Ethics Hub

Learnings from the Post Office Horizon scandal

The information on this page sets out considerations for Costs Lawyers arising from the Post Office Horizon scandal.

What happened

Horizon was an online accounting system developed by Fujitsu and used by the Post Office from 1999/2000. Defects such as software errors and bugs led to balance discrepancies being recorded. Over 900 postmasters were wrongly prosecuted and convicted for theft, fraud and false accounting based on the incorrect information produced by the Horizon system. Cases were brought by the Post Office, Crown Prosecution Service and other bodies.

In 2017, a group of 555 subpostmasters took legal action against the Post Office. The Post Office agreed to pay £58 million in compensation. In Bates and Others v Post Office Limited, the High Court found that bugs, errors and defects in the Horizon system rendered it unreliable and capable of causing discrepancies in subpostmasters’ accounts. The Post Office’s evidence in the case, litigation tactics and its attitude towards subpostmasters were also criticised.

In 2021, a statutory inquiry, led by Sir Wyn Williams, was set up to establish an account of the implementation and failings of the Horizon IT system over its lifetime. The inquiry also considered issues such as the delivery of the mediation settlement agreed by the Post Office, and the governance and whistleblowing controls in place.

The Post Office (Horizon System) Offences Act 2024 received Royal Assent on 24 May 2024. The Act will quash the convictions that meet the criteria set out in the Act.

You can find more context and a timeline of events on the Post Office website.

The role of lawyers in the scandal

The conduct of lawyers involved in the Post Office Horizon scandal has been heavily criticised on a number of legal and ethical grounds. This includes the conduct of lawyers working in-house for the Post Office – from the General Counsel through to more junior team members carrying out instructions – as well as external legal advisers.

Allegations of misconduct have been made against the lawyers involved for the following kinds of behaviour, whether carried out by the lawyers themselves, facilitated by them or witnessed by them and not prevented or reported:

drafting and advising on unfair, bad faith contracts with subpostmasters
using threatening, oppressive and unethical litigation tactics
filing misleading pleadings, misleading evidence, using excessive redaction and making aggressive and improper resistance of disclosure
failing to disclose material evidence and destroying potentially relevant documents
taking unfair advantage of litigants in person, including enforcing costs orders through to personal bankruptcy
pursuing investigations and prosecutions without evidence or despite counter-evidence
failing to disclose or investigate reasonable lines of inquiry and relevant evidence in prosecutions against subpostmasters
purporting to be independent, despite having been instructed by the Post Office in related matters
obstructing the administration of justice through threats of defamation law suits and the improper use of non-disclosure agreements
inhibiting the proper, independent investigation of the matters leading to the scandal
relying without question on the advice of senior legal counsel or blindly following the instructions of superiors

What Costs Lawyers should bear in mind

While no Costs Lawyers have been personally implicated in the Post Office Horizon scandal, many of the learnings for lawyers from the resulting litigation, statutory inquiry and regulatory interventions are relevant to Costs Lawyers’ work. The main issues that you should be aware of are summarised below.

Increased public awareness of, and scrutiny of, lawyers’ conduct

The Horizon court cases and statutory inquiry, and the success of the television drama Mr Bates vs The Post Office, have brought the legal and ethical issues involved to national attention. They have also raised public awareness of the role of lawyers in the scandal, including lawyers who provided advice to the Post Office over the years and those involved in the conduct of the litigation itself. This resultant increased public scrutiny of lawyers’ conduct places even greater emphasis on the importance of acting in accordance with your professional and ethical obligations.

Costs Lawyers have a duty under Principle 1 of the Code of Conduct to act honestly and with integrity, not only in your professional life but also in your private life where your behaviour might reasonably be considered to undermine your adherence to the core ethical principles of the profession. This duty overrides a Costs Lawyer’s duties to their client and applies to their work before the court, in advising clients and in conducting litigation. In addition, Costs Lawyers must not act in any way which is likely to diminish the trust the public places in them or in the profession of Costs Lawyers.

For further information, visit our Ethics Hub page on Costs Lawyers and the rule of law.

Maintaining your independence

The Horizon scandal demonstrates the importance of maintaining your independence, including when employed in an in-house context. Although it can be challenging to provide advice that conflicts with an employer’s business objectives or strategy, you must remember that your obligations to your client do not override your duty to promote the proper administration of justice and maintain independence, nor do they override your duty to uphold the rule of law and consider the public interest.

