16 December 2024
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(9.30 am)
Announcement by SIR WYN WILLIAMS
Sir Wyn Williams: Mr Beer, before we hear from those who wish to make final oral submissions, there’s a bit of business you and I need to deal with. First of all, I have another sad announcement to make so we’ll start with that.
The sad announcement is to record the death of Mrs Margaret Boston, who died on 2 November of this year. She was a Core Participant at this Inquiry. She became a post mistress in 1984 and, quite shortly after becoming a postmistress, she fulfilled what, for her, was a dream in beginning the post mistress at the Brecks post office in Rotherham in South Yorkshire.
In 2011, Mrs Boston ceased that role on the grounds of ill health, but she was succeeded by her daughter and son-in-law, and my understanding is that they still manage or own that post office, so that there has been very many years in which the Boston family has been involved in that post office in Rotherham. Mrs Boston viewed her work as a public service, so much so that on one occasion she confronted an armed robber and deflected him from his would be robbery of her post office, for which she received the certificate of bravery from the post office. She also spanned the coming into being of Horizon, so she knew the Post Office prior to Horizon and she knew it afterwards and I understand at an Annual General Meeting of the NFSP she spoke up and suggested that the use of Horizon should cease while its faults were worked out.
She was a claimant in the litigation proceedings between Bates and the Post Office, and it is of some consolation, I believe, to her family, that she had received full compensation via the GLO scheme prior to her death.
On behalf of all of the members of the Inquiry Team and my own behalf, I extend deepest sympathy to Mrs Boston’s family and friends. Mr Boston has been appointed as a Core Participant in place of his deceased wife.
Thank you. Over to you, Mr Beer.
Closing remarks by Mr Beer
Mr Beer: Thank you, sir. Before hearing the statements, the closing statements on behalf of the Core Participants, may I do two things: firstly, read into the record an additional 53 witness statements that the Inquiry has disclosed to Core Participants since we were last here at the end of Phase 7, on the 13 November; and, secondly, to make some very short closing remarks. I should say immediately that, unlike the position adopted by some counsel in other inquiries, I and my team do not consider it to be our role to make closing submissions that seek to persuade you of the conclusions which you should come to in your report. We have assembled, called and tested the evidence. It is not our function to urge particular conclusions upon you.
So then, reading into the record.
As you know, sir, I commonly undertake this exercise at the end of each phase and now is a good opportunity to do so, as this may be the last occasion on which the Inquiry holds a public hearing.
As you explained on the last occasion, although the Inquiry will continue to gather, analyse and disclose witness evidence over the coming months, we will not convene hearings simply to read into the record the evidence that has been obtained. Instead it will be disclosed to Core Participants and uploaded periodically to the Inquiry’s public website.
I should say that the Inquiry does not expect any of the outstanding witness statements substantially to alter the submissions that are about to be made, although if, unexpectedly, there are any particular witness statements that are subsequently disclosed that might do so, we will carefully consider whether a facility for additional written submissions should be afforded to Core Participants.
Can we please display the PowerPoint presentation INQ00002035 and look at slide 2, please.
There are 27 Phase 1 witnesses and I’ll read the names, not the URN numbers. They are the statements of: Alistair Murray, Anjana Sethi, Aslam Ramtoola, Elaine Illidge, two anonymous witnesses, James Withers, a third anonymous witness, Shahla Ahmed, Christine Goodwin, Kanagasundaram Prince, an anonymous witness, Debbie Hall, Marion Drydale, Gary Brown, Gary and Tracey Etheridge, Terence Seeney, Arun Bhanote, Mahesh Kalia, John Beswick, Nichola Arch, Teresa Lean, Margaret White, Baljit Sethi, Suzanne Palmer and Rajpal Kaur. May those be read into the record.
For Phase 2, a single witness statement, the second witness statement of Anthony Oppenheim.
Over the page, please, witness statements from Lynne Sagar (née Fallowfield), Paul Holland and Kim Riley.
Over the page to Phase 4, witness statements from Dorothy Day, Debbie Atkinson, Kenneth Donnelly, Angus Crawford, Simon Hutchinson, Elizabeth Kennedy.
For Phases 5 and 6, there are, I think, 12 witness statements here: Peter Newsome, William Gibson, Sir Jonathan Swift, Amy Prime, Kevin Gilliland, Matthew Shiels, Richard Watson, Mike Deaton Christa Band, Jessica Barker, Gareth Thomas MP and David Oliver.
Over the page, please, four witness statements for Phase 7: Thomas Cooper, Kevin Hollinrake, Jane Davies and Nick Read.
May those statements be read into the record.
Sir Wyn Williams: Yes, of course.
Mr Beer: Turning to closing remarks. When I made my opening statement to you on 11 October 2022, I said that, although the underlying subject matter of the Inquiry was information technology, the Inquiry was not and would not become a dry technical investigation into an IT project gone wrong.
That was because it would be an Inquiry that was actually about people, about people whose mental and physical health had been impacted, about people whose marriages and partnerships had deteriorated and failed, about people who thought about taking their own lives and, in some cases, who took their own lives.
Since that time we’ve been engaged in a rather substantial task. We’ve disclosed 270,785 documents to the Core Participants in the Inquiry. As you’ve heard me say a number of times, the contemporaneous material has been the lifeblood of the Inquiry because it has allowed us properly to test what witnesses have said to us. I am reliably informed that the page count for that disclosure is 2,214,858 pages. So we’ve had plenty of material to work with.
We have presently obtained 780 witness statements, including disclosure statements, and the page count for that material is 23,928 pages; and we have heard oral evidence from some 298 witnesses, including a wide range of expert evidence.
Perhaps the most significant figure, however, does not relate to the work that we have had the privilege to undertake. It’s the number of postmasters and former postmasters who have died whilst waiting for the Post Office and Government fully and fairly to compensate them, many of whom have been Core Participants in the Inquiry and whose passing it has been your sombre duty to announce, with, I’m afraid, tragic regularity.
I hope that we, as your team, have fulfilled the promise that I made at the start of the Inquiry to you, not to lose sight of the fact that the Inquiry was not to be one into a computer system but, rather, an investigation into the harm caused by people to people. It is now for others to help you to marshal your thoughts and your conclusions through the submissions that they now make.
Sir Wyn Williams: Thank you, Mr Beer.
Right, well, as I think everyone will know, we have allocated effectively an hour to each advocate, apart from one advocate who is limited to 30 minutes. I will have to be reasonably strict about that, so that we get through what we need to do in each day. Obviously, there is a vast amount comparatively of written submissions from the people who wanted to make them, which I’ve been trying to digest faithfully during the course of this last week, and it’s obvious that I’ll have to read it more than once because they are formidable pieces of work.
So I expect that each of the advocates will use their time in order to summarise their main points and, where appropriate, attack points of which they disapprove.
So with those very short remarks, over to you, Mr Henry. I think you’re first in the batting order.
Closing submissions by Mr Henry
Mr Henry: Thank you, sir.
The racist horrors of the world, man’s cruelty to man, are not caused by monsters, malfunctions or misfortune but by those who claim to act in the name of good, enforcing a perverted vision of order that leaves no room for dissent. Cruelty has a human heart.
The truth is that this tragedy, as Mr Beer has said, is not about an IT system. Horizon did not destroy the innocent: the malignant culture of the Post Office did. The Post Office’s inveterate contempt for the subpostmasters, its corrosive prejudice against them, its desire for absolute control over them was the incubator for these terrible events.
The seeds of this tragedy lie in the misappropriation of Horizon as a weapon of domination. Voltaire’s words come to mind, “Those who can make you believe absurdities would have you commit atrocities”. The absurdity was the belief that cascaded from the top down – from the Board and the Executive to the Auditors and the Investigators – that Horizon was incapable of generating shortfall errors. It was infallible. There were no bugs.
And when they were caught in that lie, they used this mantra instead: it was robust with a few minuscule exceptions or anomalies. The subpostmasters’ plaintiff cries for help were dismissed. They were stigmatised as troublemakers, incompetents or dishonest, and they were then isolated and silenced with a lie:
“It’s you. It’s only you. You’re the only one complaining about a problem. There’s nothing wrong with the system.”
Such heartlessness came from the top. They did not listen because Horizon was not rolled out to make balancing easier for the subpostmasters but as a means to annexe their accounts, deprive them of all autonomy and to exert a degree of totalitarian control. If was as if Horizon was its faithful spy for the Post Office at every branch and every counter, reporting accurately everything back to HQ. The annexation of their accounts, their being denied access to the constituent data and, ultimately, the removal of their right to challenge the figures was a modern form of corporate tyranny. Horizon had become a false god.
The atrocities that followed were the inevitable consequence of enforcing that dogma: people were ruined, people were bankrupted, people were imprisoned, there were atrocious miscarriages of justice. People died.
Whether the Board and the Executive knew of these injustices from the start is an irrelevant diversion. They ought to have known or appreciated that, by refusing to countenance the possibility that Horizon might generate shortfall errors, they had created a terrible risk. It was a recipe for certain disaster. By the time they realised that terrifying injustices had been inflicted in their name, they had a choice, but they closed their minds and closed ranks around the system.
There was a culture of contempt, ridicule, even hatred towards the subpostmasters and their complaints. Former SpAds derided the subpostmasters’ allegations as “the self-indulgence of number of malcontents to the detriment of our customers”. SPMs and others, SpAds said, had “lifestyle difficulties”. So-called investigators boasted of retaining documents in breach of the Data Protection Act, “to prove there’s no f-ing case for the justice of thieving subpostmasters. They were all crooks”.
Of course, like all culture, the prejudice was top-down. Paula Vennells piously professed her disagreement with the instinct of her predecessor Alan Cook when he said that “subbies with their hands in the till choose to blame the technology when they’re found short of cash”. But in 2014, Ms Vennells was to write disdainfully, despite – because of course, sir, it was 2014 – all she then knew that she was more bored than outraged by the subpostmasters’ complaints.
Those who lack interest, let alone curiosity about the world beyond their own notions of order often lack compassion for others and become devoid of empathy. This typified the attitude and prejudices of the Board, the Executive, and even Whitehall, during this dreadful epoch. It similarly applies to the lawyers, internal and external, who enforced this corporate psychopathy with ingenuity, ruthless disregard for ethical norms and even deceit.
This terrible story reflects badly on almost every aspect of our society and causes us to question everything we believed in previously about Britain. But you appreciate this already, sir, and I’m conscious that addressing you now at the end of years of evidence is about as useful as me presuming to teach a dolphin how to swim. You know your own mind and it is not for me to tell you what to conclude or how to think, but you have asked this question more than once: is the Post Office worth saving?
To answer that question, I refer to another mammal: has the leopard changed any of its spots? Whether the Post Office is worth saving must depend on whether it has changed or is its character, so often malignant and vindictive, immutable.
What is the test, sir? Compensation, writing past wrongs, however belatedly is surely the yardstick by which you, sir, shall judge whether the Post Office has really reformed itself. Unfortunately, the conduct of compensation, as you have seen, tells you that the leopard has not changed its spots and remains both cunning and dangerous. Its conduct of compensation reveals that the Post Office’s reprehensible traits are not historic or past, but very much alive and continue to poison the process.
The Post Office’s dirty tricks still continue, for all it says to the contrary, because the Post Office is not what it says, but what it does, and look at what it is doing now. Its technocratic demands for five expert medical reports concerning Janet Skinner’s disability reflects its adversarial robotic disdain for its victims. It’s heartless rejection of Gowri Jayakanthan’s claim for compensation mirrors its cruel humiliation of her late husband: her entire claim was rejected based on a technicality. It echoes the approach you saw during the GLO steering group meeting of 11 September 2017, in which three strategies were advanced to, I quote, “force the claimants into a position where they give up or settle”. One was called “thinning the herd”, which has a neat, dehumanising touch, does it not?
I quote from the document:
“Thin the herd. We have identified various types of claimant that might be facing procedural problems that could see them struck out. Claimants who are dissolved companies. Claimants who are bankrupt or deceased.”
The way the Post Office is treating Gowri Jayakanthan today was foretold in this GLO document, which is now seven years old: they’re thinning the herd. The mindset remains the same.
The Post Office was thinning the herd with its ludicrous demands for contemporaneous documents, wasn’t it? Despite knowing that it had locked subpostmasters out of their own premises, denying them access to their own documents and even shredding them. This requirement for contemporaneous documents during the compensation process reveals that the Post Office will put up any obstacle to evade, minimise or delay proper restitution, and that it crafted this process, not more than a few months after the Common Issues Judgment, which outlined its appallingly one-sided reverse burden of proof denial of documents to the subpostmasters. The fact that it crafted this process, predicated on such demands for contemporaneous documents, shows that it continues to manipulate, as cynically and as offensively as ever.
You will not forget, sir, that it was a Mr Underwood who made that calculated suggestion concerning contemporaneous documents to limit applications. I will return to Mr Underwood later in another context, if I have time, but he typifies the mindset of manipulation and the mindset remains the same.
The duplicitous arrogance that animated the aggressive litigation before Mr Justice Fraser, before a jury at Guildford Crown Court in 2010 and before His Honour Judge Havery just off Fetter Lane in 2006 to 2007 has now been superseded by a compensation process that is pettifogging, legalistic and cruelly slow, bogged down by attritional bureaucracy. Many claimants surrender, for that is what attrition does, you give up, you take the miserly offer you are given and do not settle for what you truly deserve.
People, as we have heard today, have died, and more will die without proper, let alone prompt, redress. They’re worn out by schemes that are cynically devised and brutally operated and so, therefore, some may take the cash not because it’s fair or full but because they can no longer face the battle. This is a Dickensian process. Legal technicalities devoid of merit are taken on a whim by the Post Office. You’ll have seen in the codicil to our written submissions reference to the grossly unmeritorious clawback employ the post office attempted, which Lord Dyson roundly rejected.
These spurious claims were driven by the Post Office’s dictatorial belief in its sense of own self-entitlement. They believed they were entitled to grasp back these modest sums which the subpostmasters had agreed between themselves, and which had nothing to do with the Post Office. The mindset remains the same.
So was this not the behaviour described by Lord Justice Coulson when rejecting leave to appeal after the Common Issues Judgment, when stating that the Post Office’s application, and I quote:
“… is founded on the premise that it was not obliged to treat their subpostmasters with good faith and, instead, entitled to treat them in capricious or arbitrary ways which would not be unfamiliar to a mid-Victorian factory owner.”
That memorable phrase sums up not only the Post Office’s grotesque imbalance of power but also its unshakable belief in its own entitlement that continues.
The mindset remains the same.
You may have been struck, although it’s now some time ago, by the Post Office’s closing submissions in Phase 3, sir, when addressing the findings of Mr Justice Fraser, as he then was, in the Common Issues Judgment. I shall refer to that as the Post Office’s modern slavery approach to contract law, for so it was.
Let me quote what the Post Office wrote in that submission, paragraph 29:
“The Post Office accepts the findings of Mr Justice Fraser in the Common Issues Judgment.”
I’m sure everybody will be relieved to hear that, but there’s a catch. They continue:
“However, it needs to be recognised that Mr Justice Fraser’s interpretation of the respective obligations of the Post Office and postmaster were significantly different from the Post Office’s genuinely held beliefs at the time as to what those obligations were. In particular, the Post Office held genuine beliefs that postmasters were contractually liable for all losses at their branch. The burden was on the postmasters to provide evidence that they should not be so liable, which, in a sense, flowed from the belief as to the postmasters’ contractual liability. The belief [they say at paragraph 30] as to the contractual liability of postmasters is key.”
Genuine belief. Genuine belief. Genuine belief. As Lewis Carroll once said, “Why, sometimes I believed as many as six impossible things before breakfast”.
Those troubling submissions reveal a not even grudging acceptance of Mr Justice Fraser’s decision, an almost palpable resentment towards his finding. They bring to mind his comments that the Post Office doesn’t tend to focus on the precise words of a contract, it knows what its interpretation is and that is what everyone works to. This could be described as the Post Office method of contractual construction, and so the Post Office ignored the plain words of the contract: it believed it could do what it liked. Just like the clawback ploy, just like its approach to disclosure, just like its belief that it could set up mediation schemes, bring in people to report upon its actions and mandate the outcome in advance. So it was then, and so it remains today. The mindset remains the same.
That grotesque imbalance of power, with its wilful abuse of privilege, including access to deep, if not bottomless, Government-lined pockets continues to destabilise this process. It is an affront to justice.
Whilst survivors scan their depleted ranks, so many having died and those who are left surrender for a derisory sum, the Post Office, in contrast with an extraordinary abuse of its material power, yet again racks up millions upon millions of pounds in legal fees – all public funds – to HSF and other corporate law firms. It’s a shameful spectacle and it conveys a pitiless, brutal message. In these circumstances, is it really any wonder that demoralised victims look on, exhausted and aghast, because nothing has changed?
Five years, sir, have now passed since Mr Justice Fraser said, and I quote:
“The Post Office appears at least at times to conduct itself as though it is only answerable to itself. The statement that it is prepared to preserve documents as though that were a concession, and the obdurate refusal to accept the relevance of plainly important documents is extremely worrying.”
The parallels with non-disclosure in this Inquiry to that in civil trials are glaring, and you may have read in the press, sir, about complaints from The Metropolitan Police that there are still problems with disclosure, where The Metropolitan Police has sought the assistance of the Post Office. But leaving aside issues of non-disclosure, the imperious attitude that Mr Justice Fraser astutely observed is also relevant, the same arrogance, high handedness and inexhaustible funds for attritional lawfare, we still see today not only in our clients’ desperate contractual for compensation but in the Post Office’s attempt to control you, sir.
Not once, not twice, but three times, the Post Office tried to play divide and rule in its attempt to overawe the expert you had nominated and to divert you from decisions you had made. Those decisions of yours, sir, being informed by your own substantial experience in criminal trials and appeals. But the Post Office wanted to hijack the narrative. I refer, of course, to the instruction of Mr Jonathan Laidlaw KC in a happily unsuccessful attempt to manipulate this Inquiry, present it with a fait accompli, Laidlaw volume 1, them ambush you with Laidlaw volume 2, and then question your decision not to admit that two-volume report into evidence.
But, of course, the Post Office knows best and continues to act as if it is answerable to no one. In fact, you will have read in its written submissions that all it ever wanted to do was assist you. All it ever wanted to do was help you when it did all of those things in defiance of the orders you had made. The mindset remains the same.
So it was when the Post Office claimed that the public interest cases were not to be compensated, despite offering no evidence against them, and so it was the same as ever when it grotesquely singled out, sought to victimise and to defame Mrs Adedayo, denying her conviction was unsafe under the cloak of qualified privilege. Its atrocious attempt at victimisation echoes its past wrongs. It’s deplorable behaviour tells you that its instinct to scapegoat the individual remains unchanged, that its propensity to abuse both power and privilege still lurks beneath the surface. The mindset remains the same.
I began with compensation, because it demonstrates that the Post Office’s wrongdoing is still continuing, not past or historic. The truth is that there is nothing full, fair or prompt in its conduct of this process, sir, and where victims have not had the benefit of legal representation, they have been further degraded, insulted and exploited in the most terrible fashion with token payments for the destruction of their lives.
So I return to your question: is the Post Office worth saving? Only when or if it is safe. It will only be safe if it grasps and understands the nature of its own history rather than continuing to deny it. It can only be trusted when its deeds match its words and when it has restored justice by way of full and fair compensation to those it destroyed.
You have seen that the Post Office and its Paymaster shareholder have failed dismally on both counts. So enough, we say, with commissioning reports and strategy papers and endless intangible outputs that waste public money and improve nothing.
The victims of its monumental harm deserve to be compensated. They are more deserving of millions than the firms who are paid to fight them. The evil that the Post Office did was profound. It was the cause, the perpetrator and the prolonger of the most serious series of miscarriages of justice in our history and yet, still, it plays the adversarial game.
Together with Ms Page, instructed by Messrs Hodge Jones & Allen, we represent a small cohort of extraordinarily fine, courageous and exceptionally remarkable people who have suffered beyond imagination and who are being revictimised and retraumatised in this appalling process. We only represent former subpostmasters, which has allowed us the freedom to argue that there is absolutely nothing to be done with an institution so blind, so wilfully incapable of understanding its own terrible wrongdoing. Our focus throughout this Inquiry has been on genuinely attempting to assist you to establish the truth and, thereby, facilitating future prosecutions of those responsible for these terrible crimes, based upon this Inquiry’s fair, impartial and unimpeachable findings of fact that you will record in due course.
Of course, our other focus, which is why I began with it, is compensation.
Unspeakable crimes were committed to convict the innocent. Evidence was commodified, the truth was withheld. Such outrages will only be propitiated by full and fair compensation and by your fair and fearless findings of fact which will bring it with the restoration of justice and accountability.
So I come now to the paradigm cases of Lee Castleton and Seema Misra and the perversion of justice at their trials. They were regarded as test cases by the Post Office, to be won at all costs and by any means necessary. Seema Misra’s case is of paramount importance but Lee Castleton’s reveals the manipulation and abuse of civil justice, of which the Post Office is still capable.
The Post Office should have said to Lee Castleton: “We perverted the civil justice system for a collateral purpose. We didn’t come after you for the money, we knew the case made no commercial sense but we wanted a deterrent, we needed a precedent and, in order to get one, we destroyed you and your family. We abused the process of the court when we told the judge we didn’t know of any problems and withheld the Coyne/Cleveleys report. We’re sorry. We fought the case on a false basis. We incited or allowed false evidence to be given against you, be it from Anne Chambers or Helen Rose. We admit it, even if they do not. We brought the case on a dishonest basis when we said you’d adopted the accounts. We took advantage of you. We knew you hadn’t adopted the accounts. You’d made nearly 100 calls to the helpline begging for help. But we’re used a clever little legal trick to reverse the burden of proof to ruin you, your family and all of your futures, to deter others.”
What about Seema Misra?
“We needed another scalp by 2010. Even before Freeths ended the fray, Shoosmiths or Access Legal, Edwin Coe were all breathing down our next, and so we ready to trod on yours. If we convicted you we could see off the civil claims and deter others from challenging the system. We knew about bugs, we knew that the receipts and payments mismatch bug ought to have been disclosed to you, particularly as it revealed remote access without branch knowledge or consent.
“We knew that the jury, according to Mr Singh were utterly beholden to Gareth Jenkins and that it was his evidence that convicted you. Of course, Mr Jenkins knew all about covert remote access but he hid that from you too. We allowed false and misleading evidence from Andy Dunks to be used against you. So many people were awaiting the outcome of your trial and, not long after you were convicted, we obtained the transcripts to use in our defence of the civil claims.
“You were our priceless test case and it was for that that your freedom was stolen. Your conviction was the so-called shining proof of Horizon’s integrity. Your conviction was the cornerstone of our strategy of deterrence and containment and when we, the Board and the Executive, found out that Gareth Jenkins had lied, we could not let you know. We could not tell you.”
The case of Seema Misra is as dark and appalling as anything you have witnessed. It is a microcosm of the wickedness the Post Office perpetrated up and down the country to convict people. But the cover-up brings with it a deeper level of wickedness because it involves the CEO and the Chair and, as time went on, countless subcommittees. What the Post Office is trying to do in its written submissions is to distance itself, its corporate mind, from that infamous episode of non-disclosure, and so abdicate responsibility for it. It denies being the cause of this deplorable strategy of suppression. It eschews responsibility for its strategy of containment.
Containment was a concerted and coordinated policy involving the upper echelons of the Post Office to suppress knowledge of Horizon’s flaws but it was not only that, it was also predicated on containing civil and criminal litigation risks involving potential civil claims and potential criminal appeals. Impermissible disclosure decisions, perverse and even perverted disclosure determinations were arrived at, influenced by the containment of those interlocking risks. Those interlocking civil and criminal litigation risks. You have seen that non-disclosure in criminal cases to buttress the defence of civil claims is but one example.
But in its closing submission, that 103-page document with 804 footnotes that will, for posterity, attest to the Post Office’s dismal failure to face its wrongs, there is no mention of the word “containment”, the very word the Board and the Executive used when discussing this calculated, callous and coordinated policy of suppressing the subpostmasters’ concerns and complaints.
It’s a word or concept you will find referred to hundreds, perhaps even thousands, of times in Board and Executive documents. It animated the policy of the Board and the Executive towards the subpostmasters, yet you will read nothing of it in the Post Office’s closing submission. Nor, will you find any explanation for why this perverse, even perverted, disclosure decisions all go one way: in the Post Office’s favour and to its adversarial advantage.
But there are clues because, although, as predicted, the Post Office wants to blame it on the lawyers, it wasn’t just the lawyers. They were only part of the arsenal of containment. Containment extended to undermining the Mediation Scheme, notorious lies being told in public statements, lies to Parliament, disgraceful, unattributable briefings, the gelding and getting rid of Second Sight: all the dark acts of misinformation, diversion and deception.
The responsibility for all this lies with the Board, and the Senior Executive.
So we say that toxic policy of containment was mandated by the Board and, of course, it affected the conduct of both internal and external lawyers. The lawyers were following the path that had been set for them by the Chair and the Executive or they resorted to drafting their terms of reference in such a way that obvious questions need not be faced, for example, and it beggars belief, not to ask the question whether the conviction is unsafe.
So, thereby, responsibility would be fragmented. Mutually delegated irresponsibility, mutually delegated unaccountability. But, of course, as you have seen, this involved the misappropriation of civil and criminal justice for the Post Office’s own commercial advantage.
By trying to hide behind the lawyers, the Post Office is worthy only of contempt. The misappropriation of civil and criminal justice came from the very top, it could only have done so. One rogue lawyer or other Executive may be regarded as a misfortune. Two looks like carelessness. Three, could it really be a coincidence? Four or more, sir, were clearly following orders.
It’s the culture. The Board and the Executive saw lawyers and legal reviews as tools for optics. They were interchangeable, malleable instruments for implementing its will but, if the Board saw lawyers as tools for optics, it cannot deny knowledge of what those lawyers were doing in its name. In the same way, it cannot say that the flaws about Horizon, the risks about Horizon, were all in a black box in either the IT Department or the Legal Department, an impenetrable black box which they could not peer inside. Nonsense.
The fact that they used the word “containment” imputes knowledge. They knew what was inside the box. They wanted to keep the lid on it and the lawyers were part of that strategy, along with PR, to enable them to do so.
