13 October 2022
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(10.00 am)
Mr Stein: Sir, good morning. We are about to start the day’s proceedings, are you receiving us loud and clear?
Sir Wyn Williams: I am receiving you but not exactly loud and clear, Mr Stein. Could you go a little near your microphone?
Mr Stein: I can. Sir, if I may begin.
Sir Wyn Williams: Of course. Can I say that if at any appropriate moment during your submissions you wish to take a break, please do so.
Opening statement by Mr Stein
Mr Stein: Thank you, sir.
Sir, as we know, the actions of the Post Office, Fujitsu, and the Department of Business, has brought shame and disgrace into the long and previously respectable history of the Post Office. It seems that people within the Post Office did everything possible to protect the reputation of the Post Office and, whilst doing so, did everything possible to destroy the reputation of their own staff.
The Post Office broke people. They broke good, honest, people. Some did not survive.
It’s almost impossible to believe that here we are, in a public inquiry, speaking about the Post Office, the staple of the community, the focus of where people live near their homes. It’s like finding out your grandmother’s a criminal.
Now whilst, of course, this Inquiry will be looking at the Horizon computer system, it’s procurement, it’s failures and faults, in truth, this Inquiry is about human decisions, human fault and human culpability.
Chair, last week we sent our written opening submissions to the Inquiry.
I don’t propose to repeat the detail which we already set out before you in some 65 pages.
Our clients gave evidence before you in the human impact hearings earlier this year. Those who felt unable to relive their traumatic experiences through giving live evidence had key passages read from their statement read into the record by Mr Enright and myself.
The human impact evidence which the Inquiry has received has been powerful and moving and we wish to acknowledge the bravery of those who have relived their experiences through the preparation of witness statements and, in many cases, telling you in person about what has happened to them and their families.
It is clear from the Phase 1 evidence that this was a scandal which went on for 20 years. It started with the rollout of Horizon in 1999 and continued until it was finally exposed in 2019 in the High Court litigation. That was only as a result of our clients taking a stand against what was then described as the nation’s most trusted brand.
Not only did this scandal last for a generation it touched all four corners of the United Kingdom. In Northern Ireland, Deirdre Connolly was a subpostmistress from the town of Strabane in that part of Ireland just south of Londonderry, on the banks of the River Foyle. She said it was her “forever job”.
In 2009, the Post Office area manager asked her if she would take on two outreach offices in rural communities. The people who had been running these outreach post offices were too afraid to continue due to the threat of so-called “tiger” kidnappings, and that’s where paramilitaries kidnap the family member of a subpostmaster to compel them to hand over Post Office money.
Despite that risk, Deirdre agreed to take on these rural post offices. She experienced shortfalls in the Horizon system. She was interviewed under caution by the Post Office and, during that interview, she was accused by the Post Office interrogators of giving money to paramilitaries.
Deirdre says that “The allegation about giving money to paramilitaries terrified us. We felt like we had to pay the Post Office or risk death”.
In Scotland, Chris Dawson was a subpostmaster of Pitlochry sub post office, that’s just south of the Cairngorms National Park. Post Office auditors accused him of a shortfall of £17,500. Post Office bully boys interviewed him under caution in his own living room whilst his wife and child were cowering upstairs.
He was suspended without pay for six months before being forced to resign. Chris says:
“I lost my livelihood, my business, my marriage, my home and my reputation. I was a young man of 36 when this happened, I had my whole life ahead of me. I was ambitious, I was driven, and all this was taken from me through no fault of my own.”
Mr Dawson’s mother went into hospital on the day he gave his human impact statement but passed away before she could see his evidence before you and this Inquiry.
In England, Sue Palmer was the post mistress of the Grange Post Office in Rayleigh, Essex. She was prosecuted by the Post Office for theft and fraud. She fought the charges and, after a three-day trial, she was acquitted. Despite this, she lost her position, her business and her home and her plight continues.
Sir, in your update report of 15 August, you recommended that subpostmasters, mistresses and managers – and I will use the same term my learned friend, Mr Beer, did to describe everybody, whether they’re a postmaster or mistress or manager, as a “subpostmaster”. On 15 August, you recommended that subpostmasters, such as Ms Palmer, who were prosecuted and acquitted, be provided with an enhanced interim compensation payment.
Sir, as you will know from our correspondence, thus far, Ms Palmer has received nothing and, thus far, the Department of Business has refused to confirm it will give effect to your recommendation.
In Wales, Pamela Lock operated a post office in Swansea for 26 years without incident, before the introduction of the Horizon IT System. Within six months of the introduction of Horizon, she was accused of theft and fraud of £31,000. She was convicted within a year. Her face and name were plastered across the front page of the South Wales Evening News. She waited 20 years to have her good name vindicated finally in the Court of Appeal.
These are not historic cases. The mental health impacts on the victims of this scandal are ongoing.
Sir, as you’re aware, last week my instructing solicitors, Howe+Co, received a study which has been sent to this Inquiry, undertaken by Professor Richard Moorhead and his team at Exeter University and you will recall the submissions that Professor Moorhead made before the Inquiry at the first hearing in November last year.
The Exeter University team surveyed 101 subpostmasters and subpostmistresses and concluded that victims of the Post Office scandal experienced mental health illness symptoms at worryingly high levels. That’s against the general population. They found that the majority of respondents, that’s 67.3, met the clinical cut-off for post-traumatic stress symptoms and depressive symptoms, and also reported high levels of post-traumatic negative cognitions. For example, views such as “People can’t be trusted” or “I have no future”.
What is particularly relevant is that the levels of post-traumatic stress and depressive symptoms found in subpostmasters are significantly higher than members of the UK forces personnel, at 4.8 per cent and 3.7 per cent for PTSD and major depressive order respectively.
The corresponding figures for frontline workers in the UK during the Covid pandemic are 2 per cent and 27 per cent. This shows that the damage that Post Office has inflicted on our clients is very substantial.
The Post Office, we suggest, must bear this in mind when apologising personally and locally to each and every one of their victims, which is something we say they must do.
Let me turn briefly to the issue of compensation.
The issue of the severity of damage inflicted feeds into the important issue of compensation for subpostmasters. Perhaps, with this knowledge of heightened mental health impacts on our clients, BEIS and the Post Office will start to treat the implementation of the GLO – that’s the High Court compensation scheme – with the urgency that the matter clearly deserves.
Our clients, sir, firmly believe that it was through the intervention of the Inquiry and pressure brought to bear, that BEIS and the Post Office have finally conceded that the litigants at the High Court were sold short in a settlement process and should be properly and fairly compensated.
We wish to place on record the gratitude of my clients to the Inquiry for bringing this issue forward and holding the hearings in July of this year. They are also grateful to you, sir, for the announcement that the Inquiry will sit again on 8 December this year to resolve some of the problems that BEIS appears to be having in giving effect to the recommendations that you made in August of this year in your update report on compensation.
Keeping pressure on BEIS and the Post Office must be done. I read from an email from Deirdre Connolly, dated only a couple of days ago on 11 October, sent to Mr Enright, my instructing solicitor at Howe+Co:
“Hi David. The last three weeks have been truly heartbreaking and frustrating for myself and my family. After finally hearing the Government telling us we’re getting a payment, albeit only an interim payment, we saw a light at the end of the tunnel, a tunnel I’ve been in for 12 years now. We had, as is natural, thought of the difference this could make to our lives, especially now when the cost of living is going through the roof. To then be told completely out of the blue, not by the Government but through the JFSA [that’s Justice for Subpostmasters Alliance] that because someone has now 12 years later deemed my case complex, I am now not getting any interim payment.
“Then the Government told me that BEIS is in talks with the Insolvency Department [the same thing, she thinks] about getting my bankruptcy annulled. Having been given a date of last Friday, 7 October, that I’d get an answer for my bankruptcy to be sorted, then getting zero correspondence and another weekend of pure anguish, to finally then be let down once more.
“This is just sapping my mental health. Again and again, just when I think I’m getting out of this nightmare it just draws me in deeper. I’m really at my wits’ end. I can’t begin to tell you how much I need this to be over.”
We know, sir, that the issue of compensation is going to be monitored carefully by the Inquiry, by you, sir, and scrutinised as this Inquiry progresses and we will endeavour to keep the Inquiry updated on the further obstacles, unreasonable delays or obfuscation by BEIS.
