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For Hearing 27" April 2023
IN THE MATTER OF A PUBLIC INQUIRY
THE POST OFFICE HORIZON IT INQUIRY
NICHOLA ARCH
VIJAY PAREKH
) SATHYAN SHYJU
SUMBMISSION ON COMPENSATION
lL. The lateness of this submission is much regretted. Circumstances precluded it being
made before now.
2. The engagement of the Chair with issues of compensation is welcomed. It is very
unlikely that the progress in respect of, for example, insolvency issues, could have
been made, but for the Chair’s engagement. Whilst writing, I mention Ms Laura
Nicholls, Senior Technical Adviser in the Chief Technical Officer’s Team at the
Government Insolvency Service. Ms Nicholls has been unfailingly helpful and
constructive in seeking to resolve complex issues, assisted, it may be said, by the
helpful written opinion of Ms Catherine Addy K.C..
3. It is surprising, on the second anniversary of the quashing by the Court of Appeal of
an unprecedented 39 wrongful convictions on 23 April 2021, to be writing in
connection with the unfairness of the arrangements made to compensate the Post
Office’s victims. Those arrangements: (1) lack independence, (2) lack transparency;
(3) are unprincipled; and (4) are incoherent. Accordingly, the present arrangements
fail basic tests for a fair compensation scheme. For reasons outlined, it is suggested
that the only way to resolve the present shortcomings of the various compensation
arrangements, and to maintain the confidence of claimants for compensation -
speaking for those whom I represent, is for an individual with appropriate judicial
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experience to be appointed to oversee/manage all 3 existing schemes. (It being
acknowledged that, in relation to the “OHC” scheme, this may entail special
adjustments, given that the ‘scheme’ is in fact litigation for damages for malicious
prosecution (but whether it should be so limited is open to serious question, for reasons
set out in my letters of March and April to Minister Hollinrake).)
The structural problems with the compensation schemes have resulted in wholly
disproportionate time and effort being diverted to addressing unsatisfactory aspects
(below), rather than progressing claims.
For any ‘compensation scheme’ worthy of the name, as distinguished from the
determination of legal rights, by court or arbitration process, there are two
requirements:
(a) That such a scheme be independent.
(b) That such a scheme be fair.
Independence may be seen as an element of fairness, but it is often treated as a
separate free-standing requirement.
Fairness carries with it at least the requirements of:
(a) Transparency.
(b) Reasonablene:
The requirement for reasonableness includes, but is not limited to, the requirement
that like circumstances be treated in a consistent way. (This is a major failing under
the present arrangements, as I have elaborated in my letter to Minister Hollinrake of
1 April 2023.)
There are at present 3 separate s
chemes for payment for harm inflicted upon its
victims by Post Office Ltd over 20 years. While familiar, the schemes are:
(a) Residual litigation in the ‘Bates’ group civil litigation that was last
before the Court in December 2019, that was otherwise settled
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under the Deed of Settlement of 10 December 2019 immediately
following circulation of the draft judgment of Mr Justice Fraser in
Bates v Post Office Ltd (Horizon Issues) No 6. [2019]
EWHC 3408 (QB). That (residual) litigation concerns claims for
the tort of malicious prosecution by the Post Office. Those claims
are made by those who were parties to that litigation and who were
prosecuted and convicted by the Post Office on misleading,
incomplete and unreliable evidence. ‘Those claims are the residue
(
of all the other civil claims (causes of action) that were asserted by
“Convicted Claimants” in that litigation but which were
surrendered by them, unaccountably,! for £0.00, the only claim
being preserved being for malicious prosecution, that being
contingent upon an appeal court, in due course, quashing their
convictions. (Dubbed the “Overturned Historical Convictions” or
OHC scheme. But it is no/ a compensation scheme, but rather
civil litigation for damages in against the Post Office, as
represented by its solicitors Herbert Smith Freehills LLP.)
(b) A scheme recently announced by the Department of Business and
Trade called the DBT GLO scheme. This is an ex gratia (non-
rights- based) compensation scheme devised by the government,
the owner and sole shareholder in Post Office Limited, established
in recognition that the compensation paid to not-convicted
claimants in the Bates civil litigation under the group litigation
order (GLO) was inadequate, when set against compensation
available under the Historic Shortfall Scheme (HSS) established as
a term of the settlement of the Bates GLO litigation for those who
Tt remains puzzling why the Convicted Claimants under the 201 ttlement Deed surrendered
all their civil claims, but for contingent malicious prosecution, for £0.00. As a matter of logic, it
might be thought that those claims be attributed value also, contingent only upon an appeal
court quashing their conviction. The claims manifestly had value, subject only to the
contingency that a claim for damages not be a collateral attack on the (jury) verdict. That
contingency was satisfied in the self-same way as the preserved claim for malicious prosecution.
It had the result that any payment made to a Convicted Claimant, prior to April 2021 was ex
gratia and not as of right.
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are victims of the Post Office but who were not participants
(claimants) in the Bates civil proceedings settled under the terms
of the Settlement Deed in December 2019. The reason for this is
that most of the compensation paid by the Post Office (upwards of
80%) was paid out to the funders of that litigation (Therium), the
insurers, and to the claimants’ lawyers. That outcome (that those
who with great difficulty established that Horizon was an
unreliable system apt to have caused the losses experienced by
them, were
riously financially disadvantaged by having
brought/been parties to that litigation) was rightly seen by the
government and Parliament to be unfair. This scheme is
administered by the government through DBT that owns the Post
Office through UKGI and HM Treasury ~ that i:
itself paying the
compensation for all the ‘schemes’, it being recognised that Post
Office Limited does not have the resources to pay the level of the
claims now made against it.
(co) The Historical Shortfall Compensation (or HSS) scheme, a legal
rights-based extra judicial scheme established pursuant to the
express terms of the December 2019 settlement agreement of the
GLO civil litigation for those who were victims of the Post Office
but not parties to the civil litigation. This is a compensation
scheme for the purpose of settling otherwise free-standing claims
by those who suffered loss and damage as a result of the Post
Office’s conduct for losses falsely alleged against them in reliance
system. This scheme was
upon its flawed Horizon accounting
established by the Post Office Ltd in conjunction with its solicitors
Herbert Smith Freehills LLP and is supervised by it - the same firm
that acts for the Post Office Ltd in the continuing Bates v Post
Office litigation under the OHC claims
(a) above).
10. Much could be written about the various shortcomings with the existing
arrangements for payment to those wronged by the Post Office — and in due course
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may be (Sir Ross Cranston’s initial review of the flawed Griggs compensation
scheme for the HBOS/Lloyds Reading fraud extends to 134 pp.). The most obvious
objection is that the three existing arrangements contribute to perpetuating the
injustice inflicted upon its victims by the Post Office its Board and its lawyers, over
20 years. The present arrangements do little to assuage, indeed augment, distrust of
the Post Office and those connected with it.
No Independence
ll. A point to which insufficient regard has been paid is that, as a matter of law, the
present arrangements militate against fair compensation being paid to the Post
Office’s victims. Without elaboration, obvious points are:
fa) English company law is predicated upon the maximisation of
shareholder value. That is to say, the directors of a company are
in law duty bound to act in the interests of the shareholder(s).
Accordingly, the Board of the Post Office is bound to act in the
interests of the government. So the HSS scheme and payments
made by the Post Office under that scheme is subject to that
constraint/duty. The Board has a duty to ensure as little
compensation as possible is paid because that is in the interest of
the government as its shareholder. Any averments by the Post
Office about its concern for fairness require to be read against that
legal constraint.
(b) Under the OHC payments, ~ i.e. settlement of outstanding claims
in litigation - not only does the Post Office’s Board owe a duty to
its shareholder to settle claims for as little as possible, HSF is duty
bound, as its solicitors, to act in the interests of the Post Office.
Recent steps have been taken to seek to ameliorate the intrinsically
adversarial nature of the OHC scheme, but these cannot change its
fact as a ‘zero-sum game’.
12, Concrete examples of how this works in practice could be given, but are not
necessary for present purposes.
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13.
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It is disappointing to see that, in recent correspondence, DBT has aligned itself
closely with the position adopted by HSF in the OHC scheme.
Any statements made by the Post Office or others on its behalf that it is concerned to
see that “fair” compensation is paid must be read as subject to the foregoing
constraints that require that the minimum possible payment is made. All the
indicators are that the present arrangements are directed towards that end.