That culture that directed that abusive policy was one that deprecated those who would put their professional obligations before their loyalty to the business. You will remember that extraordinary note from Paula Vennells about Susan Crichton, you will remember Alice Perkins complaining that Crichton hadn’t marked Second Sight, and you’ll remember later on, under Tim Parker, that the Board wanted to take potshots at Seema Misra. That is the culture, sir, that you are dealing with. The culture that even infected the law.
Because there were expectations, there were embedded commands disguised as questions, in the same way Paula Vennells learnt, so she said, from Alice Perkins to craft a question as a disguised imperative, which would necessarily result in an outcome of her choosing. So you can see how this attitude polluted everything. “I need to say this” became the be-all and end-all of everything because, just like its interpretation of the contract, the Post Office knows what its objective is and that is what everyone works to and that included delaying or denying rights of appeal.
You will remember, even in 2018 when there was so much knowledge about Horizon, Mr Butoy’s case was rejected by the Court of Appeal based on the mantra, the mantra that, by that time, the Post Office knew was a lie.
But the Post Office says, “It’s not our fault, we recruited the wrong people”, Cartwright King; “we gave Mr Parsons too much responsibility”. But the question, sir, is always why? Why did you pick such unsuitable advisers? Is it bad luck, incompetence, or a lack of integrity?
That brings me to the two questions I put to the Post Office on 8 December 2022: did the Post Office deliberately interfere with or obstruct convicted defendants’ rights of appeal; second, if so, was its purpose in so doing improper?
Why was Seema Misra not provided with the information that could have cleared her name in 2013? I described it as an integrity test, and answer came there none from Ms Gallafent, King’s Counsel.
Two years have passed and you will not find an answer to those questions in the Post Office’s written submissions. The Post Office’s abject failure to answer those two questions, which are fundamental to the issues you are enquiring into, shows that it has not learned any lessons from of the past. The mindset remains the same.
The Post Office scandal is apparently, according to the modern Post Office, a 20-year long mistake. No one is to blame other than some lowly obscure functionaries who went off on a frolic of their own: a very long, very uniform and very coherent frolic of their own. There was no deliberate decision to use Horizon evidence to crack down on dreams of fraud, there was no deliberate decision to suppress the expert report in Cleveleys, there was no deliberate decision to make Lee Castleton an example, put his head on a spike to strike fear into others.
What about Mr Smith, the Managing Director? He didn’t commission a whitewash. The Ismay Report was a genuine attempt to find out whether there was any truth in the claims that Horizon was unreliable, and he, of course, had no idea that the Misra trial was a test case to vindicate Horizon at all costs and by any means necessary. He believed it was a genuine, properly founded, prosecution.
Thereafter, it was just a terrible mistake that the Post Office didn’t realise, particularly the management, that they were covering up hundreds of miscarriages of justice because no one was deliberately suppressing knowledge that Fujitsu could tamper with branch accounts, no one was deliberately downplaying the fact that there were bugs that could have an impact on branch accounts and create shortfall errors. No one, of course, was deliberately suppressing the knowledge that the Post Office had been relying on an unsafe witness to prove that Horizon was reliable for its landmark case, the only one in which he gave oral evidence, and that the Post Office had failed to instruct him properly. No, it was just unfortunate that all of these things occurred.
As for the idea of suppressing the Clarke Advice, well, no, no, no. I mean, wasn’t it précised, wasn’t it effectively distilled in the Altman general review? Well, Mr Altman, of course, himself says he failed to realise that the Post Office needed to disclose the Gareth Jenkins taint, but the Post Office still says that it did all that it needed to do by disclosing the Altman General Review to the CCRC, and it was evidently the fault of the CCRC that they failed to realise that for themselves.
Well, we’ll come to the CCRC later.
So, in other words, this is an outright repudiation of the findings of the Hamilton judgment, which, of course, in turn were predicated on the findings of the Common Issues Judgment and the Horizon Issues Judgment. So what the Post Office is doing is saying that the Court of Appeal got it wrong in the Hamilton appeals. There was no affront to the public conscience. There was no unconscionable misconduct. This was just a series of unfortunate mistakes which happened to have a cataclysmic effect on hundreds of convicted innocent postmasters but nothing was deliberate. There was no orchestration at all.
It is seeking a repugnant stance and it would be astonishing, were we not already inured to the absurd malignance of this ungovernable institution. This strategy is a natural extension. It lies in succession with the aggressive and untenable positions taken in the GLO and the Hamilton appeals when resisting Limb 2. It proves, without any doubt yet again, that the Post Office will never change because the mindset remains the same. So what you will discover therein, instead, is a polished, an ever so carefully polished, attempt to promote a false narrative, a sustained effort to deny the reality and the gravity of the wicked wrongs it perpetrated.
It’s all a failure of governance. It’s the classic plead to a lesser offence: the governance failures of an inanimate corporate. The Board wasn’t alive to the risk, the Board wasn’t in possession of the Clarke Advices the Altman general review, et cetera, et cetera, “our systems were suboptimal”. The Board had nothing to do, the Executive had nothing to do, with the deliberate suppression of Article 6 rights, which is embodied in the case of Seema Misra.
The truth is that human beings engaged in a deliberate conspiracy, first to convict innocent people either in the criminal courts or to destroy them in the civil courts, and then to cover it up. By refusing to admit these wrongs, these despicable acts, the Post Office has shown that its words of apology are bogus and that it cannot be trusted, and that deplorable wrongdoing went to the top.
Why? Well, because those two questions about why it suppressed article 6 rights and was its purpose improper in so doing, they lie so close to the heart of this Inquiry, and the answer for them can be found in the consequences of telling the truth.
Damages. Restitution of wrongful millions upon millions of shortfall monies received, loss of compensation awarded by criminal courts, and the reversal of confiscation orders. The damages would have been vast. These were existential risks that had to be contained. Rodric Williams knew that. Rodric Williams, during his telephone call with Martin Smith on 2 September 2013 wrote down eight words which spelt out the consequences for the Post Office, should its wrongdoing ever be revealed, including, of course, that it had dismally failed in its duties as a prosecutor and was far more responsible for these disasters than the unsafe witness that it had failed to instruct. Those eight words were those that I’ve already mentioned. Those eight words were: damages, restitution of money received, loss of compensation.
This was an existential threat that had to be contained, and Rodric Williams knew that on 2 September, a week before the Altman disclosure consultation. He would have had no reason to withhold that knowledge. That apocalyptic knowledge that he had acquired from Smith about the Post Office’s failure to instruct Jenkins. He would have been duty bound and no doubt anxious to report what he knew to those with whom he worked or instructed. We say, sir, it is the dissemination of that knowledge which may explain why the Jenkins taint took years to emerge and was avoided, overlooked, at the Altman consultation and subsequently.
Because you see on the same day that Rodric Williams spoke to Mr Smith, 2 September 2013, there is an interesting exchange of emails involving Ms Vennells and Flemington, who has forwarded emails to her from Mr Richardson and Mr Parsons of Womble Bond Dickinson’s. Now, the Post Office, in its written submissions, doesn’t refer to any of those emails, and the reason, we suggest, is because they would sit ill with the suggestion that the CEO and, therefore, potentially the Chair and the Board, was not fully sighted at that critical juncture on the risk of an overturned conviction, and the malicious prosecutions that – or the malicious prosecution claims that would follow.
What the Post Office is trying to say is that its corporate mind was divorced from, and not responsible for, that protracted non-disclosure strategy. That almost sadistic strategy of delay that caused needless suffering, blighted so many lives, which was just fortuitously hatched on 9 September at the Altman disclosure consultation.
But the Post Office at paragraph 65 and 66 claims that a Horizon risks advice note, drafted by Womble Bond Dickinson in August, never got to the Board, that there was no evidence that it got to the Board, that there was no evidence that it was shared with the Board or later summarised with the Board. Then they say this, that this may explain:
“Why the Post Office appears not to have focused on the real risk of convictions being overturned and claims for malicious prosecution at an earlier stage.”
Well, there is evidence, but they haven’t referred to it: the evidence that showed that the lawyers were telling Ms Vennells not to do anything at all that might promote proactive criminal disclosure. The emails that the Post Office have not referred to, the 2 September emails that Hugh Flemington forwarded to her from Simon Richardson and Andrew Parsons, said this: they were advising Paula Vennells not to conduct a Lessons Learned Review.
She read that advice and she understood it. The reason why Andrew Parsons was advising her not to conduct a Lessons Learned Review into, of course, the Second Sight handling, and of course you’ll know from the 2 July press briefing to Paula Vennells and the Board, that the Board and Paula Vennells, from 2 July 2013 were aware that Gareth Jenkins had given evidence against Seema Misra. That is absolutely plain from the 2 July press briefing in relation to Second Sight, which also adverted to the threat of criminal convictions being overturned with the risk that James Arbuthnot would press home the point, but let’s go back to the 2 September.
In that 2 September email, Mr Parsons said this:
“If this review does need to take place at all, then it should be deferred for 6 to 12 months so as to first allow Second Sight to be managed out and the Mediation Scheme to be completed. Should the review reveal any concerns about Horizon or branch accounting processes, then the Post Office may be obliged, under Criminal Procedure Rules, to proactively pass this information to subpostmasters involved in criminal prosecutions, both ongoing and historic, in particular recommendations for change could be interpreted as highlighting historic problems that would need to be disclosed.”
Paula Vennells was fully aware of the real risk of convictions being overturned and consequential claims for malicious prosecution because of that briefing, because of that email and because of her earlier acquired knowledge about the Second Sight Interim Report, which welded Seema Misra and Gareth Jenkins together. But you will find no reference of those emails, POL00146240, Flemington’s email forwarding Richardson and Parsons to her, nor POL00146243, her response. Her response, sir, is telling:
“This is clear to me. I appreciate you spending time to provide the advice. As you know, I respect the views of our internal team and of Bond Dickinson and the timing of this is helpful. Alwyn, can we speak first thing, please?”
There is no record of what Paula Vennells discussed with Alwen Lyons but the Lessons Learned Review, like so many others, never happened.
“This is clear to me. The timing is helpful”, in other words, “I understand, I get what you’re saying, or what you’re not writing. We won’t go there”.
Almost identical wording or code to Ms Perkins reply to the unsafe witness email, “All clear and helpful.”
“The timing of this is helpful”, of course, may just be a coincidence, but if Paula Vennells had been told about Rodric Williams’ knowledge, which he acquired that day, about the mounting concerns, the abject failure of the Post Office to instruct Gareth Jenkins properly, then that would make perfect sense but, of course, what is undeniable is that those emails, reflecting the view of Womble Bond Dickinson, occurred one week before the Altman consultation:
“Should the review reveal any concerns about Horizon or branch accounting processes, then Post Office may be obliged under Criminal Procedure Rules to proactively pass this information to subpostmasters, both ongoing and historic.”
Why did the tendrils of Womble Bond Dickinson, the Post Office’s civil lawyers, infiltrate, entwine, clench, even, we say, suffocate, the criminal disclosure process? Why was Mr Altman to be walked through the civil implications of disclosure by Womble Bond Dickinson?
Why were Cartwright King to be kept appraised of civil claims? So many unanswered questions. But I now go to paragraph 209 of the Post Office’s written submissions, where we’re talking about the engagement with the CCRC.
At paragraph 209, the Post Office says this:
“Subsequent letters to the CCRC were drafted by Womble Bond Dickinson, including a holding response on 24 July, and the substantive response on 26 July, setting out POL’s proposed cause of action, namely Brian Altman’s review, Cartwright King’s review of prosecutions over the previous three years to determine the safety of the convictions, and once such a case is identified, ie where there may be issues over the safety, to determine the proper approach to be taken.”
Well, you know that they dispensed with the issues over the safety and you know, because the Post Office tells you in its next line, “neither of these drafts refer to any issue with Gareth Jenkins”.
There is no evidence, the Post Office says, that this was at the request of the Post Office rather than at the instigation of Womble Bond Dickinson. This is desperate stuff. It’s risible. Playing the limits of the evidence there is no evidence that this was done at the request of the Post Office rather than at the instigation of Womble Bond Dickinson. It is inconceivable, sir, that the Executive would not have been apprised of the contents of that letter.
The Post Office, a public corporation that inflicted misery on thousands during this protracted scandal, this country’s most extensive and prolonged series of miscarriages of justice, is acting like a teenage defendant charged with TWOC: there is no evidence. But of course there is. It didn’t want the Jenkins taint to emerge. It didn’t want the Jenkins disaster to come out. Those letters to the CCRC are an embodiment to the Post Office’s cynicism, its spin and manipulation.
Hugh Flemington, the Head of Legal had articulated it well, when he said:
“We need to give off the signals that we are proactive, doing all the right things to keep the Attorney General and the CCRC calm. Hopefully, if they see that, they may leave us to it for the moment.”
So they brought in Mr Altman.
Sir, may I just check with you about time because we started a little bit late?
Sir Wyn Williams: Oh, yes, you can have until 10.45, Mr Henry –
Mr Henry: Thank you very much, sir.
Sir Wyn Williams: – which gives you a generous hour.
Mr Henry: I’m very grateful.
Jonathan Swift, not the puny judge or author of the report, once wrote that:
“Laws are best explained, interpreted and applied by those whose interest and abilities lie in perverting, confounding and alluding them.”
It is a savage verdict on the profession of law. But it has an uncomfortable resonance in this Inquiry. How was it that a cadre of professionals, no doubt skilled, one indeed eminent, all failed, or so they said, to discern an obvious, indeed invincible avenue of appeal for Seema Misra? It takes extraordinary ingenuity, or is it disingenuity to have denied Seema Misra the ammunition to clear her name from 2013 onwards, by not disclosing to her that the credibility of the man who had given the expert evidence against her was, in your words, shot. Hers was a unique case. It was against her alone that Gareth Jenkins had given oral evidence.
When that devastating document, the Clarke Advice, was eventually disclosed in November 2020, 11 months had passed since the Horizon Issues Judgment and the conclusion by settlement of the GLO proceedings. Is that a clue that might help explain the long suppression of that document?
Gareth Jenkins lurked in the twilight of those civil proceedings, a ventriloquist for Dr Worden, Mr Godeseth, Mr Parker and perhaps many others, had he not? But his misfeasance was not disclosed in the Horizon Issues trial and an elaborate unsworn explanation, estranged from the truth, was offered for his absence.
I return to Seema Misra. How can one begin to justify this protracted group error that denied Seema Misra the precious prospect of securing justice in the nearly eight years following the Clarke Advice until the ruling of the Court of Appeal in Hamilton?
The most deluded people, as Mr Warmington pointed out at the end of his witness statement, choose to disregard what they already know. How much knowledge, skill and practical expertise in the application of the law one would have to compartmentalise, ignore, forget or overlook, to commit such a collective catastrophic failure of judgement?
Think of the people in that room on 9 September 2013. The combined experience of that room was vast, yet no one spotted the obvious duty of disclosure that would have speedily quashed Seema Misra’s conviction. It was a glaringly obvious solution: disclose to her the prior existence of bugs and disclosed to her that the credibility of Jenkins was fatally undermined.
If that had been done, one wonders how long it would have taken to bring her case before the Court of Appeal: not long, surely. Then, of course, if that had been done, the disclosure of the October 2010 receipts and payments mismatch bug issue notes could not have been far behind. They would have been disclosed too, in the run-up to her appeal.
Of course, that was the document that revealed unequivocally by the contents of Solution ONE that Fujitsu had the covert capacity to tamper remotely with the branch accounts without the permission or knowledge of the subpostmasters.
You will, of course, recall that, at the time of her trial, Mr Jenkins knew that. You will, of course, recall, although he denies it, had Jarnail Singh held that document, the notes of that meeting, in his hands the Friday afternoon before Seema’s trial. Had he and Mr Rob Wilson done the right thing, no doubt Mrs Misra’s trial would have been brought to an abrupt conclusion on the Monday morning with the offering of no evidence. The right thing to do in 2010 was staring them in the face. But they could not do the right thing because Seema Misra’s case held the dam for the flood waters of claimants whose lives had been destroyed by the Post Office’s actions.
We know that from the emails of Mandy Talbot, where she said that, if they lost the Seema Misra trial, defending those civil claims would be difficult, if not impossible. Those teeming flood waters threatened to submerge the Post Office, so even though Mrs Misra ought not to have been prosecuted at all, that document was suppressed.
I regret to submit but it seems inescapable that the same considerations, the civil crossover claims, the perverse and perverted decisions of disclosure in one being used to support and buttress the defence of the other, is in action in the run-up to that consultation, and during that consultation because the fact is, sir, doing the right thing by her in either 2010 or 2014 would have meant that there could have been no possible defence to the GLO.
This is a reflection of other aspects of the Post Office’s wrongdoing, such as on 14 March 2018, although the Post Office denies it, schmoozing the CCRC, Fujitsu and the Post Office, with anecdotal tales that Horizon was all about a dog being caught on CCTV jumping on the counter or a man using a frozen sausage to miskey. With these words the point landed: there was always an explanation. The point landed: there was always a hidden agenda to give the appearance of being helpful whilst all the time dripping poison in the CCRC’s ear.
So we respectfully submit that no one at that consultation wanted to give Seema Misra a ticket for appeal, as Martin Smith said, and the question is: why? The prospect of more “Misras crawling out of the woodwork” was mentioned, a vile phrase but she, of course, was not a cockroach or a pest, but a human being. But for the Post Office, she represented the cornerstone of their policy and they knew that if you took away the cornerstone there would be a domino effect.
Sir Wyn Williams: That’s quite a good place for you to finish, I think, Mr Henry.
We’ll start with the next domino at 10.55.
Mr Henry: Thank you, sir.
Sir Wyn Williams: I’d like to make it clear to everyone that to keep this under control, I’m going to start at 10.55, so those of you who go out either return timeously by 10.55 or come back in very quietly, please.
(10.45 am)
(A short break)
(10.55 am)
Sir Wyn Williams: I think the backdoors have now been closed, Mr Stein. So I’d ask everyone to be ready to listen to Mr Stein, please.
Closing submissions by Mr Stein
Mr Stein: Louise Dar was a lead claimant in the High Court. She was cross-examined by advocates on behalf of the Post Office for three hours. She says this:
“I was suspended from my Post Office in Glasgow in 2017 as a result of Horizon shortfalls. My mum died a few weeks later. My father broke his hip three months later. As a result, when I was a lead claimant in the GLO litigation, my mother-in-law came from Pakistan to look after the children. That was so I could travel to London with my husband to give evidence to Mr Justice Fraser.
“My family and I are going on our pilgrimage, Umrah, to Makkah – Mecca – in the spring. I’m only supposed to go on this pilgrimage to seek forgiveness in circumstances where I have true good intentions and do not owe anyone any money. Despite being a lead claimant in the GLO, working to try and get the scandal in the media and giving a human impact statement, I am still awaiting final compensation, as the Post Office and Department of Business continue to drag their feet yet again.
“The general public will presume the compensations have been paid, as promised and publicised, not knowing that this is not the case. It’s just gone quiet in the media. Are we allowed to owe monies to companies and delay without repercussions or hefty charges? No. So why can Post Office, the Department of Business, do this to us? So yet again, we are waiting and wondering: will this ever come to an end?”
As I think we all recognise, sir, this was never a computer problem: this was always a people problem.
It was people who suffered. It was people at the Post Office and Fujitsu who caused the scandal through cruelty, callousness, and connivance, and people are still suffering from the consequences. Our clients have attended the hearings, followed the hearings on the Inquiry live feed, and they have found the hearings distressing but also enormously cathartic. They take some comfort that the deplorable conduct of people such as Stephen Bradshaw, Paula Vennells, Alice Perkins, Angela van den Bogerd, Gareth Jenkins, Jarnail Singh and George Thomson, and many others, have been brought into the light. These people form part of the rogues’ gallery of the Post Office, memorable for their lies and incompetence.
From the start-up of the Horizon system, postmasters were doomed. The system was never designed to be relied upon for legal purposes. The Post Office imported policies from the last century into an IT system that the subpostmaster had had little access to and was controlled by a third party.
The Subpostmaster Contract, which had not changed from the paper age, made subpostmasters responsible for all losses. Like the Titanic, the Post Office was running full speed ahead, directly for the iceberg, with the subpostmasters locked in the hold.
Now, there was always the danger, sir, that subpostmasters might manage to speak to somebody within the organisation and query the shortfalls and that might lead to financial losses being highlighted that were not due to their actions. But the Post Office took care of that little problem through the sterling work of the helplines. They told subpostmasters that they were the only one, that they were liable for all shortfalls and they must pay up.
I recall the aftermath of the judgment in the Criminal Court of Appeal. We’d finished in the court, and we were tidying up our papers and moving out of the court into the corridors where all of the clients groups were with their families. There was a young woman who was crying, in distress, she seemed on her own and I just wanted to make sure that she had someone that could be with her and make sure that she knew where her Legal Team was. I didn’t represent her. What she was saying, and I won’t forget, was that “I thought I was the only one. That’s what they told me”.
Now, what was the effect of these helplines? Well, it meant that the subpostmaster paid up out of their own pocket but also it had the second effect, that issues being repeatedly raised about the Horizon system were never investigated. There is no accounting for the number of bugs, errors and defects in the system. The High Court judgment’s bug table is no more than a tally from the evidence that Mr Justice Fraser had at that time. That is because subpostmasters who tried to raise issues regarding difficulties and errors within the system were shut down. Therefore, we will never know how many bugs, errors and defects existed in the Horizon system at any time. Even now, the Inquiry’s YouGov survey tells us that subpostmasters are still paying off for shortfalls.
Now, that means that the current truth is that we don’t know the full extent of bugs, errors and defects in the current version of Horizon. The system is obsolete and careering out of control. It has no back-up and Fujitsu does not even dare turn it off, as they have no idea what will happen if they then try and turn it back on again.
Now, having heard all of the evidence in this Inquiry, today we know considerably more about the defects in the Horizon system and the Post Office’s cover-up, more than Mr Justice Fraser. But there remain black holes. Now, the first black hole is the issue of the helpline scripts. Our client group say that helpline staff members were reading from scripts and that they, the helpline staff, didn’t even appear to understand what they were reading out.
Now, we’ve been tilting at this windmill and asking for the scripts to be produced since the very first hearing in 2021. But here we are in December 2024, and still, three years on, no scripts. Our clients simply don’t believe that they have vanished. The Post Office is an organisation which has buried evidence, peddled the dishonest line about the robustness of the Horizon system and sought to protect its own reputation above the lives, health and mental health of subpostmasters, and the Post Office. So they can’t find the scripts: what a shocker!
The second black hole is the subpostmasters’ money. Where has their money gone? Let’s be clear about this. The money which would be possible to trace, would be money held in suspense accounts and those would have been verifiable figures held for the purposes of questioning a shortfall.
Now, sir, you’ll recall from evidence from earlier parts of this Inquiry, that in about 2003 and then put into place in 2006 the IMPACT Programme limited the ability to use suspense accounts.
Mr Justice Hooper, Second Sight and Dr Kay Linnell have all walked this path before us. We suggest that, during the lifetime of Horizon, these figures in relation to monies put into suspense accounts would have been available, but Post Office has never wanted to look into this issue and have let time take its toll on accessing this data.
I won’t go on the screen but I will read out a quote from an email dated 16 January 2015, from Christopher Aujard to Alisdair Cameron, the reference, just for note purposes is POL00040805. Mr Aujard says this:
“As you can imagine, I am concerned we give Second Sight no more information than is necessary to address the narrow proposition that money is missing from an SPMR account, is somehow taken into our suspense account and then appropriated to our profit and loss account.”
So that’s the suspense accounts. But the money that will be never found is the money used by subpostmasters to balance the branch accounts. That is when subpostmasters put their own hand in their own pockets to pay for shortfalls. Let’s be clear about this. When a subpostmaster puts their own money into the branch account, the shortfall disappears because it now balances.
That money is untraceable and can only be accounted for in the memories of subpostmasters, who use their own and their family’s money to balance a bug-ridden Horizon system. That money, over the many years, will be in the very, many, many millions and will eclipse even the guesstimate figure of 37 million given by Mr Read when he was asked by us about this.
It’s important. It’s important to understand that the subpostmasters that we represent believe that they kept the Post Office going by subbing the Post Office for the shortfalls, in the past and to date and, because of this, sir, they do not accept the term “Compensation Scheme”. The financial restitution schemes are giving them their money back. Now, of course, we all recognise and properly so that the schemes are about providing compensation as well. But for our clients, the schemes are about getting the money back stolen by the Post Office. As Sir Alan Bates put it, the schemes are really about redress rather than compensation.
Now, sir, I don’t have the time to go into the torturous and painful history of financial restitution and compensation schemes and, sir, you know it all too well. From the start of this Inquiry you have devoted very considerable time and trouble in calling for evidence and keeping abreast of the various schemes. You have even taken the unusual step of delivering an interim report on compensation.
It is no coincidence that over and over again the very existence of a hearing date on compensation has led to remarkably timely and positive announcements of changes in those schemes.
The progress of the financial redress schemes is something for which the Inquiry process must take some credit, yet no amount of money can turn the clock back and return what would have been the best years of our clients’ lives. Maureen McKelvey from Northern Ireland says this:
“I was the subpostmistress at the Post Office branch in the village of Clanabogan in Omagh in Northern Ireland from 1990 until 2001. My husband, myself and our family were respected within our community and family reputation is very important here. I had worked for 10 years without any problems but, as soon as Horizon was brought in, money began to disappear from the branch account. I was suspended in 2001, charged with false accounting. I had to wait five long years before the case came to trial in Dungannon, where everyone knew me. The trial lasted a week. The Post Office prosecution took a sample of transactions from days when there were shortfalls to prove that I was a thief. However, on some of those days, the Post Office Area Manager was running my Post Office, as I was at the hospital with my son, who had been injured in an accident. I was acquitted and the local press were waiting for me on the steps of the court where I hoped to state my innocence. However, two Post Office Security people took me by my arms and escorted me to my car and warned me that I was not permitted to speak to the press.
“My family’s reputation in the local area was wrecked, even though I was found not guilty. I lost my business. I lost my health. I became dependent on others and I was forced into an IVA. I lost myself.
