The High Court in London has granted a group litigation order which will allow sub-postmasters to challenge the Post Office. Since the early noughties, financial irregularities at Post Offices across the country have led to many sub-postmasters losing their jobs and being forced to repay financial shortfalls. Some were prosecuted for fraud, theft and false accounting. The group litigation order allows individuals who have been affected by the controversy to join the litigation until 26th July 2017.
Sub-post masters working for the Post Office were required to use the Horizon IT system, a system designed to help staff manage and record their accounts. However, many allege that the system was flawed, consistently showing shortfalls in cash and other accounting inconsistencies. The claimants continue to argue that, in fact, the financial irregularities were due to failures in the Horizon system.
Some individual sub-postmasters were made to repay the shortfalls – often amounting to tens of thousands of pounds. Others were prosecuted for crimes such as fraud and false accounting and some were jailed.
Many of the individuals concerned, who have since formed the Justice for Sub-Postmasters Alliance, felt unable to challenge such serious allegations from a large corporation. Evidence was scarce and it was difficult to prove that any inconsistencies were a result of computer programming errors as opposed to human error or fraud.
In 2013, in a bid to resolve the issues, a mediation scheme was established. The scheme aimed to help those involved seek redress. However, the Post Office faced criticism for failing to fully engage with the scheme. A report published in 2014 criticised the Post Office’s response and suggested that the computer system in some Post Offices was unacceptable.
The Criminal Courts Review Commission has also been involved in reviewing applications from sub-postmasters who were prosecuted for offences they say were attributable to the Horizon system. The Commission is responsible for reviewing potential miscarriages of justice and can refer a case back to the appeal courts for a fresh appeal.
The current litigation aims to obtain compensation for the sub-postmasters and to have the Post Office accept responsibility for IT errors. The Post Office maintains that the system was not flawed.
As is clear in this case, allegations of fraud, false accounting and theft can be extremely onerous. Fraud law is broad and varied and cases such as this tend to involve a complicated factual background and timeline. It is therefore important to build a clear strategy from the beginning when dealing with fraud related offences.
The Fraud Act 2006 is the key piece of legislation in this area and applies in England, Wales and Northern Ireland. Section 1 of the Fraud Act creates the offence of fraud, which can be committed in three different ways. Fraud can be fraud by false representation, fraud by failure to disclose information when there is a legal duty to do so, and fraud by abuse of position.
For fraud to have been committed, the defendant must have engaged in dishonest conduct and have intended to make a gain or cause loss to another. There is no need for there to be an actual gain or loss.
As demonstrated in the Post Office cases, the law in this area is not clear cut and often fraud and theft will overlap. Similarly, other offences in this area include false accounting, which is regulated by the Theft Act 1968, and forgery, which is dealt with in the Forgery and Counterfeiting Act 1981. The Crown Prosecution Service will decide which offence covers the relevant criminality and prosecute accordingly.
In the Post Office cases, individual sub-postmasters were jailed for these offences while others faced severe penalties which led to bankruptcy. Not only have these prosecutions had a devastating personal impact, the sub-postmasters lost their careers. It is perhaps therefore unsurprising that they are keen to seek redress for this potential miscarriage of justice.
It is apparent from the discussion above that the law relating to fraud is complicated and involves many over-lapping crimes. This is why it is important to have someone represent you who has experience in many diverse areas.
Fraud and serious fraud represent a substantial part of my practice and I have experience in bank fraud, internet fraud, education fraud, and multi-million-pound carousel fraud/MTIC fraud. I also have extensive experience in obtaining expert input – for example, from forensic accountants – which can be crucial in supporting any defence.
In any fraud case, attention to detail and meticulous preparation are essential. I am well placed to defend any allegations of fraud and understand the serious consequences these allegations have on personal and professional lives.
If you want to discuss further, please do not hesitate to contact one of my clerks.
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15 August 2023
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