The central structural problem with the present arrangements is that there is no
counterbalance. DBT have sought to suggest that an independent panel and an
independent firm of solicitors provide that function ~ as a sort of ‘fall-back’. They do
not ~ the requirement is that there be independence at the point where an applicant
for compensation engages ~ not once there is ‘an issue’. The absence of any proper
independence in oversight of the various arrangements will tend all compensation
paid to be skewed in favour of the Post Office/the government.
Ifa lesson was needed in how lack of true independence works out in practice,
Professor Sir Ross Cranston’s review of the Independent Griggs review in the
“Cranston Report” provides what might be seen as a template for the present
circumstances.
https://www.cranstonreview.com/Content/Documents/The%20Cranston%20Rev
iew_v2.pdf Sir Ross found that Professor Griggs’ independence was compromised.
The objection, that has previously been made, is that none of the existing
arrangements are independent. They don’t even pretend to independence. The 3
‘schemes’ are administered by:
(a)
(b) The Post Office’s owner and sole shareholder (DBT/UKGI) —
GLO.
(c) The Post Office itself (overseen by HSF) — HSS.
As is elsewhere noted, the OHC is in truth not compensation but is the continuation
of litigation. The most grievously harmed victims of the Post Office remain locked
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in adversarial litigation on a residual head of claim (malicious prosecution)
constrained by the 2019 Deed of Settlement. Those who were not convicted are
engaged in a quasi-inquisitorial process administered by DBT unconstrained by the
2019 Deed. This is not only unsatisfactory, it is ultimately insupportable in justice
and fairness. It has material effects.
19. Should the point about independence require any additional support (that ties in
with the next point), I recently received a letter in connection with observations
made by me in January 2023 in connection with an HSS scheme claim; the author
of/signatory to the letter being Mr Simon Ricaldin of the Post Office. Mr Ricaldin
has overall responsibility within the Post Office for compensation. ‘The letter was
headed “Without Prejudice”. The Post Office is in a position to determine both if
and what compensation is paid.
20. Further, no argument for the continuing participation of Herbert Smith Freehills in
the operation/ management or supervision of the HSS scheme is available that is
capable of being reconciled with established legal principle.
21. The role of HSF in the Post Office GLO litigation is yet to be considered. It is
reasonably clear, however, that HSF played an important role, not only in replacing
Womble Bond Dickinson as the Post Offi
lawyers in negotiating the December
2019 Settlement Deed, but also in events leading up to that settlement, including, it
may appear, in acting as lawyers for the litigation oversight committee chaired by
Tim Parker. It is very possible that HSF were engaged in the attempt to bring about
the recusal of the trial judge.
22. The measure or dimension of the requirement for independence and confidence in the
fairness of a scheme is nece:
rily informed/affected by the manner in which the
litigation that gave rise to the requirement for the compensation scheme was
conducted. As an objection to the present arrangements there appears to be no
available answer other than that the Post Office’s averment, and that of others on its
behalf, that it wishes to see fair compensation paid. That is no more than bare
assertion.
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23,
24.
26.
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No Transparency
A fundamental problem is that there is no proper transparency in the arrangements.
It has already become apparent that the ENE undertaken by Lord Dyson is
problematic. The exercise was undertaken between HSF for the Post Office and
Hudgells Solicitors in Summer 2022. The problem with the ENE is that it is fact-
sensitive and the determinations are all subject to undertakings/a requirement for
additional undertakings. That is unsatisfactory. The ENE binds those who were
parties to its terms, but not others. Both the DBT and HSF proceed on the basis
that the ENE is to be treated as providing parameters/ evaluation for those not party
to it. It has been suggested that others were invited to participate, but on
examination that contention doesn’t stand-up.
Similarly, correspondence is routinely marked WP or WPSATC.
Importantly, there are fundamental problems with all the schemes in that there is no
consensus as to what itis that the Post Office’s victims are being compensated for.
Two examples suflic
fa) Claimants under the OHC arrangements would in principle have
a claim for the ‘lost years’ caused by the Post Office’s concealment
of its knowledge from 2013, at the latest (more likely 2010) that the
basis for its prosecutions v
s arguably ~ on evidence then available
to it (that Horizon lacked requisite “integrity” to support findings
to the criminal standard of proof) ~ unsound. It is strongly
arguable that the Post Office’s withholding of that information
from those it had convicted was abusive in obstructing access to the
court ~ a constitutional right that any court would take extremely
seriously. Ifso, putting to one side obvious issues in connection
with different causes of action contributing/ causing similar/the
same losses, such claims, as intentional torts, where made good,
support exemplary damages. The Post Office’s position is that all
and any such claims are precluded by the terms of the 2019
Settlement Deed. As has elsewhere been pointed out, that
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position puts in sharp relief the distinction between the OHG
arrangements and the arrangements for GLO compensation under
the DBT scheme, where perforce the 2019 Settlement Deed is
treated as non-binding for the purpose of paying ex gratia (not rights-
based) compensation that is explicitly intended to place an
applicant in the position that they would have been in, but for the
wrong and harm inflicted upon them by the Post Office. That is
neither the purpose nor the effect of the OHC scheme. That
outcome is incapable of rational justification.
(b) There is a major issue in connection with claims that are classified
as variously claims for “Horizon Shortfalls” and claims that are
either classified as not being Horizon claims or else are claims
where it cannot with confidence be said that the claims are only
“Horizon claims”. This recently arose in connection with my
client Mrs Nichola Arch, Mrs Arch was prosecuted for theft but
acquitted. Her prosecution took place so long ago that there are
virtually no contemporaneous documents available. Accordingly,
when it came to the payment of interim compensation, the
question arose as to whether Mrs Arch’s prosecution fell within the
terms of the DBT scheme ~ in short was hers a “Horizon” case or
might the prosecution have been brought on other possible
grounds? The circumstances gave rise to correspondence
between DBT and Mrs Arch in which it was explained that the “...
definition covers cases “in which the reliability of Horizon data was essential to
the prosecution because there was no evidence of the alleged shortfall other than
the balance shown by Horizon, and in which there was no independent evidence
of an actual loss from the branch account at the post office concerned, as
opposed to a Horizon-generated shorffall”.” (My underlining.)
The narrowly restrictive definitional provision under (b) above is apt to give rise to
significant injustice. The restriction and limitation owes its origin to the Court of
Appeal decision in Hamilton v Post Office Ltd [2021] EWCH Crim 577. On
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behalf of Mrs Arch I submitted a Note to DBT. For completeness I attach (with her
permission) a copy of that Note to these written submissions. Mrs Arch was very
fortunate indeed to have given both oral and written evidence to this Inquiry of the
circumstances of her prosecution. That evidence is of great importance. Many will
not have had that advantage. Similarly, Mrs Arch was perhaps fortunate to have
legal representation. Many others, in a similar position, may find the problem
confronting them less easy to address and perhaps difficult, if not impossible, to
overcome.
28. The “Horizon date was essential to the prosecution” taxonomy of claims is arguably
a false dichotomy or class of claims, predicated as it is on the Court of Appeal’s
judgment in Hamilton. But Hamilton itself was largely (in effect exclusively)
based upon the CCRC’s reading of Fraser J’s Horizon Issues judgment. That
judgment in turn was necessarily only on preliminary issues in the Bates litigation.
As is elsewhere noted, Fraser J knew only the half-of-it and was in any event, as his
judgment made clear, only concerned with Horizon ~ and the Post Office’s
contention that it was a reliable and robust system. Horizon was only one of a raft
of problems confronting the Post Office from 2013 — but the only one to have been
judicially considered. The Post Office and the government have latched on to the
Court of Appeal’s approach and treat it in effect as determinative that issues and
claims other than arising out of Horizon shortfalls are outwith compensation
arrangements. The analysis, and therefore the conclusion, are both arguably flawed
(I have elsewhere given examples of both (enormous) unattributed suspense account
funds and ATM endemic error).
CONCLUSION/RECOMMENDATION
29. While the engagement of the Chair on the compensation issues is greatly welcomed,
it is understood that that is not part of the remit of this Inquiry. Further, while the
engagement is welcomed, it is necessarily subject to the other demands and priorities
of this Inquiry.
30. It is impossible for those whom I represent to have confidence in either the
independence or the fairness of the existing compensation arrangements. All the
existing arrangements are overseen by the Post Office, its owner, the government,
10
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and/or its solicitors. ‘To that extent the arrangements are structurally skewed in the
Post Office’s/the government's favour.