“Almost 20 years on I applied for compensation through the Post Office’s Historic Shortfall Scheme, the process has gone on, and on, and on. I met Nick Read and Simon Recaldin in Belfast in June 2023. I have travelled to London repeatedly to the Business Select Committee and to see you, sir, and your Inquiry. But perhaps [she says] the worst thing is I’m a proud and reserved woman. I’ve always made my own way in life, but I’ve been made to feel like a beggar with my hand out, waiting for compensation, when what I really want is the years that were stolen from us.”
The hearing dates in this Inquiry have come to an end, sir. Now, the Inquiry goes into a period of reflection on the evidence, drafting, the maximisation process and consideration of recommendations.
Now, we are at this stage, the close of evidence, Government and Fujitsu and the Post Office, they seek to breathe a sigh of relief that the Inquiry’s dogged determination to hold them to account and to a timely timetable has gone away.
But there are still steps that could be taken by the Inquiry to continue to hold the Government, the Post Office, the Department for Business and Trade, to account.
For example, in the Infected Blood Inquiry, Sir Brian Langstaff recalled the Inquiry before the final report was delivered. He recalled the Inquiry on 26 July 2023 to hear evidence from Mr Sunak, Ms Mordaunt, to ask them in public what was happening with the compensation scheme for those people infected through the Contaminated Blood Scandal and when would that compensation start to flow?
Further, after delivering the Infected Blood Inquiry report, Sir Brian Langstaff has retained his Inquiry powers, agreeing with submissions that I made on behalf of my client group in that Inquiry, that Section 14 of the Inquiries Act 2005 gives the Chair a discretion to continue to fulfil the terms of reference after delivery of the report. Sir Brian took this course after considering the precedent in the Soham Inquiry, chaired by Sir Michael Bichard.
Now, the Inquiries Act 2005, Section 14 states, under the heading “End of Inquiry”, subsection 1:
“For the purposes of this Act, an Inquiry comes to an end on the date after the delivery of the report of the Inquiry, on which the Chairman notifies the Minister that the Inquiry has fulfilled its Terms of Reference or on any earlier dates specified in a notice given to the Chairman by the Minister.”
I’ll repeat that:
“For the purpose of this Act, an Inquiry comes to an end on the date after the delivery of the report of the Inquiry on which the Chairman notifies the Minister that the inquiry has fulfilled its Terms of Reference …”
The terms of reference for this Inquiry contain no limitation of time, other than a professed aim to report by the autumn of 2022.
Sir, I suspect you won’t make that date!
Sir Wyn Williams: I’m sorry to be smiling, Mr Stein.
Mr Stein: It follows from the wording of Section 14 that an Inquiry does not end with the delivery of the report but with the Chair’s – in this case, sir, yours – notification to the Minister that the Inquiry has fulfilled its terms of reference.
The terms of reference of this Inquiry at D state that:
“The Inquiry shall assess whether the commitments made by the Post Office within the Mediation Scheme, including the Historical Shortfall Scheme, have been properly delivered.”
Properly delivered.
Those terms of reference were set in mid-2021. Time has moved on and we know that this scandal has led to the establishment of a number of schemes. We suggest, sir, that the terms of reference of this Inquiry must be read in the light of all of the schemes established to provide financial restitution and compensation and that, in order to fulfil the terms of reference, the Inquiry must ensure that they have been properly delivered.
As a matter of importance, we ask that the Inquiry adopts the approach of Sir Brian Langstaff and retain oversight of the content of the compensation redress schemes and the progress of any reinvention of the Post Office to fulfil terms of reference at F, which states:
“To establish whether current controls are now sufficient to ensure that failing leading to the issues covered by this Inquiry do not happen again.”
So, sir, your terms of reference are peppered with points that relate to whether the procedure, processes and information provided by the Post Office to subpostmasters are sufficient, in other words sufficient at this time, whether current controls are now sufficient, it says.
We make this request, sir, because our clients do not trust the Post Office or DBT because they believe that they will revert to a litigious approach within the redress schemes and when the process of this Inquiry concludes. We suggest that they are right to do so. Anna and Bharat Dalal and others are now having to start to fight all over again to make the Department understand the underlying purposes and principles of the financial redress schemes.
Sadly this week, just this last week, we have more evidence or we have evidence of difficulties happening yet again in the attitude and approach being taken by the Post Office.
Sir, you will recall that on 19 June this year, it became clear that the Post Office had leaked the confidential data of all of the 555 postmaster GLO litigants. That data leak was not limited just to their identities and locations but also disclosed other personal matters. The data breach retraumatised almost all of the claimants and exposed a considerable number to further significant harm. Almost all of those affected, instructed the key firms who have been assisting postmasters in relation to financial redress and compensation: that’s Howe+Co, Hudgell Solicitors and Freeths.
The Post Office accepted liability in August. Last Thursday, representatives from Howe+Co, Hudgells and Freeths, met with representatives of Post Office Limited. However, so negative was the Post Office stance that, after three hours of attempts to make any form of headway, the representative of all three firms were forced to walk out with nothing to show for their efforts on behalf of their clients.
So it seems that the 555 members of the GLO litigation group will now have to return to court once again to challenge Post Office because fundamentally – and I note Mr Henry has taken the point about leopards can’t change their spots – but, fundamentally, the Post Office is a tiger that can’t change its stripes.
The Post Office can’t be trusted to act fairly when it comes to subpostmasters. They cannot be trusted to prioritise the issues. So we ask that, in addition to the Inquiry adopting the approach taken in the Soham Inquiry and the Infected Blood Inquiry, the Inquiry should continue to scrutinise matters relating to the financial redress schemes through requiring that every two months – a matter for you, sir, to consider how often – the Remediation Unit and the Department for Business and Trade must report back to the Inquiry and Select Committee at the House of Commons in relation to progress.
Sir, we also ask that there is an avenue for subpostmasters to comment on progress. I’ve been thinking about this. I’ve been thinking about the burden that you have, sir.
Trust, it’s a weight, isn’t it? As lawyers and judges, we all want to be trusted but, once we have trust, it’s hard to put down. Trust becomes its own duty and it’s a hard taskmaster.
Sir, you have the subpostmasters’ trust. You have that burden. We know it’s a weight. We ask that you consider the points that we have made in our submissions, both written and oral today, in looking at both the purposes of the terms of reference, whether they have been fulfilled, but also obviously retaining oversight of compensation matters.
We know that you’re going to have a busy New Year and so we thought long and hard about how far we should be requesting this additional burden. But subpostmasters, they ask it of you, and we consider on their behalf that it’s right that the Inquiry does so.
I now turn to restorative justice. We cannot express enough the importance of restorative justice to the Inquiry process. This issue was raised in relation to this Inquiry by my instructing solicitors, Howe+Co, as early as December 2022, and the issue appears to have been accepted by the Post Office.
Now, restorative justice is important because it can plug the gaps in financial redress schemes. The evidence of Simon Recaldin on 4 November 2024, this year – in his evidence, he accepted that there is no provision in any scheme for family members. Many of those family members have suffered, he agreed, from intimidation, harassment, bullying, educational disruption, as a result of the actions taken by Post Office against their parents or spouses.
Restorative justice will also help the individual subpostmasters and branch employees who are all so badly hurt and damaged by the actions of Post Office and Fujitsu.
The measures proposed by Howe+Co back in December 2022 include ongoing psychiatric and counselling support for subpostmasters and their families; bursaries to assist with the retraining of subpostmasters and for the education of their children, whose education was disrupted by the scandal; a tangible memorial to mark this largest miscarriage of justice in British legal history that sympathetically records the experiences of subpostmasters and how profoundly they and their communities were failed by this scandal.
We suggest that the Post Office Museum in London might be an appropriate venue for such a memorial that should obviously be devised principally and mainly by subpostmasters.
What about restoration of reputation? In many cases, subpostmasters’ reputations were trashed in their local communities and regionally. Subpostmasters’ reputations must also be restored within their local communities through engagement with those communities and the local press. In addition, we proposed an entrepreneurial fund and a fund for affected family members was proposed in the questions we asked of Mr Recaldin.
Now, sir, you’re aware from the recently published report, by the “In Your Own Words” listening project of this Inquiry, that 65 per cent of people affected by the Horizon scandal have said that their family and relationships were affected. Furthermore, it was a striking feature of the Human Impact Hearings that the stigma, which subpostmasters faced as a consequence of Post Office actions, endures in a significant number of cases.
Marion Holmes from England says this, Marion Holmes who is here today:
“Sir, I gave evidence to you when you came to Leeds. I had a picture of Peter with me for support. You noticed the picture and asked to see it. Thank you. Peter was a policeman. A good husband and father. He was also a postmaster and later a Post Office Manager. Everyone in Jesmond knew him. When I met you, I showed you a letter that Peter wrote to the Post Office on 13 June 1999 regarding the new Horizon system. Peter wrote of how appalling the training was on the new system and how the trainers were learning as they went along. He said that balancing on a Wednesday night now took five hours when previously it had taken only one.
“He said in that letter that he was prepared to go anywhere, night or day, even on a Sunday, just to get better training on the Horizon system. He finished his letter saying that he no longer slept beyond 4.00 am and felt ill at ease going to work. He said that if the Post Office would not give better training, he would resign in July 1999.
“He didn’t resign but, as ever, he soldiered on. 10 years after writing this letter, Peter was convicted of false accounting. Peter’s conviction was reported in the local press. As a former police officer and Post Office Manager, Peter was very well known in the community. It was devastating to him. He was left a mere shadow of the man he had been. 13 years after his conviction and five years after his death, I was at the Court of Appeal with my son when Peter’s conviction was quashed. Such a pity he did not live to see it.
“I think that three groups are responsible for this scandal: the Post Office, the Government and Fujitsu. They should all be held responsible when this Inquiry is over. I think that they will all carry on as before. Please, sir, don’t let this happen.”
Let me turn to Fujitsu. Fujitsu say at paragraph 3 of their closing written submissions that they fully accept their share of the failings which brought about these appalling miscarriages of justice.
Fujitsu’s Mr Patterson appeared to accept when he first gave evidence that Fujitsu may have a wider role in supporting schemes which would assist family members of those impacted by the scandal.
However, and conspicuously, Fujitsu have failed to take steps towards implementing any scheme. By the time, at our urging, Mr Patterson returned to the witness box, he claimed in answers to me and my questions that he and Fujitsu had no experience in devising such a scheme. So, therefore, we address ourselves via this Inquiry to the Board of Fujitsu in Japan. For a multinational company of the size and value of Fujitsu, a failure to do nothing for subpostmasters, other than hide behind your third party legal status to avoid financial liability is shameful. Sir, I’d like a document to go on the screen, please. RLIT0000350.
Sir, this document is a document that is described by Fujitsu as the “Fujitsu Way” and sadly we suggest that they have lost theirs.
This is Fujitsu’s claim to holding itself to high standards. On page 1, you can see the Fujitsu way is comprised of three parts, “Our Purpose”; “Our Values”; and “Code of Conduct”. “Our purpose” indicates why Fujitsu exists in society.
Can I turn now to page 3. Thank you. We see there under “Trust”:
“[Fujitsu honours] promises and exceeds expectations.
“[Acts] with ethics, transparency and integrity.”
Scrolling down, please, under “Empathy”, same page:
“Listen to all people and acts for the needs of our planet …
“Generate shared value for our people, customers, partners, community and shareholders.”
In other words, Fujitsu professes to hold itself to high standards. Sadly, we suggest to the Board of Fujitsu, you are not honouring trust and exceeding postmaster or anyone’s expectations. You are not acting with ethics or integrity and you are definitely not generating shared value for people, customers, partners and community.
If you claim you have learned lessons and are sorry and want to make amends then empower Mr Patterson, the European Director of Fujitsu, to do so. Establish, we suggest – it’s not the only route – a beneficial trust with sufficient funds to support the families of subpostmasters in entrepreneurial pursuits. To assist with their education and potentially offer work experience.
If your lawyer’s advice is that this could be seen as some sort of admission of direct liability to subpostmasters, it is not. Instead, this could be the start of something great. This is an opportunity to make something good arise from the ashes of this scandal and it would support the restitution of Fujitsu’s good name.
Can we take that off the screen, please. Thank you.
So, what of Horizon now? Mr Patterson was referred on 11 November to a document dated 15 December 2023 from Mr Walton, the Head of the Post Office Account of Fujitsu to Mr Brocklesby at Post Office. I’ll give the document number, I won’t put it on the screen. Again, just for the note, FUJ00243299.
That note contains the following passage:
“The Post Office has historically been strategically focused on alternative solutions to Horizon, rather than investing in the existing infrastructure. Due to the age and consequent end of service life status of the underpinning Horizon infrastructure, there is an increasing risk of the failure of the infrastructure that could result in adverse impact in the delivery of services to the public.”
Now, that and other letters from Fujitsu to the Post Office tells us that Fujitsu are saying that the Horizon system is now obsolete and increasingly likely to fail. That Post Office has not kept its house in order, and the Horizon system is as much of a loose cannon now as it was at what might be said to be the height of the scandal but, apparently, the Horizon system may be used for years to come.
No wonder Fujitsu are keen to get it off their hands in the way that is suggested by the NBIT proposal. It takes it out of Fujitsu’s arms and into the Post Office. But we suggest the NBIT system is wrong headed and it seems wrong headed to our client. It doesn’t address the problems of the past and just brings the existing Horizon system in-house.
Now, I turn to the question of the Post Office’s Strategic Review, which I will ask to go on the screen. So this is the Post Office’s Strategic Review, Strategic Transformation Plan. It has this reference, POL00462532. Thank you. Turn to page 9, please.
This was available to the Core Participant teams on Relativity, sir, from, as far as we’re aware, the date we can find is 7 December 2024. This review, as we see on the screen, seems to turn on a £1.8 billion investment requirement over the next five years. Page 13, please.
You’ll see there under “Strategic Imperatives, New Deal for [subpostmasters] PMs”:
“Create a sustainable, fair and attractive proposition for postmasters that reflects their vital role in delivering Post Office services.”
The review does contain, sir, a recommendation of a significant increase in postmaster remuneration. But this review, we suggest, falls far short of a strategy which reverses the polarity of the Post Office, as, sir, you’ll recall the evidence of Mr Railton.
Now, sir, we request, because of the timing of the publication and the need to take instructions, that we have some more time to make some further written submissions on this document and no doubt other documents of its ilk will be produced in response by Government.
Our recommendations, in relation to the future of the Post Office – if it is allowed, frankly, to continue – to protect postmasters in the future, include these: a guarantee of a living wage; whistleblowing rights established through legislation; an institution, the Post Office, listening and investigating, and a Chief Inspector of the Post Office, and other arm’s-length bodies, to consider their operation, the welfare within the Post Office of subpostmasters, employees and workers, and the maintenance within the Post Office of its social purposes and intent.
I have provided you so far, sir, with the thoughts and reflections of our clients from England, Scotland and Northern Ireland. Let me turn to Wales.
Pamela Lock says:
“I became a postmistress in Swansea in 1974. My husband Geoffrey and I ran a successful Post Office, bakery and shop for 25 years. We’d begin work at 1.30 am and work until 5.00 pm, going to bed at 8.00 pm. We were proud of the business and the community we serve. Everyone knew us. We worked without a single problem until the introduction of the Horizon system in 2000. Within seven months of Horizon coming in, we had shortfalls in excess of £30,000. Within another year I stood numb before the Crown Court in Swansea pleading guilty to false accounting. My daughter was crying, my husband was very quiet, my paralysed son was there in spirit.
“On my way home from court, the headline of the front page of the South Wales Evening Post showed my picture and told the world I was a criminal. Geoffrey and I retreated into ourselves. My husband was a very private person. He didn’t say a lot but he felt deeply. The following years and decades were very hard. We lost our home that we had worked all our lives to buy. We had to go to the council office to beg to be housed in our old age. Eventually, we were offered a one-bedroomed flat in sheltered housing.
“When the Court of Appeal quashed my conviction, I cannot describe the relief of having my conviction overturned and to get my good name back but it cannot make up for what we have suffered over those 20 long years.
“Not one person has been held to account for my wrongful conviction, or the wrongful convictions of the scores of other subpostmasters. Anyone with eyes in their heads could have seen the problem must lie with the new computer system. How could a woman work as a postmaster for 25 years without problems of any kind and then suddenly change and become dishonest and inept? I’d like the Post Office to pay for a front page advertisement in the South Wales Evening Post showing a picture of me then and now with the headline, ‘Pamela Lock was innocent, Post Office apologises’.”
Now, sir, as you know, we have a large client group and we can see, because of that group, trends and patterns within the scandal: 49 of our clients were expressly told they were the only one; 43 were told by the helpline that they should pay for the shortfall; and 35 of these say that the helpline told them that they must pay because their contract required them to do so; 61 of our clients were threatened with prosecution; 26 were threatened with action in the civil courts; 95 say they were not properly trained to use the Horizon system; and 19 – 19 – actually experienced shortfalls while they were being trained.
Now, those figures come from 102 clients which responded to our questions in that regard.
51 of that 102 say they were ostracised by their local communities; 18 were made bankrupt or subject to an IVA; 41 found themselves in desperate financial circumstances; and 23 suffered from marriage breakdown.
Our clients routinely talk about suicidal thoughts, suicide attempts and ongoing mental health problems.
Let me turn to the Post Office’s prosecutors. We have said that Mr Clarke and Mr Altman, King’s Counsel, and others did not act appropriately in relation to the Gareth Jenkins issue because their roles as advisors to the Post Office and their duties as prosecutors became blurred.
The entirety of the Clarke Advice dated 15 July 2013 should have been disclosed to all those who had been convicted of offences which included the use of evidence from Horizon.
Statements from Mr Clarke and his colleague who investigated the Jenkins issues should have been made. The recording of the call with Mr Jenkins should also have been disclosed. The police should have been called to investigate what was believed to be perjury and an attempt to pervert the course of justice by Mr Jenkins. Mr Jenkins had been the main go-to Fujitsu witness, who was used by Post Office lawyers as an expert, despite the failings in his instruction. But Mr Jenkins was also a principal architect of the Horizon system. In other words, he had been a designer and bug investigator and bug resolution engineer from inception of Horizon.
The lawyers on behalf of the Post Office which included Cartwright King, Mr Altman, Post Office Executive, Mr Clarke and General Counsel, knew that Mr Jenkins was believed to have committed serious criminal acts and that he was also a mainstay of the system. That put into doubt his evidence at any time as well as the reliability and digital integrity of the Legacy Horizon and Horizon system.
Bugs emerging in 2013 included bugs in the Legacy and Online system. It also means that the question of the timeline for consideration of appeals, before and after 2010, should have included all Horizon cases not just them.
Now, Mr Altman was asked a number of questions obviously by Mr Beer about this and he accepted that it should have been disclosed, that’s the material in relation to Mr Jenkins: “Yeah, I’m accepting that”, said Mr Altman.
Another piece of the jigsaw puzzle as to why this all occurred in relation to the criminal lawyers can be found in the conference notes in September 2013, again for the note, INQ00001143.
Mr Altman is then recorded as saying:
“Can’t avoid possibility Misras may crawl out of the woodwork.”
Now, Mr Altman went on to prosecute, or he would say “respond”, in the Court of Appeal and he worked on the question of whether abuse of process applied to all appellants, resisted some appeals successfully, argued which limb of abuse of process should be applied to which case and, in doing so, obviously the blame was directed at the Post Office. But failed to mention his own parts in disclosure failures.
Now, of course, Post Office was centrally to blame, but the duty to ensure disclosure was plain as a pikestaff to all criminal lawyers, of which he was one.
They hadn’t pressed the disclosure button or called the police, or indeed it seems, in reality, sought introductions to do so. By that point, Mr Altman was a witness to those past events, and other witnesses, such as Mr Clarke and other people at Cartwright King. At that time in the Court of Criminal Appeal, the finger was pointed solely, it seems, at the Post Office, rather than the work of the lawyers engaged.
So how did this happen? How did this failure, which was not just the mistake and failure of one individual, but failure of a number of criminal lawyers? Perhaps we have something of an answer from Mr Clarke when I asked him these questions:
“So when you were providing the advice to the Post Office in relation to Mr Jenkins, ‘Look, there is this massive problem, really it’s a problem’, was that to a private client?”
Mr Clarke said, “Yes”.
We suggest that Mr Clarke is right. He and others failed in what any other scenario would have been their simple operation of their duty, as prosecutors in relation to disclosure, recognising the obvious: that the Jenkins material must be disclosed, and an immediate investigation launched by the police. The failure was because, by the point that they were engaged, they had become company men.
In future, no lawyer who has any part in the process of prosecution should ever be allowed to divorce their responsibilities in relation to prosecutorial duties and their advice to the entity who instructs them. We suggest the legal regulators, the Bar Standards Board, SRA at ILEX, responsible for advocates before the courts, consider these questions and put in place clear regulatory guidance that puts the prosecution duty first.
This Inquiry has highlighted important issues surrounding the use of computer data in the court. In our written submissions we have asked and suggested a recommendation that the Law Commission reviews the current position in relation to the presumption of regularity of mechanical instruments, the term used in the Law Commission going back now some time, and that courts have regard to the problem that the absence of evidence that there is a software bug is not evidence of the absence of software bugs. That needs to be done through the provision of detailed prescribed information where relevant in proceedings.
It would be intolerable, sir, to our clients were the courts to carry on acting on a presumption that computer produced evidence must be reliable unless the contrary is proved, which is the current position.
Bugs, errors and defects will always be present in IT systems. They may not be readily apparent or even visible to those accused of crimes or having actions taken against them in the civil courts, where there is the intent to use and rely upon the product of an IT system or computer data.
Now, sir, this is relevant to the terms of reference, because we know that, in the future, in whatever guise the Post Office continue to operate, there will be an IT system. There will be Horizon 3 or 10 that will be in operation, and that system will be used in relation to the ongoing work of subpostmasters. So there needs to be some consideration, we respectfully suggest, within the report, of how such data can possibly be used when there is a presumption that it is correct, which is currently in operation in the courts.
Now, sir, you have seen our submissions in relation to whistleblowing in our written submissions. Effective whistleblowing policies would have given subpostmasters a chance of bringing the scandal into the open much earlier but it is apparent to us and many other commentators that the law regarding whistleblowing has not caught up with the variety of ways that individuals work. We ask that the Inquiry recommends that legislative changes are brought about to ensure that subpostmasters, NEDs, and others working outside the traditional employment contract are protected.
We submit that whistleblowing protection should be extended to all those in the workplace who may see wrongdoing and may suffer as a result of raising public interest concerns.
The definition of “Worker” in Section 43(k) of the Employment Rights Act 1996 is already different for whistleblowers than other areas of employment law, and there are sound public policy reasons to extend it further.
It is important, we suggest, that the Inquiry recommends that the Employment Rights Act 1996 is amended to include subpostmasters, non-executive directors within the category of workers that are protected under the Act in relation to whistleblowing rights.
I would now like to talk, and very briefly, about the unsung heros of this terrible scandal. Those individuals are well known to the Inquiry: lord Arbuthnot; Second Sight; Dr Linnell and her partner Barbara; Computer Weekly, which picked up the scandal and brought it to the attention of the public in 2009; Nick Wallis, whose podcasts and book have provided a journalistic narrative which has been of enormous help and assistance to all those who have wanted to know more about what has actually happened; and of course the producers of the ITV documentary, Little Gem, which exploded the story of the subpostmasters into the public consciousness and shamed the Government into taking the sort of urgent action that Private Eye, Computer Weekly, Lord Arbuthnot and many others, including, obviously, Sir Alan, have been campaigning for for many years.
Let me conclude, though, my submissions today, by returning to the most important people in the Inquiry: the subpostmasters, assistant subpostmasters, branch employees and their families. We think, obviously, of all the people that we have lost, including Mr Holmes, the former policeman I spoke about earlier, a thoroughly good and decent man who didn’t live to see his conviction overturned by the Court of Appeal.
I reflect upon Stanley Fell, a subpostmaster of the previous century, who couldn’t cope with the business side of his branch and who couldn’t work Horizon, whose appeal was dismissed by the Court of Appeal but whose fight continues. He died last year.
It is heartbreaking that so many of our clients who were with us in 2021 have not lived to see the end of this Inquiry process. This includes Carol Riddell, Isabella Wall, Thomas Brown and, of course, sir, as you’ve mentioned earlier, Margaret Boston.
Many of our clients’ partners have also died since the Inquiry began. These are people who suffered with their husbands and wives and their reputations were also destroyed. These include Veronica Maye, the beloved wife of Francis Maye; Fiona Whybro, who was a subpostmistress and whose interests are now represented by her husband, Brent Whybro.
Now, sir, we thank the entire Inquiry Team for your hard work and dedication. We thank you, sir, for your time and trouble and patience and, frankly, tolerance of their counsel. We thank the solicitor to the Inquiry, all those people, our transcriber, document handler and, of course, Ms Pilgrim, for the wonderful arrangements that have been put in place to have allowed this Inquiry to have continued so seamlessly, and we thank you, sir, for listening to our submissions today.
Sir Wyn Williams: Thank you very much, Mr Stein.
I make it 11.52, so we will start again at 12.05. Is that all right with you?
Mr Moloney: Yes, sir, I’d be happy to start at 12 and then we can have a clear hour before 1.00 and 2.00 before –
Sir Wyn Williams: Well, you’ll have your hour, even if we have to go on until 1.05 or 1.10, so don’t worry about that. We need to have a slightly longer break, all right? So we’ll start again at 12.05.
(11.52 am)
(A short break)
(12.04 pm)
Sir Wyn Williams: We’re a minute early, Mr Moloney, so we’ll let the people come in.
Mr Moloney: Thank you, sir.
Closing submissions BY MR MOLONEY
Sir Wyn Williams: I think they’re all in the room now, so could we have some quiet for Mr Moloney to start, please.
Mr Moloney: Thank you, sir. Sir, this Inquiry is the latest step in a long, long search for justice. A group of people came together to put right a terrible wrong perpetrated against them by the Post Office, a wholly State-owned institution. The impact of the events which sit behind this Inquiry are undoubtedly life altering. Homes and families lost and broken, savings and prospects destroyed, stability and health ruined, reputation and dignity irreparably damaged.