Principle 2 of the Code of Conduct also makes clear that a Costs Lawyer’s duty to the court means that they cannot mislead the court, or knowingly allow their clients or their employer to do so, even inadvertently.

You must uphold these duties regardless of advice provided by external counsel, and regardless of the instructions of your manager or colleagues.

As a Costs Lawyer, you also have a duty of disclosure to the CLSB. You might need to disclose matters concerning your employment or business to us if they relate to compliance with our regulatory rules. An employer’s contract with you should not prohibit you from disclosing information in accordance with your professional obligations.

For further information, see the Guidance Note on Unregulated Employers of Costs Lawyers in the Costs Lawyer Handbook.

Unethical conduct and upholding the rule of law

One of the key issues highlighted during the course of the Horizon scandal and resulting litigation was the challenge of balancing your client’s commercial interests with upholding the rule of law and acting ethically.

The key principles of ethical conduct derive from the “professional principles” in the Legal Services Act 2007 and are enshrined in the Code of Conduct. Examples include maintaining your independence, acting with honesty and integrity, and keeping the affairs of your client confidential.

However, professional ethical conduct is not limited to compliance with your regulatory obligations, and it is not just about avoiding acting in a way that would breach the Code of Conduct. Professional ethical conduct is wide-ranging. It encompasses behaviour and values that you should exemplify when carrying out your work, such as treating others with dignity and respect, recognising how your professional conduct affects the culture and society that you work in, and considering broader issues of corporate and social responsibility.

For more information, visit our Ethics Hub page on Costs Lawyers and the rule of law.

Conduct of litigation/aggressive litigation tactics

The Post Office’s approach to securing convictions, the huge number of prosecutions it brought, and its conduct during hearings have all attracted criticism.

In his second judgement in Bates and Others v Post Office Limited, Justice Fraser criticised the “extremely aggressive litigation tactics” being used in the proceedings, adding that “it is both very expensive, and entirely counter-productive, to proper resolution of what is so far an intractable dispute”.

When advising clients on, and acting in, litigation and advocacy, Costs Lawyers should bear in mind the requirements of Principles 1 of 2 of the Code of Conduct. These include that you must not act in any way which is likely to diminish the trust the public places in you or in the profession of Costs Lawyers, and that you must support the proper administration of justice by promoting the appropriate and cost-effective use of the resources of the court and the parties.

Disclosure failures and misleading evidence

There were several disclosure and evidence-related issues arising in the scandal, including the Post Office’s failure to disclose known software errors and bugs in Horizon’s software, and misleading evidence being presented. The Horizon scandal has also highlighted how the use of non-disclosure agreements can frustrate the proper administration of justice.

Principle 2 of the Code of Conduct makes clear that a Costs Lawyer must act within the law at all times, and that they must not mislead the court or knowingly allow their clients or their employer to do so, even inadvertently. Costs Lawyers also have duties of disclosure to the CLSB under Principle 5 of the Code of Conduct. Costs Lawyers might need to disclose matters relating to their employment or business to us if they relate to compliance with our regulatory rules.

Reporting serious concerns to the regulator

The Solicitors Regulation Authority is investigating several solicitors and law firms who were working on behalf of the Post Office or Royal Mail Group. Some matters have also been referred to the Bar Standards Board for investigation.

The Horizon scandal serves as a reminder of Costs Lawyers’ obligation to promptly notify the CLSB of any breach of its regulatory arrangements by you or other Costs Lawyers and notify any other approved regulator, as appropriate, if you reasonably believe there has been a breach of their regulatory arrangements by any person regulated by them (including you).

Whilst notifying a regulator of your concerns may feel daunting, it is important to remember that not raising concerns with the relevant body at an early stage risks further harm being caused and potentially breaches your professional and ethical obligations. In addition, self-reporting and transparency with your regulator may be taken into account as a mitigating factor when considering whether to impose sanctions for breaches of regulatory rules.

For more information, visit our Ethics Hub page on Reporting ethical issues.

Ethics Hub

Learnings from the Post Office Horizon scandal

What happened

The role of lawyers in the scandal

What Costs Lawyers should bear in mind

Further reading