionality, to overcome issues caused by having two different systems which
meant that there was (prior to the Ping fix) no automated process to convert the client
transactional data files into the data feed necessary for Horizon for the branch accounts,
This has nothing to do with correcting excessive carelessness or fault on the part of
-619-
946.
947.
948.
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SPMs. It is, in my judgment, about remedying a deficiency in the functionality of
Horizon. That document also made it clear, because there are express entries to this
effect, that outages might mean that the system would not deal with the matters
sufficiently or accurately. A template message for SPMs is even included in the
document for when this occurs, although that template message would not inform SPMs
that outages would lead to inaccuracies. It is plain that outages would indeed lead to
this, as this is mentioned in many places in the document, and acknowledged by its
authors. This information was not however, based on the templates, to be given to
SPMs.
A theme contained within some of the internal documents is an extreme sensitivity
(seeming to verge, on occasion, to institutional paranoia) concerning any information
that may throw doubt on the reputation of Horizon, or expose it to further scrutiny. One
entry in a document that makes it clear that the Post Office itself had already recognised
this is contained in a document authored by Mrs Van Den Bogerd, entitled “Extracts
from Lessons Learned Log” and dated 1] November 2015. One entry under “issues
identified” was as follows in respect of the Post Office’s behaviour up to that date:
"Failure to be open and honest when issues arise eg roll out of Horizon, HNGx
migration issues/issues affecting few branches not seemingly publicised."
(emphasis added)
The Post Office’s guard may have been down when that document was written; it
predates issue of the first claim form by about 6 months. I consider that it is the type of
document that Males LJ had in mind when he spoke of a witness’ guard being down,
when their true thoughts are plain to see. It plainly records Mrs Van Den Bogerd’s view
of the Post Office’s approach to Horizon when it was written in November 2015.
In July 2016, following the disclosure of the Dalmellington bug, the following emails
went to and from very senior people in the Post Office. On 1 July 2016 the Chief
Executive, Paula Vennells stated to Alisdair Cameron and Rob Houghton, in the context
of an article that had appeared on the internet about problems with Horizon:
“Subject: The Dalmellington Error in Horizon / problemswithpol
Dear both,
This needs looking into please.
https://problemswithpol.wordpress.com/2015/11/10/the-error-in-
horizon/?iframe=true&theme_preview=true
[This is a reference to an internet post about a conviction of an SPM]
Can I have a report that takes the points in order and explains them.
Tim McCormack is campaigning against PO and Horizon. I had another note from him
this am which Tom will forward, so you are both in the loop.
We must take him seriously and professionally.
This particular blog is independent of Sparrow but clearly related in that it appears to
present similar challenges that were raised in the course of the scheme.
I'm most concerned that we/our suppliers appear to be very lax at handling £24k. And
want to know we've rectified all the issues raised, if they happened as Tim explains.
Thanks.
-620-
949.
950.
951.
952.
953.
954,
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Paula”
Mr Houghton of the Post Office sent it on to someone else on the same day, copied to
Mrs Van Den Bogerd. This stated:
“I need an urgent review and mini <taskforce> on this one. It probably needs to link up
heavily with Angela’s work as FSC are mentioned extensively - Angela cfi. I don't
know how we respond to this but can we section a few inside people to get all over it
and give me/AV/ Paula evidence and understanding.”
However, the same recipients also received the following message from Mr Houghton
later on the very same day:
“Can you stand down on this please? [A redacted section then follows]
Any specific actions and I will revert.
My apologies.”
The email chain is heavily redacted and therefore the reasoning behind this volte face
within the Post Office is not shown, nor was it explained by any Post Office witness.
Thus the entirely understandable initial reaction of the Chief Executive of the Post
Office, that a point by point investigation was required in respect of specific criticisms
of Horizon in respect of one particular SPM who blamed Horizon for shortfalls and
discrepancies, appears to have been very swiftly shut down and not pursued due to a
decision at what must have been very high levels within the Post Office. I can think of
no justifiable reason why the Post Office, institutionally, would not want to address the
Chief Executive's points and investigate as she initially intended, and find out for itself
the true situation of what had occurred.
Both the recipients of the Chief Executive’s email of 1 July 2016 above are specifically
named in the Technology Strategy Update Decision Paper of 30 January 2017 in which
the following is stated specifically. Mr Houghton is the Author of the paper, and Mr Al
Cameron is “the Sponsor”. Part of that document records:
“This document forms an update to the IT Strategy approved in July 2016 by the PO
Board. In July we outlined that IT was not fit for purpose, expensive and difficult to
change.”
The same document also states that "We need to quickly rationalise and resolve
misaligned contracts enacted to support legacy IT, obsolescence, a lack of PO
technical competence, particular focus on Fujitsu and Accenture”.
(emphasis added)
This therefore means that the decision taken nof to investigate further in July 2016 and
to “stand down”, in itself a surprising decision for a reputable institution to take given
all the circumstances, was taken at broadly the same time as a conclusion was reached
that the IT “was not fit for purpose”. The reference to the “lack of PO technical
competence” is a concern, given [75] of the Technical Appendix which makes it clear
that currently the Post Office can introduce new clients into Horizon without requiring
Fujitsu input. The level of competence may of course have changed since 2016. The IT
-621-
955.
956.
957.
958.
Strategy, which is referred to in this Update Decision Paper, and outlined that “the IT
was not fit for purpose” and which was approved in July 2016 by the Post Office Board
is, in my judgment, entirely consistent with my conclusions on the evidence. It is not,
however, consistent with the Post Office’s response to the claimants’ pre-action letter,
or the Defence in the group litigation, or the evidence adduced by the Post Office in the
Horizon Issues trial. The Post Office’s solicitors’ response to the pre-action letter is
dated 28 July 2016, very lengthy, and states that “the investigations to date have
consistently pointed towards human error or dishonest conduct in branches as the most
likely cause of shortfalls.”
Nor is it consistent with the way the Post Office explained, in its oral opening
submissions, that the Post Office had been investigating incidents earlier in terms of
bugs. So far as Dalmellington is concerned, the oral submissions were as follows:
“....even the documents that your Lordship saw this morning with the Dalmellington
bug, your Lordship will see the rigour that's applied. There's concern that postmasters
aren't given advice that might be incorrect. The rigour associated with that process and
the determination of Fujitsu and the other people involved, the other stakeholders, to
get to the bottom of what happened is quite striking in my submission.”
Dalmellington was investigated in 2015, and the outcome of that investigation is
available to this court. The outcome of that investigation is far from favourable to the
Post Office’s position on bugs, errors and defects, and the robustness of Horizon. The
oral submission that the Dalmellington bug was investigated rigorously (which it was)
does not easily sit with the documents showing that one year later the Post Office
specifically decided nof to investigate other incidents at all, and to “stand down” those
tasked with investigating it. This is notwithstanding that the Chief Executive’s initial
(and in my judgment entirely proper, if not the only proper) reaction was that those
allegations needed to be looked at “seriously and professionally”, that an investigation
was needed, and that an urgent review and mini task force was required. Nor does it sit
easily with the way that other bugs that were present in both Legacy Horizon and
Horizon Online were investigated by Fujitsu.
Further, a conclusion in terms that the IT is “not fit for purpose” is not something that
would have been reached lightly in an IT strategy document, or approved lightly by the
Post Office Board. The Post Office Board is a serious level within the organisation. The
Board are not likely to be involved in, nor to have brought to their attention, matters
that are anything other than serious, considered and fully researched. This conclusion
in this internal contemporaneous document has not driven my conclusions on the
evidence in the slightest. Rather, it is the other way around. I have reached my
conclusions on the evidence independent of contemporaneous references such as this
one, but then tested my evidential conclusions against these to see if there is a
contradiction. However, there is none, and they are entirely consistent.
There are only very isolated Post Office documents that are inconsistent with my
conclusions. J shall deal with only one. On 17 August 2015 the BBC Panorama
programme broadcast a programme which contained allegations about Horizon. The
contemporaneous response to that by the Post Office in its statement to SPMs started
with the following passages, which I shall reproduce. The bold emphasis was present
in the original:
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-622-
959.
960.
961.
962.
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“The Post Office wholly rejects extremely serious allegations repeated in BBC’s
Panorama programme of 17 August 2015. The allegations are based on partial, selective
and misleading information.
* The Post Office does not prosecute people for making innocent mistakes
and never has
¢ There is no evidence that faults with the computer system caused money
to go missing at these Post Office branches
¢ There is evidence that user actions, including dishonest conduct, were
responsible for missing money”
The first of those bullets point is for another day, and is not for this court in any event,
for the reasons explained at [60] to [66] above. This judgment deals with the detailed
background and technical evidence behind the second bullet point. The confidence
expressed by the Post Office in 2015, in that second bullet point, in the computer system
and its accuracy is not consistent with the evidence I have accepted, the expert evidence
on the number of bugs in the Horizon system (both Legacy Horizon and HNG-X) and
my findings. This Post Office document was however drafted for public consumption,
and this must explain the inconsistency. To the extent that the second bullet point
conflicts with my findings in this judgment, that public statement in 2015 by the Post
Office is factually incorrect. This is not to make any findings on any individual claim,
or on the cause of money said to be missing in the accounts of any particular branch
Post Office or individual claimant SPM.
In my judgment, a number of both the Post Office’s own internal documents, and
Fujitsu ones too, namely those that were not drafted for public consumption, plainly
support my conclusions on the evidence. Further, certain matters that have emerged in
the Horizon Issues trial — such as discussions within Fujitsu itself as to whether the Post
Office should be told certain detrimental information about the Horizon system, and
the Post Office’s own decision at the highest level nof to investigate certain matters as
recently as 2016 — are of great concern. The Post Office has gone to great lengths over
the years, and spent a great deal of time and a huge amount of public money, in
defending the performance of Horizon. It is also the case that the Post Office must have
been reliant on Fujitsu to a certain degree in terms of being provided with accurate
information of a technical nature. That is not only obvious from the evidence, but has
also been agreed by the experts in the 3 Joint Statement, That accuracy from Fujitsu
has not always been available, as demonstrated by this judgment.
However, regardless of that — and this judgment does not deal with who, if anyone, at
the Post Office knew precisely what about Horizon, and when, as these are not part of
the Horizon Issues — in my judgment a number of the specific internal contemporaneous
documents, rather than being contrary to my conclusions on the evidence, are entirely
consistent with those conclusions. I do not know if the Post Office Board, who were
told in July 2016 that its own IT was not fit for purpose, will be particularly surprised
at the findings on the expert evidence in the Bug Table, and the number of admitted
bugs. It does not much matter, for the purposes of resolving the Horizon Issues, whether
they are surprised or not.
The experts’ agreements in particular have been of great assistance, but everything has
been considered. This judgment, together with the Technical Appendix, is of substantial
-623-
963.
964.
965.
966.
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length, and to recite everything that has been deployed by both sides, in terms of
evidence, submission and reference to all contemporaneous documents, is neither
necessary nor desirable.
It must also be remembered that Horizon as it is today, or at least in the last couple of
years since it became HNG-A, is a very different system to earlier times. Legacy
Horizon ceased to be used in 2010. Modern Horizon Online as it is today is not the
same as the online system that was introduced in 2010; it is different and more robust,
on the agreed expert evidence, to the system as it was even when the litigation started
with the issue of the first claim form on 11 April 2016. It became HNG-A in 2017,
rather than HNG-X, and runs on a completely different Windows platform. The dates
of the bugs in the Bug Table are (between them collectively) from 2000 to 2018,
although there are far fewer in recent years. Having said that, some — such as Bug 8,
Recovery Issues, and Bug 28, Drop and Go, have been experienced up to 2018 and
2017 respectively. The latter is a reference data bug and hence easily fixed. The
Technical Appendix at [421] provides a summary of the different bugs from Legacy
Horizon and Horizon Online. It can be seen that there were more in Legacy Horizon
than HNG-X in any event, and far fewer in HNG-A. In any case, the cut-off date for
claims to be issued in the group litigation is 24 November 2017, as extended by
paragraph 15 of the 1* Case Management Order sealed on 27 October 2017.
The Post Office has been very concerned as to the outcome of this litigation on its wider
business. It described the group litigation as long ago as its Opening Submissions in
November 2018 for the Common Issues trial as representing “an existential threat” to
that business. I do not consider that these answers to the Horizon Issues represent a
significant threat to the Post Office’s entire business. Findings in this judgment as to
the performance and robustness of Legacy Horizon from 2000 to 2010, and then of
Horizon Online (in both its forms, HNG-X and HNG-A) from 2010 to 2018 are not
findings on the Horizon system as it exists at the date of this judgment. These findings
cannot be routinely applied to the way that HNG-A operates as at December 2019. It is
agreed by the experts that the Horizon System in its HNG-A form is now relatively
robust. This judgment is a historical analysis of the Horizon System as it relates to the
period in question in the group litigation, not a judgment upon Horizon HNG-A as it is
today.
Answers to the Horizon Issues
This section is intended as a very brief summary of what has gone before, both in this
judgment and also the Technical Appendix. It does not replace the previous 964
paragraphs or that appendix. The detailed passages themselves should be consulted for
a more detailed consideration of the issues.
I therefore turn to the answers to the Horizon Issues themselves. For convenience, I
shall reproduce the specific issue above each answer, in order to avoid the reader having
constantly to turn back some hundreds of pages to remind themselves. I shall also retain
the headings and sub-headings. The wording of the Horizon Issues was agreed by the
parties and approved by the court.
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BUGS, ERRORS AND DEFECTS IN HORIZON
Accuracy and integrity of data
967.
968.
969.
970.
971.
Issue (1): To what extent was it possible or likely for bugs, errors or defects of the
nature alleged at §§23 and 24 of the GPOC and referred to in §§49 to 56 of the Generic
Defence to have the potential (a) to cause apparent or alleged discrepancies or shortfalls
relating to Subpostmasters’ branch accounts or transactions, or (b) undermine the
reliability of Horizon accurately to process and to record transactions as alleged at §24.1
GPOC?
Answer: It was possible for bugs, errors or defects of the nature alleged by the claimants
to have the potential both (a) to cause apparent or alleged discrepancies or shortfalls
relating to Subpostmasters’ branch accounts or transactions, and also (b) to undermine
the reliability of Horizon accurately to process and to record transactions as alleged by
the claimants.
Further, all the evidence in the Horizon Issues trial shows not only was there the
potential for this to occur, but it actually has happened, and on numerous occasions.
This applies both to Legacy Horizon and also Horizon Online. It has happened under
both the HNG-X and HNG-A iterations of the Online system, but far less frequently
under the latter than the former. Indeed, there are only isolated instances of it happening
in respect of HNG-A, which the experts agree is a better system than either of the other
two iterations of Horizon.
Iaccept the claimants’ submissions that, in terms of likelihood, there was a significant
and material risk on occasion of branch accounts being affected in the way alleged by
the claimants by bugs, errors and defects. This is amply demonstrated by Dr Worden’s
evidence. He accepted that there was strong evidence of at least 12 bugs causing a
lasting discrepancy in branch accounts. This conclusion was reached even within the
context of his unjustified creation of both “transient” and lasting impact, which limited
his consideration of this, and is an approach which I have rejected. This number of bugs
was very much smaller than the number contended for by Mr Coyne, and the number
which I have found in Part E of the Technical Appendix, but even on that smaller
number, was itself significant. Dr Worden’s reliance upon TCs as a countermeasure led
to a failure by him to follow the agreed wording of the Horizon Issues, as TCs are not
part of the Horizon system. Given TCs are part of the way that the Post Office corrects
the branch accounts (and branch accounting statements) produced by Horizon, the only
way that a fully precise answer could be given for the number of times such impacts
have occurred would be if the figures were available for the years of operation of
Horizon, demonstrating how many TCs each year had to be issued in respect of the
effects on branch accounts of such discrepancies. Figures would also be required of the
number of TCs that were upheld when disputed by SPMs.
However, those figures are simply not available for the majority of the life of both
Legacy Horizon and Horizon Online. Nor is there any data centrally recorded by Fujitsu
of the number of bugs, errors and defects which were discovered by dissatisfied SPMs
reporting incidents to Fujitsu, with percentage outcomes of what the investigations by
the SSC led to, in terms of result. Such data as there is, namely Mr Parker’s summation
of closure codes of PEAKs, is wholly unreliable and I have rejected it. Nor are the
closure codes that were used by Fujitsu accurate in any event. The evidence of fact was
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972.
973.
974.
975.
976.
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that full and accurate records of this nature are simply not kept by Fujitsu. Had they
been, both experts could (and probably would) have used such data as a starting point
for their investigations. The sheer scale of the number of TCs issued by the Post Office
each year — which is over one hundred thousand for many of the years that are the
subject of the group litigation — supports my conclusion that there was a significant and
material risk of inaccuracy in branch accounts as a result of bugs, errors and defects in
the Horizon System (both Legacy Horizon and HNG-X).
Issue (2): Did the Horizon IT system itself alert Subpostmasters of such bugs, errors or
defects as described in (1) above and if so how?
Answer: Although the experts were agreed that the extent to which any IT system can
automatically alert its users to bugs within the system itself is necessarily limited, and
although Horizon has automated checks which would detect certain bugs, they were
also agreed that there are types of bugs which would not be detected by such checks.
Indeed, the evidence showed that some bugs lay undiscovered in the Horizon system
for years. This issue is very easy, therefore, to answer. The correct answer is very short.
The answer to Issue 12 is “No, the Horizon system did not alert SPMs”. The second
part of the issue does not therefore arise.
Issue (3): To what extent and in what respects is the Horizon System “robust” and
extremely unlikely to be the cause of shortfalls in branches?
Answer: This issue or question is in two parts. I shall deal with them sequentially. The
first is the extent and in what respects the Horizon system is “robust”. The experts are
agreed that HNG-A is relatively robust, and I have found that the system as it is in2019
is far more robust than it was prior to 2017. The Technical Appendix in general, and
[444] of that in particular, should be consulted for a more complete answer on
robustness. However, the Horizon Issues considered the whole life of the system from
2000 to date. In summary terms only, Legacy Horizon was not remotely robust. The
number, extent and type of impact of the numerous bugs, errors and defects that I have
found in Legacy Horizon makes this clear. Further, Dr Worden considered that TCs
were an essential countermeasure. If TCs are excluded from consideration of the
Horizon system, which they must be, then the answer becomes even more stark, even
on the evidence of the Post Office’s own expert.
HNG-X, the first iteration of Horizon Online, was slightly more robust than Legacy
Horizon, but still had a significant number of bugs, errors and defects. This was
particularly so in the years 2010 to 2015, but also after that. This is clearly demonstrated
from the findings in the Technical Appendix. The functionality of Legacy Horizon was
not therefore materially improved when the system moved to the online version,
although one of the major differences between Legacy Horizon and HNG-X was the
former’s use of Riposte (which was not used at all in HNG-X). I find that the robustness
of HNG-X was questionable and did not justify the confidence routinely stated by the
Post Office (prior to February 2017) in its accuracy. HNG-A is far more robust than
either of the previous two iterations of the system. I have taken into account, in reaching
these conclusions, not only the evidence of bugs, errors and defects, but also the lack
of records or logs at Fujitsu over time over the use and controls of the powerful access
roles permitted to Fujitsu personnel. This deficiency in reporting and controls seems to
have been corrected in about 2017. This adds to my conclusion (and that of the experts)
that HNG-A is more robust than HNG-X. As the experts agreed, this increase in
-626-
977.
978.
robustness has, in part, developed from Post Office discovering bugs, errors and defects
in live use and then applying fixes and improving monitoring. This is important, as it
means that the robustness today of HNG-A cannot be relied upon by the Post Office in
justifying, or being equated to, robustness in HNG-X. The same point applies to HNG-
X and Legacy Horizon.
I accept Mr Coyne’s evidence that there are far more TCs than expected even now,
compared with comparable systems in the banking and finance sectors. However, it
may be that this is the only way in which it can now sensibly be operated. TCs are
outside the scope of the definition of the Horizon system in any event. The experts are
agreed that HNG-A is robust, and far better than it was in either its Legacy Horizon or
HNG-X form.
Turning to the second part of the issue, namely to what extent and in what respects is
the Horizon system extremely unlikely to be the cause of shortfalls in branches. [ accept
that this presupposes a shortfall in a branch, and then requires consideration of whether
Horizon is extremely unlikely to be cause of that shortfall. By shortfall, this issue means
an unexplained discrepancy of the type explained by the claimants’ witnesses, and also
recorded in numerous PEAKs. In my judgment, there is a material risk that such a
shortfall in a branch’s accounts was caused by the Horizon system during the years
when both Legacy Horizon and HNG-X were in use, which is 2000 to 2010 and 2010
to 2017 respectively. For each of those iterations of the system, the Horizon system was
therefore not “extremely unlikely” to be the cause of shortfalls in branches, as
contended for by the Post Office. I realise that is a double negative, but I consider
wording the answers as closely as possible to the agreed issues is likely to be of greater
assistance to the parties.
Controls and measures for preventing / fixing bugs and developing the system
979.
980.
981.
982.
Issue (4): To what extent has there been potential for errors in data recorded within
Horizon to arise in (a) data entry, (b) transfer or (c) processing of data in Horizon?
Answer: The experts were agreed that there are a number of actual reported errors in
data recorded within Horizon arising from each and all of (a) data entry, (b) transfer or
(c) processing of data. Therefore, not only does the potential for these errors exist, but
this has in fact happened, and this has led to financial discrepancies in branch accounts.
The experts were also agreed that bugs, errors and defects identified in relation to
Horizon Issue I were often relevant to Horizon Issue 4 in that they are ultimately errors
arising from the processing of data in Horizon.
The “extent” to which this has occurred has not been fully assessed by the experts.
However, Dr Worden considered this issue to be a subset of Horizon Issue 3, in respect
of which I have effectively or substantially accepted the claimants’ case, at least so far
as Legacy Horizon and HNG-X are concerned.
The experts do not agree as to its ‘extent’ in terms of actual effect, although that is not
what the issue asks. It was agreed by the experts that there was evidence within the
PEAKs and KELs of bugs/errors/defects within Horizon arising from parts (a), (b) and
(c) of this issue that occurred that caused financial discrepancies, as well as some that
occurred without causing financial discrepancies. It was also agreed that reference data
is critical to the operation of Horizon. I have explained in the Technical Appendix what
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983.
984.
985.
986.
987.
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reference data is, and the important part it plays both in the software and operation of
the system. It is agreed by the experts that errors in reference data have led to
discrepancies in branch accounts. It has also been agreed by the experts that errors in
third-party data have led to discrepancies in branch accounts. The Post Office does not
have control over errors in third-party data, but given these have an impact upon branch
accounts, unless they are corrected, then those errors will also have an adverse effect
upon a SPM’s branch accounts.
I do not consider that the extent of the actual effect can be fully answered in precise
mathematical terms on the evidence as it is. This is not least because in order to do so,
the experts would have to consider the full data set of KELs, and several thousand KELs
were produced by Fujitsu during, and well after, the trial. However, a precise
mathematical answer is not required. The answer to the issue as posed is that there is a
material risk for errors in data recorded within Horizon to arise in (a) data entry, (b)
transfer or (c) processing of data in Horizon in both the Legacy Horizon and HNG-X
forms.
Issue (5): How, if at all, does the Horizon system itself compare transaction data
recorded by Horizon against transaction data from sources outside of Horizon?
Answer: This is largely automated. It has not however been automated throughout the
whole life of Horizon from 2000, as shown by the Ping fix in respect of the
Lottery/Camelot. The experts’ agreement on reconciliation states inter alia that
“Reconciliation between transactions recorded on Horizon and transactions recorded
by Post Office's clients is largely automated. Detected discrepancies were subject to
manual corrective fixes and/or the issue of Transaction Corrections/Error Notices to
the” SPMs. What this means is that if the data in Horizon was wrong (due to bugs,
errors or defects within Horizon) and did not reconcile with third-party data, then
“manual corrective fixes” and the issuing of TCs would be undertaken, which would
not be automatic.
Some comparison of transaction data from some clients of the Post Office is done
within the Horizon system and other client data is compared outside the Horizon
system. Again, the evidence did not deal in a comprehensive way with each such
method for every one of the Post Office’s many hundreds of clients. Nor do I consider
that such evidence would be required properly to answer this issue.
Issue (6): To what extent did measures and/or controls that existed in Horizon prevent,
detect, identify, report or reduce to an extremely low level of risk the following:
a. data entry errors;
b. data packet or system level errors (including data processing, effecting, and recording
the same);
c. a failure to detect, correct and remedy software coding errors or bugs;
d. errors in the transmission, replication and storage of transaction record data; and
e. the data stored in the central data centre not being an accurate record of transactions
entered on branch terminals?
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988.
989.
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Answer: The experts were agreed that there were many measures and controls within
Horizon that existed to prevent, detect, identify report or reduce the risk of varying
errors. However, the experts were also agreed that whilst Horizon contains measures
and controls for detecting system integrity concerns, these automatic mechanisms have
been shown to have failed in the past. The experts did not agree as to the ‘extent’ of
prevention, detection, identification, reporting or risk reduction that the automatic and
manual control measures delivered. There were numerous specific matters explored in
some detail in the trial that clearly demonstrated such failures, such as the Callendar
Square bug, the Receipts and Payments Mismatch bug, gaps and duplicates in entries
in the audit store, keying and mis-keying errors (which were referred to in different
PEAKs) and fixes which introduced other issues. The doubling of the foreign currency
discrepancy that was put to Mr Godeseth was a specifically stark example, even though
Fujitsu — inexplicably in my judgment — chose to attribute this to user error.
I do not consider that the measures and/or controls that existed in Legacy Horizon, or
HNG-X prevented, detected, identified, reported or reduced to an extremely low level
of risk any of the sub-items at (a) to (e). Indeed, I reject the Post Office’s case that there
was such an extremely low level of risk. That is, in my judgment, a wholly complacent
and unjustified position that has existed for many years, based on my findings in the
Technical Appendix.
OPERATION OF HORIZON
Remote Access
990.
991.
Issue (7): Were Post Office and/or Fujitsu able to access transaction data recorded by
Horizon remotely (i.e. not from within a branch)?
Answer: Yes. This answer is substantially agreed. Both the Post Office and Fujitsu
could read data remotely. Fujitsu could access all transaction data recorded by Horizon.
The experts agreed that Fujitsu needed remote access for support purposes. Fujistu has
direct access to the branch database. In Legacy Horizon, this was the messagestores
held on the correspondence servers; in Horizon Online, it is the BRDB. In Horizon
Online, Fujitsu can also download logs stored on the counters. The Post Office has
access to transaction data which is copied to its Management Information System or
MIS. In Horizon Online, the Post Office has read-only access to branch data on the
BRDB which includes the levels of cash at a particular branch.
Availability of Information and Report Writing
992.
993.
Issue (8): What transaction data and reporting functions were available through Horizon
to Post Office for identifying the occurrence of alleged shortfalls and the causes of
alleged shortfalls in branches, including whether they were caused by bugs, errors
and/or defects in the Horizon system?
Answer: This issue is substantially agreed. The Post Office had access to data and
systems that were not available to SPMs. The role of the Transaction Processing System
(or TPS) is to gather the transactions taking place in the branches, and to pass them on
both to Horizon’s back-end systems such as APS and DRS. These would also be passed
on to other IT systems in the Post Office, such as Credence and a succession of systems
based on SAP, which have finally culminated in what is called POLSAP. The Post
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994.
995.
996.
997.
998.
Office therefore has a range of Horizon reports and its own management information
systems (MIS). Dr Worden stated that he expected the MIS to include analytical
facilities which were not required by, and so were not available to, Subpostmasters.
None of this was controversial by the end of the trial, or in issue between the experts.
The Post Office would also be able to use standard database reporting tools to retrieve
and analyse information about branch transactions. It could also obtain audit data as
explained in Part K of this judgment. A request had to be made to Fujitsu for this audit
data, however. The Post Office could not simply access such audit data itself without
recourse to Fujitsu, who had a charging structure in place in respect of such requests.
Importantly in my judgment, the only source of actual key stroke information (in the
sense of what buttons had been pressed in the branch) was to be found within the audit
data. Credence does not provide this. I also consider that although the Post Office did
have access to “the causes of alleged shortfalls in branches, including whether they
were caused by bugs, errors and/or defects in the Horizon system”, this had to be
obtained through Fujitsu. This should be recorded for completeness. The evidence does
not show the Post Office IT department either being capable of investigating directly
itself, or if it was capable of doing so, actually undertaking this. All investigations
recorded in PEAKs and KELs show that Fujitsu did this. The terms of the experts’
agreement in this respect was that the Post Office was “reliant upon Fujitsu for
diagnosis of whether the occurrence of shortfalls was caused by bugs/errors or defects
within the Horizon system.” I find that the Post Office plainly was reliant upon Fujitsu
in this way.
Issue (9): At all material times, what transaction data and reporting functions (if any)
were available through Horizon to Subpostmasters for:
a. identifying apparent or alleged discrepancies and shortfalls and/or the causes of the
same; and
b. accessing and identifying transactions recorded on Horizon?
Answer: The answer to this Issue is also substantially agreed. The experts agreed that
the causes of some types of apparent or alleged discrepancies and shortfalls may be
identified from reports or transaction data available to SPMs. Other causes of apparent
or alleged discrepancies and shortfalls may be more difficult, or impossible, to identify
from reports or transaction data available to the SPMs, because of their limited
knowledge of the complex back-end systems. I would add that the subject matter of
every PEAK referred to in the Bug Table, and the sort of problems that initiated the
creation of each of those PEAKs, plainly could not be investigated by the SPM or SPMs.
in question in each case on the material that Horizon made available to those SPMs.
In Judgment No.3 I had identified certain features or characteristics of both the SPMC
and the NTC, the contracts under which SPMs were engaged (dependent upon the dates
of their engagement). The experts were not aware of these contractual findings when
they reached any of their expert agreements, as that judgment was not provided even in
draft until just before the Horizon Issues trial started. It was handed down formally at
the end of the first week of factual evidence. It is of interest, I consider, that the two
experts considered at least the essence of one of the implied terms (although not in
contractual terms) in their agreement that “identification of the causes of apparent or
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999.
1000.
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alleged discrepancies required the co-operation of PO staff and SPMs”. Co-operation
is an important part of any investigation, as it is an important part of the contractual
relationship between the Post Office and SPMs.
SPMs did have access to many reports relating to the different aspects of running a
branch (such as currency exchange, stock and so on). They also had access to
transaction logs that would show individual transactions, and event logs, but these were
only available for a few weeks (initially this was for 6 weeks or 42 days, then this
changed to 60 days). It was possible for a SPM to print these out on paper till rolls.
There was evidence in the Common Issues trial from both claimant SPMs and Post
Office witnesses about how unwieldy and non-user friendly this was. Indeed, in that
earlier trial one of the Post Office witnesses used the size of the Super Court in the Rolls
Building (where both the Common Issues trial and the Horizon Issues trial took place)
graphically to demonstrate how long such a till roll would be even just for a day ina
busy branch.
Because the reports and data available to SPMs were so limited, their ability to
investigate was itself similarly limited. The expert agreement to which I refer at [998]
above makes it clear in IT terms (based on the transaction data and reporting functions
available to SPMs) that SPMs simply could not identify apparent or alleged
discrepancies and shortfalls, their causes, nor access or properly identify transactions
recorded on Horizon, themselves. They required the co-operation of the Post Office.
Access to and/or Editing of Transactions and Branch Accounts
1001.
1002.
1003.
Issue (10): Whether the Defendant and/or Fujitsu have had the ability/facility to (i)
insert, inject, edit or delete transaction data or data in branch accounts; (ii) implement
fixes in Horizon that had the potential to affect transaction data or data in branch
accounts; or (iii) rebuild branch transaction data:
a. at all;
b. without the knowledge of the Subpostmaster in question; and
c. without the consent of the Subpostmaster in question.
Answer: I shall answer this by reference firstly to Fujitsu, and then to the Post Office.
Fujitsu: The answer is “yes” to each of Issue 10(i), 10(ii) and 10(iii), and to each of (a),
(b) and (c) too. There are nine different questions posed (each of (a), (b) and (c), posed
after the answer to each of (i), (ii) and (iii) if that first answer is “yes”) and the answer
is “yes” regarding Fujitsu to all nine permutations. The expressions used in the evidence
that permitted them to do this included those in the SSC role utilising various tools;
those with the APPSUP role; those exercising Privileged User rights; and those
exercising Database Administration rights. Mr Godeseth also referred to the “guys in
Ireland” who had access to a very “low level”, by which he meant very powerful access
(as in, they could go to a very deep or low level within the system). This arose in re-
examination and hence was not pursued. There is no way of knowing if these Fujitsu
personnel, who had the role that is called “UNIX user”, were included within the
descriptions I have already given. If not, then UNIX user should be added to that list.
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1004.
1005.
1006.
1007.
1008.
The injecting of transactions into branch accounts by Fujitsu, and the visibility of these
(as in whether the SPM could tell these had been done in this way, due to the use of a
counter position greater than 32) was very controversial prior to the trial. By the time
the Fujitsu witnesses were called, they had accepted that what Mr Roll had said was
correct, and Mr Godeseth confirmed this would look as though the SPM had done it.
The Post Office: this could only be done by the Post Office utilising its Global User
role. This permitted the Post Office to inject transactions without the knowledge or
consent of the SPM. However, it could only be done by someone who was physically
present in the branch, as that is the only way Global User could be used by the Post
Office. The answer therefore for the Post Office is “yes” only in respect of that part
(relating to injecting transactions) of (i)(a) (b) and (c). With that exception, the answer
for the Post Office is “no” to the other eight permutations. The qualifying statement has
to be made that whoever at the Post Office was exercising Global User rights would
have to be physically present in the branch, This would therefore be likely to mean that
a SPM or their assistant would at least know someone was in their branch doing
something in terms of access to their branch accounts. A description of “Global User”
is provided at [674] above. The Post Office’s contended for answer to this Issue was
“No” to all nine permutations so far as the Post Office (rather than Fujitsu) is concerned.
This is wrong, and ignores the existence of the Global User role.
The Balancing Transaction Tool, and how many times it was used, occupied a certain
amount of time at the trial, as its existence had arisen when the experts were preparing
their reports and had led to inter-solicitor correspondence. The majority of the factual
evidence on this is dealt with in the section of this judgment dealing with Mr Godeseth’s
evidence. This tool enabled Fujitsu specifically to insert a transaction into branch
accounts. The one documented occasion of its use was done with the consent of the
SPM in question. However, in my judgment, this issue was a sideshow. This is because
the design intent in the Low Level Design document in relation to this tool had plainly
been overtaken, over time, as the numerous other times it was used showed, based on
the messages in fact inserted. Secondly, and more importantly, the very powerful roles
identified at [1003] above enable those with such roles to do far more than someone
simply using the Tool.
Issue (11): If they did, did the Horizon system have any permission controls upon the
use of the above facility, and did the system maintain a log of such actions and such
permission controls?
Answer: Given the answers to Issue 10 above, this issue does arise and requires
answering. There were permission controls, but the roles were very wide and in my
judgment they were not controlled. This included but is not limited to the lack of any
proper logs. Although at an earlier stage in the trial, the Balancing Transaction tool was
focused upon, it emerged that there were other roles and tools available to Fujitsu in
addition to the Balancing Transaction tool which enabled Fujitsu to achieve the same
result, namely injection and alteration of transaction data. Indeed, not only were these
roles (such as APPSUP and the other roles identified in the answer to Issue 10 above)
more powerful, but they were widely available and in my judgment effectively
unaudited. The whole of SSC had the APPSUP role for many years, and internal Fujitsu
documents recorded that they were not supposed to have that role. There were a large
number of personnel within SSC. Whilst some Privileged User Logs do exist, these logs
did not exist prior to 2009 at all. Prior to July 2015, they only recorded when a user
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1009.
1010.
1011.
1012.
1013.
1014.
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logged on and logged off, with no recording of what they were doing. This is a plainly
inadequate record. Even after July 2015, the experts agree that such logs are not a useful
source of evidence about remote access, due to their content (more accurately, this
should be their lack of content). These deficiencies in the control environment were
identified as long ago as before the audit report by E&Y in 2011, such that the
deficiencies were recorded as being in existence in 2011. Even so, this was not promptly
corrected.
OCPs do evidence documentation of remote alteration of transactional and other branch
data. However, on the evidence available at the trial, these OCPs constitute what could
be described as a piecemeal and ad hoc process, and a not insubstantial percentage were
issued retrospectively. Further, in many cases there is evidence that the person raising
the OCP was the person who was to monitor it. In my judgment, and given the powerful
nature of the roles, this method of control is inadequate.
The view of Dr Worden, the Post Office’s own IT expert, who as I have identified is a
man of considerable experience in the IT world stretching over decades, is that the
number of Privileged Users and SSC users who can create a Balancing Transaction
seems high. The lack of control of these roles, the recording of access, the deficiencies
in the logs, and the concerns expressed by E&Y, demonstrate in my judgment an
inadequacy of controls. Roles were not properly controlled even after concerns were
raised by E&Y in the 2011 Audit, particularly in respect of the APPSUP role.
The answer therefore is that there were permission controls; they were however
inadequate. Logs were maintained but only after 2009. From 2009 to July 2015 they
did not record actions, only whether a user had logged on and logged off. Even after
July 2015, the experts agree that such logs are not a useful source of evidence about
remote access, due to their content (more accurately, this should be their lack of
content). In my judgment, this amounts to a deficiency in controls.
Issue (12): If the Defendant and/or Fujitsu did have such ability, how often was that
used, if at all?
Answer: Due to the nature of Fujitsu’s record keeping, the experts could not provide
any confident evidence on this subject of frequency. Mr Coyne established that the
APPSUP role was used 2,175 times between 2009 and 2019. Dr Worden confirmed that
this was consistent with his review of the Privileged User logs and he equated this to
about one person using this role each working day during that period. The Fujitsu
witnesses stated this would be in a “support role” but very little detail is available about
what this was, or why such regular access of someone with such a powerful role was
required. In any event, the Fujitsu witnesses of fact had not reviewed the Privilege User
Logs in any detail.
Indeed, the lack of evidence provided in respect of this issue supports and corroborates
my conclusions on Horizon Issue 11 which precedes it. The inability of the Post Office,
and/or the experts for both parties, to be able to provide a clear and precise answer to
what is, in essence, a very simple question (even though the actual answer might be a
large number) directly arises from Fujitsu’s plainly inadequate records. On the evidence
from the two experts, the answer should be in approximate terms only and would be
about once a day over the whole life of the system, to the extent that any records are
available.
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1015.
1016.
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Issue (13): To what extent did use of any such facility have the potential to affect the
reliability of the Branches’ accounting positions?
Answer: The design abilities of the roles to which I have referred was very wide -as a
single example only, the experts agreed that anyone with the APPSUP role could pretty
much do whatever they wanted. The answer to this issue is therefore that these facilities
had the potential to affect the reliability of a SPM’s branch accounts to a material extent.
Further, the evidence shows clearly that there were instances when this in fact occurred,
which goes wider than the issue posed (which asks about potential) but which I find is
also relevant to the Horizon Issues as a whole.
Branch trading statements, making good and disputing shortfalls
1017.
1018.
1019.
1020.
Before I turn to Horizon Issues 14 and 15, there is a point that is relevant to the group
litigation as a whole that can conveniently be made at this stage. Firstly, the answers
to both of the remaining two Horizon Issues are largely agreed by the experts. This
means, almost by definition, that the subject matter of those issues ought not to be
controversial.
However, the fact that a substantial part of Issue 14, in particular, was so controversial
for so long is, in my judgment, notable. The Post Office ought to have known how its
own system works. It is agreed by the experts that an SPM cannot record a dispute on
Horizon at all. Indeed, this point was so very clearly conceded by Mr Godeseth when
he was asked about it in cross examination that it was remarkable. He explained that
there was no “dispute” button on Horizon, and that this was something expressly and
deliberately done by design. Yet there were two substantial points in issue in the
Common Issues trial on this very same subject. One was the ability of a SPM to dispute
the figures shown on Horizon. The second was whether, in law, a branch trading
statement had the effect of what is called a settled account between agent and principal
(which would mean that certain legal consequences would flow if it were). Judgment
No.3 found in favour of the claimants, and against the Post Office, on both those points.
It is therefore more than a considerable surprise to see that, as a matter of evidence in
the later Horizon Issues trial, those points should never have been put in issue by the
Post Office at all.
In complex litigation, it is important that points that are not, in reality, contentious, are
not put in issue if there is no proper factual basis for doing so. If, as a matter of reality,
any particular point is not controversial, putting it in issue will simply increase time and
costs. A SPM cannot be criticised for “accepting” an entry in their accounts if they have
no choice but to accept that entry. Nor can a branch trading statement be given the status
ofa freely agreed (and therefore settled) account if it is no such thing. I wish to remind
the parties to this litigation that points that should not be in issue ought to be conceded
at a sufficiently early stage, such that time and legal costs are not spent in argument on
an erroneous factual basis.
Issue (14): How (if at all) does the Horizon system and its functionality:
a. enable Subpostmasters to compare the stock and cash in branch against the stock
and cash indicated on Horizon?
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1021.
1022.
1023.
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b. enable or require Subpostmasters to decide how to deal with, dispute, accept or make
good alleged discrepancy by (i) providing his or her own personal funds or (ii) settling
centrally?
¢. record and reflect the consequence of raising a dispute on an alleged discrepancy, -
on Horizon Branch account data and, in particular:
(i) does raising a dispute with the helpline cause a block to be placed on the value of an
alleged shortfall; and
(ii) is that recorded on the Horizon system as a debt due to Post Office?
d. enable Subpostmasters to produce (i) Cash Account before 2005 and (ii) Branch
Trading Statement after 2005?
e. enable or require Subpostmasters to continue to trade if they did not complete a
Branch Trading Statement; and if so, on what basis and with what consequences on the
Horizon system?
Answer: This is substantially agreed by the experts. The Horizon system can compare
cash and stock figures, but it has no facility to record a dispute. The comparison is done
by the system comparing its electronic records of what cash and stock is held in a
branch, with the corresponding figures inputted by the SPM at the end of a trading
period.
The functionality of the system is as follows. The SPM inputs, at the end of each trading
period, the relevant figures for the cash and stock that are physically present. The
Horizon system identifies any discrepancy and the system invites the SPM to transfer
the amount of that discrepancy into the local suspense account and continue “to roll
over”, or to discontinue this operation. Rolling over is required before the next trading
period can commence. For discrepancies of less than £150, the SPM has to “make
good” that amount, by adding money to the till (if it is negative) or removing it (if
positive). For negative sums in excess of £150, the SPM has the choice of making good
(by adding the money) or “settling centrally” which basically just means seeking time
from the Post Office to pay. This is extensively explained in the Common Issues
judgment, Judgment No.3. This is not done as part of the Horizon system. A slightly
different process was available prior to 2005 which was called cash accounting, but the
process was broadly the same, although “settling centrally” was not available under
cash accounting. Making good would cause the actual cash position to increase by the
amount put into the till from the SPM’s own resources. If, say, there was a negative
discrepancy of £100 between the actual cash position (the cash physically present in
the till), and the derived cash position (shown on Horizon) then making good would
lead to the figures being the same. The meaning of “settling centrally” simply means
paying the amount to the Post Office over time (or having it deducted by the Post Office
from the remuneration paid to the SPM).
A SPM had to do this in order to “roll over” to the next accounting period. This means
that a branch trading statement had to be completed if the SPM wished to open the
branch for the next trading period. The branch trading statement had to be done on the
figures for cash and stock shown on the Horizon system. There was extensive evidence
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of fact in both the Common Issues trial and the Horizon Issues trial that this had to be
done. Unless it was, the branch could not trade in the next trading period.
So far as disputed amounts are concerned, an SPM cannot dispute a discrepancy or any
figure on Horizon, or record on Horizon that they have raised a dispute. Horizon records
figures even when they are not correct, and there is evidence of figures on Horizon
being known to be incorrect by the SPM and the Post Office, or both. A dispute is
normally raised by a SPM through contacting the helpline, which is a telephone service
which was widely referred to in the Horizon Issues trial. There is a finding in Judgment
No.3 that by contacting the helpline an SPM was registering a dispute with the Post
Office. The helpline and its function are however outside the scope of the Horizon
Issues, and the helpline does not form part of the Horizon system.
Transaction Corrections
1025.
1026.
1027.
1028.
1029.
1030.
Issue (15): How did Horizon process and/or record Transaction Corrections?
Answer: This too is substantially agreed in terms of technical content, and I have
explained in the body of the accompanying judgment, that TCs are outside the
definition of the Horizon system.
The creating of TCs is a manual process. Dr Worden relied upon TCs as underpinning
his conclusion on robustness of the Horizon system. The creation of TCs is no part of
the Horizon system. Without TCs, which are very numerous, the Post Office system of
accounting with its SPMs would be even more problematic that it has been. There have
been over 100,000 TCs issued each year since 2006. This is more than 2,000 per week.
The Post Office has a central accounting function that comes to a decision that an
adjustment has to be made to a branch’s accounts, as the branch transaction data (which
comes from Horizon) is not consistent with the data the Post Office has received from
its clients or suppliers. This adjustment is the result of a human process and is made by
way of the issuing of TCs to a particular branch. This is done without the involvement
of SPMs and the decision to do so is taken outside the Horizon system. In the early days
of Horizon they were called Error Notices.
A TC is then sent by the Post Office to the SPM and the SPM processes such TCs by
accepting them. By that acceptance, the correction that is the subject of the TC will
enter the branch accounts on Horizon. Disputes to TCs are done by the SPM contacting
the helpline and again this is outside the Horizon system, which does not record that
dispute. If the dispute is upheld (as in, the original TC is accepted by the Post Office as
having been wrongly issued) then another TC will be issued to correct it. That
subsequent TC will correct the effect of the first TC in the branch accounts when it is
accepted by the SPM. The issuing of the subsequent TC is also done outside the Horizon
system.
The Post Office does not have comprehensive records of how many TCs that have been
challenged by SPMs have been upheld. I have provided at [859] and [860] above an
explanation of part of the 3% experts’ joint statement in respect of TCs, and the
percentage of TCs relating to Santander that the Post Office said were upheld. 77% of
these were upheld; which plainly means that 23%, or 1 in 4, of those disputed were
wrongly issued. I will also record here for completeness (although they are not TCs)
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that Transaction Acknowledgments or TAs are also used for making corrections to
branch accounts. To use the Lottery and Camelot as an example, the issuing of TAs is
now automated following the so-called Ping fix. However, a SPM has no option
whether to accept TAs or not; they have to be accepted in branch. This was agreed by
a number of the Post Office’s factual witnesses.
