Client Update - 12th January 2024

Like many of you this week, my interest in the Post Office Horizon scandal has been reignited by the release of the ITV mini-series "Mr. Bates vs. The Post Office". The premiere episode alone drew a staggering 9.2 million viewers, making it the most-watched program on ITV. As a TV drama, the series has received critical acclaim for its compelling storytelling and Toby Jones's portrayal of Alan Bates. The shows impact has sparked public anger and caused nothing less than political fallout.

For those that have not been following this, the series delves deep into the miscarriage of justice that unfolded between 1999 and 2015, during which hundreds of sub-postmasters were wrongfully prosecuted for theft, fraud, and false accounting. These injustices were the direct result of glitches in Fujitsu's Horizon IT system, which inaccurately reported financial discrepancies. The truth came to light thanks to the relentless efforts of Alan Bates and the Justice for Sub-post masters Alliance (JFSA), ultimately leading to a landmark legal victory in 2019 known as the Bates v Post Office case.

The impact of the show has been profound, reigniting the campaign for justice for those affected and driving public demand for former Post Office CEO Paula Vennells to relinquish her CBE. A petition quickly gained over 1.2 million signatures and Vennells announced her decision to return her CBE on Tuesday.

Politicians have been scrambling to get on the right side of history. The Government are rushing through legislation to overturn wrongful convictions and provide fair compensation for those who have suffered. Sunak pledged a substantial "new upfront payment of £75,000" for the 555 sub-postmasters involved in civil cases who contributed to the landmark legal decision in 2019. However, it seems for the moment that Fujitsu is still on the government VIP list of preferred suppliers, one assumes it would be brave for politicians to continue to authorise IT contracts to Fujitsu going forward. The labour leader Keir Starmer seems a little quiet on the matter, despite riding high in the polls. This is probably because the number of cases that were prosecuted under his leadership of the Crown Prosecution Service (CPS) seems to be growing by the day.

The Bates v Post Office case has once again placed technology in the spotlight, albeit with a less favourable focus. This scandal serves as a stark reminder of the potential pitfalls of over reliance on technology. Perhaps stock markets fell into the same trap last year as tech stocks experienced a 43% surge that propelled the Nasdaq to its strongest performance in the last two decades. Perhaps even more astonishing, "The Magnificent 7," a group comprising the seven largest technology companies in the United States, now boast a combined market capitalization greater than that of the entire stock markets of Canada, Japan, and the UK combined. I am not sure if this surprising fact says more about the ultra-high valuation of these Tech Stocks, or the heavily discounted valuations of the companies listed in three of the seven G7 countries, it is probably a little of both. Japanese equities at the very least have been trying to break out of this group of shame, posting an extremely strong week of performance.

As companies across the world start to look at AI technology as a way to improve their business or decrease costs, I truly hope that Boards take the lessons from the Horizon scandal seriously. Good governance and stewardship by Corporate Boards is essential to create successful companies and a well-functioning society.  It is good for shareholder returns as well. 

With all this renewed public attention, I suspect that any potential or alleged wrongdoings at senior levels of the Post Office will be brought to light. As has happened many times before, when the British people get behind a just cause, good things tend to happen. Do have a good weekend.