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DRAFT LETTER TO BNR ~ PROJECT SPARROW
At our meeting on 26 January 2016, I provided you with an update on the work I have undertaken with
the assistance of Jonathan Swift QC and Christopher Knight, both of 11 Kings Bench Walk Chambers to
review of the Post Office’s handling of complaints made by Sub-Postmasters about the operation of the
Horizon software system. I now write to set out further information about the approach to the review,
the scope of work undertaken so far, and my initial findings. I also outline my plans to bring the work to
a conclusion.
Before doing so, I wish to stress that this update, and the work which underpins it, reports on the legal
advice I am currently receiving and is, accordingly, subject to legal professional privilege and provided
in confidence. I am, of course, aware that once the various additional strands of work I am pursuing are
complete, we will need to find an appropriate method of communicating the results of my review to a
wider audience.
Scope of the Review
My objectives were as follows.
“To review the Post Office’s handling of the complaints made by sub-postmasters regarding the alleged
flaws in its Horizon electronic point of sale and branch accounting system, and determine whether the
processes designed and implemented by Post Office Limited to understand, investigate and resolve
those complaints were reasonable and appropriate”.
I considered that the review should address both what had happened to date (in the period 2010 —
2015), and also the important question as to whether there were any gaps in the work done and what
more, if anything, could now reasonably be done to address the complaints that had been raised.
I decided that the particular focus should be on those matters at the heart of the complaints raised
against the Post Office, namely:
i) criminal prosecutions;
ii) the Horizon system (i.e. the software);
iii) the support provided to sub-postmasters through training and helplines; and
iv) the investigations in the circumstances of specific cases where a complaint had been raised.
The remainder of this letter summarises the headline findings of the review in these areas, and the
recommendations made against each.
I can confirm that my advisors requested and were given unrestricted access to documentation.
Numerous meetings were held between them and a range of Post Office staff, employees of Fujitsu
(who provide the system), and Deloitte. I met with Lord Arbuthnot, and with Second Sight (the forensic
accountants who worked on this issue) and. I asked Alan Bates, the Chairman of the Justice for Sub-
postmasters’ Alliance, to meet me, but regrettably he declined.
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Principal Findings and Recommendations
i) Criminal Prosecutions
1 I The safety or otherwise of any specific conviction is a matter for the Court of Appeal or the Criminal
Cases Review Commission, the independent body established to consider complaints of miscarriage of
justice, and which is currently considering some 23 applications from former sub-postmasters. The Post
Office is co-operating fully with the CCRC’s work and I have, of course, directed that it should continue
to do so.
The Post Office has previously taken advice from solicitors and Leading Counsel expert in criminal law
on the adequacy of the Post Office’s policy and practice on disclosure where it acts as prosecutor.
2,3, 4 I Based on that I am satisfied that Post Office has adopted a proper_approach to disclosure such was-
Sy
madeandthat_it satisfies its duty of disclosure as prosecutor—th facing iti +
d ml id. fi ti hich. Id-have-b. helofulto theird.
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One matter raised in the BBC Panorama programme and elsewhere is the claim (and I must stress that
it is only a claim) that the Post Office brought concurrent charges of theft and false accounting against
sub-postmasters when there was no sufficient evidence for a charge of theft, and the theft charge was
only brought to put pressure on the sub-postmaster concerned to plead guilty to the false accounting
charge. As a result of the review I have decided to take the following steps.
(1) I will take advice from specialist criminal counsel as to whether the decision to charge
theft and false accounting could undermine the safety of any conviction for false
accounting if (a) the conviction was on the basis of a guilty plea following which, and/or
in return for which, the theft charge was dropped, and (b) there had not been a
sufficient evidential basis to bring the theft charge.