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Neutral Citation Number: [2021] EWCA Crim 577
IN THE COURT OF APPEAL (CRIMINAL DIVISION)
Case No 202001558 B3
(and 41 other linked cases)
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Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 23/04/2021
Before:
LORD JUSTICE HOLROYDE
MR JUSTICE PICKEN
and
MRS JUSTICE FARBEY DBE
IN THE MATTER OF A REFERENCE BY
THE CRIMINAL CASES REVIEW COMMISSION
Between:
JOSEPHINE HAMILTON & OTHERS Appellants
-and—
POST OFFICE LIMITED Respondent
Hearing dates: 22, 23, 24 & 25 March 2021
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Judgment Approved by the court for handing down, Hamilton & Others v Post Office Ltd
APPEARANCES
Mr T Moloney QC and Miss K O’Raghallaigh appeared on behalf of the Appellants:
Josephine Hamilton (202001558 B3), Gail Ward (202001559 B3), Julian Wilson (deceased)
(202001561 B3), Hughie Thomas (292001562 B3), Jacqueline McDonald (202001563 B3),
Allison Henderson (202001564 B3), Alison Hall (202001566 B3), Della Robinson
(202001572 B3), Khayyam Ishaq (202001573 B3), David Thomas Hedges (202001574 B3),
Damien Owen (202001577 B3), Mohammed Rasul (202001578 B3), Wendy Buffrey
(202001579 B3), Kashmir Gill (202001580 B3), Barry Capon (202001582 B3), Wendy
Cousins (202001584 B3), Lynette Hutchings (202001585 B3), Lisa Brennan (202001589
B3), William Graham (202001591 B3), Siobhan Sayer (202001592 B3), Tim Burgess
(202001593 B3), Pauline Thomson (202001594 B3), Nicholas Clark (202001595 B3),
Margery Williams (202001987 B3), Tahir Mahmood (202001988 B3), Ian Warren
(202001989 B3), David Yates (202001990 B3), Harjinder Butoy (202001991 B3), Gillian
Howard (202001992 B3), David Blakey (202001993 B3)
Ms L Busch QC and Dr S Fowles appeared on behalf of the Appellants:
Tracy Felstead (202001565 B3), Janet Skinner (202001567 B3), Seema Misra (202001571
B3)
Mr S Stein QC and Mr L Orrett appeared on behalf of the Appellants:
Scott Darlington (202001568 B3), Peter Anthony Holmes (deceased) (202001575 B3),
Rubina Shaheen (202001576 B3), Stanley Fel! (202001569 B3), Pamela Lock (202002979
B3)
Mr S Patel QC and Mr B Smith appeared on behalf of the Appellant: Vijay Parekh
(202001583 B3)
Mr B Gordon appeared on behalf of the Appellant: Dawn O’Connell (deceased) (202001586
B3)
Mr O Saxby QC and Mr B Irwin appeared on behalf of the Appellant: Carl Page
(202001588 B3)
Mr C Millington QC and Mr R Chand appeared on behalf of the Appellant: Neelam
Hussain (202001590 B3)
Mr B Altman QC, Miss Z Johnson QC, Mr S Baker QC, Miss J Carey, Miss C Brewer
and Miss H Jones appeared on behalf of the Respondent: Post Office Legal Services
Approved Judgment
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the handing d Hamilton & Others v Post Office Ltd
Lord Justice Holroyde:
1.
3.
This judgment, to which each member of the court has contributed, concerns forty-two
men and women who were employed by Post Office Limited, or its predecessors the
Post Office and Post Office Counters Limited, as sub-postmasters, sub-postmistresses,
managers or counter assistants. They were all prosecuted by their employer and
convicted of crimes of dishonesty. Many years later, their cases have been referred to
this court by the Criminal Cases Review Commission (“CCRC”). We have to decide
whether their prosecutions were an abuse of the process of the court and whether their
convictions are unsafe. In particular, we must consider issues as to the reliability of the
computerised accounting system, “Horizon”, which was in use in branch post offices
during the relevant period.
For convenience, we shall refer to each of the forty-two persons as an appellant, and to
each reference as an appeal. For the purposes of these appeals, nothing turns on any
distinction between the Post Office, Post Office Counters Limited and Post Office
Limited, and nothing turns on any distinction between the positions of sub-postmaster,
sub-postmistress, manager or counter assistant, or between the locations of the
appellants’ places of work. We shall therefore refer to all the appellants as “SPMs”, to
their places of work as “post offices” or “branches”, and to their employer as “POL”.
As POL was the prosecuting authority in each case, we shall use the same abbreviation
when referring to the respondent to these appeals.
Introduction:
SPMs run branch post offices. Depending on the size of the branch, they may employ
counter assistants. Often, the branch post office is situated inside a shop or other
business, and the SPM is also, but separately, the proprietor of that business. Branch
post offices, and their SPMs, play a key role in the lives of local communities.
The appellants were convicted between 2003 and 2013, of offences committed during
the period 2000-2012. All prosecutions in this country are brought in the name of the
Queen, but each of these cases was commenced and pursued by POL acting as a private
Prosecutor. Royal Mail Group was the prosecuting authority prior to 1 April 2012,
when POL became a separate body and took over the prosecutorial function. However,
nothing turns on that change. The appellants were variously charged with offences of
theft, fraud and false accounting. They either pleaded guilty to, or were convicted of,
such offences. Inevitably, their convictions resulted in not only the sanctions imposed
by the court, including in many cases sentences of immediate imprisonment, but also
the loss of their previous good character and consequent social disgrace. Very sadly,
three of the appellants ~ Julian Wilson, Peter Holmes and Dawn O’Connell — have not
lived to see the outcome of their appeals.
All of the appellants contend that their convictions are unsafe, in essence because they
were prosecuted and convicted on the basis that Horizon was reliable, when in fact it
was not. The CCRC referred the cases because it considered that two cogent lines of
argument in relation to abuse of process were available to each appellant: first, that the
reliability of Horizon data was essential to the prosecution and conviction, and it was
not possible for the trial process to be fair; and secondly, that it was an affront to the
public conscience for the appellant to face criminal proceedings.
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6.
7.
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nt Ay for handi 1 Hamilton & Others v Post Office Ltd
In making its referrals, the CCRC gave close consideration to findings made by Mr
Justice Fraser (“Fraser J”) in group litigation proceedings in the High Court between
claimants representing about 580 SPMs, and POL. Fraser J gave a number of
judgments, including in particular his judgments number 3, “Common Issues”! and
number 6, “Horizon Issues”. He was not directly concerned with any criminal
proceedings. However, as will be seen, his findings of fact have provided the factual
basis of these appeals.
The hearing of these appeals occupied four full days, and reference was made to many
documents. We have read all of those documents, and have considered all of the
submissions, though we will not refer to all of them. Although many of the points are
of general application to all or most of the appellants, we bear very much in mind that
we are concerned with forty-two individuals. Their cases require, and have received,
individual consideration.
We begin by summarising the relevant features of the Horizon system. We shall then
refer to some of the findings made by Fraser J, to the procedural history of these appeals,
and to evidence available to this court which was not available to Fraser J. Following
the course taken during the hearing of the appeals, we shall summarise the submissions
of the parties and our conclusions on general issues, before turning to individual cases.
The Horizon system:
9.
il.
12.
The Horizon system is an electronic point of sale and accounting system. It was
designed and installed by ICL, which was taken over by Fujitsu Limited in about 2002.
Again, nothing turns on that change, and we shall simply refer throughout to “Fujitsu”.
The system was piloted in 1999, and rolled out to branch post offices in 2000. Some
of the appellants were already employed as SPMs long before the system was installed.
The Horizon system provided a computerised system of accounting within branch post
offices, and between the branches and POL. It was initially operated via a telephone
line, but in 2010 that system was superseded by an online version, the first iteration of
which was known as HNG-X, We shall refer to the earlier version as “Legacy
Horizon”, to the later version as “Horizon Online” or “HNG-X”, and to the system
generally as “Horizon”.
By recording all transactions at a branch, Horizon calculated how much cash and stock
should be held in the branch. SPMs were required to make a daily declaration of the
amount of cash held at the branch. At the end of a trading period (initially one week,
latterly a four- to five-week period), the SPM was required to complete a Branch
Trading Statement: the branch could not enter (or “roll over” into) a new trading period
without the SPM declaring to POL the completion of that statement.
Once Horizon had been installed in a branch, the SPM was obliged to use it: it was not
possible to opt out. POL operated a Network Business Support Helpline (“the
Helpline”) which was provided and recommended to SPMs as a primary source of
' [2019] EWHC 606 (QB)
2 [2019] EWHC 3408 (QB)
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14,
18.
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ent Ay et for handing down, Hamilton & Others v Post Office Ltd
advice and assistance in respect of Horizon and in respect of errors and issues relating
to their trading statements and accounts.
There was no facility within the Horizon system for SPMs to dispute Horizon’s figures:
they were required instead to contact the Helpline. If at the end of a trading period there
was a discrepancy or shortfall between the cash on hand and the figures generated by
Horizon, the SPM was required to make good any shortfall, either by putting in his or
her own money (“settling in branch”) or by asking for the sum to be deducted from his
or her future income (“settling centrally”). The prosecutions of the appellants for the
most part began when POL auditors found such a shortfall.
POL had a contractual right to seek recovery from SPMs for losses relating to branch
accounts. The precise terms and legal effect of the relevant contractual provisions were
considered in detail by Fraser J in his “Common Issues” judgment. For our present
purposes, it suffices to say that the approach adopted in practice by POL was that if
Horizon showed a shortfall, however inexplicable to the SPM, the SPM was required
to make it good at the end of a trading period. Some of the appellants did so, using
their own funds, or borrowing, to make good a loss for which they did not in fact accept
responsibility. Others resorted to offences of false accounting in order to cover upa
shortfall for which they did not accept responsibility and which they were unable to
make good.
Fujitsu held audit data (“ARQ data”), which contained a complete and accurate record
of all keystrokes made by an SPM or an assistant when using Horizon. It was therefore
possible to refer to the audit data to track every transaction recorded on Horizon.
It eventually emerged in the High Court litigation that Fujitsu also had the ability to
amend Horizon data in relation to a branch without the knowledge of the SPM
concerned.
Fujitsu recorded bugs, errors and defects in two types of document. If an SPM phoned
the Helpline, and was referred to the section of Fujitsu which investigated such matters,
a document known as a PEAK would be created. The PEAKs would feed into a higher-
level document, a Known Error Log (“KEL”).
POL had a contractual right to obtain any of the information about Horizon which was
held by Fujitsu. Some of the appellants sought disclosure of ARQ data. However,
Fraser J heard no evidence to suggest that either PEAKs or KELs had been disclosed
by POL in any civil litigation or any criminal prosecution before the High Court
proceedings. This court is in the same position. In the prosecutions of these 42
appellants, so far as we are aware, there was no disclosure of any such document.
Concerns about Horizon:
19.
The initial roll-out of Horizon was delayed by technical issues. From an early stage of
its introduction, some SPMs were experiencing, and reporting, discrepancies and
shortfalls in their branch accounts which they considered were caused by faults in
Horizon. The case later advanced by the claimants in the High Court proceedings, and
by the appellants in these appeals, is that Horizon has throughout been affected by bugs,
errors and defects, and that faults in the system caused it to overstate the amount of cash
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20.
22.
23.
24,
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at Aj th for handing dows Hamilton & Others v Post Office Ltd
or stock which should be held at a particular time, thereby causing an apparent and
unexplained shortfall in branch accounts.
POL, however, maintained for many years that Horizon was reliable. It accepted the
Horizon data as establishing that money was missing: i.e., that there was an actual
shortfall of cash held in the branch, not merely an apparent shortfall generated by
Horizon. POL treated the shortfall as having been caused by dishonesty, or at best
carelessness, on the part of the SPM, and demanded repayment by the SPM. POL’s
stance was that it was up to an individual SPM to prove that a shortfall was not his or
her responsibility: if the SPM could not do so, he or she would have to make good the
shortfall. The scale of such shortfalls is indicated by the fact that, in the High Court
proceedings, the total amount of losses claimed by the claimants was about £18 million.
Fraser J found, and we accept, that when unexplained shortfalls and discrepancies were
challenged by SPMs through the Helpline, POL would treat those shortfalls as
undisputed debts. At most, an SPM might be offered time to pay the asserted debt by
deductions from his remuneration over the next 12 months. Even if an SPM resigned
his employment, he would — so far as POL was concerned — still owe the disputed sum.
As we have said, Fraser J in his “Common Issues” judgment considered in detail the
nature of the contractual relationship between an individual SPM and POL. For the
purposes of these appeals, it suffices to say that we accept that — whatever the correct
legal analysis of the contract — all these appellants understood, and were led by POL to
understand, that they were required to make good any shortfall shown by Horizon,
whether or not they accepted that there was a genuine shortfall, and whether or not there
was any negligence or dishonesty on their part. They further understood, and were led
to understand, that they would be liable to be dismissed if they did not do so.
In 2009 a periodical, Computer Weekly, published a report referring to problems with
the Horizon system. Also in 2009, two Members of Parliament reported their
constituents’ concerns about Horizon to the then Minister of Postal Affairs and
Employment Relations, who in turn forwarded the letters to the Managing Director of
POL.
In August 2010 Rod Ismay, POL’s Head of Product and Branch Accounting, prepared
a report entitled “Horizon — Response to Challenges Regarding Systems Integrity”.
Those to whom the report was copied included POL’s Head of Criminal Law. In
summary, the report stated that Horizon (both Legacy and Online) was robust, and that
the prosecutions which had given rise to adverse comments were cases in which “we
remain satisfied that this money was missing due to theft in the branch”. It noted that
the record of prosecutions supported the assertion that the SPMs had been guilty rather
than Horizon being faulty, but observed that this “does not stop speculation about the
system”. It went on to consider the merits of an independent review, not because of
any doubt about Horizon but in order to help give others “the same confidence that we
have”. The decision was that, no matter what opinions might be obtained, “people will
still ask ‘what if?’ and the defence will always ask questions that require answers
beyond the report”. Mr Ismay went on to give this warning:
“It is also important to be crystal clear about any review if one
were commissioned — any investigation would need to be
disclosed in court. Although we would be doing the review to
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25.
26.
27.
28.
29.
30.
31.
32.
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roved rt for handing Hamilton & Others v Post Office Ltd
comfort others, any perception that POL doubts its own systems
would mean that all criminal prosecutions would have to be
stayed. It would also beg a question for the Court of Appeal over
past prosecutions and imprisonments.”
In the event, several more years passed before POL did commission an independent
review.
In July 2012 POL appointed Second Sight Support Services Limited (“Second Sight”)
to conduct a review into problems with Horizon. Second Sight concluded that in some
circumstances Horizon could be systemically flawed from a user’s perspective, and that
POL had not necessarily provided an appropriate level of support.
From about March 2015 onwards, convicted SPMs began to make applications to the
CCRC, seeking to challenge their convictions. In summary, they contended that
evidence was now available concerning failings in Horizon and the response of POL to
those failings, which was relevant to the safety of their convictions. The CCRC, aware
of the civil proceedings between SPMs and POL, understandably took time to consider
the applications and the judgments of Fraser J.
Also from about 2015, POL ceased to conduct its own prosecutions, and the Crown
Prosecution Service became the prosecuting authority in relation to alleged offences by
SPMs and other POL employees.
In 2017 a Group Litigation Order was made in the High Court litigation. Six lead
claimants were identified, but the issues affected all the many hundreds of claimants.
In Fraser J’s phrase, it was “bitterly contested” litigation. POL continued to assert that
Horizon was a robust system and could be relied upon.
At the end of 2019, shortly before Fraser J handed down his “Horizon Issues” judgment,
the claimants and POL agreed terms of settlement.
We should add for completeness that a public inquiry chaired by Sir Wyn Williams,
President of Welsh Tribunals, is currently considering what went wrong in relation to
Horizon. It will draw on evidence from Fraser J’s judgments and the experiences of
affected SPMs and will identify what key lessons must be learned for the future. It
expects to submit its findings and recommendations later this year. The terms of
reference of the Inquiry do not include POL’s prosecution function or matters of
criminal law.
Fraser J, to whose industry we pay tribute, considered a mass of documents and heard
oral evidence, both factual and expert, over many days. His “Common Issues” and
“Horizon Issues” judgments, together with a Technical Appendix to the latter,
amounted to more than 500 pages. It is unnecessary, for the purposes of these appeals,
for this court to go into similar detail. We must however refer to some of his key
findings.
Findings made by Fraser J:
33.
In his “Common Issues” judgment, Fraser J found that POL, in demanding repayment
of a shortfall shown by Horizon, misstated the factual and legal liability of an SPM to
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Judgment Approv for handing d Hamilton & Others v Post Office Ltd
make good any losses. In summary, it was contended in the civil litigation that the
contract between an SPM and POL made the former responsible for all losses caused
through his own negligence, carelessness or error and for losses of all kinds caused by
his assistants. POL however repeatedly asserted that SPMs were liable to make good
any losses incurred during their terms of office. In relation to the correspondence which
POL had sent to one of the lead claimants, Fraser J at [222] expressed himself in strong
terms:
“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.”
34. Fraser J’s conclusions in that judgment included the following:
“1111. The Post Office describes itself on its own website as
“the nation’s most trusted brand” ... . So far as these Claimants,
and the subject matter of this Group Litigation, are concerned,
this might be thought to be wholly wishful thinking. Trust is an
element of an obligation of good faith, a concept which I find is
to be implied into the contracts between the Post Office and the
SPMs because they are relational contracts. The Post Office
asserts that its brand is trusted by the nation, but the SPMs who
are Claimants do not trust it very far, based on their individual
and collective experience of Horizon.”
1115. Horizon was introduced in 2000, and from then onwards
unexplained discrepancies and losses began to be reported by
SPMs. Internal documents obtained in this litigation show that
some personnel within the Post Office believed at the time that
at least some of these were caused by Horizon. Some of these
are identified at [542] above. The first document in that
paragraph of this judgment dates from November 2000. At [41]
I deal with part of an internal Post Office report from as recently
as June 2014 — other parts have been redacted — that make it clear
that steps had to be taken within the Post Office to “ensure
consistency of accounts and enable a higher chance of detecting
errors in accounts due to problems with Horizon”. The Post
Office’s position in this litigation remains that Horizon is what
is called “robust” and that none of the Claimants experienced
shortfalls or discrepancies in their branch accounts due to
problems caused by Horizon. Further consideration of this will
occur in subsequent judgments and after the Horizon Issues
trial.”
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35.
36.
37.
38.
39.
40.
41.
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he cou nding down, Hamilton & Others v Post Office Ltd
Fraser J subsequently considered the operation, functionality and reliability of the
Horizon system itself in his Judgment number 6 — “Horizon Issues”.
As we have noted, the default position adopted by POL was that an SPM must be
responsible for any shortfall in accounts which could not be explained. As an
illustration of POL’s refusal to accept any fault in Horizon, Fraser J at [209] of his
“Horizon Issues” judgment referred to reports to Fujitsu in around 2000 of “phantom
sales” which appeared to be caused by hardware issues. He noted at [210] that such
transactions were the subject of a PEAK dated 17 April 2001 which related to multiple
branches and recorded the dissatisfaction of more than one SPM as to the failure to
investigate and resolve the issues. The PEAK also recorded that at one of the branches
which had reported such issues, Royal Mail’s own engineers had attended to try to
rectify the problem and had actually seen the phantom transactions, so it was no longer
“Just the [S]PM’s word”. Fujitsu had nonetheless concluded that there was no fault in
their product and the explanation for any phantom transactions lay in operator error—a
conclusion which Fraser J found, at [213], to be “simply and entirely unsupportable”.
In July 2013 an SPM reported that Horizon had “put a phantom cheque on the cheque
line”. The SPM spoke of going to his MP. An internal email asked whether this
“alleged flaw” should be investigated “to pre-empt any enquiries from his MP”. A
senior POL official replied that the claim could not be investigated without further
details and Fujitsu involvement, and stated:
“My instinct is that we have enough on with people asking us to
look at things.”
Fraser J was highly critical of that response. He said, at [219]:
“In my judgment, the stance taken by the Post Office at the time
in 2013 demonstrates the most dreadful complacency, and total
lack of interest in investigating these serious issues, bordering on
fearfulness of what might be found if they were properly
investigated.”
Fraser J went on to refer to the problems experienced with Horizon “almost from the
outset”. One of the documents which was referred to in evidence was a heavily-
redacted “Extract from Lessons Learned Log” of November 2015, in which a POL
official acknowledged there had been a “failure to be open and honest when issues arise
eg roll out of Horizon”.
Fraser J referred to two particular bugs, known as the Callendar Square bug and the
Receipts and Payments Mismatch (“RPM”) bug. In his “Common Issues” judgment at
[541], he had described the RPM bug as one of the bugs in respect of which
contemporaneous internal documents showed “at least to some degree, an awareness of
Horizon problems within the Post Office itself over a number of years”. In his “Horizon
Issues” judgment at [428] he referred to a note which he found was written in 2010 and
which was considered at a meeting attended by personnel from both Fujitsu and POL.
The note indicated that the RPM bug was currently affecting about 40 branches: there
had at that point been no communication with the branches affected, and it was not
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42.
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believed that they were exploiting the bug intentionally. Three possible solutions were
proposed, and the note indicated the risks associated with each of those proposals:
i)
ii)
iii)
Solution 1 was to alter the Horizon branch figure at the counter to show the
discrepancy. This would involve Fujitsu manually writing an entry value to the
local branch account. The identified risk was:
“This has significant data integrity concerns and could lead to
questions of ‘tampering’ with the branch system and could
generate questions around how the discrepancy was caused.
This solution could have moral implications of Post Office
changing branch data without informing the branch.”
Solution 2 was to “journal values from the discrepancy account into the
Customer Account and recover/refund via normal processes”. The identified
risk was:
“Could potentially highlight to branches that Horizon can lose
data.”
Solution 3 was not to correct the data in the branches and to write off the loss.
The identified risk was:
“Huge moral implications to the integrity of the business, as
there are agents that were potentially due a cash gain on their
system.”
Unsurprisingly, Fraser J described this record as “a most disturbing document in the
context of this group litigation”. He continued, at [429]:
“Tt is a 2010 document and issues between the Post Office and
many SPMs concerning the accuracy of Horizon had, for Legacy
Horizon, gone on for a decade (2000 to 2010) and these
continued under Horizon Online (introduced in 2010). Under
“Impact”, some of the bullet points incorporate a summary of
these issues.
‘e The branch has appeared to have balanced, whereas in fact
they could have a loss or a gain.
+ Our accounting systems [ie Horizon or the Post Office’s] will
be out of syne with what is recorded at the branch
+ If widely known could cause a loss of confident [sic] in the
Horizon System by branches
* Potential impact upon ongoing legal cases where branches are
disputing the integrity of Horizon Data
* It could provide branches ammunition to blame Horizon for
future discrepancies.” [emphasis added by Fraser J]
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43.
45.
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th yanding down, Hamilton & Others v Post Office Ltd
Another document relating to the same bug referred to a BBC documentary broadcast
in February 2011, which reported on SPMs being unhappy about being pursued for
losses on Horizon, and to “ongoing legal cases”. Fraser J concluded at [433] that those
references showed that there was —
“a distinct sensitivity within both the Post Office and Fujitsu
about keeping this information to themselves in order to avoid a
“loss of confidence” in Horizon and the integrity of its data. A
less complimentary (though accurate) way of putting it would be
to enable the Post Office to continue to assert the integrity of
Horizon, and avoid publicly acknowledging the presence of a
software bug.”
Fraser J went on to note, in relation to a number of the bugs found in Horizon, that POL
did not communicate the existence of a bug to all SPMs or even to SPMs whose
branches were known to have been affected by it. He found POL’s approach to this in
the proceedings before him to be “simply extraordinary”. He referred at [442] to a
number of points which —
“... all lead to the same conclusion in my judgment, namely that
the Post Office ought to have notified, at the very least, all those
SPMs whose branch accounts had been impacted by this bug that
this had occurred, and that it had occurred as a result of a
software bug. The fact that the integrity of Horizon data was a
live issue at this time should not have influenced the decision to
notify SPMs of a software bug. Further, the Post Office’s
explanation in its submissions that SPMs had their accounts
“corrected in the ordinary course” is not a suitable phrase, unless
by “ordinary course” one means keeping the cause or reason for
the correction secret and therefore hidden from the other party in
the accounting transaction, namely the SPM.”
The claimants’ case in the civil litigation was that POL should have referred to the audit
data when there was a dispute between it and an SPM as to what had occurred in
Horizon. The evidence made clear that POL did not use audit or ARQ data, which
would have involved an expenditure of time and money in obtaining the data from
Fujitsu, and instead consulted management data. Fraser J at [911] accepted that it was
not necessary to consult the audit data in every case where a transaction correction was
considered. But, he said, it should be consulted when there was a dispute between POL
and an SPM about a branch account and about who or what was to blame, and he could
think of no sensible reason not to consult the audit data in such a scenario. He
continued:
“The evidence in both this trial, and the Common Issues trial,
where the Post Office cross-examined a number of SPMs on
events in their branch accounts by using a variety of management
information, other than the audit data, makes clear to me just
how important it is to use the audit data, rather than other sources
including management information. The management
information is confusing, contradictory, has been shown to be
wrong and requires numerous assumptions or a “take it from me”
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ludgment ie court for hi lows Hamilton & Others v Post Office Ltd
46.
47.
48.
type of approach on the part of a questioner. It is rarely agreed
what that management data shows. The audit data, by its very
nature, will be far superior and the best evidence available of
what has occurred on Horizon. It should be consulted in
circumstances where there is a dispute between the Post Office
and a SPM.”
Fraser J later referred to part of the evidence of a witness called before him, Mr Latif,
who described how he had performed some basic, routine steps to transfer a sum of
£2,000 between terminals, only to find that the sum disappeared from the Horizon
system. Mr Latif had been a trainer, entrusted by POL to train other SPMs. His
evidence was nonetheless challenged by POL, whose witness on this point asserted that
the sum could not have disappeared as Mr Latif had described. Fraser J accepted Mr
Latif’s evidence and at [928]-[929] expressed his view as follows:
“928. The approach by the Post Office to the evidence of
someone such as Mr Latif demonstrates a simple institutional
obstinacy or refusal to consider any possible alternatives to their
view of Horizon, which was maintained regardless of the weight
of factual evidence to the contrary. That approach by the Post
Office was continued, even though now there is also
considerable expert evidence to the contrary as well (and much
of it agreed expert evidence on the existence of numerous bugs).
929. This approach by the Post Office has amounted, in reality,
to bare assertions and denials that ignore what has actually
occurred, at least so far as the witnesses called before me in the
Horizon Issues trial are concerned. It amounts to the 21st century
equivalent of maintaining that the earth is flat.”
Although other passages in the judgment were referred to by counsel in these appeals,
we do not think it necessary to add to the above extracts. We turn to the conclusions
reached by Fraser J.
Fraser J found that there were numerous bugs, errors or defects in Horizon which were
capable of causing, and did in fact cause, shortfalls in post office branches. He found
that the evidence he had heard established 25 different bugs with the potential to impact
upon branch accounts, with evidence of actual lasting impact having occurred as a result
of 22 of them. Horizon itself did not alert SPMs to the existence of any such bugs,
errors or defects. His overall findings included the following:
“968. ... It was possible for bugs, errors or defects of the nature
alleged by the claimants to have the potential both (a) to cause
apparent or alleged discrepancies or shortfalls relating to
Subpostmasters’ branch accounts or transactions, and also (b) to
undermine the reliability of Horizon accurately to process and to
record transactions as alleged by the claimants.
969. Further, all the evidence in the Horizon Issues trial shows
not only was there the potential for this to occur, but it actually
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49,
50.
51.
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the court for handiny Hamilton & Others v Post Office Ltd
has happened, and on numerous occasions. This applies both to
Legacy Horizon and also Horizon Online. ...
970. I accept the claimants’ submissions that, in terms of
likelihood, there was a significant and material risk on occasion
of branch accounts being affected in the way alleged by the
claimants by bugs, errors and defects. ...
978. ... In my judgment, there is a material risk that such a
shortfall in a branch’s accounts was caused by the Horizon
system during the years when both Legacy Horizon and HNG-X
were in use, which is 2000 to 2010 and 2010 to 2017
respectively. ...
983. ... there is a material risk for errors in data recorded within
Horizon to arise in (a) data entry, (b) transfer or (c) processing
of data in Horizon in both the Legacy Horizon and HNG-X
forms.”
Fraser J found that POL did have access to the causes of alleged shortfalls in branches,
including whether they were caused by bugs, errors and/or defects in Horizon, albeit
that they would rely on Fujitsu to undertake any investigations. He further found, at
[1001], that Fujitsu had the ability and facility to insert, inject, edit or delete transaction
data or data in branch accounts, to implement fixes in Horizon that had the potential to
affect transaction data or data in branch accounts or to rebuild branch transaction data,
all without the knowledge or consent of the SPM in question. If Fujitsu injected a
transaction into a branch account, “this would look as though the SPM had done it” (at
{1004}).
He concluded, at [975] and for the reasons which he explained in his Technical
Appendix, that Legacy Horizon was -
“not remotely robust. The number, extent and type of impact of
the numerous bugs, errors and defects that I have found in
Legacy Horizon makes this clear”.
HNG-X was slightly more robust, but still had a significant number of bugs, errors and
defects, particularly in the period 2010-2015. The robustness of HNG-X was therefore
questionable, and prior to February 2017 did not justify the confidence routinely stated
by POL in terms of its accuracy.
These and other findings of Fraser J were considered by the CCRC, to whose work we
now turn.
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Judge
The CCRC:
52. _ By section 9(1) of the Criminal Appeal Act 1995, where a person has been convicted
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the ine di Hamilton & Others v Post Office Lid
of an offence on indictment in England and Wales, the CCRC may at any time refer the
conviction to this court. The conditions for making a reference are set out in section 13
of the 1995 Act, which so far as material provides:
53. We should note that only two of the appellants, Lisa Brennan and Harjinder Butoy, had
previously appealed, unsuccessfully, against their convictions.
realistically and fairly accepted by POL that there were exceptional circumstances
“13.— Conditions for making of references
(1) A reference of a conviction, verdict, finding or sentence
shall not be made under any of sections 9 ... unless—
(a) the Commission consider that there is a real possibility that
the conviction ... would not be upheld were the reference to be
made,
(b) the Commission so consider—
(i) in the case of a conviction, ... because of an argument, or
evidence, not raised in the proceedings which led to it or on any
appeal or application for leave to appeal against it, ...
and
(c) an appeal against the conviction, verdict, finding or sentence
has been determined or leave to appeal against it has been
refused.
(2) Nothing in subsection (1)(b)(i) or (c) shall prevent the
making of a reference if it appears to the Commission that there
are exceptional circumstances which justify making it.”
It was however
which justified the reference of all the cases to this court, notwithstanding that other
appellants had not brought any appeal against their convictions at the time.
54. By section 9(2), a reference of a person’s conviction shall be treated for all purposes as
an appeal by the person under section 1 of the Criminal Appeal Act 1968 against the
conviction. The reasons which the CCRC gave for referring these cases to this court
therefore take effect as grounds of appeal, and we must proceed in accordance with
section 2(1) of the Criminal Appeal Act 1968:
“Subject to the provisions of this Act, the Court of Appeal —
(a) Shall allow an appeal against conviction if they think that the
conviction is unsafe; and
(b) shall dismiss such an appeal in any other case”
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roved by thi handiny Hamilton & Others v Post Office Ltd
55. Because different SPMs applied to the CCRC at different times, the CCRC dealt with
more than one tranche of referrals and gave more than one statement of its reasons. For
our purposes, nothing turns on that. The CCRC considered the cases of each of these
appellants in considerable detail. We commend the care and thoroughness with which
it did so. In its Statements of Reasons for the referrals, the CCRC summarised the
Principal points raised by the SPMs as including the following:
i)
ii)
iii)
iv)
vy)
POL could not show that the Horizon figures were correct, nor could they show
when or how the alleged shortfalls occurred.
There was no direct evidence that the applicants had stolen any money.
The applicants had no choice but to falsify accounts: they would not have been
able to continue trading if the books did not balance, and they were in fear of
having their branches taken away from them.
The terms of their contracts were unfair, and there was no motivation for them
to raise Horizon problems: if they did so, POL failed to investigate properly and
would inevitably hold the SPM responsible for any monies which Horizon
showed to be missing.
POL failed to make adequate disclosure to the defence in the criminal
proceedings of data on the Horizon system.
56. I The CCRC considered that Fraser J’s judgments undermined POL’s approach to the
criminal prosecutions of these appellants, in particular because of his findings which it
summarised as follows:
i)
ii)
iii)
iv)
vy)
vi)
vii)
Legacy Horizon was not remotely robust.
HNG-X, the first iteration of Horizon Online, was slightly more robust than Legacy
Horizon, but still had a significant number of bugs, errors and defects.
There was a significant and material risk of inaccuracy in branch accounts as a
result of bugs, errors and defects in Horizon.
There is a material risk that shortfalls in branch accounts were caused by
Horizon during the years when Legacy Horizon and HNG-X were in use (2000-
2010, and 2010 onwards).
There was independent evidence which supported the SPMs’ version of events,
including from Royal Mail’s own engineers and from POL’s own auditors.
POL failed to disclose to SPMs the full and accurate position in relation to the
reliability of Horizon.
POL, and also Fujitsu, adopted the default position that SPMs must be
responsible for shortfalls. The level of investigation by POL and Fujitsu was
poor.
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Judgment Approved by the court for handing down. Hamilton & Others v Post Office Ltd
57.
58.
59.
viii) SPMs were at a significant disadvantage in terms of access to relevant
information which might have enabled them to investigate and challenge alleged
shortfalls.
ix) SPMs had no way of disputing shortfalls within Horizon.
x) POL routinely overstated the contractual obligation on SPMs to make good
losses.
xi) Remote access to branch accounts [i.e., by Fujitsu] was extensive, and some
branch accounts were in fact altered without the SPM’s knowledge. It would
appear in the accounts as though such actions had been carried out by the SPM.
The three most important of those points, in the CCRC’s view, were:
i) That there were significant problems with the Horizon system and with the
accuracy of the branch accounts which it produced. There was a material risk
that apparent branch shortfalls were caused by bugs, errors and defects in
Horizon.
ii) That POL failed to disclose the full and accurate position regarding the
reliability of Horizon.
iii) Thatthe level of investigation by POL into the causes of apparent shortfalls was poor,
and that the Post Office applicants were at a significant disadvantage in seeking
to undertake their own enquiries into such shortfalls.
The CCRC concluded, in respect of each of these appellants, that Fraser J’s findings
gave rise to two cogent lines of argument in relation to abuse of process. It decided that
there was a real possibility that this court would find that it had been an abuse of process
to prosecute the appellants. It therefore referred the cases to this court.
Although individual appellants formulate their submissions differently, the reasons
given by the CCRC give rise in each case to two grounds of appeal:
i) Ground 1: the reliability of Horizon data was essential to the prosecution and,
in the light of all the evidence including Fraser J’s findings in the High Court, it
was not possible for the trial process to be fair;
ii) Ground 2: the evidence, together with Fraser J’s findings, shows that it was an
affront to the public conscience for the appellants to face prosecution.
Those grounds reflect two possible circumstances in which criminal proceedings may
be found to have abused the process of the court. We shall refer to them as “category
1 abuse” and “category 2 abuse”. The grounds raise issues as to whether POL properly
discharged its duties of investigation and disclosure under the Criminal Procedure and
Investigations Act 1996 (“the CPIA”). Before considering the arguments, it is
convenient first to set out the relevant legal framework.
The legal framework:
60.
Section 3 of the CPIA imposes on a prosecutor a duty to -
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61.
62.
63.
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ment Ay ¢ court for handi
“disclose to the accused any prosecution material which has not
previously been disclosed to the accused and which might
reasonably be considered capable of undermining the case for
the prosecution against the accused or of assisting the case for
the accused.”
That duty continues throughout the criminal proceedings, and after conviction. We are
primarily concerned with whether POL complied with that duty at and around the time
of its prosecutions of these appellants. It is however important to note that in
connection with the appeals, solicitors and counsel instructed by POL have undertaken
a very extensive exercise in reviewing millions of documents in order to consider, and
make, post-conviction disclosure. We place on record that, from all we have seen, that
demanding exercise has been carried out diligently and thoroughly in accordance with
a clearly-stated Disclosure Management Document. As a result, those now
representing the appellants, and consequently this court, have all relevant
documentation, including important documents which were not only not disclosed to
the appellants at the time of their prosecutions but also not disclosed in the High Court
proceedings before Fraser J.
Section 23 of the CPIA requires the Secretary of State to prepare a code of practice
containing provisions designed to secure, amongst other things —
“(a) that where a criminal investigation is conducted all
reasonable steps are taken for the purposes of the investigation
and, in particular, all reasonable lines of inquiry are pursued;
(b) that information which is obtained in the course of a criminal
investigation and may be relevant to the investigation is
recorded;
(c) that any record of such information is retained;
(d) that any other material which is obtained in the course of a
criminal investigation and may be relevant to the investigation is
retained ...”
Such a code has been published and from time to time revised.
Each appellant of course had the right to a fair trial pursuant to article 6 of the European
Convention on Human Rights.
The burden is on an accused to show, on a balance of probabilities, that he is entitled to
a stay of proceedings on grounds of abuse of process. A stay of criminal proceedings
is always an exceptional remedy, because “the majority of improprieties in connection
with bringing proceedings can be satisfactorily dealt with by the court exercising its
power of control over the proceedings” (R v Togher and others [2001] 1 Cr App R 33
at [33]). We bear very much in mind the reminder given by this court, in the context
of category 1 abuse, in D Limited v A and others [2017] EWCA Crim 1172 at [50]:
“But applications for a stay of this kind cannot be judicially
resolved by a process of ‘feel’ or ‘instinct’ ... . It remains the
Hamilton & Others v Post Office Ltd
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65.
66.
67.
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t AY i nding dow! Hamilton & Others v Post Office Ltd
case that it is an exceptional step to stay a prosecution; and if a
stay is to be granted it must be by a proper application of settled
principles to the facts.”
As to those settled principles, we cite a well-known passage in the judgment of Lord
Dyson JSC in the Supreme Court in R v Maxwell [2010] UKSC 48 at [13]:
“It is well established that the court has the power to stay
proceedings in two categories of case, namely (i) where it will
be impossible to give the accused a fair trial, and (ii) where it
offends the court’s sense of justice and propriety to be asked to
try the accused in the particular circumstances of the case. In the
first category of case, if the court concludes that an accused
cannot receive a fair trial, it will stay the proceedings without
more. No question of the balancing of competing interests arises.
In the second category of case, the court is concerned to protect
the integrity of the criminal justice system. Here a stay will be
granted where the court concludes that in all the circumstances a
trial will ‘offend the court’s sense of justice and propriety’ (per
Lord Lowry in R v Horseferry Road Magistrates’ Court, Ex p
Bennett [1994] 1 AC 42, 74G) or will ‘undermine public
confidence in the criminal justice system and bring it into
disrepute’ (per Lord Steyn in R v Latif and Shahzad [1996] 1
WLR 104, 112F).”
Category 2 abuse is by its nature rarely found. In Warren and others v Attorney-
General of Jersey [2011] UKPC 10 at [24] it was said by Lord Dyson JSC that an abuse
of the second category requires a discretionary balancing of the particular offence
charged and the particular conduct complained of, with relevant considerations
including the seriousness of any violation of a defendant’s rights and the seriousness of
the offence charged. Lord Dyson went on, at [25-26], to emphasise that how the
discretion is exercised will depend on the particular circumstances of the case, that rigid
classifications are undesirable, and that
“.., the balance must always be struck between the public
interest in ensuring that those who are accused of serious crimes
should be tried and the competing public interest in ensuring that
executive misconduct does not undermine public confidence in
the criminal justice system and bring it into disrepute.”
Lord Thomas CJ, giving the judgment of the court in R v Norman [2017] 1 Cr App R
8, explained at [23] that category 2 abuse involves —
“... a two-stage approach. First it must be determined whether
and in what respects the prosecutorial authorities have been
guilty of misconduct. Secondly it must be determined whether
such misconduct justifies staying the proceedings as an abuse.”
It is at the second of those stages the court must evaluate the competing public interests.
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68.
69.
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wwoved wrt for hay wn, Hamilton & Others v Post Office Ltd
In each of these appeals, the appellant relies on failures of investigation and disclosure
which, it is argued, would have founded a successful application to stay the prosecution.
as an abuse if the relevant facts had been known at the time. As it was, prosecutions
were pursued on the basis that the data produced by Horizon was accurate and reliable,
and the appellants were advised by their legal representatives, and made their decisions
as to pleas, in that context. It is therefore important to note that in R v Mullen [1999] 2
Cr App R 143 an appeal against conviction was allowed when the court, having
summarised the facts, concluded at p157:
“In these circumstances, we have no doubt that the discretionary
balance comes down decisively against the prosecution of this
offence. This trial _was preceded by an abuse of process which,
had it come to light at the time, as it would have done had the
prosecution made proper voluntary disclosure, would properly
have justified the proceedings then being stayed.”
Where a defendant has entered an unequivocal and intentional plea of guilty, the
resultant conviction will rarely be found to be unsafe. It is nonetheless possible for
fresh evidence to be admitted and for an appeal to be allowed in such circumstances:
see R v Jones [2019] EWCA Crim 1059 at [25]. In R v Togher and others it was held
that a conviction may be quashed on grounds of abuse of process even when a guilty
plea has been entered, though only if “it would be inconsistent with the due
administration of justice to allow the pleas of guilty to stand” (see paragraph [33]). In
a case in which a defendant who has pleaded guilty appeals against his conviction on
grounds of non-disclosure, the court must consider whether the plea was entered in
ignorance of evidence going directly to his guilt or innocence. As it was expressed in
R v Togher and others at [59], the question is whether the guilty plea was “founded
upon” the irregularity of non-disclosure. In R v Early and others [2002] EWCA Crim
1904 at [18] the court emphasised the crucial importance of a prosecuting authority
making full relevant disclosure before trial. It held that a defendant who pleaded guilty
at an early stage should not, if adequate disclosure had not been made, be in a worse
position than a defendant who, as a consequence of an application to stay the
proceedings as an abuse, benefited from further orders for disclosure culminating in the
abandonment of proceedings against him.
The appeals to this court:
70.
In its Respondent’s Notice, POL accepted Fraser J’s findings that there were about 30
bugs, errors and defects in the Horizon system, which did not operate simultaneously
and which affected both Legacy Horizon and Horizon Online, and that there was a
significant and material risk on occasions of branch accounts being affected in the way
alleged by the claimants by bugs, errors and defects. It also accepted that POL failed
to disclose to SPMs and to the courts the full and accurate position in relation to the
reliability of Horizon. In relation to its duties as a private prosecutor, POL accepted
that in cases where the reliability of the ARQ data was essential to the prosecution case,
it had a duty to assess that data; and that in view of the limitations on the extent to which
SPMs could investigate discrepancies in Horizon, POL had a duty to investigate to
ensure that the evidence was accurate and to pursue reasonable lines of enquiry raised
by the SPM. It was further accepted that Fujitsu had the ability to insert, inject, edit or
delete transaction data or data in branch accounts; had the ability to implement fixes in
Horizon that had the potential to affect transaction data or data in branch accounts; and
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71.
72.
73.
74,
75.
76.
77.
had the ability to rebuild branch data. All of this could be done by Fujitsu without the
knowledge or consent of the SPM.
POL therefore accepted that in cases where the reliability of Horizon data was essential
to the prosecution and conviction of the appellant, and where Fraser J’s findings showed
that there was inadequate investigation and/or that full and accurate disclosure was not
made, the conviction may be held by this court to be unsafe on grounds amounting to
category 1 abuse. In such cases, POL did not resist the appeal on Ground 1.
POL did not however accept that the same failures of investigation and disclosure were
sufficient to justify a finding of category 2 abuse. In relation to the appeals which were
not opposed on Ground 1, that concession did not mean that the appellant should not
have been prosecuted, or that the prosecution was an affront to the public conscience
or (to adopt another phrase used in other cases) an affront to the conscience of the court.
POL realistically accepted that there were failures of investigation and disclosure in
relation to many of the prosecutions. It effectively divided the appellants into three
groups. Given the number of cases before the court, it will be convenient if we too
sometimes refer to those three groups. In doing so, we intend no disrespect to individual
appellants, and we do not lose sight of the differing circumstances of their respective
cases.
In group A, there are four appellants in respect of whom POL accepted that this court
may properly find that the prosecutions were an abuse of process within both category
1 and category 2. They are Josephine Hamilton, Hughie Thomas, Allison Henderson
and Alison Hall. POL contended that in each of those cases there were specific reasons
why it was appropriate to make a concession as to Ground 2 as well as to Ground 1.
In group B, there are 35 appellants in respect of whom POL accepted that this court
may properly find that the prosecutions were an abuse of process within category 1, but
resisted the appeals insofar as they are based on category 2 abuse. They are Gail Ward,
Julian Wilson (deceased), Jacqueline McDonald, Tracy Felstead, Janet Skinner, Scott
Darlington, Seema Misra, Della Robinson, Khayyam Ishaq, David Hedges, Peter
Holmes (deceased), Rubina Shaheen, Damien Owen, Mohammed Rasul, Wendy
Buffrey, Kashmir Gill, Barry Capon, Vijay Parekh, Lynette Hutchings, Dawn
O’Connell (deceased), Carl Page, Lisa Brennan, William Graham, Siobhan Sayer, Tim
Burgess, Pauline Thomson, Nicholas Clark, Margery Williams, Tahir Mahmood, Jan
Warren, David Yates, Harjinder Butoy, Gillian Howard, David Blakey and Pamela
Lock. In relation to the three deceased appellants, orders have been made enabling the
appeals to be brought by members of their families.
In group C, there are three appellants in respect of whom POL contended that there
should be no finding of abuse within either category 1 or category 2. They are Stanley
Fell, Wendy Cousins and Neelam Hussain.
We shall say more about the cases within each of these groups later in this judgment.
At this stage, consistent with what we have just explained, it suffices to note that in all
but three of the 42 cases, POL concedes that there were material failures of investigation
and disclosure, which meant that 39 of the appellants could not have, and did not have,
a fair trial. Whilst it is a matter for the court, POL accepts that in those 39 cases it
would be open to the court to find the convictions unsafe on the grounds of an abuse of
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79.
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tm ing do Hamilton & Others v Post Office Ltd
process of the first category. The three exceptions in group C are cases in which POL
contends that the reliability of the Horizon data was not essential to the prosecution
case. The appellants concerned argue to the contrary, and we shall address their
respective cases later. POL accepts that if the court rejects its primary submission, and
finds that the reliability of Horizon data was essential to all or any of those three cases,
then the same concessions as to category 1 abuse would be made in their cases as in the
other 39 cases. Thus the three cases in group C do not involve any departure from
POL’s concessions as to failures in investigation and disclosure: they are distinguished
from the other cases on the basis that they are not “Horizon cases” at all.
POL has fairly and properly made clear that it would not seek a retrial of any appellant
whose appeal is allowed.
Turning briefly to the procedural history of the appeals, we gave initial directions at a
hearing on 18 November 2020. At a further hearing on 17 December 2020 we heard
submissions from counsel for the parties, and from counsel helpfully instructed by Her
Majesty’s Attorney General to act as advocate to the court, on the issue of whether an
appellant whose appeal was not resisted by POL on Ground 1 was entitled to argue
Ground 2. We concluded, for reasons which we later gave in writing’, that appellants
in that position were not entitled as of right to argue Ground 2 if their appeals would in
any event succeed on Ground 1, but that in the exercise of the court’s discretion we
would permit argument on Ground 2 by any appellant who wished to advance it. In the
event, each appellant did wish to do so. Written submissions were made, in advance of
the hearing of the appeals.
We wish to express our thanks to all counsel who appeared before us at the hearing of
these appeals, and to those who instructed and assisted them, for the thoroughness of
their preparation, and for the realism and fairness with which they narrowed issues and
agreed points which were not in dispute, thereby assisting the court to focus on the real
issues. We are also grateful for the quality of the written and oral submissions.
Further evidence and information:
81.
82.
As a result of its review of the many documents, POL disclosed further material which
had not been seen by Fraser J but which this court has been able to consider. It includes
what has been referred to for convenience as “the Clarke advice” and other documents
which were relied upon in the appellants’ submissions before us.
The Clarke advice is dated 15 July 2013, but was first disclosed in these proceedings in
November 2020. It was written by Simon Clarke, a barrister employed by a firm of
solicitors which was instructed by POL in relation to prosecutions. It was written in
order to advise POL about the use of expert evidence in cases of alleged crimes by
SPMs. Mr Clarke noted that POL generally only prosecuted for three types of offence:
theft, false accounting and fraud. He commented that —
“The detection and successful prosecution of such offences is
almost always dependant [sic] upon the proper analysis and
presentation of Horizon data and accordingly it is imperative that
> [2021] EWCA Crim 21
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83.
84.
85.
86.
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the integrity and operation of the Horizon system is
demonstrably robust.”
He went on to summarise the nature of defences which either made an express assertion
that Horizon had failed in some way, or asserted that Horizon must be at fault because
the SPM had acted properly and the alleged shortfall was otherwise inexplicable. He
also noted that defendants who had pleaded guilty to false accounting or fraud alleged
that they had been covering up inexplicable losses. He added that in all these situations
defendants often also complained about a lack of training on Horizon and/or inadequate
customer support.