31. The only way in which present shortcomings can satisfactorily be addressed is by all
the compensation arrangements being restructured under the management of
someone with appropriate judicial experience ~ assisted as necessary by a properly
constituted and qualified secretariat. That was the solution that became inescapable
for the HBOS/Lloyds Reading IAU fraud compensation scheme now chaired by Sir
David Foskett. That scheme is considerably simpler than the arrangements for
compensation now required because of the Post Office’s misconduct over 20 years
(not least, in that the basis for compensation in the HBOS scheme is clearly
defined/ circumscribed). The anticipated objection, that this will cause further delay
and inconvenience, is in truth no objection; fairness and justice are not matters of
convenience and expediency. Arrangements can readily be made to extend the
interim payment arrangements that already exist to accommodate any delay.
32. The immediately foreseeable alternative is further litigation. The judgment in Post
Office Ltd v Castleton [2007] EWHC 5 (QB) was likely obtained by fraud? The
Post Office has declined to pay Mr Castleton’s costs in that claim as a condition for
setting aside the judgment.
PAUL MARSHALL
24 April 2023
2-3 Gray’s Inn Square
Annex: Submission to DBT on behalf of Mrs Nichola Arch 15 March 2023
2 RBS v Highland Financial Partners LP [2013] EWCA Civ 328, [106] per Aikens LJ.
(Judgment obtained by RBS by fraud — suppression of facts.)
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RE: NICHOLA ARCH vy POST OFFICE
A HORIZON CASE?
NOTE (Rw /)
15% March 2023
Caveat/Qualification
This is not a legal opinion and it neither is, nor is it intended to be, other than a summary of some of the points
that can be made. It is intended as a discussion document. It is not to be taken to be Mrs Arch’s ‘case’ on the
issue raised/addressed. None of the points made should be taken to bind Mrs Arch in any way. The points
made in outline may be further developed, amplified or revised as appropriate.
Mrs Arch reserves the right to refer to this document as she chooses.
1. This Note is written on behalf of Mrs Nichola Arch at the invitation of Rob
Brightwell, Deputy Director, Business Resilience, Department for Business and
Trade following a conversation with the writer on 7 March 2023.
2. The substance of the reason for this Note is that an issue/question has arisen in
connection with the claim of Nichola Arch against the Post Office for compensation
under the government scheme for (not-convicted) participants in the ‘Bates’ GLO
litigation, that was compromised in December 2019 following a trial before Mr
Justice Fraser (immediately prior to judgment being handed-down by the judge).
The essential question, as I understand it, is whether Mrs Arch can bring her
circumstances within what the Court of Appeal Criminal Division have cla
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on
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a “Horizon case”!? The solicitors’ firm Freeths wrote to DBT on 2 March an email
that included the statement: “Unfortunately we do not hold any contemporaneous/evidential
documents for Nichola including any documents relating to her criminal prosecution and trial.” In
my view this statement should cause no difficulty, either for DBT or for Mrs Arch.
For reasons that I shall outline, there are compelling reasons (and evidence) not only
for the conclusion that Mrs Arch’s prosecution was a ‘Horizon case’, but, further,
that it is an early example of what may be considered to be a paradigm of a ‘Horizon
case’. That is to say, a prosecution where the false and unsupported - and
unevidenced - infe: e was drawn that a Horizon shortfall, that is to say an
apparent discrepancy between payments and receipts, as supposedly evidenced by
the Horizon computer data (alone), constituted/disclosed dishonesty and theft on the
part of the postmaster in question. (That such a contention should have been
sustained in so many instances, with success (viz conviction), raises important and
serious questions about the reliability and effectiveness of the judicial process that, to
date, remain wholly unaddressed.)
Mrs Arch is a core participant in the statutory Post Office Horizon IT Inqui
chaired by Sir Wyn Williams. She was the first of three former postmasters with
whom Sir Wyn discussed their experiences, prior to the formal opening of the
inquiry. Mrs Arch was the last former postmaster from whom Sir Wyn heard
evidence of the devastating human impact of the harm inflicted by the Post Office
upon the victims of its conduct.
A FALSE DICHOTOMY
What follows in the discussion under this heading is provided for information (it is
not intended (perhaps selfevidently) to make the point good). It is likely that the
issue identified is a continuing cause and source of serious injustice. It is the product
of the Court of Appeal, in its judgment in Hamilton v Post Office [2021] EWCA
Crim 577, having done nothing more than the bare minimum that was required to
determine ~ and adjudicate upon ~ the outcome of the appeals. That is an
DBT letter to Mrs Arch dated 28 February 2023: “ That definition covers cases “in which the reliability of
Horizon data was essential to the prosecution because there was no evidence of the alleged shortfall other than the balance
shown by Horizon, and in which there was no independent evidence of an actual lass from the branch account at the post
office concerned, as opposed to a Horizonegenerated shortfall”.”
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approach, but it is one that wholly disregards the Gourt of Appeal’s second function
that is to say its ‘supervisory’ role for the inferior courts. Many would consider that
the court ought to have gone on to consider why, in so many manifestly similar
instances, innocent people had been wrongly convicted on seriously incomplete and
unsatisfactory evidenc a result became victims of the miscarriage of justice
on a scale hitherto unknown ~ that is to say, why the courts had failed to operate as
intended and as they should?? Why the court did not do so admits of no easy or
obvious answer. (The failure of the legal system is not an issue with which Sir Wyn
Jilliams is seized.)
This issue, accordingly, engages with the dichotomisation by the Court of Appeal
Criminal Division (Holroyde, Pickin and Farbey) in the judgment of the court,
reported as Hamilton v Post Office Ltd [2021] EWCA Crim 577, of those appeals
that it considered to be “Horizon cases” on the one hand, and those that in its.
judgment were not “Horizon cases” on the other.
The dichotomy appears to be canvassed by the CCRC in referrals under s. 9 of the
Criminal Appeal Act 1995, and, more particularly and importantly for present
purposes, in the judgment of the court at paragraphs [77], [132], [135], [137], [138].
Applying that dichotomy/taxonomy, the appeals of [GRO] , [GRO]
and [GRO] were dismissed. (In effect, the default position appears to be ‘if
not a Horizon shortfall case’ the Post Office’s prosecution was unimpeachable and
its evidence has been treated as reliable and the resulting conviction not ‘unsafe’
the litmus test for a successful appeal. The remaining 39 appeals were, in every
instance, allowed on both grounds of appeal ~ i.e. “first” and “second” category
abuse of process of the court by the Post Offi
eas prosecuting authority. The
second is the very serious conclusion that the Post Office was engaged in conduct
likely to undermine the criminal justices system and/or public confidence in it.
The essential distinction, that appears to have commended itself to the Court of
Appeal, but on which there was it appears to have been no argument and no
(relevant) evidence (a feature, perhaps not without irony, in each of the prosecutions
successfully appealed), is that if a person was prosecuted on the sole basis of evidence
A question that plainly resonates , ironically, with the Post Office’s experience with Horizon itself.
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of (typically) an unexplained balancing error in their Horizon account, then the
appeal against conviction has been allowed (because the reliability of Horizon data
was essential to the prosecution), but if that was not the sole/only basis for their
prosecution and other data/evidence was available as the basis for a prosecution, the
appeals failed, as happened with [GRO], °°! and [GRO]. Further, it appears to
be the case (perhaps remarkably) that appeals have only been allowed by appeal
courts where the Post Office has accepted that there were disclosure failures in
connection with Horizon (viz ‘first category’ abuse of process is not contested).
Itis likely that the Court of Appeal’s dichotomising and the CCRC’s analysis are
similarly flawed and simplistic. The reason for this is that the Court of Appeal’s
approach (and the CCRC’s before it) was informed by very limited (constricted)
evidence.
The burden of that evidence
Fraser in Bates v Post Office Horizon Issues (No. 6) [2019] EWHC 3408. That
vas itself provided by the judgment of Mr Justice
judgment itself, with respect to the judge, while a masterly account, was limited by
what now appears to itself have been limited and unsatisfactorily constricted
disclosure by the Post Office. That is to say, even on the Horizon Issues trial, the Post
Office failed to give important and highly relevant disclosure: Jsmay was not
disclosed, the Post Office’s board’s notification to its insurers of risk in 2013 was not
disclosed, and Detica’s October 2013 report (below) was not disclosed. Each of these
constitutes a serious and material disclosure failure by the Post Office ~ a failure that
arate from the i
is entirely s es that were considered by the Court of Appeal in its
Hamilton judgment.
