As the Financial Reporting Council announced this month that it will investigate EY over its audits of the Post Office in relation to the Horizon IT scandal, the saga shows little sign of drawing to a satisfactory conclusion.

The Post Office Horizon story has been described as one of the biggest miscarriages of justice in UK history. Between 2000 and 2014, the Post Office prosecuted 736 sub-postmasters and sub-postmistresses – an average of one a week – based on accounting anomalies arising from the Horizon system introduced from 1999.

In April 2021, the Court of Appeal quashed the convictions of 39 former Post Office sub-postmasters for false accounting, fraud and theft, with a further 700 overturned convictions potentially on the way after campaigners won a legal battle to prove the Horizon IT system – on which their convictions were based – was flawed.

But for victims of the scandal, the ordeal is far from over. Four years on since that High Court judgement, most of the Post Office scandal victims are still awaiting compensation payments. This has prompted Sir Alan Bates, the former sub-postmaster and leading campaigner for justice, to urge them to take the government to court over the delays.

Forensic accountant and ICAEW member Dr Kay Linnell is all too familiar with the twists and turns of the scandal, having assisted the Justice for Subpostmasters Alliance (JFSA) in locating evidence, attending meetings with investigators Second Sight and the legal team, and working to obtain judgments and redress for sub-postmasters. 

She says: “I was appointed by the victims to verify that Second Sight, the forensic accountants appointed by MPs to investigate the Post Office’s ‘Horizon’ computer system, were doing a proper job. Barbara [Jeremiah JP] and I have acted as their accountants and tax advisers ever since.”

Linnell’s involvement in the litigation process to support the sub-postmasters in the scandal, dramatised in the ITV hit series ‘Mr Bates vs The Post Office’, led to her receiving an OBE in this year’s King’s New Year Honours List.

As the fallout from the scandal rages on, she continues to spend at least half a day a week working on the case and loss claims for victims, fuelled by a profound sense of injustice. “It just seems so wrong and it still makes me angry, not just because of the prosecutions, but also the bullying, the taking away of people's livelihoods and not caring if victims were disrespected in their communities.” 

A Freedom of Information request made by The Lawyer to the Post Office revealed that £256.9m was paid to 15 law firms and two barristers’ chambers between September 2014 and March 2024. The figure is nearly equal to the total paid out to victims of the Horizon scandal so far, which was £261m as of July 2024 according to UK government statistics. Meanwhile, the government is using every trick in the book to delay or avoid paying out claims, Linnell says.

The case should have highlighted the important work of the forensic accountancy profession, but Ron Warmington and Ian Henderson, the forensic accountants from Second Sight who were hired – and subsequently sacked – by the Post Office to review the Horizon system told the High Court their work was constantly sabotaged by the Post Office’s senior management. 

Needless to say, a thick skin coupled with a curious mind have always been attributes that have stood accountants in good stead, Linnell says – and forensic accountants all the more so. 

Linnell’s foray into forensic accountancy happened almost by accident after she stumbled across fraud while covering for a colleague on holiday. After subsequently helping Derbyshire police with its prosecution, Linnell realised she had found her vocation. “I realised this was much more fun than doing old ladies’ tax returns. It’s absolutely addictive,” she says. “It’s like doing jigsaws. You find that piece that makes it go together, and you know who’s got the money and who to chase. I love finding out how it happened. I’m just nosy and persistent. That makes for a good fraud investigator.” 

She has worked for several major firms over the course of her interesting career, including HW Fisher, Smith & Williamson and BDO, where she held the role of Forensic Director. Previously she had been the Chief Investigating Accountant for the Board of Inland Revenue and Head of Accountancy Profession and Accountancy Adviser in the Special Compliance Office at the Inland Revenue, during which time she introduced focused accountancy-based fraud tax collection. “Accountants aren’t bag carriers for inspectors. They’re intelligent, analytical people.” 

Linnell was also the first head of the Joint Insolvency Monitoring Unit, set up to oversee implementation of The Insolvency Act 1985, “and make sure that there was more protection against cowboy insolvency practitioners”.

For the past 36 years she has run her own practice, Kay Linnell and Co, handling forensic cases in criminal, civil and family courts both in the UK and internationally. Linnell is a Chartered Arbitrator, accredited Mediator and a Certified Fraud Examiner specialising in financial investigation, fraud and tax enquiries. She is also a Fellow and Life Member of the Expert Witness Institute and has acted as an expert witness in the civil and criminal courts and various tribunals. 

Visibly passionate about her chosen field, Linnell says it’s a shame that breaking into the industry is so difficult. “You have to be recognised by a court or tribunal as having specific relevant expertise in your field. Just because someone has a Masters in Forensic Accounting doesn’t mean they will necessarily get jobs without experience.” 

The key is to build up a reputation of being able to find out where assets and money have gone, and having a track record in recovering assets or successfully prosecuting the guilty, she says. Although it’s difficult for small firms to compete with the largest firms that have enormous resources at their disposal, it’s individuals rather than firms that are appointed. 

Meanwhile, rapid advancements in technology are a double-edged sword, Linnell says. In theory, algorithms can comb through massive datasets, uncovering anomalous spending patterns, suspicious transactions and hidden connections between entities or people that would likely remain hidden from traditional sampling methods. But tech is also allowing criminals to move and hide money more easily, she says. “In the old days, you had a file about two inches thick, which had copy documents in it that you read page by page. I’d be in a room with all the files and records for 20 years in one place. Not anymore.

“Nowadays, you can discover ‘smoking gun’ emails to help and you can track who used the computer and when by using metadata, but it’s still not the same as having very simple bits of data that people can follow.”