Mr Clarke then set out the duties of an expert witness, as required by the Criminal
Procedure Rules. He summarised the prosecution’s disclosure duties under section 3
of the CPIA.
Mr Clarke stated that an employee of Fujitsu, Gareth Jenkins, had provided expert
evidence as to the operation and integrity of Horizon. He referred to a number of
statements which Mr Jenkins had provided to POL in various cases, attesting to the
robustness and integrity of Horizon. Mr Jenkins had ended most of those statements as
follows:
“Tn summary I would conclude by saying that I fully believe that
Horizon will accurately record all data that is submitted to it and
correctly account for it.”
Mr Clarke summarised the statements as Mr Jenkins saying that there was nothing
wrong with the system. He continued:
“Unfortunately that was not the case, certainly between the dates
spanned by the statements I have extracted here, the 5 October
2012 and the 3“ April 2013.”
Mr Clarke went on to say that Mr Jenkins had been aware of at least two bugs which
had affected Horizon Online since September 2010, one of which was still extant and
would not be remedied before October 2013, but had failed to say anything about them
or about any Horizon issues in his statements. He expressed the firm opinion that if Mr
Jenkins had mentioned the existence of the bugs, that would undoubtedly have required
to be disclosed to any defendant who raised Horizon issues as part of his or her defence.
Mr Clarke advised that Mr Jenkins had failed to comply with the duties of an expert
witness and should not be asked to provide expert evidence in any future prosecution.
We are aware that there is an issue as to whether Mr Jenkins had been used by POL as
an independent expert witness, a role which he could not fulfil for the simple reason
that he was an employee of Fujitsu. We do not think it necessary to say anything about
that issue, because whilst it may be important in other contexts, it does not affect our
consideration of POL’s breach of its disclosure obligations. That is because the
following conclusions expressed by Mr Clarke are equally applicable whether Mr
Jenkins prepared his statements as an independent expert or as an employee of Fujitsu
with particular knowledge of Horizon:
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“. Notwithstanding that the failure is that of [Mr Jenkins] and,
arguably, of Fujitsu Services Ltd, being his employer, this
failure has a profound effect upon POL and POL
prosecutions, not least because by reason of [Mr] Jenkins’
failure, material which should have been disclosed to
defendants was not disclosed, thereby placing POL in breach
of their duty as a prosecutor.
- By reason of that failure to disclose, there are a number of
now convicted defendants to whom the existence of bugs
should have been disclosed but was not. Those defendants
remain entitled to have disclosure of that material
notwithstanding their now convicted status. (I have already
advised on the need to conduct a review of all POL
prosecutions so as to identify those who ought to have had
the material disclosed to them. That review is presently
underway.)
- Further, there are also a number of current cases where there
has been no disclosure where there ought to have been. Here
we must disclose the existence of the bugs to those
defendants where the test for disclosure is met.”
Given that SPMs had been complaining about Horizon for well over a decade, we are
bound to say that we find it extraordinary that it was necessary for Mr Clarke to advise
in those terms. We commend him for expressing himself as clearly and firmly as he
did. But it should not have been necessary for him to have to give such basic advice to
a prosecuting authority about its duty in respect of disclosure.
Mr Clarke wrote a further advice on 2 August 2013. From this it is apparent that, before
sending his earlier advice, he had advised POL in conference on 3 July 2013. At that
conference he had advised the creation of a single hub to collate all Horizon-related
defects, bugs, complaints, queries and Fujitsu remedies, so there would be a single
source of information for disclosure purposes in future prosecutions. POL had accepted
his advice and had set up a weekly conference call, three of which had taken place by
the time Mr Clarke wrote his later advice. After the third, he said, the following
information had been relayed to him:
“@) The minutes of a previous call had been typed and emailed
to anumber of persons. An instruction was then given that those
emails and minutes should be, and have been, destroyed: the
word ‘shredded’ was conveyed to me.
(ii) Handwritten minutes were not to be typed and should be
forwarded to POL Head of Security.
(iii) Advice had been given to POL which I report as relayed to
me verbatim: ‘If it’s not minuted it’s not in the public domain
and therefore not disclosable.’ ‘If it’s produced it’s available for
disclosure - if not minuted then technically it’s not.’
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v for handi Hamilton & Others v Post Office Ltd
(iv) Some at POL do not wish to minute the weekly conference
calls.”
Mr Clarke then set out the relevant provisions governing disclosure. He emphasised
the seriousness of any attempt to abrogate the duty to record and retain material,
observing that a decision to do so may well amount to a conspiracy to pervert the course
of justice. He ended with the following:
“Regardless of the position in civil law, any advice to the effect
that, if material is not minuted or otherwise written down, it does
not fall to be disclosed is, in the field of criminal law, wrong. It
is wrong in law and principle and such a view represents a failing
to fully appreciate the duties of fairness and integrity placed
upon a prosecutor’s shoulders.”
Again, we commend the firmness and clarity of Mr Clarke’s advice. That he should
have had to give it is, if anything, even more extraordinary than the fact that he needed
to write his earlier advice. The need to give it suggests there was a culture, amongst at
least some in positions of responsibility within POL, of seeking to avoid legal
obligations when fulfilment of those obligations would be inconvenient and/or costly
to POL.
The material which we have seen includes other indications of the approach to Horizon
issues taken by at least some POL personnel involved in the conduct of these and similar
prosecutions. For example, in relation to the prosecution of Seema Misra, an appellant
in whose case it is now accepted that there was a failure of disclosure:
i)
ii)
In an exchange of internal memoranda in August 2009, a defence request for
disclosure of Horizon data was met with objections based upon the cost of
obtaining such information from Fujitsu. The basis of the objection was that
POL’s contract with Fujitsu placed limitations upon the number of requests for
ARQ data which could be made each year. In short, consideration of the data
for disclosure to the defence appears to have been resisted, not on the grounds
that it was not required by law, but on the grounds that POL’s contractual
arrangements with Fujitsu made it costly and inconvenient to comply with its
legal obligations as a prosecutor.
On 15 January 2010 a schedule of sensitive material was prepared. The
Disclosure Officer who signed it stated that she believed the single item listed
on the schedule was sensitive. The item was described as “Article relating to
integrity of Horizon system, supplied with accompanying letter by defendant”.
The reason for sensitivity was said to be “Could be used as mitigation, ie to
blame Horizon system for loss”. Given that the item appears to have been a
document supplied by the defence, the appellant was not in fact deprived of
material she should have seen; but the important point for present purposes is
that a POL employee acting as Disclosure Officer felt it appropriate to treat a
document as sensitive, and withhold it from disclosure, because it could be used
to assist the defence. Such an approach to disclosure is plainly wrong, but it
does not appear that any action was taken by anyone on behalf of POL to correct
the officer’s serious error.
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sdgme,
iii)
Seema Misra had been appointed an SPM in 2005. We note that in a report prepared
by Second Sight in April 2015 (in connection with the possibility of mediation), the
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A memorandum dated 22 October 2010 by a senior lawyer in POL’s Criminal
Law Division reported the successful prosecution of Seema Misra.
memorandum complained that the case had involved “an unprecedented attack
on the Horizon system” which, the author said, the prosecution team had been
able to “destroy”. He ended the memorandum, which was copied to the Press
Office, by expressing the hope that “the case will set a marker to dissuade other
defendants from jumping on the Horizon bashing bandwagon”.
appellant is recorded as saying:
“she was surprised to find that discrepancies occurred on each day of
her onsite training, particularly as the trainer had watched every
transaction she carried out that week. She adds that in the second
week, an unexplained shortfall of approximately £200 occurred
whilst balancing, and that the trainer rang the Helpline for
assistance. She says that the trainer followed the Helpline’s
instructions, which had the effect of causing the shortfall to
double, after which the trainer told her “we have to make the till
good now and you might get an error notice”. She says that this
‘doubling’ of a loss also occurred on another unspecified occasion in
relation to a £2,000 discrepancy. Post Office states that there are
no records in the NBSC call logs of the call that the Applicant
asserts was made by the trainer and that ‘due to the time that has
elapsed there are no transaction logs available for the
Applicant's training period’ .”
We observe that this appears to be a striking instance of a problem with Horizon, of
which independent evidence was or should have been available from the person who
was training the appellant in its use.
We mention two further examples:
i)
ii)
An attendance note dated 12 July 2010 relating to the appellant Rubina Shaheen
contained the following:
“We don’t have a defence case statement which makes some
things difficult. However, it would appear that she is using
solicitors who have jumped on the Horizon bandwagon.
However, it is absolutely vital that we win as a failure could
bring the whole of the Royal Mail system down. Counsel’s
concerns is that juries will still believe in conspiracies and there
don’t need to be many people on the jury who do believe in
conspiracy for us to have a problem.”
In a memorandum dated 2 November 2010 in relation to a different prosecution
(not involving one of these appellants) a legal executive reported that he had
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asked the defence solicitors if they intended to serve any expert evidence, but
had not mentioned Seema Misra’s case to them: “They can find that out for
themselves”.
Turning to the submissions, we begin with those which apply to all the appellants in
groups A and B, and also to those in group C if POL fails in its principal submission
about that group. We will come later to the cases of individual appellants. In view of
the concessions made by POL in relation to Ground 1, counsel sensibly concentrated
their submissions on Ground 2. We shall summarise the submissions very briefly, but
make clear that we have taken them all into account.
The submissions:
95.
96.
97.
Mr Moloney QC and Miss O’Raghallaigh, who act for the majority of the appellants,
submit that Fraser J’s findings, combined with the concessions made by POL in relation
to Ground I and the further material which has been disclosed, show deliberate conduct
by a prosecutor which brings the criminal justice system into disrepute and is of
sufficient gravity to constitute category 2 abuse of process. They submit that these are
not cases of “simple” non-disclosure: the non-disclosure was caused by apparent
institutional reluctance on the part of POL to investigate and disclose anything which
would or could compromise the perceived integrity of Horizon. But for POL’s conduct
of the investigations and prosecutions, the appellants would not have been prosecuted.
There was no urgency for these cases to be prosecuted, and nothing mitigates the
conduct of POL in prosecuting the appellants whilst failing to investigate obviously
relevant matters and failing to make necessary disclosure. No fine balance of
competing public interests is necessary in the circumstances of these cases: everything
about POL’s conduct undermines public confidence in their role as prosecutor, and the
public interest in prosecuting serious crime was largely extinguished.
As a result of further disclosure a short time before these appeals were heard, Mr
Moloney was able to put before the court minutes of meetings of the POL board in
1999-2000, showing a number of technical issues which delayed acceptance and rolling
out of the system. He submits that problems were therefore known from the outset, and
it cannot be said that POL only later had grounds for doubting the reliability of Horizon.
Yet POL chose to disbelieve what SPMs told it about problems with unexplained
shortfalls and instead pursued repayment of the supposed debt, and prosecution.
Mr Moloney submits that the financial interests of POL underlay both the contractual
terms between POL and SPMs, and also POL’s approach to these prosecutions. He
submits that there was a refusal on the part of POL to countenance the possibility of an
error in Horizon unless an SPM could provide a specific date and time for the suggested
error. He points to the PEAK of 17 April 2001 to which we have referred*. He also
draws attention to a disclosed extract from the minutes of a POL Board meeting on 12
January 2012, at which an assurance was sought that there was no substance in
challenges to the integrity of Horizon which had been raised in the press. The answer
included the following:
* See paragraph [36] above
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98.
99.
100.
“The Business has also won every criminal prosecution in which
it has used evidence based on the Horizon system’s integrity.”
Mr Stein QC and Mr Orrett, for the appellants Scott Darlington, Peter Holmes
(deceased), Rubina Shaheen, Pamela Lock and Stanley Fell, submit that POL had over
a period of years prosecuted its own representatives in such an exceptionally unfair
fashion that, after a review by independent counsel, it had to concede that the
prosecutions were an abuse of process. Such a situation has never previously arisen,
and it is a clear case of the prosecutions being an affront to the public conscience.
POL’s repeated failures of investigation and disclosure, over many years, are relevant
to category 2 abuse as well as to category 1. They submit, consistently with Fraser J’s
findings, that the approach of POL was to force SPMs to accept apparent financial
losses shown on Horizon which they did not accept as being their own fault. They refer
to what was said by Coulson LJ, sitting in the Court of Appeal, Civil Division, in giving
his reasons for refusing an application by POL for permission to appeal against Fraser
J’s decisions in his Common Issues judgment: Coulson LJ, having made the
observation (with which we respectfully agree) that “No judge will ever know more
about this case generally, and the Common Issues specifically, than Fraser J”, went on
to say this:
“The PO describes itself as ‘the nation’s most trusted brand’. Yet this
application is founded on the premise that the nation’s most
trusted brand was not obliged to treat their SPMs with good faith,
and instead entitled to treat them in capricious or arbitrary ways
which would not be unfamiliar to a mid-Victorian factory owner
(the PO’s right to terminate contracts arbitrarily, and the SPMs
alleged strict liability to the PO for errors made by the PO’s own
computer system, being just two of many examples). Given the
unique relationship that the PO has with its SPMs, that position
is a startling starting point for any consideration of these grounds
of appeal.”
Mr Stein submits that POL had in effect set up a system to blame SPMs for losses, so
that the default position was that any apparent shortfall had to be paid in full by the
SPM. He points to the bewilderment and anxiety of SPMs faced with unexplained
shortfalls, who could not understand what was happening and who in some cases
suspected the answer must lie in theft by a member of their staff or even by a member
of their family. He draws attention to the correspondence in 2009 from two Members
of Parliament’. He emphasises that Fraser J did not have all the material which is now
available to this court, and in particular did not have the Clarke advices. He submits
that the Clarke advices show that even as late as 2013, despite all the concerns which
had been expressed about Horizon, POL still had no system for ensuring that
appropriate disclosure was made when the reliability of Horizon data was a necessary
element of criminal charges. He then draws attention to the way POL implemented Mr
Clarke’s first advice, as indicated in his second advice.
Ms Busch QC and Dr Fowles, for the appellants Tracy Felstead, Janet Skinner and
Seema Misra, submit that category 2 abuse exists where a prosecutor has behaved in
such a way that the court should not make its processes available to assist it. The court
5 See paragraph [23] above
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101.
102.
103.
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should use its power to stay proceedings in order to prevent abuse of the criminal justice
system, rather than to punish prosecutorial misconduct. They submit that when
weighing in the balance the public interest in those charged with serious crimes being
tried, it is important to bear in mind that — in the light of what is now known — the
appellants’ guilt is in issue. They too refer to the duties of a prosecutor pursuant to the
CPIA and the Code of Practice, including the duty to record and retain all relevant
information and material. They point out that each of the appellants for whom they act
was prosecuted in reliance on data produced by Legacy Horizon, a system which Fraser
J found “was not remotely robust”. They helpfully prepared a summary of the bugs
errors and defects in Horizon at a given time and the impact on branch accounts.
Insofar as the evidence before Fraser J was said to show that POL was not made aware
of certain information by Fujitsu, Ms Busch relies on the observation of Fraser J that
POL “ought to have known how its own system works”. She points out that the
interviews under caution of the appellants were conducted by POL as if it was for the
SPMs to provide affirmative proof that they had not stolen the money alleged to be
missing. They submit that the prosecutions could not have been brought, or at any rate
could not have succeeded, if POL had complied with its duties as investigator and
prosecutor.
Ms Busch suggests that in one respect the Clarke advice of 15 July 2013 may have
understated POL’s disclosure obligations. She submits that the duty arose in any case
where the prosecution turned on the reliability of Horizon data, not only in cases where
Horizon issues were specifically raised by a defendant. She points out that many
defendants did not know that they could raise Horizon issues. She further submits that
whereas category I abuse of process is principally concerned with the relationship
between prosecutor and defendant, category 2 “directly implicates the courts”. She
relies on the statement of Rose LJ in R v Mullen at p158F that category 2 abuse of
process —
“... arises from the court’s need to exercise control over
executive involvement in the whole prosecution process, not
limited to the trial itself.”
Ms Busch submits that the court should consider the numerous instances of POL as
prosecutor misleading and/or withholding critical information from not just individual
defendants but also the courts. She suggests that the systemic failings of POL are
summed up by its continuing insistence, “in the face of all the evidence to the contrary”,
that Horizon was robust. She further submits that the obvious explanation for the
shortfalls, in the accounts of SPMs who were all persons of good character selected by
POL, was that there were faults in Horizon, not that so many SPMs had suddenly turned
to crime.
Mr Gordon, on behalf of the late Dawn O’Connell, emphasises the importance of
ground 2: it is important that there should be full vindication. He points out that Mrs
O’Connell explained in interview that a deficit in the accounts had arisen because of
recurring anomalies in the system which she could not explain; but no ARQ data was
obtained and there was no investigation of the integrity of the Horizon data. He points
out that the appellant herself was severely limited in her ability to challenge the Horizon
data, and submits that POL focused on proving how she had falsified the accounts —
conduct which she admitted — rather than examining the root cause of the shortfall,
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when she had always denied taking any money and when she had the support of some
30 character witnesses speaking of her honesty and integrity.
105. Mr Saxby QC and Mr Irwin, for the appellant Carl Page, similarly submit that the
reliability of Horizon data was essential to the case against him and, in the light of
Fraser J’s findings, the prosecution should never have been brought. They point out
that when the appellant said in cross-examination at his trial that he did not know
whether money was missing or there was an accounting problem, it was put to him by
prosecution counsel that he knew there was no accounting problem and he was a thief.
They emphasise that POL was victim, investigator and prosecutor in respect of the
alleged crime, with a financial interest in a successful prosecution. They submit that
POL was motivated by a desire to preserve a false confidence in Horizon, even if that
might lead to miscarriages of justice, and the reality was only revealed after the High
Court litigation which POL fiercely contested.
106. In his oral submissions, Mr Saxby argued that it is plainly an affront to justice for an
authority to prosecute when it should not; and no less an affront to justice for it to
prosecute when, had it been doing its job properly, it would have known that it should
not.
107. Mr Patel QC and Mr Smith for the appellant Vijay Parekh, who pleaded guilty to theft,
rely on R v Togher and others, and R v Kelly and Connolly [2003] EWCA Crim 2957
as showing that a conviction may be quashed on appeal as an abuse of process even
when a guilty plea has been entered. They submit that the appellant in interview raised
problems about unexplained shortfalls, but there was no investigation into what he had
said or into the cause of the shortfalls, and POL failed to make disclosure of problems
with Horizon of which it was aware or could have made itself aware. They further
submit that POL displayed an institutional obstinacy towards investigation, and a
culture of secrecy, irreconcilable with its duties as a prosecutor. The abuse of process
went beyond category 1, and brought the criminal justice system into disrepute.
108. Mr Millington QC and Mr Chand, whose submissions primarily relate to POL’s
contention that the appeal of Neelam Hussain is “not a Horizon case”, submit on her
behalf that there was a failure of disclosure in her case which should be viewed against
the background of a systemic failure by POL, over many years, to discharge its
investigative and disclosure obligations. In his oral submissions, Mr Millington said
that insofar as POL may have given any thought to its disclosure obligations, the
evidence suggests it would have deliberately disregarded them. He submits that the
appellant was deprived of the opportunity to explore the question of the reliability of
the data, and relies on the decision in R v Early to which we have referred®, He points
out that the public response of POL to the Computer Weekly report in 20097 was to
assert that Horizon was a robust system.
109. Mr Altman QC, Miss Johnson QC, Mr Baker QC, Miss Carey, Miss Brewer and Miss
Jones submit on behalf of POL that abuse of process is a fact-sensitive and time-
sensitive exercise, and that a global approach to the appeals collectively would not be
appropriate. It does not follow, from the concessions made in relation to Ground 1, that
the failures of investigation and disclosure were so bad that a finding of category 2
6 See paragraph [69] above
7 See paragraph [23] above
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Judgment wed by the
110.
111.
112.
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abuse should also be made: it is necessary to consider, on a case-sensitive basis, whether
there is evidence of prosecutorial misconduct so egregious that the appellant concemed
should never have been prosecuted. Counsel rely on what was said in Tague v
Governor of HM Prison Full Sutton [2016] 1 Cr App R 15 at [49], where Sir Brian
Leveson PQBD drew a distinction between gross misconduct which the criminal justice
system cannot approbate, and conduct which may merely be the result of state
incompetence or negligence and would not necessarily justify a “get out of jail free”
card. They remind the court that the jurisdiction to stay proceedings is exceptional,
with the burden being on the appellants to show that there was the abuse of process for
which they contend, and submit that those principles remain important in considering
category 2 abuse notwithstanding concessions made in relation to category 1.
They further submit that the evidence as to the delay in initial acceptance of Horizon
shows that POL took care to wait until the identified issues had been resolved before
accepting the system and rolling it out. The fact that there had been those issues does
not mean that POL knew or believed there were other issues which continued after roll-
out. POL was entitled to rely on Fujitsu’s assurances that the identified issues had been
resolved. They therefore submit that conduct by POL which might result in an adverse
finding in relation to a prosecution in 2010, when awareness of Horizon issues had
grown, should not necessarily result in an adverse finding in relation to a prosecution
in 2001. They suggest that the CCRC adopted a broad-brush approach to all the cases,
which this court should not take. They point out that particular bugs in Horizon,
identified at particular times, were resolved by Fujitsu and could not affect later cases.
They concede that the past existence of such bugs remained relevant because they
should in later prosecutions have been considered for disclosure. But, they ask
rhetorically, at what point did it become no longer reasonable to rely upon what Fujitsu
was saying about Horizon being robust? They point out that Fraser J in his judgments
did not need to consider, and did not consider, who in POL knew precisely what about
Horizon, and when. They submit that category 2 abuse does require consideration of
the level of knowledge of a prosecutor in a particular case: it is submitted that there is
a world of difference, so far as category 2 is concerned, between a prosecutor who was
negligent or incompetent, and one who wilfully avoided the duties placed upon him.
No large-scale computerised system such as Horizon can be expected to be entirely
bug-free, and the principal issues here relate to disclosure.
As to the arguments based on a suggested financial motivation of POL’s decisions to
prosecute, they submit that they are misconceived. They point to what was said in R
(Kombou) v Wood Green Crown Court [2020] 2 Cr App R 28 at [85] in relation to
private prosecutors:
“There is a crucial distinction between investigators legitimately
considering the possibility of confiscation proceedings, and the
decision-maker being improperly motivated to decide in favour
of prosecution by the prospect of financial gain to the authority.”
As to the reasons for distinguishing between the three groups of appellants, POL set out
in its Respondent’s Notice the fact-specific basis for its decision not to resist the Ground
2 appeals of the four appellants in group A. In summary, the reasons why it is conceded
that the court might properly find category 2 abuse in those cases, as well as category
1 abuse, are as follows.
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sdgment re e court for han m. Hamilton & Others v Post Office Lid
113.
114,
115.
116,
Josephine Hamilton was charged with one offence of theft and 14 offences of false
accounting. Her case was that she had never stolen any money or acted dishonestly.
She pleaded guilty to the false accounting offences and POL agreed not to proceed with
the theft charge on the basis that the outstanding shortage (£36,644) was paid by the
time of sentence. It was made clear to her that “there must be some recognition that the
Defendant had the money short of theft and that a plea on the basis that the loss was due to
the computer not working properly will not be accepted.”
POL concedes the following:
i) It was unacceptable to hold open the threat of the theft charge on this basis.
ii) The investigator had reported there was no evidence of theft.
iii) _It was irrational to require Mrs Hamilton to recognise that she had “had the
money short of theft” when theft was not to be pursued if the pleas to false
accounting were acceptable.
iv) The arrangement lends itself not only to the allegation that the condition of repayment
in return for the dropping of theft placed undue pressure on Mrs Hamilton, but
also more widely that POL was using the prosecution process to enforce
repayment.
vy) Moreover, in circumstances where theft was not directly provable and the
shortfall may not have been a real loss, seeking to prevent Mrs Hamilton from
making any criticism of Horizon as part of her mitigation to the charges she was
to plead guilty to was improper.
The appellant Hughie Thomas was charged with theft, but a guilty plea to an offence
of false accounting was accepted on the basis that he accepted that Horizon was
working perfectly. In his case it is conceded that:
i) There was no justification for POL imposing such a condition before accepting
Mr Thomas’s plea.
ii) POL had dropped the theft charge and so could no longer advance any case that he
had stolen the money. That should have left the way open to Mr Thomas to suggest
that there was no actual loss and he had only covered up a shortfall Horizon had
created.
iii) Anattendance note suggests that he was pressured into accepting a positive position
on Horizon as a condition of POL dropping the theft charge and accepting a plea to
false accounting.
iv) It is arguable that this exerted undue pressure on the appellant to accept that
Horizon was “working perfectly” before POL would be prepared to drop theft which
had the effect of imposing this agreement on him as a prior condition to dropping
theft and taking the plea to the alternative charge.
The appellant Allison Henderson pleaded guilty to false accounting and POL offered
no evidence on a charge of theft. Before agreement was reached to that effect, POL’s
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Judgment th din, Hamilton & Others v Post Office Ltd
117.
118.
119.
prosecuting lawyer gave instructions to counsel that a plea to false accounting on the
basis that Horizon was at fault would not be acceptable. In her case it is conceded that:
i) It was improper to make the acceptability of her basis of plea conditional on her
making no issue of Horizon;
ii) Since the theft charge had been dropped, POL could no longer advance a case
that she had stolen any money, and it should have been open to her to suggest
that there was no actual loss and she had only covered up a shortfall created by
Horizon.
The appellant Alison Hall was charged with an offence of fraud and an offence of theft.
At a plea and case management hearing she pleaded guilty to the former. The latter
charge was ordered to lie on the file. It was made clear to her that POL would not
accept any criticism or blame concerning Horizon. In her case it is conceded that:
i) It was improper to make the acceptability of her plea conditional on not making
any explicit criticism of Horizon;
ii) In circumstances where theft could not directly be proved, and the shortfall may
not have been a real loss, it was wrong to try to prevent her from making any
criticism of Horizon as part of her mitigation to the charge she admitted.
We shall come later to POL’s submissions in relation to the three appellants in group
Cc.
POL does not dispute that the appellants are entitled to rely, where relevant, on the clear
findings of fact made by Fraser J, and on the disclosed documents, including those
which have been disclosed recently. Again, that isa realistic and fair approach by POL,
and we have no doubt that it is correct.
The general issues: discussion and conclusions:
120.
121.
We can now express our conclusions about the general issues which affect every
appellant in whose case the reliability of Horizon data was essential to the prosecution.
For convenience, we shall refer to such cases by the shorthand expression “Horizon
cases”. POL rightly accepts that the prosecutions of all the appellants in groups A and
B were “Horizon cases”. We will come later to our decisions on the contentious issues
as to whether all or any of the appellants in group C were also “Horizon cases”,
We have no doubt that the concessions made by POL in relation to Ground 1 were
rightly and properly made. Those concessions relate to failures of investigation and
disclosure in all the “Horizon cases” across a period of 12-13 years. In each of those
cases, there was no independent evidence of an actual shortfall, and it was essential to
the prosecution case that the Horizon data was reliable. We accept and adopt Fraser J’s
findings that throughout the relevant period there were significant problems with
Horizon, which gave rise to a material risk that an apparent shortfall in the branch
accounts did not in fact reflect missing cash or stock, but was caused by one of the bugs,
errors or defects in Horizon. POL knew that there were problems with Horizon. POL
knew that SPMs around the country had complained of inexplicable discrepancies in
the accounts. POL knew that different bugs, defects and errors had been detected well
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it ed, nd Hamilton & Others v Post Office Ltd
beyond anything which might be regarded as a period of initial teething problems. In
short, POL knew that there were serious issues about the reliability of Horizon. If POL
needed further information, it could have obtained it from Fujitsu. It was POL’s clear
duty to investigate all reasonable lines of enquiry, to consider disclosure and to make
disclosure to the appellants of anything which might reasonably be considered to
undermine its case. Yet it does not appear that POL adequately considered or made
relevant disclosure of problems with or concems about Horizon in any of the cases at
any point during that period. On the contrary, it consistently asserted that Horizon was
robust and reliable. Nor does it appear that any attempt was made to investigate the
assertions of SPMs that there must be a problem with Horizon. The consistent failure
of POL to be open and honest about the issues affecting Horizon can in our view only
be explained by a strong reluctance to say or do anything which might lead to other
SPMs knowing about those issues. Those concerned with prosecutions of SPMs clearly
wished to be able to maintain the assertion that Horizon data was accurate, and
effectively steamrolled over any SPM who sought to challenge its accuracy.
122. We respectfully accept and adopt the findings of Fraser J as to problems with Horizon
being raised by SPMs from 2000 onwards, in relation both to Legacy Horizon and
Horizon Online, and in particular his finding® that throughout the relevant period the
bugs, errors and defects in Horizon could, and on numerous occasions did, cause
apparent discrepancies and shortfalls in branch accounts.
123. These pervasive failures of investigation and disclosure went in each case to the very
heart of the prosecution. Whatever charges were brought against an individual
appellant, and whatever pleas may ultimately have been accepted, the whole basis of
each prosecution was that money was missing from the branch account: there was an
actual shortfall, which had been caused by theft on the part of the SPM, or at best had
been covered up by false accounting or fraud on the part of the SPM. But in the
“Horizon cases”, there was no evidence of a shortfall other than the Horizon data. If
the Horizon data was not reliable, there was no basis for the prosecution. The failures
of investigation and disclosure prevented the appellants from challenging, or
challenging effectively, the reliability of the data. In short, POL as prosecutor brought
serious criminal charges against the SPMs on the basis of Horizon data, and by its
failures to discharge its clear duties it prevented them from having a fair trial on the
issue of whether that data was reliable.
124. In considering whether these failures justify a finding of category 1 abuse, we bear in
mind that a stay on grounds of abuse is an exceptional remedy. It is on the face of it
remarkable that in all the “Horizon cases” the appellants contend that they would have
been entitled to that exceptional remedy if POL had made full disclosure at the time,
and had nonetheless persisted in pursuing the prosecutions. But these are remarkable
appeals, and the fact that similar considerations apply to numerous cases is not in these
circumstances a bar to a finding of category 1 abuse.
125. We also bear in mind that many of the appellants pleaded guilty. But as we have already
said’, R v Togher and others provides clear authority that a conviction following a guilty
plea may be quashed on grounds of abuse of process where the plea was “founded
upon” the irregularity of non-disclosure. We have no doubt that all the guilty pleas of
* Horizon Issues judgment at [968]: see paragraph [48] above
° See paragraph [69] above
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126.
127.
128.
129.
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the appellants in “Horizon cases” were founded upon POL’s failures of investigation
and disclosure. The whole conduct of the prosecutions was based upon the constant
assertion that the Horizon data was reliable and that the money must have been stolen,
or at least a shortfall dishonestly concealed. The appellants were denied the material
which could have been used to question that assertion. They were, moreover, in the
very difficult position of being charged with offences of dishonesty committed in
breach of their employer’s trust. They are likely to have been advised that
imprisonment is very often imposed for such offences, and that the mitigation which
would be available to them if they pleaded guilty could therefore be of particular
importance. Many may well have felt that they had no real alternative but to plead
guilty on the most favourable basis which could be agreed with POL.
In those circumstances, we are satisfied that a fair trial was not possible in any of the
“Horizon cases” and that Ground 1 accordingly succeeds in each of those cases.
Turning to Ground 2, we are satisfied that it is not necessary in law for an appellant
who raises category 2 abuse to prove misconduct going beyond that which establishes
the category 1 abuse. Within the exceptional class of case in which an issue of abuse
of process is raised, it will often be abuse in one category only; and where both
categories are raised, there may in practice often be a distinction between the matters
relied on in each category. It is not possible to generalise. But as a matter of principle
we see no reason why the same misconduct cannot provide the basis for a finding of
both categories of abuse. We therefore accept the appellants’ submission that,
depending on the nature and degree of the abusive conduct, the same acts and/or
omissions may both render a fair trial impossible (thus, category 1) and make it an
affront to the conscience of the court to prosecute at all (and thus, category 2).
In considering whether the failures of investigation and disclosure which justify a
finding of category 1 abuse are so serious as to justify also a finding of ‘category 2 abuse,
the following considerations are relevant.
First, we reiterate that POL deliberately chose not to comply with its obligations in
circumstances in which its prosecution of an SPM depended on the reliability of
Horizon data. It did so against a background of asserting that SPMs were liable to make
good all losses and could lose their employment if they did not do so. It did so despite
the fact that POL itself had selected the SPMs as suitable persons to hold their position
of trust. In the High Court proceedings, one of the agreed facts was that POL “incurs
expense and time-costs in recruiting (including advertising for applicants and assessing
and selecting applicants) and training new Subpostmasters”. Yet if Horizon showed a
shortfall which an SPM did not accept as correct, POL invariably accepted the position
shown by Horizon, refused to countenance any possibility that the apparent shortfall
may be the result of an error or bug in the system, and was quick to assume dishonesty
on the part of the SPM. As we have seen, in internal documents relating to at least
some cases, an SPM who attributed a shortfall to a system error was dismissed as
“jumping on the Horizon bandwagon”. These were very serious failures by POL to
fulfil its obligations as a prosecutor. We are driven to the conclusion that throughout
the period covered by these prosecutions POL’s approach to investigation and
disclosure was influenced by what was in the interests of POL, rather than by what the
law required.
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130.
131.
132.
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ov ¢ cour nding di Hamilton & Others v Post Office Ltd
Secondly, whilst we agree in principle that any issue of abuse of process must be
considered in the light of the facts and circumstances relevant to the specific individual
case, we are faced in these appeals with clear evidence of systemic failures by POL
over many years. Given that the same failures occurred in case after case, year after
year, we think that later events shed legitimate light on the approach of POL to earlier
prosecutions. We note that even the four cases in group A cover a period of 5 years,
with the appellants being convicted between 2006 and 2011. We also note that no
document has been shown to us in which any POL employee or official made any
adverse comment upon the incorrect approach demonstrated in the documents to which
Fraser J, and we, have referred. Nor have we seen any contemporaneous document
criticising the misconduct which has caused POL to make concessions as to Ground 2
in relation to the four appellants in group A. We see powerful force in the points that
as late as summer 2013 it was still necessary for Mr Clarke to spell out basic principles,
and that the response to his advice of at least some personnel was to suggest that
information should not be recorded, in the hope that it would therefore not be
disclosable. We think it clear that throughout the relevant period, POL as prosecutor
demonstrated, as Fraser J found in the Horizon Issues judgment at [928], “a simple
institutional obstinacy or refusal to consider any possible alternatives to their view of
Horizon, which was maintained regardless of the weight of factual evidence to the
contrary”. Moreover, the longer that approach persisted, the more POL was able to,
and did, rely upon its own past abusive conduct by asserting that no previous challenge
to Horizon had succeeded.
In those circumstances, we are unable to accept POL’s submission that in relation to
Ground 2 there may be a distinction to be drawn in POL’s favour between the
seriousness of its conduct at an earlier time, and the seriousness of its conduct at a later
time. POL knew that there were problems with Horizon which delayed its rollout. It
knew, as Fraser J found, that SPMs were reporting unexplained discrepancies and
shortfalls from 2000 onwards. The persistence of those reports made it impossible to
assume that all the initial problems, and any subsequent teething problems, had been
resolved. It was able to obtain all relevant information from Fujitsu if it wanted to, and
the fact that its own contractual arrangements meant that it would have to incur expense
in doing so could not possibly justify its repeated failures to comply with its legal duties.
Moreover, to borrow Fraser J’s phrase (the Horizon Issues judgment at [1018]), POL
“ought to have known how its own system works”.
Thirdly, POL as prosecutor knew that the consequences of conviction for an SPM
would be, and were, severe. Later in this judgment we will mention individual cases,
but it is important here to state that many of these appellants went to prison; those that
did not suffered other penalties imposed by the courts; all would have experienced the
anxiety associated with what they went through; all suffered financial losses, in some
cases resulting in bankruptcy; some suffered breakdowns in family relationships; some
were unable to find or retain work as a result of their convictions — causing further
financial and emotional burdens; some suffered breakdowns in health; all suffered the
shame and humiliation of being reduced from a respected local figure to a convicted
criminal; and three — all “Horizon cases” — have gone to their graves carrying that
burden. Inevitably, the families of the SPMs have also suffered. In each of the
“Horizon cases” it is now rightly conceded that those human costs and consequences
were suffered after the denial by POL of a fair trial. We unhesitatingly accept and
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133.
134.
135.
136.
137,
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v court jing down. Hamilton & Others v Post Office Ltd
endorse Mr Moloney’s submission that these were far more than cases of “simple” non-
disclosure.
Fourthly, and most importantly in the context of category 2 abuse, POL’s failings of
investigation and disclosure (in Ms Busch’s phrase) “directly implicate the courts”. If
the full picture had been disclosed, as it should have been, none of these prosecutions
would have taken the course it did before the Crown Court. No judge would have been
placed in the unhappy position of learning — as some judges (or retired judges) will do
if they read this judgment — that they unwittingly sentenced a person who had been
prevented by the prosecutor from having a fair trial.
It is not necessary for us to decide whether any POL or Fujitsu witness deliberately lied
ina witness statement or oral testimony, or was “economical with the truth”. The telling
of a lie would of course provide an additional reason for concluding that the process of
the court was abused, but it is not a necessary requirement for such a conclusion.
Lastly, in relation to the balancing exercise which issues of category 2 abuse require,
we accept the appellants’ submissions that if the full picture had been disclosed, as it
should have been, the public interest in prosecution would have been heavily
outweighed by the need to maintain public confidence in the criminal justice system.
The charges were serious, but in all the “Horizon cases” the foundation of the charges
—namely, that there was an actual shortfall — would have been in issue if the full picture
had been known. There was no reason why a prosecution had to be hurried through as
a matter of urgency, and no excuse for POL’s failure to fulfil its duties. Moreover,
whilst it is not necessary for an accused who relies on category 2 abuse to prove that
the prosecutor acted in bad faith, we are troubled by contemporaneous internal
documents in which POL expressed concern that disclosure in one case of problems
with Horizon could have an impact on other cases. Public confidence in the criminal
justice system would be severely damaged if a prosecuting authority were permitted to
give priority to such a consideration over compliance with its duties as a prosecutor.
We are not persuaded by submissions that POL had an improper financial motivation
for pursuing prosecutions with a view to obtaining confiscation or compensation orders.
We are in no position to make, and it is not necessary for us to make, any finding as to
whether any individual involved in any of the prosecutions genuinely believed that
Horizon was entirely robust and could safely be relied on in every case, or entertained
doubts as to its reliability which were suppressed through fear that any breach of
Horizon’s claimed impregnability would create serious difficulties in many other cases.
Whatever an individual’s state of mind in that regard, it was POL which brought and
conducted the prosecution; and there can be no doubt that POL as a corporate
prosecutor was under a duty to investigate the claims of SPMs that there were problems
with Horizon, and to consider and make appropriate disclosure of such problems.
In those circumstances, the failures of investigation and disclosure were in our
judgment so egregious as to make the prosecution of any of the “Horizon cases” an
affront to the conscience of the court. By representing Horizon as reliable, and refusing
to countenance any suggestion to the contrary, POL effectively sought to reverse the
burden of proof: it treated what was no more than a shortfall shown by an unreliable
accounting system as an incontrovertible loss, and proceeded as if it were for the
accused to prove that no such loss had occurred. Denied any disclosure of material
capable of undermining the prosecution case, defendants were inevitably unable to
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ment 1¢ court for handiy m, Hamilton & Others v Post Office Ltd
discharge that improper burden. As each prosecution proceeded to its successful
conclusion the asserted reliability of Horizon was, on the face of it, reinforced.
Defendants were prosecuted, convicted and sentenced on the basis that the Horizon data
must be correct, and cash must therefore be missing, when in fact there could be no
confidence as to that foundation.
138. Ground 2 therefore succeeds in each of the “Horizon cases”.
139. We turn to the individual appeals, dealing first with the appellants in groups A and B
and then with those in group C. We do so comparatively briefly, but we emphasise that
we have taken into account all that we have read about each.
Appellants in group A — appeals unopposed on both Ground 1 and Ground 2:
140. For the sake of convenience in this long judgment, we repeat POL’s concessions that:
i) each of the group A cases was a “Horizon case”; and
ii) this court may properly find that the prosecution of these cases was an abuse of
process within both category 1 and category 2.
141. As set out above, we have accepted POL’s concessions. In our judgment, the
Prosecution of each of the group A appellants was unfair (category 1 abuse) and an
affront to justice (which we will use in our consideration of the individual group A and
B appeals as a shorthand for category 2 abuse). In each of the group A cases, our
general conclusions apply. We add the following details.
Josephine Hamilton
142. On 19 November 2007, in the Crown Court at Winchester before HHJ Barnett,
Josephine Hamilton pleaded guilty to 14 counts of false accounting. The prosecution
case was that she had made false entries on Horizon, making claims about the presence
of cash on hand which were untrue. The prosecution agreed not to proceed with a
charge of theft (which was ordered to lie on the file) on the basis that the outstanding
shortage of £36,644.89 was to be paid by the time of sentence. On 4 February 2008,
Mrs Hamilton received a community sentence order for 12 months with a 12-month
supervision requirement. She was ordered to pay £1,000 towards the prosecution costs.
143. Mrs Hamilton’s case was that she had not stolen any money or acted dishonestly. In a
prepared statement to the criminal investigation, she described a number of
inadequacies in Horizon which she had encountered. Between 23 October 2003 and 9
June 2006, she had made 26 calls to the Horizon Helpdesk. Between 3 December 2003
and 5 January 2006, she had made numerous calls to POL’s National Business Support
Centre Helpline.
144, POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs Hamilton’s case. The ARQ data had been collected on a disc but
the exhibits list shows it was “not copied”, so that it is not clear whether the ARQ data
was served. There was no examination of that data for bugs, errors or defects and no
examination for evidence of theft. The unfiltered ARQ data is no longer available but
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145.
146.
147.
148.
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ved by. for hat . Hamilton & Others v Post Office Ltd
it appears that there was no evidence to corroborate the Horizon evidence. There was
no proof of an actual loss as opposed to a Horizon-generated shortage.
These factors are sufficient for the court to quash Mrs Hamilton’s convictions on both
Grounds 1 and 2. We were however presented with further information which bolsters
our conclusion that her prosecution should not have been brought and which forms the
basis of POL’s concession under Ground 2. The POL investigator had reported that
there was no evidence of theft. Despite this, a POL internal log entry for 22 November
2007 records that Mrs Hamilton’s pleas were accepted on the understanding that unless
she repaid the shortfall by the date for sentence, POL would proceed with the theft
charge.
According to the log, it was made clear to the defence that:
“there must be some recognition that the Defendant had the
money short of theft and that a plea on the basis that the loss was
due to the computer not working properly will not be accepted.”
POL concedes that it was unacceptable to hold open the threat of the theft charge unless
Mrs Hamilton agreed to forego any criticism of Horizon. We regard this as even more
alarming in circumstances in which POL’s own investigator had reported there was no
evidence of theft. It was irrational and unjust to require Mrs Hamilton to recognise that
she had “had the money short of theft” when theft was not to be pursued if the pleas to
false accounting were acceptable. POL’s conduct gives a firm impression that the
condition of repayment in return for POL dropping the theft charge placed undue
pressure on Mrs Hamilton. It gives the impression that POL was using the prosecution
process to enforce repayment.
In our judgment, these additional factors are in themselves bound to bring the justice
system into disrepute, providing further strong reasons to allow the appeal under
Ground 2. We conclude that, notwithstanding her guilty pleas, Mrs Hamilton’s
convictions are unsafe. Her prosecution was unfair and an affront to justice. We allow
her appeal on Ground 1 and on Ground 2. We quash her convictions on all 14 counts.
Hughie Thomas
149.
150.
Hughie Thomas worked as a postman between 1965 and 1992. He became an SPM in
1994. On 29 September 2006, in the Crown Court at Caernarfon, he pleaded guilty to
one count of false accounting. From the incomplete case documents that remain, it
appears that a charge of theft, relating to an alleged shortfall of £48,450.87, was
dropped. Mr Thomas’ written basis of plea stated that no blame was attached to
Horizon and that he accepted there was a shortage which he was contractually obliged
to make good, but he did not know how it had come about. On 6 November 2006, he
was sentenced to 9 months’ imprisonment. Although the documentation no longer
exists, Mr Thomas recalls that he was ordered to pay £9,000 to POL. As a result of the
proceedings against him, he was forced to file for bankruptcy.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Thomas’ case. Mr Thomas had stated that he was having problems
with Horizon. In particular his online banking reports showed several transactions with
anil amount. These were occasions when he had paid money to a customer, but the
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Judgment Approved, urt for handii Hamilton & Others v Post Office Led
system did not record the value of that transaction. This led to losses and so he altered
the cash on hand figures in order to balance the accounts. In his interview under
caution, Mr Thomas said that the alleged loss was due to mistakes on Horizon and that
he did not understand the system. He had made 13 calls to the Horizon Helpdesk.
151. Although some ARQ data was obtained, it was a dip sample and it was only checked
for evidence of zero transactions. The data was not checked for bugs, errors or defects
or for evidence of theft. The prosecution produced a witness statement from Mr Jenkins
explaining the Horizon system and producing some ARQ data. Mr Jenkins produced
three schedules from this data to explain that the zero transactions were normal
occurrences. Andrew Dunks of Fujitsu made a statement in which he said that between
1 November 2004 and 30 November 2005, Mr Thomas made 13 calls to the Horizon
Helpdesk but that — in Mr Dunks’ opinion — none of the calls related to faults which
would affect the integrity of Horizon. Other material from Horizon was collated and
put into schedules but it appears there was no evidence to corroborate the Horizon
evidence. There was no proof of an actual loss as opposed to a Horizon-generated
shortage.
152. These factors are sufficient for the court to quash Mr Thomas’ conviction on both
Grounds I and 2. We were however presented with further information which bolsters
our conclusion that Mr Thomas’ prosecution should not have been brought and which
forms the basis of POL’s concession under Ground 2. An attendance note, written by
a POL prosecution lawyer on the case, recorded a conversation with an extemal
solicitor. The note is dated 25 September 2006, four days before Mr Thomas entered
his plea at the Crown Court on the basis that Horizon was not to blame for the shortage.
It records:
“We discussed whether he would plead to false accounting. I
mentioned instructions that we would proceed with false
accounting providing the Defendant accepts that the Horizon
system was working perfectly... Further instructions are that the
money should be repaid. Ann could inform Jack that some
agreement should be reached taking into account the above
instructions.”
153. As POL accepts, there was no justification for imposing such a condition before
accepting Mr Thomas’ plea. POL had dropped the theft charge and so could no longer
advance any case that he had stolen the money. As POL accepts, that should have left
the way open to Mr Thomas to suggest that there was no actual loss and that he had
only covered up a shortfall that Horizon had created.
154. As POL accepts, the attendance note suggests that Mr Thomas was pressured into
accepting a positive position on Horizon as a condition of POL dropping the theft
charge and accepting a plea to false accounting.
155. In our judgment, these additional factors are in themselves bound to bring the justice
system into disrepute, providing further strong reasons to allow the appeal under
Ground 2. We conclude that, notwithstanding his guilty plea, Mr Thomas’ conviction
is unsafe. His prosecution was unfair and an affront to justice. We allow his appeal on
Ground 1 and on Ground 2. We quash his conviction.
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Allison Henderson
156.
157.
158.
159.
