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Group Litigation Update
‘Author: Ben Foat/Rodric Williams ‘Sponsor: Ben Foat Meeting date: 10 December 2019
Executive Summary
Context
Post Office has received the courts’ decisions on the Horizon Issues trial (which is
embargoed until 2pm on 16 December 2019), and on the application for permission to
appeal the March 2019 Common Issues judgment (where permission was refused).
Mediation with the Claimant group commenced on 27 November 2019 and is continuing
in light of the progress the parties have made towards settlement.
Post Office has filed its Defences for the “Further Issue” trial scheduled to commence
on 2 March 2020, which will determine the types of financial loss the Claimants can
recover in principle and how those losses should be quantified.
Questions addressed in this report
1. What is the status of the mediation/settlement discussions?
2. What is the status of the litigation?
3. How is Post Office responding operationally to the Horizon Issues judgment and the
refusal of permission to appeal the Common Issues judgment?
4. What are the next steps in the Group Litigation?
An update on the Communications positon will be provided separately.
Conclusion
1. Mediation will continue into the week commencing 9 December 2019, during which
the parties are likely either to reach a settlement, or conclude that mediation has
run its course at this juncture such that the litigation continues.
2. The Horizon Issues judgment has been received in draft and will be made public at
2pm on 16 December 2019. Permission to appeal the Common Issues judgment
was refused on 22 November 2019. The third, “Further Issues” trial remains on
course to start on 2 March 2020.
3. The operational changes implemented after the Common Issues judgment are being
reviewed following the refusal of permission to appeal, which review will now also
incorporate any operational changes necessitated by the Horizon Issues judgment.
4. The next key steps in the litigation are to: attend to the handing down of the Horizon
Issues judgment on 16 December 2019 and the reaction to that judgment once
made public; agree the assumed facts to be used for the March 2020 Further Issues
Trial; identify criteria for selecting test claimants for subsequent trials; and prepare
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for the court’s PreTrial Review and Case Management Conference in late January
2020.
Input Sought Input Received
The Subcommittee is asked to NOTE the This paper has been prepared with
updates in this paper and the next steps to _the assistance of external legal
be taken in the litigation. counsel.
The Board is reminded to exercise caution when communicating about potential levels
of settlement. Communications about settlement should therefore only be held orally,
but if that is not possible, advice should be sought from Post Office’s lawyers.
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Mediation / Settlement
Mediation with the Claimant group began on 27 November 2019 and continued through
the week commencing 2 December 2019 into the week commencing 9 December 2019.
The parties are likely either to reach a settlement during this week, or conclude that
Mediation has run its course at this juncture such that the litigation continues. A verbal
update on the mediation and the progress made towards settlement will be provided to
the Subcommittee at its meeting on 10 December 2019.
Litigation Update
Horizon Issues Judgment
On 28 November 2019 we received Mr Justice Fraser's draft judgment on the Horizon
Issues trial (the “HIJ"). The HIJ will be “handed down” and made public at 2pm on 16
December 2019. The judgment is subject to an embargo, meaning the content
po site oan .
outside the Post Of Failure to adhere to this is a
criminal offence.
is handed down.
On the core issue of whether Horizon is a “robust system, the draft judgment has found
that:
- the Horizon system in use today (HNG-A) is "relatively robust" (a helpful finding
which substantially mitigates the immediate operational risks to the network);
BUT
- the robustness of previous versions of Horizon were "questionable, and did not
justify the confidence placed in it by Post Office in terms of its accuracy"
(Horizon Online/HNG-X; 2010 to 2018), and "not robust" (Legacy Horizon; 2000
to 2010).