Perhaps the most important single document that appears not to have been disclosed
in that (GLO) litigation was a document submitted by a firm called Detica Net
Reveal (“Detica”), a consulting division of British Aerospace (BAE Systems). In
October 2013 Detica, having undertaken several months of detailed analysis of Post
Offfice’s systems, transactions and resilience, specifically resilience to fraud, in an
‘The CCRC explained that it ceased to pursue its own inquiries and waited for Fraser J's judgment
before deciding whether to refer cases to the Court of Appeal pursuant to the Criminal Appeal Act
1995 — some of which had been subject to consideration by the CCRC from around 2013/2014.
(That does not begin to justify the delay for the purposes of Art. 6 ECHR.)
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extensive report (that is likely to have cost the Post Office several hundreds of
circulated at the
thousands of pounds - if not more - in consultancy fees) that wa
highest levels within the Post Office (and ought to have been considered by the
board) concluded and advised the Post Office that its systems were “not fit for
purpose” in a modern retail environment. That conclusion was not narrowly
concerned with Horizon. Specifically, Detica concluded that the Post Office was
unable reliably to reconcile data from disparate sources.
One example of repeated systemic error identified by Detica was in ATM.
were lypically prone to reconciliation error. Detica concluded
that ATM error could not be accounted for by fraud alone. That wasn’t a Horizon
issue.
ATM errors gave rise to enormous Post Office suspense account balances (tens of
millions). Second Sight in their 2015 Final Report observed (2.18): “In addition to
the credits being taken to Post Office’s General Suspense Account we have been
informed very recently that at each year end substantial unreconciled balances
existed on many of the individual suspense accounts. These unreconciled balances
for the 2014 financial year were approximately £96 million in respect of Bank of
Ireland ATMs and approximately £66 million in respect of Santander. These
unmatched balances represent transactions from individual branches that occurred
in the preceding six months”.
The Post Office’s ATM errors were separate from problems with, and bug
Horizon. Accordingly, even on that point alone, the Court of Appeal’s dichotomy
between “Horizon cases” and “not Horizon cases” issues is plainly flawed and somewhat
simplistic. That it has become an entrenched, if lazy, tool for analysis is regrettable.
The Detica report appears not to have been disclosed in the “Bates” GLO litigation
and was not before the Court of Appeal The reason for such an important
The Detica report of October 2013 was referred to in the writer’s written submissions to the Court of
Appeal on behalf of the appellants Misra, Felstead and Skinner (whose appeals were successfal) but
those submissions were not maintained and pursued by Lisa Busch Q.C. in March 2021 afier the
writer ceased to be involved in the appeals from December 20 20 and the Court of Appeal, rather
unfortunately, was not invited to admit the October 2013 Detica report in evidence. Had it
considered the Detica report, the dichotomy between ‘Horizon cases’ and ‘norHorizon cases’ would
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document that was widely circulated at the highest levels within the Post Office not
being disclosed remains an important, but to date unanswered, question. It was
likely a very important document in the Post Office’s strategic decision, from 2014,
to cease prosecuting its postmasters and employees for Horizon “shortfalls”.
It is not known if the government, as the Post Office’s owner and sole shareholder
was privy to the 2013 Detica report.
Regardless of the (in)correctness of the dichotomy drawn by the Court of Appeal
between those cases that it considered to be “Horizon cases” and those that were not
Horizon cases, there are a number of reasons for the view that it is overwhelmingly
likely that Nichola Arch’s prosecution was a “Horizon case” and not of the category
“not a Horizon case” according to the Court of Appeals’ (unsatisfactory) taxonomy
of appeals.
It appears to be accepted, at least in principle, that if Mrs Arch’s prosecution was for
a Horizon shortfall ~ and was therefore a “Horizon case” within the Court of
Appeal’s homespun formulation, then in principle her prosecution (ex hypothesi
without admission) may be treated as, further, a malicious prosecution. But the
argument runs, so far as is understood, “Mrs Arch was not successfully prosecuted and
therefore her circumstances are different from other prosecution cases and it cannot be said with
confidence, that she was prosecuted only for a Horizon shortfall without other evidence’. This, for
reasons outlined below, is a surprising position for DBT/the Post Office to adopt.
As a preliminary observation, it is remarkable for it now to be suggested that Mrs
Arch’s claim does not, or may not, fall within the “Horizon cases” category of
claims, as identified by the Court of Appeal. Such a view can only be the product of
ignorance and/or disregard of the account given by Mrs Arch in interview with Sir
Wyn Williams in January of 2021, and more particularly in her written and oral
evidence to the Inquiry in March 2022.
MRS ARCH’S EVIDENCE TO SIR WYN WILLIAMS WAS THAT SHE WAS PROSECUTED
FOR A HORIZON SHORTFALL
not have been available and would almost certainly not have been articulated and adoptedin the way
it was.
SUBS0000056_0017
20.
21.
22.
SUBS0000056
Mrs Arch was one of the first people with whom Sir Wyn Williams consulted prior to
the opening of the Post Office Horizon IT Inquiry (“the Inquiry”). Mrs Arch’s
account, that is both eloquent and was considered by Sir Wyn Williams to be
important, is at: https://www.youtube.com/watch?v=D5m InvtBTZ8.
It is self-evident from that brief account that Mrs Arch is explaining to Sir Wyn the
problems with reconciling balances on her Horizon system. The reason for her
suspension was, as she explained to him, that she was £28,000 short. (In her witness
statement of 15 March 2022 Mrs Arch refers to the sum being £32,000.)
In her written evidence to Sir Wyn Williams by a statement dated 15 March 2022
Mrs Arch explains what happened to her between paragraphs [6] and [23]. It is to
be borne in mind that by this time Mrs Arch had been running post office branches
on a locum basis, without difficulty and with success (it was her original business
model), since 1997, Because of the importance of th idence, that so far is known
is not disputed or challenged ~ and there appears to be no available documentary
basis for doing so, it merits full citation. Mrs Arch’s evidence® is that:
“HORIZON INSTALLATION AND TRAINING
6. During the summer of 2000 the Post Office contacted me to say that our
office would be one of the first to go on the rollout scheme of the new
Horizon system. I was really chuffed about this, because at that time we
were doing everything manually and balancing on a Wednesday evening
took us ages. Having modemised the shop I was looking forward to a
modern computer system.
7. In autumn 2000 an engineer came to the branch and installed the
equipment in the morning. A gentleman came with him, who showed me
how to use the system while the business was open. I had customers coming
in and out of the shop and the post office, and I was learning how to use
Horizon at the same time. At lunch time the gentleman left me with a
Nothing turns on that difference. In any event it was not the amount for which she was prosecuted.
The Post Office had, she explained, “found” some of the allegedly missingmonies. (A feature found
also in other cases.)
‘The writer played no part /had no role in the preparation of Mrs Arch’s witness statement to the
Inquiry.
SUBS0000056_0018
manual, a massive manual in all fairness, very comprehensive. He told me
that everything I needed to know was in the manual but I should ring the
helpline if I got stuck and they would be able help me. And then he went,
and that was that. I'd done no balancing whatsoever, because this was
only during a morning on a normal day. I wasn't frightened of the
equipment in anyway, so I wasn't too concerned about that. I thought, no,
we'll give it a go.
By then I'd employed a part time member of staff as well. I had to show
her what I had been shown, hoping that I was showing her the right things,
obviously, because I had only had a couple of hours myself:
SHORTFALLS
9.
10.
Jl.
Problems began in the first week of using Horizon.
When people came in to collect pensions they would come in with a pension
docket in a pension book. The pension docket would tell us the amount to
give them. Under the old-fashioned system we would stamp it, tear it out
and keep it. And that would account for the money paid out. Under the
new system we barcoded the docket. Each day we had to send the dockets
off to Ireland, so they would be out of the building. The only record we
had left in the office was on the computer system in front of us, which gave
a total of daily allowances. Before I sent the dockets off I checked to make
sure what the computer said was what I had got, and it was, so I thought
"lovely."
I did this each day as I thought it wouldn't hurt to do a bit of manual
work alongside Horizon, just to make sure that I was doing it right and
that I had not missed something out. Each day before I sent the dockets
off to Ireland I would add them up on my calculator and compare my total
with what it said on Horizon. I used a printer calculator, which I kept in
the office and then put just put the date on the top so that I would have my
paper trail.
During the first week all the daily totals were right, the cash was right,
and the customers had the right money, but at the end of the week Horizon
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SUBS0000056_0019
SUBS0000056
showed I was £1,000 short. I could not correct the weekly total without
changing the daily totals, which I knew were right, and the dockets had
left the building. So I rang the helpline and explained the problem. I was
simply told to wait for a correction notice. I said I'd rather not wait because
I could see what the problem was. The woman on the helpline then told
‘me that my attitude was all wrong, that I was 'anti-computer,' and that
I should leave it for the computer to correct.
