January 1 2024

This evening there is the first episode of a four part drama – Mr Bates vs The Post Office. It is a must see, if only in the hope that it will bring home to a wider public the scale and human impact of what has rightly been called the worst miscarriage of justice in English legal history. It is to be hoped that such public interest might put pressure on politicians to put right – and without further delay – matters which are – or should be – an affront to the conscience of the British state.

It is shaming to see from the evidence given during the statutory public inquiry headed by Sir Wyn Williams how so many from my own profession behaved so unprofessionally, incompetently and potentially worse, both during the events which are the subject of the Inquiry and during the Inquiry itself.

If there is one thing to learn from it, it should be a reminder that practising law or carrying out investigations without any understanding of the ethical underpinning of one’s work and the necessity of ensuring that this informs everything you do is wrong. This is not what true professionalism requires. The question is never “Can I do this?“. But “Should I?“.

It is correct to say that this is the worst miscarriage of justice. But this description underplays the nature of the scandal. In reality, this is not just a scandal about the Post Office exploiting some flawed accounting software.

• It is a scandal about the development of flawed hardware and software systems, a flawed governmental and corporate procurement process and a flawed adoption and rolling out process.
• It is a scandal about how the Post Office, a state owned body with unlimited resources and its own prosecution service, operated with no effective corporate governance or Ministerial control or supervision and exploited flawed software, flawed contracts and the civil and criminal legal systems to extort money it was not owed from subpostmasters.
• It is a scandal about how the legal system failed – and continues to fail – to understand technical evidence.
• It is a scandal about how the legal system has failed for far too long those accused and convicted of crimes which did not happen. As the government’s own Compensation Advisory Board has said: “the justice system itself is called into question in the current circumstances.”
• It is a scandal about a failure of Parliamentary and Ministerial governance.
• It is a scandal about how the state fails to put right its mistakes and compensate those harmed by those mistakes.

Ultimately, it is a story about the abuse of power.

There are so many aspects to it that it can be hard to get your head round all of it. But these articles are an attempt to summarise some of the key issues. A work-in-progress, obviously. But I hope helpful.

1. An overview

2. The Business Secretary’s role

3. Compensation

4. Revelations from the Williams Inquiry

5. Ministerial and corporate governance of the Post Offiice

6. The reliability of computer evidence and how the Law Commission got this wrong

7. What Parliament did and did not do

September 20 2023

On Monday the government finally came up with a “take it or leave it” compensation offer to the subpostmasters. £600,000. It was described by Kevin Hollinrake, Minister for Postal Affairs, as “providing a generous uplift” on compensation payments already made. Let’s see how generous it really is.

• Some subpostmasters were convicted as long as 23 years ago, between 2000 – 2015, the majority in the earlier years. That is compensation of between £26,000 and £75,000 pa. The sums on offer are less than what they would have earned had they not been wrongly convicted.
• It is an uplift only by reference to compensation payments described as inadequate and criticised by the Inquiry judge.
• It takes no account of the losses suffered by those made bankrupt and those who lost homes and businesses.
• Nor does it compensate for time spent in prison / injury to reputation and legal costs incurred in fighting criminal cases and appeals.
• Will it be tax-free? One subpostmaster who managed to get compensation then found that much of it was taken away in taxation and payment of bankruptcy leaving him with so little he was unable to heat his home last winter. The structuring and tax treatment of compensation payments and how this has been misdescribed to subpostmasters has been one of the (many) criticisms made of one the Post Office’s many legal firms.
• It is also unclear whether this is a floor – leaving some able to pursue the Post Office through the courts for more to reflect their actual losses. If this were the case, it might have some merit. If not, it is effectively presenting subpostmasters with Hobson’s choice: inadequate compensation or the prospect of spending more time and money trying to fight an organisation determined to do the minimum possible and unable (or unwilling) to comply with its legal requirements.
• Above all, it is limited to those who manage to overturn their convictions in the courts. Note that the Post Office is still opposing many of these appeals, even where the evidence came from the Horizon system. This also excludes those who pleaded guilty because they felt unable to challenge the Horizon evidence and were unaware of the Post Office’s disclosure failings. Despite all the evidence about Horizon’s failings and unfitness for purpose, despite knowing – as the Minister put it – that Horizon data was “unreliable” (a gong please for the civil servant coming up with that description for data more accurately described as “untrue“), despite all the failings in its disclosure to defendants, the Post Office is still trying to argue its case.
• Finally, compare it with the bonus of £485,000 the Post Office CEO recently received for one year, a part of which was for complying with the inquiry, a compliance which did not occur, infuriated the judge, was lied about in its accounts and signed off by the Board. This Board then commissioned a report which managed to say that everything was tickety-boo but, no, they could not identify any actual human being who had signed off or written the untrue statements in the accounts or explain how it was that the accounts misled this issue. Then it promised not to pay bonuses at all before admitting under cross-examination that this too was another lie – as all executives were in fact eligible for bonuses for complying with an inquiry necessitated by their previous wrongdoing.