On 15 December 2010, in the Crown Court at Norwich, Allison Henderson pleaded
guilty to one count of false accounting. No evidence was offered on a count of theft to
which a “not guilty” verdict was recorded. On the same day, she received a community
sentence order with 200 hours of unpaid work. She was ordered to pay £1,400 towards
the prosecution costs.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs Henderson’s case. The prosecution was based on a shortfall of
£11,957.78 following a branch audit. In an unsigned defence statement, served on 5
November 2010, Mrs Henderson stated that she could not offer an explanation for any
discrepancy. She denied theft but accepted that she was contractually obliged to make
good any discrepancies and was making efforts to do so. In an amended, signed defence
statement, served on 16 November 2010, Mrs Henderson said that it was her belief that
any discrepancy:
“was as a result of a malfunction of the Horizon computerised
accounting system ... any discrepancy could have been
discovered by the Post Office auditor, particularly as he initially
alleged £18,000 was missing, this was reduced to the alleged
sum in a matter of minutes. Further investigation by the auditor
would have discovered the whereabouts of the alleged missing
sum.”
POL accepts that there is nothing to suggest that any ARQ data was obtained. There
was no evidence to corroborate the Horizon evidence. There was no investigation of
the substance of the amended defence statement to the effect that Mrs Henderson did
not accept the loss. There was no proof of an actual loss as opposed to a Horizon-
generated shortage.
These factors are sufficient for the court to quash Mrs Henderson’s conviction on both
Grounds I and 2. We were however presented with further information which bolsters
our conclusion that the prosecution should not have been brought and which forms the
basis of POL’s concession under Ground 2. The investigation into Mrs Henderson’s
case began in March 2010. At the end of September 2010, Rob Wilson, POL
prosecuting lawyer, wrote to an investigator, enquiring about Horizon documentation,
saying:
“The current charge covers a period from 1 January 1997 to 10
February 2010. Is there any indication from the Horizon
documentation, the defendant’s bank statements or any other
material when this money first went missing? Can you confirm
when the last audit took place so that if necessary that date can
actually appear in the indictment? At the moment I suspect that
this will be a case where Horizon itself is challenged and, as
such, the Prosecution will be under pressure to disclose a huge
amount of Horizon data. It would therefore be extremely useful
if we could identify something that assists the prosecution in the
pursuit of this criminal allegation.”
-677-
160.
161.
162.
163.
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On 17 November 2010, Mr Wilson responded to an email from prosecuting counsel
advising him of the possibility that Mrs Henderson might plead guilty to false
accounting. Mr Wilson noted:
“Clearly if there were to be a plea to false accounting but on the
basis that the Horizon system was at fault then that would not be
an acceptable basis of plea for the prosecution.”
In similar fashion, POL correspondence of 25 November 2010 refers to a conversation
between prosecuting and defence counsel in which it was reported that defence counsel
had confirmed that Mrs Henderson would be entering a guilty plea “on the basis that
the money has gone missing, but the Defendant did not steal it and there will be no issue
relating to Horizon”.
POL concedes that it was improper to make the acceptability of Mrs Henderson’s basis
of plea to false accounting conditional on making no issue of the Horizon system. In
our judgment, such conduct on the part of a prosecutor is improper. POL had dropped
the theft charge and so could no longer advance any case that she had stolen the money.
POL concedes that that should have left the way open to Mrs Henderson to suggest that
there was no actual loss and she had only covered up a shortfall Horizon had created.
In our judgment, these additional factors are in themselves bound to bring the justice
system into disrepute, providing further strong reasons to allow the appeal under
Ground 2. We conclude that, notwithstanding her guilty plea, Mrs Henderson’s
conviction is unsafe. Her prosecution was unfair and an affront to justice. We allow
the appeal on Ground 1 and on Ground 2. We quash her conviction.
Alison Hall
164,
165.
166.
167.
On 30 June 2011, in the Crown Court at Leeds, Alison Hall pleaded guilty to one count
of fraud. A further count of theft was ordered to lie on the file. On the same day, she
received a community sentence order with 120 hours of unpaid work. A confiscation
order under the Proceeds of Crime Act 2002 was made in the sum of £14,842.37, Mrs
Hall was ordered to pay £1,000 towards the prosecution costs.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs Hall’s case. The prosecution was based on a shortfall of
£14,842.37 following a branch audit. In her interview under caution, Mrs Hall said that
she wanted matters investigated “because the Horizon system is not 100%”. She said
“she [had] also been out before, has taken money out then put it back in”.
It appears as if some ARQ data was obtained but it is not clear whether it was ever
disclosed. It appears there was no evidence to corroborate the Horizon evidence. There
was no investigation into Horizon integrity. There was no proof of an actual loss as
opposed to a Horizon-generated shortage.
These factors are sufficient for the court to quash Mrs Hall’s conviction on both
Grounds 1 and 2. We were however presented with further information which bolsters
our conclusion that Mrs Hall’s prosecution should not have been brought and which
forms the basis of POL’s concession under Ground 2. On 30 June 2011, POL’s external
solicitor wrote to Rob Wilson recording what had taken place in court that day,
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ent et Hamilton & Others v Post Office Ltd
including the basis on which Mrs Hall had pleaded guilty to fraud as an alternative to
theft. Despite the fact that Mrs Hall had not sought to make any express criticism of
Horizon in her defence, the attendance note records the fact it was made clear that:
“the Prosecution would not accept any criticism or blame
concerning the Horizon System.”
POL accepts that it was improper to make the acceptability of Mrs Hall’s basis of plea
to fraud conditional on not making any criticism of the Horizon system.
In our judgment, such conduct on the part of a prosecutor is bound to bring the justice
system into disrepute. Notwithstanding her guilty plea, Mrs Hall’s conviction is unsafe.
Her prosecution was unfair and an affront to justice. We allow the appeal on Ground 1
and on Ground 2. We quash her conviction.
Appellants in group B — appeals unopposed on Ground 1 but opposed on Ground 2
169.
170.
For the sake of convenience, we reiterate the POL concessions that:
i) each of the group B cases was a “Horizon case”; and
ii) this court may properly find that the prosecution of these cases was an abuse of
process within category 1.
As set out above, we have accepted those concessions. In our judgment, the prosecution
of each of the group B appellants was a category I abuse and unfair. We also consider
that the prosecution of each appellant was a category 2 abuse as being an affront to
justice. In each of the group B cases, the factors which underpin POL’s concession on
category 1 are sufficiently egregious to establish category 2 abuse. Our general
conclusions on POL’s category 2 misconduct — which we have set out above and which
we do not propose to repeat — apply to the facts of each case. We add the following
details.
Gail Ward
171.
172.
On 7 September 2007, in the Crown Court at Bristol before Recorder Miskin, Gail Ward
pleaded guilty to four counts of false accounting. The prosecution offered no evidence
on one charge of attempted theft. Mrs Ward repaid the alleged £12,030.70 shortage
after her interview under caution. As a result of the proceedings against her, Mrs Ward
was forced to file for bankruptcy.
Mrs Ward’s case was that she had experienced losses which she repaid when she could
but, as the losses got larger, she had inflated the cash on hand figure over a period of
13 months. In summary, she accepted false accounting but denied she had acted
dishonestly. Between 11 June 2002 and 11 January 2007, she had made a number of
calls to the National Business Support Centre including 10 calls about Horizon. In her
termination of contract interview she had stated that Horizon needed to be examined
and that she was “100% convinced the money disappeared and wanted an explanation
why”. POL accepts that this was an unexplained shortfall case and that evidence from
Horizon was essential to Mrs Ward’s case.
-679-
173.
174,
Julian
175.
176.
177.
178.
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Based on the papers available from the criminal proceedings, there is nothing to suggest
any ARQ data was obtained. There was no evidence to corroborate the Horizon
evidence. Neither the general problems of unexplained shortfalls raised in Mrs Ward’s
interview under caution nor the specific problems with Horizon that she raised in her
termination interview were ever investigated. Mrs Ward had informed POL that her
assistant would testify that they had experienced problems but this was not investigated.
There was no proof of an actual loss as opposed to a Horizon-generated shortage.
POL concedes only that Mrs Ward’s prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground 1 and on Ground 2. Her convictions are unsafe.
Notwithstanding her guilty pleas, we quash her convictions on all four counts.
Wilson (deceased)
The appeal of Julian Wilson is brought posthumously by his widow Mrs Karen Wilson.
On 15 June 2009, in the Crown Court at Worcester, Mr Wilson pleaded guilty to two
counts of fraud. It appears that three counts of false accounting did not proceed. On 3
August 2009, he received a community sentence order with 200 hours of unpaid work.
He was ordered to pay prosecution costs in the sum of £3,500.
In his interview under caution, Mr Wilson said that he had raised problems with
Horizon with his line manager and was told “there was nothing wrong with the system”.
In his resignation letter to his contract manager, he stated that he had raised the problem
of misbalances on three occasions and received no adequate response. In an agreed
basis of plea, Mr Wilson stated that the losses occurred because of “staff or systemic
errors” and not because the money had been stolen. He admitted inflating the cash on
hand figures over five years to ensure that the accounts balanced but believed that the
alleged shortfall — £28,551.98 — was due to problems with Horizon.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Wilson’s case. Based on the papers available from the criminal
proceedings, there is nothing to suggest any ARQ data was obtained. POL did not
investigate any of the criticisms of Horizon made by Mr Wilson historically and during
his detailed interview. There was no evidence to corroborate the Horizon evidence.
There was no proof of an actual loss as opposed to a Horizon-generated shortage.
POL concedes only that Mr Wilson’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground I and on Ground 2. His convictions are unsafe.
Notwithstanding his guilty pleas, we quash his convictions on both counts. We repeat
the condolences that we expressed at the hearing to Mrs Wilson.
Jacqueline McDonald
179.
On 8 November 2010, in the Crown Court at Preston, Jacqueline McDonald pleaded
guilty to theft. She had pleaded guilty on 5 July 2010 to six counts of false accounting.
On 21 January 2011, she was sentenced to a total term of imprisonment of 18 months,
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180.
181.
182,
183.
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raved for handin, Hamilton & Others v Post Office Ltd
A confiscation order was made in the sum of £99,759.60. As a result of the proceedings
against her, Mrs McDonald was forced to file for bankruptcy.
An audit at Mrs McDonald’s post office on 1 October 2008 had revealed a total shortage
of £94,380.69. In interview Mrs McDonald said that she had experienced problems
with Horizon and, when she contacted the Helpline, she received no assistance. She
denied theft but accepted she had unintentionally made false accounts.
Mrs McDonald’s defence statement made reference to problems experienced with
Horizon. The defence made a number of disclosure requests but the prosecution made
no disclosure in respect of any Horizon reliability difficulties. Mrs McDonald had
made 216 calls to the National Business Support Centre about transaction and balancing
problems. The pre-sentence report recorded her as saying that she had not stolen the
money but admitted to accepting the system balances as correct in order to roll over
into the next trading period.
POL draws attention to the CCRC’s observations about Mrs McDonald’s case. The
CCRC paid close attention to the significant prosecution evidence against her and to
the admission represented by her plea of guilty to theft, thereby accepting that she had
stolen the monies in question. We have taken these factors into account, together with
the CCRC’s assessment that this is a finely balanced case. Nevertheless, as POL
concedes, this was a “Horizon case”. The prosecution case was dependent on data
generated by Horizon and yet there is nothing to indicate that any ARQ data was
obtained at the time of the criminal proceedings. There was no evidence to corroborate
the Horizon evidence. Issues raised by Mrs McDonald were not investigated. There
was no proof of an actual loss as opposed to a Horizon-generated shortage.
POL concedes only that Mrs McDonald’s prosecution was unfair (Ground 1) but we
conclude that her prosecution was in addition an affront to justice (Ground 2). The
public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground 1 and on Ground 2. Her convictions are unsafe.
Notwithstanding her guilty pleas, we quash her convictions on all seven counts.
Tracy Felstead
184.
185.
186.
On 26 April 2002, following a trial in the Crown Court at Kingston upon Thames before
HHJ Thomas and a jury, Tracy Felstead was convicted of the theft of £11,503.28 and
two counts of false accounting. On 20 June 2002, she was sentenced to six months’
imprisonment in a young offender institution, aged just 19 years old.
In her interview under caution by two of POL’s investigators at Peckham Police Station,
she was asked: “can you demonstrate how you did not steal the money?” She was asked
whether she could satisfy the officers that she did not have “any responsibility for the
missing eleven thousand”. We note that these questions in essence asked Ms Felstead
to prove that she did not commit a crime.
Ms Felstead was asked whether her family had driven her to steal, with a request to put
aside family loyalty. Although nothing turns on it, we regard the suggestion that family
members may have been involved in criminality as a fishing exercise.
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judem
187.
188.
189.
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Q the sanding doy Hamilton & Others v Post Office Ltd
In circumstances in which Ms Felstead denied theft, POL accepts that this might have
been an unexplained shortfall case and that the reliability of Horizon data might have
been essential to her defence.
There is no contemporary material to identify what the detail of the defence case was
but there is nothing to suggest any ARQ data was obtained at the time of the criminal
proceedings. There is no evidence of any investigation into the root cause of the
shortfall. POL is prepared to accept that there was no proof of an actual loss as opposed
to a Horizon-generated shortage.
POL concedes only that Ms Felstead’s prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground I and on Ground 2. Her convictions are unsafe. We quash her
convictions on all three counts.
Janet Skinner
190.
191.
192.
193.
On 5 January 2007, in the Crown Court at Kingston upon Hull before HHJ Thorn, Janet
Skinner pleaded guilty to one count of false accounting. A further count of theft was
ordered to lie on the file. We understand that the alleged shortfall was £59,175.39. On
2 February 2007, she was sentenced by HHJ Barber to nine months’ imprisonment. On
29 August 2007, she was ordered to pay a confiscation order in the sum of £11,000 and
to pay compensation to POL in the same amount, out of the proceeds of the confiscation
order.
During a POL audit, Mrs Skinner had volunteered that there would be a £40,000
shortage of cash. In her interview under caution, she stated that the losses had begun
in January 2006. She said that she did not declare them as she could not afford “to put
it right”, She believed that one of her members of staff had stolen the money, a belief
in part predicated on the belief that such a large amount of money “just doesn’t go
missing”. The prosecution relied on the evidence of three of the four other members of
staff but we are not persuaded that their evidence was capable of materially advancing
the prosecution case. Between I January 2004 and 31 January 2005, Mrs Skinner made
116 calls to the National Business Support Centre. Some of those calls concerned
Horizon faults and balancing.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs Skinner’s case. Although there is reference to a “Horizon data
disk” in the exhibits, it is not now known what it contained or whether it was disclosed
to the defence. It appears there was no evidence to corroborate the Horizon evidence.
There was no proof of an actual loss as opposed to a Horizon-generated shortage. There
was no investigation into the various Helpline calls made by Mrs Skinner. We are
struck by the fact that POL failed to take these steps despite Mrs Skinner’s long service
to POL and her professional progress (doubtless reflecting her trustworthiness) from
counter clerk to permanent SPM of North Bransholme Post Office.
POL concedes only that Mrs Skinner’s prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
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appeal both on Ground I and on Ground 2. Her conviction is unsafe. Notwithstanding
her guilty plea, we quash her conviction.
Scott Darlington
194,
195.
196.
197.
On I February 2010, in the Crown Court at Chester before HHJ Elgan Edwards, Scott
Darlington pleaded guilty to five counts of false accounting. On 23 February 2010, he
was sentenced by HHJ Dutton to a total of three months’ imprisonment suspended for
12 months, with a requirement to carry out 120 hours of unpaid work. His conviction
was reported in the local press, with consequent damage to his reputation, which we
understand to have caused him great distress. Of the alleged £44,508.46 shortfall, he
paid £9,000 from his own wages.
During an audit by POL, Mr Darlington admitted that he had for a period been inflating
cash figures in order that they matched Horizon figures. He thought that the problem
was due to employee error and was expecting a transaction correction. He was
interviewed under caution and reiterated his account. He had contacted the Helpline
about one matter but was too scared to ask for help. He denied stealing any money.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Darlington’s case. Based on the papers available from the criminal
proceedings, there is nothing to suggest any ARQ data was obtained. There was no
evidence to corroborate the Horizon evidence. There was no investigation into the
integrity of the Horizon figures. There was no investigation into any calls made, or not,
by Mr Darlington to the Helpdesk. There was no proof of an actual loss as opposed to
a Horizon-generated shortfall (as found by the judge at the sentence hearing).
POL concedes only that Mr Darlington’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground 1 and on Ground 2. His convictions are unsafe,
Notwithstanding his guilty pleas, we quash his convictions on all five counts.
Seema Misra
198.
199.
On 21 October 2010, following a trial in the Crown Court at Guildford before HHJ
Stewart and a jury, Seema Misra was convicted of the theft of £74,609.84. She had
previously pleaded guilty at a plea and case management hearing on 20 March 2009 to
six counts of false accounting. On 11 November 2010, she was sentenced to 15 months’
imprisonment for the theft and six months’ imprisonment concurrently on each count
of false accounting. On 8 July 2011, a confiscation order was made in the sum of
£40,000. She was ordered to pay compensation of £40,000 to POL, to be paid out of
the amount recovered by the confiscation order.
An audit at her branch on 14 January 2008 led to the accusation that she was responsible
for a shortfall of £74,609.84. In interview under caution, she said there were losses of
£89,000-£90,000 due to staff thefts. She admitted that she had falsified the figures for
cash on hand and currency awaiting collection in the branch trading statements for two
branch trading periods, adding that she was afraid she would lose her job if she revealed
the true figures.
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200.
201.
202.
203.
204.
205.
206.
207.
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ved 1 handin, Hamilton & Others v Post Office Ltd
A defence statement of 20 March 2009 denied theft and asserted staff thefts had been
responsible for the losses. Mrs Misra indicated she was guilty of false accounting. Her
first trial in May 2009 for theft was aborted at the start, when she raised issues of
Horizon reliability and suggested that errors in the system accounted for some of the
losses, albeit she continued to assert there had been staff thefts.
Numerous disclosure requests followed including about Horizon. A second defence
statement stated: “The general defence is ... there have been unquantifiable thefts by
former employees causing loss, but this has been compounded by operational faults in
the Horizon computer system”.
The defence served expert evidence from Professor Charles McLachlan regarding
Horizon. Six reports were served in total. One of the issues raised was whether a
Horizon problem that had afflicted the Callendar Square branch in Falkirk could have
been the cause of the losses at Mrs Misra’s West Byfleet branch. In addition, Professor
McLachlan advanced a series of hypotheses including whether the user interface gave
rise to incorrect data entry, and whether the system failed to Process transactions
properly.
The prosecution served evidence in response from Gareth Jenkins. He ruled out the
Callendar Square bug as being the cause of the losses. He rejected most of Professor
McLachlan’s hypotheses. He did concede that he could not exclude the possibility of
errors in the system, although he said that that could not be the cause of the volume of
the losses in question.
There was an application to stay the indictment for abuse of process on grounds of non-
disclosure in March 2010, but it failed. The trial recommenced on 11 October 2010.
At the outset, the defence made a further application to stay the proceedings for abuse
of process on grounds of non-disclosure, particularly as regards the Callendar Square
bug issue. The application was refused, and the trial continued. The application to stay
was renewed at the close of the prosecution case but was again refused.
Mr Jenkins and Professor McLachlan gave evidence to the jury. During her own
evidence, Mrs Misra maintained there had been staff thefts but also that there had been
unexplained losses that had continued after the staff in question had been dismissed,
which she had reported to the Helpline. She stated that she had borrowed money from
friends and family to put into POL’s funds. Mrs Misra’s sister-in-law gave evidence
that she had lent her £22,000 for that purpose.
Before Mrs Misra’s trial, POL and Fujitsu had met to discuss the RPM bug in Horizon
Online. Although it was only a matter of days before her trial that discussions about
the issue had taken place — and a report by Mr Jenkins proposing a fix had been written
— there is no information to suggest that the RPM bug was considered for disclosure,
and it was not disclosed to the defence. The bug only appeared in Horizon Online in
2010 and did not have an impact on Legacy Horizon, which was the version of the
system in issue in Mrs Misra’s trial. Nevertheless, POL has properly conceded that it
ought to have been considered for disclosure — and indeed disclosed — in Mrs Misra’s
trial where issues of Horizon reliability were involved.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs Misra’s case. It is conceded that the fact that Mr Jenkins gave
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208.
209.
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the cou fin Hamilton & Others v Post Office Ltd
evidence means that POL did not disclose the “full and accurate position regarding the
reliability of Horizon.” The ARQ data was disclosed to the defence but it was not the
unfiltered ARQ data and did not cover the whole of the indictment period. There was
no examination of that data for bugs, errors or defects or for evidence of theft. It appears
there was no evidence to corroborate the Horizon evidence. There was no proof of an
actual loss as opposed to a Horizon-generated shortage.
We have earlier in this judgment mentioned other alarming factors relating to Mrs
Misra’s prosecution and do not repeat them here.
POL concedes only that Mrs Misra’s prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
Given all these circumstances, including but not limited to the fact that Mr Jenkins gave
sworn evidence to the jury, we regard this as a compelling case of the sort of
prosecutorial misconduct that undermines public confidence in the criminal justice
system and brings it into disrepute. We have no hesitation in allowing her appeal both
on Ground I and on Ground 2. Her convictions are unsafe. Notwithstanding her guilty
pleas to the counts of false accounting, we quash her convictions on those counts and
on the count of theft.
Della Robinson
210.
211.
212.
213.
On 12 December 2012, in the Crown Court at Manchester Minshull Street before HHJ
Lowcock, Della Robinson pleaded guilty to one count of false accounting on the day of
trial. We understand that the alleged shortfall was £17,587.86. On 18 January 2013,
HHJ Lever imposed a community sentence order with 180 hours of unpaid work.
In her interview under caution, Mrs Robinson said that the losses had started about two
years before. She stated that she and her partner initially made good the losses from
their own funds but, as the losses accumulated, this became unsustainable. From
around August or September 2010, she instead declared the amounts on the mutilated
(ie. unusable) cash line of the accounts. In her defence statement she said that any
errors or deficiencies were as a result of her difficulties in using Horizon.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs Robinson’s case. There is nothing to indicate that any ARQ data
was obtained at the time of the criminal proceedings. There was no evidence to
corroborate the Horizon evidence. There was no investigation into the integrity of the
Horizon figures. There was no proof of an actual loss as opposed to a Horizon-
generated shortfall.
POL concedes only that Mrs Robinson’s prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground I and on Ground 2. Her conviction is unsafe. Notwithstanding
her guilty plea, we quash her conviction.
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Khayyam Ishaq
214,
215.
216.
217.
218.
219.
220.
On7 March 2013, in the Crown Court at Bradford before HHJ Potter, Khayyam Ishaq
changed his plea to guilty to the theft of £17,863. On 22 April 2013, he was sentenced
to 54 weeks’ imprisonment.
The defence challenge to the Horizon system was clear from a very early stage in the
proceedings. Mr Ishaq’s solicitor had informed POL of the issue and of the defence
intention to instruct an expert at an earlier Magistrates’ Court hearing on 25 July 2012.
A defence statement of 29 August 2012 repeated the defence challenge to Horizon and
made a series of disclosure requests targeted at the Horizon system.
Mr Ishaq denied theft but admitted to altering items on Horizon out of necessity in order
to reconcile the accounts and due to the system malfunctioning. The defence sought
any information relating to the malfunctioning of the Horizon system generally (such
as the outcome of any enquiries or investigations or any internal memoranda recording
malfunctioning) and the data produced by Horizon. The defence repeatedly sought
disclosure in relation to Horizon and instructed an accountancy expert to analyse the
accounts.
POL produced evidence to demonstrate the integrity of Horizon and relied in particular
upon the involvement of Mr Jenkins who provided witness statements and contributed
to a joint expert report. In a served witness statement dated 15 January 2013, Mr
Jenkins defended the integrity of the Horizon system.
On 5 February 2013, the defence made a formal application to a judge for further
disclosure on Horizon. The application was refused. On 20 February 2013, the defence
served an addendum defence statement which alleged Horizon malfunction and set out
reports of technical faults which Mr Ishaq had made to the Horizon Helpdesk. He had
also made reports to the National Business Support Centre about shortfalls and
discrepancies.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Ishaq’s case. ARQ data for the indictment period was provided to
the defence on 26 October 2012. It is unclear what, if any, analysis was performed with
it. There was no examination of that data for bugs, errors or defects or for evidence of
theft. It appears there was no evidence to corroborate the Horizon evidence. The fact
that Mr Jenkins provided witness statements in itself suggests that POL did not disclose
the full and accurate position regarding the reliability of Horizon. There was no proof
of an actual loss as opposed to a Horizon-generated shortage.
POL concedes only that Mr Ishaq’s prosecution was unfair (Ground 1) but we are bound
to conclude that his prosecution was in addition an affront to justice (Ground 2). The
public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground I and on Ground 2. His conviction is unsafe. Notwithstanding
his guilty plea, we quash his conviction.
David Hedges
221.
On 7 January 2011, in the Crown Court at Lincoln, David Hedges pleaded guilty to one
count of theft in the sum of £23,660.89 and three counts of fraud. On 4 February 2011,
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222.
223.
224.
225.
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he was sentenced to seven months’ imprisonment suspended for 18 months with an
unpaid work requirement of 125 hours. He was ordered to pay prosecution costs in the
sum of £1,000.
Mr Hedges had a history of long service, working as an SPM from 16 November 1994
until his suspension on 5 May 2010. He had expressed his anxiety about unexplained
shortfalls since 7 July 2005 which he described to POL as a “dramatic drain” on his
resources. He reported a loss of £4,000 in March 2009, agreeing to pay it back from
his salary. An intervention visit took place on 6 May 2009. A report of that visit noted
that Mr Hedges was doing everything that was required of him as an SPM and that it
was not possible on that occasion to identify the cause of the high losses at the branch.
The branch was audited on 5 May 2010. A shortfall of £23,621.84 in cash and £39.05
in stock was identified (which together represent the sum on which Mr Hedges was
indicted). In interview, Mr Hedges denied theft but admitted to inflating the cash
figures on the branch trading statement in order to balance the accounts and to hide
increasing shortfalls. He admitted to deploying three fictitious cheques for the same
purpose. He said that there was something wrong with the Horizon system which had
been longstanding.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Hedges’ case. There is nothing to indicate that any ARQ data was
obtained at the time of the criminal proceedings. There was no evidence to corroborate
the Horizon evidence. Despite Mr Hedges’ extensive history of co-operation with POL,
there was no investigation into the root cause of the shortfalls. There was no proof of
an actual loss as opposed to Horizon-generated shortages.
POL concedes only that Mr Hedges’ prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground 1 and on Ground 2. His convictions are unsafe.
Notwithstanding his guilty plea, we quash his convictions on all four counts.
Peter Holmes (deceased)
226.
227.
The appeal of Peter Holmes is brought posthumously by his widow Mrs Marion
Holmes. On 22 December 2009, in the Crown Court at Newcastle upon Tyne, Mr
Holmes pleaded guilty to four counts of false accounting, asking for nine similar
offences to be taken into consideration. He was acquitted of theft by direction of the
judge. We understand that the alleged shortfall was £46,049. On 29 January 2010, he
received a community sentence order with a three-month curfew.
Mr Holmes was employed for over 13 years as an SPM at Jesmond Sub Post Office and
had served as a police officer for 12 years prior to this. In interview, he had said that
he had no idea why there was a discrepancy unless “it’s the Horizon that has let us
down”. He denied theft but accepted that he had been covering up the shortfall. The
defence statement accepted false accounting but denied theft. It repeated that he
believed Horizon was at fault and had created the shortfall. He also complained about
the adequacy of the investigation. He raised a complaint about the training provided
when Horizon was introduced.
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judge
228.
229.
230.
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ve sanding Hamilton & Others v Post Office Ltd
The prosecution relied upon three receipts for cash deposits, a transaction log, the
branch trading statements, cash declarations and “variance checks” — all produced by
Horizon.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Holmes’ case. ARQ data was obtained but it is not clear whether
it was disclosed. It appears there was no evidence to corroborate the Horizon evidence.
There was no investigation into the integrity of the Horizon figures. There was no proof
of an actual loss as opposed to a Horizon-generated shortfall. There was possible
evidence of dishonesty relating to cash declaration. POL accepts, however, that that
did not obviate the need for proving an actual loss.
POL concedes only that Mr Holmes’ prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground 1 and on Ground 2. His convictions are unsafe.
Notwithstanding his guilty pleas, we quash his convictions on all four counts. We
repeat the condolences that we expressed at the hearing to Mrs Holmes.
Rubina Shaheen
231.
232.
233.
Although the court record sheet no longer exists and there is some doubt about the
content of the indictment, it appears that, on 22 November 2010, in the Crown Court at
Shrewsbury, Rubina Shaheen pleaded guilty to one count of false accounting. We
understand that there was an indicted shortfall of £43,269.10. On 17 December 2010,
Ms Shaheen was sentenced to 12 months’ imprisonment. As a result of her prosecution,
she was forced to auction her home so that, upon release from prison, she and her
husband had to sleep in a van for six weeks and were dependent on a food bank before
they were provided with bedsit accommodation.
In interview, Ms Shaheen said that she had been experiencing problems with Horizon and
produced a list of figures in support of what she said. By the time of the defence statement,
she denied theft and denied that she was responsible for the deficiency. She said she could
not explain the discrepancy. She accepted that the prosecution had demonstrated that
her explanation in interview could not account for the bulk of the shortfall which she
believed was due to poor record-keeping. The prosecution investigation only accounted
for £32,000 of the £43,000 shortfall.
POL accepts that, although there are no witness statements or exhibits available from the
original proceedings, it would appear that Horizon evidence was essential to the
prosecution case. The fact that the explanation which the appellant proffered in interview
was disproved did not obviate the need for a full investigation, particularly because the
POL investigation had only accounted for part of the shortfall. There is nothing to
indicate that any ARQ data was obtained at the time of the criminal proceedings. There was
no evidence to corroborate the Horizon evidence. There was no investigation into the integrity
of the Horizon figures. There was no proof of an actual loss as opposed to a Horizon-generated
shortfall. POL accepts that in this case it failed to have regard to the bigger picture, namely
that in 2007 there was an “intervention visit” by a POL representative. The accompanying
report set out the various errors that Ms Shaheen was making, and the account was
reduced to just over £8,000. We have already referred to the troubling attendance note
in Ms Shaheen’s case in which she was said to be “using solicitors who have jumped
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on the Horizon bandwagon” and in which the need to “win” was expressed as being
“absolutely vital”.
POL concedes only that Ms Shaheen’s prosecution was unfair (Ground 1) but we are bound
to conclude that her prosecution was in addition an affront to justice (Ground 2). The public
interest requires us to mark this latter conclusion. We do so by allowing her appeal both on
Ground I and on Ground 2. Her conviction is unsafe. Notwithstanding her guilty plea, we
quash her conviction.
Damien Owen
235.
236.
237.
238.
239.
240.
On 7 December 201 1, in the Crown Court at Mold before HHJ Parry and a jury, Damien
Owen was convicted of the theft of £24,867.99. On 23 December 201 1, he was
sentenced to eight months’ imprisonment.
The prosecution case (in short) concerned Horizon transactions on 23 July and 26 July
2010. Following a POL audit on 9 August 2010, it was alleged that Mr Owen stole
money and covered up theft by inflating the coin on hand which he knew was not
checked. However, when he discovered that Horizon Online was being installed in his
branch, he changed the records to reduce the level of coin on hand which increased the
level of stock. In interview, Mr Owen said the branch had transferred to Horizon Online
on 23 July 2010, when a thorough cash check was carried out and the accounts
balanced. He could not explain the shortage.
In his first defence statement, Mr Owen denied that he had falsified accounting records
or stolen any money. The defence statement said: “The defendant does not know
whether the accounting procedures adopted to produce this information are accurate,
nor whether there is a shortfall as alleged. Further, it is Mr Owen's understanding that
the accounting systems operated by the Post Office are notorious for producing
imbalance anomalies.”
An amended defence statement was served shortly before trial. The amendments
concerned the role of the SPM (Mr Owen was a member of staff but ran the post office
for the SPM pursuant to a private agreement). Mr Owen put the prosecution to strict
proof that any doubtful entries in the Horizon system were performed by him rather
than the SPM on 23 July 2010. He now accepted inputting correctional data on 26 July
2010, but on instruction from POL.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Owen’s case. Despite the fact that the discrepancies on which the
prosecution relied were found at an audit a mere two weeks or so after the branch
transferred to Horizon, POL showed no concern that the new system might be to blame.
There was no investigation into the root cause of the shortfall. There is nothing to
indicate any ARQ data was obtained at the time of the criminal proceedings. There was
no evidence to corroborate the Horizon evidence. The issues raised by Mr Owen in
interview were not investigated. There was no proof of an actual loss as opposed to a
Horizon-generated shortage.
POL concedes only that Mr Owen’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
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appeal both on Ground I and on Ground 2. His conviction is unsafe. We quash his
conviction.
Mohammed Rasul
241.
242.
243.
244,
245.
On 20 June 2007, in the Crown Court at Manchester Minshull Street before HHJ Lever,
Mohammed Rasul pleaded guilty to 21 counts of theft. The precise amount to which
he pleaded guilty is not clear but it was probably either £11,907.52 or £10,237.19. On
19 July 2007, he received a community sentence order with 100 hours of unpaid work
and a three-month curfew requirement. He was ordered to pay £500 towards
prosecution costs. We understand that he paid to POL the amount charged in the
indictment.
On I July 2004, Mr Rasul reported that the barcode scanner on counter position 2 was
not reading. The problem was reported again on 3 July 2004 and a loose cable was
fixed. Following an audit on 10 March 2005, POL alleged (among other things) that
Mr Rasul was responsible for a shortfall of £14,118.79 caused by pension and
allowance overclaims. In a voluntary interview on the day of the audit, he made no
admissions to theft or to overclaiming the pension and allowance submissions made to
the Department of Work and Pensions. He was presented with a transaction log which
showed the most recent discrepancy of £685.80 from the Cash Account Period (“CAP”)
week 48. He remembered that he had scanned two pension and allowance dockets
twice but was unsure if it was on this occasion.
He was presented with a pension and allowance schedule which showed discrepancies
amounting to £10,923.72 covering numerous other CAP weeks. It was also put to him
that discrepancies had been found in other CAP weeks amounting to £936.07 in
addition to the £685.80 discrepancy in CAP 48. He was shown other potentially
incriminating information relating to pensions and allowances, such as information
collated by a third party on behalf of the DWP. Horizon data for various CAP weeks
revealed that the barcode on benefit books had been scanned twice. The period in which
it was alleged that thefts were occurring appears to have been from 5 May 2004 to 23
February 2005. Mr Rasul explained that he had experienced problems with the Horizon
system following the installation of an ATM at his office.
In a formal interview on 2 June 2006, Mr Rasul essentially confirmed his first account.
Further DWP evidence was put to him. Mr Rasul denied stealing POL funds and said
that ifhe had an explanation, he would have offered it, apart from a couple of occasions
when he had scanned a book twice. He said that he never received any Horizon screen
prompt to show a docket had been scanned twice.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Rasul’s case. Although the prosecution relied on DWP evidence,
the discrepancy which led to the theft charge was dependent on the difference between
the DWP records and the Horizon printout: POL accepts that there is insufficient
freestanding, independent evidence from DWP to demonstrate theft. There was no
evidence from the recipients of the pension and allowances to say they had not received
the money as alleged.
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246. POL accepts that there was insufficient investigation of the problems raised by Mr
Rasul relating to the scanner and the ATM. Although ARQ data was obtained, it is not
known if it was analysed or disclosed.
247. POL concedes only that Mr Rasul’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground 1 and on Ground 2. His convictions are unsafe.
Notwithstanding his guilty pleas, we quash his convictions on all 21 counts.
Wendy Buffrey
248. On 8 April 2010, in the Crown Court at Gloucester before HHJ Picton, Wendy Buffrey
pleaded guilty to two counts of fraud. On 18 October 2010, HHJ Hart imposed a
community sentence order with an unpaid work requirement of 150 hours on each
count. Ms Buffrey was ordered to pay £26,250.63 compensation and £1,500 towards
the costs of the prosecution.
249. It was the prosecution case that the figures in her accounts had been misrepresented to
conceal a deficit of £26,256.63. In her basis of plea, Ms Buffrey accepted that she had
committed the offence “knowingly and dishonestly” and that she had misrepresented
the figures in her branch accounts in order to postpone the day when she would have to
make good her losses. She accepted that the branch had incurred a trading loss of
£21,256.63 during the indictment period. She accepted that she was responsible for
making good that loss to POL. She said that she did not know what had caused the loss
and had not taken any money.
250. The prosecution relied upon Horizon stock adjustments and branch trading statements.
Statements from Penelope Thomas and Andrew Dunks from Fujitsu were served.
Although the prosecution could prove that Ms Buffrey recorded a cash pouch as
containing £22,000 when in fact it only contained £5,000 (Count 2), that physical
evidence did not cover the entirety of the alleged loss or explain the reason why there
was a £5,000 shortfall. In summary, the prosecution purported to have excluded human
error as a reason for the shortfall but had not investigated the integrity of the Horizon
system.
251. POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Ms Buffrey’s case. Although ARQ data was obtained, it is not known
if it was disclosed. It appears there was no evidence to corroborate the Horizon
evidence. There was no investigation into the integrity of the Horizon figures or the
root cause of the shortfall. There was no proof of an actual loss as opposed to a
Horizon-generated shortfall.
252. POL concedes only that Ms Buffrey’s prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground 1 and on Ground 2. Her convictions are unsafe.
Notwithstanding her guilty pleas, we quash her convictions on both counts.
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Kashmir Gill
253. On 5 February 2010, in the Crown Court at Oxford before HHJ Hall, Kashmir Gill
pleaded guilty to two counts of false accounting. POL alleged a shortfall of £57,306.20.
Following her pleas, POL reviewed the case and decided that, as Mrs Gill had agreed
to repay the full amount of the alleged shortfall, it was not in the public interest to
proceed with a theft count, which was left to lie on the file. On 9 April 2010, Recorder
Benson QC imposed a fine of £485 and ordered Mrs Gill to pay £1,500 towards the
costs of the prosecution.
254. During an audit, Mrs Gill stated that she had inadvertently given the CashCo collector
too much cash and/or had mistakenly put a pouch containing cash into the post bag
collected by the postman. As a result, she had inflated the cash on hand figures to
balance the accounts. Mrs Gill repeated this account in her interview. In a second
interview she made it clear that she was not suggesting that she attributed the entire loss
to this event and that “there may also have been errors within the ATM machine and
other things”. ARQ data was requested for the period 18 December 2008 to 17 June
2009 but was only produced for the period 20 March 2009 to 17 June 2009.
255. POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs Gill’s case. There was no investigation of the matters she raised
in her second interview, namely problems with the ATM machine. Irrespective of
whether the account that she had given too much money to the CashCo collector was
truthful, that still left open the question of how the shortfall arose. It appears there was
no evidence to corroborate the Horizon evidence and no investigation into the integrity
of the Horizon figures. Incomplete ARQ data was served. There was no proof of an
actual loss as opposed to a Horizon-generated shortfall.
256. POL concedes only that Mrs Gill’s prosecution was unfair (Ground 1) but we are bound
to conclude that her prosecution was in addition an affront to justice (Ground 2). The
public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground 1 and on Ground 2. Her convictions are unsafe.
Notwithstanding her guilty pleas, we quash her convictions on both counts.
Barry Capon
257. On 9 October 2009, in the Crown Court at Ipswich before HHJ Goodin, Barry Capon
pleaded guilty to four counts of false accounting. One count of theft was ordered to lie
on the file. On 14 October 2009, he received a community sentence order with an
unpaid work requirement of 180 hours.
258. At an audit, Mr Capon said that he had been inflating the cash on hand figure to cover
earlier losses. His father was present at the audit and said that there had been problems
since changing to Horizon Online. In interview Mr Capon stated that he had been
inflating the cash on hand figures for the last 6-7 years. He explained that the problems
arose when they changed to Horizon Online. There had been a problem with cheques,
for several thousand pounds, and he had expected to receive an error notice, but it had
never been forthcoming. Mr Capon raised a specific issue with giro cheques. He had
kept a list of the shortages.
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259. While the prosecution may have been able to disprove some of the specific matters on
which Mr Capon had relied in his interview, POL accepts that the prosecution engaged
in rebuttal rather than direct proof that there was a loss and direct proof of its cause.
One of the POL investigators wrote that “there was no evidence to show shortages were
not caused by clerical errors”.
260. POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Capon’s case. ARQ data was retrieved but was only examined in
relation to giros and was never examined for bugs, errors or defects. It is unclear
whether it was disclosed. It appears there was no evidence to corroborate the Horizon
evidence. There was no investigation into the integrity of the Horizon figures. There
was no proof of an actual loss as opposed to a Horizon-generated shortfall.
261. POL concedes only that Mr Capon’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground 1 and on Ground 2. His convictions are unsafe.
Notwithstanding his guilty pleas, we quash his convictions on all four counts,
Vijay Parekh
262. On 8 November 2010, in the Crown Court at Harrow before HHJ Mole, Vijay Parekh
pleaded guilty to the theft of £74,880.75. On 10 January 2011, Recorder Kogan
sentenced him to 18 months’ imprisonment. The funds alleged to be missing were
tepaid to POL prior to sentence.
263. The loss came to light as a result of a POL audit carried out on 30 April 2009 when Mr
Parekh was an SPM at Willesden Post Office. The amount of the loss was calculated
by reference to the Horizon system. In interview, Mr Parekh described financial
difficulties at the branch and stated that he had used Post Office money in order to repay
transaction corrections, staff wages, National Insurance and council tax. He denied any
intention of making a gain for himself. In his defence statement for trial, he raised
Horizon faults.
264. POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Parekh’s case. ARQ data was possibly obtained around October
2010 but it is not clear whether it was analysed or disclosed. It appears there was no
evidence to corroborate the Horizon evidence. Mr Parekh had raised problems about
unexplained shortfalls. There was no investigation into his account in interview or into
the root cause of the shortfalls.
265. POL concedes only that Mr Parekh’s prosecution was unfair (Ground 1). Mr Altman
submits that, in this case, where Mr Parekh admitted taking money for purposes such
as his council tax, the various failures in investigation and disclosure — which have been
accepted by POL — are not of such gravity as to warrant a finding of second category
abuse of process. We disagree. This is a “Horizon case” to which our general concerns
apply. Further, as Mr Patel submitted, when Mr Parekh pleaded guilty, Mrs Misra’s
trial had very recently concluded. In her case, the integrity of Horizon was specifically
addressed as an issue in the trial with evidence from Gareth Jenkins. Any reasonable
prosecutor, concerned with the interests of justice, would have had questions about
Horizon at the front of its consideration. Mr Parekh was 51 years of age at the time of
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conviction and (like other appellants) of previous good character. Yet POL appears to
have learned nothing from any aspect of Mrs Misra’s case.
We conclude that Mr Parekh’s prosecution was an affront to justice (Ground 2). The
public interest requires us to mark this conclusion. We do so by allowing his appeal
both on Ground 1 and on Ground 2. His conviction is unsafe. Notwithstanding his
guilty plea, we quash his conviction.
Lynette Hutchings
267.
268.
269.
270.
271.
272.
On 30 July 2012, in the Crown Court at Portsmouth, Lynette Hutchings pleaded guilty
to one count of false accounting. POL offered no evidence against her on one count of
fraud and a “not guilty” verdict was entered. The alleged shortfall was £10,814.83, On
24 August 2012, Recorder Watson QC imposed a community sentence order with an
unpaid work requirement of 120 hours.
Between I June 2010 and 5 April 2011, Ms Hutchings had made 33 calls to the National
Business Support Centre, two of which related to losses or gains. Dip samples covering
13 January 2010 and 30 March 2011 showed that she had made four calls to the Horizon
Helpdesk for advice.
Ms Hutchings produced a prepared statement at her interview under caution, saying
that problems had arisen since her branch had transferred to Horizon Online. She had
believed that the incorrect balances would be sorted out by transaction corrections in
the fullness of time. She had not stolen any money, nor had she acted dishonestly. She
gave specific examples of problems she had experienced including the fact that POL
advice was difficult to access and unreliable.
In her written basis of plea, Ms Hutchings said that she had balanced the books to put
off the evil day of having to sort out the muddle. She did not take any money, nor had
she intended to. That basis was not accepted by the prosecution, but they did not contest
it.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Ms Hutchings’ case. ARQ data was requested but it is not known if it
was obtained. It appears there was no evidence to corroborate the Horizon evidence.
There was no investigation into the integrity of the Horizon figures. The investigation
concentrated on proving how the accounts were falsified, which was admitted, rather
than examining the root cause of the shortfall. There was no investigation of Ms
Hutchings’ complaints as set out in her prepared statement. There was no proof of an
actual loss as opposed to a Horizon-generated shortfall.
POL concedes only that Ms Hutchings’ prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground I and on Ground 2. Her conviction is unsafe. Notwithstanding
her guilty plea, we quash her conviction.
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Dawn O’Connell (deceased)
273.
274.
275.
276.
The appeal of Dawn O’Connell is brought posthumously by her son Matthew
O’Connell. On 11 August 2008, in the Crown Court at Harrow before HHJ Arran, Mrs
O’Connell pleaded guilty to five counts of false accounting. A count of theft was
ordered to lie on the file. The alleged shortfall was £46,469.15. On 12 September 2008,
she was sentenced to 12 months’ imprisonment suspended for two years with an unpaid
work requirement of 150 hours.
In short, the factual basis for the conviction related to an audit carried out by POL in
February 2008 at Mrs O’Connell’s branch in Northolt. During the audit, she admitted
the shortage and said that she could not explain how it had occurred despite having tried
to identify the cause. In her interview under caution, she stated that the issue had begun
with an initial shortfall of £10,000 in July 2007. Over time, the deficit had accumulated
to approximately £45,000. She admitted declaring cash which was not there in order
to “buy time” and protect her job. She denied theft but accepted falsifying the accounts.
Statements were taken from the other employees working at the branch but they did not
incriminate Mrs O’Connell.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs O’Connell’s case. There is nothing to indicate that any ARQ data
was obtained at the time of the criminal proceedings. There was no evidence to
corroborate the Horizon evidence. There was no investigation into the integrity of the
Horizon figures. The investigation concentrated on proving how the accounts were
falsified, which was admitted, rather than examining the root cause of the shortfall.
There was no proof of an actual loss as opposed to a Horizon-generated shortfall.
POL concedes only that Mrs O’Connell’s prosecution was unfair (Ground 1) but we
are bound to conclude that her prosecution was in addition an affront to justice (Ground
2). The public interest requires us to mark this latter conclusion. We do so by allowing
her appeal both on Ground 1 and on Ground 2. Her convictions are unsafe.
Notwithstanding her guilty pleas, we quash her convictions on all five counts. We
repeat the condolences that we expressed at the hearing to Matthew O’Connell and to
Mark O’Connell who attended the appeal hearing with him.
Carl Page
277.
278.
On 15 November 2006, in the Crown Court at Stafford before HHJ Mitchell, Carl Page
pleaded guilty to theft. The indicted shortfall was £282,000. On 19 January 2007, he
was sentenced to two years’ imprisonment following a basis of plea which accepted the
theft of £94,000. We were told that Mr Page went bankrupt before any confiscation
proceedings could be instituted.
Mr Page and a co-defendant, I were jointly charged with conspiracy
to defraud and theft. At a trial in the summer of 2005, the jury acquitted both of
conspiracy to defraud but was unable to reach a verdict on theft. Mr Page was retried
on his own for theft. He pleaded guilty on the first day of the retrial.
_at the first trial was that Mr Page had colluded to steal money with Mr
_}who was a customer. That case was not maintained at the second trial at
alleged that Mr Page had physically stolen £282,000 from the branch and
‘which POL
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fu t Appr art for 7" Hamilton & Others v Post Office Ltd
hidden the losses on the foreign exchange system. The theft was alleged to have taken
place between 1 March 2002 and 14 July 2003.
280. _Inhis defence statement for the second trial, Mr Page denied that he had been dishonest,
saying that POL could not prove how much money ought to have been in the accounts
at the beginning or end of the indicted period, or when or how money was taken.