Nobody, as yet, has been held accountable. Aside from the issue of compensation, our clients’ greatest wish is for the Inquiry to uncover who was responsible for the abuse and suffering that was inflicted on them, and to have them exposed and brought before the criminal courts, where, with true irony, they will receive better treatment than our clients ever did when they were unfairly prosecuted.
It remains the case that, notwithstanding the enormity of the scandal, not one individual within the Post Office has been held accountable, responsible or otherwise censured. Our clients’ lives and reputations have been ruined by this scandal. They need to know that those who are responsible for these tragedies will be held to account for their actions. That is one of the ways that this Public Inquiry will be able to afford a degree of closure to them.
Let me turn to the High Court findings by Mr Justice Fraser.
They are the starting point. The terms of reference of this Inquiry state that the Inquiry will draw on the findings made by Mr Justice Fraser from the Bates and Others v Post Office Limited Group Litigation and, in particular, no doubt we pay particular care and attention to the judgment number 3, Common Issues and judgment number 6, Horizon Issues. You will also be considering, as we all will, the judgment of the Court of Appeal Criminal Division in Hamilton and Others.
For example, the judgments of Mr Justice Fraser refer to the Post Office and its continual efforts over time to bury or avoid the truth. Briefly, I’ll read from judgment number 6, on 16 December 2019, paragraphs 217, 218, 219.
These paragraphs relate to a subpostmaster who asked for an issue, in fact not causing a loss, to be looked at, believing it to be a Horizon flaw in July 2013:
“The question was posed internally at the Post Office. Given the current media and in particular the BBC’s attention on Horizon, do you think it’s worthwhile looking into this alleged flaw with Horizon that this subpostmaster has highlighted to pre-empt any enquiries from his MP?”
Paragraph 218, Mr Justice Fraser went on to say:
“The ultimate response from Andrew Winn of the Post Office was that the claim could not be investigated without further details and Fujitsu involvement, that Mr Winn did not understand the purpose of the call by the subpostmaster and also stated: ‘My instinct is that we have enough on without people asking us to look at things’.”
Paragraph 219, Mr Justice Fraser continued:
“Mrs van den Bogerd agreed in her evidence before the High Court that this was an inadequate response. She said it would have been very easy for Mr Winn to have contacted the branch and obtain further details and he should have done so.”
Mr Justice Fraser commented as follows:
“In my judgment, the stance taken by the Post Office at the time in 2013 demonstrates the most dreadful complacency and total lack of interest in investigating these serious issues, bordering on fearfulness of what might be found if they were properly investigated.”
Mr Justice Fraser was there talking about events that relate to the evidence of, and concerning matters that touched, the Post Office and a subpostmaster in 2013. But that is not all.
In judgment number 3 on 15 March 2019, Mr Justice Fraser confirmed the attitude of the Post Office even at that time in 2019: paragraph 8. The different claimants all had different experiences with Horizon over different periods of time, however there is at least one common theme: at the time, these accounting shortfalls that came to the notice of the Post Office were pursued, yes, as exactly that: shortfalls, with the relevant claimants.
The Post Office’s stance, both then and now, was and is that the claimants were responsible for these shortfalls and that the shortfalls represented actual amounts of money missing from the claimants’ accounting.
Mr Justice Fraser continued and said:
“An alternative way of putting what may amount to the same point but using the approach of the pleadings, is that the Post Office maintains it is for individual subpostmasters to prove that the shortfalls were not their individual responsibility and, failing proof of that by an individual subpostmaster, then the shortfalls were their individual responsibility and the subpostmaster in question would have to pay the relevant sum to the Post Office and face the consequences.”
We are not talking about historical examination of evidence. As the litigation in the High Court only couple of years ago tells us, the attitude of the Post Office continued right the way through.
Now, the settlement in the Group Litigation prevented Mr Justice Fraser from ultimately resolving the degree to which either or both Fujitsu and the Post Office expressly or constructively knew exactly where and when. This Inquiry will be considering the settlement in the later stages of its investigations and looking at whether the Post Office and BEIS deliberately and cynically used the prolonged litigation to break the will of the 555 litigants and therefore empty the pockets of their investigation funders in an effort to limit the damage to the Post Office.
The findings of Mr Justice Fraser are vital to this Inquiry.
It is important that the institutional Core Participants understand that a line has been drawn. The findings made by Mr Justice Fraser are detailed and comprehensive. They have not been appealed and they stand as a basis upon which this Inquiry was set up and on which it proceeds. Fujitsu and the Post Office must understand that any attempt to seek to go behind the judgments cannot be permitted.
Let me deal with some matters that relate to witnesses to be called before this Inquiry.
We ask that the Inquiry calls evidence from those who appeared before Mr Justice Fraser, including Mr Godeseth of Fujitsu, Mr Henderson of Second Sight, and Ms Angela van den Bogerd, who was the subject of much criticism at the High Court.
There are a number of other potential witnesses for this Inquiry who did not give evidence in the High Court but who played a significant role in the scandal. Our clients would wish to have questions put to Ms Vennells, who must bear significant responsibility, we say, for allowing the scandal to continue and for engaging in what can only be described as a cover-up.
Our clients wish to hear evidence, oral evidence, from Dr Gareth Jenkins, whose evidence played a significant role in the prosecution of subpostmasters, and whose absence from the list of witnesses called by the Post Office was commented upon by the High Court judge in the Horizon Issues judgment.
Sir, as you’re aware, we have also asked that the Inquiry hears evidence from Susan Crichton, Chris Aujard, in relation to the Mediation Scheme and, when considering the issues in Phase 5 we consider that Lord Arbuthnot will be well placed as a witness to communicate the views of MPs at the time of that scheme, as well as what they were being told. Sir Anthony Hooper would also provide helpful evidence to the Inquiry on such issues.
We also respectfully invite the Inquiry to consider calling Ms Kay Linnell, the mainstay of the JFSA and who has worked tirelessly behind the scenes on behalf of subpostmasters, and we suggest that she would provide useful evidence in regard to Phase 5.
From the point of view of the litigants we suggest the Inquiry considers calling our clients Pamela Stubbs, Elizabeth Stockdale and Louise Dar, all of whom gave evidence as lead claimants in the Common Issues trial. Their accounts and the evidence adduced in support of those accounts were considered in much detail by Mr Justice Fraser. We suggest that, in calling them, the Inquiry will be able to build on the findings made in that evidence with respect to the issues which the Inquiry must deal with and address but which were outside the remit of the matters considered by Mr Justice Fraser.
Let me turn now to deal with three aspects of this scandal which are truly remarkable: the abuse of power; criminalisation of subpostmasters; and the position taken in the litigation.
Firstly, abuse of power: the abuse of power and bullying behaviour employed by the Post Office with the support of BEIS towards subpostmasters and many like them. The Inquiry has heard in the Phase 1 hearings that the Post Office deliberately set out to destroy good reputations, I remind you of Peter Holmes, a hard working and honest former policeman. They told – given by his wife, Marion Holmes; of course he died.
They told subpostmasters who had been selected by the Post Office as people of good character that unless they paid monies which the Post Office knew they were not owed, they would be prosecuted and imprisoned.
You’ve also heard evidence in the human impact hearings that Post Office auditors conducted raids of branches in full view of customers and how the Post Office spread rumours in the local press. There was the divide and conquer strategy, this appears as an overriding theme in the evidence from the human impact hearings. This is where subpostmasters were deliberately lied to and told that they were the only ones experiencing problems with the Horizon System. We say the divide and conquer strategy was key to the Post Office’s campaign against subpostmasters, otherwise it would have been necessary for the Post Office to justify its actions on the outrageous basis that hundreds of subpostmasters who were all persons of good character, and had been selected by the Post Office on that basis, had suddenly decided to turn to crime.
The criminalisation of subpostmasters. The second remarkable aspect of this scandal is the use of the criminal justice system by the Post Office to criminalise hardworking people dedicated to serving their local communities. I represented some of the many appellants in the Court of Appeal whose convictions were overturned. Those appeals arose, as you well know, sir, as a result of a CCRC referral, following the findings made by Mr Justice Fraser in the Group Litigation.
