It Took a TV Show to Bring Justice in UK Post Office Scandal

Sabah Meddings
·8 min read
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(Bloomberg) -- Seema Misra was pregnant when she was wrongfully found guilty of stealing from the Post Office she ran in a small town south-west of London. Seven months later, including four spent in jail, she gave birth in the hospital wearing an ankle tag used to monitor released criminals.

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Misra is among the victims of arguably the biggest scandal in British legal history. Between 2000 and 2014 the Post Office, the taxpayer-owned provider of unfashionable services that still make an economy tick — think postage stamps and pension payments — accused thousands of its storekeepers of stealing. It secured more than 900 convictions of sub-postmasters, as they are known. Most lost their businesses, many were bankrupted. At least four died by suicide.

After a two-decade struggle for national attention, it was a TV drama watched by almost 11 million people that finally prompted the government to promise a swift end to the saga in favor of the victims. Until this week, hundreds of sub-postmasters had been left in limbo even after a court ruling in 2019 blew open the scandal and ordered the Post Office to pay compensation.

But it’s also a story about flawed software, a 1990s state contract worth an initial £1 billion to modernize the Post Office’s accounting system, and now the intense pressure on Japanese IT company Fujitsu Ltd. to set out what it knew and when about errors that led to sub-postmasters’ books showing up shortfalls that weren’t real. With the UK on the hook for millions of pounds of compensation, ministers say the company should pay its share, too.

Since entering the UK in the 1990s, Fujitsu has become one of most prolific private contractors to the government, from the tax department to the Home Office and the Ministry of Defence. Illustrating how interwoven it is to core state functions, one of Fujitsu’s contracts is to maintain the criminal record database, which includes the wrongful convictions of sub-postmasters.

Fujitsu has won £6.8 billion ($8.7 billion) of UK public sector work since 2012, according to data company Tussell, which started keeping track of contracts that year. Some deals came after a bombshell 2019 High Court judgment, which set out the bugs in Fujitsu’s Horizon software and said Fujitsu employees knew about them and debated whether to tell the Post Office. The government has also faced criticism for handing it more contracts.

“If they made big mistakes, then frankly we need to know how they have had the temerity to carry on taking public contracts,” said Liam Byrne, chair of the House of Commons business and trade committee, who has summoned Fujitsu’s Europe CEO Paul Patterson to testify in Parliament next week.

A Fujitsu spokesperson said the company is committed to supporting the UK’s ongoing public inquiry into the Horizon scandal. A Post Office spokesperson said it is “for the inquiry to reach its own independent conclusions after consideration of all the evidence on the issues that it is examining.”

In a 2020 letter to the Parliament committee, the company acknowledged the bugs and that its employees could access Post Office computers remotely — contrary to critical evidence in some of the convictions — while reiterating that it had no role in the Post Office’s decision to prosecute its sub-postmasters.

Still, Fujitsu was closely involved in Misra’s 2010 trial via one of its employees. Gareth Jenkins, who according to an official submission by the chair of the UK’s official inquiry is under police investigation, was the expert witness who testified that the Horizon system was free from bugs. The legal representative for Jenkins didn’t respond to a request for comment.

A memorandum of a meeting circulated between Fujitsu and the Post Office in September 2010 — before Misra’s trial — discussed the effect of a bug in the Horizon system, according to a submission to the public inquiry by lawyers on behalf several accused sub-postmasters including Misra.

Fujitsu’s entry into the UK came via its purchase of British IT supplier International Computers Ltd., which won the contract to develop a new digital system for 17,000 Post Office branches.

There were issues from the start. The plan was a system to let pensioners and benefits claimants to be paid at the Post Office using a swipe card, removing the need for cash. But the Post Office doubted the software’s reliability and in 1999, scrapped the project in what the House of Commons Public Accounts Committee called “one of the biggest IT failures in the public sector.”