Appendix [4] has a summary of the answers to each of the 15 Horizon Issues. The (Formatted: Font: Bold )
key findings, in addition to above, are:
>In relation to Legacy Horizon and HNG-X, there was a "material risk" that bugs~..—{ Formatted: Font: (Default) Verdana, 11 pt )
in Horizon could be the cause of shortfalls in branches. ~{ Formatted: Justified, indent: Left 1m, Hanging” 05
Fujitsu (but not Post Office) has wide abilities to edit branch data using remote ce oh ot Recoieeie ine retary bhegle
access (Post Office accepted this pre-trial) but those abilities were subject to 1.2 li, Bulleted + Level: 1 + Aligned at: 0.63 cm +
"inadequate" controls. Hiaetaat Tare
= Post Office could inject transactions into a branch's accounts if physically
present in a branch, but could not do this remotely (Post Office accepted this
pre-trial).
ff ary-of- the findings-on the 15-specificHorizonissues:
feagthy}}
It appears that the tone of the HIJ is generally better than the Common Issues
Judgment ("CIJ"), but there is repeated and, in places stringent, criticism of Post Office
and Fujitsu for not properly and diligently investigating possible IT problems and being
too quick to assume that fault rested with the postmaster. This echoes Fraser J's
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comments in the CIJ about a lack of investigative support and transparency from Post
Office.
Post Office is obtaining advice from Leading Counsel on the prospects of appealing the
HIJ. Advice is also being obtained on the costs consequences that flow from the
judgment. A verbal update on these issues will be provided to the Subcommittee at its
meeting on 10 December 2019.
HJ Impact on Criminal Convictions
Brian Altman QC has been instructed to advise Post Office on the impact the HIJ may
have on postmasters convicted in connection with branch losses, and the steps Post
Office should now take with respect to those convictions in light of the judgment.
Brian’s preliminary views are that:
- the HI) may be of limited relevance to convicted postmasters or the CCRC
because it largely deals with the potential for branch accounts to be affected by
Horizon errors generally, rather than whether Horizon had any actual effect on
an individual's specific case (which is what the Court of Appeal (Criminal
Division) should be concerned with);
the HIJ has however put Post Office on notice that it may (as a prosecutor) need
to give disclosure to convicted postmasters on the existence of bugs and errors
in Horizon, the reliability of a Branch Trading Statement, and/or Post Office and
Fujitsu's ability to access remotely a branch’s accounts; and
Post Office should liaise and ideally agree with the CCRC the approach to take
to the disclosure issue so that any action best assists their reviews and is taken
with their sanction.
Brian will provide finalised advice on this once the final version of the judgment has
been handed down.
Common Issues Appeal
On 22 November 2019, Court of Appeal judge Lord Justice Coulson refused Post Office's
application for permission to appeal the CIJ. The key points to note are:
Coulson LJ considered that Fraser J's conclusions were too difficult to
disentangle from the findings of fact he made at trial (which findings should not
be the subject of an appeal);
He also considered that some points taken on the permission application could
and should have been taken at trial;
He emphasised that the good faith duty is not a demanding obligation, and only
requires the parties to “refrain[] from conduct which in the relevant context
would be regarded as commercially unacceptable by reasonable and honest
people”.
- There is again some criticism of Post Office in the judgment, but not about the
way the permission application was pursued in the Court of Appeal.
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The effect of this decision is that the findings made in the CIJ will govern Post Office’s
relationship with postmasters (discussed further below). Post Office has been advised
that it has no prospect of successfully reopening this decision.
Third / Further Issues Trial
On 25 November 2019 Post Office filed its Defences for the March 2020 Further Issues
trial, which will determine whether the losses the Claimants are claiming are recoverable
in principle and, if so, how they should be quantified. The Claimants can file Replies to
the Defences by 16 December 2019. Post Office can then file Rejoinders by 10 January
2020 if so advised.
The parties will now produce by 16 January 2020 a list of assumed facts against which
the Claimants’ claims can be assessed. There will then be a court PreTrial Review with
Fraser J on 23 January 2020 to address any outstanding issues which need to be
resolved before the scheduled start of the trial on 2 March 2020.
Future Trials
The parties have asked the Court to convene a Case Management Conference on the
first available date on 23 January 2020 (i.e. when the parties will be before him for the
Further Issues PreTrial Review) or shortly after to agree the procedural steps and
timetable required for the further conduct of the Group Litigation.
If the litigation is not settled, the most effective way to conclude the litigation is for
there to be a trial of all the issues raised by around 5-15 test cases. We also consider
that putting the full story of the Claimants’ cases, including some of their improper
conduct, in front of Fraser J may be the only way to change his general perception of
Post Office. This would result in a trial in possibly late 2020, but more likely 2021. The
Claimants may however argue (and the Court may prefer) to continue to break the
litigation down into phases.
