Reports that Matter

Post Office Horizon IT Inquiry Report, Volume 1 · 2025

INTRODUCTION

Section 1 of 18

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Post Office Horizon IT Inquiry Report Volume 1

HC 1119

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Post Office Horizon IT Inquiry Report Volume 1

Presented to Parliament pursuant to Section 26 of the Inquiries Act 2005 Ordered by the House of Commons to be printed on 8 July 2025

HC 1119

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Contents

    1. INTRODUCTION — 6
    1. RECOMMENDATIONS — 10
    1. THE HUMAN IMPACT — 12

  • a. Introduction — 12

  • b. Categories of persons affected — 13

  • c. Case Illustrations — 22

    1. FINANCIAL AND OTHER REDRESS — 46

  • a. Introduction — 46

  • b. The Horizon Shortfall Scheme - HSS — 50

  • c. The Overturned Conviction Scheme - OCS — 77

  • d. The Group Litigation Scheme - GLOS — 88

  • e. The Horizon Conviction Redress Scheme - HCRS — 96

  • f. Discrete topics relevant to all schemes — 98

  • g. Restorative Justice — 115

    1. SUBMISSIONS ON BEHALF OF CORE PARTICIPANTS AND OTHERS — 117
    1. CONCLUSIONS AND RECOMMENDATIONS RELATING TO REDRESS — 120

  • a. The meaning of the phrase 'Full and Fair Redress' — 122

  • b. Has "Full and Fair Redress" been delivered to Claimants in all schemes? — 124

  • c. Has financial redress been delivered promptly? — 143

  • d. Other Issues and Recommendations — 158

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INTRODUCTION

1.1. Post Office Counters Limited ("the Post Office") began rolling out the Horizon IT System ("Horizon") to branches and Crown Offices in about September 1999.1 The phrase "the Post Office" means Post Office Limited and all predecessor and subsidiary companies as the context requires. The phrase "the Horizon IT System" and the word "Horizon" have the same meaning as attributed to the phrase the Horizon System in the judgment of Fraser J (as he then was) in Alan Bates and Others v Post Office Limited (No.6: Horizon Issues) [2019] EWHC 3408 (QB) ("Horizon Issues judgment"). By about the end of 2001/early 2002 the process was complete, since which time and to this day all Post Office branches and Crown Offices have used a version of Horizon as an integral part of their business.

1.2. The first version of Horizon, now usually known as "Legacy Horizon", was developed for, and supplied to, the Post Office by a company known as ICL Pathway Limited.2 Henceforth, the term "Fujitsu" will be used to refer not just to ICL Pathway Limited, but also the compa- ny known as Fujitsu Services Limited, all its subsidiary and controlling companies and all its predeces- sor companies as the context requires. The focus of this volume of my report will necessarily be on the entities that operate in the UK and, where that is not the case in future volumes, it will be clear from the relevant context and any accompanying wording. Legacy Horizon was in use in branches and Crown Offices until 2010.

1.3. Prior to roll out, some employees of Fujitsu had discovered that Legacy Horizon was capable of producing data which was false. Specifically, it was known to those employees that it could produce losses or gains in branch or Crown Office accounts which were illusory rather than real. That state of affairs came about because, from time to time, Legacy Horizon would be afflicted by what have come to be known as "bugs, errors and defects".

1.4. Although many of the individuals who gave evidence before me were very reluctant to accept it, I am satisfied from the evidence that I have heard that a number of senior, and not so senior, employees of the Post Office knew or, at the very least, should have known that Legacy Horizon was capable of error as described above.3 I will summarise and explain the evidence which justifies this statement in a later volume of my Report. Yet, for all practical purposes, throughout the lifetime of Legacy Horizon, the Post Office maintained the fiction that its data was always accurate.4 Ibid.

1.5. In 2010, Legacy Horizon was replaced by the version of Horizon known as "HNG – X" or "Horizon Online". This version was also developed for and supplied to the Post Office by Fujitsu. Like its predecessor, Horizon Online was also, from time to time, afflicted by bugs, errors and defects which had the effect of showing gains and losses in branch and Crown Office accounts which were illusory. I am satisfied that a number of employees of Fujitsu and the Post Office knew that this was so.5 Ibid.

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1.6. In 2017, Horizon Online was replaced by HNG-A. This version too, was developed for and supplied to the Post Office by Fujitsu. My understanding is that this version of Horizon is in current use, albeit subject to some modifications since 2017. When I commenced hearing evidence in this Inquiry my working assumption was that this version of Horizon was "far more robust than Horizon in earlier times" or at least "different and more robust".6 Horizon Issues judgment [936]; Horizon Issues judgment [963]. However, as I will explain in a later volume of my Report, these assumptions may no longer be wholly justified given evidence provided to the Inquiry on behalf of Fujitsu and from postmasters who use this version of Horizon.7 In all volumes of my Report the word "postmaster" is used to describe the person (either actual or legal) who/which is the party to a contract with the Post Office to operate a Post Office branch. Where a postmaster has described themself either in writing or orally as "postmistress" that term is used instead of the term postmaster.

1.7. Between 2000 and the autumn of 2013 the Post Office prosecuted postmasters and others who worked in branches and Crown Offices in England and Wales in reliance upon accounting data produced by Horizon. Such data was relied upon to prove that actual losses had occurred in branches or Crown Offices which could only be explained by theft, false accounting or fraud on the part of the person or persons who had been charged. In Northern Ireland and Scotland, the prosecuting authorities brought prosecutions of postmasters and others before the courts for offences of dishonesty during the same period and, indeed, for some years beyond 2013. In each, or at least most of those cases, they relied upon data from Horizon to prove that losses had actually occurred. In each such case brought against an accused within the United Kingdom, the Post Office and/ or the prosecuting authorities asserted either expressly, or by implication that the data produced by Horizon was wholly reliable.