Instead of risking further political embarrassment, the government stuck with the software and decided to use it to upgrade the Post Office’s system of recording transactions on paper spreadsheets.

Almost immediately after the Horizon terminals were installed, some sub-postmasters began finding discrepancies between the amount of cash held and how much Horizon said there should be. At Misra’s branch in West Byfleet, it was £75,000. They began calling a designated Horizon hotline in a panic, according to witness statements to the UK inquiry including from an ex-Fujitsu employee.

The Post Office, which has the power to bring criminal prosecutions without involving the UK’s Crown Prosecution Service, accused some sub-postmasters of stealing and took them to court. Sub-postmasters were forced to dip into savings and borrow to make-up the shortfalls. Some told the inquiry they were pressured by the Post Office to admit false accounting to avoid prison.

The Post Office was effectively saying that the new computer system had unearthed a secret crime wave.

That premise was shot down at the High Court trial in 2019, when 555 sub-postmasters sued the Post Office for compensation. Richard Roll, who worked at Fujitsu’s UK headquarters in Bracknell between 2001 and 2004, testified that staff could not only access Horizon terminals remotely but did so regularly — to fix bugs. The revelation changed the narrative. “If we were unable to find the cause of the discrepancy then this was reported up the chain and it was assumed that the postmaster was to blame,” Roll told the court.

But while the ruling cleared the path for sub-postmasters to apply to clear their convictions and seek compensation, their struggle to achieve either is key to understanding why such a long-running scandal has suddenly shot to public prominence and dominated Parliament’s return from the winter holiday.

A New Year drama by broadcaster ITV set the wheels in motion. Using a star-studded cast with credits including The Crown and The Hunger Games, the four-part Mr Bates vs the Post Office tracks a real-life campaign against the Post Office led by Alan Bates on behalf of wrongly accused sub-postmasters.

Paul Marshall, a barrister who represented a group of sub-postmasters who had their convictions quashed at the Court of Appeal in 2021, said the drama “hit a nerve” with the public in a way that “reading any number of law reports or journals or articles was simply incapable of effectively conveying.”

Labour MP Barbara Keeley, a shadow minister, told Bloomberg the drama had left the public “outraged” and “in a general election year the government party will be especially sensitive to public opinion.” A UK vote is expected to be held in the second half of 2024.

But the scandal has run through so many administrations that all the major political parties are nervous of being associated with it. That is especially so for Prime Minister Rishi Sunak’s Conservative Party, in power since 2010 and trailing the Labour Party by about 20 points in national opinion polls.

Sunak promised that Post Office convictions would be quashed by Parliament within weeks, and said the government aims to complete compensation payments by the summer. Paula Vennells, Post Office chief executive from 2012 to 2019, said she would return an honor awarded to her in the name of the monarch — after a petition calling for her to do so topped 1 million names.

The Post Office risks a £100 million bill and potential insolvency if authorities reject its claims for tax relief on compensation it paid to the victims, the Financial Times reported Saturday.

The Horizon scandal was “an appalling case of systematic state failure and the actions of all involved must be reviewed,” former Cabinet minister Priti Patel, whose father was a sub-postmaster, told Bloomberg.

The urgency reflects the febrile mood in Britain, and the risk for politicians, the Post Office and Fujitsu is that it is unlikely to fade until the issue of compensation — and whether taxpayers are on the hook for it — is settled. With Britain facing a cost-of-living crisis and with government budgets stretched, more politicians are now calling for Fujitsu to pay a share of compensation and questioning whether it should be handed more state contracts.

For Misra, who has flashbacks of being unable to leave her house after dark due to a curfew enforced when she was released from prison, all parties including Fujitsu have questions to answer. “Each and every person who knew could have stopped it,” she said. “They need to answer. They need to be behind bars.”

--With assistance from Emily Ashton, Yuki Furukawa, Mayumi Negishi, Katharine Gemmell, Julius Domoney and Irina Anghel.

(Updates viewership in third paragraph.)

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