The judgment of the Court of Appeal is dated 23 April 2021, three of the appellants, including Mr Holmes who I’ve just mentioned, did not live to see the outcome of his appeal and died before their names and reputations were cleared.
Chair, we know that you followed and indeed attended that appeal. You will recall that the Post Office conceded that it had failed to disclose to subpostmasters the existence of 30 bugs, errors and defects on the Horizon System and had inadequately investigated its own data.
Post Office conceded that convictions were unsafe because the trial process had been unfair. Significantly, the matter did not end there. The Court of Appeal also found that the evidence, together with Mr Justice Fraser’s findings, showed that it was an affront to the public conscience for the appellants to face prosecution. This category of abuse of process forms an exceptional class of case and findings of this highly serious type of abuse are so rare as to make hens’ teeth near commonplace in comparison.
So it is absolutely right to say that the convictions of subpostmasters and many others, such as Mr Holmes, Mr Darlington, Ms Lock, Ms White, so many others, are part of the worst miscarriage of justice in British legal history.
Sir, as you know, I have some experience working in public inquiries. There’s a tendency, I suggest, with public inquiries, to sympathise with accounts given by victims, to feel very sorry for what has happened to them and what has been brought to their door. That sympathy, on occasions, can sometimes cloud the consideration of their evidence. We need to remember the evidence from our clients tells us collectively and over the time of the Horizon System’s operation that bugs and errors encountered in the system were common. Their evidence tells us that because those bugs and errors were so prevalent, the subpostmasters had to routinely cope with them by adding their own money to make the system balance. You will recall the evidence that this meant that many had to borrow money from friends, family or loan sharks.
The evidence from our clients also tells us that the helpline was useless, often knowing less than the subpostmasters. Our clients were told that the Horizon System was fine and, if there was missing money, it was their fault and their responsibility to make up for the loss and make it balance.
Subpostmasters, who had worked at their branches before the installation of the Horizon System, said that these errors and balancing issues did not happen before Horizon.
So where were all these errors and bugs coming from? What within the Horizon System was going wrong? The High Court never had the chance to establish all of the bugs and didn’t hear from all of the witnesses as the matter never went to a final resolution. But our clients have given evidence before you and they provided solid evidence of multiple bugs and errors. Is it really the case that Fujitsu are saying they weren’t aware of it and that they truly did not know about them? Did they get worse after the Horizon System was in operation for some time?
It seems possible that part of the answer to these questions might be that the postmasters did report them but not all of them because the helpdesk was designed to put them off and told them it was their fault and they must pay up. Once you’re told that repeatedly, imagine the effect.
Other questions arise from our clients’ evidence in the earlier phase’s hearings. Why would some subpostmasters have big errors and some have small errors? Well, the Horizon System doesn’t make decisions. It doesn’t decide to make the error high for one person and not another. It’s a machine. For some, sometimes the error will be small enough but would mount up into thousands and, for other subpostmasters, the error would be thousands in one time.
Let me now turn to the Simon Clarke Advices and I’ll also be mentioning the advices and reviews conducted by Mr Altman, King’s Counsel.
As a result of the Simon Clarke Advice or Advices, the Post Office did stop prosecuting and, because there was then no police involvement and no CPS oversight, there was no formal investigation, in that sense, into what happened next.
Now, this is part of the effect of what happens when the Post Office is its own prosecutor. The Post Office prosecutors, the Post Office experts, had been aware that subpostmasters said the system was in error. I am going to take you, sir, to some quotes from the Simon Clarke Advice of 15 July and hopefully we can have it on our screen, POL00006798 at page 2, paragraphs a to d.
Mr Clarke in this advice on 15 July set out – this is his description of the generality of what was being encountered by the Post Office prosecutors, by the Post Office expert witnesses, working at Fujitsu. What he said was this:
“The defendant will raise issues attacking Horizon, suggesting in general and often ill-defined terms” –
Sir, do you have this on the screen?
The Chairman: Yes, I do. Sorry about the delay but I keep myself mute in case there’s some background noise. But, yes, I do.
Mr Stein: I’m grateful. Mr Clarke described what was known by the prosecution, by Fujitsu and the Post Office. He’s talking about what has happened in the currency of previous prosecutions and what has been raised in the past. This is set out on that page at paragraphs a to d:
“The defendant will raise issues attacking Horizon, suggesting in general and often ill-defined terms that the shortfalls giving rise to prosecution are inexplicable and thus must rest with Horizon. Here the defendant does not specify the Horizon failing, he or she merely asserts that because they did as they should, the system itself must be at fault;
“b. An express assertion that Horizon has failed in some way;
“c. In admitting Fraud or False Accounting (but NOT theft), that either a or b above is true, their culpability being limited to the covering-up of otherwise inexplicable losses rather than revealing what is a genuine (on their account) problem to [the Post Office]. Here the issue is that of sentence, Judges being required to consider the quantum of losses when determining the appropriate punishment.
“d. In all three of the scenarios noted above, a defendant often complains of a lack of training on Horizon and/or inadequate customer support.”
The Post Office, the Post Office prosecution team, Fujitsu, Fujitsu’s experts, all had consistently, from people that were being prosecuted, the ingredients of things that were going wrong, inexplicable losses from a Horizon system that was riven with bugs, that caused issue when trying to balance, that postmasters, postmistresses and managers could not explain. The issue – so very well described by my learned friend Mr Beer, King’s Counsel, yesterday – of training is writ large upon this matter as well: the inadequacy of training, the inadequacy of the helpline.
Although Dr Jenkins, and others, was in a position to consider what so many of the people who were being prosecuted were saying, fatally, he was Fujitsu to the core. He was not even remotely an independent expert witness. Again, from the Simon Clarke Advice from 15 July, so same reference, please, ending in 6798, page 14, paragraph 14.
I can’t see on my page, is that page 14, paragraph 14? I’ll read the quote instead, sir.
Mr Clarke set it out this way:
“For many years, both RMG and latterly the Post Office has relied upon Dr Gareth Jenkins for the provision of expert evidence as to the operation and integrity of Horizon. Dr Jenkins describes himself as an employee of Fujitsu Services Limited and its predecessor company, ICL, since 1973. He holds a number of distinguished qualifications in relevant areas. He has worked on the Horizon project since 1996. He is accordingly a leading expert on the operation and integrity of Horizon.”
Dr Jenkins is a true Fujitsu, Pathway, Horizon insider, not even remotely independent.
Sir, you heard from my learned friend, Mr Beer, yesterday in reference to two points that he detailed and indeed showed on the screen. I’ll give you the reference but read you the quotes. The same advice from Mr Clarke, ending with the number 6798, page 13, paragraph 38, and I’ll only read the top two bullet points.
Mr Clarke set out the fact that Dr Jenkins failed to disclose material known to him but which undermines his expert opinion. This failure is in plain breach of his duty as an expert witness. “Accordingly”, Mr Clarke went on to say:
“Accordingly, Dr Jenkins’s credibility as an expert witness is fatally undermined. He should not be asked to provide expert evidence in any current or future prosecution.”
But, sir, as you are aware, this is not all that has been written about the position left after the Post Office had been made aware by Mr Clarke about the serious issues concerning Dr Jenkins. Mr Altman, King’s Counsel, advised the Post Office from 2013 and he also represented the Post Office in the Court of Appeal as regards the criminal appeals.
Now, he set out his conclusions in the review dated 31 October 2013. I’ll read the reference and ask for it to go on the screen please. It’s POL00006358, page 39, paragraphs 105 and 106. I’m grateful.
Just as a reminder, this is October 2013, Mr Altman, King’s Counsel:
“It may be thought that POL’s prosecution role is anachronistic, and highly problematic in light of recent events. Its prosecution role today is certainly based upon the historical protection afforded to the mail, which I assume was itself founded upon the historical importance of protecting an important means of communication and commerce. The role today is couched in terms of guardianship, and the protection of assets, integrity and reputation.”
We may want to remember those words:
“However, the recent events have to be seen in their proper context. The serial non-disclosure of relevant material occurred in circumstances in which POL asserts that it and its advisers were wholly unaware that there might be disclosable material or information, and so, whatever the reason, were not placed in a position whereby they knew of its existence and could deal with it appropriately.”