Some did not live to see their conviction overturned. Julian Wilson, for example, is now represented by his wife Karen. She had his photograph with her when she gave evidence. He is one of the Shoosmiths claimants all the way back in 2011.
Moreover, very sadly, some died while evidence was being heard, and are now represented by their families. Indeed, the Inquiry has announced and mourned name upon name during its course, Lynette Hutchings, Robert Boyle and Gillian Blakey to name but a few, and very sadly today Margaret Boston.
As we did in our opening statements on 13 October 2022 and as we have done at the closing of each phase, we reiterate the value of this Inquiry’s work for those we represent. Through three years of work and many, many hours of evidence, the Core Participants we represent have followed the Inquiry. Many have attended in person, others have watched at home, others still find it too painful to hear the minutiae of the scandal which stole their lives.
Yet for them, its work is crucial. Each of our clients is grateful for the work of all the Inquiry Team. Everyone involved in the proceedings, from you, sir, and your assessors, to counsel and solicitors, from the ushers and the shorthand writer, to the staff here at Aldwych House and at the IDRC, all have treated the postmasters with dignity and care and this Inquiry with the seriousness it deserves. We and our clients are grateful.
It was Tim Brentnall who said in his evidence, first referred to at the end of Phase 4:
“Horizon merely provided the data that showed a shortfall but it was people who chose to believe that data, over myself or hundreds of other subpostmasters. It wasn’t Horizon that prosecuted us, it was the Post Office. It wasn’t Horizon that encouraged us to pay back money under threat of theft charges, that was people at the Post Office.”
The same Tim Brentnall now says of the people that have worked in this Inquiry:
“The Inquiry Team deserves enormous thanks. They have considered every stage and tried to help us attend and make sure our concerns have been met and have all been as helpful and accommodating as possible.”
Our submission today deals with six main topics: first, we look at Phases 5 to 6, and the years upon years spent by the Post Office supported by Fujitsu in their unblinking defence of Horizon and their prosecution practices; second, we consider the last of the evidence served on investigations and prosecutions; third, we look to the role of regulated legal professionals in this scandal; fourth, we look at management, governance and oversight; fifth, we turn to redress, restorative justice and rebuilding trust; and, sixth and finally, we ask where we are now as the Inquiry ends.
Before dealing with each of those topics in turn, in this introduction, there are three initial propositions we invite the Inquiry to consider. First, our Core Participants are very conscious that this Inquiry may not be the last step in the process of accountability. The Metropolitan Police service is a Core Participant and continues its investigation concerning possible criminal offences arising from this scandal. While not for this Inquiry to determine any question of civil or criminal liability, this cannot inhibit the Inquiry’s duty to reach conclusions on the facts and make recommendations within its terms of reference.
Second, on knowledge. A key question has always been who knew what and when. This must include individuals who were purposefully shutting their eyes when faced with evidence that ought obviously to have been explored. This included failings to confront risks and failing to tell people about those risks. The evidence supports that, throughout this scandal, structural problems at both Post Office and Fujitsu aside, there were people within the business who knew or were reckless to the truth, or were wilfully blind when confronted with the possibility of failures in the integrity of Horizon, and that Post Office prosecution practices were deeply flawed. Horizon was seen to be too important to fail.
Thirdly, while explanations may properly be offered, we urge the Inquiry to carefully scrutinise any conduct which may have contributed to this scandal. For example, first on individual memory. The events in this scandal span decades. The Inquiry is familiar with how the law approaches evidence and memory. Calls for caution inevitably and reasonably echo in earlier submissions. The Inquiry has substantial contemporary documentation, against which it may test recall and faulty memory. Those we represent have found it surprising when some witnesses with a vague recollection are suddenly sharp in their recall of conversations or meetings that put them in a good light.
The excuse, “I was poorly advised”, after decades is no excuse when the questions they asked were skewed or advice ignored, or obvious matters left unpursued; and “I wasn’t told”, which may provide an explanation for some, is insufficient when the culture of the business was set from the top to deny any possibility that Horizon was flawed or that the prosecution practices of the Post Office had operated egregiously for years.
Fourthly and finally, but importantly, any suggestion that the Inquiry must identify the villain of this piece as either Fujitsu or the Post Office draws a false premise. Both have their explaining to do. We have heard apology upon apology and we anticipate further contrition to come at the conclusion of the Inquiry.
However, after decades of dogged resistance to hear and see the problems they were causing, these are difficult to hear. They are especially difficult to hear alongside mismanagement of disclosure in this Inquiry and evidence which suggests that for five years, since the judgments in the GLO, both Post Office and Fujitsu have remained slow to recognise the scale and significance of this scandal.
They are difficult to hear alongside witness upon witness slow to accept there was a problem with what they did. Fujitsu only accepted a moral responsibility to the victims of this scandal in late January 2024, coincidentally a few short weeks after the showing of Mr Bates. Contrition now for some feels self-serving for many CPs, another in a long line of manoeuvres in brand management, defence, and damage limitation.
This scandal could not have happened if either Fujitsu or the Post Office had acted on the appreciation that Horizon was not infallible and had listened when postmaster after postmaster told them there was a problem.
Without errors by both and clear failures in the oversight exercised by Government, this scandal would never have happened, for this story is also about poor decisions in Government. The Inquiry might conclude that in dodging important strategic decisions about the future of the Post Office Network in a digital age, Government kicked the wrong can along the road. They left the wrong people in charge at a time of existential crisis, and sowed the seeds of this disaster. When things had plainly gone horribly wrong, they were slow to step in for reasons of political expediency.
In this, the biggest miscarriage of justice in modern legal history, transparency and accountability really matter. After years of obfuscation and denial, this Inquiry has served to bring some clarity as to how and why the Post Office came to wrongfully prosecute hundreds of its own people.
With that, we now turn to the first subject of these submissions, an important characteristic, we say, of the events that this Inquiry has been concerned with, that being really an overarching theme of the story of this scandal: the unblinking defence of Horizon.
The response to any question over the integrity of Horizon was defensive: defensive of Horizon, defensive of Fujitsu and defensive of the Post Office. Phases 5 and 6 taken together provide months of shocking evidence on the actions taken year on year that would keep the truth about Horizon and the Post Office’s mistreatment of postmasters out of the public domain and, in this section, we suggest ten propositions the Inquiry might consider in respect of the Post Office response to concerns about Horizon and unsafe convictions.
Firstly, the unblinking defence of Horizon did not start in 2013 after Second Sight. Instead, the defence of Horizon was only doubled down on, to use Mr Cameron’s words, in 2013. The business knew from rollout that, if the Post Office were to survive, its ethos had to be Horizon centric. There wasn’t a Plan B. From the apparent ignorance or ignoring of the warnings in Jeremy Folkes’ red flags to the business, which was commissioned by David Miller, to the critical failure to engage with the joint expert report in Cleveleys, everything in the first days of Horizon pointed to the prospect of it going wrong, being too big a reality to face: consequently it was never faced.
The Inquiry has good grounds to be sceptical as to whether the troubled early history was forgotten or, instead, a blind eye was wilfully turned in the face of growing evidence. The evidence of Phases 3 and 4 demonstrates the continued refusal to countenance any message that the operation of Horizon and the approach of Post Office to the investigation and prosecution of its own people was worthy of concern. One only needs to look at the Ismay Report in 2010 to see that this was an approach that was set well before 2013.
Secondly, independent technical interrogation of Horizon was dodged time and again. Opportunity upon opportunity to consider and conduct a full independent investigation was passed over before the engagement of Second Sight. It was a lose-lose prospect for Post Office and so it never happened. In truth, recommendations for independent investigation of Horizon as a system went ignored or allowed to drift.
Third, any independent view was to be ignored, dismissed, avoided or diminished. Any critical or potentially critical external view on Horizon delivered to the Post Office was forgotten, ignored, dismissed, avoided or diminished. Alternatively, its circulation was limited with the very real prospect that it was hidden. It is, we say, sir, striking that documents that really damaged the business view of Horizon had very limited circulation.
The Inquiry has evidence of the role played by Fujitsu from Paul Patterson. The Inquiry also has the evidence of Phases 2 to 4. Fujitsu undoubtedly did not pass on everything it should to Post Office in the way it should, and the handling of the EPOSS Taskforce is a case in point.
Where bugs were passed on, they appear to have been consistently dismissed or explained away as fixed or not relevant, with limited questioning, and this was precisely how it appeared the bugs considered in the Second Sight Interim Report had been handled long before 2013.
Moreover, Ernst & Young raised the flag on remote access in 2011 and continued their work into 2012. Alice Perkins was full of apology that she didn’t get to the bottom of what was going on. Yet, at the start of her tenure in September 2011, Angus Grant at Ernst & Young appears to have given her an idea, jotted down in a Post Office notebook with the prescient legend, “We do not see things as they are, we see them as we are”. She recorded:
“With Fujitsu, Post Office drove a very hard bargain on price but they took back on quality/assurance. Horizon is a real risk for us.”
Days later as Ms Perkins recognised, Donald Brydon, Chair at the parent Royal Mail Group, RMG, was questioning what he’d read in Private Eye about Horizon. Even if, as suggested by Ms Perkins, Ernst & Young’s concerns were for the past, which were patently not the case, this was a glaring warning that perhaps there might just be something in the postmasters’ claims that Horizon lacked integrity but nothing was done.
The appointment of Second Sight was apparently a sea change in the attitude at Post Office, and it ought to have been. Yet the business plainly saw the appointment not as an opportunity for rigorous interrogation of Horizon and honest reflection on Post Office’s own past practices but, instead, as a means of shutting down press and Parliamentary pressure.
When Second Sight wasn’t man marked by Susan Crichton, in the way Post Office expected, they had to go and the handling of external inputs from experts after the Second Sight Interim Report is a sorry tale. After Second Sight, the whole business ought to have been on alert but it was not because, instead, it was on the defensive.
It will be for the Inquiry to conclude whether to accept incompetence truly did ensure ignorance but we urge scepticism. The actions taken in the post-2013 period invite close scrutiny. Unblinking in its defensiveness at best, it appears that individuals shut their eyes to information which didn’t suit the narrative. At worst, they may have buried it, and the greater the opportunity for dots to be joined, the less credible the claims of incompetence or ignorance.
The handling of the Clarke Advice of July 2013 is another shameful case in point and we spend a little time on that because of its importance. The Clarke Advice was plainly seen by many lawyers for the Post Office, both internal and external. It went to General Counsel and to Bond Dickinson. Its significance is plainly understood from the outset with Gavin Matthews from Bond Dickinson and Susan Crichton discussing potential liabilities for Post Office, Fujitsu and Cartwright King, as a result of Mr Jenkins’ failure to comply with his obligations as an expert witness.
The information in the Clarke Advice ought to have gone to the Board and directly to the CCRC in July 2013. There were plainly cases within Post Office’s knowledge where Horizon integrity had been in issue.
Had a proper Inquiry been conducted, consistent with the duties of the Post Office, then a range of other exculpatory matters may have been discovered. It might have been included that Mr Jenkins had not been properly instructed before each case by the Post Office, their Legal Team or Fujitsu. They would have arguably discovered Mr Jenkins’ far wider knowledge of bugs, errors and defects relevant to Horizon, including in its development and knowledge of KELs, and so on.
Further, on examination of his earlier witness statements, it would be, we say, inevitable that the trail of edits relating to Mr Jenkins’ statement in the Thomas case would have been discovered.
The advice should have been disclosed without delay. Instead, the narrow focus of Cartwright King and, in turn, the Post Office fell horribly short. The Inquiry has numerous examples of this narrow focus. To take one, the Inquiry has the advice of Andrew Parsons on the approach to the Helen Rose Report as disclosed. Limiting disclosure and downplaying the significance of a document, which, if disclosed without redaction, could have exposed the position of Mr Jenkins, was what Mr Parsons advised in relation to the Helen Rose Report. We know that information was passed to Paula Vennells and to Alice Perkins, so they were or ought to have been aware of the substance of the advice of July 2013.
Ms Crichton’s recollection of dates was unclear but she testified that she would have briefed Ms Vennells on the Cartwright King advice some time after they advised at the London office. Ms Vennells conceded that she would have known about the problem with the Fujitsu witness at least a month before September 2013, and definitely in July. She insisted that she never saw the advice, and never had its full implications explained to her. On her own explanation as to what she knew, we suggest it is simply incredible that she did not ask to be fully briefed about such an important topic.
Similarly, that Ms Crichton and Mr Aujard and then Ms MacLeod all proceed in the tasks that they did without ensuring the full understanding of the Chief Executive Officer as to the serious implications of this revelation for the business appears simply incredible. The Inquiry will determine whether the suggestion that no request was ever made for a briefing or a copy of the advice, is credible or merely convenience.
Ms Perkins asserts that she was unaware of the Clarke Advice until much later. That is during the appeals. She said it ought to have been provided to her by Ms Crichton and she said:
“I see this as one of number of failed turning points in this very sorry story.”
Yet it’s Ms Vennells’ evidence that she told her Chair what she knew. We observed that this appears supported by the unsafe witness email of 21 October 2013.
This has to be, at best one, of the most egregious examples of reckless incompetence on the part of each of the players.
The Board was updated at the disastrous meeting of 16 July, whilst General Counsel was held outside. The Board had a paper, including Appendix 1. It didn’t deal with the tainted witness. But whatever the Board was told, it caused sufficient concern for wrongful prosecutions and the liability of Post Office and its directors asking for a briefing on the insurance position and tasking the team to update the insurers. Did no one in that meeting or any later meeting ask to talk to the lawyers directly about what exactly triggered the real risk to the business and were there no repercussions for the Board members who failed to ask such questions?
The following things did happen: members of the Board were told that there was a need for a new witness. They knew this conversation was going on against the background of years of challenge to POL’s historic prosecutions. Did no one really ask: why now, what’s wrong with the one we used to use? Again, is this incompetence or might the absence of any question suggest that the reason had already been explained, even if not recorded?
The Inquiry heard that the Board continued to be involved in conversations on change in policy on prosecutions and on prosecutions being paused. The suggestion that during this time there was no discussion of the true reason why the pause had become necessary, again appears incredible and, whilst the plight of postmasters was conspicuously ignored, we know the issue triggered a series of enquiries about insurance for Directors and Officers’ liabilities and notification to the Board’s insurers.
The Inquiry might conclude that there was much too great a focus on the possible civil liabilities of the Post Office and its directors and scandalously little regard had for the impact of the serious miscarriages of justice which had occurred for postmasters.
Fourth, public relations governed the public interest. Any concern about Horizon or the safety of prosecutions was met first with concern for the business and its public perception. Whilst those in corporate control of an organisation must have concern for its brand reputation and public relations, evidence before the Inquiry was of a Post Office wholly driven by a desire to protect the brand, its message and commercial interests to the exclusion of all else.
Steps responsive to substantive concerns raised about Horizon or about prosecutions were never about asking the right questions, “Is this thing working? Are we in the wrong?” Instead, they asked “How do we defend ourselves from this attack?” The Post Office lines on Horizon evolved but, at the core of the business, remained a combination of disdain and contempt for postmasters.
As examples, subpostmasters were incompetent or on the take, Horizon was robust, Horizon worked across the network and many, many transactions were absolutely perfect, and it didn’t matter if what was said was wrong if the myth stood, the myth being that Post Office had never lost a case where Horizon was challenged.
It didn’t matter if what was said was offensive, there were moments when the mask truly slipped. We’ve been reminded this morning of Mark Davies describing what postmasters were suffering as “lifestyle difficulties”, which was shameful, of course. But Ms Vennells asked the Inquiry to believe that she rolled her eyes and said, “Oh, Mark”, when but only days later her unguarded late evening post-One Show congratulations showed the true position. She said she was more bored than outraged by the plight of the postmasters, Mrs Hamilton lacked passion – which was a risky remark – and Ms Vennells was so apologetic when shown this whilst sitting in the room with Mrs Hamilton. Yet in 2014, she was so proud of her team she copied this to the Chair, Mrs Perkins, twice, once in the original and again recirculating her missive the next morning in the cold light of day.
The Inquiry may be invited to treat these as gratuitous moments of unguarded chat between colleagues under pressure. Instead, they paint a telling picture of the true story.
Fifth, the message from the top was, “I need to know all is well, so tell me what I need to know, tell me what I want to hear”, and that was seen in February 2015 before Ms Vennells’ appearance before the Select Committee, when she said:
“Is it possible to access the system remotely? We are told it is. What is the true answer? I hope that it is that we know that this is not possible, and that we are able to explain why that is. I need to say no, it is not possible and that we are sure of this because of XX and that we know this because we have had the system assured.”
Litigation privilege and secrecy in all its forms was overused by the Post Office. The Inquiry has heard a lot about concerns for privilege within the Post Office and it underlines the criticism made of Post Office by Mr Justice Fraser. The Inquiry will remember the circular from Ms Springford in the face of the Shoosmiths letters before claim:
“Your staff should therefore think very carefully before committing to writing anything relating to the above issues which is critical of our own processes or systems, including emails, reports, or briefing notes.”
Lawyers for Post Office were very quick to assert that this was standard commercial litigation practice, but it wasn’t and Rodric Williams effectively conceded as much.
Seven, the Post Office did not respect obligations as a prosecutor or its duties to the court. By way of contrast to the very assiduous approach taken to privilege, it appears that there was very little understanding or little respect for the duties of Post Office as a prosecutor, including the continuing duty of disclosure. It is plain that Post Office were advised in the Clarke Advice and in the advice of Brian Altman, King’s Counsel, both of which were predicated on the prosecutorial duty. However, the Inquiry may wish to consider whether the business ever understood, respected or took ownership of that duty.
When this duty was spelled out with the business it was, coincidentally, once again restricted in its circulation. Those who sought to understand and had a responsibility to do so, ought to have done better. It appears that successive lawyers failed to appreciate the scope and implications of the continuing common law duty of disclosure, or approached it in an unduly narrow way in its application. General Counsel, such as Susan Crichton, Chris Aujard and Jane MacLeod, and Bond Dickinson, all ought to have understood the duty by virtue of information provided to them by Cartwright King or Brian Altman, and we return to consider the position of regulated legal professionals shortly.
When problems were escalated thorough the business, as my eighth point, there was a wholly inadequate response. When issues were escalated no one acted as they should. When information which should have changed the path of this scandal crossed the desk of anyone at the Post Office, the response fell short. We have already dealt with the 2013 Clarke Advice but we now deal very briefly with Project Zebra and the Zebra Action Summary because the handling of Deloitte is a paradigm example of Post Office’s approach to external expert input.
The Zebra project was of course so closely guarded when all it was doing was looking into whether or not matters such as remote access were possible, but it was so closely guarded that when disclosure was eventually given, the name remained redacted for privilege. Hence the comments on the absurdity of the approach to privilege from Mr Justice Fraser. We ask again: why is it that documents that were fundamentally problematic to Post Office just happened to have a very limited circulation and ended up not being properly escalated?
Because Project Zebra resulted to advice to the Board from Linklaters designed to satisfy the Board that all was well. The work was to expressly consider data integrity and the Zebra Action Summary eventually disclosed into the GLO shows that the business was plainly aware of the Deloitte work for the integrity of Horizon at this time and didn’t just become aware of it when Jonathan Swift QC, as he then was, pointed it out.
The report, the Board summary and the action summary contain very important information about remote access and the integrity of data and the actions summary is very clear that, essentially, remote access was possible in an undetectable way. That was there in 2014. It wasn’t disclosed.
On Zebra, Mr Aujard made a point to Ms Sewell and Ms Sewell made points to Mr Aujard. Mr Ismay, who again wrote the whitewash, which of course covered integrity issues and to whom we will return shortly, was again in the mix. The Inquiry may conclude that questions of accountability must be considered for all. This was yet another seemingly missed or maybe dodged opportunity for things to have gone so very differently. It ought to have been disclosed in 2014 and, certainly, no later than 2016, when the question was raised by Jonathan Swift.
Nine, the hardened beat all defence of Horizon of POL, of the individuals involved, presented any notion of true accountability and infected the approach to both the Mediation Scheme and the GLO.
The “defend at all costs” attitude that we’ve seen in the previous eight points – the failure to disclose things, the failure to let people know about the problems – that attitude calcified and hardened the approach of the Post Office to every step in the scandal. This included the mediation and the conduct of the GLO. Again, the evidence heard by the Inquiry fully justified the criticisms laid at the door of the business by Mr Justice Fraser.
Tenth and finally, Fujitsu supported Post Office until the end. We address the role of Fujitsu in support of the actions of the Post Office in Phases 2, 3 and 4. We don’t repeat those submissions here but we reiterate that, while the decision making of Post Office was front and centre in the final stages of this Inquiry, Fujitsu’s role remained critical. All of those ten points were part of the unblinking defence of Horizon by Post Office as a theme running throughout this Inquiry.
Now, the second of our topics: investigation and prosecution. We don’t revisit our lengthy and detailed submissions made at the close of Phase 4. We repeat them and adopt them and summarise them briefly now, sir, if we may.
First, the approach of the Post Office supported by Fujitsu to investigation and recovery of losses, as well as prosecution of alleged offences, was deeply and fundamentally flawed.
Second the management and oversight of investigations and prosecutions by the Post Office, as supported by Fujitsu was wilfully blind to, or disregarding, of the proper, lawful administration of justice.
Thirdly and finally, an overarching focus on the commercial interests of both the Post Office and Fujitsu, including in protecting the brand reputation of both companies, contributed significantly and detrimentally to the prosecution of individuals in the face of faults in Horizon, of which the Post Office were, or ought to have been, aware.
Since Phase 4, we’ve had further evidence about investigation and prosecutions over the summer and autumn in Phases 5 and 6. That evidence confirms that the approach of Post Office to prosecution was fundamentally flawed. It was built on a toxic premise, it was run by those who were incompetent, ill trained, under-supervised and overly aggressive and, ultimately, motivated by commercial and/or personal interest.
There was structural and individual failures in investigation and prosecution at the Post Office from the start. While focus may principally have been on Mr Bradshaw and on Mr Singh, there remains considerable concern that the action of others, including those who did not give evidence, ought not to be overlooked, whether for criticism by the Inquiry and/or some other outcome.
Examples of poor conduct pepper the evidence. One example is found in the interview of David Blakey covered in the evidence of Paul Whitaker. There were first unfounded insinuations of an unfair, and then implicit threat that continuing to resist the allegations of Post Office would result in the interview and investigation of his ill wife.
The other example is the questioning of Lynette Hutchings by Gary Thomas, accompanied by Graham Brander, as to why they had retained Issy Hogg as a solicitor instead of a local solicitor. Ms Hogg had first represented Jo Hamilton and then went on to represent a number of other postmasters who raised Horizon when they were prosecuted. She believed in the postmasters’ cause at a time when it was not a cause célèbre. She was plainly a thorn in the side of Post Office and that question should never have been asked.
Ms Hogg died on 26 November this year after living with cancer for a long time, and living every moment of what life was left to her to the full, and so we pay tribute to her courage and integrity.
We anticipate that such prosecution files that remain available and subject to complaint by individual postmasters have been passed not only to the Inquiry, but to the Metropolitan Police Service.
We spend no more time on this now but turn to where we are now: whether Post Office has learned enough from the past to make proper change. We make a number of observations on this. In order to consider whether the Post Office has learnt lessons of the past, the Inquiry must consider how its approach to investigation and prosecution has changed.
First, we underline that while much store was placed in the decision to stop prosecutions in 2014, this was not a swift, full stop. We note that there appear to be at least some evidence of a discussion of a return to prosecution as late as 2019, and we say that the Post Office should never be permitted to pursue private prosecutions in their own right ever again.
The evidence about self-reflection in Phase 7 is deeply disappointing. It appears that this work was prompted only by the work of this Inquiry and the evidence of postmaster Core Participants on Human Impact and we note that Project Phoenix was only concluded in August 2024, and Post Office employees were supported to come before this Inquiry to give evidence when they were working in roles which essentially led them to have direct contact with postmasters when they were seeking redress. The process of ensuring that that didn’t happen has taken way too long and the suspicion must be, sir, that this process of self-reflection didn’t really matter to the business until it had the potential to embarrass senior management during the coverage of this Inquiry.
Third, whilst a renewed commitment to whistleblowing appears positive on paper, in practice, the Inquiry might be concerned that the commitment is hollow with all the different investigations that have gone out, and then come back in with nothing resolved.
Fourth, and most importantly, a true change in approach is unlikely to occur until the toxic attitude of disbelief and distrust in postmasters, and especially as seen with the Postmaster Non-Executive Directors, is made a thing of the past.
Finally, there is scope for learning beyond the Post Office in this Inquiry. While the Post Office may have stopped pursuing private prosecutions, there are a number of bodies which have pursued and continue to pursue private prosecutions.
We invite this Inquiry to recommend Government conduct a review of the operation of private criminal investigations and prosecutions within the UK, focusing on both public and private bodies who pursue these activities outside of the ordinary activities of the police and CPS.
The House of Commons Justice Select Committee previously recommended that an inspectorate for private prosecutions be created. This would have included the introduction of a binding code of standards. These proposals were rejected by the Government but we invite the Inquiry to revisit these recommendations and associated safeguards and to urge Government to establish an Inspectorate of Private Prosecutions without delay in order to try to ensure that no repetition of this scandal can ever occur.
We turn now to our third topic, the role of regulated legal professionals. Whether working in-house or at Post Office, or acting for Post Office when based externally in firms in chambers, regulated legal professionals might be expected to provide the requisite independence to rein in a blinkered corporate resistance to criticism. But this scandal all too often saw both internal and external lawyers form an integral part of the robust defence of Horizon, and the civil and criminal proceedings which were founded on its corrupt data.
All too often, lawyers were seen to fight a rear guard action for Post Office, whether they were involved in civil proceedings, criminal prosecutions, reviews of convictions or the Group Litigation. We have touched on some examples of this in our written submissions. We won’t expand too much, sir, but, firstly, the civil proceedings.
The early proceedings which led to the bankruptcy of Lee Castleton are informative of the approach which was to be taken by Post Office throughout this scandal. It had nothing other than a vindication of Horizon to gain from fighting to a conclusion against a man who is experiencing health problems. They should have settled but they didn’t and forced a conclusion in their favour.