13. We carried on checking the daily totals manually for another week, but
the following week the shortfall doubled exactly to £2,000. The daily
totals were all correct, all the customers had had their money, and the cash
on my manual side was correct, but the weekly total was now
£2,000 short.
14. I rang the helpline again. I was concemed that I would not get a correction
notice because the daily totals were correct, and I was sending the dockets
off with the correct daily type-out. I was told not to be silly, that the system
would rectify itself, that there would be teething problems on the roll-out
and I should be patient. Every week the shortfall doubled. I
rang the helpline every single week to say what was
happening and that I could see it happening. I carried on
doing the manual work because I could see the problem happening.
AUDIT AND INVESTIGATION
15. By week six the shortfall had doubled again to £32,000.
Trang the helpline and asked for something to be done, as I had not received
any error notices. Two days later I arrived at work and there were three
people at the door. I recognised the auditor. I had been in the business for
eight years by then and had had a few audits in the past in different offices,
and it wasn't a problem. I did not recognise the other two people, but they
said they were also auditors. To be honest, Iwas chuffed to bits. I thought
geal, we're going to get to the bottom of this.8 I told them straight away
This is precisely what Mrs Seema Misra was told when she identified and complained of similar
experience/ problems.
A sentiment that is identical to Miss Janet Skinner’s when auditors attended her branch ~ in 2006.
She was also pleased that at last someone would get to the bottom ofwhat was happening,
SUBS0000056_0020
16.
17.
18.
that I had had a problem with the new computer system fiom day one and
had been calling the helpline.
One of the gentlemen went into the post office and did the audit. There
was no room for me to go in or the lady who was with him. We just stood
out in the stockroom, had a chat, drinking coffee, and then at about 10:30
he came out and he said yes you're £32,000 short. I said yes that's
exactly what I've told the helpline. I also said I had put it to nil each
Thursday in order to reboot the system and run a fresh week, as the helpline
had told me to do. I told them I had all the written paper copies as well,
but they said they did not want them as they could see what was happening.
The auditor then told me they needed to ask me more questions and that
it would be better if they could do so at the Stroud Crown Office, 6 miles
away, because there was more room there. They insisted that I go with
them in their car rather than driving myself, saying that parking in Stroud
was difficult. Iwas 29 years old and I thought, oh well, that that makes
sense. On the way there the lady, who sat in the back with me, made
comments about what a lovely area Chalford was, and how expensive it
must be to live there. I said my partner and I could only afford a small
shared ownership properly as houses were so expensive, but we wanted to
settle as he was born in the area.
When we arrived at Stroud Crown office I was taken through a side door
to a little room with a key code on the door and recording equipment on
the desk. I walked in and the door locked after me, and they were in the
room with me. I was told that the interview would be recorded. When I
asked why, the man said 'I don't actually think you realise the sort of
trouble you are actually in.' I said ‘well I haven't done anything.’ He told
me to stop messing around, saying he was ex- CID, that he had met people
like me before, that I should stop lying and stop wasting his time. He said
he knew I had stolen the money and all I needed to do was to tell him
what I had done with it. I said I hadn't taken a penny and offered both
mine and my partner's bank statements, and also tried to tell him that I
knew what was causing the problem. He said 'no, you don’t'. This went
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SUBS0000056_0021
20.
on continually, and I kept repeating myself. I then said that I thought I
needed somebody there with me. Iwas told that I would only need someone
if I was worried, or if I was hiding something I did not want them to
think Twas guilty so T agreed not to have anyone with me.
The interview continued until quarter past four in the afternoon. I was
locked in the room throughout, with nothing to eat or drink. Eventually
they said they would drive me back as they were not getting anywhere.
They said they knew I had taken the money, they would get to the bottom
of it, and they would ensure that I never ever step foot in that building
again. And so, they dropped me off outside my post office and took the
keys. I couldn't get into the shop or the post office at all. I had no access
to my paperwork, my till all my stock- everything was locked in.
So I drove home, absolutely hysterical. I was terrified and did not know
what to do. As soon as I got home I rang my partner and my Mum and
told them what had happened. They arrived within minutes, and told me
to calm down, saying of course I hadn't stolen any money and it would
sort itself out. But I was frantic about what we were going to live on.
Steve, my partner was a self-employed tree surgeon at the time and his
work was sort of hit or miss without the shop and my post office salary.
SUSPENSION AND TERMINATION
21.
22.
I then received a call from the subpostmaster, who told me that the Post
Office investigators had been to his house and had told him to suspend me,
or they would go after him instead. He could not cope with that, as he was
a 74 year old man who lost his wife of 48 years just four and a half
months previously. I thought it was an awful position to put him in, but
L understood that he had to suspend me. He also told me that the shop had
to stay shut until the Post Office contacted him - I was not allowed to go
in and get my stock.
About two weeks later he told me that the Post Office had been in touch
and told him that he had to sack me. When I asked why he said he did
not know. He told me that the Post Office had also said I had to empty
the shop, although I was not allowed in the building myself: So I arranged
SUBS0000056
SUBS0000056_0022
23,
for my partner and a friend to go up on the Saturday morning and empty
the shop completely. I had nowhere to store the stock and had to dump a
lot of it in the end. A friend also managed to sell some of the stock at a
car boot sale so we would have some money to live on.
I wasn't allowed in the post office. I wasn't allowed to
take any paperwork whatsoever - including my hand-
written records. That all had to remain. The cash register
and everything we purchased had to stay, even though we bought all the
shop fittings, the brand new flooring, all gone. So that was the end. That
day everything ended.” [Emphasis supplied.]
SUBS0000056
Mrs Arch’s account of the prosecution case at her trial is vivid and compelling
(statement paragraphs [25]-[27] and [32]-[36]):
NS
a
On my doctor's advice I decided to get a solicitor. We applied to the Post Office
to get all my written paperwork back, and for access to my branch. The
Post Office completely refused to supply anything. We
then requested a copy of the recorded interview record. They refused to
give me that as well. Later, when I joined the FSA, I applied for
the interview record again but was told that it had been
destroyed. {Emphasis supplied.]
I was stuck in a place where everybody knew I was innocent but we had
nothing to prove that, That was my element of hope as well, as there was
nothing to prove I was guilty either, so I felt I could not give up.
About 12 months later I received a letter fiom the Post Office charging me
with theft and fraud. In the end they had charged me with theft of £24,000
as they had found £8,000 of the shortfall.
[Omitted text]
32.
The following April I received notification that my case had been transferred
from Gloucester Crown Court to Bristol Crown Court. My solicitor had found
a barrister who said he would see me on the day of the trial and he would
discuss things with me when I got there.
SUBS0000056_0023
T remember the trial like it was yesterday- even the music that was playing on
the radio in the car on the way there. The Post Office had arranged for two
witnesses lo give evidence against me- the subpostmaster and my part time
employee. They hadn't been allowed to speak to me at all once they'd been
told that they were now Post Office witnesses, which really upset me because
they used to be my friends. But as it happened, they might as well have been
my witnesses because they were so lovely, and said they knew I hadn't done
anything wrong. Meanwhile, nearly a year before I was charged I had given
the Post Office every bank statement of mine for the last four years, and
Steve's even though he was nothing to do with it, so they had all that
information and could see exactly how I paid for what, and how I paid bills
and eerything else. The Post Office also called two elderly customers as
witnesses, who simply confirmed that they collected their pensions from the Post
Office.
My turn came on the afternoon of day two. I had to sit separately fiom everyone
else with two prison wardens next tome. When I got into the witness box the
Post Office's barrister went absolutely berserk. He chucked a bundle of
Pension dockets at me because he was getting so annoyed. My barrister had
told me to go in, to say what I knew and nothing more, and not to try to
solve problems with the Post Office's case for them. And so every time the Post
Office's barrister asked what I had done with the money, I told them that I
did not have the money. He said 'well, you must have had the
money. We all know you've had the money. You've gone on holiday for a
week. The Post Office paid for that. So why don't you just tell us you've had
the money." I said 'T’ve not had any money.' He said, 'do you know what this
is?! It was a docket ina plastic clear bag. I said 'yes that's a pension docket."
He said 'you duplicated those yourself so_you could take the money. You've
made them pay out to people, but you didn't pay it out. You popped it in your
purse." I said 'no I didn't. I told him that the daily totals were
right and I had evidence to show that, but I couldn't
access it. And he replied that he was not interested in what I said as the
computer was the most high-tech equipment you could wish for, and no one
else had had any problems with it. He insisted that I should
SUBS0000056
SUBS0000056_0024
24,
26.