281. The amount of the theft in the second trial was reduced to £94,000 following an
accepted basis of plea, which asserted: “The Defendant stole £94,000 from the Post
Office having begun to do so on return from holiday in August 2002. The remaining
deficit of £188,000 may have been the result of incompetent accounting or possibly
theft by other person(s)”. The underpinning rationale for that reduced figure is no
longer clear.
282. POL relied on Horizon data to evidence the missing £282,000. Two separate defence
expert reports noted that the prosecution case was almost exclusively based on the
missing money in Horizon but POL argued that it was also based on data from the Forde
Moneychanger (which is separate from Horizon).
283. POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Page’s case. The defence experts were critical of the POL audit
and the conclusions to be drawn from it. One of the defence experts expressed the
opinion that the shortfall could be attributable to unidentified errors in Horizon and
noted the high incidence of errors in the system. This expert disagreed with the
Prosecution assertion that the shortfall automatically amounted to theft without further
evidence.
284. Despite the fact that Horizon’s reliability was plainly raised by the defence, there is no
evidence of any investigation into the root cause of the shortfall. There is nothing in
POL’s case papers to indicate that any ARQ data was obtained at the time of the
criminal proceedings. There was no evidence to corroborate the Horizon evidence.
There was no proof of an actual loss as opposed to a Horizon-generated shortage. We
also regard it as unsatisfactory (to say the least) that Mr Page was subjected to cross-
examination in the first trial on a basis which POL felt unable to sustain thereafter.
285. POL concedes only that Mr Page’s prosecution was unfair (Ground 1) but we are bound
to conclude that his prosecution was in addition an affront to justice (Ground 2). The
public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground I and on Ground 2. His conviction is unsafe. Notwithstanding
his guilty plea, we quash his conviction.
Lisa Brennan
286. On 4 September 2003, in the Crown Court at Liverpool before HHJ Phipps and a jury,
Lisa Brennan (who had become a POL counter clerk when she was 16 years old) was
convicted on 27 counts of theft representing a shortfall of £3,482.40. She was acquitted
on five further counts. On 6 September 2003, she was sentenced to six months’
imprisonment suspended for two years. On 11 May 2004, her appeal against conviction
(on the basis of inconsistent verdicts) was dismissed (R v Brennan [2004] EWCA Crim
1329). Asa result of the proceedings against her, she was forced to file for bankruptcy.
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288.
289.
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POL decided to pursue criminal charges against Ms Brennan in relation to events in
2001 — close in time to the rollout of Horizon. According to the limited available
documentation, the prosecution case was that when she paid out cash for allowance and
benefit vouchers, she removed more cash than was permitted by the voucher and kept
the difference herself. The evidence of theft depended on the difference between the
amount Horizon showed had been entered onto the system and the lesser amount of the
voucher.
Ms Brennan admitted the discrepancies. She said that they were errors on her part
because of problems at home and pressures of work. She denied theft and said she did
not know what had happened to the money.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Ms Brennan’s case. Her explanation was that she must have made
keystroke errors when entering voucher amounts onto Horizon. The prosecution did
not consider whether a bug, error or defect could have affected this process. There is
nothing to indicate that any ARQ data was obtained at the time of the criminal
proceedings. There was no evidence to corroborate the Horizon evidence. The issue
at trial was dishonesty but there was insufficient proof of an appropriation.
POL concedes only that Ms Brennan’s prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground I and on Ground 2. Her convictions are unsafe. We quash her
convictions on all 27 counts.
William Graham
291.
292.
293.
294.
On 16 October 2009, in the Crown Court at Norwich before HHJ Patience QC, William
Graham pleaded guilty to two counts of false accounting. One count of theft was
ordered to lie on the file. The alleged shortfall was £65,521.07. On 14 January 2011,
HHJ Macdonald QC sentenced him to 32 weeks’ imprisonment suspended for 18
months with an unpaid work requirement of 100 hours.
During a POL audit, Mr Graham admitted to false accounting. In interview he repeated
those admissions but was adamant that he had not stolen any money. In his defence
statement, he denied theft. He denied falsifying accounts with a view to gain for himself
or to cause loss to his employer. He had noticed a loss of £50,000 at the end of 2008
and had assumed that he had made a mistake. He had previously suffered a shortfall of
£5,000 which he had repaid, and he panicked. A basis of plea was submitted to the
judge but no copy is now available.
The defence instructed a forensic accountancy expert who challenged the Horizon
system. The expert stated that the shortfall might be because of a computer error and
asserted that faults in disclosure had prejudiced Mr Graham’s case. ARQ data was in
this case obtained and disclosed as unused material.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Graham’s case. It appears there was no evidence to corroborate the
Horizon evidence and no investigation into the integrity of the Horizon figures. There
was no proof of an actual loss as opposed to a Horizon-generated shortfall.
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POL concedes only that Mr Graham’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground 1 and on Ground 2. His convictions are unsafe.
Notwithstanding his guilty pleas, we quash his convictions on both counts.
Siobhan Sayer
296.
297.
298.
299.
On 18 January 2010, in the Crown Court at Norwich before HHJ Barham, Siobhan
Sayer pleaded guilty to one count of fraud. The alleged shortfall was £18,997. On 15
February 2010, Recorder Wilson sentenced her to 40 weeks’ imprisonment suspended
for 18 months with an unpaid work requirement of 200 hours. A confiscation order
was made against her in the sum of £4,800.
In her interview, Mrs Sayer stated that her branch had been incurring losses since 2004
and admitted inflating the cash on hand figures as a result. She became ill during the
interview, which was suspended. She was subsequently interviewed on a separate
occasion at which a prepared statement was read out. She complained about inadequate
training and the lack of supervision. She had suffered from ill health and found it hard
to cope. She had contacted the Helpline but received no meaningful assistance. She
denied any dishonest intent.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs Sayer’s case. ARQ data was obtained but it covered only part of
the indictment period and appears not to have been analysed by the prosecution. It
appears that there was no evidence to corroborate the Horizon evidence and no
investigation into the integrity of the Horizon figures. There was no proof of an actual
loss as opposed to a Horizon-generated shortfall.
POL concedes only that Mrs Sayer’s prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground 1 and on Ground 2. Her conviction is unsafe. Notwithstanding
her guilty plea, we quash her conviction.
Timothy Burgess
300.
301.
On 12 August 2011, in the Crown Court at Teesside before Recorder Slater, Timothy
Burgess pleaded guilty to one count of false accounting. The prosecution offered no
evidence on a theft charge to which a “not guilty” verdict was entered. The alleged
shortfall was £7,525.65. On 1 September 2011, HHJ Bowers imposed a community
sentence order with an unpaid work requirement of 150 hours.
At a POL audit, Mr Burgess had told investigators that he had borrowed £1,300 from
POL. He later retracted that statement, saying it was a lie and that the shortages had
arisen as a result of mismanagement and errors. In interview, he explained that he had
been declaring false figures for four years, after he had become the victim of a cheque
fraud. He was unable to explain how the cash shortages had arisen. The audit occurred
during the upgrade of Mr Burgess’s branch to Horizon Online.
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302. We treat this as a “Horizon case” because POL accepts that this was in part an
unexplained shortfall case and accepts that evidence from Horizon was essential. Based
on the papers available from the criminal proceedings, there is nothing to suggest that
any ARQ data was obtained. There was no evidence to corroborate the Horizon
evidence. There was no investigation into the integrity of the Horizon figures. There
was no proof of an actual loss as opposed to a Horizon-generated shortfall.
303. POL concedes only that Mr Burgess’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground I and on Ground 2. His conviction is unsafe. Notwithstanding
his guilty plea, we quash his conviction.
Pauline Thomson
304. On I February 2010, in the Crown Court at Maidstone before Recorder Taylor, Pauline
Thomson pleaded guilty to three counts of false accounting. One count of theft was
ordered to lie on the file. The alleged shortfall was £34,331.41. On 18 March 2010,
HHJ St John Stevens imposed a community sentence order with an unpaid work
requirement of 120 hours.
305. Ata POL audit, Ms Thomson accepted that the cash on hand would be about £40,000
short. She could offer no explanation. She had kept quiet about it through panic. The
defence statement raised (among other things) the possibility that the discrepancy was
caused by Horizon malfunction or error. The prosecution was put to strict proof that
Horizon produced accurate accounts of cash held at the branch. A number of detailed
disclosure requests concerning the Horizon system were made. A defence forensic
accountancy expert was of the opinion that there was “a paucity of evidence that any
loss was caused by dishonest actions of Ms Thomson”.
306. POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Ms Thomson’s case. Although ARQ data was requested, it is not clear
whether it was obtained. It appears that there was no evidence to corroborate the
Horizon evidence and no investigation into the integrity of the Horizon figures. There
was no proof of an actual loss as opposed to a Horizon-generated shortfall.
307. POL concedes only that Ms Thomson’s prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground I and on Ground 2. Her convictions are unsafe.
Notwithstanding her guilty pleas, we quash her convictions on all three counts.
Nicholas Clark
308. On 24 February 2010, in the Crown Court at Grimsby, Nicholas Clark pleaded guilty
to seven counts of false accounting. The prosecution offered no evidence on one count
of theft. The alleged shortfall was £7,694.49. He was sentenced to six months’
imprisonment suspended for two years with an unpaid work requirement of 220 hours.
309. During a POL audit, Mr Clark had accepted that he knew that the branch ATM did not
contain the amount of cash that Horizon indicated it should contain. He said that he
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311.
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owed POL £7,000. At the start of his interview under caution, he handed over a cheque
for the shortage amount. He produced a prepared statement in which he said that he
was owed money by a friend and his “balancing” had got out of hand.
Mr Clark did not admit theft or false accounting in his prepared statement but, when
answering questions in interview, he accepted that he had falsified accounts since
August 2008 by inflating the cash on hand figures. In his written basis of plea, he said
that he had done so in order to give himself time to make good the loss and in the hope
that the shortfall might balance out subsequently.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Clark’s case. It appears that there was no evidence to corroborate
the Horizon evidence and no investigation into the integrity of the Horizon figures.
There was no proof of an actual loss as opposed to a Horizon-generated shortfall.
POL concedes only that Mr Clark’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground 1 and on Ground 2. His convictions are unsafe.
Notwithstanding his guilty pleas, we quash his convictions on all seven counts.
Margery Williams
313.
314,
315.
316.
317.
On 16 February 2012, in the Crown Court at Caernarfon before HHJ Jones, Margery
Williams pleaded guilty to four counts of fraud. The alleged shortfall was £14,633.57.
On 3 May 2012, she was sentenced to 52 weeks’ imprisonment suspended for 18
months with an unpaid work requirement of 200 hours.
The alleged shortfall was the result of a POL audit on 3 June 2011. During the audit,
Mrs Williams had given no reason for the shortage. In her interview under caution, she
admitted that she had inflated figures relating to cash on hand and to stamp books. She
knew that it was criminal to produce false accounts but denied stealing. She did not
know what had produced the shortfall and added: “I know we had the new system on
the computer... Horizon online”.
Call logs suggest that, on 24 October 2009, Mrs Williams had informed POL that she
was having “problems with the system” and that she had reported a power cut on the
same day. She was “advised to call (an) electrician” for the power cut and transferred
to the Horizon Helpdesk for the system problem.
The temporary SPM who took over from Mrs Williams also suffered problems with
balancing. There are emails from that SPM to POL complaining about the problems.
They do not appear to have been disclosed.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs Williams’ case. There was a failure to investigate the issues that
she raised in interview. Based on the papers available from the criminal proceedings,
there is nothing to suggest any ARQ data was obtained. There was no evidence to
corroborate the Horizon evidence. There was no proof of actual loss as opposed to a
Horizon-generated shortfall.
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POL concedes only that Mrs Williams’ prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground 1 and on Ground 2. Her convictions are unsafe.
Notwithstanding her guilty pleas, we quash her convictions on all four counts.
Tahir Mahmood
319.
320.
321.
322.
323.
On 17 November 2005, in the Crown Court at Birmingham before HHJ Griffith-Jones,
Tahir Mahmood pleaded guilty to six counts of false accounting and asked for 84
similar offences to be taken into consideration. The alleged shortfall was £33,437.39,
On 21 December 2005, Recorder Stevens sentenced him to nine months’ imprisonment.
On 30 April 2005, POL auditors had made a visit to Mr Mahmood’s branch. He
informed them that the branch was about £25,000 short. The audit was completed and
a shortage of £33,437.39 was identified.
In interview under caution on 4 May 2005, he said that he had been incurring large
losses since a previous audit in March 2003. The first loss had been shortly after that
audit and was in the region of £400 to £500. He had been falsely inflating the cash
account balance every week since then. He had done this in order to hide the losses
which he could not afford to pay, believing that his contract would be terminated if
POL discovered the truth of the situation. Mr Mahmood denied taking any of the
money for himself, and said he believed the losses had been caused by giving cash to
customers by mistake.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Mahmood’s case. There is nothing to indicate that any ARQ data
was obtained at the time of the criminal proceedings. There was no investigation into
the matters raised by Mr Mahmood during his interview — even though he had
volunteered a time period in which the problems had begun. There was no evidence to
corroborate the Horizon evidence. There was no proof of an actual loss as opposed to
a Horizon-generated shortfall.
POL concedes only that Mr Mahmood’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground 1 and on Ground 2. His convictions are unsafe.
Notwithstanding his guilty pleas, we quash his convictions on all six counts.
Jan Warren
324,
325.
On 30 March 2009, in the Crown Court at Chelmsford before HHJ Goldstaub QC, Ian
Warren pleaded guilty to one count of theft. The alleged shortfall was £18,412.50. On
2 November 2009, he was sentenced to nine months’ imprisonment suspended for 18
months with an unpaid work requirement of 75 hours. Three counts of false accounting
were left to lie on the file.
On 9 and 10 April 2008, POL carried out a two-day audit at Mr Warren’s branch which
led to the allegation of a shortfall. A large proportion of the alleged shortfall was said
to come from stock, namely an overstatement of the lottery scratch cards on hand. In
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327.
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his interview under caution, Mr Warren said that the system he had for scratch card
sales “fell down” because he got “sloppy” due to “work pressures and exhaustion”. He
admitted that he would put forward the cash figure he was “supposed to have” from the
Horizon printout, rather than the cash figure he actually had. He could not explain the
missing money, saying that he could not have lost it: something else must have gone
wrong.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Warren’s case. There is nothing to indicate that any ARQ data was
obtained at the time of the criminal proceedings. There was no investigation into the
matters raised by Mr Warren during his interview as to problems with accounting
procedures. It appears that there were financial irregularities after a new SPM took
over from Mr Warren but it is not clear if the existence of those irregularities was
disclosed. Although the prosecution purported to disprove Mr Warren’s case about the
lottery scratch cards, POL did not prove that there was an actual loss as opposed to a
Horizon-generated shortfall.
POL concedes only that Mr Warren’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground I and on Ground 2. His conviction is unsafe. Notwithstanding
his guilty plea, we quash his conviction.
David Yates
328.
329.
330.
331.
David Yates started as a Post Office counter clerk in 1979 and became an SPM in 1993.
On 12 September 2003, in the Crown Court at Guildford before HHJ Addison, he
pleaded guilty to one count of theft. The alleged shortfall was £356,541.35. On 31
October 2003, he was sentenced to three years’ imprisonment.
There is little contemporaneous material available in relation to his case and it is in any
event only necessary to summarise matters. A POL audit of Mr Yates’ branch had
taken place on 6 March 2003 and he was interviewed under caution on 7 March 2003.
At interview, he admitted to inflating his cash figures over three to five years in order
to conceal an ever-increasing shortage, due to his expenditure exceeding his income.
This had included the period before Horizon was installed at his branch on 11 July
2000. Mr Yates claimed that the cash was used to pay for (among other things) personal
bills and loan repayments.
POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Yates’ case. Although Mr Yates admitted theft during his
interview, this was against a background of unexplained shortfalls. Importantly, POL
accepts that the vast majority of the “loss” represented an accumulated shortfall rather
than any theft.
POL further accepts that the investigation was poor. There was no examination of the
unexplained shortfall. Although the amount of any theft is not a material averment on
an indictment, POL accepts that it is very unclear how much Mr Yates admitted to
taking from POL monies as opposed to from other available revenue. The evidence
suggests that he had paid out money to make good error notices prior to any
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Hamilton & Others v Post Office Lid
roved by
appropriation by him. There is nothing to indicate that any ARQ data was obtained at
the time of the criminal proceedings.
POL concedes only that Mr Yates’ prosecution was unfair (Ground 1) but we are bound
to conclude that his prosecution was in addition an affront to justice (Ground 2). The
public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground I and on Ground 2. His conviction is unsafe. Notwithstanding
his guilty plea, we quash his conviction.
Harjinder Butoy
333.
334.
335.
336.
337.
338.
On 25 September 2008, in the Crown Court at Nottingham before HHJ Teare and a
jury, Harjinder Butoy was convicted of ten counts of theft relating to an alleged shortfall
of £206,376.76 between August 2006 and April 2007. The prosecution case in respect
of each count was that he had made false entries on Horizon in relation to the payment
of cheques, in order to balance the system and allow him to steal cash held to that value.
He was acquitted of a further count of theft, where no cheque was alleged to have been
used to conceal the loss of cash.
On 27 October 2008, Mr Butoy was sentenced by HHJ Teare to 39 months’
imprisonment. On 6 March 2009, a confiscation order was made against him in the
sum of £61,294.34. He was also ordered to pay compensation in the same sum to POL.
Mr Butoy had been unable to provide an explanation for the cash shortages during his
interview under caution. His first defence statement, dated 24 January 2008, made it
clear that he denied theft and false accounting. In a second defence statement, dated 2
April 2008, he said that POL could not prove the existence of the underlying cash which
it was alleged that he had stolen. He challenged the Horizon system which he described
as “plagued with technical problems”.
Defence accounting and IT experts were instructed. Detailed disclosure requests were
made in respect of Horizon and its underlying data. It appears that POL disclosed full
ARQ data as well as details of the relevant Horizon transactions and logs of calls to the
Horizon Helpline. On the other side of the scales, statements from Fujitsu employees
attested to Horizon’s reliability. Ultimately, the issue of Horizon’s unreliability was
not pursued at trial — possibly because the defence experts had struggled to understand
the Horizon system.
Much later, Mr Butoy applied for leave to appeal to this court, seeking an extension of
time of around nine years. It appears that his grounds of appeal were founded on the
unreliability of Horizon in light of reports about the Horizon system that had come to
light since his trial. His application was refused on the papers but he renewed it orally,
appearing in person at a hearing on 11 October 2018. POL was not represented at the
hearing but relied on a written respondent’s notice.
The court (Macur LJ, Julian Knowles J and HHJ Wall QC as he then was) refused the
renewed application: R v Butoy [2018] EWCA Crim 2535. The transcript of the court’s
ruling summarises the effect of the respondent’s notice at [11]:
“First, they say it is not arguable that the convictions are unsafe
on the basis that the Horizon system was shown to be unreliable
and open to errors. Furthermore... although Horizon was
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1 court jing dows Hamilton & Others v Post Office Ltd
involved in the alleged thefts (proved thefts as the jury found
them to be) it was not at the heart of the thefts — what lay at the
heart of the thefts were the missing cheques and the applicant's
inability to explain why it was when the paperwork was
otherwise in order that these cheques should have gone missing.
They also point out that during the course of the trial there was
an agreed fact before the jury that at all material times the
Horizon system had been operating properly.”
Despite its previous position before this court, POL accepts that this was an unexplained
shortfall case and that evidence from Horizon was essential to Mr Butoy’s case.
Although POL emphasises the paper trail, proof that money had been stolen depended
upon the Horizon evidence. There was a detailed investigation into Horizon, including
securing the ARQ data, but there was no disclosure of what is now known about
Horizon’s unreliability as determined by Fraser J. On the contrary, there was an agreed
fact which attested to the reliability of the Horizon system. The data was not tested for
the presence of bugs, errors and defects.
POL concedes only that Mr Butoy’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground 1 and on Ground 2. His convictions are unsafe. We quash his
convictions on all ten counts.
Gillian Howard
341.
342.
343.
344,
On 26 April 2011, in the Crown Court at Bradford before Recorder Isaacs, Gillian
Howard pleaded guilty to one count of fraud. The alleged shortfall was £45,850.05.
On 26 May 2011, HHJ Durham Hall imposed a six-month community sentence order
with a six-month supervision requirement.
Mrs Howard’s husband was the SPM of New Mill Post Office until around June 2008
when he suffered a stroke and a subsequent heart attack. Before his illness, Mrs Howard
had worked part-time on the newsagent side of the branch but she later took over the
sole responsibilities of both SPM and managing the retail business. During their time
running the branch, Mr and Mrs Howard had made 22 calls to the National Business
Support Centre about unexplained shortfalls or other accounting problems relating to
Horizon.
In her interview under caution, Mrs Howard accepted that the shortfall was — at least in
part — due to the fact she was “never sure” she was completing the monthly balance
correctly. She said that she would enter inflated figures into Horizon in order to make
them balance. She denied taking any money from POL but said that she had noticed
money start to go missing from the tills, perhaps as the result of the actions of another
employee or as a result of her providing credit to some customers (which she recognised
should not have happened).
Mrs Howard brought to the interview an extract from The Grocer magazine relating to
glitches in Horizon, which she said made her wonder whether she had in fact been
solely responsible for all of the shortfall. She said that she had never been confident
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using Horizon Online, since the branch had transferred to that system on 25 March
2010. Her account of the problems she faced was detailed and (so it seems) forthright.
345. POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mrs Howard’s case. There is nothing to indicate that any ARQ data
was obtained at the time of the criminal proceedings. There was no evidence to
corroborate the Horizon evidence. There was no investigation into the matters raised
by Mrs Howard in interview. There was no examination of the numerous calls that she
had made to the Helpline. None of the other staff at the branch was interviewed. There
was no proof of an actual loss as opposed to a Horizon-generated shortfall.
346. POL concedes only that Mrs Howard’s prosecution was unfair (Ground 1) but we are
bound to conclude that her prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing her
appeal both on Ground I and on Ground 2. Her conviction is unsafe. Notwithstanding
her guilty plea, we quash her conviction.
David Blakey
347. On 17 December 2004, in the Crown Court at Great Grimsby before Recorder Kelly,
David Blakey pleaded guilty to six counts of false accounting. One count of theft was
ordered to lie on the file. The alleged shortfall was £65,366.46. On 25 February 2005,
Recorder Gibson sentenced him to nine months’ imprisonment suspended for two
years. He was ordered to pay £1,000 towards the costs of the prosecution. The papers
before us show that Mr Blakey and his wife were declared bankrupt in February 2006.
348. Mr Blakey was the SPM assistant, his wife having been the SPM at their branch from
September 1996 until her contract of services was terminated in 2004. On 13 May
2004, auditors arrived at the branch because of disproportionately large cash on hand.
Mr Blakey spoke to the audit team, admitting that there would be a significant shortage
of cash, which he said had gone missing from the office “over the last few months”.
He co-operated with the auditors in providing a signed statement to that effect.
349. Mr Blakey told POL subsequently that he was aware money had been going missing
for some time, but he was unable to replace it. Mr Blakey vehemently denied stealing
the money, stating he had only covered up the shortages because he wanted to protect
his wife and feared for her ill health should she find out. He said that he was the only
person who inputted figures into Horizon.
350. In his interview under caution, Mr Blakey said that he did not know where or how the
money had gone. He was hoping there was an error, but it did not “appear to be the
case” and the figure had just accumulated.
351. POL accepts that this was an unexplained shortfall case and that evidence from Horizon
was essential to Mr Blakey’s case. There is nothing to indicate that any ARQ data was
obtained at the time of the criminal proceedings. There was no evidence to corroborate
the Horizon evidence. There was no investigation into the matters raised by Mr Blakey
during his interview, nor was there any investigation into Horizon reliability. There
was no proof of an actual loss as opposed to a Horizon-generated shortfall.
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POL concedes only that Mr Blakey’s prosecution was unfair (Ground 1) but we are
bound to conclude that his prosecution was in addition an affront to justice (Ground 2).
The public interest requires us to mark this latter conclusion. We do so by allowing his
appeal both on Ground 1 and on Ground 2. His convictions are unsafe.
Notwithstanding his guilty pleas, we quash his convictions on all six counts.
Pamela Lock
353.
354.
355.
356.
On 6 November 2001, in the Crown Court at Swansea before Recorder Parry, Pamela
Lock pleaded guilty to three counts of false accounting. One count of theft was ordered
to lie on the file. On 29 November 2001, Recorder Powell imposed a community
sentence order with 80 hours of unpaid work. Mrs Lock was (as we understand it)
ordered to pay compensation to POL in the sum of £26,071.53. There is now very
limited material available in relation to her case but it appears that this sum would have
covered the whole of the alleged shortfall. She was ordered to pay £500 towards the
costs of the prosecution. We have been told that, as a consequence of the criminal
proceedings, Mrs Lock was forced into retirement and that she and her late husband
were forced to sell the family home to avoid it being repossessed.
Mrs Lock had been the SPM of a branch in Cwmdu, Swansea since 1974. She says that
in January 2000 the Horizon system was installed at her branch. She has accepted that
she inflated the figures to make the accounts balance. She says that after six months
the shortfall was £31,000 and so she cashed in an ISA for £5000 in order to reduce it.
Despite the shortage of available documents, POL properly accepts that the evidence
from Horizon might have been essential to her prosecution and convictions. As Mrs
Lock was charged with counts of false accounting, POL accepts that it is highly likely
that the printouts from the Horizon system were the primary evidence in her case.
While recognising the paucity of evidence still in existence, it is fair that we treat this
case as a “Horizon case”. There is no indication that ARQ data was obtained and so
POL has assumed that there was no evidence to corroborate Horizon. There was no
proof of actual loss as opposed to a Horizon-generated shortfall.
POL concedes only that Mrs Lock’s prosecution was unfair (Ground 1) but, as it falls
to be treated as a Horizon case, we are bound to conclude that her prosecution was in
addition an affront to justice (Ground 2). The public interest requires us to mark this
latter conclusion. We do so by allowing her appeal both on Ground 1 and on Ground
2. Her convictions are unsafe. Notwithstanding her guilty pleas, we quash her
convictions on all three counts.
Appellants in group C - the appeals opposed on both Grounds:
357.
358.
We turn next to the three appeals which are opposed on both Grounds. These are the
appeals brought by Wendy Cousins, Stanley Fell and Neelam Hussain. It is necessary
to consider each of these appeals separately since, as will appear and as might be
expected, they involve different facts. In setting out those facts, we have drawn heavily
from the case summaries which Mr Altman and Miss Johnson prepared and which were
not, at least as we understood it, controversial or materially so.
Before doing so, it is convenient, first, to say something about the law, albeit only
briefly, since we were taken to a number of authorities.
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359. The first of these was R v Togher and others, to which we have previously referred and
in which the Court of Appeal held that a conviction should be liable to be quashed on
the ground of abuse of process, even after a guilty plea, if the appellant had been unable
to apply for a stay at trial because the facts constituting the abuse of process had not
been disclosed by the prosecution. As Lord Woolf CJ put it at [33]:
“... the circumstances where it can be said that proceedings
constitute an abuse of process are closely confined ... It has to
be a situation where it would be inconsistent with the due
administration of justice to allow the pleas of guilty to stand.”
360. The other case to which we would refer at this juncture is R v Kelly and Connolly,
another case to which we have previously referred and in which, having reviewed the
relevant authorities (including R v Togher and others and R v Bhatti, an unreported
decision made on 19 December 2000) Rix LJ stated as follows at [127]:
“Ultimately, however, the test is of the safety of the conviction.
For the reasons expressed in Bhatti, the scope for finding that an
unequivocal and intentional plea of guilty can lead to an unsafe
conviction must be exceptional and rare. However, undue
pressure or errors of law or unfairness in the trial process may all
be of such an important causative impact on the decision to plead
guilty that the conviction which follows on such a plea can, in an
appropriate case, be described as unsafe ... Ultimately, as the
authorities emphasise, it is a question of fact in each case.”
Wendy Cousins
361. Mrs Cousins was indicted with 17 counts of theft, covering the period April 2005 to
October 2006. On the first day of trial (5 May 2009), in the Crown Court at St Albans,
Mrs Cousins pleaded guilty to counts 2, 4, 6, 8, 9, and 11 to 16. POL offered no
evidence on the remaining counts (1, 3, 5, 7, 10 and 17). She also accepted a schedule
of 23 offences taken into consideration. The total loss to POL was calculated as
£13,759.38.
362. Mrs Cousins had been the SPM at the Hertford Heath branch since 23 April 1997. She
had one part-time employee with whom she shared a single Horizon log-in.
363. The thefts involved green giros (“giros”). The procedure for paying customers who
presented a giro at a Post Office branch was explained as follows in prosecution
counsel’s opening note at the trial:
“Green giro cheques are a method of payment used by the
Department of Work and Pensions. Giros are sent out by post to
customers and each giro has a date on it showing the earliest date
that it can be cashed. When a cheque is presented at a counter for
payment the clerk must check that it is valid for payment.
Cheques are valid for a month. The clerk checks that the words
and numbers on the cheque agree and that it is permissible for it
to be cashed at that office. Proof of identity must be produced if
the giro is for more than £100. The cheque must be signed on the
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364.
365.
366.
367.
368.
reverse by the payee (and the agent if an agent is collecting the
money on a customer's behalf). The clerk date stamps the giro
on the front and then enters the amount into the Office computer
system by touching the green giro icon on the computer screen.
The screen will then show the amount to be paid to the customer.
The cash is handed over and the transaction is completed on the
screen. The giro is retained by the clerk in their ‘stock’. This is
the name for the Post Office property (cash, receipts, stamps etc)
for which a particular member of staff is responsible.”
The Post Office accounting week ran from Thursday to Wednesday. At the end of each
accounting week the SPM would check the actual giros physically present as against
the Horizon summary of giros entered into the system. They should have been the
same. A summary would then be placed at the front of the bundle of giros, a G6311
identification docket would be completed and put on the top of the bundle and the
bundle would then be tied with an elastic band and put in a pouch ready to be collected
by the postman for dispatch to Girobank (also referred to latterly as Alliance and
Leicester).
The pouches to be collected would be written up on a collection card completed by
someone at the branch. The collection card would be annotated with the number of
priority items collected. A Girobank pouch was one such priority item. The postman
would sign the collection card. Girobank would receive the giros sent by the branch
with the accompanying summary. They would also receive information from POL’s
central accounting division in Chesterfield as to how much had been paid out for giros.
In relation to Mrs Cousins’ branch, Girobank noticed a considerable discrepancy
between the data which it received from Chesterfield, showing how much money had
been paid out for giros, and the number of pouches received. Girobank notified POL
about this, specifically that between April 2005 and June 2006, 12 pouches were
missing. As stated in the opening note:
“The Chesterfield data showed that there were a number of
weeks where giro transactions were being performed at Hertford
Heath but they had received no giros at all for those weeks. They
wanted these ‘missing pouches’ to be investigated. Of course the
truth was that the giros were not missing. Their despatch was
simply being delayed until Mrs Cousins could recash them
fraudulently.”
The prosecution case was that Mrs Cousins had committed the theft by making some
overclaims and many reintroductions. The opening note described an overclaim as “a
claim for a giro that never existed”. Elsewhere it has been described as occurring when
a branch records a payment on Horizon but does not remit the associated giro (i.e. an
amount is claimed as paid but there is no giro to support the claim). For example, if a
customer cashed a single giro, but the SPM put the giro through Horizon twice, Horizon
would register two payments in. This would create a cash surplus, because only one
giro had been paid to the customer. This would allow the SPM to take the money which
had purportedly been paid out for the “second” giro.
As for reintroductions, these were explained as follows in the opening note:
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“A more sophisticated tactic is by the reintroduction of a
legitimately cashed giro. Having correctly performed the giro
transaction through Horizon the clerk retains the giro rather than
despatching it and then re-cashes it in another week. The giro is
date stamped when the reintroduction takes place. It is then sent
off with the summary and because it appears on the summary
and it has the date stamp for the appropriate week it has a
legitimate appearance, even though the genuine transaction has
taken place in an earlier week. If a genuine mistake had occurred
where a cheque was cashed in one week but not accounted for
until the next it would be expected that the Horizon accounts
would show a loss for the first week and a gain in the second.
This would be because in the first week cash would have been
given out but there would be no document to account for the
payment, thus producing a loss. In week 2 there would be a
payment document, but no money would have been given out,
thus producing a gain.”
On 12 October 2006 (week 29) an audit took place at the branch but nothing suspicious
was found. However, Lisa Allen, the investigator, checked that the giros at the branch
had all been date stamped with the correct week. They had but Ms Allen noted that a
number of customers had apparently cashed two cheques in week 29, and so she
contacted Girobank to confirm whether the cheques for the previous week (week 28)
had been received. They had not.
Ms Allen, then, obtained copies of the giros received from weeks 23 to 31 (30 August
to 25 October 2006). Witness statements were taken from five regular customers, Ms
Allen showed them some of their giros. They confirmed that the way the giros were
date stamped was inconsistent with their usual practice of encashment. All the giros
shown to the witnesses were stamped with dates from week 29. No giros had been
received at the Girobank for the previous week. Thus, by way of example, one said
that she visited Hertford Heath every Monday afternoon. As well as collecting her and
her husband’s pension, she cashed three giros each time on behalf of neighbours. She
was shown the four week 29 cheques for one of those and the two cheques for the other.
The earlier cheques could have been cashed from 2 October 2006 but all six are date
stamped 9 October 2006. She stated that she only cashed two giros at a time for the
first of her neighbours and one at a time for the other neighbour. The prosecution case
was that she went to the Post Office on 2 October, her usual Monday, and cashed the
giros valid from 2 October. She obtained the cash for those giros, but Mrs Cousins did
not date stamp them then. She retained them for the witness’s next visit on 9 October.
She then reintroduced the cheques from the previous week at the same time that she
cashed the giros that were valid on 9 October.
As for another of the witnesses, she told Ms Allen that she was only ever served by Mrs
Cousins. She normally visited Hertford Heath every Thursday afternoon to cash a
single giro to obtain her pension. She was shown two giros. The cheques were dated
28 September and 5 October and have her signature on the reverse but were both date
stamped 6 October, a Friday. She stated that she may have broken her routine and
attended on a Friday, but she did not cash two cheques on the same day. The
prosecution case was that the reason that the two giros had the same date stamp is that
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Me Hamilton & Others v Post Office Ltd
the earlier giro was presented a week earlier by the witness: Mrs Cousins did not stamp
it then but retained it for the next week when she could put it through the system again
and pay the money to herself. The other witnesses told Ms Allen essentially the same.
372. On 5 December 2006, investigators re-attended Hertford Heath. The audit revealed no
discrepancy on the Horizon system when transaction corrections were taken into
account (it showed a surplus of £32.91), Later that morning, Mrs Cousins was
interviewed on tape under caution. Mrs Cousins explained that she would take a giro
from a customer, enter it on to Horizon, date stamp it, pay the customer and then pin
the giro on a board she had for that purpose. She confirmed that she had always
prepared the office balance and summarised the giros and prepared them for despatch.
She stated, however, that a colleague had served behind the counter and that she may
have handed the pouch to the postman and completed the collection card. Mrs Cousins
said that she did the books each week after closing at 5.30 pm ona Wednesday night.
She printed off two summaries of the giros. One she put in the pouch with the giros
and the other she used to check the giros, ticking them off against that list. She sent the
giros off once a week. They would be handed to the postman on a Thursday morning.
Mrs Cousins was shown a schedule of giros from weeks 22 to 31. Mrs Cousins was
unable to explain why giros which had been cashed in weeks 22 and 28 had appeared
in the following weeks’ pouches (23 and 29). All the giros had been signed by the
customers. Mrs Cousins did not volunteer any explanation for the missing giros.
373. Mrs Cousins was shown the schedules of double encashments. She explained the
habitual transactions of each regular customer. She stated she had “never” held back
giros in the office and had done them “religiously” every Wednesday since she started
working at POL. Mrs Cousins said that she “always” date stamped the giros as she
cashed them into the system. She said that she “couldn’t disagree” with the first witness
to whom we have referred whose evidence was that she had never cashed two giros at
a time, save for one occasion when “maybe” that witness cashed two giros. Mrs
Cousins said that “by and large” it was right that the five customers did not cash two
giros. The investigator noted that this would not result in the day changing. It was put
to Mrs Cousins that if the double encashments were correct, the customers listed in the
schedule were all claiming for more benefits than they were entitled to. Mrs Cousins
had no answer to this suggestion. Mrs Cousins accepted that she could not provide a
credible explanation but said that she wanted to speak to the customers herself.
374. POL collected all the giro encashments from week 5 (w/e 27 April 2005) to week 37
(w/e 6 December 2006). From this information, the prosecution created two schedules
which were at the heart of the prosecution case. The first schedule set out the giro
transactions in date order. The second schedule set out the giro transactions. The
schedules were based on copies of all the giros and the transaction logs from Horizon.
The schedule revealed a pattem of reintroductions and overclaims. By way of example,
over a period of 81 weeks the first of the witnesses to whom we have referred appeared
to have cashed 97 cheques. One cheque was for £350, not her normal amount. Ms
Allen’s conclusion was that nine giros were reintroductions and six were overclaims,
The reintroductions were in the weeks following the non-receipt of a pouch. Ms Allen
checked the cash accounts and branch trading statements for the period April 2005 to
October 2006 and found no cash surpluses.
375. The defence statement summarised the nature of Mrs Cousins’ defence in this way:
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“The defendant will say at no stage did she steal any money
belonging to the Post Office Limited and nor did she ever benefit
from any such sort of theft. The defendant will say that she has
only ever cashed those giro cheques presented by customers to
her in the manner prescribed by the Post Office.”
The defence statement denied dishonesty and denied knowledge of the reintroductions.
It did not accept that POL suffered a loss. The information contained within the
schedules was not accepted, in particular the records “alleged to have come from the
Horizon computer system”. It noted that Mrs Cousins’ colleague prepared the pouches
from “time to time” and noted a previous investigation by POL into that colleague. The
defence statement was served on 23 May 2008.
The defence made several disclosure requests. It appears that prior to the hearing of
that application, counsel were able to reach agreement as to what matters should be
disclosed. An unused schedule was disclosed. It appears also that, following a quote
for interrogating the hard drive, Fujitsu provided a witness statement dealing with issues
raised by the defence instead of interrogating the hard drive.
The case was listed for trial on 8 September 2008. The trial did not, however, go ahead
since there had been a recent change in counsel and the new defence barrister required
more time to prepare for trial.
On or around 29 April 2009, a proposed basis of plea was sent to the prosecution. It
read:
“1. It is proposed that guilty pleas are entered to the following
counts on the indictment: 2,4, 6, 8, 9, 11, 12, 13, 14, 15 and 16.
The total value of these counts is £7,037.81.
2. There are arguments in respects of counts 1, 3, 5, 10 and 17
that at least one of the suspect transactions that comprise each
count may have been a legitimate transaction.
3. In respect of count 7 the defendant was on holiday at the
material time and could not have performed the alleged
transactions.
4. A schedule of matters to be taken into consideration
containing 23 further charges has been prepared. These Tic’s are
accepted. The total value of the Tic’s is £6,651.57. The total
value that Mrs Cousins will be admitting having stolen will
therefore be £13,759.38.
5. It is proposed that the agreed figure of loss by the Post Office
is £13,749.38. It is further proposed that this be the subject of a
compensation order, and that in the circumstances it would be
inappropriate to pursue formal confiscation proceedings.
6. These are matters of personal mitigation that relate to Ms
Cousin’s family circumstances. Mrs Cousins does not seek to
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381.
382.
383.
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suggest that any person other than herself was responsible for the
thefts.”
On 5 May 2009, Mrs Cousins was re-arraigned on counts 2, 4, 6, 8, 9, and 11 to 16.
The sentencing hearing was listed on 28 May 2009. The defence suggested in
mitigation that Mrs Cousins stole the money to pay for her sick mother, who needed a
wheelchair and a downstairs toilet, although in the subsequent mediation proceedings
Mrs Cousins asserted that this mitigation was a lie. The total loss to POL was calculated
as £13,759.38 following the basis of plea. Mrs Cousins had already made a voluntary
contribution of £13,000 on 21 May 2009, and so compensation was ordered for the
balance (£759.38). Mrs Cousins was also ordered to pay a contribution to prosecution
costs of £2,000.
On Mrs Cousins’ behalf, Mr Moloney frankly acknowledges that Mrs Cousins’ appeal
turns on whether Horizon-generated evidence was essential to the POL case against
her: if it was, then, he submits that the appeal succeeds; if it was not, then, he accepts
that the appeal must fail. Accordingly, whilst a number of other points were raised on
Mrs Cousins’ behalf which are independent of the Horizon issue, again as Mr Moloney
concedes, it is unnecessary to explore those other points unless Mrs Cousins’ case
concerning the Horizon issue is accepted. Mr Moloney, indeed, accepts that the other
points, which Miss Johnson for the prosecution characterises as being concerned with
evidential sufficiency rather than anything to do with Horizon, are insufficient on their
own to render Mrs Cousins’ convictions unsafe.
These other points include, for example, the contention that there was no evidence that
Mrs Cousins ever stole pouches in the first place since, so it was suggested, the
overwhelming majority of the collection sheets show that Mrs Cousins’ green pouches
were collected by the Royal Mail. However, as explained, we need not take up time
addressing these points and can focus instead on the central issue, namely whether
Horizon evidence was essential to POL’s case against Mrs Cousins. As to that issue,
Mr Moloney’s submission is straightforward. It is, in essence, this: that there was no
evidence which safely pointed to how, or by whom, the reintroductions had been made;
nor even, Mr Moloney suggests, whether reintroductions had, in fact, occurred. Mr
Moloney submits in this context that the procedures for processing Pension and
Allowance (‘P&A’) vouchers were fundamentally flawed.
Mr Moloney advances this submission aided by the evidence which we permitted to be
given on a de bene esse basis by Mr Ian Henderson, a forensic accountant who gave
evidence before Fraser J and who is also a director of Second Sight, the company which
was appointed by POL to conduct an independent inquiry between 2012 and 2015 and
which was involved in the associated mediation scheme: see the “Horizon Issues”
judgment at [185]-[201]. Mr Moloney submits that, as he put it, “the reality of those
procedural flaws” was borne out by the fact that reliance had to be placed by Ms Allen
on identical sums being recorded on the Horizon system and those sums then bei
linked to individuals because of the sum involved. That, he submits, was the underlying
rationale for a central aspect of the case against Mrs Cousins since there was nothing
further to confirm that a sum had actually been introduced. The basis of the analysis
undertaken by Ms Allen, Mr Moloney submits, has been fundamentally undermined by
the discovery of examples of payments being established as being to a person other than
the person assumed by POL.
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384. We are not persuaded by these submissions. We agree with Miss Johnson that it has
not been demonstrated that Horizon reliability was essential to the case against Mrs
Cousins. This is not a case involving a Horizon-generated shortfall which Mrs Cousins,
as the SPM, had to make good. It is not a case, in simple terms, in which the amount
of cash or stock held at the branch did not match what Horizon recorded should be
present. The case against Mrs Cousins was as described in prosecution counsel’s
opening note, which we have quoted earlier. It was a case which was concerned not
with any shortfalls in Mrs Cousins’ accounts but with the discrepancies between the
data Girobank received from Chesterfield showing how much money had been paid out
for giros, on the one hand, and the number of pouches received, on the other. It was,
as prosecution counsel put it, a case which was concerned with “missing pouches”. The
prosecution’s case was that Mrs Cousins had committed the theft by making some
overclaims (“a claim for a giro that never existed”) and many reintroductions (‘the
reintroduction of a legitimately cashed giro”). This had nothing whatever to do with
Horizon and everything to do with what was done, physically, with giros, specifically
with regard to signatures and date-stamping and the evidence of customers as to their
usual habits and how they would not, as Miss Johnson put it, store up giros and cash
more than one at once.
385. Although, in his evidence, Mr Henderson expressed the belief that Horizon data was
essential to Mrs Cousins’ prosecution, based on the fact that Ms Allen was using data
“derived from what is now accepted to be an unreliable computer system”, this does
not alter the fact that the case against Mrs Cousins did not depend on Horizon. Mr
Henderson’s criticism was, on analysis, as Miss Johnson submits, a criticism as to the
design of Horizon, specifically the fact that Horizon did not allow individual customers
to be identified. That, however, does not make this a case in which Horizon can be said
to be essential to the case against Mrs Cousins. In any event, as Miss Johnson further
points out, this was a deficiency which was known about at the time that Mrs Cousins
was prosecuted; it is not something which has only later emerged.
386. It is right to acknowledge that Mr Henderson also floated the possibility that there was
a phantom bug responsible for multiple giro entries. This was, however, little more
than speculation based on the fact that Fraser J concluded that there were bugs in
Horizon, including a phantom transaction bug. Indeed, when it was put to him in cross-
examination by Miss Johnson that the phantom transaction bug identified by Fraser J
had been fixed in 2001, all that Mr Henderson could say was that it should be borne in
mind that bugs “can manifest themselves in many different ways” whilst accepting that
what he was saying about a phantom transaction bug was, indeed, speculation. As he
put it: “Who knows whether such bugs, errors and defects could have had the
consequence that I have highlighted”. Given Mr Henderson’s acceptance that he was
engaging in speculation, we feel quite unable to conclude that there was any such
phantom transaction bug. However, even if there had been, what is clear is that it would
have manifested itself at the time to Mrs Cousins. As she herself stated in interview,
each Wednesday, after the branch closed at 5.30 pm, she reconciled the physical giros
in her branch with what Horizon recorded as having been paid out. In view of this, she
would have been bound to have become aware of any bug, not least because if a bug
had led Horizon to record extra giro payments being made, there would have been a
surplus in the cash till because Mrs Cousins would not have paid this money to a
customer. Mrs Cousins did not describe this happening. Nor did Ms Allen find any
evidence of a surplus.
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ent the ing Hamilton & Others v Post Office Ltd
In conclusion, we agree with Miss Johnson when she submits that Mrs Cousins has
tried to shoehorn this case into a Horizon matrix by arguing that Horizon capability was
poor when the real question is not as to its capability but as to its reliability and, then,
as to whether it can properly be said that that reliability was essential to the case which
was brought against Mrs Cousins. This is not such a case. Nor, it follows, is it one of
those exceptional and rare cases in which it would be appropriate to conclude that Mrs
Cousins’ conviction is unsafe on either of the abuse of process grounds which are
advanced. Mr Moloney, we record, accepts that if we were to decide that this is not a
category 1 abuse case, it would inevitably follow that nor is it a category 2 abuse case.
Mrs Cousins’ appeal must, therefore, be dismissed.
Stanley Fell
388.
389.
390.
391.
Mr Fell appeared before the Crown Court at Leicester on 27 July 2007 when he pleaded
guilty to a single count of false accounting. He was sentenced to 50 weeks’
imprisonment suspended for two years, with a requirement to participate in an
Enhanced Thinking Skills Programme.
At the time that he was sentenced, Mr Fell was aged 54. He was the SPM at the Newton
Burgoland Post Office in Coalville, Leicestershire from 13 September 1976 until the
termination of his contract with POL on 22 June 2007, he having been suspended on
25 October 2006. The branch was a single-counter office within commercial! retail
premises (a village general store) also run by Mr Fell. He was, as his counsel, Mr Stein,
points out, the third generation of his family to work and operate the Newton Burgoland
Post Office. He was a highly regarded member of the local community.