But it was the response to the Shoosmiths litigation that saw the real doubling down and the real foundations for the inexorable outcome that POL’s legal strategy was to become as much a part of the robust defence of Horizon as the actions of its PR-driven Executive and Mafiosi investigators.
The advice from Emily Springford became the orthodoxy within Post Office and echoes of this guidance can be found in the advice offered by Bond Dickinson in the aftermath of the Second Sight Interim Report and beyond.
Until the Clarke Advice of June 2013 shattered forever the smug triumphalism of Post Office prosecutors epitomised by the “bandwagon” email from Jarnail Singh at conclusion of the trial of Seema Misra, no lawyer in Post Office had ever turned their mind to whether such an approach, in terms of privilege, created issues for the prosecutions conducted by RMG and Post Office.
In reality, if John Scott shredded notes of the review meeting and ordered that no notes be taken other than by him and his Department, he may only have been acting in accordance with longstanding practice.
In criminal prosecutions, the treatment of the evidence of Gareth Jenkins as an expert witness is almost inconceivably poor. That none of the lawyers involved in deploying his evidence realised at the time that Gareth Jenkins was acting as an expert evidence and therefore should be guided as to his duties as an expert and properly deployed by them as such, is difficult to believe.
Additionally, the approach to disclosure was very often flawed. Post Office, whether through its internal or external lawyers, and whether in respect of third-party disclosure concerning Fujitsu or response to defence requests, failed so often in its disclosure duties. Mr Singh described disclosure requests by Ms Misra’s Legal Team as unreasonably and unnecessarily raised, completely in keeping with the robust defence of Horizon.
On reviews of convictions, Post Office announced that it had instructed an independent firm of criminal specialist solicitors to identify every criminal case prosecuted by Post Office and Royal Mail Group prior to their separation. As Simon Clarke accepted, that was not accurate. In fact, it was positively misleading. Cartwright King were not independent. Only weeks before they were appointed as an independent firm of criminal specialist solicitors, they had secured a PII certificate, with the stated objective being to protect the reputation of Post Office. They had been prosecuting the very cases they were looking into; they were marking their own homework. If a truly interpreter firm had been commissioned to carry out the review, it may be that the false substance of the Clarke Advice would have been disclosed in appropriate cases as Brian Altman conceded that It should have been.
The Group Litigation, finally. The GLO saw the continued aggressive defence of the position of Post Office by internal and external lawyers. That Mr Justice Fraser considered it necessary to refer to the litigation strategy adopted by POL in his judgment in the terms that he did is a measure of how apparent that approach was. The application to recuse the trial judge and the subsequent appeal against the refusal of that application were, in reality, entirely consistent with that strategy.
In summary, issues of independence, conflict and competence arise throughout the evidence of the legal professionals paid to support POL through this crisis. The Inquiry might conclude that this evidence, taken together, makes a strong case for the more effective regulation of both professions. It may wish to call for a substantial change to the guidance which the SRA and the BSB provides to solicitors and barristers on the dangers of losing independence.
Our fourth topic now, that of management, governance and oversight. We take this briefly, as we have dealt with it in detail in our written submissions: first, pre-2013; second, post-2013; and then some themes in the evidence.
Pre-2013. Plainly, failures in governance were not limited to the period post-second Sight. The Cleveleys case study reached significant conclusions about the weakness in governance at POL and RMG in the period around 2004. There were plainly other failures, whether in communication, failures to exercise curiosity or to act on obvious indications of risk, which directly contributed to the making of this scandal or which were obvious missed opportunities to avert it.
David Miller, who signed off the Cleveleys settlement, had been Programme Manager for Horizon. The same Mr Miller now accepts they ought not to have told the Post Office Board before acceptance that Horizon was robust and fit for service.
The failure to act in response to the growing recognition of problems in the context of ongoing proceedings, at the same time as the Castleton proceedings evidences continuing failure.
By March 2006, Keith Baines was being copied in on important correspondence regarding expert evidence on prosecutions. Almost at the same time, he was coordinating with Mandy Talbot and highlighting the issues raised in the Thomas case and others for Castleton. Whether aware of the Cleveleys and/or Castleton reports or not, this discovery, both of the position of Mr Jenkins, and that POL was actively seeking to doctor supposed expert evidence, ought to have been escalated up the executive line and beyond.
Against the background of the Cleveleys and Castleton experiences, it ought to have been a clear indicator of a problem for both POL and Fujitsu in their approach to Horizon integrity and the supported proceedings against postmasters, and this shut down of proposals for an independent investigation in March 2010 is familiar to the Inquiry. Again, we see Ms Talbot, Mr Ismay and Mr Scott playing a role in this conversation alongside Mr Wilson.
In 2011, the first subpostmaster letters before claim arrived. One of them was on behalf of Scott Darlington, who is in the room today. These were being run under the RMG Legal Team with the advice on privilege circulated by Emily Springford in October 2011. The Ernst & Young work done on integrity went nowhere.
The Inquiry is invited to treat with scepticism any assertions of those in leadership, whether at Post Office or Royal Mail Group, of ignorance of the prosecuting function of the Post Office or the continuing question of Horizon integrity. Mr Miller, for example, was clear that he understood that function and the role of RMG Legal when part of the Executive Team before he retired in 2006.
At each of these stages there were commercial incentives and imperatives to look the other way. In 2005, impact was being rolled out. By 2006, plans were beginning for Horizon Next Generation. The Board wanted it to be cheaper and the planning was discussed by the Board both at Post Office and Royal Mail Group. These provided the foundation for cheaper operations and the growth of network banking. No one appears to have considered the operational experience for the postmaster.
Post-2013, there are numerous failures of governance illustrated in the two case studies in 2013. We don’t repeat them but there were further problems beyond the case studies. Those failures must be viewed in the context of a history of years of defensive retrenchment on the part of the leadership of POL, a toxic culture of anti-postmaster feeling, which carried into every aspect of POL’s engagement with the issue of Horizon integrity and the evidence included as analysed in both case studies supports the conclusion that precisely those who that the opportunity to halt this scandal, the Chief Executive, the Chair and the Shareholder singularly failed.
The themes we identify in terms of governance are perhaps wrongdoing, wilful blindness, incompetence or inertia, Board effectiveness and the role of the Shareholder. There are clearly issues to consider under wrongdoing, wilful blindness, incompetence or inertia about the state of mind of those involved in making decisions. So far as Board effectiveness is concerned, the Inquiry may consider issues of overboarding, whether or not directors had sufficient guidance and training, and whether or not Board Effectiveness Reviews are sufficient to ensure that public companies are able to function properly.
Finally, in this section the role of the shareholder. The Inquiry may recommend that UKGI take ownership of the failings of the successive Non-Executive Directors in this process and accountability for the failures of oversight afforded by Government generally. There ought to be a serious process of reflection within UKGI and Government more generally, as to the effectiveness of the safeguards in place for the management of risk in Government assets, taking on board all of the learning in this Inquiry and its conclusions.
We turn now to our fifth, penultimate, and quite short topic: redress, restorative justice and rebuilding trust. As said earlier, the impact on postmasters and their families affected by this scandal has been life altering. Full, fair and prompt compensation has been the touchstone commitment repeatedly given by ministers and the Post Office since 2021. From its outset, this Inquiry has consistently asked whether those twin goals of full and fair compensation could be delivered promptly. Compensation has not been prompt; for many, it has also so far been neither full nor fair.
In our written submissions, we have identified a number of difficulties with the operation of each of the schemes. There is no time to mention those problems now but problems persist with each, and all of those failures contributed to cause, delay, and to undermine the trust of postmasters in each of these schemes.
For many, the retraumatising impact of making a complaint is confirmed in expert evidence. Put simply, many awaiting compensation, continue to live in poverty. Many are aging and desperate to move on and these vulnerabilities should not be ignored or exploited. It seems that many problems have any been addressed once the Inquiry has asked Post Office to address them. The Inquiry is invited to consider whether a more fundamental shift in approach by both Post Office and the Department is necessary to secure the confidence of postmasters and the wider public in the continuing process.
On restorative justice, we welcome the indication by the Minister and by Fujitsu that they will be open to engaging with Lost Chances for Subpostmaster Children. A more innovative and open-minded approach to restorative justice for those impacted by this scandal is well warranted.
To conclude on redress, we suggest that this is a scandal founded on flawed corporate culture and repeated corporate failings. Where the actions of the State harm its citizens, there must be a moral obligation to see justice as more than simply an opportunity for good press or political popularity. The State must accept that when it’s wrong and its citizens are damaged, the value of compensating those who suffer must be measured in more than solely pounds and pence, and this is a lesson which appears long overdue. It ought to have been learned time and again in previous schemes. It is one which ought to be marked in this Inquiry.
This injustice cannot be undone. It cannot be forgotten, and redress for all may start to rebuild trust for some, but no postmaster will truly be able to move on nor can the Post Office even begin to be rehabilitated in the public consciousness until that is achieved.
We turn now to our final topic: where are we now?
When Mr Read gave evidence to the Inquiry on 11 October 2024, he recognised that securing a replacement for Horizon should be something that Post Office should quickly deal with. On the 4 December 2024, The Daily Mail reported that Post Office had dumped plans for introduction of NBIT. Instead, Post Office had agreed a one-year extension to its Horizon contract with Fujitsu.
Whilst a new deal for postmasters was trumpeted on 13 November, it is now five years since the Horizon Issues Judgment conclusively established the unreliability of the system; it’s now three and a half years since the judgment in Hamilton & Others and there still appears to be no firm plan for the replacement of Horizon. Progress has been too slow in that regard, and progress has been too slow in too many regards.
Mr Cameron suggested that NBIT and its management had problems which were both structural and individual. He and other witnesses agreed that the funding rounds of Central Government are necessarily not suited to a dynamic business or the planning of longer-term commercial projects. However, he also appeared to accept that the failure to grapple with this scandal went back to the failure of management during separation. The Inquiry might also consider that the roots of this scandal lie in a bigger question, tied more inherently to a more fundamental schism in the Post Office, in an unhappy marriage between the public and the private.
At the inception of Horizon, the Post Office was in existential crisis, looking into the future to a very different business model to support the move away from a network supported by a closed market in benefits collection.
As the pension book system was ripped up, successive governments sought to both maintain the community model for the Post Office and, at the same time, impose a more commercial, efficient operation designed with a long-term goal to reduce reliance on public funds.
Yet, through all the projects and all the strategies, up to Network Transformation and beyond, it must be asked whether anyone really considered whether a successful commercial operation would or could operate on the same model as a network designed to preserve a nationally valued community resource.
The tension between these goals runs through the evidence before the Inquiry. In failing to grapple with this problem effectively in 1999, and again and again and again throughout the last 25 years, it might be said that successive governments contributed to the position of crisis and commercial hunger which drove the Post Office, as an institution, and individuals within it, to lose sight of the true value of the network and the individuals within it.
The focus of all in 2013 on the future of Post Office as a freestanding entity with an eye on mutualisation, as Royal Mail passed into private ownership, was plain in the evidence of Ms Vennells and Ms Perkins. If Horizon were to fail, mutualisation, the public goal for the future of a commercially viable Post Office, would be impossible. Post Office strategy is a problem with which this Government, and any that follows, must grapple with honestly.
A truthful strategy that understands the value of the network to the communities we live in now must be the starting point. What happened to the postmasters can never be allowed to happen to others again. It is simply not acceptable for decent, hardworking people of good character to be collateral damage in the pursuit of commercial imperatives. Their value must be recognised. The value of what they do must be recognised. High net worth should not just be viewed as how much money a person has: it should be measured by what worth the person is to the community in which they live, their contribution to the lives of others, to education, to healthcare and security.
In communities across this country, the role of postmaster is of high net worth, and now needs to be treated accordingly. Although Post Office refused to hear the concerns of postmasters and dismissed them as “subbies with their hands in the till” who “lacked passion” and had “lifestyle problems”, this Inquiry has listened intently to them and the evidence of the reasons for their plight.
They are uniformly grateful for that now and now await the findings and recommendations of the Inquiry.
Sir Wyn Williams: Thank you, Mr Moloney.
It’s now just about 1.05, so we will resume at 2.00.
(1.05 pm)
(The Short Adjournment)
(1.59 pm)
Sir Wyn Williams: Are we ready then, ladies and gentlemen? Mr Munro is anxious to make his submissions.
Mr Henry is trying to knock the pillar down! At least we’d have a better line of sight if that happened, Mr Henry.
Right, Mr Munro, please.
Closing submissions by Mr Munro
Mr Munro: Thank you, sir.
Sir, my client, Susan Sinclair and my firm came into the Inquiry mid-way thorough Phase 4. As a result, others are far better placed to address many of the core issues surrounding this terrible scandal and have done so in comprehensive and skillfully made submissions.
We have instead sought to focus on a discrete issue, namely the experiences of those wrongly accused and prosecuted in Scotland, and we are very grateful to you and to the Inquiry team as a whole for allowing us to attend and offer these submissions.
Sir, the experiences of those affected in Scotland, as against those in the rest of the UK, had many similarities. The same terrible accounts of careers, families, lives, destroyed, of institutional cruelty, of systematic injustice. But there were also several important differences and I urge the Inquiry to keep those differences in mind, not only so that we in Scotland can benefit from any specific recommendations that this Inquiry can make but also so that the Scottish experience can inform the analysis of what might need to change across this United Kingdom. Events north of the border, for instance, might cast some doubt on the impact that stripping POL of the right to privately prosecute in England and Wales will have or would have had, had that happened earlier.
I propose to begin by outlining some key differences in the system as between Scotland and the rest of the UK, and I’ll try to identify four broad categories, if I may. The first main point of contrast is that, broadly speaking, all prosecutions in Scotland are brought in the name of the Crown, specifically by the Crown Office and Procurator Fiscal Service, with the Lord Advocate at its head. There is no tradition of private prosecutions in Scotland. Whilst technically that is a remedy that is available, it is all but extinct.
POL, as a result, could not prosecute directly in Scotland. It was instead a Specialist Reporting Agency, or SRA. There are in the region of 40 or 50 such bodies, largely public authorities, and, arguably, the only one that appeared on that list that was a commercial enterprise was POL and, arguably, the only one which had a financial interest in the outcome of prosecutions and on any proceeds of crime procedure that may follow was POL.
The role of an SRA in the Scottish system is akin to that of the police, in a normal conventional prosecution: to investigate, to detect evidence of criminality, to report. Interestingly, whilst the Crown has a statutory right to direct and instruct the police with regard to the investigation and reporting of criminal offences, there is no corresponding provision in relation to SRAs.
I will return to the issue of revelation and disclosure but to note briefly here: SRAs are, as with the police, under a duty of revelation, in terms of the Criminal Justice and Licensing Scotland Act 2010, and are obliged to comply with the Crown’s Code of Practice on disclosure of evidence in criminal proceedings, and that, read short, requires SRAs to comply with a number of core responsibilities, including conducting reasonable lines of inquiry, identifying and investigating exculpatory information, and revealing information to the Crown and, as a whole, in submitting standard prosecution reports, the template by which all criminal matters are reported to the Crown in Scotland.
COPFS also issues guidance to SRAs, including guidance on disclosure, which has, we were told by the Deputy Crown Agent, a senior official at COPFS, Kenneth Donnelly, has apparently existed in one shape or form since the mid-1990s.
Training is also offered by COPFS and Mr Donnelly told the Inquiry that, between 2000 and 2013, COPFS would routinely meet with SRAs to provide guidance and advice. There was an annual training conference held for SRAs from 2003 onwards regarding the reporting of cases to COPFS and training regarding the duties of disclosure specifically was delivered to SRAs, including POL, we are told, in 2009. Despite those efforts by the Crown, however, it was apparent from the evidence that there was a profound lack of knowledge in POL about its duties under the Scottish system. Robert Daily, for instance, a Scottish POL Investigator, gave evidence in Phase 4 of the Inquiry and he said that, while those at POL did indeed receive copies of the guidance issued to SRAs by COPFS, his earliest memory of any formal training was in 2009. He recognised there was generally a lack of knowledge within POL when it came to Scots criminal law. He himself did not feel adequately supported by POL’s Criminal Law Team for the work that he was doing in Scotland.
Raymond Grant described the training he received as a “bone of contention”. Jarnail Singh, the Inquiry will recollect, the Head of Criminal Law at POL, clearly had little understanding of the Prosecutors Code and the duties of disclosure in England and Wales, so there was little chance of him understanding the distinct and discrete duties that POL had under the Scottish system.
Even when the current Chief Executive of the Post Office, Nick Read, came to give evidence to this Inquiry on 11 October 2024, a matter of weeks ago: the position of POL as an SRA in Scotland was not something he was aware of.
I will return to the issue of revelation and disclosure a little later on but if I can say this: it is worth stressing that the relevant rules are not difficult. Everything relevant must be revealed.
It might be seen that there were gaps in the institutional knowledge in POL in respect of its legal position in Scotland. But, even allowing for that, there was no obvious need for POL or indeed any SRA to obtain external legal support and certainly not at the level of individual cases. Unlike elsewhere in the UK, POL was not a prosecuting authority. The reason for its decision to specifically engage external Scottish lawyers, BTO, in 2013 was never established. That created an odd dynamic, I suggest. Having, on the one hand, a privileged relationship with lawyers dealing with individual cases, while on the other, having absolute duties of revelation.
The second main point of contrast between the Scottish and other domestic systems relates to the substantive law and I can touch on this very briefly. The Fraud Act does not apply in Scotland. Most financial crimes in Scotland are governed by the common law and the typical charge in POL cases was one of embezzlement, which, read short, involves the dishonest appropriation of funds belonging to another whilst entrusted to the accused.
The third and perhaps more substantial point of contrast relates to evidential and procedural distinctions. Perhaps the most obvious distinction, and it’s one that has been referred to in written submissions lodged by other parties, is the requirement in Scots Law for corroboration, a rule that goes back centuries. Nobody, in principle, can be convicted on the basis of a single source of evidence. But it is important to understand the extent of this: there is no requirement for every fact in a criminal case to be corroborated. Corroboration simply extends to the fact that an offence was committed and the accused was the person who committed it.
Conviction does not require there to be two strong independent sources. Where there is one strong source, all that is generally needed is something that is capable of pointing in the same direction. It’s about providing an independent check on the primary source of evidence.
That was the case here. Horizon was presented as a very strong source of evidence to show that funds had been appropriated. The fact of Horizon’s reliability did not, in and of itself, require to be corroborated. What did, namely that an offence had been committed, was, from the Crown’s perspective, typically supported by the words of accused persons when confronted by Investigators, very often confronted in their own homes or in private places of work.
The corroboration requirement in Scotland is often seen as providing a balance to other peculiar features of the Scottish system that may be less well known to practitioners south of the border, including firstly, in jury cases, the ability of the jury to convict by a simple majority. I should stress that although some cases in Scotland were prosecuted on indictment, there is no evidence of any actually going as far as a jury trial.
Secondly, the absence of equivalent powers to those contained in Section 78 of the Criminal Evidence Act of 1984 and Sections 125 and 126 of the Criminal Justice Act 2003, essentially allowing the court to exclude unfair evidence and to exclude hearsay evidence.
Thirdly and importantly, I respectfully submit, until 2010, suspects in Scotland were not regarded as having any right to legal advice and representation during suspect interviews. Scotland did not experience the scandals of the 1980s that led to the passing of the Police and Criminal Evidence Act 1984, an Act which does not apply north of the border. Indeed, as recently as 2009, a full bench of the Scottish Criminal Appeal Court held that there was no unfairness arising from the Crown’s reliance on admissions given during a police interview, where the accused had been unrepresented. For the avoidance of doubt, that wasn’t a Horizon case.
But the court’s view, even as late as 2009, was that the absence of the right to representation in a suspect interview was balanced by other features of the system, such as corroboration. The following year, however, in 2010, the United Kingdom Supreme Court, in the case of Cadder, unanimously disagreed with that approach and held that the absence of the right to representation created a breach of Article 6 of the convention.
I will return to the question of suspect interviews and their salience when dealing with the matter of corroboration later.
The next point to make is the prosecutorial test applied by the Crown in Scotland differs from that applied, for instance, by the CPS today. It does not include a reasonable prospect of conviction like. Instead the focus is on technical sufficiency and the public interest.
Then, finally, another salient point, section 196 of the Criminal Procedure of Scotland Act 1995, which obliges courts to take account of the point at which an intention to plead guilty was intimated when determining sentence, in practice, that means a discount for early pleas.
The fourth and final main category of contrast, sir, relates to the statutory scheme for revelation and disclosure of evidence, which is now found in Part 6 of the Criminal Justice and Licensing Scotland Act 2010, and the process by which that came into being was not, I might submit, Scotland’s finest hour. Previously, there was no statutory regime for disclosure. The Criminal Proceedings and Investigation Act in England and Wales did not extend to Scotland. The system instead operated on trust, the premise that the Crown would disclose what was appropriate. Statements given by witnesses to the police, for instance, were not routinely disclosed to the defence. The defence would be given a list of witnesses and would have to carry out its own investigations.
Following a series of decisions before the Privy Council, including the cases of Sinclair in 2005 and McDonald in 2008, the position developed, initially with the Crown issuing a practice statement on disclosure in more serious cases and then eventually the legislative framework that came in 2010.
The 2010 Act requires an investigating agency, usually the police, but an SRA as well, to reveal all relevant information to the Crown, and that’s Sections 117 and 119 for summary in solemn cases respectively.
The Crown then requires to disclose all information meeting the statutory test, in essence evidence which is part of the Crown case, evidence which materially weakens the Crown case or evidence which materially strengthens the defence case, to the defence as soon as reasonably practicable.
The statutory duty of revelation persists during the lifetime of the case, but the Crown’s guidance makes it clear that that continues beyond as well. At least at common law, and at least in terms of convention compliance. The Crown’s duty, the duty to disclose to the defence, continues in perpetuity. Section 137 of the 2010 Act makes that clear, and it continues after the final disposal of a case.
There is also a concomitant statutory duty on the Crown to review information held, even after the conclusion of a case. Now, having set out that framework, I now turn to the question of how that worked in practice in Scottish cases.
Sir Wyn Williams: Before you do, can I just ask you a question, because you told me, I think, that, given the special status conferred upon the Post Office, during the course of a trial, the duty of revelation or disclosure would be imposed upon them, but did that persist once there’d been a conviction, so far as the Post Office is concerned?
Mr Munro: Post Office as an SRA did not have a statutory duty to reveal, but the Crown made it clear in its training and protocols that it took the view that they had a common law and convention duty to reveal in perpetuity. So whilst there wasn’t a statutory provision that could be pointed to, that was the understanding of the prosecution authorities.
Sir Wyn Williams: Fine. Thank you.
Mr Munro: Thank you.
As I say, there were undoubted failures in revelation. To take as an example, COPFS representatives met with POL in September 2013. It was a meeting arranged to discuss the findings of the Second Sight and Helen Rose Reports and whether the defects identified in the system were present in any live or pending prosecutions. We now know that, during that meeting, POL failed to mention or otherwise disclosure the Simon Clarke Advice notes from July and August of that year relating to Gareth Jenkins. Redacted versions of these advice notes were only made by available by POL to COPFS in 2023, 10 years later, in the context of the criminal appeal proceedings that took place before the Scottish criminal appeal court.
POL also failed to reveal the true extent of problems with Horizon and indeed that issues were, in fact, identified with Legacy Horizon, which had been in operation from 2000 to 2010, and then, and even until recently, the Crown seemingly did not know about the existence and role of Fujitsu in supplying the Horizon data, resulting in no attempt to secure information directly from that company.
Although it appears that Gareth Jenkins was never involved in a Scottish prosecution, the disclosure of Simon Clarke’s Advice to COPFS at this meeting would have provided an important indicator as to: (a) the existence of Fujitsu in providing POL with the underlying Horizon data; (b) potential issues surrounding the reliability of such data and the ability for this to be spoken to and supported at trial; and (c) the possibility of POL shredding or at least not handing over information relating to issues with Horizon, contrary to its duty of revelation.
So what did the Crown know, and when? Kenneth Donnelly, the Deputy Crown Agent, says that, between 2000 and 2013, COPFS was not institutionally aware of the bugs, errors and defects in the Horizon system. No record is held, he said, which suggests that POL provided details of any issues with Horizon prior to May 2013. That being said, we know of one case where information about the reliability of Horizon featured in 2012. The case of Aleid Kloosterhuis.
In mid-2012, her solicitor wrote to the Crown and referred to his client being:
“… aware from the national newspapers that the accounting system used by Post Office Counters is currently being questioned on its accuracy.”
It remains unclear whether the national press concerns had not been picked up on by the Crown’s Policy Unit at that time.
We know of other instances, such as a report by a Procurator Fiscal Depute in May 2014, that is Andrew Lazzarin in the criminal case against Rosemary Stewart, where he comments on well-publicised concerns about the reliability of the Horizon system. A similar comment was made in a later report in the case of Murtaza Rasul by the same prosecutor, who said the problems concerning the Horizon system were widely reported at the time so would probably be something that the defence focus on.
Clearly, these were matters that were known about by the Crown at that stage. But upon receipt of the Helen Rose and Second Sight Reports in 2014, COPFS decided that these reports did not meet the statutory test for disclosure, given POL’s assurances that the bugs, errors and defects identified did not impact live or concluded cases, and further action was to be taken by POL for the purpose of future prosecutions, which were reliant on Horizon evidence.
That decision, in retrospect, is very difficult to understand. Horizon evidence formed the basis upon which the prosecution proved appropriation. These reports materially undermined the reliability of that evidence, evidence which was crucial in securing convictions.
Of course, by 2019 we have the Bates judgment and nobody could be any clearer on what had gone wrong. Yet there was no attempt to alert convicted persons to that information. Even then, notwithstanding the clear relevance to the convictions and the statutory duty in Section 137 of disclosure in perpetuity, the Crown did not undertake its own retrospective review of the cases upon disclosure of the Second Sight and Helen Rose Report in 2013, it trusted what POL said.
Only in recent months has its own internal review determined that, of the 148 cases between 2000 and 2020, originally identified as being potentially impacted by issues with Horizon, 52 are considered now as giving rise to miscarriage of justice, due to reliance on faulty Horizon evidence.
So what do we now know of Horizon prosecutions in Scotland? Mr Donnelly confirmed that:
“… of the cases identified by COPFS in its recent review of cases, in which a conviction may have been impacted by Horizon unreliability [that was something like 60 cases], only one case went to trial”, Susan Sinclair’s.
