Private prosecutions: safeguards Contents

1The Post Office prosecutions

1.Since 1991 the Post Office has successfully prosecuted more than 900 of its own workers for fraud and similar offences. A significant number of those cases have, however, been referred to the Court of Appeal after doubts were raised about whether the operation of the Post Office’s Horizon IT system may have been responsible for financial discrepancies that gave rise to some prosecutions. The Criminal Cases Review Commission (CCRC) asked us to consider aspects of the private prosecution system in England and Wales in June, on the same day it referred new cases to the Court of Appeal for reconsideration.

2.The CCRC’s referrals are yet to be heard and are sub judice. Our colleagues on the Business, Energy and Industrial Strategy Committee are conducting an inquiry into the Post Office and Horizon, and the Government has announced there is also going to be an independent review. Our role is to consider the safeguards available against misuse of prosecutions more generally and beyond the specific circumstances of the Post Office cases.

3.The CCRC specifically asked us to consider the circumstances and safeguards in which an organisation acts as both investigator and prosecutor in cases in which it is also the alleged victim. This report examines the safeguards that regulate the way in which organisations, other than the Crown Prosecution Service, bring prosecutions in England and Wales.

The Horizon cases

4.In response to a freedom of information request dated 22 May 2020, the Post Office revealed that between 1991 and 2015 it brought 918 successful prosecutions against subpostmasters, subpostmistresses, their assistants and other employees.1 During the most active period, between 1999–2012, the Post Office brought 735 successful prosecutions, an average of 52 a year.

5.The Post Office’s approach to these prosecutions, and the reliability of the Horizon IT software upon which many of the convictions were based, has been queried by the Justice for Subpostmasters Alliance and investigative journalists. In 2012 the Post Office commissioned the accountancy company Second Sight to conduct an independent review of Horizon. In 2013, Second Sight published an interim report highlighting faults in the Horizon system. The Post Office established a Complaint Review and Mediation Scheme to examine cases raised in Second Sight’s report, but the Scheme was disbanded in 2015.

6.The Justice for Subpostmasters Alliance argued that there had not been enough opportunity for sub-postmasters to enter the Complaint Review and Mediation Scheme and, on its closure, embarked on legal action against Post Office Ltd. In January 2017, a High Court Judge granted a Group Litigation Order for sub-postmasters to begin such action. In March 2017, a Group Litigation Order was brought by 550 sub-postmasters and two High Court cases took place in 2018 and 2019.

7.On 15th March 2019, Mr Justice Fraser ruled in favour of the sub-postmasters in the first case and stated that the Post Office showed “oppressive behaviour” in response to claimants who had been dismissed for accounting errors they blamed on the Horizon system.2 He was also very critical of Post Office Ltd’s attitude and behaviour. He said that the submissions provided by Post Office Ltd paid “no attention to the actual evidence, and seem to have their origin in a parallel world” and that the Post Office “seemed to adopt an extraordinarily narrow approach to relevance, generally along the lines that any evidence that is unfavourable to the Post Office is not relevant”.3 He also described the Post Office as fearing “objective scrutiny of its behaviour” and operating with a “culture of secrecy and excessive confidentiality”.4

8.Before handing down his judgment in the second case in the group litigation in December 2019, Mr Justice Fraser announced that he was referring information to the Director of Public Prosecutions (DPP) because he had concerns about the accuracy of evidence given in court by Fujitsu (the suppliers of the Horizon software) in previous trials of accused sub-postmasters:

Based on the knowledge that I have gained both from conducting the trial and writing the Horizon issues judgment, I have very grave concerns regarding the veracity of evidence given by Fujitsu employees to other courts in previous proceedings about the known existence of bugs, errors and defects in the Horizon system. These previous proceedings include the High Court in at least one civil case brought by the Post Office against a subpostmaster and the Crown Court in a greater number of criminal cases, also brought by the Post Office against subpostmasters and subpostmistresses.5

9.Mr Justice Fraser’s judgment in the second trial, delivered on 16 December 2019, stated that Horizon was not “remotely robust” which led to a “significant and material risk” of Post Office branch accounts suffering from “bugs, errors and defects”.6

The Criminal Cases Review Commission

10.The CCRC has referred 47 Post Office cases to the courts for appeal on the basis of an abuse of process argument arising from those two High Court judgments.7 The CCRC’s evidence states that “in broad terms the CCRC is saying the thing that went wrong in the legal process was that the defendants were unaware of significant problems with the Horizon computer system”.8 The CCRC’s evidence to the Committee states that the Post Office’s status as victim, investigator and prosecutor of the offences “may have been at the root of what we believe went wrong in these cases”.9 The CCRC’s statement of reasons for referring the Post Office cases for appeal explains that the High Court’s judgments raised “serious concerns as to whether POL carried out thorough and objective criminal investigations”.10 CCRC’s statement of reasons explains as follows:

The CCRC further considers that this concern applies to POL’s approach throughout the period 2001 to 2013, that is, the timespan of the convictions which are considered in this Statement of Reasons. Although general awareness of problems with the Horizon system has undoubtedly increased in recent years, the CCRC considers that POL was on notice regarding alleged problems with Horizon throughout the period in question. Accordingly, POL was under a duty to make all reasonable inquiries into those alleged Horizon problems, in order to satisfy itself that it was bringing criminal prosecutions based upon sound evidence as to branch accounts.11