2013, Mr Clarke and Mr Altman, King’s Counsel, were warning about the dangers of any possible reliance upon Dr Jenkins. They were making sure that the Post Office understood the nature of this calamity.
What should the Post Office have been done at this stage? What should have been the advice to the Post Office at this particular point? Do any of us think that the answer from the Post Office at this stage is to carry on denying that there is anything wrong with the Horizon System, as they did at the High Court? Or should the Post Office have done what anyone else should have done, let alone a respected, public institution, which is called the police?
We also wonder whether the paragraph, paragraph 106, where Mr Altman is setting out, no doubt from his instructions, that serial non-disclosure of relevant material occurred in circumstances in which the Post Office asserts that it and its advisers were wholly unaware that there was disclosable information. Does that set up what we are going to hear through this Inquiry: the Post Office casting blame upon Fujitsu and no doubt an internecine war backwards from Fujitsu to the Post Office saying “Yes, they did, they knew all about it, it was their decisions?” Well, we are not helped by the written submissions made by the Post Office, who haven’t set out their position on such matters.
What we do know is that the Fujitsu experts and staff members were uniquely placed to consider and investigate what was wrong with the system. The Post Office investigators, the Post Office prosecutors, they also knew, and the Post Office knew, from repeated information from the subpostmasters, that the system did not work properly but no one listened.
The subpostmasters were saying, the people who were prosecuted were saying, “This system is buggy, we can’t explain it”. This a cohort of people saying that they don’t know what’s going on, that there’s a problem with the Horizon System; no one listened.
For years and years after Mr Clarke and Mr Altman, King’s Counsel, had set out their views about Mr Jenkins and bugs within the system, the Post Office preferred to pretend that the Horizon System was fine and fought the High Court case on that basis.
That’s despite the advice from Mr Clarke, underlined by Mr Altman, King’s Counsel, that Dr Jenkins’s evidence, Dr Jenkins’s credibility as an expert witness, is fatally undermined, and, as Mr Clarke went on to say, he, Dr Jenkins:
“… should not be asked to provide expert evidence in any current or future prosecution.”
Well, that’s pretty clear, isn’t it? That should put paid to any input that Dr Jenkins should have in any proceedings in the future. But no. The Post Office chose to use his evidence as a source of evidence before the High Court. Let’s just pause to remind ourselves. Mr Justice Fraser was not in a position to know, understand, think about, take into account, what was being said by Mr Clarke or indeed Mr Altman. That was not before him.
Judgment number 6, paragraph 509, the judgment of Mr Justice Fraser:
“When the Post Office served its evidence of fact there was no witness statement from Mr Jenkins, although many of their witnesses relied upon him as their source of information. He was referred to very often, and he obviously knew a great deal about Horizon.”
It is clear, we suggest, Mr Clarke and Mr Altman, must be called before this Inquiry. We need to hear from them what they were told, what instructions they had, what material they were provided with over the time of their involvement with the Post Office and their reviews and advices as regards evidence. We need to know why it was, at the Court of Criminal Appeals, there had been disclosure of the Clarke Advices but, as far as we are aware at that stage, not disclosure of the reviews or advice from Mr Altman, King’s Counsel, who of course was prosecuting or responding on behalf of the Post Office at the Criminal Court of Appeals.
So what does this mean? Well, no one, not Second Sight, not Mr Justice Fraser, no police investigation, no one before this Inquiry has ever heard of the extent of the complaints about the Horizon System that you have heard. Fujitsu: did they want to know? Did they want to listen? Has this been in part the effect of the PFI – the private financial initiative model – putting all design, installation and running of the system upon Fujitsu, also upon Fujitsu to bare any costs arising?
For the Post Office, is this all about the fact that it cared about only one thing, which is protecting its own image? The effect during the time of the worst parts of the Horizon System’s operation was not only were people prosecuted through the criminal and civil courts but that the bugs were allowed to continue, unresolved, leading to more and more subpostmasters being put through the same wash cycle time and time and time again.
We also need to know and we need to discover, not just that people within the Post Office deliberately concealed the truth from their own staff and the courts for many years but what did BEIS know about this, what did UKGI know about their investment in the Post Office and how it was operating? What were ministers told, what were the MPs told? What information was being released?
Yesterday we heard from Mr Beer, King’s Counsel, in reference to various points of advice being given from eminent jurists, Lord Neuberger was mentioned.
Perhaps the Post Office needs to learn, as so many people do in the police station, that advice is only advice. If you know what you’re doing is hurting people, the people that trust you, that think that you might be there to look after them, if you know that that’s what you’re doing, you think very carefully about taking legal advice. You may think, therefore, sir, that it is incredible important to know what the lawyers were told, what information they had on which they could base their advice and, if they got it wrong, then they need to come to this Inquiry and accept that fault also lies at their door.
So, of course, you’ll have appreciated earlier this week, we do take exception on behalf of our clients to the fact that the Post Office has yet again, we suggest, been seeking to keep back evidence, that they must have appreciated, since the very first Clarke Advice, that should have led to a thorough nook and cranny search through every box and every available amount of information that could possibly bear upon these issues.
That is why the reaction from our clients to the failures in disclosure that have been discussed earlier this week does not surprise a single subpostmaster. But it requires analysis and the obtaining of all of the missing material because it has the capacity to show that the Post Office is simply continuing on with its contemptuous behaviour. In other words, we ask this Inquiry to consider these failures and recent failures in disclosure not only to find out and establish what the material is, but to consider evidentially what it tells us about the Post Office in 2022.
Touching upon one matter that appears in the opening statement on behalf of the Post Office, and I’ll read its Relativity reference, SUBS0000005, I don’t ask for this to go on the screen. Reference is made in this document on behalf of the Post Office, dated 4 October, paragraphs 11 and 12:
“In addition to action points relating to allegations against specific individuals, POL has carried out, or is in the process of carrying out, internal investigations and reviews of contemporaneous documents to verify other broader points raised by Human Impact witnesses. These include, for example, alleged conduct by Fujitsu.
“POL anticipates that the outcome of a number of these investigations will be relevant to forthcoming phases of the Inquiry and it will, of course, be disclosing all relevant information and outcomes in that context.”
Sir, the Post Office is saying that it is genuinely going to investigate and be carrying on investigation alongside this Inquiry. We respectfully ask this Inquiry to ensure that it maintains a careful overview of what is going on with the Post Office’s investigations. We respectfully ask this Inquiry to establish what investigations are currently ongoing, against whom, about what and when will be the delivery time.
We ask, sir, that you take this step because we can see, we respectfully submit, what is going to happen otherwise. Witnesses may be called that are subject to investigations that we don’t know about, reports or investigations information provided late and too late for this Inquiry to see such material and consider it properly.
Sir, as you know and as I’ve already said, Dr Jenkins and other members of his team at Fujitsu should be called, statements taken from counsel, solicitors who acted in the High Court matter, as well as Mr Altman, who gave advice and reported internally to the Post Office.
We probably don’t need to underline this point any more but let’s just turn, for a moment, to paragraph 512 of the Horizon Issues Judgment. It’s always worthwhile remembering the dates of these judgments. This is not long ago. Mr Justice Fraser said this – this about the failure to call Dr Jenkins, paragraph 512:
“This explanation by the Post Office included the following passages in its written submissions [internal references, page 144, the claimants]. The claimants understandably complained that Mr Jenkins and the other source of Mr Godeseth’s information could have given some of this evidence firsthand. However [and refers to a paragraph 114.1], taking into account that Mr McLachlan’s evidence specifically addressed things said or done by Mr Jenkins in relation to the Misra trial, Post Office was concerned that the Horizon Issues trial could become an investigation of his role in this and other criminal cases.”
What was being put forward by the Post Office was an excuse as to the reasons why Dr Jenkins was not called in the High Court case. They were not saying that they had every good reason to distrust him. They are not saying that they believe his credibility is damaged and dented by revelations made to Mr Clarke. They are not saying that Mr Altman has advised that there are real issues with Dr Jenkins, his credibility and the POL investigation team. That’s 2019.
