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NOTE ON HORIZON ISSUES JUDGMENT
This note is designed to record the essence of the advice I provided during the conference
call on 2 December 2019, with a few additional points, having read in advance of the
conference call the draft judgment (Parts A-L). I have now read Part M of the draft
judgment and the revised Technical Appendix, which I received on 6 December.
Just as he did in the Common Issues Judgment, in the Horizon Issue Judgment, Fraser J
notably emphasised that criminal prosecutions are not part of the proceedings albeit that
evidence of software bugs, errors and defects “which led to consequences for SPMs” did
form part of the Horizon Issues trial. So, criminal convictions, he said, were not part of
the trial but part of the background (§62). He emphasised that the group litigation had no
bearing on what, if anything the CCRC did in respect of the judgments arising from the
litigation (§66(6)), and that the Commercial Court had no jurisdiction over the criminal
convictions of those SPMs successfully prosecuted by POL.
Significantly, also, the judge added “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 ... nor will they arise in either of the next two (the principles governing
Heads of Loss, and then some individual claims” (§66(7)). I am unsure what he meant
by “some individual claims” but (subject to correction, as I do not know which individual
claims are currently proposed to be litigated) I take it to exclude claims by anyone
convicted. I assume by “evidential effect” he means that when an individual claimant has
been convicted by a jury on the criminal standard of proof, that claimant will have a high
bar to surmount, before the judge can say on the civil standard of proof that POL are
liable to him for a Horizon issue.
In my view, these passages are a good reminder to any convicted claimant as well as the
CCRC that this judgment has its limitations. The judge did not make any findings about
individual convicted cases. He did refer to the Misra case at various points in the
judgment. Passing references are to be found at §§77, 282 (misspelt as ‘Nisra’), 289, 291,
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414, 508 and 512. But in none does he analyse the evidence against her or make any
particular finding which could advance any appeal in her case.
Given that POL is in the throes of mediation, I expect it is not known whether any of the
individual claims will be litigated at all? Given also that the convicted claimants fall
outside any proposed settlement, I imagine their decision whether to pursue POL in
individual claims is yet to be decided.
There are 61 convicted claimants participating in the group litigation, 32 of whom (I am
told) have referred their cases to the CCRC.
In theory, there are three potential generic arguments that could be taken on appeal or on
a CCRC reference. In basic terms, they appear to be:
a) At the time of the trial in question there was material non-disclosure, thereby
rendering the conviction unsafe; and/or
b) A particular bug, error or defect impacted the branch account as to explain the loss
or shortfall; and/or
c) The branch account was remotely accessed and interfered with in such a way as to
explain the loss or shortfall, thereby rendering the conviction unsafe.
The judgment does not identify any evidence or make any findings that presently can
lead to a ground argued in respect of point (b) or (c). That may have to await individual
trials (if any) of the convicted claimants’ cases.
The disclosure issue at point (a) is arguably different. The first question that arises from
the information disclosed in the litigation and the effect of the judgment is whether POL
complied with its disclosure obligations during each of the trials in which POL secured
a conviction (the test for disclosure being whether the material might reasonably be
considered capable of undermining the case for the prosecution against the accused or of
assisting the case for the accused (s.3(1) CPIA 1996).
In light of the fact that the evidence given in certain criminal trials eulogised the
‘robustness’ of Horizon, there are three factual issues that arise in considering the
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question whether there was material non-disclosure. In simple terms they appear to be
(1) the existence of bugs, errors or defects in Legacy Horizon or Horizon Online; (2) their
potential or actual impact on branch accounts (and as a sub-issue, the related lack of
systemic ‘robustness’); and (3) remote access. (I have noted the judge’s findings in the
Technical Appendix about the 29 bugs, errors or defects in the table, and his views about
their impact on branch accounts, as well as his views about permissions and remote
access, but this note is not the place to consider them further.)
Because the convicted claimants are now fully sighted on these issues, POL has no duty
as such of disclosing something which has previously been disclosed to them (see s.3(1)
CPIA 1996, and the same must apply at common law to the post-trial duty). It may be
recalled that, in the Common Issues Judgment advice (§42), I considered whether there
needed to be a review of cases in light of the Branch Trading Statement aspect of that
judgment, and advised against this, given the matter was now out in the open, although
that part of the litigation and the focus of the judgment was on the contractual relationship
between POL and SPMs.
However, the same will not apply to those convicted individuals who are not claimants
in the group litigation. POL cannot safely assume they are aware of the generality, far
less the detail, of the litigation and the judgments so far handed down. It is better therefore
to treat both categories the same. So, subject to the outcome of the advice I have given
that POL should engage first with the CCRC so as not to make any misstep, POL may
have to consider if any disclosure/further disclosure/review must be made across the
board not just to those convicted individuals who are not claimants in the group litigation,
but also to the 32 convicted claimants in the litigation who have referred their cases to
the CCRC, as well as the other convicted claimants in the litigation.
