Post Office faces legal action over alleged accounting system failures

More than 50 postmasters are planning legal action against the Post Office to reclaim money they paid to the Post Office after being accused of theft and false accounting.

All the postmasters protested their innocence and it is alleged that the problems could be down to the Post Office's Horizon accounting system, which they all use. The Post Office has denied an IT fault could cause the system to show incorrect balances

Access Legal, the consumer arm of law firm Shoosmiths, will initially launch the action for a group of six postmasters. It has a total of 55 already lined up to bring action and expects many more once the cases are made public.

Some of the postmasters gave exclusive interviews to Computer Weekly almost two years ago about the alleged Horizon problems.

Thousands of post offices use the Horizon IT system for their accounts and postmasters claim faults with the technology could be generating unexplained losses. The Post Office has denied this.

In recent years dozens of postmasters have been charged and even jailed with others repaying money following prosecutions. More than 250 post offices have been forced to close, according to Shoosmith's.

Amanda Glover, head of legal disputes at Shoosmiths, said, "Horizon was introduced to sub-post offices to provide first weekly, then monthly accounting, but didn't do a double entry, so it couldn't be checked regularly. Many users reported problems and couldn't work out how losses were arising. When they called a helpline, many claimed the problems got worse.

"Customers would try to get money from the hole-in-the-wall, but although they didn't receive it, it later showed as having been taken from their account.

"A key issue is the fact the system couldn't be accessed unless postmasters confirmed they agreed with figures on a daily basis, which led to errors being accepted by postmasters just so that they could log on to the system.

"They all say they have not taken any money, and while the Post Office says there is nothing wrong with Horizon, it appears to record people using it when they are not even logged on. One post office even recorded a loss when it was closed."

Glover said some postmasters are paying back "missing" amounts to avoid prosecution. The most common amount is around £35,000.

The Post Office said in a statement that it is "fully confident that the Horizon computer system in its branches, and all the accounting processes around it, are absolutely accurate and reliable at all times."

It added, "The Horizon system has been subjected to full, independently assured, robust testing procedures.

"The Horizon information security processes meet the relevant industry standards which apply to such organisations as banks and building societies.

"Subpostmasters are given fully appropriate training, typically including classroom training and a further time on site under close supervision and guidance from a Post Office manager. Subpostmasters can also ring a dedicated helpline for advice.

"The Horizon system has operated successfully for more than 10 years across the Post Office network, which currently stands at more than 11,500 branches.

"The National Federation of Subpostmasters, which represents the views and interests of subpostmasters around the country, has gone on record on a number of occasions to express its full confidence in the accuracy and robustness of the Horizon system.

"The Horizon system provides detailed records of every transaction, no matter how small or large, in any individual post office branch. Separate records of all key strokes in the system are stored in a tamper-proof way.

"The Post Office handles large sums of public money as well as the money entrusted to it by the 20 million people who visit our branches each week. The Post Office rightly makes every effort and takes all reasonable steps to protect the money in its care."