The Post Office has recently explored resuming the practice of taking branch owner-operators to court, as mounting losses from shortfalls in its network of 11,500 outlets hit £12m a year. During the Horizon IT scandal more than 900 operators were wrongly prosecuted over discrepancies caused by the faulty accounting software, many of them brought privately by the Post Office, a practice it stopped in 2015 and has promised not to restart. However, the Post Office continued to use the court system for the civil recovery of losses from branches until 2018. In the wake of damning high court judgments a year later, the state-owned company currently only pursues losses if there is an agreement with the branch owner-operator, or assists the police if the issue is of a scale that it may become a criminal case. This has led to the Post Office having to write off increasingly large amounts of money in its own accounts, which has prompted the organisation to once again look at how to recoup losses through direct action. “What we were seeing was after two months if we thought a postmaster owed us money and the postmaster didn’t pay it then we wrote that off to the P&L [profit and loss account],” said the former Post Office finance director Alisdair Cameron, who left the company in June, in testimony to the public inquiry into the Horizon scandal last week. “You could see the scale of that very quickly. It was £2m a year when I joined. It went up to £5m a year and suddenly it was £12m a year.” On Wednesday, the inquiry was shown the notes of a quarterly meeting between Post Office executives and UK Government Investments, the body that manages the state’s interests in businesses in which it owns a stake. The minutes revealed that a return to court action was formally explored last year. “In cases where there is fraud, these could be tested in a civil jurisdiction,” the Post Office said in the meeting notes. “A paper on this was noted as being worked on currently and would be raised with government in due course.” The Post Office chief executive, Nick Read, giving evidence at the inquiry on Wednesday, said that while the organisation had no current plans to resume court-led civil recovery proceedings it was becoming more confident in how robust its investigations are. “What we saw at this particular time was an escalation in potential liabilities, with losses starting to grow in the network, and the shareholder [government] was asking why,” he said. “This was a conversation that arose as a consequence of that. “We are building a team that know how to properly interrogate and investigate Horizon data. We are confident about … the way we can go about an investigation and identify where there are shortfalls and discrepancies.” Read said he did not know what had become of the paper that had been worked on for the government but that there was currently no testing of civil court cases of alleged fraud. The inquiry was shown an email chain from earlier this year relating to a spat between the Post Office and Fujitsu over the use of Horizon data for criminal cases, in which the software company said it would not help in either criminal or civil cases if pursued by the Post Office. One exchange between Owen Woodley, who is running the Post Office after Read stepped back to prepare for the inquiry, and Fujitsu’s European boss, Paul Patterson, said the move towards a renewal of the civil recovery strategy was an “evolving process”. “While Post Office does not currently take civil recoveries action to recover established losses from postmasters, this may be necessary in the future to establish a fair, transparent and consistent approach to recoveries,” Woodley said. “Critically, this would only be undertaken in future with the wide endorsement of the postmaster community and robust independent assurance.”