Bates v Post Office: Horizon Accounting System

This House of Lords Library briefing provides information in support of the House of Lords debate on the Government's response to the judgment in Bates v Post Office [2019] EWHC 3408; and whether they intend to take any action against the directors responsible for the Horizon Accounting System.

• The Horizon accounting system was introduced by the Post Office in 2000. Horizon recorded financial transactions at Post Office branches. The provider of this original system was ICL. ICL was partly owned by Fujitsu and was fully incorporated within Fujitsu in 2001.
• The campaign group Justice for Sub-postmasters Alliance was established in 2009. Members of the group argued that the Horizon accounting system was incorrectly showing sub-postmasters in some branches to be in arrears in their payments to the Post Office as a result of technical faults. The group said sub-postmasters were being incorrectly accused of false accounting and fraud by the Post Office. It argued this had resulted in sub-postmasters losing their jobs, facing bankruptcy and possible imprisonment.
• In 2012, the Post Office set up an independent inquiry conducted by the accountancy company Second Sight. In 2013, an interim report highlighting faults in the Horizon system was published. The Post Office established a Complaint Review and Mediation Scheme to examine cases raised in the report. This scheme was closed to new applicants later that year. The Justice for Sub‑Postmasters Alliance argued there had not been enough opportunity for sub-postmasters to enter the scheme.
• The mediation scheme was closed by the Post Office in 2015.
• The Justice for Sub-postmasters Alliance began legal action against the Post Office in 2015.
• On 11 December 2019, the Post Office and the sub-postmasters concerned announced they had reached an out of court settlement.
• In the subsequent judgment on the issues, the High Court ruled that the original Horizon system had not been sufficiently robust and had suffered from a number of bugs and errors.
• Fujitsu was not a party to this litigation. However, the judge in the High Court said he would refer Fujitsu to the director of public prosecutions for possible further action.
• In addition to this legal action, the Criminal Cases Review Commission has received applications from former sub-postmasters claiming to have been falsely convicted of offences as a result of failures in the Horizon accounting system. These claims are still being reviewed.