Post Office could face huge costs bill for first Horizon trial

The legal team representing the claimants in the IT-related Post Office versus subpostmasters group litigation order (GLO), has submitted a bill, likely to be for several million pounds, for the legal costs in the first trial in the case, in which the judgment came out heavily in favour of the claimants.

Freeths, the solicitors acting for the subpostmasters, submitted the claim on 29 March, which is normal for the successful party to do at the conclusion of a trial.

The first trial was part of a GLO through which more than 550 subpostmasters are suing the Post Office for damages caused by their treatment after experiencing unexplained losses that they blame on the computer system. They have also criticised the Post Office’s failure to investigate unexplained account shortfalls. The Post Office denies the accusations.

The claimants’ case is being funded by Therium through third-party litigation funding, which involves a number of funders investing in litigation, paying fees and other costs. If the case succeeds, they make a profit, but their investment is at risk if the case is lost.

The first trial, one of four planned, focused on the contractual relationship between the Post Office and subpostmasters.

In his ruling on 15 March 2019, Judge Fraser found there was a general culture of secrecy and confidentiality in the Post Office, particularly around the Horizon accounting and retail system used by subpostmasters to run their branches.

Fraser issued significant judgments on the nature of the relational contract between subpostmasters and the Post Office. Criticisms of the Post Office included “oppressive behaviour” when demanding sums of money that could not be accounted for by subpostmasters.

During the second trial, which is focused on the Horizon computer system, the solicitors acting for the Post Office made an application for the judge to recuse himself for alleged bias, following his judgment at the first trial.

The second trial is currently suspended. A hearing about the application for the judge to recuse himself will be heard in court tomorrow (3 April).

The second trial has seen Torstein Olav Godeseth, chief architect at Fujitsu, questioned about know errors in the Horizon software. The court heard how errors were known about but not always relayed to subpostmasters, who had suffered losses as a result.

These included the error known as the Dalmellington bug, which Computer Weekly revealed in 2015. This involved an incident in which thousands of pounds’ worth of payments were duplicated for one subpostmaster. If undetected, this would have appeared as a loss when the accounts were completed, which would be the responsibility of the subpostmaster.

The court heard that the error had been known about for a few years before the Dalmellington revelation, but was not revealed to subpostmasters until it was made public by Computer Weekly and the Communications Workers Union (CWU).

Two more trials are planned after the currently suspended second trial is concluded.

The plight of some subpostmasters was first reported in 2009, when Computer Weekly revealed that the lives of some of them had been turned upside down after being fined, sacked, made bankrupt and even imprisoned because of unexplained accounting shortfalls. Some claimants were sent to prison, one while pregnant. They blamed Horizon for the problems, but the Post Office denies this.

Horizon, which was introduced by the Post Office in 1999/2000, is used by about 12,000 branches, and subpostmasters are held liable for any unexplained losses (see timeline below).

For live tweeting from court, see the Twitter account of broadcast journalist Nick Wallis. Also read his Post Office Trial blog.

The case continues.

Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009

• May 2009: Bankruptcy, prosecution and disrupted livelihoods – postmasters tell their story.
• September 2009: Postmasters form action group after accounts shortfall.
• November 2009: Post Office theft case deferred over IT questions.
• February 2011: Post Office faces legal action over alleged accounting system failures.
• October 2011: 85 subpostmasters seek legal support in claims against Post Office computer system.
• June 2012: Post Office launches external review of system at centre of legal disputes.
• January 2013: Post Office admits Horizon system needs more investigation.
• January 2013: Post Office announces amnesty for Horizon evidence.
• January 2013: Post Office wants to get to bottom of IT system allegations.
• June 2013: Investigation into Post Office accounting system to drill down on strongest cases.
• July 2013: Post Office Horizon system investigation reveals concerns.
• October 2013: End in sight for subpostmaster claims against Post Office’s Horizon accounting system.
• October 2013: Former Lord Justice of Appeal Hooper joins Post Office Horizon investigation.
• November 2013:150 subpostmasters file claims over ‘faulty’ Horizon accounting system.
• September 2014: Fresh questions raised over Post Office IT system’s role in fraud cases.
• December 2014: MPs blast Post Office over IT system investigation and remove backing.
• December 2014: Why MPs lost faith in the Post Office’s IT investigation, but vowed to fight on.
• December 2014: MPs to debate subpostmaster IT injustice claims.
• December 2014: MP accuses Post Office of acting “duplicitously” in IT investigation.
• January 2015: MPs force inquiry into Post Office subpostmaster mediation scheme.
• January 2015: Post Office faces grilling by MPs over Horizon accounting system.
• February 2015: Post Office CIO will talk to any subpostmaster about IT problems, promises CEO.
• March 2015: Post Office ends working group for IT system investigation day before potentially damaging report.
• March 2015: MPs seek reassurance over Post Office mediation scheme.
• March 2015: Retiring MP aims to uncover truth of alleged Post Office computer system problems.
• April 2015: Post Office failed to investigate account shortfalls before legal action, report claims.
• April 2015: Criminal Courts Review Commission set to review subpostmasters’ claims of wrongful prosecution.
• May 2015: IT system related to subpostmaster prosecutions under review by CCRC.
• June 2015: Post Office looking to replace controversial Horizon system with IBM, says MP.
• July 2015: Campaigners call for independent inquiry into Post Office Horizon IT system dispute.
• October 2015: James Arbuthnot takes Post Office IT fight to House of Lords.
• November 2015: The union that represents Post Office subpostmasters has warned of a problem with the Horizon accounting system.
• November 2015: An email from Post Office IT support reveals a problem with the Horizon system and supporting processes that could lead to accounting errors.
• November 2015: Group litigation against Post Office being prepared in Horizon dispute.
• February 2016: Post Office faces group litigation over Horizon IT as subpostmasters fund class action.
• June 2016: Post Office chairman Tim Parker says there would be “considerable risk” associated with changing its Horizon computer system.
• November 2016: The legal team hired by a group of subpostmasters will take their case to the next stage.
• January 2017: The group action against the Post Office that alleges subpostmasters have been wrongly punished for accounting errors gets a green light from the High Court of Justice.
• March 2017: 1,000 subpostmasters apply to join IT-related group litigation against Post Office.
• April 2017: Investigation into claims of miscarriages of justice in relation to a Post Office accounting system has appointed a forensic accountant firm.
• May 2017: Hundreds of subpostmasters have applied to join IT-related legal action since March.
• July 2017: Post Office defence in computer system legal case due this week.
• August 2017: Campaigners submit initial evidence in group litigation against Post Office over controversial Horizon IT system.
• October 2017: Subpostmasters’ group action against the Post Office reaches an important milestone.
• November 2017: An end is in sight for subpostmasters’ campaign against alleged wrongful prosecution, which they blame on a faulty computer system.
• November 2017:The high court judge managing the subpostmasters versus Post Office legal case over an allegedly faulty computer system tells legal teams to cooperate.
• January 2018: Forensic investigation into Post Office IT system at centre of legal case nears completion.
• April 2018: Criminal Cases Review Commission forensic examination of the IT system at the centre of a legal case against the Post Office has raised further questions.
• May 2018: Post Office branches unable to connect to Horizon computer system for several hours after morning opening time.
• October 2018: After over a decade of controversy, next week marks the beginning of a court battle between subpostmasters and the Post Office.
• November 2018: Case against Post Office in relation to allegedly faulty computer system begins in High Court.
• November 2018: High Court case in which subpostmasters are suing the Post Office has revealed a known problem with a computer system at the core of the dispute.
• November 2018: A High Court trial, where subpostmasters are suing the Post Office for damages caused by an allegedly faulty IT system, ends second week.
• November 2018: Post Office director admits to Horizon errors and not sharing details with subpostmaster network.
• November 2018: The High Court trial in which subpostmasters are suing the Post Office has reached an important stage.
• December 2018: CCRC may hold off subpostmaster decision until after Post Office Horizon trial.
• December 2018: Court case where subpostmasters are suing the Post Office set to span at least four trials and extend into 2020.
• January 2019: Subpostmasters’ campaign group attacks Post Office CEO Paula Vennells’ New Year honour amid ongoing court case.
• January 2019: Thousands of known errors on controversial Post Office computer system to be revealed.
• March 2019: Tech under spotlight at High Court in second subpostmasters versus Post Office trial.
• March 2019: Post Office considered Horizon IT system “high risk”, court told.
• March 2019: Post Office ‘lacked humanity’ in the treatment of subpostmasters, says peer.
• March 2019: CCRC watching Post Office Horizon trial closely.
• March 2019: Judge rules that Post Office showed “oppressive behaviour” in response to claimants accused of accounting errors they blamed on Horizon IT system.
• March 2019: A high court judge heard that the Post Office did not investigate a computer system error that could cause losses, despite being offered evidence.
• March 2019: The Post Office legal team in the case brought by more than 500 subpostmasters has called for the judge to be recused after questioning his impartiality.
• March 2019: A senior civil servant asked the Post Office to repay public money it had wrongly allocated to paying legal costs.