The parties required to file on 23 January 2020 criteria for selecting test cases which
are representative of cases in the wider Claimant group. Significant work has been
undertaken to understand each individual Claimant's case, and to identify the high-level
features of the claims which should be reflected in the test cases. We intend drafting
the criteria so as to allow Post Office to select Claimants most favourable to our case.
Costs
LIMARK UNDERWOOD TO UPDATE the November 2019 UPDATE: As presented to
the Board on 30 April 2019, £8m was initially included in the 19/20 Budget for the cost
of the litigation. Since then, and as included in the October 2019 Quarterly Delivery
Board Paper, this allocation in the 19/20 Budget has been increased to £15m and as at
P7, £7.7m has been spent. By the end of November 2019, we will know whether we
have permission to appeal the Common Issues judgment, the Horizon judgment will
have been received, and the first mediation meeting will have taken place. A revised
spend forecast will be provided at the January 2020 Board.]]
Operational Impacts
Horizon Issues Judgment
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As a result of our contingency planning, we are ready to identify and respond to the
likely immediate reactions (postmaster, customer, client) to the HIJ and any subsequent
operational impacts. Our external and internal communication material is extensive
and able to be refined quickly to suit the need. An update on the Communications
position will be provided separately.
Having assessed the embargoed HIJ, we expect our post office network to continue to
operate normally, however some postmasters may raise some of the findings in the
HI, turn to Post Office for confirmation that the Horizon system they are using is fit for
purpose, and question the validity of previously settled discrepancies and TCs whilst
using older versions of Horizon (pre-HNG-A).
We therefore anticipate ‘historic claims’ to flow from the Horizon Issues Judgment once
handed down on 16 December 2019, either in a piecemeal fashion or as part of a
secondary group, from current and former postmasters who have repaid/are repaying
shortfalls, were suspended without remuneration, and/or question whether they
received adequate notice of contract termination.
The agreed view across Legal and Operations is that we apply the same distinction to
resolving historic claims that Fraser ] has made between the Horizon systems, and
distinguish claims that arise out of events post HNG-A going live in a branch ("new
claims") from those that arise out of truly "historic" events.
New claims are to be assessed through the recently introduced Operations investigation
processes, and historic claims are to be resolved by the Post Office case review team
within LCG, We are currently developing the scope and design of the ‘historic claims’
approach with the aim of including this in our public statement to the HIJ, and as part
of any agreement to settle the litigation as a whole.
Common Issues Judgment / No Permission to Appeal
The Court of Appeal’s refusal to grant Post Office permission to appeal the CI) means
that Post Office’s legal relationships with postmasters must be managed in accordance
with the findings made in that judgment.
Since the CIJ was handed down, a number of operational changes were introduced to
reflect its findings. An overview of Operational position following the refusal of
permission to appeal is set out at Appendix 3.
Now that we have been refused permission to appeal the CJ, and have also received
the HIJ, Legal and Operations are revisiting our policies, processes and ways of working
to discharge our legal obligations consistently with the courts’ findings. The intention
is to have one plan that addresses both judgments. Internal and external assurance
will be built into this plan.
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Central to this plan will be revising Post Office’s standard postmaster contracts to
address the courts’ judgments. A preliminary legal workshop was held on 4 December
2019 to identify contract reform objectives and strategy options, the contractual
amendments that could be made, and the means by which any variations could be
implemented. The discussion paper prepared for this workshop has been placed in the
Reading Room.
Next Steps
‘An overview of the main court and settlement-related activity in the Group Litigation
through to October 2020 is set out in the “Group Litigation Timetable” at Appendix 1.
Between now and January 2020 we will:
* continue to mediate and pursue settlement discussions with the Claimant
Group;
* attend to the HIJ handing down on 16 December 2019, the reaction the
judgment receives once made public, and operationalising the outcomes of the
HIJ and refusal of permission to appeal the C1J decisions; and
continue to prepare for future trials, including agreeing the assumed facts to be
used for the March 2020 Further Issues Trial, identifying criteria for test claimant
selection for subsequent trials, and preparing for the court's PreTrial Review and
Case Management Conference in late January 2020.
