Big Brother: The Curious Case of the British Post Office
How a Faulty Computer System Ruined Hundreds of Lives, Overtaking Human Judgments and Denying Justice
I n his eponymous novel, “1984”, George Orwell predicted that the State would take the role of ‘Big Brother’, controlling the lives of the common citizens. While that vision has found reality in certain geographies, Computer systems, and the so-called Artificial Intelligence permeate our lives without our knowing. In this two-part series, we shall first see the fall-out of our faith in Computer systems, that can make no mistakes!
The Post Office is a familiar sight and part of our daily lives that we hardly pay any attention to it. The bright red mailboxes are an integral part of the urban landscape worldwide, providing us with basic communication service through letters and mail, although much has changed in this digital age.
But beneath this time-tested and reliable public service lies a recent saga of deception, prosecution, conviction, and ruined lives of hundreds of innocent people who form the backbone of the Post Office over the last two decades in the UK.
Curiously, it was caused by a faulty computer system. Still, the concomitant blind faith of the administrators, ministers, and the government reposed on the computer system without a proper and thorough investigation is shocking.
The British Post Office is one of the oldest institutions, originating in the early sixteenth century. The postal service went all over the Empire — from India to Kenya, from Hong Kong to Australia. Originally known as The General Post Office in the UK, it became a statutory corporation after the passage of the Post Office Act in 1969. Subsequently, the business restructuring process started in 1969 and was completed in 2012. Post Office Limited became a government-owned entity with the government represented at the board level. Still, at the branch post office level — approximately 11000 in number, it was franchised, in which the Sub-postmasters are self-employed and they run the branch post offices under contract to the Post Office.
According to the contract, “The Operator shall be fully liable for any loss of or damage to, any Post Office Cash and Stock (however this occurs and whether it occurs as a result of any negligence by the Operator, its Personnel or otherwise, or as a result of any breach of the Agreement by the Operator)… Any deficiencies in stocks of Products and/or any resulting shortfall in the money payable to Post Office Ltd must be made good by the Operator without delay so that, in the case of any shortfall, Post Office Ltd is paid the full amount.” This condition of the contract, as we shall see later, is used as a legal weapon to punish sub-postmasters for faults never committed by them.
As part of business process modernization, the paper-based system was proposed to be replaced with a full-fledged computerized payments and accounting system covering the full range of services, including pension and public benefits payments. In 1999, a computer software system known as Horizon, designed by Fujitsu Corporation of Japan was introduced. The new Horizon project, introduced in 1999, became the largest non-military IT contract in Europe.
Within a few weeks of its roll-out, some Sub-postmasters began reporting balancing errors. The Post Office not only denied the sub-postmasters’ reports of faults in the system but also insisted that the sub-postmasters make up any shortfall of money, reported by the system and in many cases untruthfully denied that any other sub-postmasters had reported problems.
Strangely, the middle-management level never cared for the fact that Horizon could either contain bugs or be able to manipulate the accounts remotely and that it needed a thorough review.
During the years that followed, a large number of Sub-postmasters were convicted of theft, fraud, and false accounting based on faulty Horizon data. About 700 of these prosecutions were carried out by the Post Office itself. Another 283 cases were brought by other bodies, including the Crown Prosecution Service (CPS). Other sub-postmasters were prosecuted but not convicted, forced to cover Horizon shortfalls with their own money, or had their contracts terminated. All these happened till 2015.
Meanwhile, concerns were raised by the media and a group of Parliamentarians. In 2012, an independent firm of forensic accountants, Second Sight, was commissioned by the Post Office to conduct an independent inquiry. In a preliminary report submitted in 2013, it was stated that, although there was no evidence of system-wide problems with Horizon, there had been two incidents where defects or bugs in the software had led to false shortfalls in accounts at 76 branches. The losses in these two incidents had been identified by the Post Office and the sub-postmasters had not been held liable. More than 100 sub-postmasters were by this time saying that they had been prosecuted or forced to repay shortfalls created by Horizon. Still, 236 Sub-postmasters went to Prison, including a pregnant lady.
In a subsequent report in 2015, titled Initial Complaint Review and Mediation Scheme and marked as confidential, it was revealed that, “for some sub-postmasters in some limited circumstances, Horizon could not be described as ‘fit for purpose’”. It also came to light that according to an earlier version of the report leaked to the BBC in September 2014, Horizon had not been tracking money from lottery terminals, Vehicle Excise Duty payments, or cash machine transactions — and Post Office investigators had not looked for the cause of the errors, instead accusing the sub-postmasters of theft or false accounting. Consequently, a mediation scheme was introduced but the post office rejected nearly 90% of applications. As a result of a growing tension between the Post Office and Second Sight, the latter’s contract was terminated and the investigation of cases was brought in-house.
Two years later, a group action against the Post Office was filed in the High Court by 555 sub-postmasters led by Alan Bates. For the first time after the saga began, the judge ruled in 2019 that the Post Office’s contracts with the sub-postmasters were unfair and that Horizon “contained bugs, errors, and defects”. The case was settled for £58 million, but after deducting legal costs, left the claimants with only £12 million. But the judgment paved the way for other sub-postmasters to challenge their convictions in the courts.
A draft report uncovered by the BBC showed the Post Office spent £100m fighting the group in court despite knowing its defense was untrue. The Post Office said it would be “inappropriate” to comment on the report. At the same time, the top executives of the Post Office continued to receive high salaries and bonuses, including that for fighting the case, running into millions of Pounds.
In 2020, the UK government established an independent inquiry into the scandal. This was upgraded into a statutory public inquiry the following year. As of April 2024, the public inquiry is ongoing and the Metropolitan Police is investigating executives from the Post Office and its software provider, Fujitsu.
Courts began to quash convictions. By February 2024, 100 of the sub-postmasters’ convictions had been overturned. Those wrongfully convicted became eligible for compensation, as did more than 2,750 sub-postmasters who had been affected by the scandal but had not been convicted. The final cost of compensation is expected to exceed £1 billion. In January 2024, the scandal was described by Prime Minister, Rishi Sunak, as “one of the greatest miscarriages of justice in British history.”
According to the BBC, the government said that a new scheme will process compensation applications “as soon as possible” for those whose convictions are quashed. Interim payments have been announced or they can accept a full and final payment of 600,000 pounds.
Justice finally arrived, 25 years after it all began. The years spent in the prison cannot be returned. Families that were ripped apart cannot be reunited. The four suicides committed by affected Postmasters cannot be undone. All because the people who govern the institution believed computers could not make mistakes!
The Horizon is still in service though!
References:
1. BBC, “Post Office scandal explained: What the Horizon saga is all about”, 11th April 2024
2. Jane Croft, “Ex-MP tells inquiry Post Office ran a ‘behind-the-scenes deception process”, The Guardian, 10th April 2024
3. Wikipedia: “British Post Office Scandal”
Author’s Notes:
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