In every other case, every subpostmaster prosecution reliant on Horizon evidence concluded in a guilty plea.
As Mr Donnelly said, in a significant proportion of these cases, the accused subpostmaster had admitted the offence during an interview with POL investigators at the initial investigation stage. These admissions will have formed a major plank of prosecution cases and will have provided the necessary corroboration. These admissions were generally not given in police stations, they were not video recorded. At least and until 2010, and in many cases beyond that, the suspects did not have access to legal advice or representation prior to or during their interviews.
In the case of Colin Smith, for instance – and the instances that I’m going to refer to are all drawn from the Appeal Court decision that forms part of the Inquiry’s papers – apparent admission is given at the time of the audit, not repeated in subsequent interview, were what were relied upon for corroboration. The court concluded in the appeal that these could not be regarded as having been given freely and consistently but, rather, arose from the seemingly indisputable evidence with which he was faced: Horizon infallible.
In the case of Aleid Kloosterhuis, whom I have mentioned, the Post Office Investigator submitted an “incorrect and misleading” standard prosecution report to the Crown which essentially misreported the position admission regarding admissions that had been made, admissions made in an interview in 2011, so after the Supreme Court decision in Cadder, without representatives present in her small Post Office on an island on the west coast of Scotland. She “declined” the opportunity of having a lawyer attend.
Even where Horizon evidence was originally challenged by the defence, such as in the case of William Quarm, who originally pleaded not guilty in 2010, and a forensic accountant was instructed, the Horizon system was deemed to be watertight. Mr Quarm was left with no real choice, as he saw it, but to tender a plea of guilty to “simply get the matter resolved”. Tragically, he died before he was able to clear his name.
Robert Thompson is another gentleman who was put in a position where his original account of innocence was deemed impossible by POL Investigators, based on the supposed reliability of Horizon. Thus, his eventual admission was not freely obtained.
The Inquiry didn’t hear from any defence solicitors or counsel instructed for those accused in Scotland but the assumed reliability of a computer system developed by Fujitsu and rolled out by a major public institution, combined with the damning effect of a perceived admission, were likely to have led both the accused and their legal representatives to the conclusion that the allegations were nigh on impossible to defend.
The alternative – plead guilty to a restricted charge, secure a lesser sentence – was likely to have been seen as irresistible.
In the one Scottish case, where we know an accused person went to trial, Susan Sinclair, we see how that went. To quote the Lord Justice Clerk, Scotland’s second most senior judge, in the Appeal Court decision:
“In convicting her [Susan Sinclair], the Sheriff relied on the fact that she had continued to deny any wrongdoing without providing a coherent explanation.”
So her persistent denials were somehow regarded as corroborative of her gilt.
According to Lord Justice Clerk:
“There could hardly have been a clearer case of a miscarriage of justice having regard to the disclosure issues.”
Susan Sinclair was convicted in 2004, it took 19 years for her conviction to be overturned, and yet the Crown was aware of difficulties with Horizon from at least 2013.
In the written submissions, which were tendered last week to the Inquiry, I returned to four questions that had been posed in the Phase 4 submissions and, rather than going into detail of them, I simply refer to what was said, and pose and answer them. Did the involvement of COPFS afford greater protections to those accused in Scotland? In my submission, no is the answer.
Did POL understand and discharge its duties as an SRA? Plainly no.
A real question, I should add, arises as to whether it should ever have had the status of SRA, given its commercial nature and financial interest in the outcome. But the next question: did COPFS comply with its duty of continuing disclosure? No and, had it done so, people like Susan Sinclair would have been able to take steps to try and clear their name at a much earlier time than turned out to be the case.
Finally this: did corroboration act as a safeguard? No. Simply put, it appears that nobody was able or prepared to look past Horizon evidence, which was held to be the strongest piece of evidence justifying prosecution, leading to confirmation bias.
Everything, even protestations of innocence, were then regarded as corroborative. In any event, the ability of Investigators to wrest admissions from vulnerable suspects neutered the safeguard of corroboration. A much more productive approach would have been to look for corroboration elsewhere, such as in the type of financial audits so common in criminal confiscation applications, and to investigate the totality of the crime alleged. Evidence of an increased availability of funds not matched by declared income would have acted as an independent check on the Horizon evidence but such evidence checks were generally not carried out. They weren’t necessary because the Crown or POL had what they needed.
There is no evidence of that than, again, in the case of Susan Sinclair, where the Crown did in fact lead evidence from a Post Office Auditor at the trial who said he had not attempted to trace the alleged missing money as this was “not part of his remit”.
In other Scottish cases, the accused were prosecuted without any independent evidence of theft and loss beyond Horizon.
Sir, I would end, if I may, with a rhetorical question: what confidence can we have that the scandal could not happen now, whether in a Post Office setting or otherwise? Are we as a society or as a justice system any less trusting of large-scale propriety computer systems? Are we any less inclined to rush to judgement to see everything through the prism of our initial conclusions? Are we sure that our public prosecutors will be better able and better equipped to spot patterns, investigate concerns and disclose all relevant information without delay? Are we sure that comments made by terrified suspects, faced by investigators who repeatedly insist on the impossibility of their denials, will not be regarded as evidentially significant?
Finally, nobody who’s innocent should ever plead guilty but are we sure that a vulnerable accused person, finding themselves in the position that countless subpostmasters did, would not conclude that a guilty plea was their only conceivable option? There are, we suggest, several measures that would lead to these questions being answered in a more positive way, some of which include: an expectation of a cultural shift, so that lines of defence are not dismissed out of hand but professionally and properly investigated; independent investigation of potentially criminal allegations by properly trained police officers, not agency employees who have a financial interest in the outcome; recognition of trends and patterns, as Mr Stein alluded to but, in this case, by police and prosecution having a proper oversight so that common threads can be investigated; and a clear recognition that computer systems we do not properly understand should not be assumed to be infallible, a matter of ever greater importance, I submit, as we move you have into a world of machine learning artificial intelligence, where going and checking the code book isn’t nearly as simple as it once was.
As Mr Moloney reminded us in his submission, in the words of Tim Brentnall: it wasn’t Horizon that prosecuted the SPMs.
Finally this, a focus on searching for corroboration in its truest form, not tick box checking, but evidence that provides a proper independent check on the allegation made.
This Inquiry, sir, has performed a vital function. It has shone an arc light into these appalling events and the victims of this appalling scandal trust that it will produce robust recommendations that will prevent or at least limit the chances of something similar happening again.
I’m obliged.
Sir Wyn Williams: Thank you very much, Mr Munro.
So I think Ms Watt next, yes? Ah, she has moved. That’s why I was slightly taken out of my stride. There you are, Ms Watt.
Closing submissions by Ms Watt
Ms Watt: Just keeping you on your toes, sir!
Sir Wyn Williams: It is very important that you all do that.
Ms Watt: Sir, the National Federation of SubPostmasters, the NFSP, takes this opportunity to reiterate its thanks to you, this Inquiry, its legal and counsel team and all of those who have supported and worked to make it run as smoothly as it has. The NFSP looks forward to the publication of your report and we make the following oral closing statement to add to the original opening statement and the closing submissions for Phases 2, 3, 4, 5, 6 and 7.
The NFSP also endorses and adopts the submissions of Howe+Co, Hudgells and HJA on behalf of their clients, in respect of their position and comments on Post Office UKGI, Government and Paula Vennells. The NFSP, without repeating them all here, adopts and endorses the recommendations and requests made in the written closing submission produced by Howe+Co.
I would also say, in setting off on these closing submissions, that the submissions for the NFSP, having fully engaged with the Inquiry and fully reflected on its place within the history of Horizon, are made both with reference to the present and the future, as well as to the past, all of which fall within the Inquiry’s terms of reference.
Sir, whatever the motto for the Post Office is today, the phrase from Dante’s Inferno, “Abandon hope, all ye who enter here”, is the one that was metaphorically across the top of the door for all those postmasters, assistants and Crown Office employees who had the misfortune to be the victims of the bugs, errors and defects of the Horizon system, and even greater misfortune to have been victims of the Post Office’s toxic culture which saw a ruthless and relentless prosecution and recovery strategy over many years, culminating in its full-scale defence of the GLO court actions.
There he seemed to be no hope for the users of Horizon, who were investigated and prosecuted, or those who became broken financially paying for shortfalls which the system generated. No hope for each individual presented with Horizon data, advised to plead guilty in the face of the evidence, to avoid a more severe sentence, told they were the only one, and geographically distant from anyone else in a similar situation. No hope for the loss of their reputations, families, finances and, in some tragic cases, their lives. All at the hands of the Post Office. Another translation of Dante’s phrase is “Abandon all hope, ye who enter”, but, sir, the placement of “all” in this translation suggests there is, and can be no hope at all. It is submitted that that is not necessarily the case.
In the Greek myth of Pandora’s box, after all the evils had escaped when it was opened, hope remained inside and, sir, the hope that sits at the bottom of the Post Office box of evils resides with you and your Inquiry. The hope that through the Inquiry’s dogged determination eventually to recovery all the documents, its focus on the compensation scheme and its careful interrogation of the documentary evidence and witnesses, there will be an outcome and recommendations from your report which ensures a dreadful, terrible thing, such as the Horizon scandal, can never happen again.
Hope, sir, is to expect the good while fear is to expect the evil. Hope, expecting the good, is and must be a good thing. However, it is submitted for the NFSP that, based on Phase 7’s evidence, we are unfortunately still somewhere between hope and fear in terms of the future of the Post Office, its culture and governance, the role of UKGI and Government, and, most importantly, the role, status and remuneration of the key investors and stakeholders in the business: the postmasters.
For far too long and far too often, taking account of the actual views and input of postmasters and their representatives has been ignored or sidelined. True engagement has been illusory and everything that was said over the years to the NFSP and to others by the Post Office has turned out not to be true. Just taking a few examples: Horizon was robust, not true; prosecutions were safe, not true; recoveries were required under the postmaster contract in all circumstances, not true; network Transformation would provide services and products which would transform the earnings and businesses of postmasters, not true.
But that was then and this is now. Sadly, however, despite all the time that has passed all that became known from the court cases and everything that has subsequently come out in the Inquiry still, many, many issues remain. As the Phase 7 evidence has shown, a very great deal is unresolved, including but not limited to ongoing lack of proper redress for the thousands of victims of prosecutions and shortfall recoveries, lack of transformation in the Post Office’s culture and governance, past roles and the failure to recognise and deal with those involved, postmaster relationships with and trust in the Post Office, postmaster remuneration, the continuing use of and reliance on Horizon as the operating system meantime, NBIT, delays, spiralling costs and likely lack of suitability of the Horizon replacement, public trust in the Post Office.
Those whose lives and finances were ruined still do not have the redress they deserve, whether through the Overturned Convictions Compensation Scheme, the Group Litigation Order Compensation Scheme, the Horizon Shortfall Scheme. Alongside that, the victims have also had to hear that some of those who had involvement in the Horizon scandal years, even where no direct wrongdoing, somehow ended up working on and assessing applications in the very compensation schemes for what went wrong during their employment.
Worse, the victims have had to hear that it was only in the last 18 months or so that the Post Office thought to examine this and move some people, and only even more recently, following direct interventions by the Post Office, that the Post Office took steps to relieve Past Roles individuals who are now current senior people at the Post Office from their postmaster-facing roles.
At the present time, there’s no confidence that Horizon in its current form can be relied upon and now has come the news that the Government may no longer be going to fund the already scandal-hit, proposed Horizon successor, NBIT. Due to have replaced Horizon in March 2024 at a cost of approximately 200 million, it has spiralled out of control, had costs escalating into the billions, has IT equipment purchased sitting in warehouses, all in a further demonstration of the lack of Board and UKGI oversight, their lack of risk identification and without there even having been clarity to them that the final product would, in fact, be fit for purpose. That all sounds very familiar when we think back to what we heard in Phase 2 about the procurement of Horizon.
Now, the existing Horizon will remain in place, complete with its bugs, errors and defects and, while it was wrong for Post Office to prosecute and recover money on the basis of a faulty system, equally, the Post Office is certainly losing money, which it legitimately is owed, but is paralysed from doing anything about.
It is submitted that it is hard to imagine how things could get any worse for postmasters who have to live with the system, for taxpayers and Government who have to fund a replacement for Horizon, however long that may now take, and for the public and their lack of trust in the Post Office brand.
The Inquiry has heard that inertia and paralysis are widespread, both at senior management and board level, in respect of decision making at Post Office, and that culture change and significant governance improvements needed have not yet happened.
Some minor changes have been magnified, made to look as if they are bigger than they actually are, for instance that postmaster engagement and postmaster views are being taken seriously by the creation of two Postmaster Non-Executive Directors on the Board. However, sadly in a demonstration that little has moved on from the Horizon years, both the Postmaster NEDs have been or are being investigated by the Post Office, and one gave evidence to the Inquiry about the heavy-handed way in which this has been done.
This evidence sat alongside the evidence of both Postmaster NEDs that they felt they were not being listened to at the Board. As well as this, the issue of conflict of interest has meant Postmaster NEDs cannot vote or even sometimes participate in matters which affect them directly as postmasters, such as the vexed issue of remuneration.
Postmasters have reported through the Inquiry’s YouGov survey that they feel they are not kept informed by the Postmaster NEDs. Meanwhile, the Inquiry heard that it’s a necessary part of being a board member that some matters remain confidential.
While there is a suggestion, in at least one Core Participant’s submission, that increasing the number of Postmaster NEDs is a solution, it is submitted for the NFSP it is not the solution, and it doesn’t and can’t change the issues that arise from the inevitable conflicts of interest. Yes, they can give the board some additional insight from those individual Postmaster NEDs and their experience, but it doesn’t change the fact they may not be able to participate in some discussions or some votes.
It doesn’t change that they still won’t be able to share information from the Board due to confidentiality, and, importantly, they have no real or formal mechanism for engaging with and obtaining the views of a wide and diverse range of many thousands of postmasters, which an organisation like the NFSP does.
The Postmaster NEDs may be complementary to, but they cannot and must not be the last word in postmaster representation. That, it is submitted, is a job they and the role they are in is simply not one they can or should do. Anyone, on the NFSP’s analysis, going into the Postmaster NED role in the next changeover, thinking they’ll be able to campaign, influence or change the Post Office’s mind on strategy with the focus of postmaster benefit will have to be mindful of their Director duties under Sections 170 to 176 of the Companies Act, which means that they will always have to compromise on their own personal and business interests as a postmaster to ensure they fulfil their duty to act in the best interests of the company, which in this instance is the Post Office.
In addition to this, it is submitted that everything said, heard and seen, Post Office simply cannot be trusted not to control every narrative, every aspect of what is to happen to postmasters and their businesses, and their remuneration, and not necessarily for the betterment of postmasters.
It is not just that rabbits are coming out of the hat with astonishing speed but also the timing of what is being said about the future is incomprehensible when the work and scrutiny of the Inquiry and the stage it has reached is taken into account, including the announcement of the new deal, a so-called transformation plan, made public on the last day of the Inquiry’s evidence sessions on 13 November. Ironically, when the expert evidence was giving evidence on appropriate governance arrangements at the Post Office, and which includes the proposed closure of over 100 Crown post offices.
Apart from the loss of the Crown post offices and the hundreds of job losses involved, there was next to no consultation with representative bodies such as the CWU and the NFSP on the detail of what was announced. It’s certainly not clear what the headline-grabbing sum in the face of publicised postmaster remuneration being at the top of the list of priorities for postmasters is going to equate to, potentially a transformation that may not be an actual transformation, and certainly not one that has had any real, meaningful engagement with postmasters and their representatives.
A strategic review presentation pack provided to the Inquiry, after the conclusion of evidence, which meant it could not be scrutinised in any way by the Inquiry and those representing the key Core Participants, could not interrogate it; a strategic review presentation pack that is exactly that: a presentation. No detail as to how any of those objectives are going to be achieved. No consultation with the NFSP and what was in the presentation pack, despite it having more than 6,800 postmaster members.
A transformation plan introduces a so-called consultative council, a postmaster panel, to work with the Post Office to deliver the transformation plan. It is submitted that this simply reinforces, rather than changes the way in which Post Office consults, delivers and transforms. In other words, yet another illusory mechanism purporting to show engagement with postmasters while retaining the control over the plan, its delivery and who can comment on it.
It is submitted that a postmaster panel run by and appointed by the Post Office could not actually realistically challenge senior management and the Board about a plan which will, by then, have been approved by Government, and therefore not subject to any real change, but it will allow the Post Office to say it has consulted some postmasters.
A strategic review and transformation plan that simply doesn’t take account of the current and ongoing failures of governance, budgeting and relationships, which mean that, despite the transformation, an unreliable Horizon system will remain in place with NBIT as I mentioned over budget, badly managed and well overdue.
The NBIT project is the perfect example of how little has changed despite everything that this Inquiry has heard: a senior management which knows what happened in the Horizon procurement rollout and introduction, a Board which also knows the same, a Board which has UKGI represented on it. It’s not so much that the governance and oversight of Post Office is credible. Rather, that it is incredible it is still capable of this astonishing failure and with no real plan identified in the transformation plan as to what will happen.
In relation to the proposition within the Strategic Review of the Post Office as a franchiser, the NFSP has concerns about such a model as compared to the goal of mutualisation, quite a different thing. As Calum Greenhow said in his first witness statement at paragraph 343:
“The NFSP is aware that franchising has been proposed as another way forward for the Post Office. We believe this would cause a movement of risk from Post Office to postmasters. Under a franchising model, it’s likely that postmasters would have to pay the Post Office to provide Post Office services within their branch. They would also have to lease the IT equipment from Post Office. If there was an issue with the IT equipment causing a loss to the postmaster, the postmaster, rather than the Post Office, would automatically carry the loss until they could prove that the fault was with the Post Office’s IT system, and they would then have to pursue the Post Office for the loss.
“It may be that franchising could be held out by the Post Office as increasing postmaster remuneration, however how exactly this increase is generated is unclear and a movement to this model would mask a significant transfer of risk and cost to the postmaster. The NFSP’s position remains that mutualisation should be the goal.”
It’s submitted that the postmasters need certainty that their investment partner, Post Office, has a vision to make sure their businesses are, at the very least, sustainable and that there is a plan for the future. Postmasters today are facing an attrition of business and associated remuneration, traditional streams of revenue are decreasing, and the Government work promised to them under Network Transformation simply did not happen. Indeed, some Government work is, in fact, being removed, an example being the DVLA contract which NFSP has campaigned to get extended to March 2025 and has now been further extended until 2026. But it’s still due to come to an end in the next few years.
The postmasters of today are expected to carry out a public service and have continued to do so at great personal sacrifice. However, it is submitted that the Government and Post Office have been unwilling or unable to repay postmaster investment and public service with appropriate stewardship of the network, including a long-term strategy that would enable their businesses to be viable.
While there is some encouragement to be taken from movement towards having a long-term strategic direction for Post Office and the network, there is a lack of detail about what it actually means, other than it aims to change the polarisation of Post Office, and that there is an objective to increase postmaster remuneration.
Early reports suggest it’s intended there will be a decrease in central costs, and there may be a closure programme or a transfer of ownership of Crown Offices. The CWU has hit out against a proposal and the way in which it was announced with little or no warning. For the NFSP, there is a significant lack of detail about what the new deal actually involves, how the supposed increase in remuneration are meant to become a reality and, at a practically level, how a viable network is to be achieved.
This makes the NFSP wary about the new deal. Postmasters have been subject to numerous change programmes: the Network Urban Reinvention in 2003, Network Change in 2007 and Network Transformation in 2012. None of these change programmes transformed the business of postmasters other than in a largely negative way and, of course, we have what happened with Horizon, with Network Transformation in particular being missold to postmasters and the NFSP in a blaze of ultimately unfulfilled promises. It was a transformation that promised many new services to be provided by Government in exchange for large scale closures and changes to the business model and method of remuneration. Postmasters today, sir, remain worse off because of Network Transformation and those unfulfilled promises, and that all sits alongside the Horizon scandal.
It is submitted that feedback from postmasters and the NFSP could only have made the new deal stronger. Surely, when determining whether this is a plan that is sensible, it could only have been a useful thing for the Government actively to seek the views of postmasters and the NFSP as to whether this would actually work in practice. On what basis should the Government determine whether the plan was otherwise a sensible one?
The NFSP questions how postmaster centric the new deal can be if postmasters and their representatives have not been consulted or feedback sought on it before publication.
As already mentioned, the timing of the announcement of the new deal and the proposed time line of the Government’s Green Paper has meant that this Inquiry is now unable to scrutinise and comment upon these and, in particular, to answer with certainty the questions posed at the Inquiry’s term of reference E. As mentioned already, the announcement of the new deal itself fell on the last day of the Inquiry’s evidential hearings. Even the Strategic Review, despite being dated 21 October 2024, was made available only on Friday 6 December, one working day or the last working day before the deadline for written submissions by Core Participants to this Inquiry and the review cannot be examined through the evidential hearings.
It is unclear if the timing is designed to avoid the scrutiny, but this scrutiny would have been an opportunity for the Government and the Post Office to benefit from the experience and insights of an Inquiry that has been examining these pertinent issues for a number of years.
The scrutiny would also have given postmasters some confidence that the Strategic Review, the New Deal and the Green Paper on the future of the Post Office, has been examined and commented on by the Inquiry.
The examination and comment of the Inquiry would be independent from Post Office or Government, who, it is submitted, carry much of the responsibility for this scandal in the first place. The NFSP does not want sections of the Inquiry’s report when published to be cherrypicked out of context, simply to support a Green Paper or a New Deal but without the Inquiry ever having been able to scrutinise these.
Therefore, as has been mentioned this morning, the NFSP submits there may be a need to resume the Inquiry briefly at a later point, prior to the issuing of your report, sir, to check what is actually going to happen with the new deal so that the answers to the questions in terms of reference E can be answered fully.
Given the Post Office’s history of selectively focusing on aspects of reports, unfortunately the cherrypicking cannot be considered to be beyond the realm of possibility.
Taking the behaviour, failure to change and, ironically, the failure to transform itself, it is submitted that it’s essential for something independent to be put in place as the NFSP considers the evidence in Phase 7 shows that the answers to the questions in the Inquiry’s terms of reference at E(i) and (ii) and at F currently have to be “No, the processes as provided by the Post Office are not sufficient to enable postmasters to run their businesses and, no, the Inquiry cannot be satisfied that relevant controls are in place to avoid issues such as have taken place, do not happen again”.
It is submitted that the evidence of the past phases and the evidence of the current position in Phase 7 of the Inquiry has shown that simply the Post Office rearranging the deck chairs does not bring material and relevant change. It is submitted that the failure of both Post Office and Government to grasp the real issues of culture and governance mean that the NFSP’s proposal for an oversight committee, or something akin to it, is what is needed to restore the trust of the public and postmasters and to ensure the appropriate level of curiosity, challenge and risk identification actually comes into being.
It is submitted that this Inquiry has heard evidence of significant concerns about the governance of Post Office, as have said. The NFSP has been trying to bring attention to these concerns. If we think about the key findings of the Grant Thornton report, it said there was an inability to unlock a unified purpose and shared ambition around a longer-term vision and strategic between POL and its shareholder. There was an unconscious bias around the lack of accountability. There was a lack of clarity around the practical application of foundational governance documents.
Decision making forums appeared to lack a clear understanding of objectives, roles and responsibilities. On culture, the misalignment on accountabilities between POL, DBT and UKGI is culminating in a failing working relationship.
These key findings go to the heart of the expected and best practice governance principles as outlined in Dame Sandra Dawson and Dr Katy Steward’s first report. While it is the case that the response to the NFSP’s questions on an oversight committee, that Dame Sandra said the ideal model was a Board that was properly functioning, able to challenge and interrogate the Post Office senior management, it is the NFSP’s position that sadly we are not anywhere near that being a reality.
The NFSP agrees that this should be an organisation able to operate and manage itself in accordance with the principles of the Companies Act, the Nolan Principles and with social purpose front and centre of all it does.
Right now, the production of the Transformation Plan’s Strategic Review, the timing of announcements, the lack of consultation, and the way in which things, such as a consultative council are apparently to be set out without such as a “by your leave” from postmasters and their representatives show that Dame Sandra’s ideal is some way off.
The evidence before the Inquiry as submitted indicates that, since the GLO, time and time again, Post Office governance has failed, despite attempts to change its internal culture and governance. For example, the improvements to culture and governance cited by the Post Office as being a protected factor against a similar scandal happening again have not prevented the Post Office’s decision after the GLO to nevertheless pay leadership bonuses in full, which they had to be talked out of by Sir Alex Chisholm, the payment of Nick Read’s incentive payment prior to shareholder approval, the payment of bonuses which NFSP calls “bonusgate”, that is the one relate to the fulfilling the Inquiry’s requirements, the requirement for the Past Roles Review or Project Phoenix as motivated by the Inquiry, not by the Post Office itself, five years’ worth of delays in the compensation schemes, mounting significant concerns about NBIT, what will happen if NBIT is indeed abandoned and Horizon is not fit for purpose?
That does not mean the NFSP considers that an accountable, fully-functioning board cannot be achieved, rather something urgent and independent needs to be put in place, even if temporarily or even if with a role which changes over time, and it asks this Inquiry to consider seriously that proposal.
It is interesting to note that Sir Alex Chisholm, former Permanent Secretary at what is now the DBT, was open to the possibility of an independent committee to scrutinise arm’s-length bodies with mandatory reporting responsibilities to their board, and the authority to write to the Secretary of State with concerns.
While he thought that in a perfect world you wouldn’t need it, he did note that in the particular circumstances of the Post Office, where the Board had failed in its oversight responsibilities and the management executive and internal legal teams had failed over many years to provide effective service, causing a terrific breakdown in trust with both postmasters and the wider public, special measures, such as an independent oversight committee, might well be required.
While the submissions of the DBT commit the Government to bringing forward legislation for a legal duty of candour to be introduced for all public servants and public bodies, this is welcomed by the NFSP as absolutely necessary, it’s also submitted that, at this time, it’s not enough.