What instructions were given to which lawyers, to which parts of the counsel team, so that these matters were put forward? It seems entirely possible that individuals within the Post Office conspired to pervert the course of justice by giving factually incorrect instructions to their lawyers. This is an extremely serious issue which the Inquiry should consider.
The position taken in the Group Litigation.
The third aspect of this scandal which sets it apart from all others is the conduct; of the Post Office in the Group Litigation. Mr Justice Fraser described the litigation as “bitterly contested”. Throughout the litigation, Post Office maintained that the Horizon System was robust and that none of the 555 claimants had experienced shortfalls or discrepancies in their accounts as a consequence of Horizon.
However, the findings in the Horizon Issues judgment show that the Post Office’s position before the court was untenable. For example, there were reports of phantom sales which emerged as early as 2000 and which Royal Mail engineers had tried to rectify. Yet the Post Office, apparently unquestionably, accepted Fujitsu’s views there was no fault in Horizon and the explanation lay in operator error.
Mr Justice Fraser also found that there had been problems with Horizon from the outset and that there were 22 bugs which had caused lasting impact, in particular the RPM bugs, receipts and payments mismatch bug was the subject of a 2010 note produced from a meeting attended by both Fujitsu and the Post Office, in which it was accepted that it could potentially highlight to branches that Horizon can lose data.
Mr Justice Fraser went on to say this:
“In reference to the material in that note, the identified risk was that there were huge moral implications to the integrity of the system, as there are agents that were potentially due a cash gain on their system.”
That’s from the Horizon Issues judgment at paragraph 49; “huge moral implications to the integrity of the business”, 2010.
It is absolutely clear that the Post Office was aware of the failings in the Horizon System and approached the civil litigation in the same matter as it approached complaints by subpostmasters concerning Horizon, with the primary objective of defending a lie.
The conduct of the Post Office is all the more reprehensible because these were the actions of a publicly owned body using public money to defend the indefensible and maintained that it was entitled to inflict the most appalling harm to innocent hard working subpostmasters and their families. So why was the Post Office so fixated on maintaining the lie in the Group Litigation and denying entirely justified claims for compensation?
Who within the Post Office has made the decision to spend, reportedly, over 70 million, a figure we draw from the Post Office annual and consolidated financial statements of 2020/21, that money being used to fight the High Court litigants with so much energy?
Sir Wyn Williams: Sorry, Mr Stein in the written submissions, which I have before me, I think you use a figure of 20 million.
Mr Stein: We did, sir. We have looked at this and we checked it and this is why we went to the Post Office annual reporting consolidated financial statements. In fact, I’m grateful for you drawing our attention to that again because we would like to correct that to that figure.
Sir Wyn Williams: That’s fine. Thank you.
Mr Stein: I’m grateful, sir, for you raising it.
Who within the Post Office decided that it was a good idea to make an application to the Court of Appeal to recuse Mr Justice Fraser on grounds of apparent bias? Well, we heard something yesterday from Mr Beer about that: an application that Lord Justice Coulson described as “absurd”. We will need to consider the circumstances of the advice from Lord Neuberger and what he had been told or not been told.
Sir, we have made detailed representations in on the upcoming Phases 2 to 7 in our written submissions. Now clearly, at the moment, such detail as we would like to get to is limited, as this Inquiry is disclosing matters, to an extent, in phases and we cannot get yet to the extent of detail we would like. But what we do so, overall, is that subpostmasters’ lives have been very badly affected, as you know, and the public are entitled to know who knew what and when.
We note that under paragraphs 12 to 14 of the Post Office shareholder relationship framework, the Post Office were required to provide quarterly updates to BEIS’s representative on any active litigation and any threatened or reasonably anticipated litigation. So BEIS should have been aware of these issues. Currently, we note there are a number of directors who are still in place who were appointed well before the High Court action.
Now, putting aside the question of whether the Post Office should still have directors in place who are party to decisions made within the High Court action, the Inquiry should discover what those directors had been told, what decisions were they party to and what did they know or not know?
The past directors of the Post Office should be asked these and many other questions.
Now, sir, I’m going to turn to some points we make regarding the individual phases. I note the time is 11 o’clock. Sir, if we can have a short break now, I’ll be very grateful.
Sir Wyn Williams: Yes, certainly. Is ten minutes enough, Mr Stein?
Mr Stein: Yes, thank you, sir.
Sir Wyn Williams: All right then, 11.10, everyone. Thank you very much.
Mr Stein: Grateful.
(11.01 am)
(A short break)
(11.10 am)
Mr Stein: Sir, if you’re ready I’ll restart.
Sir Wyn Williams: Fine.
Mr Stein: The Phase 2 evidence demonstrates that the Horizon project was blighted from the outset. It was over ambitious in terms of the technology available at the time and poorly thought out.
A Parliamentary Select Committee found in 1999 that the project had effectively been a financial quagmire and, after the withdrawal from the Benefits Agency that year, regarding the restoration of the scheme, they said the impression was of an essentially political deal to ensure that ICL has a substantial contract with the Post Office at a price which seems to have been largely determined in advance of contractual negotiations or renegotiations, as a means, however, inadequate of making up some of the £180 million written off by ICL in their ‘98/’99 accounts. That’s the House of Commons Trade and Industry 11th Report.
You will listen with interest, we suspect, to the evidence of Mr Roberts and other witnesses. Mr Roberts was a CE, chief executive, of the Post Office. I’ll give his statement reference and paragraph reference, but don’t ask for it to go on the screen. WITN03390100, and the reference is at paragraph 17.
He refers at that point to the fact that, in his view of what he could see, the Benefits Agency did not want Horizon and they instead wanted to move to ACT, Automated Credit Transfer, instead.
What had happened to the position in relation to the negotiations to advance Horizon when, in fact, the Benefits Agency is said to have long wanted to move to a different type of system entirely?
The Horizon scheme was never robust. It should have been abandoned after the Benefits Agency withdrew. It is, we suggest, no accident that a pared down system, with the financial burden resting upon Fujitsu Pathway, meant that the system was going to lose functionality. It is no accident that there was no dispute button or function for subpostmasters built into the Horizon System.
What did the auditors, who were charged with investigating shortfalls in subpostmasters branches, often and too often doing so in a thuggish manner – did they have anything near the requisite levels of technical knowledge to make informed decisions about the system?
Mr Cipione, who is going to be the first witness in Phase 2, will no doubt confirm what he says in his report. I’ll give the reference, I again don’t ask it to go on the screen: EXPG0000001. Mr Cipione states in his report that there were conflicting intentions of the Post Office and Pathway and that let to disruptions at management levels and that affected the implementation of the Horizon IT System.
Importantly for our clients, Mr Cipione refers to poor training and lack of support from the helpdesk as self-inflicted wounds, that’s at paragraph 1.1.9 at page 5 of his report.
He says that recurrent balancing problems experienced by subpostmasters directly degraded the accounting integrity of the Horizon IT System, paragraph 1.1.9, again at page 5.
We, of course, note that his report looks at issues primarily up to the year 2000 but not beyond that year. It’s significant, therefore, to remind ourselves that you have heard the evidence in statement form and evidence lies before you of so many subpostmasters who explained their experience with Horizon after the year 2000.
Sir, the problems manifested themselves from the pilot scheme from the very outset. In summary, we suggest that Horizon was always deeply flawed. It was procured as the cheapest option to the Government within the overly-ambitious Pathway programme.
After the withdrawal of the Benefits Agency and after the scheme was left to limp onwards, it was rolled out to unsuspecting subpostmasters, after a number of errors and defects had been identified in the pilot period.
Quite simply, we say the evidence shows, as a whole, that Horizon was not fit for purpose when it was rolled out. You’ve heard the evidence from what happened from the subpostmasters’ perspective and the way that the system worked thereafter.
Witnesses from Fujitsu may seek to maintain otherwise but that position, in the words of Mr Justice Fraser, would be the 21st century equivalent of maintaining that the earth is flat.
In Phase 3, the Inquiry will consider the issue of training. Sir, you have hearing very many accounts of subpostmasters in the hearings to the effect that the training that was given on Horizon was woeful.
One example arises from the Group Litigation. Pamela Stubbs, whom we represent, gave evidence in the High Court on the extent of training that she and her assistants had received. She had one day of training in a pub, about two weeks before Horizon was installed in her branch. Her assistants each had half a day. The training did include balancing for her but did not included shortfalls or how to get to the root cause of them or how they could be disputed. She was simply told she should contact the helpline for any help or advice on any issues experienced at the branch.