1.8. Over the whole period since the roll out of Legacy Horizon, the Post Office has relied upon data from Horizon to hold postmasters liable under their contracts for apparent losses in branch. In each case in which this has occurred, the Post Office has asserted that the losses were real, as opposed to illusory and that data produced by Horizon was wholly reliable.

1.9. As a consequence of the activities described in the preceding two paragraphs, many hundreds of people have been convicted, wrongly, of criminal offences, and many thousands of people have been held responsible, wrongly, for losses which were illusory, as opposed to real. As later volumes of my Report will demonstrate, all of these people are properly to be regarded as victims of wholly unacceptable behaviour perpetrated by a number of individuals employed by and/or associated with the Post Office and Fujitsu from time to time and by the Post Office and Fujitsu as institutions.8 I have chosen to use the phrase "wholly unacceptable behaviour" since it is apt to describe behaviour which is worthy of condemnation. However, the phrase does not necessarily, mean that persons or the Post Office committed crimes or would be liable in civil proceedings. I am precluded by section 2 Inquiries Act 2005 from determining criminal or civil liability.

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1.10. The impact upon those wrongly accused and prosecuted for criminal offences has been disastrous.9 Most of the persons prosecuted were convicted of offences of dishonesty. An unknown percentage of those prosecuted were acquitted (probably somewhere in the region of 7.5%) but the impact of prosecution was invariably disastrous even for those acquitted. The impact upon those held liable for losses which had not actually occurred has also been disastrous in many instances. Some of the close family members of many of these persons have also suffered considerably.

1.11. Almost as soon as Legacy Horizon had been rolled out, postmasters began to complain that Horizon was, on occasions, producing false data which affected branch accounts. The complaints continued throughout the life span of both Legacy Horizon and Horizon Online. As the years went by the complaints grew louder and more persistent. Members of Parliament became involved and provided substantial support to postmasters. Still the Post Office trenchantly resisted the contention that on occasions Horizon produced false data.

1.12. In 2009 the organisation was formed which will forever be known by the acronym JFSA ("Justice for Subpostmasters Alliance"). By 2016, the organisation was ready for a battle in the courts with the Post Office over the reliability of Horizon and a myriad of other related disputes. There were sufficient numbers of claimants (approximately 555) to justify the making of a Group Litigation Order. The proceedings were extremely hard fought. They ended, apparently triumphantly for the claimants, after the managing Judge, the Honourable Mr Justice Fraser (as he then was), produced two substantive judgments in which the claimants' main contentions were accepted without reservation.10 Alan Bates and Others v Post Office Limited Judgment (No.3) (Common Issues) [2019] EWHC 606 (QB) and Horizon Issues judgment.

1.13. From the moment of my appointment as Chair of this Inquiry, I was always of the view that those who had been adversely affected by Horizon should have a major role in the work of the Inquiry. That is why Core Participants who fell into that category were the first persons to be asked for witness statements and called to give oral evidence. That is why, too, I thought it appropriate that the recognised legal representatives of these Core Participants should have a significant role in all aspects of the Inquiry.

1.14. I have formed the view too, that the impact upon those affected, the "human impact", should be placed at the forefront of my Report to the Minister. That is why I have decided to publish this volume of my Report as soon as it was completed rather than wait for the whole of my Report to be ready for publication.

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1.15. It also seemed to me to be natural to combine my description of the suffering endured by so many with my assessment of, and conclusions about, the attempts by the Post Office, the Minister and the Department to provide redress to those affected which is "full, fair and prompt" – a phrase used and an objective so often repeated during the course of the more than five years which has now elapsed since the litigation between Sir Alan Bates and other claimants, and the Post Office ("the Group Litigation") was brought to an end.11 The phrase "the Minister", depending upon its context, means any Minister of the Department for Business and Trade and any predecessor department and any relevant Minister of HM Government and previous Governments from 1997 to the present. "Department" means the Department of Business and Trade and any predecessor department from about 1995 to the present.

1.16. As followers of the Inquiry will be aware, I held many hearings to receive oral evidence about human impact between February and May 2022. I also held discrete hearings at which I received submissions about financial redress on 6 July 2022, 13 July 2022, 8 December 2022 and 27 April 2023. I have published the following:

(i) "Chair's Progress Update on Issues relating to Compensation" ("the Progress Update") on 15 August 2022.12 [INQ00002032].

(ii) "Chair's Statement on Issues relating to Compensation" ("the Chair's Statement") on 9 January 2023.13 [INQ00002033].

(iii) "First Interim Report: Compensation" ("the Interim Report") on 17 July 2023.14 [INQ00002027].

1.17. Those acting for postmaster Core Participants and/or their next of kin have suggested from time to time that these hearings and publications have played a part in persuading the Post Office, the Minister and the Department to refine and improve the administration of the schemes, then in being which were and still are the vehicles for delivering financial redress to those entitled to claim it. The conclusions which I reach and the recommendations which I make in Section 6 of this volume are aimed at ensuring further refinement and improvements to the schemes which now exist.

1.18. This volume is based primarily upon oral and written evidence provided to the Inquiry in response to formal requests, and upon published documents which were produced primarily by the Post Office and the Department. Additionally, however, it takes account of information provided to the Inquiry which does not constitute evidence in the strict legal sense, but which nonetheless, has assisted me.

1.19. I have considered all evidence and information available to me up to and including 6 June 2025.

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