I will turn to matters such as representation, Past Roles and recommendations towards the end of these oral submissions, but it is the NFSP’s submission that its proposal for an interpreter oversight committee is something the Inquiry should consider seriously. It has been refined and revised, and it has gone to Boston Consulting, the group working with DBT on the future of the Post Office. It is submitted it is an imperative to have something which is outside of the control of the Post Office, and even UKGI, which, it is submitted, has not shown sufficient insight into the failings of its NEDs and its advice to DBT over many years.
The idea of an independent body with representative bodies and consumer champions which therefore have the interests of the Post Office, Government, postmasters and the public at its heart, already experienced knowledgeable in Post Office issues, and able to see what needs challenged in the way the previous iterations did not, is essential.
The Oversight Committee has its aims and purpose to expand on the existing shareholder relationship framework that currently exists between the Government and Post Office while retaining its social purpose. The NFSP believes that the Oversight Committee would be a vital new tool in the toolkit of Post Office Government. It is used and seen in a number of other public sector areas, including health boards. It is not the creation of an additional layer of meaningless bureaucracy, rather it would be as an active reviewer, an interrogator of risk, strategy and delivery of culture and governance improvements, providing checks and balances in a way that evidence to the Inquiry has demonstrated did not happen and has not yet happened.
It is also to ensure that nothing even similar to the Horizon scandal can ever happen again, whilst securing the future of the network. As has been heard by the Inquiry, there has been a failure over many years and across different Board members, Chairs and senior management to either identify risks or ask questions which would have identified risks to the business and might have avoided this scandal and thereby prevented it from getting worse. Postmasters invest in the network via their retail businesses which host post offices. However, their ability to understand or feed into the short or long-term strategy of the Post Office is limited, as is that of the public, who are the ultimate owners and users of the Post Office.
As mentioned for the NFSP, there remain questions over whether the Government as a shareholder and the Post Office as the operator can, on their own, make effective changes in governance and culture, and ensure the oversight necessary for proper safeguarding of the investment postmasters make in the network, or not to act in a manner that is not actually a detriment to the investment of postmasters. It is therefore the aim of this proposal of the oversight committee to bring together people with specific Post Office knowledge, alongside those from a wider social perspective to ensure the social purpose of the Post Office remains key.
The relationships between Post Office, Government and representative bodies and consumer groups need to be repaired following the damage done by the Horizon scandal, and the cultural and governance failures which led to it, as well as the ongoing failure to transform culture and governance.
It’s true to say that the reputation of the Post Office has been severely impacted by past and present events. The oversight committee is proposed as a way of repairing the relationships, restoring public and postmaster trust in Post Office. The preferred option in terms of ownership of the Post Office, as I’ve said, is via mutualisation. However, the financial stability of the Post Office must be secured first to ensure that is feasible. The secondary aim of this proposal, therefore, is to provide the ground for mutualisation.
I’d like to call up a document, if I can. That would be NFSP00001481.
Thank you, if we could scroll down, I’ll say when to stop – keep going. There we are “Current Postmaster Representation” notes there are two formal representative voices for postmasters holding contracts with the Post Office, being the NFSP and the Postmaster NEDs.
“Current Postmaster views of Post Office”, a 9 per cent decrease on postmasters feeling valued as a partner of the Post Office; 14 per cent de crease on how supported postmasters feel by Post Office; and a 12 per cent decrease in the number of postmasters who believed Post Office were genuinely trying to improve the relationship.
If we can just scroll down further, on “Postmaster earnings”:
“In 2024, postmaster perceptions of Post Office continued to erode, as found via the 2024 YouGov Postmaster Survey [for] the Inquiry …
“48% felt dissatisfied with their roles as a postmaster.
“72% reported feeling undervalued by POL.
“74% disagreed that the POL Board understand the concerns of postmasters.”
If we can scroll on a couple of pages, please, and stop at “Key aims”. There we are, “Key aims”:
“To review and, where relevant and appropriate, challenge the strategy of Post Office and identify potential risks, interrogate those risks …
“To enhance the role of the Government as sole shareholder …
“To Ensure Government uses its powers to improve the culture at [the Post Office] …
“To ensure the Post Office’s … IT system is externally audited …
“To demonstrate that a diverse group of people with a range of interests in a successive Post Office can work together.”
If we scroll down to “The role of the Oversight Committee”, that would be:
“Due diligence takes place before key decisions are made.
“Policies and strategies are being implemented as intended.
“Key risks identified, monitored …
“Business processes and systems working well
“Expected results being achieved.
“Value for money being obtained.
“Activities comply with policies, laws, regulations …
“Developing areas of concern are dealt with.
Just scroll down again to the “Committee Membership”, thank you. The Charity Governance Code proposes that the Board should comprise of between 5-12 people, it’s said here 12, the make-up being: Government DBT civil servant 1; membership bodies the NFSP, CWU, Unite; and external legal representation; representative bodies for older people, those with disabilities, the rural network, economically deprived, the consumer champion.
Now, if we can just scroll to the next diagram that shows how that committee would be made up. Just scroll down one more page to “What the Oversight Committee offers”. So, what does the oversight committee offer that isn’t currently met? Preparation for mutualisation; ensure transparent distribution of subsidy; ensure the future viability of the network; offer a solution to any findings to be shared by your report, sir; scrutiny of daily running of Post Office to protect the investment made by postmasters, invaluable insights from those at operational level; and ensure the principles of public life.
So we can take that down now. Thank you.
The oversight committee does not seek to take the ownership of or control of day-to-day operations. Instead, it’s to include a scrutiny function between the Board and Government as seen in diagram 3, a check and balance. It is straightforward. Those participating come with knowledge, experience and background. It is not meaningless bureaucracy.
It might be the Inquiry considers such a committee can be adjusted to fit its own recommendations, sir. It might be the Inquiry considers such a committee has a limited life, while things get on to the footing that Dame Sandra envisions. Whatever it is called and however it exactly would work, it is a submission of the NFSP that, at the very least, something independent of the current stakeholders is absolutely required for the Inquiry to answer questions E and F in the terms of reference positively.
I’m going to move now from the present and the future to look at the past and, before moving on to look at representation and the roles of the representative bodies of the past, another aspect of the present Post Office is concern in the way it has conducted reviews of key issues, such as Past Roles, Project Phoenix, and Project Boland.
In Past Roles, the NFSP has previously raised concerns about Post Office employees who were part of the Post Office in the Horizon scandal years, however culpable or otherwise they were or were not, and are now in roles that are postmaster facing or affect postmasters.
The NFSP wrote to the then Postal Affairs Minister Kevin Hollinrake on 8 January and said, “We’re not confident that the correct review has or will be taken”. Various individuals within the Post Office, who have had past roles in the Post Office continue to hold or held until recently postmaster facing roles, including:
Rodric Williams, who provided legal advice to the Senior Management Team and was, until recently, involved with the Remediation Unit.
Tracy Marshall, who appears to have had at least some knowledge of remote access when passing information to Angela van den Bogerd and is current Retail Engagement Director with responsibilities for postmaster onboarding and postmaster training.
Nick Beal, Head of Network Development, which includes the NBIT project – we’ve already spoken about that – and who gave evidence on behalf of Post Office to Mr Justice Fraser in the GLO and was criticised.
Martin Edwards, who was Paula Vennells’ Chief of Staff and, for instance, was seen in emails back in 2013 looking at how the Second Sight Interim Report could be spun to Lord Arbuthnot. He is now Network Strategy and Development Director, and the NFSP understands that, despite his previous role as Paula Vennells’ Chief of Staff and the evidence this Inquiry has seen, Martin Edwards has responsibility for the Strategic Review and will be part of its implementation. The NFSP considers it completely inappropriate that someone involved in the Horizon scandal is now in charge of implementing a plan for the Post Office’s and the postmasters’ future.
In addition, the NFSP raised past roles with Post Office when it transpired Post Office were intending to send individuals with Past Roles and whose names had come up in the Inquiry, to the NFSP’s annual conference this year, and Mr Greenhow had to write to the Post Office asking them not to send individuals, including Tracy Marshall.
It appears that the Past Roles Project only came about due to the Inquiry’s compensation hearings in December 2022, in which it became clear Post Office had recruited people into the Remediation Unit. That was three years after Lord Justice Fraser’s judgment. The question arises: why, in the near present day, was it ever considered appropriate for such people to be allocated to the Remediation Unit in the first place?
There has been reference to the “untouchables”. Added to these issues, the Inquiry has heard evidence there are some within the Post Office who are said to be considered “untouchables”, including investigators, the Legal Department, individuals within the Legal Team, and the Retail Team. This is potentially as a matter of culture within the Post Office but, at the very least, they are said to have been referred to as such by Nick Read, although he considered he had not used this term. Mr Ismail, Mr Elliot, Mr Staunton and Ms Burton all gave evidence to this Inquiry indicating that it was a term used.
Putting to the side the recent history of the Post Office should mean that absolutely no one is above investigation or accountability, the NFSP questions whether there’s a possibility that the approach taken to the Past Roles Project or Project Phoenix was influenced by an idea that some of those involved in the projects were untouchable. Project Boland, another major failure to identify, “Where has the money gone?” That is in reference to the millions recovered and paid by postmasters and arising from shortfalls in the Horizon years.
The Post Office project investigate this, when asked where the money went, former Financial Director Alisdair Cameron said the question should be asked of Mr Read. Mr Read in his evidence suggested a figure of 36 million. The NFSP is concerned that the issues of wrongfully obtained recoveries may fall into obscurity, and that, without the scrutiny of this Inquiry, it may not be kept on the agenda. The NFSP has been calling for a full investigation into the wrongful use of the Subpostmaster Contract which required shortfalls to be made good only where error, negligence or carelessness on the part of the postmaster had taken place, that excludes Horizon, and all that we know about it.
At a recent meeting which the NFSP had with the Lord Advocate in Scotland on 12 December, they raised the issue of whether any criminal offences may have been committed by Post Office personnel in enforcing the postmaster contract for shortfall recoveries based on Horizon, knowing that there were bugs, errors and defects in Horizon. It’s now understood that this is something which will be looked at as part of the overall UK-wide Metropolitan Police investigation.
In terms of knowledge, information and representation, the submissions for Phases 5 and 6 for the NFSP made extensive reference to the past, as set out in full in the written closing submissions, the NFSP in the current Chief Executive, Calum Greenhow, wish to take this further opportunity to recognise and apologise for the failings of the past. It is accepted that those failings meant there were members affected by Horizon and sought assistance who did not get the response or the support they ought to have done.
It also meant that when information that the Post Office line that Horizon was robust, as fed over many years by the Post Office to Government, courts, the media, the NFSP and many others, could not be true, was brought to the attention of the then General Secretary George Thompson. For instance, in the correspondence to the NFSP from Lee Castleton in 2009 and from Sir Alan Bates in 2012, which the Inquiry has seen, it was not acted on in the way it should have been.
Although this correspondence was not properly shared within the NFSP by Mr Thomson, he certainly should have given serious consideration to what was in that correspondence and, at the very least, started to question the Post Office narrative. It turned out Mr Thomson was not the person to fulfil that role. Instead of Mr Thomson forwarding the correspondence to the Post Office as rubbish, he should have strongly challenged the Post Office about the reliability of its claims that Horizon was robust but he did not. For that, the organisation of today is truly sorry.
Although only 54 per cent of those prosecuted were subpostmasters and not all of them were members of the NFSP, and although a challenge from the NFSP would not have stopped the Post Office – as we have found through this Inquiry, nothing and no one could stop the Post Office machine – it certainly would have offered some support to those affected. This is also so because the Inquiry has heard that the Post Office and Government were able to rely on Mr Thomson’s support for the “Horizon is robust” mantra.
Turning to the representative bodies, of which listed issues 49 to 60, as part of your Inquiry, sir, being the CWU and the NFSP, the one thing the NFSP wishes to be clear to the Inquiry and has included in its Phase 5/6 submissions: in terms of the start of Horizon’s rollout in 1999, right up until the removal of trade union status in 2014, there was no difference at all between the CWU and the NFSP and the methodology for the representation of their members.
Neither organisation did or does now provide legal funding or legal backing for criminal representation. Neither organisation at the time had any real method of local representation with issues being fed back up the line to HQ. Both organisations did not know about those members who resigned or left their post quietly without seeking help. Neither organisation had information coming through to it which showed a pattern of prosecutions. Both organisations described regularly feeding back to the Post Office, for instance Colin Baker of the NFSP and Tony Kearns of the CWU did this, describing in their evidence to this Inquiry about what they understood were teething problems and glitches.
As Tony Kearns said, it was not for them to look under the bonnet. The assurances given to them by the Post Office were taken at face value by both organisations.
It is submitted the Inquiry can find there were no real differences between the NFSP and the CWU in the way in which they were organised and undertook their representation of members on the ground.
The NFSP’s written closing submissions note the difficulty the Inquiry may have being able to scrutinise the CWU’s role in terms of question 49 or listed issue 49, due to the lack of available information from it as apparently it knew nothing, didn’t hear from its members about Horizon, despite thousands of them using it every day, anyone charged with a criminal offence would have been dismissed or resigned and would no longer be a member and so wouldn’t have contacted them, according to the witness statement of Andy Furey.
The Inquiry will also have seen the CWU’s brief written closing submissions, which says that failed representation of the past means there should be an independent trade union for postmasters and this should be recommended by the Inquiry.
The NFSP considers those submissions do not show insight into the failure of the model of representation which both organisations operated at the time. There appears to have been no look-back, no information about how it has changed its representative model. By contrast, it’s submitted through the evidence provided in the witness statement of Calum Greenhow the documents including the updated grant funding agreement with the much criticised clauses removed, the ongoing public criticism of the Post Office by the NFSP, demonstrates that the CWU’s submission on the NFSP is simply out of date, focused on the past, and not the present.
It is submitted that the evidence of Calum Greenhow in his witness statement and to this Inquiry demonstrates real learning and a very wide set of changes made since the Common Issues Judgment. The NFSP wishes to assure you, sir, that it is committed to representing its members’ views and is not afraid to challenge the Post Office when that is in the interests of its members. It is submitted the NFSP has demonstrated this initiative, such as the training of branches officials to the introduction of the advocacy system, information gathering monthly and reporting from branch officials for board meetings to identify patterns and issues, helping members with the Horizon Shortfall Scheme and identifying suitable legal support, meeting with and campaigning on diverse issues from Hard to Place, remuneration, failure of Network Transformation, the historic systems of capture and ECCO+ and much more, introduction of its own whistleblowing and complaints policies.
The campaigns with the other jurisdictions and the quashing of convictions. The NFSP is very pleased to report a very useful meeting with the Lord Advocate and Cabinet Secretary of Justice for the Scottish Government. As I mentioned, it took place last week, and a lot of work is clearly being done to identify past victims, and also with involvement with the Metropolitan Police into potential criminality.
As was said, the question is asked: if you can’t trust a senior in-house solicitor and a senior barrister when they tell you they have looked at all past prosecutions and it’s okay to continue with prosecutions, then who can you trust? It’s submitted it was reasonable for the Crown to believe what they were told, just as it was reasonable, subject to the caveats I’ve mentioned earlier about Mr Thomson, for the NFSP over many years to believe what it was told, certainly in the early years about Horizon.
The NFSP is an organisation today which has looked in an in-depth way to understand what went wrong and to change it, and marry that up with what works well. It is submitted that is a measure of an organisation which has insight. It has updated, reformed and adjusted where necessary, while continuing to campaign and noise up where necessary the Post Office.
It has admitted that nothing has been seen, heard, or done in the time of this Inquiry that could allow the Inquiry to find that the NFSP today is some sort of puppet or Patsy for the Post Office, it is not. It is submitted that it is vital that a large and strong organisation which the NFSP is remains very firmly on the map for postmaster representation. It is even more vital when it appears the Post Office seeks to divide the postmaster groups appearing to consult or take views into account but in a way that waters down actual campaigning and challenge.
The NFSP asks the Inquiry to take into account its submission on the relevant timelines as set out in its submissions on Phase 5 and 6. That was done in some detail in the submissions, sir, but we’d ask you to take that into account. There’s not enough time to go into all of that now.
Sir Wyn Williams: Sure.
Ms Watt: But it’s there.
In particular, where each event sits in the history between 2000 and 2016, the trade union status, Network Transformation, the coming into being of the GFA in July 2015, it is submitted that things have moved on so much and so much has been done and changed that much of what has been said about these matters is time limited and now in the past.
Right now, it’s submitted that the thousands of postmasters who are members of the NFSP need such a body bored with its structures, experience and knowledge to represent them. Informal groups of a few hundred here and there have no funding, no structure, and the danger is they could ultimately be used by or subsumed into the corporate structure via, for instance, the Postmaster NED role, the postmaster panel role, which ultimately weakens rather than strengthens the ability to challenge. It may be complementary but it weakens the ability to challenge. It is something of an irony that the organisation criticised by Lord Justice Fraser is today the organisation which actually can and does challenge the Post Office on so much and campaigns on so many issues affecting postmasters.
For the NFSP it is an organisation of the now and the future. It has looked, learned and adjusted, and it is the true voice for today’s postmasters.
In concluding remarks, sir, it is submitted that the postmasters in the Post Office Network deliver an essential service. This service should be valued and promoted. Although the Post Office has broken every element of trust that there ever was, there has to be the hope that it can be saved for the public who need it. The NFSP say the Post Office should not be closed down. Postmasters have invested in the network, it serves communities, vulnerable individuals and the public at large.
Those people have invested their funds their time, their families and their lives into this. It is submitted that it is time the Government DBT, UKGI and Post Office itself honours that investment and acts properly with proper oversight put in place, bringing back the trust the public and the postmasters so want to have in it.
In closing these oral submissions, sir, the NFSP turns back to the theme of hope. It hopes that the simple truth is that there is some good in this network, and that it is worth fighting for. It is a good that every postmaster upholds when they make the choice to invest in the Post Office Network and serve their communities every day. It is a good felt by the most vulnerable groups in our society, and it is a good that, if it is removed, will not be brought back.
The good that is brought into this society by the service of postmasters and others within Post Office branches must be valued and must be protected. Postmasters, including the NFSP’s members, feel real pride in serving their communities and they should be able to do so in a way that rewards their service. The NFSP has faith in the findings of this Inquiry that it will help to realise the vision and protect the service of so many hardworking public-minded individuals across the country, who have been let down and undervalued consistently for decades.
While the Inquiry has heard much of the “Can’t remember, can’t recall, I don’t remember seeing that, I don’t remember reading that, I don’t remember receiving that”, and so on, and so on, the documents interrogated by this Inquiry give the lie to that. As Robert Burns famously said in his poem, “A Dream”:
“… Facts are chiels that winna ding,
“And canna be disputed …”
Translated as:
“Facts, and therefore the truth, can never be denied.”
Sir, it is a big ask, a huge ask, but the hope of the postmasters of the past, the postmasters of today and the public, now resides with you. Thank you.
Sir Wyn Williams: Thank you, Ms Watt.
Right. So we will break now and have 15 minutes. I think if we start just after 3.40, Mr Sheldon, and then we’ll continue until you have used up your time.
(3.26 pm)
(A short break)
(3.39 pm)
Sir Wyn Williams: I think the door has been closed, so if we’d all now be quiet so that Mr Sheldon can make his submissions.
Closing submissions by Mr Sheldon
Mr Sheldon: Sir, thank you.
As you are aware, I act for UK Government Investments, UKGI in this Inquiry, which is grateful to you for giving us the opportunity to make these closing submissions at the end of your hearings.
I’m very conscious that I’m delivering them at the end of a long day and I would wish to reassure you and indeed everyone else that what I’m going to say I will say as concisely as possible.
I last addressed you, sir, in October 2022, by way of an opening statement which was accompanied, as you may recall, by a lengthy set of written submissions, which sought to set out in as much detail as possible the nature of the role played by UKGI and its predecessor organisation, ShEx, an analysis of the chronology by what we perceive to be the key milestones and UKGI’s reflection on its performance.
Sir, those opening submissions and the witness statements we have provided to the Inquiry for the purposes of Phases 5, 6 and 7, which we sought to make as detailed, precise as comprehensive as we could, set out our account of what we did, what we did not do and what we should have done better.
In both our written evidence and the oral evidence of those witnesses from whom you have heard, we have endeavoured to be frank and self-critical, and we hope you have found that evidence to be of assistance.
Sir, we have now provided you with an equally lengthy set of written closing submissions and, in those submissions and the brief observations I propose to make this afternoon, we have not sought to repeat or reanalyse the chronology of our involvement. You have our evidence as to what occurred, and you will, of course, reach your own conclusions on that.
We have instead sought to focus primarily on the present situation for the purposes of addressing head on some of the issues of concern we anticipate that the Inquiry may have, having listened to the evidence in Phases 5 to 7. We have sought to explain how we have addressed those issues and we have provided, we hope, some reassurance that the lessons of this scandal have been learned, at least from UKGI’s corporate governance perspective.
Before I turn briefly to look at some aspects of that analysis, which we would submit are of particular significance, it’s right that I deal with two matters of fundamental importance at the outset.
The first is to address directly the purpose of the task with which we are all engaged. Sir, you do not need me to tell you of the utter devastation that this scandal has caused to the lives of postmasters and their families. You have heard from them directly, and you had heard eloquently from their representatives today.
They also, I suspect, will have little time for yet further expressions of sympathy from yet another institution that had the capacity to do more to at least potentially prevent some of the harm that they have suffered.
But it is important that I provide you and everyone else with an interest in this Inquiry with the reassurance that, throughout this process, we have not lost sight for a moment of why we are here. UKGI’s Board, our Chief Executive, Charles Donald, who has spent many days in this room listening to the evidence, our witnesses, the team at UKGI, that have been supporting the work of the Inquiry, and its external Legal Team, all of us, have had at the forefronts of our minds throughout the responsibility we have to postmasters and their families, who have been affected by this scandal, and the overriding imperative to ensure, as far as humanly possible, that nothing like this ever happens again.
That obligation has informed every witness statement, every set of submissions and every decision that has been taken in determining our approach to this Inquiry.
As to how that obligation is to be discharged by a responsible public body, I can only repeat what I said to you in our opening statement. A responsible public body must give a full and frank account of itself at the earliest possible opportunity.
It must provide the investigation with complete and unequivocal cooperation. It must be objective and self-critical in its evidence and it must remain open-minded and willing to learn lessons throughout.
Sir, we stand by those obligations and we acknowledge that we should be and will be judged by them.
Secondly, whilst the rest of what I’m going to say is going to be directed primarily at the future and the present, I need to deal with what has happened in the past to at least this extent. As we anticipated in our opening statement, it seems to us that the evidence you have heard has borne out the conclusion that there were governance failures relating to Horizon in which UKGI, and its predecessor, ShEx, played a part and for which it must therefore bear its share of responsibility.
There were times when we were too accepting or trusting of assurances given by others as to the integrity of Horizon, and the baselessness of legitimate postmaster concerns.
There were times when there were opportunities to effectively challenge such assurances, which were not taken. There were times when investigations were started which might have led to the true position being identified much earlier, but they were not followed through. There were times when advice was given in relation to Horizon which lacked sufficient objectivity and failed to make clear that it merely reflected what we had been told by the Post Office.
We have read with care the closing submissions of the other Core Participants, including those of the Department. In some respects, the criticisms made of ShEx and UKGI reflect our own analysis, which I have just sought to summarise. In others respects, we would disagree for reasons that are addressed fully in the witness evidence of the individuals concerned, which we know you will consider with care. But we have sought, as an institution, and through our individual witnesses, to be as frank and objective as we can in identifying where we fell short, and we have no intention now to start engaging in an exercise of blaming others or avoiding responsibility.
Corporate governance may often be thought to be a dry and rather esoteric subject, of interest to company directors but perhaps not many others. However, corporate governance goes to the heart of what we do, and we have devoted a great deal of energy on assessing where corporate governance for the Post Office could and should have been delivered more effectively. I doubt there has ever been a clearer example, in the history of this country at least, of the real world impact on people’s lives if corporate governance is not delivered effectively and well.
Having reflected on our role very carefully, it seems to us to be clear on the totality of the evidence that you have heard that, at critical junctures, we should have provided more robust challenge and, had we shown more curiosity, the legitimate concerns raised by postmasters and their representatives may have been given more weight. For that, sir, we apologise unreservedly.
Nonetheless, it is also important that I make clear that there is no suggestion in the reams of evidence and millions of pages of documents that are before the Inquiry of any ShEx or UKGI employee ever having deliberately sought to victimise postmasters, hide the truth or engage in any form of cover-up.
The failings which we have acknowledged, and for which we apologise, significant though they were, result from a lack of curiosity and/or objectivity. There is no evidence whatsoever of any ShEx or UKGI employee being aware of defects with Horizon that they sought to conceal, deny or obfuscate.
There is no evidence whatsoever of any UKGI or ShEx employee being aware of a wrongful conviction that they sought to conceal, deny or obfuscate, and there is no evidence whatsoever of any UKGI or ShEx employee deliberately providing information they knew to be misleading or seeking to hide the truth. No such allegations have been put to any of the ShEx or UKGI witnesses from whom you have heard, and there is no support for them in any of the evidence before the Inquiry. UKGI itself has found no evidence for such suggestions. If we had, we would have told you.
The answer to the question of whether ShEx and UKGI should have reached a better understanding of the nature, scale and implications of the Horizon scandal sooner is undoubtedly yes. The answer to the question of whether UKGI and ShEx or any of its employees deliberately sought to suppress evidence of that scandal is unequivocally no.
Sir, having dealt with those two important preliminary matters, can I turn to the focus of my submissions this afternoon, which is on the way in which UKGI now seeks to deliver effective corporate governance oversight as a shareholder representative to the assets in its portfolio and the Post Office in particular, and the ways in which we have sought to address the historic shortcomings which the evidence given to this Inquiry has helped to identify.
Sir, the first submission I want to make in this regard is that the shareholder model or framework within which UKGI seeks to provide effective corporate governance oversight to complex arm’s-length bodies, such as the Post Office, which has evolved in a number of important respects since 2012, is fundamentally a sound one.