Let me turn to the helpline. The helpline was unable to assist subpostmasters when they reported shortfalls. Mr Abdulla, another lead claimant who gave evidence in the common issues trial, gave evidence on this point before that court, and said that he would contact the helpline about six or seven times a month, and was shocked at the inadequate support.
He would often experience shortfalls on the days when he would perform balances but could rarely get through to the helpline on these occasions. He thought the advisers were ill-informed, and would often give the impression of reading off a script. Even his area manager could not help and he was told by his area manager that he should just pay the shortfalls and wait to see if a transaction correction was issued in his favour.
You will be interested, sir, we respectfully suggest, in the question of whether there was a script for the helpline advisers. Did they have standard answers? What did those answers contain? What was the motivation behind them?
Those scripts if they exist, or directions or guidance in whatever form should be considered, if they can be found, and evidence taken from helpline advisers as to what it was that they would say and how they would deal with matters, what training they had.
It emerged in the Common Issues trial that the only way a subpostmaster could dispute a discrepancy was via the helpline. Importantly, it came out in the Group Litigation that if a subpostmaster decided to settle centrally – and sir, you will recall hearing about that matter from Mr Beer yesterday – if a subpostmaster decided to settle centrally, the disputed sum was treated by Post Office as a debt owed to Post Office by the subpostmaster. It would then be subject to debt recovery procedures.
So the only route to challenge Horizon was through the helpline but the helpline did not offer advice in a way that enabled dispute to be resolved. Elizabeth Stockdale and Pam Stubbs gave evidence before Mr Justice Fraser on the failure of the helpline to investigate disputed shortfalls.
The procedure adopted by the helpline was simply to do nothing, and Mr Justice Fraser said this at paragraph 558 in the Common Issues judgment:
“It is therefore the case that on the evidence before me the helpline did not operate for the lead claimants in the manner that the Post Office contended for.”
What was presented to the court by the Post Office, in respect of disputes notified to the helpline, show that, for the first part, initially the subpostmaster in these individual cases was told they would have to pay the shortfall. Even when persistent, all that would happen is the sum would be settled centrally and, after a period of weeks, the subpostmaster would be chased by the Post Office for that sum as though it were a debt.
There is a pattern, we suggest, in the evidence that shows that the helpline may have been deliberately obstructive.
Now, Mr Cipione states in his report, that the support system theoretically had three levels through which help could be provided to a subpostmaster but the evidence from the subpostmasters is that they only got to the first level and they weren’t aware, except in very rare occasions, that there were other levels on which matters could be pursued.
A stark feature of the human impact hearings was evidence of the seemingly routine practice of telling subpostmasters that they were the only ones who had experienced shortfalls. This seems to have been a centrally coordinated approach. Immediately after the judgments had been handed down in the criminal appeals, I recall very well speaking to an appellant who, in tears, was repeatedly saying, “I thought I was the only one”.
If I can turn to the position of the NFSP, the National Federation of SubPostmasters.
Of course, another way that subpostmasters could have challenged the alleged shortfalls and discrepancies was through the support of their union. However, in this case, perhaps uniquely, the union sided with the employers rather than its own membership. At paragraph 368, Mr Justice Fraser said:
“It is obvious in my judgment that the NFSP is not remotely independent of the Post Office nor does it appear to put its members’ interests above its own separate commercial interests.”
This is an appalling state of affairs for any representative body.
You will recall that our client, Wendy Martin, has stated she received enormous help from the Communication Workers Union, of which she wasn’t even a member. Ms Martin’s evidence of the support provided from the CWU, the Communications Workers Union, and that of other witnesses, brings out the contrast between a genuine union and an organisation who appears to be in the pocket of the employer.
Our clients hope that there is some sort of explanation to account for what appears to be a union who is dancing to the employer’s tune.
If I can turn to the knowledge and rectification of errors in the system.
The Inquiry will consider the issue of knowledge and rectification in relation to the errors in the system, and this arose, of course, in the Group Litigation, where the court considered a large number of PEAK reports. Sir, as you know, PEAK reports, the previous version of those were PinICLs, and PEAK reports and PinICLs were then put into KELs, discussed by my learned friend, Mr Beer, yesterday.
Now, these are reports within the system, within the Horizon System, of technical and error issues.
The evidence in the Group Litigation demonstrated that Fujitsu and the Post Office knew that subpostmasters were not responsible for shortfalls. Mr Justice Fraser noted number of unguarded comments including from Anne Chambers, a Fujitsu employee, who in February 2006 stated “This problem had been around for years and affects a number of sites for most weeks. This appears to be a genuine loss”.
Our clients’ position is that the Post Office and Fujitsu knew the true position all along but had failed to act and that is what the High Court findings show.
Another issue that arose in the Group Litigation concerns audit data. It has always been possible for the Post Office to check what a subpostmaster had done because Fujitsu held complete and accurate record of all key strokes made by a subpostmaster or assistant when using Horizon. This is known as an audit or ARQ data. Yet it was established in the evidence in the Group Litigation that the Post Office did not consult ARQ data and we need to consider that within these hearings. Is that right?
The ARQ data, the very evidence that would have satisfactorily have resolved disputes potentially when deciding how to deal with discrepancies and issue transaction corrections, TCs, and when responding to any complaints about Horizon System.
Is it possible that the Post Office failed to use audit data because of charges raised by Fujitsu for access to such information? We say that the Post Office were happy to require subpostmasters to make good apparent shortfalls in the knowledge that the discrepancies were caused by the Horizon System because the Post Office had an incentive, it seems, to avoid paying Fujitsu to investigate or rectify errors causing shortfalls.
Sir, you’re also aware that, in the Group Litigation it became very clear, as decided by Mr Justice Fraser, that Fujitsu could remotely insert a transaction into the accounts of a branch using a counter number which was the same as the counter number actually in use by the subpostmaster or an assistant. This would appear to the subpostmaster from the records that they could see – and anyone looking at those records – as though the inserted transaction had been performed in the branch itself.
This is another matter which we ask the Inquiry to investigate thoroughly. Was this evidence disclosed within the criminal proceedings? What would have been the effect upon advice given to a subpostmaster if it had been known and understood within criminal proceedings or civil litigation that, actually, the data could be changed in a way that made it look like the branch did it?
Phase 4, we’ll be considering the actions against subpostmasters and others. The conduct of POL, the Post Office, in taking actions against subpostmasters, was oppressive. The Post Office was unrelenting in pursuing subpostmasters for shortfalls which it knew were caused by Horizon. In the period from April 2013 to June 2018, the number of subpostmasters who were suspended was 626. This equates to about ten subpostmasters being suspended per month. Mr Justice Fraser found, amongst other things, the Post Office frequently misrepresented the subpostmasters’ liability for losses when demanding for apparent shortfalls.
There is also the question of whether subpostmasters were permitted legal representation by the Post Office when they were interviewed in connection with alleged shortfalls. Were they denied legal representation at that time because that’s what it appears? They were certainly not permitted access to information concerning the allegations that had been made against them. They were allowed to take friends with them but if that friend, I quote, “interrupted in any way, by word or signal, they would be required to leave”. Bizarrely, the Post Office justified these procedures by relying on the Official Secrets Act.
The Post Office appears to have sought to cover up its actions even at the point of suspending a subpostmaster. For example, Mr Justice Fraser accepted the evidence of Pamela Stubbs that the temporary subpostmaster who replaced her was told to destroy all documentation in the branch that related to her appointment. Mr Justice Fraser also found that the Post Office had deliberately destroyed all of Elizabeth Stockdale’s documents after she had been suspended and it even refused to give any documents to one of their auditors who was investigating a shortfall claimed by Mrs Stockdale.
In addition to the rate of suspensions and terminations, the Post Office prosecuted subpostmasters at an alarming rate. Mr Beer, King’s Counsel, told the Inquiry in February that between 2000 and 2015, the Post Office brought a total of 844 prosecutions, resulting in 705 convictions. Sometimes, the Post Office brought POCR proceedings, going after what they are suggesting is the money lost, claims against those convicted, allowed to seize assets and bankrupt people.