Ms Jane Bailey, then a Business Development Manager employed by POL, provided
two witness statements as part of the criminal proceedings, respectively dated 14 and
15 March 2007. In her first witness statement she described having attended the branch
on 23 October 2006 due to concerns over the amount of cash in the branch and the
amount of ‘rems’ (i.e., the amount of cash which Mr Fell had requested he be provided
with by POL in order to service the cash needs of the branch) being requested. Ms
Bailey spoke to Mr Fell and told him that she was there in order to check the cash, as it
was not matching up with what the Horizon computer system was showing. She printed
off an office snapshot which showed that the branch should have had £28,819.97 in
cash. Mr Fell counted all of the notes and coins in front of her. It became clear that
there was a large shortfall of cash. The actual cash present was only £9,420.67, leaving
a shortfall amounting to £19,399.30. Ms Bailey asked Mr Fell if he could explain the
shortfall. He said that he could not do so. Ms Bailey asked Mr Fell if he could think
of a reason for the loss. He said that he could not, before adding this: “If I was to give
you a cheque for the shortage, would that be the end of it?”. Ms Bailey told him that
an audit team would need to verify the discrepancy and the reason for it. Having
ensured that the cash and stock was secured, she then left.
Two days later, on 25 October 2006, an audit was carried out at the post office by
Branch Auditor Paul Field. Ms Bailey was present when the audit took place, along
with Mr Fell’s daughter and her boyfriend. Mr Fell was absent due to illness. Michael
Rudkin of the National Federation of Sub-Postmasters was, however, in attendance.
The cash and stock on hand were verified. A shortage of £19,583.04 was found. This
was an overall total, taking account of a shortfall in cash figures in the sum of
£19,587.66 but a surplus in stock figures in the sum of £4.62.
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The next day, 26 October 2006, Ms Bailey returned because Mr Fell’s wife had signed
for a pouch that had contained the Christmas stock which had been sent there. Ms
Bailey locked the unopened pouch in the safe. Mr Fell was present in his shop and
invited Ms Bailey into his dining room adjoining the shop to speak. During the
conversation, Mr Fell said to her that he had been very stupid, and he had not intended
to take money from the post office, but circumstances had led him to do it. It appears
also that Ms Bailey was told by Mr Fell on 26 October 2006 that he had “not taken any
more money for quite a while”. Mr Fell was at pains to make Ms Bailey understand
that it was not in his nature to do something like this, and he said that he had run the
post office for many years. Several times, he told her that it had been a foolish thing to
do. He also told her that he thought that he would have been found out a while back
but that a person who had visited him then had not checked the cash against the balance
snapshot as she had done.
On 1 November 2006, Ms Bailey spoke to Mr Fell on the telephone to discuss
arrangements for an interim SPM. During the conversation, Mr Fell said that he was
concerned that he might be sent to prison. Ms Bailey visited the branch that same day.
She told Mr Fell that her colleague, Mr Paul Williams, would deal with the question of
his contract and that anything else would be dealt with by the POL investigation team.
Ms Bailey told Mr Fell that she did not know what would happen to him. He told her
that it was a stupid thing that he had done and that he should have known better.
A week or so later, in a letter dated 8 November 2006, Mr Fell was notified that POL
wished to interview him. That interview took place on 30 November 2006 and was
conducted by Mr Jonathan Longman, a POL investigation manager, who had in
advance obtained the transaction log CD, which showed all the Horizon transactions
for the period from 27 September 2006 to 25 October 2006.
The interview took place under caution with Mr Rudkin also in attendance but no
lawyer acting for Mr Fell because he had waived his right to be represented by a lawyer.
Mr Fell read a prepared statement, in which he denied theft and said that he always
intended to repay monies but in which he did accept what he called “financial
negligence”. More particularly, the statement was in these terms:
“May I state from the outset without prejudice that at no time
have I sort [sic] to steal or defraud POL of any Stock or cash
whilst in my custody. POL appointed me in 1976 as the Sub-
Postmaster of Newton Burgoland Post Office and until my
suspension on the 23rd October 2006 I was the Sub-Postmaster
of Newton Burgoland Post Office where I have carried out the
duties of a Sub-Postmaster and run the village store for 30 years.
On the 23rd October 2006, Jane Bailey (Community Business
Development Manager) for POL entered the premises of Newton
Burgoland Post Office to investigate a complaint that I (Stanley
Fell) had made to POL’s cash management centre about the lack
of funds I had at my disposal to finance the running of Newton
Burgoland Post Office.
Jane Bailey representing POL, having examined the Post Office
cash identified there was a shortage of £19,587.66.
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th + handin; Hamilton & Others v Post Office Ltd
I was with immediate effect suspended from my duties as Sub-
Postmaster of Newton Burgoland Post Office. However I have
been allowed to carry on trading at the same premises with my
village store.
On the 24th and the 25th October 2006 I had to seek medical
attention due to the stress and anxiety of being suspended. My
doctor prescribed anti depressants along with sleeping tablets to
assist me.
On the 25th October 2006 upon my return to Newton Burgoland
Post Office having needed further medical attention from my
doctor I was informed by my daughter who I left in charge of the
store that during my absence Jane Bailey (BDM) and Paul Field
(POL Audits) had entered the Post Office secured area and
proceeded with an audit of my Post Office accounts during my
absence, despite my daughter’s requests to suspend an audit until
1 Stanley Fell had returned from the Doctors.
My federation representative Michael Rudkin has subsequently
informed me that he was present throughout the audit. Michael
has confirmed to me upon completion of the audit by Paul Field
the Post Office accounts for Newton Burgoland Post Office
revealed a cash shortage of £19,587.66.
The burden of my actions became so unbearable that on the 11th
November 2006 I planned to end my life by taking an overdose
of paracetamol tablets and alcohol that lay in waiting for me in
the garden shed. The failure that I feel I have become, I was
discovered by members of my immediate family and stopped
from attempting suicide.
Once again medical attention was called for and on 12th
November 2006 an emergency locum Doctor attended my
premises and once again prescribed antidepressants.
Should you require any further information I would ask the Post
Office Investigation Department to write to either myself or my
Solicitors Richard Nelson outlining your requirements and I will
co-operate fully with the investigation.
I wish to offer POL and my Family an un-reserved apology for
my financial negligence but wish to reaffirm without prejudice
that at no time have I sort [sic] to steal or defraud POL of any
Stock or cash whilst in my custody and it has always been my
intension [sic] to repay the money to POL.
Having consulted with my solicitors Richard Nelson Business
Defence, I have been advised to co-operate as fully as possible
in this voluntary interview with the Post Office Investigation
Department.
-716-
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Al ¢ court for handing down. Hamilton & Others v Post Office Ltd
I have decided to read my prepared statement as the prescribed
medication that I am taking may interfere and not allow me to
give clear and coherent answers when questioned.
This concludes my statement. Should any further questions be
put to me they will be met with the response NO COMMENT.”
Mr Fell was, then, asked about the comments he had made to Jane Bailey. Consistent
with what he said he would do, he answered ‘no comment’ to each of these questions.
Mr Fell was subsequently indicted with a single count of theft, the particulars being that
on a day unknown between I June 2006 and 24 October 2006 he stole £19,583.04
belonging to POL. On 11 May 2007, Mr Fell was committed for trial on this charge,
POL having assembled witness statement evidence not only from Ms Bailey concerning
her visits to Mr Fell’s post office in October 2006 but a further witness statement from
her in which she set out a general explanation of the Horizon computer system. There
was also a witness statement from Penelope Thomas of Fujitsu, which made reference
to the Horizon transactions for the period from 27 September 2006 to 25 October 2006
which Mr Longman had obtained ahead of the interview and which set out the way in
which the Horizon system stored information and providing evidence of the integrity
of the system. She confirmed that the Horizon system was installed at the branch on
16 February 2001. She produced an ARQ, which she had received from POL
investigators on 8 November 2006. The ARQ requested a report of all transactions and
events for the post office branch within the date range 27 September 2006 to 25 October
2006. Ms Thomas undertook extractions of data held on the Horizon system in
accordance with the requirements of the ARQ and produced the resultant CD, which
she forwarded to the POL investigation section.
There was also a witness statement from Mr Longman, who had also received a number
of cash declarations from Mr Field, the auditor who had carried out the audit of the
branch on 25 October 2006. He used the transaction log and some of the cash
declarations to examine the cash flow within the post office to see whether he could
verify if any of the cash declarations made by Mr Fell were correct. The first he
examined was printed by user SFE001 at 18.28 hours on Saturday 21 October 2006.
The cash declaration purported to show that the post office had £18,107.35 in cash. Mr
Longman interrogated Horizon for Monday 23 October 2006 and produced a schedule
in which all the transactions involving cash in and out were added or subtracted from
the £18,107.35, up to the point where Ms Bailey closed the office on 23 October 2006.
The schedule showed that, if the cash declaration figure for Saturday 21 October 2006
had been correct, then, the cash on hand figure when Ms Bailey closed the office should
have been £19,770.85. Only £9,276.99 in cash was, however, in fact, on hand. There
was, therefore, a discrepancy of £10,493.86. This proved, Mr Longman suggested, that
Mr Fell’s cash declaration for Saturday 21 October 2006 had been false.
Mr Longman prepared another example, this time using the cash declaration for 28
September 2006 as the cash balance brought forward, printed by user SFEOO1 at 18.04
hours on 28 September 2006, and which purported to show that the office cash holding
was £25,475.13. The cash in and out of the post office for 29 September 2006 was
scheduled but it did not tally with the cash declaration for 29 September 2006, printed
by user SFE001 at 18.22 hours. A discrepancy of £13,256.93 was found.
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400.
401.
402.
403.
404.
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proved by th ing Hamilton & Others v Post Office Ltd
Mr Longman also prepared two further examples, the details of which we need not
address.
Mr Longman’s evidence was, in effect, that none of the cash declarations made by Mr
Fell which he examined were a true account of what had been physically on hand at the
post office, based on what the Horizon system disclosed should have been present. In
each case, there was a substantial shortfall of cash.
After the hearing on 11 May 2007, a defence statement was served on Mr Fell’s behalf
on 7 June 2007. In this, Mr Fell denied theft on the basis he had no intention of
permanently depriving POL of the sum of £19,583.04. The document went on to say
this:
“That he [Mr Fell] used the Post Office monies to keep the
adjoining shop afloat having suffered a decline in the trade of the
Post Office and having mismanaged the stocking of the shop
resulting in financial difficulties in meeting the overheads of the
business.
He always intended to repay the monies.”
At the same time, Mr Fell made a request for disclosure of four items from the schedule
of non-sensitive unused material. Disclosure of this material was given under cover of
a letter dated 19 June 2007 addressed to Mr Fell’s solicitors.
On 29 June 2007, a plea and case management hearing took place before HHI Lea.
Prior to this, there were discussions between prosecution and defence counsel during
which the prosecution told the defence that, if Mr Fell repaid the outstanding monies,
then the prosecution would substitute an alternative charge of false accounting in place
of the charge of theft. Mr Fell was, therefore, not arraigned. A pre-sentence report was
ordered on the basis of an expected plea of guilty to false accounting. The case was
adjourned to 27 July 2007.
Following this hearing, a second indictment was produced, which alleged a single
offence of false accounting, the particulars being that, on dates between 1 June 2006
and 24 October 2006, dishonestly and with a view to gain for himself, Mr Fell had
falsified accounts required for an accounting purpose, namely the Horizon system cash
declaration statements and trading statements for the post office, by making entries on
those accounts purporting to show that the cash in hand held at the post office was
greater than it actually was. This was the indictment which was before the court at the
hearing on 27 July 2007.
Also before the court on that occasion was a written basis of plea dated 27 July 2007
and signed by Mr Fell, Peter Hampton (his counsel) and Charlotte Knight his solicitor).
This stated as follows:
“I, Stanley Fell (b. 09.02.1952) am currently charged with a
single offence of False Accounting [01.06.06 — 24.10.06]. I will
plead guilty to this offence on the following basis:
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t Approv. for handin; Hamilton & Others v Post Office Lid
Towards the end of 2004 / the beginning of 2005 I entered into
a contract with a wholesaler by the name of ‘Ist Choice Ltd’.
“Ist Choice Ltd’ were to supply the stock to my shop which is
contained within the Post Office premises. In entering into such
an agreement, I hoped to turn around the poor sales that the shop
had experienced in the recent past.
Initially, the new contract led to a modest improvement but this
trend quickly reversed due to one particular term in the contract
which stipulated that I must spend a minimum of £2,000 on stock
every week.
It soon became obvious that I simply did not have the finances
to meet the stipulated term and I began to borrow Post Office
funds in order to meet the shortfall and keep the shop afloat. This
took place over the [sic] roughly the same period as set out in the
charge and I admit that I acted dishonestly in falsifying the
Monthly Trading Statements.
I would wish to confirm to the Court that at no time did I intend
to permanently deprive the Post Office of the monies in question.
It was always my intention to pay back that which I had
borrowed, as I now have. I did not intend to steal the money.”
It was on this basis that Mr Fell was sentenced in the manner which we have previously
described.
In support of Mr Fell’s appeal, Mr Stein relies upon the fact that on 26 March 2020 the
CCRC referred Mr Fell’s case to the Court of Appeal on the basis that “unexplained
losses were an important part of the context of this applicant’s admission that he took
Post Office money, and therefore the High Court’s [Fraser J’s] finding that there was a
significant and material risk of bugs, defects or errors in Horizon causing branch
shortfalls is of clear relevance to this case”. It was Mr Stein’s submission that, Mr Fell
having pleaded guilty at a time when the extensive nature of the concerns about the
Horizon operation system had not yet come to light, his is a case in which the plea of
guilty operates as no bar to a successful appeal. He highlighted in this respect how in
her witness statement Penelope Thomas described the system as operating properly,
He submits that Mr Fell was prosecuted, and required to decide how to plead, in
circumstances where, as Mr Stein characterises it, due to POL’s corporate attitude of
placing the protection of Horizon above the reputation of people such as Mr Fell, his
legal team had incomplete and, indeed, misleading information about the reliability of
Horizon.
Mr Stein points out, in particular, that Mr Fell had to rely on others to assist him as he
found operating the system difficult. Before the audit leading to his prosecution,
indeed, Mr Fell had made up for “discrepancies” on four occasions between 2005 and
2006. This is what he told Second Sight when interviewed for the purposes of the Post
Office Mediation Scheme (see the report dated 5 December 2014 at paragraph 2.2).
There is no evidence, Mr Stein submits, that POL disclosed to Mr Fell’s then legal team
that he had been putting money into the system in order presumably, so Mr Stein
suggests, to make it balance. This, Mr Stein points out, in circumstances where, during
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nt. urt ling di Hamilton & Others v Post Office Ltd
the period leading to Mr Fell’s prosecution, he made 721 calls to the helpline. Mr Stein
submits that this is behaviour which suggested that Mr Fell was struggling with
operating the system, not that he was engaged in criminal conduct.
408. Mr Stein submits that, all in all, Mr Fell can be forgiven for not knowing that if he had
told his legal team about the discrepancies and that the system had thrown his
accounting out of balance, they could have used that to support applications for
disclosure and gone on to consider further legal arguments such as an application to
stay, the exclusion of computer evidence or to support a defence that he was not acting
dishonestly. Mr Stein submits that, had Horizon’s failings been known to Mr Fell, he
would have not taken “such a fatalistic approach” as he did on 23 October 2006 when
talking to Ms Bailey or in interview or when facing the subsequent criminal
proceedings, and he might have raised the concerns and issues that he had with the
Horizon system. Mr Fell’s “fatalism” could, Mr Stein suggests, have been countered
by his union representative and his legal team if they had been informed by POL of
Horizon’s bugs, errors and defects. The denial of information about the Horizon
system, Mr Stein submits, failed to allow Mr Fell’s legal team the opportunity to fully
and properly advise him as to his options, what disclosure might be requested and why
that might assist his case or undermine the prosecution case.
409. We do not agree with Mr Stein about this. We remind ourselves, in the first place, that,
as made clear by Rix LJ in Kelly and Connolly, it will be an exceptional and rare case
where an unequivocal and intentional plea of guilty will be overturned. This is because,
as Potter LJ put it in Bhatti at [30] (as cited by Rix LJ in Kelly and Connolly at [1 18}),
a plea of guilty “represents a voluntary recognition of guilt”. Secondly, and critically
in this case, we are not persuaded that this is an exceptional and rare case since we agree
with Mr Altman that this was not a case which was concerned with Horizon, more
specifically its reliability. As such, we do not accept that Mr Stein can be right when
he submits that there was an obligation to disclose material going to Horizon reliability.
It follows that Mr Fell’s guilty plea cannot be said to have been undermined by what
has subsequently emerged concerning Horizon. It further follows, therefore, that Mr
Fell’s conviction cannot be regarded as being unsafe.
410. Specifically, as Mr Altman submits, although Mr Stein seeks to rely upon the CCRC
having described Mr Fell as having “explained that he had been using the shop income
to pay unexplained Horizon losses which were occurring, and then had taken money
back when he couldn’t cover the shop bills”, that was not something which he ever
suggested at any time before he came to be sentenced. It is not what he told Ms Bailey;
nor is it what he told Mr Longman in interview; nor is what he put in his defence
statement; and nor is it what was stated in his written basis of plea. The latter
confirmed, indeed, that he had “borrowed” the money from POL in order to prop up his
retail business, having entered into a contract with a supplier (1st Choice Ltd) to stock
his shop with a minimum spend of £2,000 every week. He stated, in terms, that he “did
not have the finances to meet the stipulated term” and so he “began to borrow Post
Office funds in order to meet the shortfall and keep the shop afloat”. Again as stated
in the written basis of plea, “This took place over roughly the same period as set out in
the charge [i.e., 1.6.06 — 24.10.06]”.
411. Inshort, Mr Fell never suggested that what he did had been done in order to cover up a
Horizon-generated shortfall as opposed to one created by his own actions in taking
money to prop up his retail business. Nor did he ever suggest, including in his written
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414.
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1 the court for handig Hamilton & Others v Post Office Lid
basis of plea, that he had borrowed money from POL to repay what he had made good
in the past. What he told Second Sight some years later in the course of the mediation
process was not what he was saying at the time that the investigation was being
conducted and at the time that he was prosecuted. As Mr Altman submits, that includes
the suggestion made by Mr Fell to Second Sight that he informed POL of shortages on
several occasions. He had previously made no mention of having told POL this.
Matters do not stop there, however, since, as already observed, far from putting forward
Horizon-related explanations, Mr Fell made a series of comments during the course of
the investigation which entailed his express acceptance of wrongdoing. Thus, at the
time of the audit he admitted to having taken the money and stated that he had not
intended to, but circumstances had led him to do it. He, then, denied theft in the
prepared statement which he produced at the time of his interview, in which he referred
to “the burden of my actions” and his “financial negligence”, apologised and stated that
he did not steal because “it has always been my intention to repay the money to the Post
Office”. His position, in essence, was that, although he admitted taking the money,
there was a lack of intention permanently to deprive. He repeated this in his defence
statement, going on to explain that “he used the Post Office monies to keep the
adjoining shop afloat having suffered a decline in the trade of the Post Office and having
mismanaged the stocking of the shop resulting in financial difficulties in meeting the
overheads of the business”. As Mr Altman submits, there was no word about having to
make good shortages in the past as his reason for borrowing the funds and covering it
up by fraudulent accounting.
It is clear, furthermore, although hardly surprising in the circumstances, that in his
solicitor’s letter to him dated 6 July 2007, which was disclosed as part of the Second
Sight mediation process, reference is made to there having been a full conference at
court at the PCMH on 29 June 2007 with counsel, the solicitor and Mr Rudkin and to
Mr Fell having been given full advice regarding his plea. That letter states: “You have
always accepted that you were guilty of false accounting by way of creating false cash
records to disguise the monetary loss to the Post Office caused as a result of you taking
funds to keep your shop afloat”. There was clearly no suggestion on Mr Fell’s part that
Horizon was responsible for any shortfall. On the contrary, he was putting forward a
positive reason for what had happened which did not involve any suggestion that it was
Horizon-related.
Furthermore, although Mr Stein seeks to rely upon the CCRC’s reference to Mr Fell
having “on four occasions between late 2005 and October 2006 ... made good defaults
generated by Horizon”, as the final Second Sight report of 5 December 2014 made
clear, these totalled just £1,110.87 and so very much less than the £19,583 which
appeared in the indictment to which Mr Fell pleaded guilty. It follows that the four
discrepancies he made good during that period cannot explain the scale of the losses
with which this appeal is concemed. Although Mr Stein submits that there is no
evidence that POL disclosed the fact that Mr Fell had made these payments, we agree
with Mr Altman that this is not a matter for criticism in this case given that Mr Fell
himself knew that he had made those payments. Indeed, if anything, as Mr Altman
submits, the fact that Mr Fell did not tell his legal team is consistent with recognition
by him that those four incidents had nothing to do with why he took the money. His
case, we repeat, was that the reason why he did what he did was to fund his shop having
made a bad stock supply arrangement.
-721-
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d 1 handiny Hamilton & Others v Post Office Ltd
We conclude, in the circumstances, that this is not a case in which Horizon can properly
be regarded as having been essential to the case which POL brought against Mr Fell. It
follows that his is not one of those exceptional and rare cases in which it would be
appropriate to conclude that his conviction is unsafe on either of the abuse of process
grounds which are advanced. We should add in this context that we reject Mr Stein’s
submission that, were we to decide that this is not a category 1 abuse case, we could
nonetheless decide that it is a category 2 abuse case. We see no basis on which it would
be appropriate so to decide, as Mr Moloney correctly concedes in Mrs Cousins’ case.
Mr Fell’s appeal must, therefore, also be dismissed.
Neelam Hussain
416.
417.
418.
419.
420.
Neelam Hussain appeared before the Crown Court at Wolverhampton on 20 June 2011
when, on the day of trial, she pleaded guilty to theft. An allegation of money laundering
was ordered to lie on the file. Aged 20 at the time of conviction, she was sentenced to
21 months’ detention in a young offender institution. Subsequently, on 9 March 2012,
she was ordered to pay confiscation in the sum of £78,922.75. A compensation order
was made in the same amount, to be paid out of the confiscation. Having served her
original sentence, she then served a further 9 months in custody as she had not met the
confiscation order.
Ms Neelam had worked at various post offices as a counter clerk since 2005. She was
appointed the manager at the West Bromwich Post Office in March 2008. Her brother,
Shamhir Hussain, was employed as a clerk at the branch during the period covered by
the indictment which she came to face. The SPM at the branch was Mrs Baljinder
Dhadda.
An audit of the branch on 13 November 2009 revealed a shortfall of £101,617.15,
£93,159.18 of which was suspected to be missing cash. The shortfall came to light
when the auditors noticed discrepancies in the branch accounts. The largest of these
discrepancies related to a stock unit named “GG”, which was alleged to be a phantom
stock unit created and used by Ms Hussain to conceal the fact that cash was missing.
Horizon records indicated that sums totalling £83,000 had been transferred to stock unit
GG over the course of three weeks between 16 October 2009 and 5 November 2009.
There were five separate payments, appearing in the records as internal transfers made
to GG from two other accounting stock units within the branch named “BB” and “BC”.
None of the sums credited to the GG stock unit by way of these five transfers were
recorded as having been accepted by it. The effect was that £83,000 cash was alleged
to be missing because the money appeared to have left one part of the branch accounts
without ever being recorded as having been received back in.
According to Horizon records, four of the five suspicious payments to the GG stock
unit had been made by someone using an electronic staff identification (“ID”) code
attributed to Ms Hussain. A staff ID code consists of three letters followed by three
numbers. Often the three letters will be the first letter of the staff member’s given name
followed by the first two letters of that person’s surname. Each staff member should
only access the system under their own user ID code, using a private password. If a
transaction is made under a particular user ID code, the Horizon records provide the
relevant details, including the time and date of the transaction, the user ID and the value
of the transaction. The Horizon records also showed when and by which user ID code
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ludement Approved by the court for handing down, Hamilton & Others v Post Office Ltd
421.
422.
423.
424.
425.
certain stock units had been created. The Horizon evidence indicated that on 16
October 2009 the GG stock unit at West Bromwich had been created by someone using
an electronic ID user code attributed to Ms Hussain.
The five payments to stock unit GG comprised two transfers from BB to GG for a
combined total of £74,000 and three payments to GG from BC to a total value of £9,000.
The transfers into stock unit GG had not been accepted by that stock unit until the
auditors made the necessary adjustments themselves on 13 November 2009. The five
suspicious transfers recorded as having been made to stock unit GG were: (i) £25,500
on 16 October 2009 at 08.36 hours from BB to GG by user ID NHU004; (ii) £48,500
on 17 October 2009 at 14.13 hours from BB to GG by user ID RMA002; (iii) £6,000
on 20 October 2009 at 15.38 hours from BC to GG by user NHU004; (iv) £1,500 on 29
October 2009 at 17.26 hours from BC to GG by user ID NHU004; and (v) £1,500 on 5
November at 16.21 hours from BC to GG by user NHU005.
Records from Horizon showed that the stock unit with the code GG had been created
using an electronic identification user code NHU004 attributed to Ms Hussain at 08.35
hours on 16 October 2009. That was the same user ID recorded as having made
transfers (i), (iii) and (iv). NHU004 was an ID code allocated to Ms Hussain. The user
ID code NHU005, which was used to make the final transfer of £1,500 to GG on 5
November 2009, was also a user ID code used by Ms Hussain.
The other user ID connected to one of the five suspicious transfers was RMA002. This
user ID code was used by another member of staff. That other member of staff said
that she did not make the transfer of £48,500 on 17 October 2009 to stock unit GG. She
said that she had never used, or even knew about, the stock unit until Mrs Dhadda told
her about this aspect of the audit’s findings. She telephoned Ms Hussain in December
2009 to confront her about the use of her user ID (RMA002). When challenged about
it, Ms Hussain admitted responsibility for making the transaction on 17 October using
that ID code, telling her that she had done so because she had lost a cheque and, if she
had not transferred the funds, there would have been a shortage on the accounts.
Whilst the auditors were still at the branch on the morning of 13 November 2009, Ms
Hussain went into the nearby Netto supermarket, where she tried first to obtain cash
and then a cheque from the store manager. He did not provide cash or give her a cheque.
She appeared distressed, telling him that she had mislaid a cheque from the previous
day’s banking and that she wanted a cheque to keep in the office to cover for the cheque
she had lost. Ms Hussain, then, asked somebody else, a warehouse operative, whether
he had a cheque book on him. When he said he had not, she asked him if he could go
home and get one.
Shortly afterwards, Ms Hussain returned to the branch where she snatched a cheque
book from one of her colleagues. That colleague’s cheque book was in her husband’s
name. Ms Hussain used a cheque from this cheque book to write out a cheque for
£85,000 in favour of POL, signing it in the name of the colleague’s husband. She told
her colleague that a customer had come in to purchase an £85,000 growth bond but that
she had been unable to put the cheque in the Horizon system as she had lost the cheque.
Ms Hussain offered her £5,000 to keep quiet about the cheque. The cheque written out
by Ms Hussain and made payable to “PO Ltd” was later found during the audit. The
cheque was dated 2 August 2009. Attached to it was a piece of paper on which was
-723-
426.
427.
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rove for handiy 7 Hamilton & Others v Post Office Ltd
written “chq to put in system - growth bond” and “To put in system - sent application -
growth bond”.
At the time of the audit, Mr Longman, one of the investigators who was similarly
involved in Mr Fell’s case, was alerted by another of his colleagues who was checking
recent transactions at the branch to a transaction for a growth bond which had been
issued on 6 October 2009 for £50,036.82. The transaction had been made by someone
using the ID code NHU004 and was shown to have been settled to cash. Mr Longman
subsequently made contact with the purchaser of the bond, a woman in her eighties,
who explained to him that on 13 August 2009 she withdrew £50,036.82 by cheque from
her West Bromwich Building Society Account made payable to her and went directly
to West Bromwich post office, having already completed a growth bond application.
She told Mr Longman that she had been served by the manageress of the post office
(Ms Hussain), who advised her that there was an error in her application form for the
growth bond and so the manageress completed a new application form on her behalf.
Although she had left the branch with a receipt for the growth bond, she had still not
received her growth bond some weeks later. The customer, therefore, made inquiries
with the Post Office helpline. They referred her to the Bank of Ireland, the bank
operating the growth bond scheme. The Bank of Ireland representative told her that
there was no record of any growth bond transaction in her name. Mrs Green knew that
the cheque which she had cashed had been debited from her account on 16 August
2009. She decided to confront Ms Hussain and did so on 6 October 2009. She also
arranged for the Bank of Ireland representative to telephone the post office to speak to
the manageress during her visit so that he could help her via the telephone whilst she
was there.
A recording of the call which took place between the manageress of the branch and the
Bank of Ireland representative was obtained and a transcript produced. This confirmed
that the customer had visited the post office on 6 October and that a person identified
as Ms Hussain spoke to both her and the Bank of Ireland representative about the
transaction. During the call, Ms Hussain gave the impression that she had dealt
personally with the growth bond transaction. She told the Bank of Ireland
representative that she remembered the transaction in question, that the customer had
made a mistake and so she “filled in the form for the lady and processed it and gave her
a receipt”. She explained that she had reversed the application after the customer had
left the branch as no appropriate identification details had been entered on to the
application document. However, she said that another staff member had processed the
customer’s cheque which had been sent off. She explained that “it made my till go up
£50,000”. She explained that the money had been kept in the safe with the application
form for the growth bond. She agreed to complete the transaction and to give the
customer £70 from POL to compensate for any loss of interest resulting from the failure
to process the bond transaction at an earlier stage.
Mr Longman also obtained earlier transaction records from the Horizon system in
relation to the growth bond sold to the customer. These records, which were obtained
from Fujitsu, indicated that, on 13 August 2009 at 13.09 hours, a growth bond was
entered on the system by a person using the ID code NAYO01. The same user ID was
used to settle the transaction to cash at 15.36 hours. It should have been settled to
cheque as this is how Mrs Green paid for the bond. The transaction was reversed by
user ID NAY001 at 15.37 hours, effectively cancelling the transaction. The user ID
-724-
Judgm
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430.
431.
432.
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fh anding down. Hamilton & Others v Post Office Ltd
code NAY001 was attributed to Nayla Hussain, Ms Hussain’s sister, who also worked
at the post office but who was not a suspect in the subsequent investigation. The
Horizon records exhibited indicated that at 10.16 hours on 14 August 2009 a cheque
for £50,036.82 was entered into Horizon by user ID NHU004 and that cash to the same
value was shown as having been being paid out. The transaction log data showed that
user ID NHU004 entered a growth bond transaction on to Horizon for £50,036.82 at
14.44 hours on 6 October 2009 and settled it to cash.
Mr Longman examined the branch trading accounts for the period 15 July to 19 August
2009. In doing so, he saw that there was no surplus which would have been expected
had there been an additional £50,036.82 in cash at the branch for any innocent reason.
Mr Longman’s conclusion from his analysis of the Horizon evidence was that the
customer’s growth bond had, in effect, been cashed by user ID NHU004 on 14 August
2009.
According to her work colleague, Ms Hussain had previously asked her to bring a
cheque book to the branch on two different occasions in early October, first on 6
October and then on 13 October 2009. On each occasion, Ms Hussain wrote out a
cheque from the work colleague’s husband’s cheque book for £8,000, saying that she
would pay £8,000 in cash to the colleague to enable the cheque to be met. The first
cheque written out on 6 October 2009 was made payable to “Wilding and Co.
Solicitors”. Ms Hussain telephoned her colleague about a week later to say that she
had made an error on the cheque and asking her to bring her cheque book into the post
office again, which she did on 13 October 2009. Ms Hussain told her that her brother,
Shamhir, was purchasing a house and that somebody might query where he had got the
money from. On 13 October 2009, Ms Hussain returned the first cheque to her
colleague and wrote out a second cheque for £8,000, again signed by her in the name
of the colleague’s husband. This cheque was made payable to Shamhir Hussain. The
colleague subsequently received a letter from her bank dated 16 October 2009 returning
the cheque marked “refer to drawer” and explaining that the cheque could not be
honoured due to there being insufficient funds.
Ms Hussain was in the process of buying the leasehold of the branch for £175,000 from
the postmistress, Mrs Dhadda. According to Mrs Dhadda, this purchase had been
planned to be completed on 20 October 2009 but had been delayed because a cheque
for £1,437.50 provided by Ms Hussain to Mrs Dhadda’s solicitors had bounced.
Banking evidence provided by Lloyds TSB showed that cash deposits of £8,500 on 20
October 2009 and of £1,500 on 30 October 2009 were made into the brother’s bank
account. The banking evidence also demonstrated that a deposit of £8,000 made into
the account on 14 October 2009 was shown in the account on 19 October 2009 as an
“unpaid cheque”. This was the deposit of a cheque signed in the name of BS Hayer. A
sum of £8,565.46 was paid to ‘Wildings Solicitors’ on 20 October 2009, who it appears
were acting for Shamhir Hussain in his prospective property purchase.
Ms Hussain was arrested on 13 November 2009. Her brother was arrested on suspicion
of theft on 12 May 2010. In her first interview under caution on 13 November 2009,
held in the presence of her solicitor, Ms Hussain made no comment except when
answering a small number of introductory questions. In her second interview under
caution on 18 December 2009, also in the presence of her solicitor, she provided a
prepared statement denying any wrongdoing, suggesting that her colleague (the person
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whose husband’s cheque book had been used by Ms Hussain) may have been
responsible for the money which was said to be missing and explaining that it was
common practice for staff members to use other people’s username and password. She
said that all her dealings with growth bond transactions were legitimate. She then
declined to answer further questions.
Ms Hussain was charged on indictment (count 1) with theft of £101,617.15 belonging
to POL between I July 2009 and 13 November 2009, although this count was later
amended to reflect the £83,000 linked to stock unit GG before she pleaded guilty. She
was also indicted with money laundering (count 3) in respect of £1,500 paid into her
brother’s bank account on 30 October 2009. Her brother, Shamhir Hussain, was
charged and indicted with money laundering in respect of £8,500 (count 2).
In her defence statement, Ms Hussain denied theft and dishonesty. She denied, in
particular, responsibility for creating stock unit GG and for making any of the transfers
to stock unit GG. She denied using the other staff member’s user ID to make a transfer
or telling her that she had made the transfer. She said that other staff members had
access to both her user [Ds and would use them. She maintained that any deficits might
be due to accounting errors or losses or thefts by other counter staff, She explained that
her monthly trading statements did not reveal any errors or losses; counter staff could
overstate the cash being held in their till or safe when providing a balance and cover up
their theft. Since the monthly trading statements did not require physical checks to be
made of the cash held in tills or safes, she took the balances on trust and failed to pick
up errors or thefts by others. She said that she was in the process of buying the business
from Mrs Dhadda and suggested that she had been set up by others who did not want
her to buy the branch. She denied giving her brother £1,500 or that the sum was the
proceeds of crime committed by her.
On 18 October 2010, Ms Hussain and her brother made their first appearance at West
Bromwich Magistrates’ Court. The case was sent to Wolverhampton Crown Court, At
the Plea and Case Management Hearing at Wolverhampton Crown Court held on 23
December 2010, they were arraigned and entered not guilty pleas. The case was listed
for trial on 20 June 2011. At a mention hearing on 28 January 2011, the defence
indicated that all prosecution witnesses were required to give evidence. On 20 June
2011, the day of trial, Ms Hussain pleaded guilty to count 1, which had been amended
to allege theft of £83,000 from POL. Count 3 was ordered to lie on the file. No
evidence was offered against Shamhir Hussain on Count 2. Sentencing was adjourned
until 6 September 2011.
On 6 September 2011, at Derby Crown Court before by HHJ Waite QC, Ms Hussain
was sentenced to 21 months’ imprisonment. A POL memorandum dated 12 September
2011 indicates that the judge rejected the defendant's assertion that she had only taken
the money in order to fund treatment for her mother in Pakistan but accepted that she
was under pressure from her family and that she did not receive the full benefit of the
money stolen.
On Ms Hussain’s behalf, Mr Millington submits that hers is a case where POL failed to
comply with its disclosure obligations in not revealing the problems which were being
encountered with Horizon in circumstances where Ms Hussain had stated in her defence
statement, at paragraph 1.5, that “any deficits maybe due to accounting errors ...”. Mr
Millington submits that Ms Hussain was thereby putting POL on notice that there was
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ent wv court ding down, Hamilton & Others v Post Office Ltd
an issue regarding the accuracy and reliability of the Horizon data used in her
prosecution.
Mr Millington submits that Ms Hussain’s was as much a case for which Horizon was
essential as others. He highlighted in this respect how Penelope Thomas from Fujitsu
had made a witness statement in Ms Hussain’s case in which she stated, in essentially
standard terms, as follows:
“To the best of my knowledge and belief at all material times the
system was operating properly, or if not, any respect in which it
was not operating properly or was out of operation was not such
as to effect [sic] the information held within it.”
Mr Millington submits that, in such circumstances, it is fanciful to suggest that Ms
Hussain’s was not also a “Horizon case”. He observes in this connection that, had Ms
Hussain maintained her not guilty plea, then Penelope Thomas would have given
evidence and that, in any event, her witness statement essentially guaranteed the
reliability of Horizon data. His submission is that POL, in effect, made Ms Hussain’s
case a “Horizon case” by choosing to serve this witness statement. Accordingly, he
submitted that, in the circumstances, it was not possible for Ms Hussain to have
received a fair trial because a legitimate line of defence had been unfairly and
improperly closed to her, notwithstanding her having raised accounting error as a
possible explanation for what happened. Mr Millington submits, as a result, Ms
Hussain was unable properly to advance the defence which she had raised and was
driven instead to plead guilty when that ought not to have been the case.
We cannot accept these submissions. We agree with Mr Altman that there was a strong
and compelling circumstantial case of theft against Ms Hussain and, more importantly
still for present purposes, that there is not in her case the abuse of process which POL
has conceded in other cases because this was not a case in which the reliability of
Horizon was essential. This is, therefore, neither a category 1 nor a category 2 abuse
of process case.
The position is not changed by the fact that POL served a witness statement from
Penelope Thomas saying what it did. It is, in particular, not changed by the fact that in
that witness statement reference was made to ARQ data which had been requested on
Ms Hussain’s behalf since that does not make it a case in which the reliability of
Horizon data was essential to the case which POL brought against her. What was
essential was the fact that, as Ms Hussain now accepted but which she disputed in her
defence statement, it was she who created the GG stock unit and it was she who made
all 5 transfers. That is what the Horizon record showed, and it was what she (now at
least and anyway by her guilty plea) accepted having done: that the GG stock unit was
created on 16 October 2009 by her using her user ID NHU004, and that the transfers
were made in the space of three weeks between the middle of October and early
November 2009, the first transfer being on 16 October 2009 itself.
Indeed, as Mr Altman observes, whatever was meant by Ms Hussain in paragraph 1.5
of her defence statement concerning deficits being “due to accounting errors”, including
if it amounted to an assertion that Ms Hussain did not accept what the Horizon record
showed, that is clearly no longer Ms Hussain’s position in view of the admissions which
she now makes as regards her creation of the GG stock unit and her being responsible
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the 1 handin; . Hamilton & Others v Post Office Lid
for the transfers which, on her own case, cannot constitute accounting errors. It follows
from this that there cannot conceivably be the abuse of process which has been
suggested because the failure of disclosure of the full and accurate position on Horizon
was not material where the reliability of Horizon data was not essential in the context
of the evidence in the case. Put differently, there can have been no failure of disclosure
concerning Horizon because Ms Hussain accepted (and accepted by her guilty plea)
that she did, after all, create the GG stock unit and make the relevant transfers. The
Horizon records were, in fact and as a result, reliable.
This is sufficient to dispose of this appeal. However, it is worth having in mind other
aspects which we consider underline the lack of merit of Ms Hussain’s appeal, indeed,
which point strongly towards Ms Hussain having created a sophisticated scheme to take
money from the branch where she was working and which she was in the process of
buying at the same time as her brother was trying himself to buy a property. We
propose, in the circumstances and since we have already set out the background in some
detail, to address these matters only briefly. However, it is significant that, during the
audit on 13 November 2009, Ms Hussain sought to explain the shortfall by saying that
she had lost a cheque, not that she had suffered any Horizon-generated loss. It was for
this reason that she wrote a cheque on a work colleague’s cheque book for £85,000,
having told the colleague that a customer had come in to purchase an £85,000 growth
bond but she had been unable to put the customer’s cheque through as she had lost a
cheque. That cheque was later found during the audit. It was dated 2 August 2009
(apparently corrected from September) and, as we have previously noted, attached to it
was a piece of paper on which was written “chq to put in system - growth bond” and
“To put in system - sent application - growth bond”. Later, in December 2009, Ms
Hussain admitted to a colleague responsibility for making the second transfer on 17
October 2009 using her RMA002 user ID, telling her she had done so because she had
lost a cheque and if she had not transferred the funds, there would have been a shortage
in the accounts. As Mr Altman puts it, this was, therefore, not an unexplained but an
explained shortfall.
Furthermore, the suggestion made on Ms Hussain’s behalf in her grounds of appeal that
she created the phantom GG stock unit to cover up a Horizon-generated shortfall,
specifically, as it is put, that “she created a balancing account i.e., she created stock unit
GG as a balancing account to address the losses which were showing on Horizon” (an
assertion which was not made in her defence statement) is undermined by her dealings
with the growth bond for £50,036.82 in August 2009 since those dealings suggest that
she was not then, or indeed later when she created the GG stock unit and making the
transfers, covering for any Horizon-generated shortfall.
Nor is what Ms Hussain actually did as regards the growth bond consistent with her
seeking to cover up a Horizon-generated shortfall. As previously explained, she
conducted the bond transaction on 13 August 2009, before reversing it out of the system
two hours and ten minutes later. The following day, she entered a cheque for
£50,036.82 into Horizon, and cash to the same value was shown as paid out. These
were physical acts with, as Mr Altman submits, no explanation. The effect of entering
the cheque on to the system was to increase the stock value by £50,000. Since as far as
Horizon was concerned cash had been paid out, the cash value would have decreased
by £50,000 in the accounts. If Ms Hussain did not remove the cash, when she came to
balance Horizon, her accounts would show a £50,000 surplus that would need
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red t for ing de Hamilton & Others v Post Office Ltd
explanation. It would need to be declared as a positive discrepancy. However, the
records show that there was no cash surplus in the accounts at the relevant time, As Mr
Altman explains, Ms Hussain’s explanation to the Bank of Ireland representative as to
what happened, in particular that using the stock unit to process the cheque “made my
till go up £50,000” and so the “money” was put in the safe with the application form
for the growth bond where it remained until the transaction was again put through
Horizon on 6 October 2009 when it was shown as having been settled to cash,
demonstrates that the growth bond cannot explain any shortfall that required covering
up and certainly not one of £83,000. Taken together with Ms Hussain’s requests to
work colleagues for cheques, the returned payment into her brother’s account of the
cheque for £8,000, as Mr Altman submits, this amounts to strong circumstantial
evidence supporting Ms Hussain’s guilt.
446. We are quite satisfied, in such circumstances, not only that the reliability of Horizon
evidence was not essential for the case which POL brought against Ms Hussain, but
furthermore that her conviction is clearly safe. Again, we reject the submission that,
were we to decide that this is not a category 1 abuse case, we could nonetheless decide
that it is a category 2 abuse case. It follows that Ms Hussain’s appeal is also dismissed.
Conclusions:
447. For those reasons:
i) The appeals of Wendy Cousins, Stanley Fell and Neelam Hussain fail and are
dismissed;
ii) The appeals of Josephine Hamilton, Hughie Thomas, Allison Henderson, Alison
Hall, Gail Ward, Julian Wilson (deceased), Jacqueline McDonald, Tracy
Felstead, Janet Skinner, Scott Darlington, Seema Misra, Della Robinson,
Khayyam Ishaq, David Hedges, Peter Holmes (deceased), Rubina Shaheen,
Damien Owen, Mohammed Rasul, Wendy Buffrey, Kashmir Gill, Barry Capon,
Vijay Parekh, Lynette Hutchings, Dawn O’Connell (deceased), Carl Page, Lisa
Brennan, William Graham, Siobhan Sayer, Tim Burgess, Pauline Thomson,
Nicholas Clark, Margery Williams, Tahir Mahmood, Ian Warren, David Yates,
Harjinder Butoy, Gillian Howard, David Blakey and Pamela Lock are allowed
on both Grounds. Accordingly, all of their respective convictions are quashed.
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R. v Early (John), 2002 WL 1446239 (2002)
For educational use only
R v John Early, Narip Singh Bajwa, Royston Gary Vickers,
Richard Alexander Dowell, Rahul Patel, Nilam Patel, Colin
Pearcy, Madhusudan Maganbhai Patel
a} Positive/Neutral Judi
‘onsidecation
Court
Court of Appeal (Criminal Division)
Judgment Date
26 uly 2002
Case No:200100174 $3
200103761 $3
200200397 $3
200202543 $3
200105358 X2
200105359 X2
200201484 X2
200103094 Y4
Court of Appeal (Criminal Division)
Neutral Citation No: [2002] EWCA Crim 1904, 2002 WL 1446239
Before: The Vice President of the Court of Appeal Criminal Division ( Lord Justice Rose ), Mr Justice Colman and Mr
Justice Roderick Evans
Friday 26th July, 2002
Representation
Mr C Bridge & Mr D A Stein appeared for Early.
Mr PL Guest & Mr A M Jenkins appeared for Bajwa.
Mr B Reece appeared for Vickers.
Mr A Lakha & Miss § Cohen appeared for Dowell.
Mr NJM Lucas & Mr M Rainsford appeared for the Crown.
Mr J Carter-Manning QC & Miss P Mcatasney appeared for R Patel & N Patel.
Mr D Batcup appeared for Pearcy.
Mr J Gompertz QC & Mr Ashley-Norman appeared for the Crown.
Mr A Arlidge QC & Mr K Galvin appeared for M M Patel.
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R. v Early (John), 2002 WL 1446239 (2002)
Mr A Glass QC & Mr TVM Kark appeared for the Crown.
JUDGMENT
The Vice President:
Introduction
1.. These 8 appellants, with leave of the single judge or this court, appeal against their convictions. They appeared, at
different times, at three different Crown Courts, before three different Crown Court Judges. They all pleaded guilty to an
offence or offences involving fraud on the revenue by virtue of the improper diversion to the UK market, from a bonded
warehouse, London City Bond (LCB), of large quantities of duty suspended alcohol, ostensibly intended for other countries
in the European Community. For over two years, before Customs & Excise (C&E) put an end to matters in April 1998, some
30 or 40 separate scams were being conducted through LCB. These resulted in a loss to the revenue of £300 million. The
consequential impact of unlawfully cheap alcohol on the domestic market was great. Tension developed in C & E between
those whose primary concern was lost revenue and those whose primary concern was investigating and obtaining evidence of
fraud. Codenames were given to the separate investigations. Operations Fallover, Fusion and Fajita led to these three groups
of defendants.
2.. Their appeals have been heard together because, common to all of them, are the contentions that, first, they pleaded
guilty on the false assumption that full and proper disclosure had been made to them by the prosecution and, secondly,
non-disclosure of the true roles of the brothers Alfred and Edward Allington at LCB, plus, in the cases of M M Patel and
Nilam Patel, lying evidence by prosecution witnesses to judges, on the voir dire, precluded them from making an effective
application to stay proceedings as an abuse of process.
History of the litigation and the relevant facts
3... The first appellant dealt with was M M Patel (Operation Fallover). At Kingston Crown Court on 18th February 1999,
after a hearing over many days in which HH Judge Hucker, having held PII hearings, rejected submissions that to proceed
with his trial would amount to an abuse of process, the appellant changed his plea to guilty to two of the four counts in the
indictment (counts 1 and 3) which alleged conspiracy to cheat the public revenue. The other two counts were ordered to lie
on the file on the usual terms. On 19th March 1999, he was sentenced to 30 months imprisonment on each count concurrently
and disqualified for 5 years under s2 of the Company Directors Disqualification Act 1986 . On 27th April 2000, a
confiscation order was made against him in the sum of £600,000, with 4 years imprisonment, consecutively, in default of
payment within 6 months. Three co-accused, § Bhandal, Khan and P Patel, were all sentenced to 30 months imprisonment,
each having changed his plea to guilty to one similar count in the indictment. Following the decision of this court in Villiers
CACD transcript 9th November 2001, the single judge granted M M Patel leave to appeal against conviction on grounds
relating to that case and the necessary extension of time was granted.