I won’t deal this afternoon with the rationale for the existence of arm’s-length bodies, which, as you know, there are over 300 across Government and which have been a feature of the Government landscape for over 50 years, nor am I going to set out the reasons why Government departments consider it appropriate to outsource the shareholder responsibility for the most complex of those arm’s-length bodies to a specialist organisation, such as UKGI. We have dealt with all of that in our written submissions and you have heard evidence from a number of very senior and experienced witnesses as to why individual departments require the specialist corporate governance and corporate finance expertise of a body such as UKGI for those complex assets.
I’m going to focus, if I may, on the more difficult and, we would submit, pertinent question of how effective corporate governance should be delivered within that model. Put simply: how should the system operate and who is responsible for doing what?
In seeking to express this as clearly as possible, and I accept that there have been times during the evidence where it has seemed perhaps unnecessarily complicated, we will gratefully take the lead from your corporate governance experts and describe the way the process is supposed to work by reference to the three levels of governance and how they are supposed to operate when a problem like Horizon comes along.
The first level of effective corporate governance is frank, accurate and honest reporting by the Executive to the Board. It is a fundamental requirement of responsible management that when you identify a problem, you provide an honest and accurate account of that problem to the Board, and the culture of the company must encourage that approach.
The second level of effective corporate governance is professional curiosity and challenge by an engaged, proactive and suitably skilled Board. The Board is obviously entitled to expect that it is receiving a frank and honest account from the Executive, but it still has the responsibility to question, challenge, and test what it is being told. Where necessary, it can call for further information. It can direct the Executive to do further work. It can commission investigations of its own.
There are a range of tools available to the Board to get to the truth of the matter and, if it has any concerns about the accuracy of the information with which it is being provided by the Executive Team, it must use them.
The Shareholder Non-Executive Director, as a member of the Board, must play his or her part in ensuring that that is done.
The third level to is that of the shareholder, in this case the Department for Business and Trade and its representatives, namely the shareholder team within ShEx or UKGI, with responsibility for the asset.
It is important to note that ShEx was a Directorate of the Department until UKGI was formed in 2016. When things are working as they should, both the Department and the UKGI Shareholder Team will have good visibility of the operation of the company, including how it is dealing with significant problems or difficult issues, through frequent interactions at a variety of levels, ranging from meetings between ministers and the Chief Executive or Chairman down to day-to-day contact between members of the shareholder team and their counterparts in the company on a whole range of issues.
It is through this interaction that the Department or the UKGI Shareholder Team deal with the way or become aware of the way in which issues are being dealt with by the company. If they are concerned about how that is being done, there are a number of things they can do about it.
They include, as you have heard, escalating the issue within UKGI up to the Chief Executive and, if necessary, the Board, and escalation with the potential for direct intervention by the Department, including by the Minister.
However, sir, it will be immediately obvious that the effectiveness of this level of governance also depends upon the reliability of the information that is being provided by the company as to the nature and extent of the issues, and the willingness of the Shareholder Team and the Department to challenge and interrogate what they are being told. It is also self-evident that, if a proper understanding of the problem is not grasped at levels 1 and 2, the Management and the Board, it is going to be very difficult to do so for the first time at the third level.
Now, that is not to say of course that the third level of governance is not important or that its effectiveness should not be optimised. Operated properly, it provides a vital opportunity to identify governance shortcomings at levels 1 and 2, and to take action to address them through the variety of means that we’ve described in our written submissions. In particular, sir, in this regard, we would respectfully disagree with the witnesses who have suggested that ministers lack the power to act in circumstances for the purposes of directing how the companies should approach an issue such as Horizon.
There are, and there were at the time, a suite of hard and soft powers available to ministers ranging from the power to dismiss the Chairman, contained in the Articles and exercised recently to remove the former Chair, to issuing of the annual Chair’s Letter, to the power to call in the Chair or the Chief Executive for a meeting to provide direction, as to was the case when Baroness Neville-Rolfe commissioned Mr Parker to undertake his review.
It may be that the full range of these powers was not clearly understood by all of those in office through the relevant period but there is no doubt that those powers existed and continue to exist and the chronology shows examples of them being used effectively.
In short, therefore, sir, we submit that there is nothing fundamentally wrong with the underlying governance model in place for complex government-owned assets such as the Post Office and we would agree with the submissions of DBT in this regard: it is a well developed model, it is applied to a large number of complex commercial assets across Government, and it has the potential to operate successfully, provided, of course, that those involved at each level effectively discharge their responsibilities.
That being so, the focus of UKGI’s reflections and the analysis of how we ensure that the failings evident in relation to Horizon are not repeated has been on how to promote good practice at each of those three levels of governance, so that, if issues of the type that arose in this case were to arise again, whether in the Post Office or in any of our other assets, they would be identified and properly dealt with before they can cause the type of damage we have seen here.
Sir, as you will have seen, the greater part of our written closing submissions is directed to that issue, and there is no value to be gained from me trying to summarise 90 pages of analysis in 30 minutes or so.
What I would like to do, however, is to provide a short overview of the work that has been done by UKGI over the last five years or so, some of which has been directly in response to the Horizon scandal, and how that is intended to fit together in a coherent and comprehensive way to ensure that the governance framework I’ve just described is operated effectively.
So before I deal with that, can I just pause to make these two important points, which set the context for what follows. First, it is not the role of a shareholder body such as UKGI, or indeed the shareholding department to run the company. That is the job of the company’s management, overseen by the company’s board and, as I’ve touched on, there are good and obvious reasons why that should be so.
Nor is it the role of the shareholder to act as a shadow board or a shadow executive. The measures that I’m just about to describe, the operating principles, training, guidance, evaluation, and so on, are not designed to equip UKGI’s Shareholder Non-Executive Director or the Shareholder Teams to run assets or second guess the Executive, but to put them in the best position possible to assess the performance and culture of the company, identify issues facing the company when they arise and support the company in dealing with those issues effectively and appropriately.
Secondly, sir, we would wish to emphasise that UKGI is committed to remaining a learning organisation which seeks consistently to evolve in order to incorporate developing corporate governance standards in its practice.
Whilst we seek to reflect current best practice in our operating principles and guidance, we recognise that delivering effective shareholder oversight of a complex company, which is not providing a full and accurate account of the difficult issues it is facing, is a very challenging task.
The history of corporate scandals is sadly littered with examples of high powered and experienced boards failing to detect or address what turned out to be a devastating problem. As you have heard, the Board of the Post Office included, over a period of many years, highly capable and experienced individuals who failed to understand fully the scale and impact of the Horizon problem, the same obviously applies to the ShEx and shareholder teams and the Department.
You’ve heard many of them say that they would have positively welcomed a clear answer to the question of the reliability of Horizon and the resolution of the dispute with postmasters, regardless of which way it went, and yet it look the litigation to uncover what on any view should have been revealed much sooner.
So in reflecting on this scandal, the one lesson that has been driven home to UKGI, above all others, perhaps, is that it has to continually reflect and enhance how it performs the shareholder role for organisations in its portfolio, and identify strategies to ensure that it can support those organisations in identifying issues early and take appropriate action in response.
What we have sought to provide you with, sir, and what I’m about to briefly describe is where we have got to thus far in that process. But we acknowledge that there will always be more to do and the findings of this Inquiry will inevitably play an important part in that work.
Turning then to the first level of corporate governance and the fundamental requirement of an open, no-surprises culture of frank reporting. The focus of UKGI’s attention has been on ensuring that we more rigorously and actively assess the culture of an organisation from a shareholder perspective. Horizon has brought home very clearly how vital this is. There should never be circumstances in which the Executive feels able to be less than frank and open with the Board, or to withhold important documents which illustrate the true position.
If they do, then the corporate governance framework will be very seriously undermined from the outset. We identified this issue as one of the five key reflections in our internal review, and we have reflected on it further over the course of this Inquiry to identify how best we can ensure that deficiencies in the culture of a portfolio asset can be quickly identified and addressed.
As we set out in our written submissions, there is now a clear emphasis on the importance of corporate culture that runs through UKGI’s training, our guidance, and our operational processes.
UKGI’s Shareholder Non-Executive Directors and Shareholder Teams understand that it is a central part of their role to monitor and report on the state of the culture within their assets and to take active steps to encourage and promote a healthy corporate culture. This is done at Board level by the Shareholder Non-Executive Director. It is done through the Shareholder Teams’ interactions with the chair and the senior executive, including at quarterly shareholder meetings, where the Post Office corporate culture is now a standard agenda item, and it is done through monthly ministerial meetings involving the Post Office, UKGI and the Department.
Activity 1 of our Portfolio Operating Principles, to which I will return in a moment directs that UKGI Shareholder Teams should seek to promote a healthy corporate culture within the asset and ensure that the asset develops appropriate metrics and reporting on cultural issues, and we have developed internal guidance and training to assist Shareholder Teams and Non-Executive Directors in effectively supporting and challenging our asset boards to address cultural challenges.
They set out the specific actions that the Non-Executive Director and the team should undertake in relation to culture, providing practical guidance as to positive and negative indicators the Board should be monitoring, and how the shareholder team should seek to encourage these activities.
We encourage the appointment of Postmaster Non-Executive Directors to the Board of the Post Office and we continue wholeheartedly to support that initiative.
The annual Chair’s Letter emphasises the importance of maintaining a healthy corporate culture and sets out clear expectations in this regard.
Sir, that’s a brief summary. It’s by no means a comprehensive one. The key point that we would wish to convey is that this lesson, the fundamental importance of carefully monitoring and assessing the corporate culture of a portfolio asset, and ensuring that that vital first level of corporate governance is effective, has been well learned, and a wide range of measures implemented to ensure that, if an unhealthy corporate culture starts to develop in an asset, it is quickly identified and robustly addressed.
As to the second level, sir, professional curiosity and effective challenge by the asset Board, we have developed a range of measures designed to support asset boards in being more robust and more effective in this respect.
This is an area in which we would respectfully suggest that the problem is quite easy to articulate but the solution is much more sophisticated and multi-layered. Sir, we don’t seek to pre-empt your conclusions in any way but it seems to us clear that there were points in the chronology where the Post Office Board did not display adequate curiosity or apply adequate challenge or, when it did, it failed to follow through with investigations it had set in train.
Now, a Board inevitably relies in the first instance on what it’s being told by the Executive and the material with which it is provided. It will justifiably place a degree of trust in that information. But it can ask questions. It can demand more information. It can direct the Executive to undertake further investigations. It can commission independent assurance exercises itself and the Horizon chronology contains periods in which that was done. Examples include the Board’s demand for a comprehensive programme of remedial action in response to the Second Sight Interim Report, once the initial concerns about the handling of the process had been addressed. That’s one example.
The commissioning of the independent assurance work by Linklaters and Deloitte is another but there are other examples of where the curiosity and interrogation was limited, including the Second Sight thematic report and the Panorama broadcast. Detailed refutations were prepared by the Executive and considered by the Board with little, if anything, in the way of challenge and, in the final analysis, there is simply no getting away from the fact that the Board never demanded or commissioned a full drains-up review of the Horizon system, of the type it ultimately took the litigation to deliver.
So how do you ensure that a Board, faced with an issue like this in the future, is more curious, more challenging and more ready to do whatever is necessary to get to the bottom of the matter? UKGI has reflected very carefully on that and, from our perspective, there are three central elements to the answer to that question. That is to say three key ways in which UKGI can seek to promote high standards of curiosity and challenge on the Boards of its assets.
The first is ensuring that the Board is subject to a regular and thorough process of evaluation. Our Portfolio Operating Principles now set a clear requirement for Board Effectiveness Reviews to be conducted every year with every third review undertaken by external reviewers.
That requirement is reinforced in the Chair’s Letter, along with the requirement to involve stakeholders, including the Government, in the process. The reviews must include Board composition, risk management, the overarching culture and tone of the Board, and the clarity of leadership it gives to the Company.
Our Portfolio Operating Principles also require a separate appraisal process for the Chair, in addition to the Board Effectiveness Review and for the evaluation of the performance of individual Non-Executive Directors.
The second, sir, is the establishment of a clear set of specific requirements concerning information flow into the Board and the circumstances in which the Board should seek its own independent assurance of what it’s being told. As to the former, sir, you will have heard number of times from number of different witnesses that legal professional privilege was used as a justification for failing to provide important information to the Board. It is now made crystal clear that LPP will not provide a proper reason for withholding any information from the Board, and this has been expressly written into the Framework Agreement that covers the relationship between the Post Office and the shareholder.
As to the latter, the Portfolio Operating Principles deal expressly with the importance of a board commissioning its own assurance work, and also make clear that this is a tool available to the shareholder as well, if it has concerns as to the accuracy of the information with which it is being provided.
Sir, you have seen some evidence of the operation of these principles in relation to the current project to replace Horizon, and the commissioning of external assurance work by the Board, including the recent instruction of Accenture, and by the Department as well, through the engagement of Public Digital and the Infrastructure Projects Authority.
So the third way in which we seek to achieve this objective now is the development of a suite of good practice guidance to help provide UKGI Shareholder Non-Executive Directors and their teams with a set of standards by which the quality of a Board’s processes and procedures can be assessed.
Sir, I don’t have time to deal, even in summary, with all the relevance of this guidance this afternoon and it’s all set out in our written closing submissions and the documents we have referred to, but I would just take a moment to deal with one issue of particular relevance and importance, which is whistleblowing.
Sir, as you may recall, this was an issue that was identified as requiring careful attention in our internal review, and we dealt with it at some length in our opening statement. The position now is that our Portfolio Operating Principles expressly require Shareholder Teams and Shareholder Non-Executive Directors to ensure that the assets’ whistleblowing policies and procedures are adequate and effective, and there is a detailed set of guidance which identifies precisely what good practice looks like in this area, including regular reporting, analysis of how complaints are being handled, the role of the Board Whistleblowing Champion, and so on.
Both Tom Cooper and Lorna Gratton in their Phase 7 witness statements have described how the shareholder team has assessed the Post Office’s procedures against those standards.
So, in short, that model of identifying an express requirement on the part of the Shareholder Team in the Portfolio Operating Principles, to monitor and assess the information flowing into the Board, backed up by a suite of guidance that makes clear what good practice should look like, provides a benchmark for the assurance process. That model is one that has been applied in the same way across number of relevant areas, and I refer to whistleblowing simply as a representative example in that regard.
Sir, I turn then, finally, to the third level of governance, which is the level provided through the oversight of the asset by UKGI, in conjunction with the relevant department and the ways in which we’ve sought to improve our effectiveness at this level, with particular regard to the issues which we anticipate are likely to be of concern to you.
Sir, as you will have seen from the written submissions, there is again a lot of detail here, and I won’t length then these submissions by attempting even a summary of all of it, but there are just four short areas I would wish to highlight as being of particular significance in the light of the evidence you have heard.
The first is the development of our Portfolio Operating Principles, which you will have seen were introduced in 2020 and have been updated on a regular basis to take into account evolving developments in corporate governance standards. In keeping with UKGI’s reflective approach and desire to avoid recurrence of a significant failing such as Horizon occurring in its portfolio, the Portfolio Operating Principles have also been significantly amended to incorporate further lessons and insights derived from our reflections on Horizon and our engagement with your Inquiry. I’m very conscious that this may not be the most exhilarating topic to introduce at this stage in the afternoon but its importance really cannot be overstated. The Portfolio Operating Principles and the guidance that they incorporate amounts to nothing less than a clear, comprehensive and accessible codification of how UKGI should go about discharging its shareholder governance functions, which any member of any shareholder team can refer to whenever they are considering how best to deal with an issue.
Everyone is trained against using them, and performance is regularly assessed against them.
Sir, you will have heard evidence from a number of witnesses at a variety of levels who have described having to navigate novel situations or deal with difficult issues at times without the necessary guidance to do so. UKGI has sought to address the thematic governance issues it has identified from Horizon to date, and to evolve its processes accordingly.
Whether the issue is whistleblowing, the commissioning of independent assurance of management information, the performance of the Board, the performance of the Executive, or effective engagement with the Department, the correct approach will be found in the Portfolio Operating Principles and the guidance embedded within them.
So the second key element of this is an overhaul of the recruitment and training of Shareholder Non-Executive Directors and Shareholder Teams. In relation to recruitment, there is a clear emphasis on identifying and developing Shareholder Non-Executive Directors with the right balance of skills and backgrounds, including Board experience and very often Civil Service experience as well. Lorna Gratton, the current Shareholder Non-Executive Director on the Post Office Board, stands as a representative example of this approach.
To the extent that there may have been an impression in the past, fair or otherwise, of UKGI being solely staffed by investment banking deal makers, with limited interest in corporate governance, that is emphatically not the case now.
The organisation today is a broad church with civil servants, corporate restructuring experts, accountants, lawyers, consultants, all well represented, alongside those with banking and corporate finance experience.
It’s precisely this mix of skillsets, we would respectfully suggest, that enables UKGI to deal effectively with a very wide range of different assets, from the Nuclear Decommissioning Authority, to the Ordinance Survey, to the British Business Bank, as well as the wide range of Government departments with responsibility for those assets.
As for training, about which all our Shareholder Non-Executive Directors were quite understandably asked by your counsel, UKGI frankly acknowledges that there was plenty of room for improvement in this area and, as you’ve heard, this has been a particular focus for our Chief Executive since taking up post in March 2020.
UKGI now has a Learning and Development Leader who oversees an extensive programme of formal training for our Shareholder Non-Executive Directors, and Shareholder Teams, supported by a variety of initiatives including seminars run by experienced external chairs and a number of internal forums, in which Shareholder Non-Executive Directors can discuss difficult issues in their assets and shared experience. Understanding of and compliance with the Civil Service Code is treated importantly, forming part of the induction training for all our new joiners. Its significance for UKGI staff in the discharge of their duties is also emphasised in UKGI’s internal code of conduct.
Sir, you will recall the evidence of those dealing with Horizon issues at particularly challenging points in the chronology, including 2015, to the effect that it was very difficult to see a solution or an effective way forward other than litigation. That generated a degree of frustration which had the potential to bleed into correspondence, submissions and the approach to issues more generally. That is not an excuse but it is at least a partial explanation.
In light of that evidence, the benefits of the suite of resources now available to a Shareholder Non-Executive Director and a shareholder team, in terms of training, guidance and encouragement to test their understanding of how best practice might be applied to the issue in question, when to escalate their concerns, are obvious.
Sir, the third area I wanted to highlight briefly concerns the separation of the shareholding and policy roles, which occurred in 2018 in the case of the Post Office and is now the established model across UKGI’s portfolio of assets. Sir, as you’ve seen, one of the complexities in assessing the performance of ShEx and/or UKGI over the lengthy period with which you are concerned, is that the model was different at different times. The first Shareholder Non-Executive who was in post from 2012 to 2014 was not part of the Shareholder Team, was not involved at all in briefing ministers regarding the Post Office.
Between 2014 and 2018, when the second Shareholder Non-Executive Director was in post, that Director was also the head of the Shareholder Team and was responsible for briefing ministers, interacting with the Department on both policy and shareholder issues. From 2018, roughly coinciding with the appointment of the third Shareholder NED, the Department set up its own Policy Team, leaving the Shareholder Team and the Shareholder Non-Executive Director to focus on shareholder governance issues alone.
Now, it’s that final model that UKGI has identified as the correct one. As to why this should be of any interest to you, we have attempted to articulate that as clearly as we can in our written submissions but there are just two essential points. The first relates to the provision of advice to ministers. There were points in the chronology, particularly around 2015, when the issue arose of how directly the Department should seek to involve itself in the Horizon issue, and whether it should establish some form of further investigation. You will recall that some concern was expressed as to the nature of the advice that was given on that issue.
It’s fair to say that those concerns do not appear to have been expressed at the time, and that ultimately the minister did commission a further investigation in the form of Tim Parker’s review, but it is also fair to say that, with the benefit of hindsight, those concerns are understandable.
The problem in this context, which, with respect, sir, we submit you correctly identified in some of your questions to the relevant witnesses, is that there is the potential for conflict between the policy and the shareholder roles when it comes to a difficult issue receiving public attention.
Again, at the risk of oversimplification, the answer to the question of how best a minister should approach a difficult and controversial issue, receiving critical public attention, may well be different, depending on whether you’re approaching that question from a policy perspective or a corporate governance perspective.
In relation to the former, it’s understandable how advice relating to the operation of a company’s IT system could be characterised as an operational matter for the company – leave it there; in relation to the latter, corporate governance, the correct approach may well be to shorten the arm in relation to the arm’s-length body and get directly involved in seeking a solution.
So the final area I wanted to highlight is how UKGI and its Shareholder Non-Executives manage conflicts of interest when they arise.
UKGI recognises that there will be times when specific issues will arise in which the interests of the company and the priorities of the shareholder may pull in different directions. As you’ve heard, funding is one example, and others may arise from time to time.
That said, it is important, we would respectfully submit, not to overstate the issue. Where a company is owned by a sole shareholder, substantive conflicts are likely to be rare, as the views of the company and the shareholder are, more often than not, going to be aligned. Nor is this a situation that is unique to the Post Office or Government-owned companies generally. Indeed, this is a challenge which is regularly grappled with by private sector companies and frequently within the public equity model, where it is customary to place a shareholder representative on a board.
Where conflicts of interest do arise for Shareholder Non-Executive Directors at the Board, however infrequently that may be, UKGI’s view is that these are very manageable. For the most part, constructive dialogue will provide mutually acceptable ways forward. In some cases, formal recusal may be necessary, but even in that situation, the Shareholder Non-Executive Director will still typically be able to convey the views of the Department to the asset board so that the shareholder’s perspective can be provided to the board in their decision making.
The issues that arose in the very particular context of the recusal application concerning Lord Justice Fraser were unique and do not, we would submit, reveal any inherent deficiency in the model.
The Inquiry will recall that, at the time, given the uniqueness of the situation, the Shareholder Non-Executive Director sought and followed legal advice from the Department’s lawyers and acted in a manner which was consistent with the messaging received from the Department.
As with private equity funds companies, it is UKGI’s view that the advantages of having shareholder representation on boards in terms of information flows and helping boards understand the priorities of shareholders generally significantly outweigh any potential disadvantages.
So, sir, in addition to the guidance and training to which I have already referred, UKGI has given careful thought to how the structural issues that have been exposed by the evidence relating to at least some of the parts of the chronology should be addressed. The role of the Shareholder Non-Executive Director and the Shareholder Team, when dealing with a difficult and intractable issue within an asset, are now very clear.
Sir, that’s all I intend to say for the purposes of highlighting what we consider to be some of the most relevant aspects of the work that has been done since the events that you have been examining in Phases 5 and 6.
There is much more in our written closing submissions which we know you will consider in full, but we hope that we have provided you, and all those concerned, with summary assurance as to the nature and extent of the progress that has been made.
As for Phase 7 and the Post Office today, UKGI has an important role to play in the future of the company. We need to support it, provide a critical shareholder oversight role, and act as an interlocutor between the company and the shareholder. The structures that are now in place in UKGI for delivering on those objectives are essentially sound, and you have heard from our current Shareholder Non-Executive Director and Chief Executive how they’re being operated.
The effectiveness of the Post Office Board is being regularly assessed, and now seems to be heading broadly in the right direction. There is good visibility of the company’s operations on the part of the Department and the Shareholder, the lines of communication are effective, there is frequently challenge and interrogation of information.
However, whilst that may be the state of play from a corporate governance perspective, there is no avoiding the fact that the Post Office continues to face significant challenges in delivering substantial and tangible improvement in its relationship with postmasters, and embedding a corporate culture that treats them as valued partners working towards a common set of objectives.
UKGI is committed to doing all it can in supporting the company to overcome those challenges, and if the Inquiry identifies ways in which it considers that that can more effectively be done, we will, of course, be very receptive to any such guidance and direction.
Sir, just finally this: I am conscious, acutely conscious, that it is not uncommon for institutional Core Participants to stand up at the conclusion of an Inquiry of this nature and assert their unwavering commitment to the learning of lessons, and how much they are looking forward to receiving the Inquiry’s recommendations. The understandable reaction to any assertions of that sort will obviously be “They would say that, wouldn’t they?”
In my submission, what an Inquiry will expect to see from an institutional Core Participant at this point in the process and what the public, and most importantly those directly affected, are entitled to see, is that the institution has not sat around waiting for the Inquiry to tell it what to do, but has got on with the task of working out what went wrong, identifying the changes and improvements that need to be made to ensure that it doesn’t happen again, and implementing those changes.
Sir, as you’ve heard, UKGI started a formal process of reflection and learning lessons in 2020. In our opening statement in 2022, we sought to provide you with a progress report on the work done at that point. We have sought, in our closing submissions and in the brief summary I’ve sought to give you this afternoon, to provide you with a further update. We are acutely conscious that we cannot undo the mistakes that have been made in the past or the damage that has been suffered. We can only apologise for what we got wrong, and I repeat that apology, and do our utmost to ensure that it doesn’t happen again.
I hope that our closing submissions have gone some way to demonstrating our continuing determination in that regard.
Can I make these two very short observations in conclusion: the first concerns the Inquiry Team, including, but by no means limited to, your Legal Team. Sir, you will know better than anyone that the last few phases of this Inquiry have been run to a demanding timetable, which has led to everyone concerned working under considerable pressure. Notwithstanding those pressures, UKGI has been treated throughout this investigation with the highest standards of professionalism and courtesy by the entire Inquiry Team, and we would wish to record our thanks and appreciation for that.
Finally, UKGI would wish to conclude these closing submissions by addressing the postmasters and their families whose lives have been irreparably damaged by the tragic and unjustifiable events with which this Inquiry is concerned.
UKGI has paid close attention to the evidence given in this Inquiry from the outset, including the Human Impact Hearings and focus groups. Representatives from UKGI, including our Chief Executive, General Counsel, members of our Board, have spent many days in this room listening to evidence, much of which must have been incredibly difficult for postmasters and their families to hear. The dignity and resilience that they have shown during the Inquiry, as indeed with the fight for justice which preceded it and which still continues, has been remarkable, and all of those involved in this Inquiry, both within and on behalf of UKGI, would wish to pay tribute to them.
Sir, thank you very much. Pause.
Sir Wyn Williams: Thank you, Mr Sheldon.
Well, I think we are on schedule, and we will resume again at 9.30 tomorrow morning.
Yes, Mr Beer?
Mr Beer: That’s correct, sir. Thank you very much.
Sir Wyn Williams: All right. See you all in the morning.
(4.35 pm)
(The hearing adjourned until 9.30 am the following day)