11.One of the CCRC’s principal concerns is whether any organisation with the Post Office’s combined status, as victim, investigator and prosecutor, would be able to take decisions on investigations and disclosure “appropriately free from conflict of interest and conscious or unconscious bias”.12 The CCRC suggested that the Committee look into the following areas as part of this inquiry:

The Post Office as a private prosecutor

12.The Post Office is not a typical private prosecutor. Many private organisations that bring private prosecutions engage external law firms and specialist investigators to conduct the prosecutions on their behalf. Conversely, the Post Office relied on its own internal investigators and lawyers to conduct the prosecution of its own workers. Edmonds Marshall McMahon, a law firm which specialise in private prosecutions, point out that the Post Office, due to historic origins as a public body that brought prosecutions, retained “its own team of (in-house) prosecution lawyers, which is atypical for a commercial organisation”.14 The Private Prosecutors’ Association question whether the Post Office was conducting private prosecutions at all and was in fact a “publicly-owned entity and a public prosecutor” during the relevant period.15 There is no clear legal definition of what counts as a “public prosecutor”. For the purposes of this report, the Post Office is taken to have been operating as a private prosecutor. Nick Read, the Group Chief Executive Officer of Post Office, in a letter dated 16 June 2020 to the Chair of the Business, Energy and Industrial Strategy Committee, has confirmed that the Post Office “no longer exercises a private prosecutorial function” and that as far he is aware the last private prosecution by the Post Office took place in 2015.16 Paula Vennells ,the former CEO of the Post Office (2012–2019), in a letter to same committee dated 24 June 2020, explained that the Post Office decided to change its policy on private prosecutions in 2014 “to focus on the most egregious cases of wrongdoing” and that this effectively ceased all prosecutions of false accounting, inflating figures, or theft.17

13.Ian Henderson and Ron Warmington, the investigators for Second Sight who conducted a review of the Post Office in 2012, gave evidence to the Committee on 7 July. They emphasised the unusual nature of the Post Office’s approach to investigations and prosecutions. Ian Henderson set out that the Post Office used prosecutions to facilitate debt recovery and that defendants “were routinely threatened with the charge of theft, which would not be proceeded with, provided they pleaded guilty to false accounting, made good all losses and did not mention any problems with Horizon”.18

Ian Henderson told us that the investigations conducted by the Post Office were “extremely limited”.19 The approach of the Post Office’s in-house investigations team was said to be flawed: “problems with Horizon were effectively off limits to investigators, who, as a matter of policy, were not allowed to consider Horizon as the cause of the reported shortfalls”.20 Ian Henderson also noted that there was little external or internal oversight of either investigations or prosecutions conducted by the Post Office.21

Conclusion

14.The Committee has received a number of submissions which argue that the issues raised by the Post Office’s prosecutions are not relevant to understanding the regulation of private prosecutions. Paul Marshall, a lawyer representing a number of sub-postmasters prosecuted by the Post Office, argues that the issues arising from the Post Office’s prosecutions will not be solved by restricting the right to bring private prosecutions.22 Paul Marshall argues that the problems revealed by the High Court’s judgments are the result of a combination of factors, including a number of systemic and structural issues within the justice system and failings of corporate governance at the Post Office.23

15.The CCRC’s evidence to the Committee, by contrast, places emphasis on the Post Office’s institutional approach to investigations and prosecutions. The CCRC recognises that the concerns they raised with the Committee are based only on their experience with the Post Office and that they have not encountered similar issues with any other private prosecutions.24 However, their evidence refers to reports that the number of private prosecutions are widely said to be increasing and argues that this justifies a proactive approach.25 We agree. The startling figures on the scale of the Post Office’s prosecutions, together with concerns raised by the Environmental, Food and Rural Affairs Committee in relation to the RSPCA in 2016 and reports that the number of private prosecutions is rising, justify a proactive approach to examining the effectiveness of the regulation of this area of the criminal justice system.26


2 Bates V Post Office Ltd [2019] EWHC 606 (QB) (15 March 2019 - the “Common Issues” judgment) [222]

3 Bates V Post Office Ltd [2019] EWHC 606 (QB) [138] [34]

4 Bates V Post Office Ltd [2019] EWHC 606 (QB) [28] [36]

5 Extract from the full transcript of the final hearing of Bates V Post Office Ltd [2019] EWHC 3408 (QB)

6 Bates V Post Office Ltd [2019] EWHC 3408 (QB) (16 December 2019 – the “Horizon Issues” judgment)

7 Criminal Cases Review Commission (PPS0026) para 4

8 Criminal Cases Review Commission (PPS0026) para 5

9 Criminal Cases Review Commission (PPS0026) para 6

10 Criminal Cases Review Commission (PPS0026) para 10

11 Criminal Cases Review Commission (PPS0026) para 14

12 Criminal Cases Review Commission (PPS0026) para 6

13 Criminal Cases Review Commission (PPS0026) para 27

14 Edmonds Marshall McMahon (PPS0009) para 4

15 Private Prosecutors’ Association (PPS0021) para 1.4

18 Q2 (Ian Henderson)

19 Q2 (Ian Henderson)

20 Q2 (Ian Henderson)

22 Paul Marshall (PPS0024) para 63

23 Paul Marshall (PPS0024)

24 Criminal Cases Review Commission (PPS0026) para 23

25 Criminal Cases Review Commission (PPS0026) para 23

26 House of Commons Environment, Food and Rural Affairs Committee Animal welfare in England: domestic pets (November 2016 HC 117) paras 163 -165




Published: 2 October 2020