What is POL’s duty? If material comes to light after the conclusion of proceedings which
might cast doubt on the safety of a conviction, then there’s a duty to consider disclosure.
This is just another way of saying that if there was any material non-disclosure at trial,
POL has a duty to consider the matter for disclosure. That said, I am far from sure in light
of the limitations in the Horizon judgment that anyone can say presently that any material
has come to light which might cast doubt on the safety of any of the convictions without
there being a wholesale sale review of each and every one of them.
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Naturally, there is some risk of the convicted claimants seeking to appeal their
convictions to the Court of Appeal Criminal Division (CACD) out of time now, arguing
that there was material non-disclosure at the time of their trial, arguably rendering their
conviction/s unsafe, even though they are not yet the beneficiaries of individual, fact-
specific judgments in their favour.
In my view, however, that would be precipitate, not least because they cannot argue such
a ground of appeal unless they can show that any non-disclosure was in fact material.
And that would involve a complete review of each case on its facts in light of the alleged
material non-disclosure, including the impact any bug, error or defect or alleged remote
access actually had on the facts underlying their conviction.
The CACD, if asked to determine the issue, would decide whether the material that was
not disclosed caused it to doubt the safety of the conviction, and for those purposes the
CACD might have regard to the question of the impact the withheld material would have
had on the mind of the jury, which is a mechanism it will use to test its view in a difficult
case. Even if the non-disclosure was material, ultimately the issue is whether,
notwithstanding the material non-disclosure, the trial was fair; the test is whether there
is a real possibility that, if defence counsel had been in a position to use the undisclosed
material at trial, the jury would have arrived at a different decision.
So, by way of trite example, because the alleged non-disclosure has to be material, the
non-disclosure of a bug that affected Legacy Horizon only could not be of any materiality
in a Horizon Online case. A bug that affected one aspect of Horizon Online will not be
material if the case against the SPM was based on a wholly different type of transaction
that the bug could not possibly have impacted. A straightforward theft of £500 and falsely
accounting for it, together with a fulsome confession, followed by a plea of guilty, will
not be explained by any bug, error or defect that arguably affected this branch at the time,
so not only would this not be material non-disclosure, but also it would not impact the
safety of the conviction.
It is of note that (so far as I am aware — subject to one possibly irrelevant appeal) no one
has sought to appeal any conviction following the Cartwright King review and disclosure
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exercise in 2013 and after. Despite the absence of any individual application to appeal,
the CCRC are nonetheless clearly considering the case to see if they can or should make
a reference under their ‘exceptional circumstances’ jurisdiction. References by the judge
to “a stay of proceedings” (§§60, 64(4)) seems to me wide of the mark of what the CCRC
are actually doing.
As I said during the recent conference call, material non-disclosure would be the first
issue the CCRC would logically look at, hence my advice of engaging them first about
what, if anything, POL does on disclosure at this stage. I await sight of a draft letter to
the CCRC. I would, however, suggest that the CCRC would also have a hurdle to
overcome which is the one identified before: to show that any non-disclosure was
material to the case under review. As I have said before there is no one-size-fits-all (see
§41 of the Common Issues Judgment advice); each case has to be looked at on its own
facts.
Finally, there are also particular issues arising from the Horizon Issues Judgment which
require explanation:
e The reference to “legal cases” (§429-430, 457) has puzzled me. There was comment
about it in the judgment but nothing more. What were those legal cases and were
they criminal ones?
e The reference in POL’s opening submissions to the occasions on which privileged
Fujitsu users “have exercised their ability to remotely inject, edit or delete branch
transactions or accounting entries will represent a tiny percentage of the relevant
transactions/accounting entries. And the occasions on which they have done so
negligently or dishonestly will ... represent a tiny percentage of those occasions”
(§534). This apparent concession made on behalf of POL appears to be that entries
may have been entered/edited/deleted negligently or dishonestly. On what factual
basis was this concession made? The judgment makes equally clear that this could
have been done without the SPM’s knowledge or consent. This startling concession
does not appear to have been fleshed out further in the judgment. If this is what the
concession means, then the suggestion is that Fujitsu could have interfered with a
branch account without POL’s knowledge also. How confident is POL that it has not
prosecuted to conviction a SPM purely on the basis of such an act?
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21. May I be told if POL has done as I advised in the Common Issues Judgment advice (see
§84-88, 92), as regards PEAK PC0211833 (which I note was not mentioned anywhere in
the Horizon Issues Judgment or the Technical Appendix).
Brian Altman QC
2 Bedford Row
London WCIR 4BU
baltmant GRO