The Minister insisted in Monday’s debate that the government wanted to ensure “swift and fair” compensation. Whatever this process can be described as, “swift and fair” is not it. The government presents itself as above the fray, generously funding the Post Office. In reality, the government has been responsible in a number of ways:

• Its supervision of the Post Office and its management;
• Its relationship with Horizon (the correspondence between Harriet Harman and Tony Blair about Horizon’s inadequacy at a very early stage is worth reading to see how early matters started to go wrong and how);
• The failures of the criminal justice system; and
• Its control over how the Post Office has responded to the miscarriages of justice and the government’s own inquiry.

The compensation offer came as a surprise on Monday. Why? Well, on Tuesday we had one of the Post Office auditors, Helen Rose, giving evidence. She audited one of the subpostmasters who reported problems with Horizon and sought help. This lady had no qualifications or training as an auditor; no training or experience as an investigator and no training on the Horizon system (that she could remember). She gave written evidence to the High Court supporting the case against the subpostmaster (despite her original report showing flaws in Horizon). From her evidence now it is clear that she left out key information, removed anything true which might have helped the defendant, put in incorrect information and inserted defamatory and untrue statements about the person being investigated. She signed it as true but accepted that it wasn’t. She could not, however, remember how this came about. She could not even remember whether she had been subject to a disciplinary process as a result of the suicide of a subpostmaster she had met and audited. This convenient memory loss is likely to be repeated during this phase as various professionals – from auditors to IT experts and lots and lots of lawyers – give evidence, as the evidence of today’s witness shows.

When hearing evidence like this from people plainly not up to their job, utterly careless of their obligations and seemingly lacking any sense of professionalism, I think of the words of one bereaved Aberfan mother listening to the evidence of NCB officials: –

“What I heard there was very difficult for me to accept. Because most people who were brought to the stand seemed to think it was somebody else’s fault. Not theirs at all. I believe one of the engineers got on the stand and he didn’t seem to realise his dreadful part in this happening. And when I heard what he had to say it made me feel sick because it looked to me as though he couldn’t have cared less about what had happened on account of his neglect. It was a good thing that I wasn’t on the stand or wasn’t talking to him, you know, because I’d have floored him.“

If we are ever to have a hope of preventing this or any injustice reoccurring, if we are ever to provide some justice to those so grievously harmed, those responsible need to be made accountable, to suffer consequences – and soon. If not, “flooring” them may be the only option. It feels like a vain plea. But I make it nonetheless.

August 4 2023

She had to go. You simply cannot have the CEO of a bank unable to understand that if a journalist asks you about a live story involving confidential details about a bank customer, the only possible response is “I can’t talk to you about that.” Especially not when a few days later you will be presenting the bank’s results and, therefore, are currently in possession of price sensitive market information. If you can’t keep quiet about the former, how can you be trusted with the latter?

What is surprising is that despite, according to reports, having two PR firms (one of them with expertise in “crisis management”) advising the CEO and another one advising the bank, this issue appears to have been handled in a somewhat reactive way, lacking in joined-up thinking or any coherent strategy. It might be wise to remember the advice given to intelligence officers: “A matter is of the highest possible importance and so should be handled at the lowest possible level.” This should never have reached the CEO’s desk in the way it did. And once there, handled better, it goes without saying.

Politicians and commentators have, predictably, piled in, most of them ignoring why she had to go and drawing the wrong lessons from what has happened, or the one which most comfortably suits their prejudices and obsessions, often filtered through whether they approve or disapprove of Farage.