(2) If the advice received is that such a conviction could be undermined in those
circumstances, I will ask counsel to review the prosecution file in the cases concerned
to establish whether, applying the facts and law applicable at the relevant time, there
was a sufficient evidential basis to conclude that a conviction for theft was a realistic
prospect such that the charge was properly brought.
ii) Horizon
6,7 I Post OfficeThe review repert recognisesd that in a system of the age, size and complexity of Horizon, it
was unremarkable that occasional bugs, errors or glitches were uncovered and addressed. A limited
number of specific problems with the potential to affect branch accounts were brought to the
attention of Second Sight during the course of their work, together with details of the way in which the
8,9 I Post Office had addressed these matters. Based-en th: jew it has-b. It is apparent that these
bugs were capable of having a generic impact (i.e. of affecting all users of the Horizon system and not
10 I only those who had raised complaints about them). However, #4 jew-did not disel. y-_Nno
11, 12 I evidence_has emerged to suggest that_a technical fault in Horizon resulted in a postmaster wrongly
12 I being held responsible for a loss. anyefthese bugs had bi a Jgant (ont beestie ht
therth: thy ho-had jsedth: 4 bh —trth textofthi: 1 i +h: luded.
that therei basi hich t d-furth tion in relation to these k fi
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Nevertheless, the review report suggested that consideration should be given to whether it would be
possible, by analysis of the transaction logs of sub-postmasters who made complaints, to determine
more comprehensively whether or not the matters complained of by each sub-postmaster could show
the existence of some other, generic, bug within the system. Work is now underway to assess if such
testing is possible, and if so, to scope the work that would need to be done.
Further work is also underway to address suggestions that branch accounts might have been remotely
altered without complainants’ knowledge. In particular the security controls governing access to the
digitally sealed electronic audit store of branch accounts over the life of the Horizon system, will be
reviewed.
iii) Training and Support
A consistent theme of the complaints against the Post Office is the allegation that sub-postmasters
were provided with insufficient training to operate the system effectively and/or did not receive an
appropriate level of support while in post.
A number of factors, including the lack of specificity in the allegations made and the relative paucity of
available training records, made it very difficult for the review to determine the merits of these
complaints.
I have concluded that these issues have already been addressed as comprehensively as is reasonably
possible by both the Post Office and by Second Sight through their investigations of all complainants’
cases. However, I am taking forward one further line of enquiry in relation to the very limited number
13 I of cases where specific allegations were made of misleading advice being provided by the Post Office’s
helplines.
iv) Investigation of Cases
The review also looked at the Post Office’s investigations of the complaints as part of the Mediation
Scheme process. It has concluded that the investigations were detailed and thorough, and left no more
14 I than very limited gaps which might now reasonably be filled by further work. There is; only one further
accounting exercise recommended by the review team, which consists of an examination of the extent
of any relationship between unmatched balances in the Post Office’s general suspense account and
branch discrepancies, and independent experts have been instructed to undertake this examination.
Next steps
I have commissioned independent persons to undertake the necessary work. I am satisfied that they
meet the standards of expertise and independence appropriate to the tasks.
I do, of course, share your aim that matters should be drawn to a conclusion as soon as possible
consistent with the need for the work that remains to be done to a high standard. I hope you will
understand that, particularly in relation to the further testing of the Horizon system, this work may
take some time. I anticipate that I will be in a position to report back on the outcome of this further
work during May
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I firmly believe that the focus and scope of my review to date, together with the further work which I
have now commissioned, will at that time allow me to confirm that the processes designed and
implemented by Post Office Limited to understand, investigate and resolve those complaints were
reasonable and appropriate, and that there are no further enquiries which need to be undertaken into
this matter, whether by Post Office Limited or, indeed, by anyone else.
Finally, may I mention two other matters? First, and as I have noted above, a number of sub-
postmasters have made applications to the Criminal Cases Review Commission for the circumstances of
their convictions to be looked into with a view to those cases being brought back to the Court of
Appeal. That work is on-going and the Post Office continues to co-operate fully in the process. Second,
the Justice for Sub-postmasters Alliance is reported to have received funding to instigate civil
proceedings against the Post Office. However, at the time of writing, no claim has been issued, nor has
15 I any letter ofbefere claim been received.
I hope that the above sets out matters satisfactorily. If you would like to discuss the review report with
me, I would be happy to do so.
[ENDS]
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Mark Underwood, 02/03/2016 04:10 PM
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