4.. The case against M M Patel was that he and Bhandal had provided a safe haven and onward sale for goods obtained from
LCB with falsified documents, particularly Accompanying Administrative Documents (AADs), part of which was returned
to, LCB bearing a forged stamp purporting to show the goods had reached a foreign destination. The counts related to such
activity through a company called Richview Ventures Ltd in count 1 and Culvane Ltd in count 3. M M Patel was the sole
director of Multi-Rush. He ran a cash and carry business and had two warehouses in Southeast London as well as a number
of retail outlets. Bhandal had a cash and carry business in Hanwell. On 15th December 1996, a lorry was seen by customs
officers to go from Bhandal’s premises to Multi-Rush and back again. On 19th December, following a raid on all the cash
and carry premises, duty-suspended goods diverted from LCB were found at each. At Multi-Rush, goods identified as having
come via Richview and Culvane were found. In interview, M M Patel claimed that his stock came from Avtar Singh and had
been bought in good faith. He produced invoices to support this which the crown alleged were fraudulent.
5.. The defence submitted that the indictment should be stayed as an abuse of process because removal of the goods from
LCB and the evasion of duty had been provoked, encouraged or facilitated by C & E officers working for the National
Intelligence Service (NIS) in collusion with the manager of LCB, Alfred Allington. It was said that the offences would not
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R. v Early (John), 2002 WL 1446239 (2002)
have occurred if that encouragement and facilitation had not taken place. Evidence was heard on the voir dire from Lesley
Blackburn, who was in charge of a team of customs officers, Mr Snuggs the manager of the NIS Team, Alfred Allington and
others. It was submitted by the defence that there could be no fair trial, or it would be unfair to try the defendant, because his
possession of duty- suspended goods called for an explanation which he could not, in the absence of further disclosure,
Properly provide. NIS had encouraged LCB to facilitate the fraud by giving Allington a nod and a wink, according him
special status. It was reasonable to conclude NIS had failed to disclose all relevant material. C & E involvement went beyond
passive investigation. At the PII hearings, it was said that Edward Allington was a registered informant, but Alfred Allington
was merely a trade source who did not become a participating informant until March 1998. The judge ruled against the
defence submission. He found that Alfred Allington’s co-operation was not given because he had been positively encouraged
to set up despatches to “dodgy” destinations: he simply passed on information of a trade nature which he was contractually
bound to do. The conduct of customs was a thousand miles from being unworthy, shameful or an affront to public
conscience. There was no sufficient direct link between LCB and M M Patel and no evidence that he was tricked by C & E or
anyone at LCB to commit fraud. There was no evidence that Allington was induced or pressured into taking part in unlawful
activity. Thereafter, as we have said, the appellant changed his plea. Subsequently, the defence learnt that Allington had made
a statement to the effect that he had not told the truth on the voir dire. His portrayal as a trade source of information was not a
true reflection of the situation. He had dealt with Bernie Small of NIS, who had repeatedly removed unopened documents
from LCB. Allington had no idea what happened to them. He referred to some of the benefits he had received. He had told
lies approved by C & E. At a meeting prior to M M Patel’s trial he was told what line the defence would take to show that he
was an informer, but he was to say that he was a trade source. In effect he was to perjure himself. C & E knowingly allowed
the duty fraud to take place because they wanted to catch people. He was encouraged by NIS to open accounts for companies
which he knew were taking part in the scam. He was told to keep his relationship with Small and his department secret. It is
admitted for the purposes of this appeal that, by 13th August 1996, Alfred Allington was a participating informant with an
implied indemnity against liability for excise duty on goods diverted from LCB. He was not registered as an informant. He
had no controller and not all his dealings with Small were recorded. It was incorrect to describe him to the trial judge as a
trade source. He lied to the trial judge in saying that he could not know if there had been a fraud if a stamped AAD was
returned and that he had had no discussion with Small about an indemnity. It is further admitted that Small was a frequent
visitor to LCB and often took away returned AADs. C & E actively encouraged LCB to allow goods to leave without duty
being paid and knew the Allingtons were facilitating that fraud. In 1996 LCB informed C & E, as a matter of course, when a
new account was opened.
6.. The appellants Rahul Patel, (Rahul) Nilam Patel (Nilam) and Pearcy (Operation Fusion) appeared at Southwark Crown
Court before HH Judge Mota Singh. On 41 May 1999 Rahul and Pearcy pleaded guilty, on re-arraignment at the start of their
trial, to conspiracy to cheat the public revenue. After an adverse ruling on submissions by the defence based on abuse of
process, Nilam pleaded guilty on 22nd July 1999. On 21 * December 1999 Rahul was sentenced to 5 years imprisonment,
subsequently reduced by the Court of Appeal Criminal Division to 4 years. Nilam was place on probation for 12 months and
Pearcy was sentenced to 2 years imprisonment and confiscation orders made. Co-accused called Dhillon and Sihota who
pleaded guilty were sentenced to 3 years imprisonment and a confiscation order was made. Other co-accused called Basram,
Montague, and Bothwell were each ordered to carry out community service. Five other defendants were each found not guilty
of conspiracy to cheat the public revenue on the judge’s direction at the close of the prosecution case Alfred Allington gave
evidence for the prosecution which contained, as the Court of Appeal Criminal Division subsequently found in Villiers .
Paragraph 26, four false answers, as customs personnel must have known: namely, that he was not aC & E informant, he was
not aware goods leaving LCB were being fraudulently diverted, he did not allow the frauds to run with C & E connivance
and was not party to any deals with C & E and he did not know he would not be called on to pay the lost duty. Their
applications for leave to appeal against conviction having been referred to the Full Court by the Registrar, this court granted
Rahul, Nilam and Pearcy leave to appeal on the ground that, before they entered their pleas, the Crown had failed to make
mater disclosure of matters relating to LCB. As in the case of M M Patel, duty-suspend goods, ostensibly destined for France
or Spain, left LCB with false AADs and were dispersed in the United Kingdom. The transactions were carried out through
front companies purchased for the purpose. Rahul and Nilam, who were husband and wife and took instructions from a man
called Bhandari, were concerned with purchasing, finance, storage and distribution of the alcohol. The haulier they used
principally was Reynolds Transport Ltd of which Pearcy was a director. On interview after his arrest, Rahul denied knowing
Pearcy and Reynolds Transport and said he was unemployed, despite considerable evidence about his cash and lavish
spending. He entered a written basis of plea admitting only onward distribution of the goods, not their purchase, and
involvement in no more than half a million pounds of duty evasion: the Crown did not accept either of these points. Nilam
pleaded guilty on the basis that she had merely assisted her husband in a subordinate role under his guidance and instructions:
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R. v Early (John), 2002 WL 1446239 (2002)
the Crown accepted this.
7.. The remaining four appellants (Operation Fajita) appeared before Judge Maher at Wood Green Crown Court. On Ist
March 1999, Bajwa pleaded guilty to four counts of being knowingly concerned in the fraudulent evasion of duty payable on
goods and, subsequently, to a further count. Six other counts were ordered to lie on the file. On 11th May 1999, Vickers
pleaded guilty, on re-arraignment during his trial, to two counts of being knowingly concerned in fraudulently evading duty
chargeable on goods. On 24th May 1999, Early pleaded guilty, on re-arraignment, to a single count of conspiracy to cheat.
On 27th May 1999, Dowell pleaded guilty on re-arraignment during trial to a single count of conspiracy to cheat. On 4th
June, 1999 Vickers was sentenced to 18 months imprisonment, consecutively to a sentence of 10 years imprisonment being
served for an unrelated offence. On 30th July 1999, Bajwa was sentenced to 2 years imprisonment, concurrently on each
count, but consecutively to a term of 6 years imprisonment for another conspiracy to cheat in relation to a bonded warehouse
in Ipswich. On 22nd September 2000, Early was sentenced to 3 years imprisonment, consecutively to other unrelated terms
of imprisonment and Dowell was ordered to undertake 100 hours of community service. Bajwa and Early appeal against
conviction by leave of the single judge, following the court’s decision in Villiers . Applications for leave to appeal by Vickers
and Dowell having been referred to the Full Court, this court granted leave. Renewed applications for leave to appeal against
sentence by Bajwa and Vickers were refused by the Full Court on 12th January 200 There were other co-accused, three of
whom were acquitted on the direction of the trial judge.
8.. The loss to the exchequer from the frauds with which these four appellants we involved exceeded £35 million. Bajwa
was a principal organiser, a step away from the centre. Early and Vickers organised transport. Dowell was a lorry driver. As
with the other conspiracies, goods accompanied by false AADs were removed from LCB: There were many other documents,
including instruction faxes ftom Bajwa and consignment notes, in relation to the movement of goods. Four bogus companies
were set up —Amco Global, Buckhurst M & M, Forthright Trading and JD Trading. Each company bought large quantities
of duty-suspended spirits from LCB, ostensibly to go to a bond in Spain. The goods were diverted to the home market, There
was a good deal of observation evidence by customs officers in relation to the various loads. Primary disclosure under s3 of
the Criminal Procedure and Investigations Act 19 was given on 6th October 1998. On 28th February 2000, Judge Maher
ordered further disclosure in relation to Alfred Allington’s role. The following day, the Crown offered no evidence against
the other defendants. Judge Maher refused to allow Early and Dowell to change their pleas: no reasons for that decision have
ever been given. The Court of Appeal in Villiers knew of Judge Maher’s ruling ordering further disclosure and dealt with it at
paragraph 28 of the judgment.
9.. In Villiers this court held, in paragraphs 13 and 14, that Edward Allington had been a participating informant whose
status was not revealed to the judge at the trials Villiers and others in 1999 and 2000 as it should have been; that Alfred
Allington, was not registered and had no controller for his handler Small; and no proper records were kept of his dealings
with customers or C & E: these breaches of clear guidelines should have been disclosed to the judge, to enable him to reach
an informed conclusion as to whether Alfred Allington was a participating informant. The court concluded that C & E
actively encouraged personnel at LCB to allow goods to leave the warehouse without duty being paid and that the Allington
brothers were facilitating the fraud. Those findings have been treated as binding by all the parties to the present appeals.
Indeed a different constitution of this court, in which Tuckey LJ presided, so directed on 15th January 2002. As will emerge,
there was less disclosed material before the CACD in Villiers than before us. For example, there was disclosure of two ring
binders of further documents about 2 weeks before the hearing of these appeals, another ring binder during the week before
and yet another on the day the appeals opened. On the fourth and last day of the hearing of this appeal, a further bundle of
documents was disclosed by Mr Glass QC, for the prosecution in relation to M M Patel.
The court’s approach
10.. Judges can only make decisions and counsel can only act and advise on the basis of the information with which they are
provided. The integrity of our system of criminal trial depends on judges being able to rely on what they are told by counsel
and on counsel being able to rely on what they are told by each other. This is particularly crucial in relation to disclosure and
Pil hearings. Accordingly, Mr Gompertz QC, rightly, accepted that when defence counsel advised Rahul, Nilam and Pearcy
as to plea, they were entitled to assume that full and proper disclosure had already been made. He also rightly accepted that a
defendant who pleaded guilty at an early stage should not, if adequate disclosure had not by then been made, be in a worse
position than a defendant who, as the consequence of an argument to stay proceedings as an abuse, benefited from further
orders for disclosure culminating in the abandonment of proceedings against him. Furthermore, in our judgment, if, in the
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course of a PII hearing or an abuse argument, whether on the voir dire or otherwise, prosecution witnesses lie in evidence to
the judge, it is to be expected that, if the judge knows of this, or this court subsequently learns of it, an extremely serious
view will be taken. It is likely that the prosecution case will be regarded as tainted beyond redemption, however strong the
evidence against the defendant may otherwise be. Such an approach is consistent with the view expressed by this court, in
Edwards [1996] 2 CAR 345 @ 350F where, in a different context, Beldam LJ referred to the suspicion of perjury starting to
infect the evidence and permeate other similar cases in which the witnesses are involved. We approach the question of safety
of these convictions, following pleas of guilty, in accordance with Mullen [1999] 2 Cr App R 143 as approved in Togher &
others [2001] 1 Cr App R 457 , namely a conviction is generally unsafe if a defendant has been denied a fair trial, We bear in
mind, in particular, three observations by Lord Woolf CJ in Togher . First, at paragraph 30, “if it would be right to stop a
Prosecution on the basis that it was an abuse of process, this court would be most unlikely to conclude that, if there was a
conviction despite this fact, the conviction should not be set aside”. Secondly, at paragraph 33, “The circumstances where it
can be said that the proceedings constitute an abuse of process are closely confined. It has to be a situation where it would be
inconsistent with the due administration of justice to allow the pleas of guilty to stand”. Thirdly, at paragraph 59, freely
entered pleas of guilty will not be interfered with by this court unless the prosecution’s misconduct is of a category which
justifies this. A plea of guilty is binding unless the defendant was ignorant of evidence going to innocence or guilt. Ignorance
of material which goes merely to credibility of a prosecution witness does not justify reopening a plea of guilty.
11... Against this background, we turn to the submissions made and our conclusions in relation to each of these appeals.
MM Patel
12.. For M M Patel, Mr Arlidge QC submitted that the prosecution’s failure to disclose Alfred Allington’s role as a
participating informant, the failure to register him, the failure to provide him with a controller and the failure to maintain
Proper records of meetings between Alfred Allington and Small, were all in clear breach of the Home Office Guidelines in
relation to informants. As those breaches were not disclosed to the trial judge the abuse hearing before Judge Hucker was
necessarily unfair. He exercised his discretion on the basis of false evidence, so it was necessarily flawed. Mr Arlidge relied
on Mullen . In the alternative, he submitted that the appellant was denied the Opportunity to argue the abuse hearing fully and
therefore the proceedings were unfair. Furthermore, Mr Arlidge pointed out that, at the PII hearing on 27 ® January 1999, the
Judge was told by counsel for the Crown (transcript 14B) that they were seeking to conceal that Alfred Allington had acted as
a confidential informant in other cases without, of course, disclosing to the judge that he was a participating informant in this
case. At a further PII hearing on Sth February 1999, Mr Payne of NIS (transcript 5C) confirmed leading counsel’s question
that Alfred Allington was a trade source and drew a distinction between his status and that of Edward Allington, who was a
registered confidential informant. Evidence was also given that this state of affairs had prevailed from early 1998: whereas,
as is now admitted, both brothers were facilitating the fraud, as participating informants, from August 1996; Snuggs, on 30 ©
October 1996, was writing a letter described by the Court of Appeal in Villiers “as a masterpiece of obfuscation”. and Mr
Pratt of “Romford Excise Office was writing an undated memorandum to a senior officer referring to Alfred Allington and
inquiring “whether this trader should still be encouraged to take on suspect customers and despatch good under bond to
dodgy destinations”. This memorandum having been seen by Judge Hucker on the February 1999, he expressed concem, at a
further PIT hearing, but was again assured (transcript 11-13) that, from the beginning of 1998, Alfred Allington had been a
trade source and was still so registered. On that occasion, Snuggs gave evidence (transcript 44-45) that there was no
collusion or conspiracy between NIS and LCB to create, facilitate, or in any way improperly foster business which would not
otherwise have occurred. That was in accordance with the memorandum written by Snuggs on 9th January 1999 to Mrs
Dunn, C & E solicitor in charge of Fallover Fusion and Fajita. At paragraph 19 of Villiers CACD concluded that use of the
phrase “trade source” was “distinctly misleading” and in paragraph 22 the court concluded that customs actively encouraged
senior personnel at LCB to leave the warehouse without duty being paid and knew that the Alington brothers were facilitating
that fraud. Small also gave evidence on the PII hearing on 8th February denying (transcript 53F) any encouragement to LCB
to trade or not trade with any particular company Mrs Blackburn, the senior C & E person with control duties in relation to
LCB, also gave evidence on the same date. The judge ruled that it was not necessary to disclose to the defence Pratt’s
memorandum to which we have referred. On 11th February however, Mr Glass QC accepted that it should be disclosed. On
12th February (transcript 10) the judge expressed the view that there was no evidence to support the view of Mr Sallon QC,
then appearing for M M Patel, that the Allingtons were involved in “some deep and devious plot with the customs to finger
his and other defendants”: “they have all thoroughly got the wrong end of the stick”. On 15th February at a Pll hearing,
Alfred Allington gave evidence that he had been doing no more than what he felt was required as an honest trader.
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13.. In his abuse submissions on 17th February, Mr Sallon QC submitted that there was overwhelming evidence that Alfred
Allington was a participating informant and that, throughout 1996, NIS. knowingly permitted LCB to continue trading with
suspect customers. He also submitted that the defendant was precluded from discharging the burden of proving the
provenance of the goods. However in his ruling (transcript 68H) the judge concluded that Alfred Allington’s co-operation
with C & E and NIS was not the result of positive encouragement to set up despatches to dodgy destinations. “He was simply
left to continue to pass information of a trade nature to customs that he was in effect contractually bound to do as part of his
bonded warehouse licence —no more no less”.
14.. Mr Arlidge submitted that the disclosure failures were particularly serious because, on the facts as now known, both the
Allington brothers were, at the material time, participating informants, not just generally but in relation to this case, as the
name of Richview was given to NIS by Alfred Allington (his evidence on 15th February 1998 at 28E). The trial judge was
positively misled into accepting that Alfred’s role was merely that of a trade source. The defence was seriously handicapped
by the absence of information now known to this court. Mr Arlidge accepted that the excise fraud involving this appellant
was not at a very high level of criminality compared with the serious terrorist offences in Mullen . But the non-disclosure by
Cand E and the cover- up by dishonest evidence to conceal Alfred Allington’s true status was so unworthy or shameful as to
amount to an affront to public justice. He relied on a passage in Mullen at 157E; “the need to encourage voluntary disclosure
before trial of material and information in the hands of the prosecution relevant to the defence is a further matter of public
policy to which it is also necessary to attach great weight. Omission to make such disclosure clearly is a matter to be taken
into account on the exercise of this court’s discretion following a conviction”.
15.. For the Crown, Mr Glass QC stressed that it was a very short investigation which led to the arrest of this appellant and
the real issue in the case was the state of the appellant’s mind when receiving duty-suspended goods; if he knew that they
were duty-suspended the jury could conclude that he was playing the part of receiver in the conspiracy. It was no part of the
case for the prosecution or the appellant that he had any connection with LCB: this differentiated his case from the
defendants in Villiers who all had direct dealings with LCB. The prosecution did not accept that the Allingtons were
participating informants in this appellant’s case. The appellant was a very experienced businessman who knew what the
going price must have been for the alcohol which he bought. He knew who he was dealing with and the price at which he
could make a profit, taking into account whether duty had been paid. It would, therefore, be glaringly obvious to him that he
was paying too low a price. Mr Glass accepted that the judge was misled by lies that Alfred Allington was merely a trade
source, But, he submitted, if the judge had known the truth he still would not have stayed the proceedings or concluded that a
fair trial was not possible. All that the judge was effectively deprived of was “the icing on the cake” namely that Allington
had an indemnity and knew what was happening. There could have been a fair trial because all the issues had been canvassed
and Alfred Allington’s credit could have been put under the spotlight in cross-examination. The point that there were many
duty-suspended goods on the market and all other points would have been available to the defence. If there had been full
disclosure to the judge it would have been fair to try the appellant. All that the Allingtons had done was give dishonest people
the opportunity to open accounts. Judge Hucker could not have come to any different conclusion than he did. Mr Glass
distinguished Mullen, ex parte Bennett. 98 Cr App R 114 and Schlesinger and Dunk CACD transcript 28th July 1994 on the
basis that the first two cases dealt with getting a defendant to court in an unlawful manner in breach of international law and
human rights and Schlesinger dealt with preventing a fair trial by putting defence witnesses in baulk. He relied on paragraph
59 in Toher in that the defendant, in pleading guilty, had not been deprived of material directly) bearing on his guilt or
innocence. He had pleaded guilty to two counts because he realised he was in danger of conviction on all four. Alfred
Allington would have been called by the prosecution exclusively to produce documents. The appellant's pleas should stand.
16.. In his reply, Mr Arlidge submitted that the central question is not what the judge would have decided if he knew
everything but whether the appellant had been deprived, of the opportunity to argue abuse properly, with full knowledge at
his disposal. On the material now available, it is arguable that Alfred Allington was a participating informant in relation to
Fallover. It is not for this court to decide whether an agent provocateur argument would have succeeded before the judge. Ifa
false market is created, this may tempt honest traders and others down the line who may not have committed offences had
they not been enticed. In interview, the appellant had said to C & E if you want to do business honestly you can’t do the
business today”. The appellant had pleaded guilty in ignorance of the fact that lies had been told to the judge.
Conclusions re M M Patel
17.. In our judgment the material now before this court shows (i ) lies were told to Judge Hucker by prosecution witnesses in
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the course of PI I hearings and on the voir dire (ii) those lies were told by reason of a deliberate decision on the part of C & E
to conceal from the judge the true status of Alfred Allington and the real nature of the relationship between C & E and LCB;
(iii) the judge, in giving his rulings as to disclosure and as to whether there should be a stay for abuse, was materially mislead
by those lies in reaching conclusions, now known to be wrong, that Alfred Allington was merely acting as a trade source and
that there was no collusion between LCB and C & E to facilitate the frauds, including that in which this appellant was said to
be involved; (iv) had the judge known the true position it may be that his decision in refusing a stay would have been
different; (v) the appellant pleaded guilty only after the abuse submission had failed.
18. It is a matter of crucial importance to the administration of justice that prosecuting authorities make full relevant
disclosure prior to trial and that prosecuting authorities should not be encouraged to make inadequate disclosure with a view
to defendants pleading guilty. We agree with the court in Villiers (paragraph 40) that it is not for a judge to piece together
stray pieces of information to decide whether someone is a participating informant. When inadequate disclosure is sought to
be supported by dishonest prosecution evidence to a trial judge, this court is unlikely to be slow to set aside pleas of guilty
following such events, however strong the prosecution case might appear to be. Lord Woolf CJ in paragraph 59 in Togher
enunciated general principles with which we respectfully agree: he was not dealing with, and it seems unlikely that he had in
mind, a case in which non-disclosure, accompanied by perjury, preceded a guilty plea.
19.. Accordingly, M M Patel’s appeal is allowed. His conviction, not-withstanding his plea of guilty, is unsafe and is
quashed, as is the confiscation order made against him. In the ordinary way we would have ordered a re-trial so that a trial
judge, on the basis of honest evidence, could have had the opportunity of deciding about disclosure and about whether or not
a stay should be granted. However, as the appellant has already served his sentence and it is nearly 6 years since the offence
is alleged to have taken place, we make no such order, as it would not be in the interests of justice to do so.
Rahul. Nilam and Pearcy
20.. In the Fusion appeal, Mr Carter-Manning QC, on behalf of Rahul and Nilam, relies on the admissions made in M M
Patel’s appeal which we have already identified in relation to the roles of the Allington brothers, the relationship between
LCB and C & E and the activities of Small. In addition, admissions are made as to the findings of fact by the Court of Appeal
in Villiers and that there was a failure prior, during and beyond the end of the trial, to disclose to the defence the true status of
the Allington brothers. It is also admitted that much of the further disclosure during the voir dire in relation to these
appellants should have been disclosed prior to the trial. It is also admitted that Alfred Allington’s evidence, served before the
trial, producing AADs gave a misleading impression, which, it is said, is particularly important in relation to Rahul. It is
further admitted that the AADs purporting to have been stamped in Spain had “Spain” rather than “Espana” stamped on
them. It is further admitted that the role of the Allington brothers as participating informants should have been made known.
to the judge prior to or during the course of the voir dire and that evidence of the relationship between NIS and LCB,
Particularly from Small, was “at the very least incomplete or misleading”. There are further admissions that Rahul pleaded
guilty, on a basis not accepted by the prosecution but set out in writing, and that a Newton hearing, which al! counsel and the
court had anticipated, never took place. The basis of plea included that Rahul was not involved at any stage with the purchase
of goods from bonded warehouses. It is admitted that Nilam pleaded guilty on the basis that she assisted her husband in the
operation of the fraud playing an active but subordinate role. Finally, it is admitted that, in the voir dire, allegations of failure
to disclose, entrapment, as to the informant-status of the Allington brothers and as to direct involvement of NIS with LCB
were raised.
21.. Mr Carter-Manning submitted that, in the light of these matters, the exercise of discretion by the judge in refusing a stay
was fatally flawed, particularly in the light of the false evidence given to him by Alfred Allington as identified in paragraph
26 of the CACD judgment in Villiers . He submitted that, although Ex parte Bennett and Mullen dealt with defects prior to
trial and the present case is concerned with the trial process itself, it is just as fundamental for the courts to prevent dishonest
evidence at trial as grossly improper prosecution conduct before trial. He referred to ex parte Bennett No 2 [19935] I Cr App
R 147 and the observation of Lord Justice Mann at 150B that “a propriety of procedure in regard to the liberty of any who are
brought within our jurisdiction is transcendent”. Although, in a statement made on 30th October 2000 and in evidence to
which we have already referred, Small claimed never to have actively encouraged Alfred Allington to take on suspect
accounts, the statement of Janice Wanstall dated 11th October 2000, to which CACD referred in Villiers at paragraph 20,
referred to a meeting in September 1996 at which Small said he had actively encouraged Alfred Allington to take on suspect
accounts. Furthermore, the findings in Villiers that “customs personnel knew that one or other of the Allington brothers
20°31 Thoms:
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would themselves allow the fraud to occur by signing AADs for goods purportedly going to destinations which they knew to
be false” (paragraph 17) and “customs did indeed actively encourage senior personne! at LCB to allow goods to leave the
warehouse without duty being paid and ... customs knew that the Allington brothers were facilitating that fraud” (paragraph
22) must, had he known about them, have made a difference to Judge Mota Singh’s ruling that no stay should be ordered. Mr
Carter-Manning pointed out that nobody was convicted at Southwark Crown Court, because the judge ruled that there was no
case to answer, as continuity in relation to the goods had not been established because of the inadequacy of the seals on the
lorries.
22,. There was no suggestion that Mr Gompertz QC had misled the defence. But defence counsel’s advice as to plea was on
the basis that what prosecution counsel said was correct, whereas Rahul’ s plea was clearly not based on true information.
The memorandum of 2nd February 1999 from Maureen Dunn, the solicitor responsible for the cases against all these
appellants, to her senior John Flood (to which we refer further at paragraph 38 below) demonstrated that it was clearly known
to C & E lawyers in February 1999 that Alfred Allington was not a trade source. Yet full relevant disclosure in relation to this
had not been made by the time Rahul pleaded guilty three months later, or during the PII hearings now disclosed, or during,
the abuse of process submissions on the voir dire, or at any time before Nilam pleaded guilty on 22nd July 1999. On the
contrary, during the PII hearings Alfred Allington was described by prosecution counsel as “virtually a full blown informer”
in the context of seeking to continue having him described to the defence as a trade source. Further, on 24th June 1999, on
the voir dire, Small gave evidence to Judge Mota Singh that Alfred Allington was a trade source. It is to be noted that, as Mr
Batcup for Pearcy was to point out, on 26th July 1996 Small had written to Snuggs referring to LCB as “a valuable source of
intelligence” and, referring to the relationship having begun several years ago, sought “that consideration be given to
protecting this relationship by indemnifying the bond against losses of excise duty. The intelligence from this source had
always been A I grade and continues to increase in quantity”. The operations listed in that note as being dependent on
intelligence from LCB included Edenderry, which became Fusion.
23.._ Mr Carter-Manning submitted that the checks and balances involved when advising a client as to plea require the utmost
good faith at every stage, so far as the prosecution are concerned. The common law duty applicable in relation to Fusion
required reference to the judge if the prosecution had any doubt about disclosure and all involved had a continuing duty of
review. (see Keene 99 Cr App R I ). It is fundamental that a judge should be told the true position: Judge Mota Singh was
not, even three months after the Dunn memorandum of 2nd February 1999. What happened on the voir dire was as relevant
to Rahul as to Nilam. Although, in his basis of plea, Rahul denied a connection with LCB, the prosecution did not accept this,
and in opening the case on sentence on 20th December 1999 (transcript 29D), referred to Sihota (the service of whose
statement on the defence was the immediate cause of Rahul’s plea) saying that Rahul took him to LCB and there introduced
him to Pearson, an LCB employee. In sentencing Rahul to $ years, submitted Mr Carter-Manning, Judge Mota Singh appears
to have accepted that he was close to LCB. Mr Carter- Manning submitted that Rahul’ s position is indistinguishable from
that of Sewell in the Villiers appeal: he pleaded guilty but the court quashed his conviction as he was a henchman of the head
conspirator whose conviction was being quashed. The court took the view, in the light of the information then disclosed, that
Sewell would have material to support an application to stay for an abuse of process and should have the opportunity of so
doing, (paragraph 57f the judgment). Mr Carter-Manning submitted that it would be a licence to the prosecution to run amok,
at least up to the end of a voir » if it were open to them to rely on a plea entered at a time of inadequate disclosure
subsequently supported by false evidence.
24.. As to Nilam, Mr Carter-Manning submitted that Judge Mota Singh’s ruling on the abuse argument would, inevitably,
have been affected by full knowledge. He was told lies by Alfred Allington (see Villiers paragraph 26) and expressly found
(21 st July 1999 transcript page 20 A~C) that proper disclosure had been made; that the defence complaints would not have
any significant impact on the ability to challenge the prosecution case or the integrity of prosecution witnesses and (transcript
34); that the Allingtons did not participate in the fraud; and that there was no evidence that the Patels were entrapped,
encouraged, incited or enticed to commit an offence which otherwise they would not have committed. Mr Carter-Manning
submitted that the present is as bad an example of prosecution misbehaviour before and during a trial as it is possible to see.
C & E officers, in breach of their own guidelines, kept no proper records, lost notes and lied to the trial judge; and the C & E
solicitors’ department, 3 months before trial, made a decision not to disclose these matters. In addition the judge was misled
at the PII hearings.
25.. On behalf of Pearcy, Mr Batcup adopted the submissions made by Mr Carter- Manning. He stressed that trust between
bench and bar and bar and bar is essential to the integrity of the system of criminal justice. Counsel must be able to give
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informed advice to encourage early, proper, pleas. It would be absurd if a defendant who pleads early is in a worse position
than someone who adopts a policy of wait and see. Pearcy’s role was secondary to that of Rahul, who recruited him. On
proper disclosure there would have been arguments in relation to entrapment and agent provocateur. Mr Batcup pointed out
that the voir dire before Judge Mota Singh finished in July 1999, but it was another 2 months before Pearcy and the Patels
were sentenced. Had proper disclosure been made, Pearcy could have applied to vacate his plea, but he was denied this
Opportunity.
26.. For the Crown, Mr Gompertz QC adopted Mr Glass’s submissions in the Fallover appeal. He pointed out that, whereas
M M Patel and Nilam pleaded guilty after the failure of an abuse of process argument, Rahul. and Pearcy had both pleaded
guilty at the outset. He submitted that their pleas were not founded on the failure of the Crown to give disclosure in relation
to matters bearing upon their guilt or innocence: he relied on paragraph 59 in Togher . The failures on the part of the
Prosecution did not amount to misconduct justifying either a stay or interfering with freely-entered, unequivocal, pleas of
guilty, by legally advised defendants fit to plead who knew what they were doing. They should not be permitted to resile
from their pleas unless there had been a breach of process of the gravity arising in Mullen and ex parte Bennett . He
distinguished the courts approach in Villiers to Sewell on the basis that the court there did not have the passage in paragraph
59 in Togher in mind. Rahul pleaded guilty because Sihota had made a statement and was likely to give evidence against
him, demonstrating considerable contact between Rahul and LCB. Mr Gompertz accepted, however, that there is no
distinction properly to be drawn between those pleading guilty before and after a voir dire. He also accepted, that, as the
purpose of calling Alfred Allington was to prove the AADs, if the jury disbelieved his evidence about these the Crown would
have been in great difficulty and its case would have failed. He also accepted that a defendant is entitled to assume that there
has been full disclosure when he pleads. As to Nilam, he said he was on weaker ground. He conceded, that the judge might
have ruled differently in relation to a stay had he known the full facts. But the judge in his ruling, on 21 * July 1999
(transcript pages 32-34), would still have been entitled to conclude, as he did, that Nilam was not entrapped, because there
was no nexus between Nilam and LCB. As to the PII hearing, he conceded that the judge was not told that Alfred Allington
was a participating informant. But when Alfred Allington gave evidence at the PII hearing on 15th June 1999 he expressed
concern about threats to his family if he was accused of being an informer.
27.. As to Pearcy, Mr Gompertz submitted that he had pleaded guilty three weeks before there was any mention of an abuse
of process hearing. The principal evidence against him was his own record of transactions in relation to un-customed goods
taken from LCB to other places. There was no other link between him and LCB and no contact between him and Edward
Allington. Persons involved with removal of goods voluntarily applied themselves to the fraud.
28.. In reply, Mr Batcup submitted that, if there had been proper disclosure in the Fallover trial in February 1999, there
would have been no Fusion trial in May. Mr Batcup stressed that Pearcy had had an honest haulage business and might well
have been able to run an entrapment defence if there had been proper disclosure.
Conclusions as to Rahul. Nilam and Pearcy
29.. In paragraph 26 of their judgment in . to which we have already referred, the CACD concluded that, with the
knowledge of customs personnel, Alfred Allington lied to Judge Mota Singh in four respects. Furthermore, on the basis of
disclosure now made, Small’s evidence to Judge Mota Singh was also dishonest in the manner identified above in paragraph
22. Had he not been misled by those lies, Judge Mota Singh’s decisions in relation to disclosure and stay of proceedings
might have been different. Accordingly, Nilam was precluded from properly advancing an abuse argument and pleaded
guilty. Mr Gompertz concedes that Rahul and Pearcy should be in no worse position. We repeat, in relation to this appeal,
what we said in paragraph 18 above. It follows that the appeals of Rahul, Nilam and Pearcy are allowed. Their convictions
are quashed. A re-trial is not sought in relation to Nilam. As Rahul and Pearcy have like M M Patel, both served their
sentences and as their offences were alleged to have been committed more than 4 years ago, we do not think it in the interest
of justice that they should be re-tried.
BAJWA, Early, Dowell & Vickers
30.. We tum to the Fajita appeals.
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31.. For Bajwa, Mr Guest made the following submissions.
32.. When, on 1 * March 1999, Bajwa pleaded guilty, there had been a total failure to disclose to his advisers a very
substantial body of unused material and other documents which were directly material t an abuse of process submission and
to challenging the authenticity of vital prosecution evidence.
33. The substance of the undisclosed material was that Alfred Allington was a participating informant who was operating
LCB as what was, in effect, a honey trap, with the knowledge and encouragement of C & E. He was not registered, nor did he
have a handler or controller, as required by the Guidelines. Nor were proper records kept of his contacts with C & E. Fu her,
in the course of the witness statement made on 23 February 1998, Alfred Allington failed to disclose that he was a
participating informant and that the AADs, referred t in that statement as being produced by him from the records of LCB,
were, at least in part, documents which had, in truth, been supplied as exhibits to the statement by S. It was further submitted
that it was never disclosed that AADs would be routinely removed from LCB by or on the instructions of Small of NIS, very
soon after they c e back from the apparent consignee to LCB and often without Alfred Allington knowing which documents
were being removed.
34.. Tt was submitted that the on-disclosure of the intervention by NIS into the documentation and of the physical control
which NIS exercised over that documentation deprived the appellant of the opportunity of challenging, if not destroying, a
vital part of the prosecution evidence, namely proof that AADs were stamped with a bogus warehouse stamp from Spain or
France. In essence, because of the way in which NIS had con rolled the documentation and subsequently supplied the AADs
exhibited to his statement, and having regard to the encouragement by NIS of LCB in co-operation with customers who set
out to defraud the bond, it might have been possible to demonstrate t at Alfred Allington was unable to prove that the AADs
bore the bogus stamps when they were received by LCB and that the stamp might have been added by NIS. If the
prosecution’s evidence could be neutralised in that way, its entire case would, or at least might, collapse.
35.. As already indicated, in the course of February 1999, Alfred Allington had given evidence at the trial of M M Patel
before HH Judge Hucker. In the course of the hearing the voir dire on the abuse of process and at the PII applications at the
start of that trial, Alfted Allington had given untrue evidence on two matters, as found by this court in Villiers, namely (1)
that if an AAD bearing a stamp were returned to LCB he would not know if there had been a fraud and (2) that he had no
discussion with Small about an indemnity from C & E for LCB. This evidence clearly masked the function of Alfred
Allington as a participating informant. At the time when Bajwa pleaded guilty neither he nor his advisers had any knowledge
of the falsity of this evidence.
36.. In addition to these undisclosed facts, there was, up to 1 March 1999, a very extensive and concerted exercise by NIS
and those advising it the aim of which was to hide from the defence the participation of Alfred Allington and LCB in the
fraudulent disposal of the goods.
37.. Thus, by the time when primary disclosure pursuant to section 3 of the Criminal Proceedings and Investigations Act
1996 was completed on 6 October 1998, there had been no disclosure that Edward Allington was a registered informer or that
Small was his handler.
38.. The appellant further relies on the fact that the non-disclosure of the conduct of the Allingtons and LCB was in the face
of Bajwa’ s express allegations, first made at the remand proceedings in March 1998, and repeated at the transfer proceedings
on 11 August 1998, that the directors of LCB were working in collusion with C & E to facilitate the diversion of bonded
goods. There followed, in October 1998, an independent report by a senior customs investigating officer in which he
concluded that the allegations were “spurious, unfounded, diversionary tactics” on the part of Bajwa. However, on 1
February 1999 there took place a conference with Prosecution counsel, Mr Noel Lucas and Mr Ashley Norman, attended by,
amongst others, on behalf of the C & E Maureen Dunn, and Mr Tony Bond of NIS. The notes of the meeting record that
Bajwa was said to have withdrawn his allegation, presumably of collusion between the NIS and Alfred Allington, and further
disclose that those present were extremely concemed as to the consequences for the pending prosecutions of disclosure of the
true position of Alfred Allington. Various options were discussed, including proceeding with the Prosecutions in the hope
that the information did not break. It is submitted, and we infer, that the information under consideration was that he was at
least closely involved with those suspected of fraud if not a participant himself The fact that on 26 January Mrs Dunn had
written to Mr Tom Kark who was about to open the prosecution case in the trial at Kingston informing him that Alfred’s role
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R. v Early (John), 2002 WL 1446239 (2002)
had moved from being merely a trade source to being an informant suggests that the lawyers concerned with the prosecutions
were at least worried about the precise nature of Allington’s involvement. The letter dated 2 February 1999 written by Mrs
Dunn to Mr Flood, already referred to, clearly demonstrated the lawyers’ perception of the risk that Allington would
“apparently become a guilty party to the frauds”. Whatever doubts counsel and solicitors entertained, there would have been
no doubt in the mind of NIS officers, such as Small and Bond, that Alfred Allington was a participating informant.
39.. Further, in the course of February 1998, NIS appeared to have procured a meeting between Bajwa and Pearson of LCB.
It is suggested on behalf of Bajwa that their meeting was intended to create evidence, for the purposes of the prosecution in
the Fajita trial, that the man known only as Jag, who was believed to be in direct contact with LCB, was Bajwa. This was a
further example of NIS concocting evidence which should have been disclosed.
40.. Mr Guest argued that the failure to disclose these facts to counsel and his client, prior to the giving of advice on plea
and to the taking of the decision to plead guilty, unlawfully deprived Bajwa of information directly relevant to his decision
whether to plead guilty. Had he been given the information which ought to have been disclosed, he might well have been
advised that there was an arguable defence based on entrapment and abuse of process and that the prosecution case could be
seriously undermined by its inability to prove that the AADs were stamped with bogus stamps when they were returned into
LCB’s hands. Bajwa was therefore effectively deprived of the opportunity of, at the very least, putting the prosecution to
proof of its case.
41.. Although the conviction of Bajwa occurred on 1 March when he pleaded guilty, he was not sentenced until 30 July
1999. In the meantime, on 4 July 1999, the first Fajita trial commenced before HHJ Maher at Wood Green. There was a PII
hearing almost at the outset. Small gave evidence and both he and Bond were present during the hearing and so lent support
to what counsel told the judge. In the course of it, the judge was not told that Alfred Allington had acted as a participating
informant. Indeed he was presented by counsel (Mr Lucas) and by Small in evidence as an enthusiastic bonded
warehouseman and trade source, in contrast to Edward Allington who was disclosed as a registered informant. The Judge was
never told that, at Alfred Allington’s request, NIS had, at least impliedly, given LCB an indemnity against liability for goods
removed without the payment of duty. Nor was the judge informed of the information given by Maureen Dunn to Mr Kark or
of what Mr Kark told HHJ Hucker in January 1999 or of the contents of Mrs Dunn’s report of 2 February 1999 to Mr Flood.
The judge ordered disclosure of the payment of £100,000 to Alfred Allington by a customer and its payment to C & E some
two years later, but declined to order any further disclosure.
42.. Judge Maher and the defendants in this trial were not aware of these lies told to Judge Mota Singh, as found by this
court in Villiers .
43.. It is argued on behalf of Mr Bajwa that, had there been full disclosure to the judge at the PII hearing, or prior to
sentence, he would have been bound to order further disclosure to the defendants, included Bajwa, even though the latter had
already pleaded. Had that been done, Bajwa could have mounted an abuse of process application, which might have led the
judge to order his plea to be vacated before sentence. Accordingly, the unfairness of the proceedings continued up to
sentence. By the time when yet further disclosure had been made to the judge in February 2000, which caused him to order
full disclosure that Alfred Allington was a participating informant, he was functus officio as regards Bajwa. Thereupon, the
second Fajita trial at once collapsed when the prosecution offered no evidence against the remaining defendants. Had that
order been made earlier, Bajwa might not yet have been sentenced and his application to vacate his plea might have
succeeded.
44.. For Early, Mr Bridge, while relying on the continuing non-disclosure and the untruthful evidence of Alfred Allington,
Pearson and Small, drew attention to the following additional matters.
45.. On 17 December 1998 Early, at his request, had a meeting with NIS officers Bond and Muldoon. Amongst various
allegations made by Early was that Alfred Allington was involved with a man called Boparan in the Fajita fraud, He also
claimed to have in his possession original documents, understood by Bond to be AADS, copies of which Allington had
provided to Boparan.
46.. Early had not pleaded guilty until 24 May 1999, after HHJ Maher had given his decision on further disclosure following
the PII hearing on 4 and 5 May. At that hearing, the judge was given the impression that Alfred Allington’s evidence, as
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R. v Early (John), 2002 WL 1446239 (2002)
contained in his statement relating to vehicle movements and exhibiting the AADs, might well be uncontroversial. Mr Bridge
drew the attention of this Court to the fact that the statement was taken by Small and to the evidence given by Small at that
hearing to the effect that Allington was volunteering information as to when he was “with certain people” and as to all those
who opened an account at LCB, in other words, everything about his day to day business, including drawing to the attention
of Small the appearance of false stamps on AADs. It is submitted that there was nothing to suggest to the judge that
Allington, much less C & E, were encouraging or facilitating the frauds.
47.. Mr Bridge further drew attention to the fact that, although some AADs were signed by Edward Allington, a registered
informant, no statement was taken from Edward and it was decided to prove the AADs by calling Alfred, because,
apparently, as a mere trade source, he was regarded as a less vulnerable witness than Edward.
48.. The impact of the involvement of the Allingtons with the fraud on the teliability of the prosecution evidence was further
exemplified by the production, by Early, of an AAD signed by Edward Allington, but with no foreign warehouse stamp. The
AAD in question was identical to one exhibited to Alfred Allington’s statement, except that the one exhibited did bear a
stamp, but was not signed by anybody. That raised a potentially serious question as to the circumstances in which the stamp
was applied and whether it might have been applied by NIS. A report, dated 9 July 1999, of an investigation conducted by Mr
Martin, a senior C & E investigating officer concluded that these documents, being in their original format, were evidence of
the diversion fraud. Although this might well be so, it left unanswered the question how Alfred Allington came to exhibit to
his statement a stamped but unsigned AAD.
49.. Following the judge’s decision on the PII hearing, advice was given to Early as to his plea. In the event he pleaded
guilty. He did so without information which should have been disclosed as to the involvement of the Allingtons with the
fraud and the connivance of NIS in that involvement. Had that information been available when that advice was given, there
would have had to be taken into consideration the possibility W of an abuse of process defence based on entrapment and the
possibility that the prosecution evidence of fraud by reference to the stamps on the ADs could be seriously challenged. We
interpose that, if, following the decision on the PII hearing before HHJ Maher, it had been disclosed to the defence that the
judge had been materially misled by what he was told about the role of Alfred Allington, there would have been available a
powerful independent abuse of process argument.
50.. In March 2000, before sentencing Early, the judge, having conducted a further PII hearing, after there had been
disclosure to him of the involvement of Alfred Allington as a participating informant, invited submissions from those who
had pleaded guilty as to whether their pleas should be vacated. He declined to vacate any of those pleas, but gave no reasons
for that decision at the time. In all the circumstances, he should have done so on the basis of the material then before him.
Instead, after the prosecution had reacted to his ruling on disclosure at the PII hearing in February 2000 by offering no
evidence against those co-defendants who had pleaded not guilty and they having been acquitted by direction, he went on to
sentence Early on 22 September 2000. Accordingly, the incomplete disclosure which continued up to that time placed Early
at an unfair disadvantage at the sentencing hearing.
51.. On behalf of Dowell, Mr Lakha, adopting submissions advanced for Bajwa and Early, further submitted as follows.
52.. At the PII hearing in May 1999 the judge was seriously misled not only by the evidence of Small but also by that of
Bond, who confirmed in answer to the judge that everything, even of the most peripheral interest or relevance, had been
disclosed. This reflected a concerted exercise by NIS to conceal the extent of Alfred Allington’s involvement, there having
been discussion as early as September 1996 as to the problems for the various pending prosecutions arising from his
involvement with those who were illegally removing goods from LCB.
53.. Mr Lakha also drew attention to the culture of secrecy relating to LCB, exemplified by an internal NIS email of 4 April
1996 relating to the concern raised by Alfred Allington as to the liability of LCB for duty on goods fraudulently abstracted
and indicating that LCB should not be charged duty for which, as a bonded warehouse, they would otherwise be liable. it was
also apparent from that document that Allington had knowingly allowed goods to be illegally removed from LCB without
payment of duty. The message ends “this note should not be discussed outside the NIS”.
54.. Amongst the undisclosed material was a document consisting of a NIS report on operation Chamfer which stated that,
with the knowledge and encouragement of NIS officers, Allington had relaxed certain requirements for seals on lorries in
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R. v Early (John), 2002 WL 1446239 (2002)
respect of removals from the warehouse. This proved fatal to the prosecution case before Judge Mota Singh and was
potentially relevant to the defence of Dowell, in as much as it went to encouragement of the fraud by C & E and, therefore, to
a possible abuse of process argument. This was potentially important to Dowell, against whom the case was based on
observation of the movement of a single load driven by him.
55.. Dowell, having originally pleaded not guilty on 18 December 1998, changed his plea to guilty on 27 May 1999,
following the PI decision. He did so in the light of the incomplete information then available. He also relied on assurances
from the prosecution that the basis of plea proposed by him would be acceptable, namely that it related only to count 1,
conspiracy to cheat the Revenue, on one occasion on 6/7 February 1998, when he was party to the diversion, on the
instructions of another, of a load of alcoholic beverages from LCB and their delivery to a warehouse in Charlton for which he
was paid £60. He had become a party to the agreement to cheat when he attended at LCB and became aware that the goods
were destined for Spain but nevertheless continued to follow the instructions to deliver in Charlton. Two counts of being
knowingly concerned in fraudulently evading duty chargeable on goods were not proceeded with and, on 22 September 2000,
he received a sentence of 100 hours’ community service. His decision to plead took into account advice from counsel on the
basis of the incomplete disclosure received up to that time. Subsequently, following the order by HHJ Maher for disclosure of
Alfred Allington’s true role in February 2000, application was made on Dowell’s behalf for his plea to be vacated, but on 21
July 2000 this was refused. In essence, therefore, his plea of guilty had been made in reliance on incomplete information, due
to substantial non-compliance by the prosecution with its disclosure duties made worse by untruthful evidence given by the
prosecution witnesses at the PII hearing.