• Kemi Badenoch, the Business Secretary and Minister for Women and Equalities, sought to remind banks that they must remember free speech and not discriminate on the grounds of political belief. She “hoped” banks would remember this. For the Minister for Equalities not to realise that the Equality Act protects “religious or philosophical belief”, political opinions do not automatically come within this category and it is only in Northern Ireland that public sector bodies (not banks) are under a duty to promote equality of opportunity between people with different political opinions is not encouraging.
• Other Tories have given the impression that they are only bothered about this because it happened to Mr Farage. Unwise. Ms Rose’s actions would have been foolish were it any bank customer.
• Farage himself has suggested that there should be a rolling back of AML and PEP requirements.

This would be a mistake. There is always a problem with rules such as these in that the amount of detail and checking needed can make the process so bureaucratic that it is easy to lose sight of what they are for, why this matters and why judgment should never be absent from the process. But ensuring that banks (and other professionals) are not used by bad actors to disguise their actions and give them a wholly undeserved veneer of respectability is essential if Britain’s finance sector is not to become a shady place for shady people, a risk for any significant financial centre.

Importantly, this row is not just or even at all an issue about political beliefs. Banks have obligations to “know their customer” – something considerably more than simply recording their name and address. Anti-Money Laundering rules are onerous, as are those for Politically Exposed Persons. Additionally, banks have to comply with equalities legislation. The Proceeds of Crime Act 2002 matters too. Quite considerably, given the various criminal offences banks commit if they fail to comply with it. Balancing all these different legal and regulatory requirements requires a proper understanding of all the relevant rules, overlaid with sound judgment.

Knee-jerk reactions rarely lead to good law, as this article explains more fully. Would that lawmakers understood this basic point.

Above all, banks do need to assess reputational risk – both in relation to who they take on as clients, who they do business with and, critically, how and why they exit them, if their risk appetite changes. This all needs careful consideration and even more careful – and consistent – recording and communication. It is not always easy to get it right. But saying that banks should never take into account the reputation of their customers is as absurd as saying that banks should only take on customers whose political beliefs they approve of.

Farage has also raised the “debanking” issue. Ironically, this might also be described as “inclusivity” – not the woolly-headed “I’d like to teach the world to sing” version so beloved of organisations thinking that the appearance of goodness is all that is needed to demonstrate their “values” – but the tension caused by having private profit-making companies provide vital services without which it is hard to be a fully functioning or contributing member of society: bank accounts / social media / transport / phones / internet access. If everyone needs these, should companies be obliged to provide them regardless of other considerations? And if not, who should?

If only there were a trusted and competent state-owned organisation which could provide such services, something like …. Oooh, I don’t know …. the Post Office? If only.

Darren Jones, the Business Select Committee’s Chair, inadvertently touched on this when he commented on the selectivity of the government’s concerns. He compared its rush to express dismay about NatWest’s behaviour, a company only 38% of which is owned by the government, compared to its silence over the Post Office – 100% owned. The government would do well to heed him on this.

Others (I’m looking at you, Rachel Reeves, Shadow Chancellor) have suggested that Ms Rose was bullied and treated unfavourably because she is a woman. (She did this in an interview in which she admitted not knowing the full story. The irony of saying this when commenting on a CEO talking about a matter on which she had not been fully briefed was apparently lost on her.) It is an easy to make – but ultimately misdirected – point. What do the careers of Cressida Dick and Dido Harding suggest then?

More seriously, it masks a more important point. Even a competent, highly regarded person can make mistakes, sometimes serious and career-ending ones. Even the most effective CEO can panic in a crisis and make elementary and stupid mistakes. One reason for needing strong and effective governance and staff with good judgment at all levels of an organisation is precisely to minimise the risk of this. Or, bluntly, to protect senior managers from their own foolishness. It can seem unfair that one error, even a “serious error of judgment”, should overshadow an otherwise effective career, as if all the achievements are not put – let alone weighed – in the balance. But this is one of the burdens of leadership. And why leaders are paid as well as they are.

It is possible for someone to do a good job overall but still make the sort of mistake that leads to resignation or sacking. That is an important lesson for all of us. No-one is – or should be thought of or think of themselves – as indispensable. That too is an important – if humbling – lesson.

Photo by Markus Spiske on Unsplash