A timeline of the key milestones through January 2020 is set out at Appendix 2.
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Appendices
1. Group Litigation Timetable
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2. Group Litigation Timetable
Date
27 — 28 November 2019
lestone
Mediation (ongoing): UKGI/BEIS authority to be obtained if required.
2. I 10 December 2019 Post Office Board Subcommittee Meeting
3. I 16 December 2019 Horizon Issues Trial: Handing down of trial judgment (2pm)
4. I 16 December 2019 Further Issues Trial: Deadline for Claimants to serve Replies to Post Office's Defences
5. I 10 January 2020 Further Issues Trial: Deadline for Post Office to serve Rejoinders to Claimants’ Replies (if advised)
6. I 16 January 2020 Further Issues: Parties to set out assumed facts and issues to be decided at Further Issues Trial
7. I 22 January 2020 Post Office Board Subcommittee Meeting
8 I 23 January 2020 Further Issues Trial: PreTrial Review
9. I 23 January 2020 Further Issues: Proposed date for parties to serve and file their proposed Selection Criteria for Test Claimants
10. I 23 January 2020 Overall GLO: Case Management Conference (first available date on or after 23 January 2020)
11. I 28 January 2020 Post Office Board Meeting
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3. Operations planning post appeal outcome
Authors! Tim Perkins, Julie Thomas Business Sponsors: Julie Thomas, Amanda Jones
Summary
The refusal of permission means that the Common Issues Judgment (C13) has radically
reshaped the relationship with SPMs. It will now be more difficult to make commercial
decisions about the network without legal challenge, recover shortfalls and suspend or
terminate SPMs where there is improper conduct. Beyond the legal issues, the CIJ calls
for a new relationship with SPMs grounded in good faith, trust and confidence and
transparency. In light of the CIJ, many operational changes have already been
implemented and further changes will be required.
Operational changes to date
Changes have been made to the Branch Support model applying the requirements of
the CID:
1. Transaction Correction wording changed and under strict quality control to ensure
these are plain English and correct
2. Transaction Correction Disputes Team mobilised to help SPMs if they do not
agree with a Transaction Correction
3. Tier 2 Branch Support implemented with dedicated Case Handlers helping
Postmasters by investigating discrepancies if Tier 1 call is unable to identify the
cause (this is currently running at 99% success rate)
4. Horizon Knowledge Based Faults (KBFs) formerly known as KELs - joint work
with IT and Fujitsu completed to separate known faults from Knowledge Based
Articles (KBA) and Knowledge Based Information (KBI)
5. KBF Process — the process for identifying faults has been formalised and the
(current) 11 known faults have been documented and uploaded to Dynamics and
the Branch Insights Tool for reference by the Branch Support, Loss Prevention and
Area Manager teams if a Postmaster reports a discrepancy
6. Branch Insight Tool - developed and launched to all Area Managers and branch
support teams and is designed to be shared with SPMs to give detailed Operational
performance information to enable supportive discussions around Operations
conformance.
Changes have also been made to the approach to losses, suspensions, terminations
applying requirements of the CI):
7. New Loss Prevention function has been established to minimise loss whilst
supporting branches against the threat of internal and external losses
8. End to end process review - all data, decisions, letters, processes involved in
supporting branches, identifying losses, supporting recovery of discrepancies,
moving into loss dispute, recovery, suspensions and terminations have been
reviewed and adjusted to address the requirements of the CIJ
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9. Loss Prevention Case Workers - new team mobilised to administer the end to
end audit process ensuring accurate, consolidated information is maintained at an
individual case level
10. Audit Rationale Document ~ produced for every audit and shared with the branch
operator at the start of each audit to improve the transparency of the rationale for
the audit
. Audit opening and closing scripts - have been produced to ensure a consistent
conversations the branch operator at the start and end of each audit
12. Audit attendance - all audits now have a minimum of two auditors to ensure
consistency and cross check
13.New telephone quality assurance process to gain feedback from branch
operators on their audit experience
14. Weekly management of suspension cases introduced to improve visibility and
speed of resolutions
15. Contract management restructured to create one point of decision making for all
suspension, termination and reinstatement decisions to improve consistency and
speed.