SUBS0000056
just say what I had done with the money so they could
all go home. {Emphasis supplied.]
35. When the judge came to sum up after 3 days he told the jury to study the
evidence that had been put before them and decide what crime they could
actually see had been committed. And I felt that he had believed me. The jury
went off for about an hour and came back with a unanimous verdict that I
was innocent, And the judge told me I could go.
36. I left the court and fell to my knees in the corridor. This was 2 and a half
years after everything. I didn't know what to do, so Twas absolutely howling.
Mrs Arch’s account shares many obvious similarities with the account of the
inves
gation and prosecution of others. The circumstances bear a striking
resemblance to Tracy Felstead’s prosecution, save that she was convicted.
It is striking that Mrs Arch’s evidence is that the Post Office withheld documents
from her. This a point to which it will be necessary to return.
Mrs Arch gave oral evidence to Sir Wyn Williams. She was the last witness to give
evidence on the human impact of the Post Office’s conduct on 17 March 2022.
In the course of her evidence she was asked by Counsel to the Inquiry:
MRBLAKE Moving on to the prosecution, about 12 months later you
were notified of the prosecution. What were you charged
with?
Mrs ARCH Theft and fraud. They'd charged me for £24,000 of theft.
They'd found -- apparently, they'd found £8,000, and fraud
for making the accounts correct for business on the
Thursday.
MR BLAKE Was that a letter that came through the post?
MRS ARCH _ Yes.
SUBS0000056_0025
28.
29.
SUBS0000056
MR BLAKE How were you when you saw that letter?
MRS ARCH ___I would safely -- I was absolutely shattered.”
The inference that Mrs Arch’s case was a pure “Horizon shortfall” case is obvious
not least from her oral evidence to Sir Wyn Williams (Transcript p 134):
MRS ARCH
The barrister was really -- the Post Office
barrister was very aggressive. He was very frustrated
with what he would describe as my attitude, the fact
that I was wasting everybody's time by denying it.
He threw a bundle of pension dockets actually at me,
at one point, and, luckily, the judge of the case
stopped it and said, "That's enough, she's not going
to say any different now, so can you move on", and
he just sat down then and, yeah, it went to
deliberation at that point.
MR BLAKE So there came a time for the judge's summing-up.
What do you remember about that?
MRS ARCH I genuinely -- I'm absolutely convinced he believed
me because he pointed out to the jury --
straightaway he said, you know, "Obviously when
you go to deliberate and consider everything that
you have heard, please, please consider whether
a crime has actually even happened here",
and when he said that I thought, "He knows, he
knows I've done nothing".
Consistently with the evidence that Mrs Arch gave to Sir Wyn Williams, the Inquiry
has also received other evidence from those with first-hand expert knowledge of the
problems that were encountered with the Horizon software at the time of and shortly
after roll-out.
SUBS0000056_0026
32.
SUBS0000056
Mrs Arch’s problems were well-known at the time that she recounts her having
experienced them.
Mr Andrew Simpkins, a senior IT managing consultant, and by background a
computer programmer engaged in senior management roles for large scale IT
projects, who was engaged in the Horizon project roll-out and in the Live Trial to
statement made
2000, gave the following evidence to Sir Wyn Williams, by a witness
by him on 13 September 2022 that was put in evidence to the Inquiry on 3
November 2022:
“30. At the time I left Horizon I was not so much worried as to
whether known faults had been fixed. It was rather that the system
delivered into Rollout had an ongoing vulnerability to error due to its
complexity and lack of transparency. When errors arose over time
during live operation, as they do in all sy: s, it would be difficult
if not impossible for postmasters and postmistresses to
understand what had gone wrong. So a situation arose
where they could not validate their own financial
information, and yet they were held accountable for it.”
(Emphasis supplied.)
Mr Simpkins, in his oral evidence on 3 November 2022, gave the following evidence
to Sir Wyn Williams (Transcript pp 92-93) in response to questions from Mr Jason
Beer Q.C., Counsel to the Inquiry:
MR BEER This explains why the branch staff had difficulties with cash accounts
and stock unit balancing, as reported during the live trial. So there is
another issue, which is how the system works -- although the branch
staff can use it, they are not too clear on how it works, either.
Obviously, they don't have to understand it at a technical level, but
to cut to the chase here, one of the things that I only discovered
reading some of the postmaster testimonies, and has come out in
some other literature, is that when the postmaster had a problem
with his cash account -- you know, he had a deficiency, he had an
SUBS0000056_0027
34,
SUBS0000056
unexplained deficiency -- there is nothing that he could
do to understand how that had happened.
MR BEER So he could not interrogate the system?
MR SIMPKINS — He could not interrogate the system.
[omitted text}
But I can remember evidence fiom some of the postmasters who were
saying "Well I want some evidence of" -- I suppose you might say
an audit trail, "Where is the audit trail that explains my
deficiency"? As we know, they could not produce the audit trail
and the Post Office refused to give them that
information...”.
[Text in bold typeface supplied.]
At the end of his oral evidence, Counsel to the Inquiry put to Mr Simpkins:
MR BEER “That's what you say in your last sentence: "So a situation
arose where they could not validate the integrity
of their own financial information ..."
MR SIMKINS _ So they could not validate it,...”.
On 9 November 2022 Mr John Simpkins, an employee of Fujitsu and the team
leader for software support centre (SSC) on Horizon, gave evidence to Sir Wyn
Williams.
In the course of his evidence it emerged that errors encountered in the Horizon
system that were communicated to the Horizon helpdesk by postmasters that were
unresolved, despite being acknowledged, were allocated as postmaster responsi’
That is to say, known unresolved errors that were not specifically attributable to fault
in the Horizon system were posted as the responsibility of postmasters. The
following exchange took place in connection with “phantom transactions” in 2000.
Questioned by Ms Flora Page (Q), Mr Simpkins (A), gave the following evidence to
Sir Wyn Williams:
SUBS0000056_0028
SUBS0000056
MISS PAGE I’m going to start .... With the third supplemental agreement... To give
you a little ... chronology, it was signed in January 2000, so relatively
early in the national rollout. You were working then, weren't you, in the
SSC?
MR SIMPKINS Yes.
MISS PAGE One of the issues that is clear from that third supplemental agreement is
that the technical people in Fiyitsu, and indeed as a result of that
agreement it is clear that Post Office also knew, that there would be cash
account errors caused by reference data, also caused by other technical
faults and that, in some cases, they anticipated that they would only be
picked up by subpostmasters phoning the call centre. Is that something
that you can sort of accept from me, in terms of the interpretation of the
agreement?
MR SIMPKINS J can accept that, yes.
MISS PAGE All right. Well, were you and your team ever alerted to that?
MR SIMPKINS Jf the -- we would take the calls -- sorry, so they would contact either
MBSC or HSH and then, if it was HSH it would, if it was a software
issue, hopefully find its way to us and then we would investigate them
based on that, but I don't know about the agreement.
MISS PAGE Well, obviously, you would be alerted if a subpostmaster came to you~
MR SIMPKINS Ys.
MISS PAGE — ~ through the lower lines of support, and you would know that you were
speaking to a subpostmaster, but my question was: did anyone at Fujitsu,
in your management structure or in any fashion, let you know and your
team know that there would be or there could be faults, which would only
become apparent because a subpostmaster alerted the helpdesk to that and
that might come to you up through the chain?
SUBS0000056_0029
SUBS0000056
MR SIMPKINS Not particularly. I can't recall being told that there would be faults that
only a subpostmaster may notice, but we did identify faults based off calls
JSiom subpostmasters. So it was definitely a thing we did and we did
identify faults based on those calls. If we identified a fault, we would
scope the fault and, once it was recognised -- and identify who was
affected by that, so I think I'm saying the team knew that there were
issues that subpostmasters were identifying that weren't being picked up
by automated things in the data centre.
MISS PAGE ~All right. Well, in that case, can we please look at document number
POL00028743. When it comes up , you will see that it's a PEAK
Jiom 2001. It is sometimes quite hard to read these PEARS. If we
perhaps -- can you read it? Are you able to?
MR SIMPKINS J can read it, yes. I think this was in my pack as well.
MISS PAGE It will have been. If we look in closely at 12.58 on 14 April, it says the
"pm" — I presume meaning postmaster: counters. He says he has had to
pay out over £1,500 in losses that are due to these problems. He has
informed POCL they can suspend him because he is refusing to make
good any further losses." He asks for a face-to-face meeting: "[He] feels
very strongly about this and says he is willing to take POCL to a
tribunal/court because of the stress he has suffered because of the
problems." ...