56.. On behalf of Vickers, Mr Reece with commendable brevity, adopted the submissions on behalf of the other appellants.
57.. On behalf of the prosecution, Mr Noel Lucas told this Court that, had he appreciated at any time before 24 February
2000 that Alfred Allington had been a participating informant, he would have at once disclosed this to HHJ Maher as he did
immediately he saw the NIS intemal email dated 4 April 1996 (see paragraph 53 above). He told the judge that neither he,
nor Mrs Dunn, nor Mr Bond were previously aware of that document ot other documents in the file which had just been
provided to them by Mr Connolly of NIS in the course of the PIT hearing in which he had been called as a witness.
58.. Mr Lucas submitted that the legal team had previously understood that Alfred Allington had not been a participating
informant, but merely a trade source —a bonded warehouseman who was volunteering information beyond his strict duty.
The advice which had been given in the conference with Mrs Dunn on 2 February 1999 —either to disclose Allington’s true
position, or to refer it to the judge or to avoid calling him — had not been given because it was relevant to any live issue in
the case. We were referred to a note dated 7 March 1999, written by counsel for C & E, by way of post mortem in relation to
the collapse of the Fajita trial, in which the view was expressed that the judge had become increasingly concermed that the
true nature of the relationship between Allington and NIS ought then to be disclosed because it went to the quality of
Allington’s evidence: the defendants had all withdrawn the admissions which they had previously been prepared to make as
to the LCB evidence about movements of goods.
59.. Mr Lucas further relied on the fact that there had been disclosure to the judge of documents and information from which
it would have been clear to him that Allington was running LCB as a means of acquiring information for NIS and what the
source and nature of the information was. He emphasised that there were no less than 44 linked prosecutions in respect of
these LCB frauds. The information and evidence that emerged in all of them were too complicated for any one person to keep
track of for the purposes of disclosure. The fact that disclosure was not made earlier did not therefore indicate any concerted
exercise in deception.
60.. Mr Lucas accepted that, overall, the one matter that should have been disclosed was that Allington was a participating
informant. That, however, was not material to any issue in the case, as demonstrated, for example, by Bajwa’ s defence
statement in which, for the purposes of the sentencing hearing, he put forward what he claimed to be the extent of his
participation in the fraud.
61.. The fact that Allington’s role was that of a participating informant was no more relevant to any issue involving Early,
Dowell and Vickers. In reality, the misrepresentation of his status went no further than to his credibility.
62.. Even without Allington’s evidence it would have been possible to prove, by less direct means, that the AADs were false
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R. v Early (John), 2002 WL 1446239 (2002)
documents. However, Allington’s evidence was a stronger method of proof and Mr Lucas conceded that, without it, the
prosecution case would be “listing a little bit”.
63.. Mr Lucas took this court through the transcript of the PII hearing on 4/5 May 1999 in order to demonstrate what
information was given to the judge and further to show that the judge was prepared to regard Allington as, in substance, an
informant but could not see why that affected the case against any of the defendants, having regard to undisputed evidence of
the fraud.
64.. Mr Lucas further referred us to the judge’s reasons, given in private in July 2001, for deciding in May 1999 and 2000
not to order disclosure of the documents and information sought to be withheld to those who had already pleaded but
remained unsentenced. The substance of his reasoning was that, while accepting that Allington was an informant who had
kept C & E fully informed at all stages and, there was, perhaps, some mileage in the argument that C & E had permitted the
fraud to operate, the basis of the pleas of all those defendants was that they had no direct contact with C & E or LCB before
deciding to embark on their dishonest activities. Although there was some concem inside C & E about the methods
employed, he detected no dishonesty. There was no entrapment of anyone and, even if there were, it was not a defence in
English law. Thus, if all that material had been in the hands of the defence, it would not have enabled an abuse of process
argument to be mounted with any reasonable prospect of success.
65.. We interpose that the judge took a different view on the Prospects of an abuse of process argument succeeding when, on
28 February 2000, he ordered full disclosure of Allington’s position to all those defendants who had not yet pleaded. On the
materials then before him, he concluded that an abuse of process argument based on the involvement of LCB and C & E with
the frauds was not so fanciful a submission that disclosure should be withheld. The fact that, when he came to consider
disclosure to those defendants who had pleaded, he arrived at a different conclusion on abuse of process on substantially the
same evidence suggests that he must have been influenced by the interposition of the guilty pleas. However, that should, in
the circumstances of the present case, have been an extraneous factor when considering the effect of this procedural
impropriety by the prosecution.
66.. Mr Lucas further submitted that Villiers was a very different case from the present: the matter was there opened to the
jury on a false basis and the defendants were running defences not raised in the present case.
67.. As to the argument advanced by Early relating to the duplicate AADs, Mr Lucas referred us to the July 1999 Report by
Mr Martin of C & E in which it was suggested that the duplications were properly issued “in order to obtain satisfactory
evidence of receipt in accordance with the relevant EEC Directive”.
68.. In reply, Mr Guest for Bajwa submitted that his client, who had pleaded guilty on arraignment, should be in no worse
Position than a defendant who had not so pleaded until after a PII ruling against disclosure. He relied on this Court’s
approach to the defendant Sewell who had already pleaded in Villiers.
69.. He further submitted that HHJ Maher’s decision in July 2001 was reached without the benefit of argument by the
defence. Further, there had, since then, been significant further disclosure. He also emphasised the evidential significance of
the fact, not disclosed to the defendants, that the AADs were being removed by NIS from LCB and therefore were under the
control of the C & E almost from the outset. Yet Allington was the only means of proving the falsity of the stamps.
70.. Mr Bridge for Early, in his reply, drew attention to the duty of the C & E, as laid down in Regulation 23 of the Excise
Warehousing Regulations 1988 , to return to the warehouseman within a reasonable time records taken away for inspection.
This had not been done with large numbers of AADs removed at once and then retained by NIS.
71... Mr Lakha for Dowell, emphasised that, in the course of the May 1999 PII hearing, the judge was misled, in as much as
the true significance of the defects in record-keeping as to contacts with the Allingtons was not brought home to him.
72.. Further, he drew attention to the apparent inconsistency between the views of the judge at the February 2000 PII hearing
and those expressed in his judgment, given in private in July 2001, refusing further disclosure to those who had pleaded, to
which we have already referred,
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R. v Early (John), 2002 WL 1446239 (2002)
73.._ Mr Reece for Vickers, in reply, pointed out that the judge had never been informed of the extent of the loss of duty
attributable to transactions at LCB being monitored by NIS, namely £310 million. He also drew attention to the fact that
Vickers had pleaded guilty 10 days after Bajwa, perhaps influenced by the course taken by a defendant in closer contact with
LCB.
Conclusions as to Bajwa. Early. Dowell & Vickers
74.. With regard to Bajwa, as we have already indicated, a defendant who pleads guilty at an early stage should not, if
adequate disclosure has not been made by then, be in any worse position than a defendant who, as the consequence of an
argument to stay proceedings as an abuse, has the benefit of further disclosure which leads to the abandonment of the
proceedings against him. The disclosure of Alfred Allington’s involvement as a participating informant and of the extent of
the control exercised by NIS over the AADs was directly relevant to the strength of the prosecution evidence of fraud based
on the false AADs and it was further relevant to a possible abuse of Process argument. So also was the fact that Allington
had, in February 1999, given false and misleading evidence at the PII hearing before HHJ Hucker in the Fallover
proceedings. At the time when Bajwa was in the course of taking his decision to plead, none of those matters had been
disclosed. His decision was therefore taken on the basis of information which was materially deficient by reason of the
prosecution’s failure to comply with its duty of disclosure.
75.. Vickers pleaded guilty 10 days after Bajwa, and is therefore in a similar position.
76.. For these reasons, the convictions of Bajwa and Vickers are unsafe and are quashed.
77.. Early and Dowell both pleaded guilty in May 1999, following the judge’s decision against disclosure of information and
documents at the PII hearing on 4/5 May 1999. At that hearing the judge was seriously misled as to the role of Alfred
Allington by reason of the untruthful evidence of Bernie Small and by what he was told, quite innocently, by counsel on the
basis of inaccurate instructions. This was therefore a seriously tainted hearing. If the judge had been given the full
information to which he was entitled, it is, in the view of this court, most improbable that he would have taken any other
course than to order the same full disclosure to the defendants as he ordered following the hearing in February 2000, at which
he was given a much fuller picture of the involvement of LCB with the fraud and of C & E with LCB., Had he taken that
course, it is probable that the prosecution would have dropped the case against Early and Dowell, as was done in March 2000
in relation to other defendants. Accordingly, the prosecution’s failure to comply with its duties of disclosure and its abuse of
the PII hearing in May 1999 have given rise to the conviction of Early and Dowell. Their convictions are accordingly unsafe
and are quashed,
78.. As to whether there should be a retrial of Bajwa, although he has not yet completed the total consecutive sentences (2
years consecutive to 6 years for other offences), the period of time which has elapsed since the Fajita events is now already
over four years, Further, serious evidential and professional problems may well arise on a retrial in view of the plea of guilty
previously entered by this appellant. Similar considerations apply in relation to Vickers who is still serving a sentence of 10
years to which the 18 months sentence he received for the Fajita offences was consecutive. It is not, in our view, in the
interests of justice that Bajwa or Vickers should be retried. Early has now served his sentence and is on licence. It is not
appropriate that he should be retried. No retrial is sought in the case of Dowell.
THE VICE PRESIDENT: For the reasons given in the judgment handed down, these appeals are all allowed and the
convictions quashed.
(Short Adjournment)
MR GALVIN: On behalf of Patel, I am sorry I was not fast enough on my feet. He was not in receipt of legal aid for his trial
or the confiscation hearing. IN ALL the circumstances I ask and say it is appropriate that his costs be paid out of central
funds.
THE VICE PRESIDENT: Are there any other applications?
We make an order for his costs to be paid out of central.
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R. v Early (Jolin), 2002 WL 1446239 (2002)
MR GOUDIE: L ask for a similar application on behalf Mr Peacy. He started off paying privately for his representation in the
‘Crown Court, and received legal aid at a later stage. Also before these proceedings, he initially paid privately for the papers
to be reviewed prior to advice written for legal aid in respect of these matters. I ask for his costs for the Crown Court and this
matter be assessed for taxation from Central Funds.
THE VICE PRESIDENT: So be it.
MR STEIN: On behalf of Early, he had been in receipt of legal aid. However, I understand your learned judges have to
decide whether he should have to make a contribution in relation to that.
THE VICE PRESIDENT: You can assume if we make no order, no order is being made.
MR STEIN: I ask for travelling expenses etcetera to be paid out of Central Funds.
THE VICE PRESIDENT: Why?
MR STEIN: He has attended Court on a number of occasions.
THE VICE PRESIDENT: Which Court?
MR STEIN: The Court of Appeal.
THE VICE PRESIDENT: Why?
MR STEIN: It has been of assistance to have our client here, obviously assisted in relation to conferences and also he is
entitled, in my submission, to attend to see how your learned judges decide.
THE VICE PRESIDENT: He does have a right to attend, that is perfectly true.
MR STEIN: My Lord, given the outcome of this case, I would suggest that subject to the normal taxation, he should be
entitled to any reasonable expenses he has incurred.
THE VICE PRESIDENT: So be it.
MR PAUL: I make an application on behalf of Rahul and Nilam Patel.
THE VICE PRESIDENT: Such an application in relation to what, their travelling expenses?
MR PAUL: Yes. Applications both with regards to costs for their legal aid taxed from Central Funds and also a defendant’s
costs order. My Lord, the first application relates to the defendants’ legal expenses both in the Magistrates’ Court where they
were not legally aided and in the Court of Appeal until at late stage it was granted.
THE VICE PRESIDENT: Speaking entirely for myself I can see no reason whatever why they should have costs in relation
to the Magistrates’ Courts.
MR PAUL: At that stage legal aid had not be granted.
THE VICE PRESIDENT: That is a different point. The fact of the matter is that at the Magistrates’ Court, as distinct from the
situation at the Crown Court, where, inadequate disclosure had been made, the position of the defendants was somewhat
different. This is not a case in which we have given a declaration of innocence in relation to any of these appellants, we have
not made an order for a retrial. But, matters proceeding in the Magistrates’ Court — speaking entirely for myself — and
subject to consultation with other members of the Court are not an attractive basis for an order for costs.
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R. v Early (John), 2002 WL 1446239 (2002)
MR PAUL: So be it. My Lord, yes, with regard to the costs of the appeal prior to legal aid being granted I hope your
Lordship would not have such a view.
THE VICE PRESIDENT: You may have your costs out of central funds.
MR PAUL: With regard to the defendant’s cost, I make an application for defendant’s costs in the Crown Court. The travel
and expenses.
THE VICE PRESIDENT: So be it.
MR JENKINS: On behalf of Mr Bajwa there is an application. There was a short period of time throughout the Crown Court
Proceedings Mr Bajwa did not have the benefit of legal aid and I ask for the costs in relation to that period to be taxed out of
Central Funds.
THE VICE PRESIDENT: In relation to the Crown Court proceedings — yes.
MR JENKINS: I am grateful.
THE VICE PRESIDENT: I take it there are no more piecemeal applications.
Crown copyright
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Neutral Citation Number: [2019] EWCA Crim 1059
No: 201803461/B3
IN THE COURT OF APPEAL
CRIMINAL DIVISION
Royal Courts of Justice
Strand
London, WC2A 2LL
Thursday, 31 January 2019
Before:
PRESIDENT OF THE QUEEN'S BENCH DIVISION
‘SIR BRIAN LEVESO)
MR JUSTICE NICOL
SIR BRIAN KEITH
REGINA
v
NOEL JONES
Computer Aided Transcript of the Stenograph Notes of Epiq Europe Ltd 165 Fleet
Street, London EC4A 2DY Tel No: 020 7404 1400 Email: rej@epiqglobal.co.uk
(Official Shorthand Writers to the Court)
This transcript is Crown Copyright. It may not be reproduced in whole or in part
other than in accordance with relevant licence or with the express consent of the
Authority. All rights are reserved.
WARNING: Reporting restrictions may apply to the contents transcribed in this
document, particularly if the case concerned a sexual offence or involved a child.
Reporting restrictions prohibit the publication of the applicable information to the
public or any section of the public, in writing, in a broadcast or by means of the
internet, including social media. Anyone who receives a copy of this transcript is
responsible in law for making sure that applicable restrictions are not breached A
person who breaches a reporting restriction is liable to a fine and/or imprisonment.
For guidance on whether reporting restrictions apply, and to what information, ask at
the court office or take legal advice.
Mr S Killeen & Ms Yates appeared on behalf of the Applicant
Mr M Heywood QC appeared on behalf of the Crown
JUDGMENT
(Approved)
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1.
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PRESIDENT OF THE QUEEN'S BENCH DIVISION: This applicant, who is now 61
years of age, pleaded guilty to manslaughter. He was sentenced to a term of 12 years’
imprisonment which he served. Now, nearly 37 years on, he seeks leave, out of time,
to appeal against his conviction. The Registrar has referred both the application for an
extension of time and the application for leave to the Full Court.
The background is unusual and as follows. Janet Commins was born on 9 June 1960.
On 7 January 1976, shortly after 7.00 pm, she left her home in Flint to meet friends at
the local swimming baths. She left a note for her parents, as she often did, to say that
she would be back at around 8.30 pm. She saw her friends at the baths and was
sighted close to her home in the company of two teenage boys at about 8.10. At some
time between 8.15 and 8.45 she called to see a friend who lived a few doors away from
her in her own street. She was told they were not in. After 9.00 pm, when the baths
were closed, Janet's parents became increasingly concerned and at 11.00 pm they
reported her missing. On the following morning children playing on rough ground
adjacent to Gwyneth Primary School found Janet's body concealed in bushes.
A police investigation was commenced. From the state of her clothing and her limbs it
appeared that she had been dragged by the legs to where her body was concealed. Her
upper clothing was normally fastened and in place but the waistband and zip of her
jeans were unfastened. Her knickers were missing. Both her shoes were missing.
They were found, each, in a separate thicket, close to the pathway from where her body
had been concealed. The pathway was the usual route that she and her friends took to
go to and from the swimming baths.
Dr Ruben Woodcock, a forensic pathologist, attended the scene and later conducted a
postmortem. He identified bruising under the chin, consistent with light pressure with
a hand, linear abrasions, consistent with clothing being held tightly in an act of
asphyxia, a 1-inch wound to the scalp consistent with a blow from a blunt object, a
recent tear half an inch long from the back of the vulvar orifice extending towards the
anus consistent with forceful penile penetration and a tear in the anus, again 1 inch long
consistent with forceful penile penetration. There were other minor injuries consistent
with sexual assault. The conclusion reached by the pathologist was that the vaginal
and anal injuries occurred when Janet's circulatory system was already shutting down
and the scalp injury might have been occasioned as her body was dragged to the
deposition site. Swabs were taken during the postmortem and a swab from a semen
stain on the back of the jeans worn by Janet.
Dr Woodcock considered that death took place suddenly and unexpectedly from
pressure on the neck due to vasovagal stimulation in the course of a sexual attack
involving rape and buggery.
A large scale murder investigation was launched and all men in the area aged between
17 and 22 were asked to account for their movements between 6.00 pm on 7 January
and 8.00 am on 8 January. Any that could not were brought to the police station for
questioning.
SMITH BERNAL WORDWAVE
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11.
Stephen Hough had just turned 17 and was one of those who were interviewed. He
admitted that he had been masturbating in the back of a car that he kept on a bus yard in
Earl Street on the far side of Flint from his home address and he had been out siphoning
petrol. His account was then accepted. He was charged with theft and appeared
before the magistrates where he was fined. At the time he was living barely half a mile
from the home address of the victim; his grandparents lived a few doors away from
that. Both houses overlooked the pathway and playing fields near where the body was
found.
This applicant had no apparent connection with the victim. He came froma family of
travellers and was illiterate. He made an admission to his girlfriend that he had killed
Janet and as a result on 17 January 1976 he was arrested, although it is worthwhile
noting that there is evidence that when challenged he laughed the admission off and
that after he had been charged he continued to deny involvement in the killing when his
girlfriend visited him.
The applicant was interviewed pursuant to the judge's rules, the crime and investigation
long pre-dating the protections included by the Police and Criminal Evidence Act 1984.
Neither solicitor nor appropriate adult was present and the interviews were not
recorded.
The applicant made two statements under caution, dated 29 and 30 January 1976,
during the course of which the applicant admitted he had raped Janet and that during
the struggle she had died. In the first statement he claimed to have acted alone; in the
second, prompted by an officer who challenged Jones that his account of pushing
Janet's body over a fence seemed unlikely if he was alone, he claimed that a friend,
whom he named, had been with him. That his friend had raped Janet after he had. He
claimed to have carried one of Janet's shoes away with him, forgetting he had placed it
in his pocket and he later disposed of it although both shoes were in fact recovered in
the vicinity of the body. He purported to point out the place where he had first seen
Janet and followed her but that route did not appear to be particularly credible and took
Janet away from her own street onto an open playing field in a close-knit community
where there were many opportunities to seek help.
At the time of that investigation forensic science provided limited additional evidence
in relation to depositions of blood or semen. Blood could be grouped although mixed
blood staining could not be differentiated. Janet's blood group was B. In such tests as
were available group B blood would cover all blood groups present in a sample so
further analysis of blood samples were possible. A sample of Jones’ blood showed that
he was group O. Tests on the semen stain onto the back of the jeans indicated that it
had been admitted by a blood group O secreter; that is say someone whose body
naturally secretes an indicator of their blood group into other bodily fluids. By modern
standards it can only be described as crude.
So it was that the applicant stood trial for murder. At that time it was not considered
good practice to include other counts on such an indictment. On the third day of his
trial he changed his plea to guilty to manslaughter. On the direction of the trial judge
the jury returned verdicts of guilty to manslaughter and not guilty of murder. He was
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then sentenced, as we have indicated, to 12 years' imprisonment. He did not appeal,
served his sentence and went about re-establishing his life.
Due to the passage of time it is not clear what action was taken against the applicant's
named friend. It appears that he was arrested, charged and appeared before the court
but that the case was discontinued against him at an early stage.
The possibility of a second perpetrator meant that as far as the police were concerned
the case remained, to some extent, alive. Slides prepared from samples taken during
the postmortem in 1976 were preserved and in due course submitted for DNA analysis.
The process was such that the DNA profile obtained derives from sperm heads
recovered from seminal stains and from no other sources of DNA.
It was originally hoped that the DNA analysis might confirm the existence and identity
of the second alleged offender, whether it was the applicant's friend or someone else.
However, it was found that the DNA emanated from a single source, a male person who
was not the applicant. The profile was put on the national DNA database.
In February 2016 Stephen Hough was arrested on suspicion of the rape of a 15-year-old
girl. In the course of that investigation a DNA sample was taken and in due course,
when the profiles compared to those on the database, matched the profile obtained from
the samples was revealed, thus the 1976 case was reopened. A forensic scientist who
conducted the DNA examination concluded that the vulval samples taken from Janet
Commins contained sperm cells that matched the DNA profile of Hough and from the
condition of the sperm present sexual activity had taken place between Commins and
Hough that was unlikely to have occurred more than 48 hours prior to her death. It is
unnecessary to detail the findings of that DNA analysis. Further, Y-STR profiling was
carried out to ascertain whether there was any evidence of DNA present from another
male to Hough. In truth, there was no other male DNA in the vulval swab. There was
the trace of DNA from a male in a second vulval swab but it was unsuitable for analysis
in isolation but the small number of results available matched the DNA from Hough as
it would be expected if it emanated from him or another relative. There was only one
single result in 23 areas in relation to the anal swab that could have come from another
male. Even if so the comparison was impossible and it was possibly a fragment
introduced when the sample was taken or examined. There was nothing to indicate it
related to sexual activity with the victim. In other respects the Y-STR analysis
corroborates Mr Peet's findings. Hough's blood group, like that of the applicant, was
group A.
It is not surprising that Stephen Hough was then arrested. He was tried between 26
June and 16 July 2017 before Lewis J and a jury. The evidential significance of the
applicant's extant conviction was the subject of detailed submissions before the trial
judge, who ruled the Crown had to overcome that conviction and make the jury trying
Hough sure that Jones was not the killer and the jury were so directed.
Another Home Office pathologist interpreted the findings of Dr Woodcock (now
deceased). He broadly agreed with what Dr Woodcock had found. He added that he
did not think that the head injury resulted from severe force as there was no skull
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20.
21.
22.
23.
24.
fracture or brain injury beneath. Dr Rodgers concluded that Janet Commins had died
during a sexual assault which included both vaginal and anal rape and in his evidence
stated death had come on very quickly and posture asphyxia was likely to be a
significant element in the rapid demise.
In that trial the applicant was called by the Crown as a prosecution witness of truth.
He gave evidence that he was not guilty and had confessed due to the pressure he felt at
the time. Mr Heywood has made it clear that it was not suggested that there was any
specific criticism of police officers that was put that was the subject of elaboration and
that it may have been no more than this young man, illiterate and from a travelling
family, had submitted to questions in circumstances when perhaps a stronger
personality would not.
In the course of the defence case both the senior investigating officer DS Derek Evans
and the interviewing officer then DC Albert Roberts and DS Brian Davis also gave
evidence. They made it clear that the applicant was interviewed appropriately under
the regime then in force. The interviewing officers also gave evidence that the
applicant had indicated the location where he said he had burned and buried his clothes
but there was no evidence of that visible at the time.
Junior counsel to the applicant also gave evidence, Mr Gareth Edwards (as he then
was), said that Jones had not given instructions that his confessions were false and
confirmed that Jones had willingly pleaded guilty to manslaughter but did allow, as Mr
Heywood explained to us, that this was the lesser of two evils.
The defence in the second trial did not challenge the findings that Hough's DNA was
identified. His case rested on a challenge to the correct identification of the slides and
their continuity and integrity since 1976. The jury unanimously acquitted Hough of
murder and convicted him of manslaughter, rape and buggery. Following the
conviction in respect of her Hough also later pleaded guilty to sexually assaulting the
victim for which he had been arrested in 2016.
Thus, since the review in 2006 this case has been meticulously investigated. The Crown
accept that the admissions made by the applicant during his interviews can no longer be
treated as objectively reliable. It was on that basis that the decision was taken to call
him and to threat him as a witness of truth. Mr Heywood makes clear that the
applicant was a credible witness, whose assertion of innocence was clearly believed by
the jury who saw and heard him. Following the judge's direction the jury must have
been sure he was telling the truth and, at the very least, must have been satisfied that
Jones' admissions could not be relied upon. The contemporary DNA evidence
supported the case that there was only one attacker and that Stephen Hough was that
man.
It is not surprising that the applicant has left it as long as now to renew his application
for leave to appeal against conviction. The subsequent conviction of Stephen Hough
was obviously an essential component of this application. Following the conviction an
appeal was intimated. The papers to the original trial were disclosed to those advising
him and in the circumstances this appeal against conviction was launched.
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It is of course very rare to admit an appeal against conviction where an unambiguous
guilty plea has been entered or to admit fresh evidence under section 23 of the Criminal
Appeal Act 1968 in those circumstances but it is beyond argument that there is a
discretion to do so: _R v Verney 2 Cr App R 107 and R v Foster [1985] 1 QB 115; 79
Cr App R 61. Both concerned convictions based on guilty pleas which were quashed
as a result of receiving fresh evidence. This is an another such case.
In the circumstances we unhesitatingly extend time for appealing. We grant leave to
appeal. We admit the fresh forensic evidence and the evidence of the conviction of
Stephen Hough and we quash Noel Jones' conviction for manslaughter. This appeal is
allowed and the appellant can leave court wholly exonerated of involvement in this
terrible crime.
Before leaving the case we must add further observation. Our system of criminal
Justice is, of course, human and errors can be made however strenuous the efforts to
ensure that evidence is properly and appropriately collected and placed before the court
so there can be analyse fairly and a true verdict delivered. The pressures of being
interviewed by the police are clearly real and the protections introduced by the Police
and Criminal Evidence Act 1984 have done much to address, to such extent as it is
possible, the pressures on those arrested and being interviewed.
In this case however, it is clear that a serious injustice was done for an innocent man
felt constrained to admit a grave criminal offence, not sharing the true position with his
own legal team. Many years have passed since he was released from prison but we
hope that the quashing of his conviction and the contents of this judgment start to
address the injustice that was done to him.
Epiq Europe Ltd hereby certify that the above is an accurate and complete record of
the proceedings or part thereof.
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Neutral Citation No. [2015] NICA 39 Ref: MOR9680
Judgment: approved by the Court for handing down Delivered: 11/06/2015
(subject to editorial corrections)*
IN HER MAJESTY'S COURT OF APPEAL IN NORTHERN IRELAND
THE QUEEN
ve
RAYMOND BROWNLEE
Before: Morgan LCJ, Coghlin LJ and Gillen LJ
MORGAN LC] (giving the judgment of the court)
[1] This is an application pursuant to section 16(2) of the Criminal Appeal (NI)
Act 1980 (“the 1980 Act”) for an extension of time in which to lodge an application
for leave to appeal against conviction. A considerable period of time has elapsed
since the conviction and the applicant has been advised by counsel and solicitors
previously retained that there was no merit in the pursuit of such an appeal. This
case provides us with an opportunity to set out the principles which should apply in
exercising the power to extend time under the 1980 Act. Mr Greene QC and Mr Toal
appeared for the applicant and Mr Tannahill for the prosecution. We are grateful to
all counsel for their helpful oral and written submissions.
Background
[2] _ By virtue of section 1 of the 1980 Act a person convicted on indictment may
appeal to the Court of Appeal with the leave of that court. Section 16(1) provides that
a person who wishes to obtain the court's leave to appeal shall give notice of his
application within twenty-eight days from the date of the conviction. Section 16(2)
provides for an extension of time but prescribes no criteria on the basis of which the
power should be exercised. The vast majority of applications to extend time arise
because the application for leave to appeal is only lodged after the passing of the
sentence which in most cases is outside the 28 day time limit which begins to run
from the date of conviction.
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[3] The jurisprudence in England and Wales arose initially in relation to
applications from co-accused made after successful appeals by others. R v Marsh
[1936] 25 Cr. App. R. 49 was such a case where the convictions took place on 10
October 1934 and the applications for the extension of time were lodged on 14, 20
and 21 December 1934 respectively. The court rejected the applications in the
following terms:
[4] Rv Hawkins [1997] 1 Cr. App. R. 234 was a case in which an appellant
convicted of obtaining by deception sought leave to appeal seven months after the
conviction. Lord Bingham approved counsel’s description of the court's general
practice:
“... it being the rule and practice of this court not to
grant any considerable extension of time unless we
are satisfied upon the application that there are such
merits that the appeal would probably succeed, we
are quite unable to say in this case that there was no
evidence upon which these applicants could properly
be convicted on some, at least, of the counts of this
indictment. We, therefore, do not grant the
applications for an extension of time.”
“He submits that while the Court of Appeal has
power to extend the 28 day time limit for applying for
leave to appeal, the court has traditionally been
reluctant to do so save where the extension sought is
relatively short and good reason is shown for the
failure to apply in time. In the ordinary run of cases
the extension sought is a matter of days and the
application is usually made because of some mishap
or misunderstanding or administrative delay in the
settlement of documents. Such indulgence has not
traditionally been shown where the defendant, acting
on advice has pleaded guilty or where he has taken a
conscious decision not to appeal. In our view the
submission is well founded and the court should be
satisfied that good reason exists for granting leave to
appeal out of time in circumstances such as the
present.”
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[5] _ The English Court of Appeal returned to this issue in R v Bestel and Others
[2013] 2 Cr App R 30. Although the court primarily focused on appeals in change of
law cases it set out the general experience at paragraph 9:
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principles in R v Bell
“9. It is the experience of this court that an
extension of time will generally be granted by the
single judge under s.31 of the 1968 Act when the
defendant provides a satisfactory explanation for
missing the deadline by a narrow margin and there
appears to be merit in the grounds of appeal. This
may be because counsel or solicitors were at fault and
the defendant, personally, was not. The court has
been more likely in recent times to permit an
extension of time where a co-accused’s appeal has
been allowed on grounds which apply equally to the
defendant but the defendant was erroneously advised
that no grounds existed. An extension of time is likely
to be granted in cases where relevant and cogent fresh
evidence admitted under s.23 of the 1968 Act has
emerged for the first time well after conviction.
Nonetheless, evidence as to the circumstances in
which the fresh evidence emerged will be required
and prompt action thereafter will be expected. Long
periods of delay will require cogent explanation.”
“The Court of Appeal has power to extend the time if
it thinks fit, but substantial grounds must be given to
account for the delay before it will exercise its power.
One of the factors to be taken into account is the
likelihood of success in the appeal if the extension is
granted: see R_v Marsh [1936] 25 Cr App Rep 49,
where it was said to be the rule and practice not to
grant any considerable extension of time unless the
court was satisfied that there were such merits that
the appeal would probably succeed.”
“In my view, the matters to be considered are the
requirements of justice on the particular facts of the
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In this jurisdiction Lord Lowry LCJ observed in R v Winchester [1978] 3 NIJB
that an extension of time is not obtained for the asking. The most important point is
that justice should not be sacrificed to procedure and convenience. The potential
merits of an appeal are relevant but not paramount. Carswell J touched on the
[1978] 5 NIJB giving the judgement of this court where he said:
[7] _ These authorities were relied upon by the Court of Appeal in R v McBride
and others [2014] NICA 45. It was submitted in that case that the court should also
take into account the practice in the Republic of Ireland on such an extension set out
by O'Higgins CJ in The People v Kelly [1982] IR 90:
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case before the court. A late and stale complaint of
irregularity with nothing to support it can be
disposed of easily. Where there appears to be a
possibility of injustice, of a mistrial or of evidence
having been wrongly admitted or excluded, the
absence of an earlier intention to appeal or delay in
making the application or the conduct of the
appellant should not prevent the court from acting.
This seems to me to be the practical result of
considering what the ‘justice of the case may
require’.
In McBride two applicants sought an extension of time to apply for leave to appeal
some months after their sentencing on the basis of a disparity argument arising from
the sentence imposed on another of those involved in a blackmail offence who was
dealt with on a separate indictment. The court examined the merits of the cases and
dismissed the appeals.
[8]
From this examination of the authorities we consider that the following
principles governing the exercise of the discretion to extend time to apply for leave
to appeal can be derived:
@
i)
co)
(iv)
)
Where the defendant misses the deadline by a narrow margin and there
appears to be merit in the grounds of appeal an extension will usually be
granted. This occurs most frequently when the application to extend time for
a conviction appeal is lodged immediately after sentencing.
Where there has been considerable delay substantial grounds must be
provided to explain the entire period. Where such an explanation is provided
an extension will usually be granted if there appears to be merit in the
grounds of appeal.
The fact that a person involved in the crime subsequently receives a more
lenient sentence will generally not be a satisfactory explanation for any delay
in an appeal against sentence. A defendant should take a view about his
attitude to the sentence at the time that it is imposed.
A convicted defendant will usually get advice on any grounds for appeal
from his legal representatives at the end of the trial. It will normally not be an
adequate explanation for considerable delay that the defendant has sought
further advice from alternative legal representatives.
Where the application is based upon an application to introduce fresh
evidence the court may extend time even where a considerable period has
elapsed as long as the evidence has first emerged after the conviction, the
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circumstances in which the evidence emerged are satisfactorily explained, the
applicant has moved expeditiously thereafter to pursue the appeal and the
evidence is relevant and cogent.
(vi) Even where there has been considerable delay or a defendant had initially
taken the decision not to appeal, an extension of time could well be granted
where the merits of the appeal were such that it would probably succeed.
The background to this case
[9] On 5 September 2011 the applicant was committed for trial in the Crown
Court on a total of nine counts comprising one count of false imprisonment, two
counts of malicious wounding with intent, five counts of common assault and one
count of threats to kill. At his arraignment on 21 October 2011 he pleaded not guilty
to seven of the counts. He further pleaded not guilty to the remaining two counts on
10 November 2011. He did, however, on 28 May 2012 change his plea to guilty on
one count of common assault. The applicant's trial commenced on that date before
Judge Miller QC sitting with a jury.
[10] The evidence at trial was that on Sunday 3 October 2010, Miss Hunter, the
complainant, was drinking outside the British Home Stores in the city centre in the
company of other homeless people. At some point the applicant passed by and
invited her to join him at his flat. She agreed after some initial reluctance in order to
make up and chat as they had previously fallen out. Both the applicant and the
complainant consumed large amounts of alcohol over the next three or four days
during which the complainant said that the applicant subjected her to verbal and
physical abuse. This included the applicant slapping her once in the face, punching
and head-butting her, throwing a bottle at her which hit her in the right temple but
did not break, biting her left ear, not allowing her to leave the bedroom to use the
bathroom, telling her “you’re not leaving this place alive”, urinating over her while
she was in the bathroom and pulling her hair. The complainant said that she escaped
by running out of the back door of the apartment wearing only a jumper. The
applicant ran after her, assaulted her again and only stopped when a bystander
intervened. The trial judge described the injuries to the victim as:
“A small cut to her left eyebrow approximately half
an inch long, bruising and swelling to both eyes and
also chin, swelling and bruising to cheekbone just
below the right eye and generalised complaints of
pain to right wrist, lower back and neck.”
[11] The applicant did not give evidence but evidence was called on his behalf.
This established that he had been in custody for part of the period during which it
was alleged these offences occurred. The case proceeded on the basis that all of the
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allegations were denied other than the common assault to which he pleaded guilty
at the start of the trial.
[12] On the morning of 31 May 2012 all of the evidence had concluded. Senior
counsel retained under the applicant's legal aid certificate advised the learned trial
judge that he and junior counsel felt that they could not continue in the case. The
solicitor was not present at that stage but he arrived shortly afterwards. The solicitor
had a short consultation with the client and indicated that the respondent was
concerned in particular in relation to some documentary evidence that he felt should
have been put before the court. The solicitor also informed the judge that the
applicant said that there was a person who could provide evidence on his behalf to
say that a witness had made false allegations of rape in the past. Thirdly, the
applicant indicated concern about the way in which an issue in the trial relating to
padlocks and the connection to the false imprisonment charge had been dealt with.
The solicitor indicated that the applicant had lost a degree of faith and confidence in
his legal team because of those issues and he also indicated his intention to
withdraw.
[13] The learned trial judge noted that the issue of the padlocks was fully explored
with the police witness during cross-examination and noted that the false
imprisonment charge related to other matters such as locks on doors. The judge
explained to the applicant that his senior counsel felt professionally compromised
and unable to further represent him. The applicant indicated that that was not his
wish. He thought that things had been taken up the wrong way. In those
circumstances the solicitor indicated that the position might be retrievable and that
there may well have been misunderstandings. The judge noted that it would be in
the interests of the respondent that he should continue to have the services of
counsel and the solicitor who had served him and his interests in a proper fashion.
On the basis of the circumstances explained to him he said that he would be “loath
to conclude” that there was a proper ground for withdrawing instructions. If it
turned out to be the position that the applicant had no legal representation he did
not consider it appropriate to transfer the legal aid certificate to other representatives
but would deny the Crown the opportunity to address the jury. The case was
adjourned over lunchtime.
[14] After lunch the applicant indicated that he had dispensed with the services of
his legal representatives. The judge explained that the basis upon which he had
dispensed with the services of his lawyers was such that he did not believe that it
would be appropriate to transfer the certificate of legal aid. With the agreement of
the parties the learned trial judge thereafter proceeded to charge the jury. On 31 May
2012 the jury returned verdicts of guilty of false imprisonment, two counts of
malicious wounding with intent and a common assault, not guilty of two further
counts of common assault and not guilty by direction on one count of common
assault. It was directed by the court that the offence of threats to kill was to remain
on the books not to be proceeded with without the leave of the court.
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[15] Following his conviction the applicant sought to instruct new legal
representation. An issue, however, arose in relation to the legal aid fees payable to
the new representatives and culminated in a judicial review before the Supreme
Court. For this reason the sentencing of the applicant did not take place until 14
February 2014. On that date the learned trial judge imposed an Extended Custodial
Sentence comprising 6 years’ imprisonment and 4 years’ extension period. The
applicant lodged a Notice of Appeal, dated 25 February 2014, seeking leave to
appeal his sentence only. He accepts in his skeleton argument that counsel gave him
an oral opinion advising that there was no merit in an appeal against conviction.
Leave to appeal sentence was refused by Maguire J, acting as the Single Judge, on 9
October 2014.
[16] In or around the end of September or start of October 2014 the applicant again
sought new legal representation. His new solicitors received papers from the
existing solicitors on 7 October 2014. A brief was sent to senior counsel on 21
October 2014 and, during the course of a consultation on 23 October 2014, the
applicant requested consideration be given to an appeal against sentence. The
relevant form to renew his application for leave to appeal sentence to the full Court
of Appeal was lodged. At the same time the solicitors also informed the Court Office
that the applicant wished to appeal his conviction and to obtain counsel’s opinion.
His solicitors received the transcript of the trial on 4 November 2014 and, following a
series of consultations, the applicant lodged a Notice of Appeal, dated 27 January
2015, applying for leave to appeal conviction and an extension of time in which to
lodge the application.
The basis of the proposed appeal
[17] _ It was submitted that there were various ways in which the fairness of the
trial was affected by the issues surrounding the withdrawal of counsel. The issue
first arose on the intimation by senior and junior counsel that they felt professionally
compromised. The learned trial judge properly explored the basis for that suggestion
before lunch on 27 February 2013. Having done so he indicated that he did not
consider that the matters of complaint were well founded and that he would,
therefore, be loath to conclude that there were proper grounds for withdrawing
instructions or transferring the legal aid certificate.
[18] We accept that where such an application is made, particularly at such a late
stage, the court should carefully explore the basis for the withdrawal of legal
representatives in order to avoid, where possible, prejudice to the defendant and
prevent manipulation of the system. In this instance the learned trial judge properly
explored the basis for criticism of defence counsel and found it unsubstantiated. He
alerted the defendant to the consequences of proceeding without legal
representatives and made it clear in open court that it would be in the interests of the
applicant that he should continue to have the services of counsel and solicitor who
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had served him in a proper fashion. Despite those observations and the opportunity
for the solicitor to discuss them with his client the applicant chose to dismiss his
legal representatives. He was given every opportunity to understand the
consequences of his actions. We do not consider that there is any substance in the
suggestion that because the learned trial judge did not take further steps after lunch
to try to recover the situation there was any unfairness in the trial.
[19] When the applicant dismissed his legal team the learned trial judge explained
to him that, as he had already indicated, he did not believe that it would be
appropriate at that stage to transfer the certificate of legal aid having regard to what
he had been told. He explained that he proposed to give the jury a legal charge in the
case but would not permit the prosecution to have a closing speech. He indicated
that the applicant could address the jury if he wished but that the judge would deal
with matters that were raised on his behalf in the course of cross-examination. He
told the applicant that he was entitled to seek alternative representation. The
applicant elected to proceed without addressing the jury. The judge had explained to
the applicant before lunch that it was his intention to proceed with the case and in
our view there was no obligation on him to discharge the jury in circumstances
where it was accepted that the applicant had shown no justifiable reason for
dispensing with the services of his lawyers. In light of the course Proposed by the
learned trial judge the applicant was not unfairly disadvantaged in terms of
preparation.
[20] There were two points specifically developed in the oral argument on behalf
of the applicant. First it was contended that despite his indication that he would put
the defence case the learned trial judge failed to do so adequately. We do not accept
that there is substance in that submission. At an early stage in the charge the learned
trial judge referred to the fact that the complainant's evidence that she was with the
applicant in the applicant's flat from the evening of 3 October until 7 October 2010
was plainly wrong since the applicant had been held at Strandtown Police Station
between 4 and 5 October. He correctly indicated to the jury that as a result the
complainant's reliability in terms of the accuracy of her recollection of events, times
and places was highly questionable.
[21] _ He then moved on to deal with the fact that on two occasions she had made
an allegation of rape against the applicant but subsequently withdrawn the
allegations. In fact there was evidence that she had made upwards of 100 complaints
to police many of which she had subsequently withdrawn. The judge took the jury
through her criminal record and gave appropriate direction about the effect of those
convictions. He dealt with the fact that the defence had demonstrated that the
allegation that her memory was affected because she had been in a coma in hospital
for a period of up to two months was wrong. All of this was couched in language
designed to warn the jury about the danger of convicting on the complainant's
evidence in light of her inconsistencies. Having put the prosecution case in relation
to the various counts he reminded the jury that the defence case during interview
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was that none of this happened, that such physical contact as. they had was in the
form of having sexual intercourse and that the jury needed to bear in mind the
frailties in her character and her capacity to give accurate evidence.
[22] In respect of the allegation of false imprisonment there was an issue about
whether there were padlocks on the door of his flat as alleged by the complainant.
The applicant provided information at an early stage in the course of his interviews
that there were no such padlocks but no action was taken by police to investigate the
matter. The judge reminded the jury that the applicant and the complainant had
gone out to get drink together and had also gone out to get a Chinese meal. Mr
Greene submitted that the elements of the defence case could have been better
brought together in a comprehensive manner but we are satisfied that the charge
included a succinct but accurate summary of the issues of fact as to which a decision
was required, a correct but concise summary of the evidence and arguments on both
sides and a correct statement of the inferences which the jury were entitled to draw
from their conclusions about the primary facts (see R v Lawrence [1982] AC 510).
There were further points made about the leaving of alternative counts and the
direction on wounding but there was no issue of safety of the conviction arising on
either.
[23] The final point advanced on behalf of the applicant related to a portion of the
learned trial judge’s charge dealing with bad character evidence where he said:
“In order to convict the defendant you must be
satisfied beyond reasonable doubt that he committed
the offences as alleged by the complainant. When
considering that you may consider it relevant that the
defendant has been convicted of a multiplicity of
offences including several for assaults of various
kinds and that he also has convictions for dishonesty
in the manner that you have heard outlined. The
prosecution say that the defendant has a tendency to
use violence and to be untruthful. And that this
supports the prosecution case that he used violence
on this occasion.
The defendant says that whatever he did in the past,
these allegations are untrue. It is for you to decide the
extent to which if at all the defendant's previous
convictions assist you in deciding whether he
committed each of these offences.
Now of course it is equally a matter of some
considerable relevance ... on the facts of the present
case that the complainant Ms Hunter who is the
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primary witness against the defendant does herself
have a considerable record for offences of dishonesty,
public disorder and petty violence. You will recall
that she was cross-examined extensively out of her
record and you will recall the manner in which she
dealt with those convictions. You are entitled to
consider whether that record of hers calls into
question the veracity of her claims in the present
case.”
[24] The bad character evidence had been introduced by agreement between the
prosecution and the defence. There had been a perfunctory discussion about it
between the judge and counsel at the end of the evidence when preparing for closing
speeches. We consider that it is particularly important where bad character evidence
is introduced by agreement to ensure that the use to which the evidence can be putis
discussed before speeches to the jury. When admitting bad character evidence
pursuant to any of the gateways it is, of course, always a good discipline to identify
how the jury are to be directed in respect of it.
[25] The agreed evidence disclosed a Magistrates’ Court record largely influenced
by alcohol comprising offences of violence, dishonesty and public disorder. There
was one recent conviction for Assault Occasioning Actual Bodily Harm but three
other convictions for the same offence were more than 10 years old. It was accepted
that the convictions for violence were capable of constituting material upon which
the jury could consider whether the applicant had a propensity to commit offences
of violence.
[26] The criticism that Mr Greene developed concerned the assertion in the charge
that convictions for offences of dishonesty could give rise to a propensity to
untruthfulness. The distinction between a propensity to untruthfulness and a
propensity to dishonesty was considered in R v Hanson [2005] EWCA Crim 824 at
paragraph 13. Previous convictions for dishonesty are only likely to be capable of
showing a propensity to be untruthful where truthfulness is in issue. In R v
Campbell [2007] EWCA Crim 1472 the court concluded at paragraph 31 that the only
circumstance in which there is likely to be an important issue as to whether a
defendant has a propensity to tell lies is where telling lies is an element of the
offence charged.
[27] We accept that this was not a case where propensity to untruthfulness arose.
It was, however, a case in which there was a real issue about the competing
credibility of the complainant and the applicant. The applicant's case was that the
complainant had falsely invented these allegations and the issue for the jury was
whether they were satisfied beyond reasonable doubt that the complainant's account
on each of the counts was reliable.
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[28] Although the evidence of previous convictions was admitted by agreement, it
is clear that much of this evidence would in any event have been admissible under
Article 6(1)(g) of the Criminal Justice (Evidence) (NI) Order 2004 by reason of the
attack made by the applicant on the complainant's character. In such a case the
purpose of this gateway is to enable the jury to know from what sort of source
allegations against the witness have come. Where the issue is one of credibility it is
important that the jury in assessing the reliability and truthfulness of the competing
accounts should see the full background of the applicant as well as the complainant
(see Rv Singh [2007] EWCA Crim 2140).
[29] We consider that it is plain from the latter part of the passage set out at
paragraph 23 above that the learned trial judge was directing the jury to carry out
precisely that exercise when assessing the credibility of the account given by the
applicant at the interview and the evidence of the complainant. We accept that the
direction should not have been couched in the language of untruthfulness but we do
not consider that the direction diverted the jury from the task in hand.
Conclusion
[30] This is a case in which the applicant was convicted on 31 May 2012. His
application to extend time to appeal against conviction was lodged on 27 January
2015. In the highly unusual circumstances of this case he has an explanation for the
period until February 2014 but no adequate explanation for the period thereafter.
This is, therefore, a case where there has been considerable delay. For the reasons
given we do not consider that the arguments which it is proposed to make on appeal
are likely to succeed in undermining the safety of the conviction. Accordingly we
refuse leave to appeal.
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