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POST OFFICE LTD
ADVICE
CRIMINAL APPLICANTS TO THE MEDIATION SCHEME
CONVICTED OF FALSE ACCOUNTING
1. This Advice considers:
i. The propriety of mediating claims to the Mediation Scheme (“the Scheme”)
made by a person who stands convicted of false accounting committed against
POL assets or has been cautioned in respect of such an offence (“criminal
Applicant” or “Applicant’”);
Criminal Offenders and Mediation
2. It remains our considered view that no Applicant guilty of a criminal offence
committed against POL should be allowed into the Scheme or should be the subject of
any “discussions” process, for the reasons set out below.
3. Itis suggested that it would be practically possible to have a discussion with a criminal
Applicant about a loss without needing to discuss the false accounting position,
because false accounting is a method of hiding losses independent of any explanation
as to how the losses occurred or who should be responsible for them. It is our view
that this approach is fraught with danger.
4. There is an initial problem in defining what we mean by false accounting, for that term
seems in the context of this process to have moved away from the criminal meaning.
In a large number of cases we have charged fraud and false accounting
interchangeably, the indictment depending very much upon counsel’s approach to the
facts of each case”. If we permit entry into the mediation scheme to those criminal
1 Dishonestly making a false, misleading or deceptive entry in an accounting record.
2 John Dickson M073 refers to himself as being charged with false accounting, which on the facts
he could have been, but was actually charged under section 2 of The Fraud Act 2006.
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Applicants convicted of fraud then we shall have to separate out those who were
charged with fraud as an alternative to false accounting, from those who were charged
with fraud as an alternative to theft. An example of this dilemma may be found in
cases involving Post Office Card Accounts: here cases where the defendant entered a
customer’s PIN number twice were charged as fraud, notwithstanding that they had
stolen money, he rationale behind this approach being that a charge of fraud does not
require proof that the suspect physically removed the corresponding amount.
All of this means that one of the fundamental difficulties of the proposed a
“discussions” with criminal Applicants is that there are no “typical” false accounting
cases. Convictions range from those cases where it was a virtual certainty that the
defendant stole the money and falsely accounted to hide the fact’, to those cases where
the reason for the loss of the money could not be ascertained, the criminality being that
the defendant had tried to evade their contractual liability for the shortfall.
Further difficulties emerge. Identifying the basis of the Judge’s sentencing decision is
often difficult: in some cases there is good evidence as to where the lost money went;
in others we did not have such evidence. In some cases the defendant was sentenced
on an agreed basis; in others the Judge announced the basis upon which he was
mt Tt is thus
sentencing; and in yet others the Judge conducted a “Newton Hearing
often impossible to tell upon what basis the Judge sentenced: indications such as the
imposition of a particularly lenient sentence do not assist for we are not privy to the
mitigation advanced on behalf of a defendant.
In many of the latter cases the main cause of being unable to ascertain the reason for
the loss was that the defendant had hidden it through their false accounting. It is
somewhat ironic that those who were better at false accounting are now in a more
favourable position than those who did not take such care. There are also a number of
3 But for whatever reason, those prosecuting took a pragmatic view to accept a plea to false
accounting, perhaps because of the absence of evidence pointing to the physical taking of monies.
4A process designed to identify whether the defendant was covering up a loss that he/she had
deliberately created rather than covering up an unexplained (HOL2?) loss.
5 A defendant may, for example, escape an immediate custodial term through ill health, or for
other compelling personal mitigation.
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10.
cases in which it was not the applicant who committed the false accounting but rather
an employee or relative did so.°
The reality unfortunately is this: the whole point of any false accounting exercise in to
conceal a loss from POL, howsoever caused. It is impossible to divorce the issue of the
loss from the issue of false accounting. The applicants are almost unanimously saying
that the losses were either unexplained, or were generated by Horizon. In most cases
they are saying that they were blameless in incurring the original loss and only entered
false figures into the system because of the economic duress imposed upon them by
POL’s ‘draconian’ contract.
It is inevitable that criminal Applicants with false accounting convictions will say that
the losses they covered up were generated without any culpability attaching to them:
they should not have been prosecuted and convicted and they should not have had lost
their homes, businesses and in many cases their liberty. In each case the court was
referred to the amount of the loss and took that factor into account when passing
sentence. The loss is also important in any ancillary proceedings, particularly where
Confiscation Orders were sought under the Proceeds of Crime Act 2002.
It is in our view vitally important to ask the question why the applicant seeks to enter
the mediation process or any “discussions” process, for the answer in many respects
amounts to the answer to the conundrum posed by the issue considered in this
document. In most cases the remedy the criminal applicant seeks is an
acknowledgement from POL that they did not steal and did not dishonestly hide losses
(howsoever caused). They seek this concession in order to provide a strong basis upon
which they can then seek leave to appeal against their conviction to the Court of
Appeal thus restoring their good name, recovering their assets’ and obtaining
compensation. Importantly, criminal Applicants will not be interested in any
6 Gillian Blakey M015. The applicant’s husband admitted false accounting on the day of the audit
and was prosecuted for theft and false accounting; the Crown accepted a plea to false accounting.
In this case the applicant was probably in a better position to ferret out the truth of the position as
she was unencumbered by PACE considerations. Her position is, however, one of blind faith in
her husband not being a thief despite the fact that he lied to her for months over the false
accounting.
7 No doubt with interest.
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12
“discussion” limited to identifying how a loss might have arisen, for this will not
address the issues they consider important and indeed some have stated as much.
. Thus the inherent danger in accepting criminal Applicants into the mediation scheme,
or in entering into “discussions” with them, is that any concession made therein will be
seized upon as the basis of an appeal. This would generate considerable repercussions
outside of the mediation scheme, particularly were an appeal be successful: one such
repercussion relates to issues of the disclosure of concessions to those outside the
scheme.
. In most of the cases the records of the legal process are not complete and in some
cases virtually non existent.* The “discussions” would have to rely upon the
recollections of the applicants, some of whom have imperfect recollections’ and others
who are downright dishonest: POL would have some considerable difficulty in
rebutting what a criminal applicant might say in any “discussion.”
In other cases any “discussion” would be unmerited, the defendant having admitted
causing the loss'° or being in a better position than POL to know how the loss had
occurred.
. It is our view that any attempt to divorce the cause of the loss from the fact of any
false accounting would be a futile exercise, without merit, fraught with danger and
probably impossible. In most cases the available material is simply insufficient to
establish the cause of the loss''. This lack of evidence was, in most cases, down to the
fact that the criminal applicant had concealed losses, either to the point that a realistic
reconciliation was impossible. In other cases the false accounting was so extensive that
a reconstruction of a reliable picture would be impossible. To try to embark upon such
8 Carl Page M118 Applicant had two trials, prosecution file destroyed and Court tapes destroyed
with no transcripts available. The Applicant is contending that between his trial and retrial the
Crown entirely changed the basis upon which he was prosecuted.
° Graham Howard states that the Judge in sentencing “commented that he felt this was an
injustice.” The transcript of sentencing remarks reads, “You and I will understand why the Post
Office had to take the action against you, they must do that, but on the other hand they have done
so also, I think, with a degree of sensitivity and understanding.”
1 David Hedges M068 wrote an article admitting “borrowing” POL money.
1 Which may be why the applicant was have charged with false accounting
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a reconstruction exercise years later, on limited documentary evidence and reliance on
dishonest or imperfect recollection is absurd.
Harry Bo 24” September 2014
Senior Counsel
Cartwright King