MISS PAGE T see. If we go on a bit further, if we go as far as page 4, please, and
about halfivay down we can see: "This is an update for yesterday's call
[this is in capitals} made by the pm ... PowerHelp server was down ...
"Call was taken over by STSA Donna Moulds and the following
information was manually logged: "PM would like to add to the current
complaint that transactions are currently appearing and disappearing on
screen and also the PM's counter printer has not been working either.
"PM had a message on screen stating [about the] transaction then the
screen froze and timed out. When logged back in, the transaction was not
on screen. PM rebooted the printer, and a receipt for this transaction was
printed. Now the printer won't print any receipts", et cetera. A bit further
SUBS0000056_0030
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down, it says at 9.33: "PM would like to add that on the 18th April ...
the PM spoke to Gareth from the Environmental Team. Gareth advised
the PM that he will be in touch with him before the end of the month to
investigate any problems. It is now past the end of the month, and still
nothing has been done." If we carry on down a bit, please. This is at
"PM feels the system is unreliable. PM cannot trust this system."
He says again that he wants to speak to someone face-to-face. It is quite
clear, as far as this postmaster is concerned, that he is saying that this is
not his fault, he has not done anything wrong, the system is unreliable,
ig
yes?
MR SIMPKINS és, this was a phantom transactions call, wasn't it?
MISS PAGE It was, that's quite right and, indeed, if we go down to page 10, we can
see that reference to phantom transactions. I think a little higher -- Well,
while we're here we can see that it ts closed down on the basis that: "I
am therefore closing this call as [it is] no fault in product." A bit higher
up we can see, under 12 November 2001 Patrick Carroll: "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. Iam
therefore closing this call as no fault in product." But
if we look further up and, in fact -- I mean, you may be able to confirm it
Jor us without us looking further up, the phantom transactions
that the user is referring to were, in fact, witnessed,
weren't they --
MR SIMPKINS Yes, by the Romec engineer.
MISS PAGE __ -- by a Romec engineer, exactly. Yet, this later entry says "Well, we
will just close this down, there's no fault, it must be
user error".
MR SIMPKINS Yes, J did read through it. I don't remember Pat Carroll researching this
one. I know he did do a lot of monitoring and things like that, that's all
SUBS0000056_0031
36.
38.
SUBS0000056
in the call, and I don't know if this comment is after -- for afler those -~
those were put in place but, yes, I agree it doesn't read well.”
[Emphasis supplied.]
It may perhaps be suggested that in fact Mrs Arch was prosecuted on evidence that
went beyond simply a Horizon shortfall - or on evidence other than her Horizon
account balances, so that the reliability of Horizon data may not have been essential
to her prosecution.
First, there is no evidence whatever to support such a view, which appears merely
imagined. In contrast, Mrs Arch’s recollection is clear and vivid.
The Post Office of course has an established track record, without any evidential
basis for doing so, for simply contending that witnesses are liars. It adopted this
approach, conspicuously without success, before Mr Justice Fraser. In the Horizon
Issues trial it was repeatedly put to witnesses who gave evidence of experiencing
unaccountable and inexplicable shortfalls, that they were simply giving false
evidence. As Fraser J noted, those allegations and challenges to postmaster evidence
had no factual or evidential basis beyond bare assertion, they were rejected by the
court.
As against that observation, the following exchange with Sir Wyn Williams is
salutary, and the Post Office, and the Department of Business and Trade are invited
to take note of it (Transcript p 137)
(https:// www.postofficehorizoninquiry.org.uk/sites/default/files/2022-
03/POH%2017%20March%202022. pdf):
SIR WYN WILLIAMS: “..I'm wondering what evidence they may
have called, either read or orally, to
establish that money was missing.
Mrs ARCH ‘They literally went by the weekly balance
sheet of what Horizon told them.
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40,
41.
42,
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SIR WYN WILLIAMS: Well, I think you've answered my question
now. So there was evidence before the jury
about what Horizon had said?
Mrs ARCH Yes, yes, they had the documents, the
weekly report.
SIR WYN WILLIAMS: Yes, that's fine.
Mrs Arch Every week.
SIR WYN WILLIAMS: = Thank you.”
The obvious, indeed inescapable, conclusion is that Mrs Arch was prosecuted for the
shortfalls of which she had repeatedly notified the Post Office that she was
experiencing. To use a contemporary formulation, ‘you couldn’t make it up’; but
the Post Office did — a view that appears from Mrs Arch’s evidence to have been
taken by the trial judge.
It seems that the DBT is not as readily satisfied by Mrs Arch’s explanation as Sir
Wyn Williams was. It may be that Sir Wyn would be as surprised and disappointed
by this as Mrs Arch herself is. Neither the Post Office nor DBT are able to offer any
other, alternative, explanation.
ACQUITTAL BY THE UNANIMOUS JURY’S VERDICT
Second, Mrs Arch was acquitted. Invariably (and I think the word applies literally)
where prosecutions have been brought on grounds other than Horizon shortfalls and
have succeeded, the CCRC has either not had the requisite confidence to refer
under the Criminal Appeal Act 1995, or else appeals that have been referred by the
CCRC have failed. Notable instances are the three cases in the March/April 2021
appeals reported as Hamilton. The plain logical and legal inference is that had
there been any evidence of dishonesty, - or any evidence at all, other than unexplained
Horizon shortfalls, Mrs Arch is likely to have been convicted. That she was not
convicted is overwhelmingly likely to be attributable to the jury being (properly)
directed by an unusually sensible and astute court in connection with the absence of
evidence other than an unexplained shortfall. No reasonable prosecutor would
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44,
47.
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have prosecuted Mrs Arch. No evidence of theft, no evidence of mens rea ~ i.e.
dishonesty, no evidence of any proceeds of any alleged dishonesty (viz criminal
property) and no evidence of any unlawful act.
THE DESTRUCTION OF DOCUMENTS BY THE POST OFFICE AND PERVERTING THE
COURSE OF JUSTICE
It is convenient to briefly touch on the applicable principles.
The essential complaint (as it is understood) is that there is no documentary evidence
in the hands of the Post Office to support the contention that Mrs Arch was
prosecuted solely/only for a Horizon shortfall — and thus that her case was a
“Horizon case”. It is suggested that it may follow that Mrs Arch cannot show that
she was prosecuted for a Horizon shortfall without there having been other evidence
(so that the reliability of Horizon data cannot with confidence be said to have been
“essential” to her prosecution ~ in the Court of Appeal’s formulation).
Consequently, any claim that she may have, must accordingly fall outside the DBT
government ex gratia? compensation scheme, shortly to be introduced.
That is to confuse or elide a number of different is
's that are in truth separate.
First, as noted, Mrs Arch is perfectly clear that she was prosecuted for the £32,000
(later reduced by the “found” £8,000) shortfall identified upon the so-called auditors
attending her branch. She had previously repeatedly reported experiencing
increasing shortfalls.
It matters not that the Post Office does not retain documentary evidence that is
consistent with or supports Mrs Arch’s account. In order to displace it is necessary
for the Post Office to show she was prosecuted other than for a Horizon shortfall. It
is legally insupportable (and wrong) to suggest either that:
a. Tt is ne
sary for there to be documents that evidence the basis upon which
Mrs Arch was prosecuted; or
In the sense that it is implemented in express recognition that the December 2019 settlement was
unsatisfactory and unfair. It is thus compensation superadded to the settlement sum.
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48.
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b. That Mrs Arch has any burden to show that she was not prosecuted for an
offence other than an offence that was disclosed/evidenced by a Horizon
shortfall.
The latter is to reverse the burden of proof a technique which the Post Office has
adopted with some success ~ but which was explicitly deprecated by the Court of
Appeal in Hamilton.
As noted, there appears to be no documentary evidence that weakens, let alone
undermines Mrs Arch’s evidence. In the circumstances it is the best evidence. No
witness is likely to have a better recollection of events than Mrs Arch.
But that is not the end of the issue. There are other important material
considerations.
Lord Diplock famously put the point in British Railwz
UKHL 1, 31 ({1972] 1 AILER 749):
ys Board v Herrington [1972]
“The Appellants, who are a public corporation, elected to call no witnesses,
thus depriving the court of any positive evidence as to whether the condition
of the fence and the adjacent terrain had been noticed by any particular
servant of theirs or as to what he or any other of their servants either
thought or did about it. This is a legitimate tactical move under our
adversarial system of litigation. But a defendant who adopts it cannot
complain if the court draws from the facts which have been disclosed all
reasonable inferences as to what are the facts which the defendant has chosen
to withhold.”