16. Correspondence review and amended ensuring legal compliance, but supportive
tone of voice (including remedy letters sent by Contract Advisors and discrepancy
letters sent by Loss Recovery)
17. Loss Recovery call monitoring introduced to ensure quality and consistency of
telephone calls
18.PACE interviews - no longer carried out by Security given that prosecution
processes are on hold
19. Increased support and Operation Torch visits - are being carried out by the
Security teams to focus on helping operators prevent their exposure to increasing
retail crime and to drive security compliance
20. Culpability reviews — processes for operator culpability (e.g. sleight of hand) have
been reviewed to ensure consistency and a focus on support for the branch operator
1
Next Steps
In light of the refusal of permission, some key Operational issues require further review
and amendment. Work is underway between Legal and Operations to review and focus
on the four areas outlined below to ensure Post Office has fully embedded the outcomes
of the CJ:
21.Loss recovery and Branch Trading Statement (Grounds of Appeal 21-24):
The BTS is a high level end-of-month summary showing cash and stock movements
over the period. It shows whether there was a net surplus or shortfall at the end of
the month. Currently, Post Office relied on an undisputed BTS as a basis to recover
shortfalls from Postmasters on the basis of it being a "stated account" as a matter
of agency law. The CI) questioned whether the BTS could ever be a "stated
account", pointing to the lack of a mechanism to dispute entries in the branch
accounts within Horizon and the BTS not showing that sums may be
disputed. Consequently, Post Office can no longer rely solely on an undisputed BTS
to recover shortfalls. The possibility of delivering improvements to the BTS should
now be considered to improve the clarity of the information shown on the BTS. This
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will increase the evidential weight of the document, as part of a new loss recovery
framework.
. Establishing losses: The current processes for establishing losses cannot always
distinguish between the total level of loss and level of loss caused by ‘negligence,
carelessness or error’ of the agent or their assistants. (Grounds of Appeal 25-26).
This impacts all investigations into disputed losses as losses are currently considered
on the balance of probability to be caused by ‘negligence, carelessness or error’
where other potential causes have been ruled out, rather than through positive
establishment of a direct cause. Losses can be proven via a Tier 2 investigation
(implemented after the C1J), and this will show specifically where the error occurred
if there was one. Where losses are disputed, e.g. where the Tier 2 investigation
outcome is inconclusive, it is unclear how a direct cause can be established unless
there is an admission by the agent or their assistant.
Suspension: Suspension periods are currently used for investigation purposes,
where the CIJ states that Post Office needs to have first complied with all its other
implied duties (which would include investigation of a discrepancy) prior to
suspension (Grounds of Appeal 11-13). This is currently not possible in all cases and
in the most extreme circumstance where Post Office believes there are significant
sums at risk, or where there is a clear breach of contract (akin to Gross Misconduct).
Post Office is currently suspending on full remuneration in line with the requirements
of the CL).
. Repudiatory breach: Operationally, there is not currently an exhaustive list of what
constitutes a repudiatory breach of contract. This is required to ensure compliance
for terminations (Grounds of Appeal 8, 14-20). This accelerates the need to re-write
SPMs contracts and work is underway to confirm approach.
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4. Horizon Issues outcomes
Issue (1): To what extent was it possible or likely for bugs to have the _
Formatted: Font: Verdana, 11 pt
transactions, or (b) undermine the reliability of Horizon accurately to process
and record transactions?
It was possible for bugs to have the potential both (a) to cause shortfalls in to
Subpostmasters’ branch accounts or transactions, and also (b) to undermine the
reliability of Horizon accurately to process and record transactions. There was a
significant and material risk of branch accounts being affected by bugs in Horizon.
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 the subject of the group litigation ~
supports the conclusion that there was a significant and material risk of inaccuracy in
branch accounts as a result of bugs in the Horizon System (both Legacy Horizon and
HNG-X).
Issue (2): Dit ri IT system itself. Subposti rs of such
bugs, errors or defects as described in (1) above and if so how?
The Horizon system did not alert SPMs to bugs. 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.
Issue (3): To what extent and in what respects is the Horizon System
S ” >
Legacy Horizon was not remotely robust.