As to civil proceedings, many subpostmasters were made bankrupt through the Post Office taking actions for recovery of the apparent shortfalls. Many subpostmasters remain bankrupt today as a consequence of these actions and enforcement taken through civil judgments by the Post Office.
Were these actions taken as part of a cohesive policy against subpostmasters by the Post Office? Certainly it seems that those actions were applied on a uniform basis throughout the Post Office. Some of the procedures described emanated from the modified subpostmaster contract.
Is it possible that Post Office had a policy or policies which directed these actions being taken against subpostmasters? We ask that we keenly consider the question of whether policies exist and their disclosure, if they do exist, within the Phase 4 hearings, and who is responsible for creating such policies, guidance or documents that relate to the way that matters are taken against subpostmasters.
Of course, we anticipate that the culprits might not be forthcoming in disclosing material, which might be considered reputationally damaging. That, again, is one of the reasons why we are more than keen that this Inquiry is rigorous, as you have said you will be, in ensuring that the Post Office, BEIS and Fujitsu comply with any request made of them.
I turn now to Phase 5. Our clients were involved in the Mediation Scheme and believe that the breakdown of this process marked at least one part of the Post Office’s cover-up. It is possible to consider that the cover-up might be seen as the greater scandal than the IT failure. The Post Office realised that they have known about the defects in Horizon for years and tried desperately to prevent that knowledge from ever becoming public.
In July 2012, the Post Office came under renewed press interest and pressure from a group of MPs led by James, now Lord Arbuthnot. Consequently, the Post Office met with group of MPs and agreed that an independent firm of forensic accountants should be appointed by the members of Parliament to conduct an independent assessment of Horizon, and the Post Office agreed to fund the process. This led to the instruction of Second Sight.
The partners in Second Sight specialised in banking fraud and IT systems so, in fact, were a good fit for the problems they were being asked to investigate.
It is important to understand that Second Sight were, at all times, answerable to the MPs who had commissioned them and not to the Post Office, who funded the project.
You will recall, sir, hearing oral submissions from Mr Henderson of Second Sight in relation to the independent assessments that they were instructed to carry out by the group of MPs, he told the Inquiry that their work started in the summer of 2012, and that, initially, Post Office were cooperative and appeared committed to the agreed goal to seek the truth, irrespective of the consequences. However, as their work progressed, the attitude of the Post Office changed. Was this the result of legal advice? Was it a change of view? Who was responsible?
In August 2013 the Post Office set up the initial Complaint Review and Mediation Scheme, which was intended to operate as a formal mediation between aggrieved subpostmasters, managers and assistants, who had complained to their MPs, and the Post Office. The Mediation Scheme was overseen by a working group which comprised the Justice for Subpostmasters Alliance, the JFSA, headed by Mr Bates and Ms Linnell, Second Sight and Post Office. The independent chair of the working group was Sir Anthony Hooper, a retired Court of Appeal judge.
Unfortunately, the scheme floundered in November 2013 when Susan Crichton left the Post Office. She was the internal legal adviser who had instigated the process. Ms Linnell, who we represent, met her by chance once in Birmingham and was impressed by what she heard from Ms Crichton as to her wish to collaborative and her problem-solving approach to the process.
Susan Crichton was replaced by Chris Aujard. We don’t know why Ms Crichton left – she should be called – but it is probably not a coincidence that her departure took place around the same time that the Post Office realised its position had become difficult.
Ms Crichton was replaced by Mr Aujard as Post Office general counsel and we are advised that he adopted an obstructive and litigious attitude. He sought to rely on limitation periods and removed subpostmasters from the scheme.
The situation deteriorated further in 2014. We say this is because the Post Office had become aware that Second Sight were getting closer to the truth and you will need to consider, as we will, that issue.
Second Sight were due to deliver a report in April 2015. However, on 10 March 2015 the Post Office bought the Mediation Scheme to an end and gave Second Sight a month’s notice. We’re not sure to what extent the Post Office was entitled to act in this way, given that Second Sight were answerable to the MP group and not to the Post Office.
These events appear to be part of the lamentable concerted attempt by the Post Office to cover up wrongdoing. We ask that the Inquiry focuses on this cover-up over time, what happened in relation to Second Sight and identifies those Post Office individuals, the officials – Fujitsu officials and individuals – who were involved, and any knowledge by BEIS or involvement.
Phase 6, regarding the monitoring of Horizon and internal and external audit. We know from the evidence before Mr Justice Fraser and before this Inquiry that Fujitsu monitored Horizon from the outset and liaised with the Post Office throughout. We know about the year 2000 Fujitsu reporting phantom sales on the system. Mr Justice Fraser found that the Post Office sent over 100,000 transaction corrections to subpostmasters each year since 2006, which amounts to more than 2,000 per week. An unusual feature of the Horizon Issues trial was that Fujitsu had provided and disclosed 5,000 KELs but only in September 2019, months after the trial had ended.
However, whilst the system was being monitored, the findings in the Horizon Issues judgment demonstrate that the Post Office refused to monitor and investigate Horizon when its systemic problems threatened to enter into the public domain.
We maintain that the Post Office did monitor Horizon, did receive information, but did not want to actively investigate the defects.
Can I turn briefly to whistleblowers. There must have been hundreds of helpline workers, contract managers, auditors, internal lawyers and Post Office officials who would have been aware of the defects and the bugs within the system, aware of the cover-up and scandal that surrounded the Horizon System. BEIS and Fujitsu must also have been aware of the unfolding scandal. Yet there appears to be only one whistleblower of any note, Richard Roll of Fujitsu. It is important that the Inquiry ascertains why so many others knew and kept silent. What were the whistleblowing procedures? What guidance was there? What had been set up or not set up by the Post Office or Fujitsu to allow whistleblowers to come forward? Were people afraid to disclose what was unfolding?
Is there a more sinister reason? Was there a culture at the Post Office which prevented whistleblowing?
There was indeed a procedure of excessive secrecy at the Post Office, extraordinarily the evidence in the Common Issues trial demonstrated that the Post Office sought to use the official secrets act to justify seizure of documents and equipment when suspending a subpostmaster.
Furthermore the modified subpostmaster contracts, section 15, clause 19, prevents any communication concerning interviews by Post Office investigators, as such communication might constitute a breach of the Official Secrets Act.
Mr Justice Fraser found, at paragraph 723, that it was somewhat unusual and potentially oppressive that the Post Office could seek to use the Official Secrets Act in that way.
We ask the Inquiry to examine whether the Post Office sought to apply that same legislation in respect of any disclosures made by employees. Is that part of the reason why we have not heard from whistleblowers?
Phase 7, current practice and procedure recommendations for the future.
In reality, this Inquiry is not about the Horizon System, with all of its faults and problems, but about a sickness which lay at the core of the Post Office. The Post Office was employer, victim, investigator and civil and criminal prosecutor and it is now the arbiter of which of its victims should receive compensation and how much. It held extraordinary power over each and every one of its subpostmasters and wielded that power with impunity and, we suggest, in bad faith.
The Terms of Reference for this Inquiry say that we will be assessing whether the Post Office has learned the lessons from criticisms made by Mr Justice Fraser in his judgments. Our clients are very concerned that all that has changed within the Post Office is that Paula Vennells, Angela van den Bogerd and others, have been found out. It is important that the Inquiry delves into the issue of whether there has been real cultural change.
This, of course, gives rise to potential issues for the future. We suggest that it is not inconceivable that another set of circumstances could arise in the future where powerful institutions will make false or mistaken allegations of systemic robustness of an IT system at the expense of livelihoods and reputations of individuals who are affected by such IT systems. Anyone knowing even the remotest part of what has happened in relation to Horizon would be at this time wondering whether IT systems could be trusted at all.
Can I deal with some procedural matters.
Firstly, I’m instructed to request and ask that, on behalf of our clients, we are permitted to make brief closing submissions at the conclusion of the hearings of each phase of the Inquiry. If permitted, it might be that we would consider the position and not require or not ask that we’d make such submissions. But the reasons for leaving this as a request that we may ask that this Inquiry allow us to do so, is that we can only address you on the written and oral evidence that is before us at any given time. This Inquiry is going to be dealing with disclosure as we go onwards. We don’t have it all at this stage because the Inquiry, for very good reason, wants to make good progress.
