Computer Error – Lessons from the failures of Horizon

By Roger Isaacs, Forensic Accountant at Milsted Langdon

More than £57.7 million will be paid to subpostmasters after it was revealed that they had been falsely accused, and in some cases convicted, of misappropriating funds due to an error in the Post Office’s Horizon computer system.

The world of banking, finance and accounting has become increasingly automated by computers to the point where the majority of transactions and record keeping are now done online.

This has undoubtedly removed a lot of work from organisations’ human workforce, but what happens when the computing system is inaccurate or goes wrong?

There seems to be a pervasive belief that computer systems are infallible, that they take in the figures and produce an accurate calculation every time, but what many fail to appreciate is that for a computer to function this way they must first be programmed by a human and this is where errors can slip in.

As a forensic accountant, my services were called upon for one such case against a subpostmaster implicated in a prosecution concerning the Horizon system in 2012.

Working on the behalf of the Courts, it was my responsibility to act as an expert witness and review the evidence of the Post Office in question to see if I could uncover a pattern of accounting irregularities

After many queries and a long period of investigating the figures I concluded that there was no accounting evidence to support any allegations, other than the fact that the cash said to have been present at the branch during a spot-check, was less than the balance calculated by the Horizon system.

I argued that it was not possible to attribute any specific shortfall to the defendant in this case.  However, I did identify several weaknesses in the Post Office’s internal controls, which were highlighted to the Courts at that time.

Subsequently, it has been revealed that the Horizon system at the time of its launch was not fit for purpose and was leading to errors being replicated many times over between various branches.

In some cases, subpostmasters were jailed, while others were fined, sacked and made bankrupt; losing many hundreds of thousands of pounds in the process.

This latest settlement follows a period of mediation between 500 subpostmasters and the Post Office and will be a welcome relief to those involved, but many more questions still need to be asked.

As this was a civil case brought to recover the costs from the Post Office’s errors in implementing the Horizon system in the early 2000s, it will have no impact on the criminal proceedings which took place.

This means that those who were found guilty of offences or pleaded guilty to a lesser offence and were convicted, imprisoned and given a criminal record must now await future appeal cases to find out whether earlier decisions can be overturned.

For me, it is a great regret that despite the warnings of subpostmasters and the findings of expert witnesses, such as myself, in many cases prosecutions were taken forward by the Courts and it seems that many innocent people may have been wrongly convicted.

With hindsight, this case says much about the trust the juries put in a computing flawed system that has been shown not to have been fit for purpose.

As we become more and more reliant on computer technology this case is a timely reminder of its fallibility.

Computers are invaluable tools but as we rely on them ever-more it becomes vital that we understand their limitations.

It is clear that the IT industry should learn from the failure of systems such as Horizon in the hope that miscarriages of justice like those suffered by these subpostermasters and subpostmisttresses can be avoided in future.

Posted in Press Releases.