HNG-X, the first iteration of Horizon Online, was slightly more robust than Legacy
Horizon.
HNG-A is far more robust than either of the previous two iterations of the system.
There was a material risk that 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.
Issue (4): To what extent has there been potential for errors in data recorded
within Horizon to arise in (a) data ent 'b) transfer or (c) processing of data
in Horizon?
There was a material risk for errors in data recorded within Horizon to arise in (a)
data enti b) transfer or (c) processing of data in Horizon in both the Legacy
Horizon and HNG-X forms.
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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?
The comparison of data is largely automated. The Judge does not go into detail as to
how this is done. 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 did the Judge
consider that such evidence was required properly to answer this issue.
Issue (6): To what extent did measures and/or controls existed in Horizon to
revent, detect, identify, report or reduce to an extremely low level of risk of
data and software errors?
The measures and/or controls that existed on Legacy Horizon and HNG-X did not
revent, detect, identify, report or reduce to an extremely low level the risk of data or
software errors. 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.
Issue (7): Were Post Office and/or Fujitsu able to access transaction data
recorded by Horizon remotely (i.e. not from within a branch)?
This answer was substantially agreed by the parties. Both Post Office and Fujitsu
could
by Horizor
Issue (8): What transaction data_ and reporting functions were available
they were caused by bugs, errors and/or defects in the Horizon system?
This issue was substantially agreed by the parties. The Judgment lists out a series of
systems and data sources available to Post Office that are not controversial. The
Judge also notes that Post Office had access to data and systems that were not
available to SPMs (again this is not controversial).
Issue (9): At all material times, what transaction data and reporting functions
(if any) were available through Horizon to Subpostmasters for (a) identifying
shortfalls and their causes; and (b) accessing and identifying transactions
recorded on Horizon?
This issue was substantially agreed by the parties. The experts agreed that the causes
of some types of shortfalls may be identified from reports or transaction data available
to SPMs. Other causes of 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.
The Judge also found that because the reports and data available to SPMs were so
limited, their ability to investigate was itself similarly limited. He went on to find that
SPMs simply could not identify discrepancies and shortfalls, nor their causes, nor access
or properly identify transactions recorded on Horizon, without cooperation from Post
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Office. This finding was not however required as there was no question to this effect
asked by any of the Horizon Issues and the Judge has gone out of scope here.
Issue (10): Whether the Defendant _and/or Fujitsu have had the ability to
remotely access and change branch data without the knowledge or consent of
SPMs.
Fujitsu had many facilities for doing this and some of these could have been done
without the knowledge or consent of SPMs (as accepted by Post Office before trial, but
only following Fujitsu initially giving incorrect evidence on this point).
Post Office could only change branch data utilising its Global User role. This permitted
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 a branch,
as that is the only way Global User could be used by the Post Office. 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.
Issue (11): Did the Horizon system have any permission controls around
remote access and did the system maintain a log of such actions and such
permission controls?
There were permission controls, but the remote access facilities were very wide and
they were not effectively controlled. The permission controls and logs were
"inadequate" and "deficient.
Issue (12): If the Defendant and/or Fujitsu did have such ability, how often
was that used, if at all?
Due to Fujitsu’s poor record keeping, the experts could not provide any confident
evidence on this subject of frequency. 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.
affect the reliability of the Branches’ accounting positions?
The remote access facilities were very wide. These facilities therefore 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 the Judge
held was also relevant to the Horizon Issues as a whole.
Issue (14): How (if at all) does the Horizon system allow a SPM to render
accounts and dispute shortfalls?
This was 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.
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Note: Without naming Post Office but clearly aiming the comment at Post Office, the
Judge criticises the parties for raising this as point of dispute when the answer was clear
from the Common Issues. However, Post Office has never claimed that Horizon had
the ability to record a dispute. Post Office's case was that disputes are raised through
the helpline. This dispute method is acknowledged by the Judge at the end of his
answer
Issue (15): How did Horizon process and/or record Transaction Corrections?
This was substantially agreed by the parties. TCs are largely created and processed
outside of Horizon through manual actions, save for when a SPM accepts the TC in
branch on the Horizon terminal. 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.
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