There is now a line of cas
s not involving document destruction which follows
Herrington. Brooke LJ in Wiszniewski v Central Manchester Health Authority
[1998] 1 Lloyd’s Rep. (Med) 223 identified principles in which adverse inferences
may be drawn from the absence of evidence from particular witnesses.
Charles Hollander in his (well regarded) text Documentary Evidence (12'" Ed.) records
[2009] EWHC 2500 (QB) “In
cases where there is a deliberate void of evidence, such negativity can be used as a
the judge’s observations in Earles v Barclays Bank ple
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weapon in adversarial litigation to fill the evidential gap and so establish a positive
case.” Hollander comments: “Thus if there was no evidence on a point, the court
could rely on the inferences drawn from the destruction of documents to provide
evidence otherwise absent. Indeed it is because of this possibility that in criminal
fe
38(3) of the Criminal Justice and Public Order Act 1994 provides that a
person may not be convicted on an inference drawn from a failure to give evidence.”
Hollander concludes the section citing Infabrics v Jaytex [1985] FSR 75, “ifyou
haven't troubled to retain the documents, why shouldn’t the court make assumptions as to their
content against you?” and comments, “So the principle is more one of fairness than
depending upon deliberate destruction.” (That was the principle articulated on
behalf of Mrs Arch in the course of discussion on 7 March 2023.)
The jurisdiction of the court here (viz a presumption against a person responsible for
the absence of evidence) is of great antiquity and goes by the maxim omnia
praesumuntur contra spoliatorem. Applications include R v Arundel (1617) 89 Eng. Rep
(1721) 1 Stra. 505.
258 and Armory v Delamirie
The proposition that follows from this discussion is that, irrespective of Mrs Arch’s
own evidence referred to above, the non-existence of documents in connection with Mrs Arch’s
prosecution (if that is true, which is not to be taken to be accepted, without more) is entirely the
responsibility of the Post Office. Accordingly, it does not lie with the Post Office, in
reliance upon that (asserted) fact to contend that Mrs Arch cannot show that she was
not prosecuted for an offence other than a Horizon shortfall such as to thereby make
her case a “Horizon case” within the Court of Appeal’s formulation. Any such
contention carries the vice that it is a requirement to prove a negative (even though
double). In my view any court would almost certainly conclude, regardless of Mrs
Arch’s own positive evidence (above), from the absence of evidence preserved by the
Post Office that Mrs Arch’s case was other than a Horizon case, that it was indeed a
Horizon case. Such a conclusion will more readily be reached by the court where:
a. The Post Office, over a very long period, systematically withheld from those
it prosecuted, important evidence. (This is accepted by the Post Office.)
b. ‘The Post Office is known to have engaged in the destruction of documents
that it considered to be unhelpful (7.v. the August 2013 “Shredding
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on
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Advice”). (The Post Office and its employees were seemingly so inured to
wrongdoing that this appears to have elicited no protest, still less
whistleblowing.)
The position will be a fortiori where the Post Office engaged in th
obstruction of rights of appeal, by the suppression and withholding of evidence,
required in fairness as a matter of law to be disclosed to those it had convicted, as it
appears it did, thereby causing years of delay in the hearing of appeals. As has
elsewhere been noted by the House of Lords, such delay (and violation of statutory
right) is of the utmost importance and consequence in the administration of justic
the reason being is that lost time is in truth incompensable.
CONCLUDING OBSERVATIONS
From the foregoing discussion:
a. Mrs Arch’s unchallenged (extensive and vivid) evidence is that from the
‘ive it - she
outset following installation of Horizon - as one of the first to r
experienced repeated shortfalls/balancing issues with her Horizon terminal.
She reported these and complained of this over a period of time. For those
shortfalls she was in due course prosecuted following a ‘branch audit’ (in
truth nothing more than a cash-check against Horizon records). There is
no evidence available that weakens or undermines that contention.
Furthermore, Mrs Arch in terms, in answer to a question from Sir Wyn
Williams, identified the basis upon which she was prosecuted.
b. Mrs Arch’s account is now reinforced/supported by evidence given to the
Williams’ Inquiry that it was known, at the time of roll-out, that postmasters
such as Mrs Arch had no means of validating/verifying the figures
produced by Horizon. That is precisely the experience of which Mrs Arch
has given evidence to the Inquiry and that she has, in some detail,
described. Further, balancing problems that were identified but not
explicitly attributed to Horizon software issues were, it now appears,
routinely knowingly wrongly attributed to postmaster actions ~ with
resultant (false) contractual liability to make good (Simpkins, above).
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c. Mrs Arch was acquitted. It appears, including by elementary probability,
that had there been evidence other than a shortfall at Mrs Arch’s Horizon
terminal/in her account balances, she would have been more likely to have
been convicted of an offence. Further, those postmasters who were
prosecuted for offences that were not ‘Horizon cases’ appear to be in a
significant minority. In the same vein, the Post Office’s
strategic decision in
or about early 2014 was to cease prosecution for shortfalls. (A detailed
analysis of Post Office prosecutions, even two years after the Court of
Appeal’s Hamilton judgment, appears yet to be produced.)
d. As a matter of law, in any event, (i.e. irrespective of the (reasonably
extensive and full evidence given by Mrs Arch herself) the absence of
documentary evidence from the Post Office would likely be treated by the
court as the basis for drawing inferences adverse to the person responsible
for its absence (q.v. Hollander, above), in this case the Post Office as
prosecuting authority, as a matter of justice and fairness. That will be all
the more so when there is evidence of other (extensive) misleading and
unfair conduct on the part of the person in whose possession the documents
once were. In common with many others, Mrs Arch’s evidence to Sir Wyn
Williams was that the Post Office repeatedly withheld documents from
disclosure. That it routinely did so is well-attested. It appears to have done
so habitually and as a conscious policy. (That is entirely separate from the
Post Office practice of withholding evidence, for its own benefit and
advantage to facilitate convictions, as it plainly did.)
As noted at the start of this, by now somewhat lengthy, note, it is surprising that it
should be suggested either that Mrs Arch’s circumstances do not fall within what the
Court of Appeal has been pleased to classify as ‘Horizon cases’ ~ or else that there is
insufficient evidence that it does. The reverse
in fact, the case.
As suggested above, not only is it clear that Mrs Arch’s prosecution was a ‘Horizon
case’, her prosecution may be considered to have been a paradigm of a Horizon case.
The only remarkable feature of her prosecution, that separates and distinguishes it
from the ordinary run of Post Office prosecutions, is that she was acquitted of the
charges against her. The strong inference is that the trial judge was alert to the fact
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that the only evidence against Mrs Arch appears to have been the Horizon data. That
Mrs Arch’s evidence to Sir Wyn Williams. That is not only unchallenged but, it
would appear, is incapable of being disputed or challenged!°. Mrs Arch’s evidence to
Sir Wyn that her trial judge directed the jury to consider whether there had been
any offence committed at all, is a question that might with advantage have been left
to juries in other cas
59. I look forward to receiving confirmation that Mrs Arch’s case will now be treated by
DB! ible for and will
s a “Horizon case’ and, for confirmation that Mrs Arch is elis
re interim payment of compensation.
60. Given the effluxion of time, not least, since Mrs Arch’s prosecution, and the harm
, livelihood
inflicted upon her by the Post Office in the destruction of her busine:
and aspirations, it will be disappointing should Mrs Arch receive less than £71,105
on an interim basis.
61. It is fair to Mrs Arch for me to say that it is regrettable and disappointing, and I can
say for her, personally seriously distressing, that 21 years’ afier she was acquitted of
the serious and false allegations made against her by the Post Office, that resulted in
the loss of her business, her good name in her community, her livelihood, and the
consequences of which have undermined her health, her claim to compensation as a
“Horizon case’ is now subject to question and challenge; that, in the face of clear and
compelling evidence of her experience given by her to Sir Wyn Williams in the
public inquiry. That the Post Office may not now retain documents from 2001-
2002, relating to what it then did in its investigation and prosecution of Mrs Arch, is
nothing to the point.
PAUL MARSHALL
Cornerstone Barristers
Gray’s Inn Square
Gray’s Inn
15' March 2023
10 Other than, perhaps, by it being said that Mrs Arch’s evidence to Sir Wyn Williams is simply
untruthful. That boat may, however, for the Post Office have sailed?
28
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