Corporate cruelty: the Post Office

The Oxford dictionary defines cruelty as “behaviour that causes physical or mental pain to others and makes them suffer, especially deliberately”. An individual can be cruel. But can a corporation? Let’s find out.

Lee Castleton was an engineer, then briefly a stockbroker, before buying a sub-post office in Bridlington, Yorkshire. Like thousands of sub-postmasters who plough their savings into what is often the hub of a little community, he wanted to give his young family a life they would enjoy. He describes himself as a thick-skinned Anglo-Irish man, sustained by his faith.

In 2003 his little branch began showing unexplained losses: first £1,103.68 on January 31, a week later £4,230, then another and another. By March the shortfall was £26,000.

Castleton suspected there was a glitch in the computer system. But he had no means of checking the back-office systems, so he emailed the IT helpline and his line manager –  no fewer than 91 times. Eventually they stopped replying.

The Post Office demanded that he make up the shortfall. He refused. Castleton went to court. “I knew it wasn’t me” he told the Financial Times. Unknown to Castleton, these mysterious shortfalls were appearing in sub-post offices just like his right across the country.

It turned out that the Horizon computer system manufactured by Fujitsu, the £22 billion Japanese Technology giant, was riddled with bugs and spewing out false accounts. But nobody interrogated it. And so nobody knew. Horizon was used by at least 11,500 post office branches, processing some six million transactions a day.

Castleton lost his case in the High Court. “It is inescapable “ said the judge in what must be one of the bench’s most fateful lapses in judgement, “that the Horizon system was working properly in all material respects.” Castleton was ordered to repay £26,000 plus £321,000 the Post Office spent suing him for a debt that didn’t exist.

His was bankrupted, his dream shattered. His wife suffered a breakdown. As a bankrupt, he could not go back to stockbroking. So he took odd engineering jobs to pay the mortgage on his obsolete post office, sometimes sleeping in his car to save on hotels.

Fast forward to 2022. The public inquiry into what may be the biggest and most cruel miscarriage of justice in British legal history is in its third phase.  Its remit is to find out why more than 700 postmasters like Castleton were wrongfully prosecuted and convicted of fraud and false accounting with devastating personal consequences.

Lives were ruined, some went to jail, false confessions were extracted under duress, good people were defamed, families broke up, a few victims took their own lives.

Miscarriages of justice or justice delayed is not new: think of the Birmingham Six, Thalidomide, Hillsborough, Grenfell. But the events surrounding the Post Office scandal are especially dark.

Fresh evidence now suggests that both the Post Office and Fujitsu knew of the computers’ errors, but failed to reveal them during the trials of the sub-postmasters.

More shocking is evidence that in Castleton’s case — and one must assume others — Post Office executives ended up destroying his life because they wanted to deter other sub-postmasters from questioning the reliability of the Horizon system.

Computer Weekly, which has been following the trial assiduously, revealed in March that the Post Office threw everything at Castleton to “send a clear message” to other sub-postmasters. In a recent inquiry hearing, the barrister Flora Page, representing former sub-postmasters, quoted from an internal document about its legal strategy. This, it said, “was not to make a net financial recovery but to defend the Horizon system and hopefully send a clear message to other sub-postmasters that the Post Office will take a firm line and deter others from raising similar allegations”.

It gets worse. Documents have more recently come to light showing that Post Office prosecutors tasked with investigating sub-postmasters were asked to group suspects based on racial features.

One document asked investigators if the suspects were “N*****d Types” — a racist term that refers to people of African descent. Other categories on the document include “Chinese/Japanese types” and “Dark Skinned European Types”.

Responding to a Freedom of Information requests from the media, a Post Office spokesperson dismissed it as a “historic document” but condemned the “abhorrent” language. One can only shrug.

The Post Office also appears to have tried to gag postmasters with whom they reached a compensation settlement in a bid to avoid going to court. In its settlement letters marked “without prejudice”, the Post Office stated: “Terms and details of the (compensation) offer are confidential and, unless we both agree, cannot be shown to a court or to others unless for a legitimate reason and on confidential terms.”

The inquiry continues. Police are investigating two Fujitsu employees for possible perjury at the inquiry. There will no doubt be more horror stories.

My wife and I live in a small, rural community in the Chilterns. Our post office, like so many others around Britain, is a convenience store, community hub, gossip centre, emergency ration supplier and purveyor of fine locally grown asparagus.

It’s a family business run by a south Asian family. I’ve watched their daughters grow up and get married and one son-in-law branch out into eye-testing and selling glasses.

If there’s a better example of hard work, thrift, entrepreneurship, and community I can’t think of one. So this cruel assault by the Post Office and its executives has also been an assault on all communities that depend on these little beating hearts of British enterprise.

The Post Office is a taxpayer-owned company with a special commercial remit. Last month the government’s representative on the board resigned after the board admitted it had approved director bonuses based on misleading information.

The bonus targets were partly set on the basis that directors had supplied the Horizon inquiry with all the information it needs. One quarter of the value of the 2021-2022 bonuses was for work done on the public inquiry. I had to read that several times before it sank in.

Nick Read, the Chief Executive of the Post Office, accepted a £455,000 bonus partly based on the claim it had “helped the inquiry finish in line with expectations”. He has since said sorry and handed some of it back.  The irony is jaw-dropping.

We are left with so many questions about this shameful saga but here are just a few:

• You are senior Post Office executive. Suddenly and simultaneously hundreds of your local representatives with no criminal record or dodgy past appear to have their hand in the till. Is your first reaction “there’s something weird going on”? Or is it “they’re all crooks”?
• The Post Office prosecuted 736 sub-postmasters between 2000 and 2014, an average of one a week. Why, when evidence now suggests it knew the system was not fit for purpose, did these prosecutions continue?
• Why did it take nearly 20 years for some campaigners to get their cases reconsidered?
• Why hasn’t anyone been fired? Why has the entire board not been fired and replaced with a new team?
• Why hasn’t any executive been investigated for failing to carry out their duties as a director?
• Paula Vennells, CBE, was Post Office CEO from 2012 to 2019. She moved seamlessly from the Post Office to chair an NHS trust and take a position as an advisor to the Cabinet Office. She has since left both jobs. Is she really going to get away scot free?

It’s been three years since the government-owned company conceded defeat in a landmark High Court case. Of the more than 700 postmasters prosecuted, only 85 have been acquitted and only four have received full compensation.

There’s one other question that arises from this appalling scandal. Computers are everything. But few of us, including Lee Castleton, the judge who ruled against him and clearly Post Office bosses, understand them. We just assume they’re always right.

This presumption of infallibility will become even more difficult for ordinary people to challenge when things go wrong with the advent of AI and the indispensability of algorithms . This scandal is a wake-up call for us all.

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