As matters stand, we will not be able to give voice to our clients’ instructions on the evidence or comments as that evidence emerges, until the very end of the Inquiry, much later next year. By allowing us the potential opportunity to make such submissions at the close of the phases, we suggest that is helpful for you, sir, in keeping the subpostmasters at the centre of this Inquiry.
Our clients are, frankly, expecting to be taken by surprise and outraged by some of what they hear from institutional witnesses. They do not want to have to sit on their hands and, after having been kept silent for so long, they wish to instruct their own legal team to convey their instructions or responses at the close of phases if it is appropriate, rather than just in final closing submissions. For clarity, we don’t ask to make written submissions at such stages, simply an opportunity to make short closing, oral submissions.
Second procedural matters relates to the issue of compensation. As you know, this issue impacts very greatly on our clients. We saw that in July of this year how quickly BEIS were able to act when the Inquiry held their feet to the fire through holding specific hearings on the question of compensation.
None of our clients have any doubt that it is only through the resolve of you, sir, and through this Inquiry process that a new compensation scheme for the High Court litigants is under way and that some of the fundamental problems relating to the HSS and historic conviction schemes have also been addressed.
However, sadly, very little has been achieved since the July hearings. Following letters written by Howe+Co, my instructing solicitors, and possibly others we will have another compensation hearing on the 8 December 2022.
What we can tell from our experiences earlier this year is that, if that is anything to go by, we can expect a flurry of activity and announcements in the first week of December this year. These points will demonstrate, as were demonstrated in the July hearings, that the scrutiny by this Inquiry process is essential to make any movements forward on the vital issue of compensation.
We cannot state, we cannot overstate, how concerned our clients are that, if this Inquiry is no longer able to monitor BEIS in August or later next year, after which BEIS will have no access to funds in this matter, they will be forced to relive their experiences a third time through further litigation in the courts.
It is essential that the matter of compensation be kept in sight and under review at all times and, if that means, sir, that we ask at a later stage for further hearings on compensation as we go through, we hope you look kindly on such a request.
The third procedural matter relates to the pace of the Inquiry process. Now, we recently learnt and discussed the question of disclosure from Post Office. That undoubtedly, in some ways, is going to lead to the delay in the process of the Inquiry. We do not wish the Inquiry to proceed to continue very important matters without being able to take into account all of the relevant material and, sir, you have already indicated this week that you regard the process of an Inquiry to be much more flexible than litigation and, indeed, said that that is one of the advantages of a statutory Inquiry.
We ask that great care is given to consider the timing and the pace of process of this Inquiry. We all know from long experience before the courts that the danger of allowing the witness to give evidence and then to allow the possible re-call means, that there will be discussion between the parties, “Do we really need that witness? Should that witness come back?” always leading to the position whereby, if the witness doesn’t come back, someone is going to be dissatisfied because the evidence should have been put before them the first time.
The process, therefore, is one that we ask you to consider, and the progress of this Inquiry, with great care. If there needs to be gaps, there needs to be time out so that we make sure we have the material that we need for the particular phases, then we ask you to take that time and trouble.
Sir, I come therefore to conclusions and requested outcomes. What can our clients expect? Well, firstly, they wish that this Inquiry continues to exercise oversight of the compensation schemes. Secondly, restorative justice, that each and every subpostmaster who is affected by the Horizon System has the opportunity to meet face-to-face with a senior Post Office official, to have the full opportunity to recount their experiences and the impact that they have had on them, and their family, to have those experiences genuinely acknowledged and to receive a genuine apology.
We have experience in other public inquiries of how important personal apologies are to victims and survivors of institutional abuse. Ministerial announcements and press releases from the Post Office are not cathartic and do not provide closure. Our clients wish to see senior Post Office officials come to them, see the localities where their reputations were attacked and understand the real suffering that was caused. We cannot impress upon the Inquiry how important that process is.
Thirdly and lastly, our clients ask that those who are responsible for this tragedy are identified and publicly named. We suggest that they should never hold or wield power and responsibility again. Not only would that provide a measure of justice to our clients but it will enable the public to move on from this scandal with confidence that the institutional culture which gave rise to this scandal has been addressed and that mistakes of the past will not be repeated.
Sir, that brings me to the close of my submissions. I’m very grateful for being allowed the time to make those submissions and I now cede my place to my learned friends.
Sir Wyn Williams: I’m very grateful to you for your submissions, Mr Stein, and, insofar as the first of your procedural points is concerned, you didn’t invite me to make any kind of even provisional decision about that. What I will say is that I will clearly keep that under review throughout the phase, and if I think it important that you should have some short time to make submissions, I’ll give it to you, but I’ll keep it under review.
Mr Stein: Very grateful, sir. Thank you.
Sir Wyn Williams: So is it Mr Moloney next?
Mr Moloney: It is, sir, yes. I’m content to make a start or take a short break, whichever you would prefer, sir.
Sir Wyn Williams: I don’t mind. I think perhaps a short break because I’m going to retrieve your opening statement, so that, as I was doing with Mr Stein, I can follow both your oral and written submissions at the same time.
Mr Moloney: I’m obliged, sir.
Sir Wyn Williams: Just five minutes will be enough? Yes.
Mr Moloney: I think if we start at 12.00, sir, I should finish at 1.00.
Sir Wyn Williams: That’s fine.
(11.53 am)
(A short break)
(12.00 pm)
Mr Beer: Sir, good afternoon, you didn’t expect to hear from me. The reason for the short delay and why we didn’t start at 12.00 was a problem with the live time transcription. I have been told that that is going to take about another 15 minutes to cure, and we wondered therefore, whether you would give us 15 minutes to allow that to happen, in order that the transcript can be broadcast live but also to ensure that the transcription is actually working, ie a note is being taken of what is being said.
Sir Wyn Williams: Yes, well I think that seems inevitable, if I may say so Mr Beer, so yes, keep me posted.
Mr Beer: The only reason for coming on the camera now is so that other people who are watching know what’s going on, even though you did.
Sir Wyn Williams: That’s important. You’re quite right to make it public in that way. So perhaps, so that I can just know what’s going on, and so forth, if in 15 minutes’ time, you only need another minute or two, that’s fine, but if there’s going to be any kind of further substantial delay, maybe we should come back on camera again at that point, so you can explain it.
Mr Beer: Thank you, sir. In the meantime, we will maintain email contact with you.
Sir Wyn Williams: Yes, and I won’t go far from the screen so that if, happily, things work out quickly, I shall be ready to resume.
Mr Beer: Thank you, sir.
(12.08 pm)
(A short break)
(12.17 pm)
Mr Beer: Sir, we are ready to resume, so over to Mr Moloney.
Sir Wyn Williams: Thank you.
Opening statement by Mr Moloney
Mr Moloney: Thank you, sir. These submissions in opening, as you know, sir, are made on behalf of 64 Core Participants represented by Hudgells Solicitors, each of whom was convicted following prosecution by the Post Office on the basis of Horizon evidence and each of whom has since had their conviction quashed.
Sir, the Inquiry heard a powerful summary of the unprecedented miscarriage of justice suffered by our clients and the events which led to it in Counsel to the Inquiry’s opening in Phase 1, starting on 14 February of this year, and Counsel to the Inquiry, Mr Beer, King’s Counsel, has provided over the last two days a further comprehensive introduction to the events of the last two decades and the evidence the Inquiry will hear.
We noted, and continue to note, sir, your guidance that openings by Core Participants are not expected to cover every phase and we do not attempt to do so at this stage. We don’t repeat, moreover, the entirety of our written submissions, not least because a number of the issues we highlight therein have been raised by Mr Beer in what we, if we may say, was an excellent opening to these proceedings.
However, we gratefully take the opportunity to underline matters of considerable importance for our clients, and we well try to focus, sir, essentially, on what is to come, the opportunities this Inquiry presents to our clients, in fully investigating and addressing the injustice they have endured.
Briefly, sir, our submission follows, in the same way that our written submissions did, four themes: the significance of the Inquiry; the priorities for Phase 2, the questions for Phase 3 and beyond; and, finally, redress and responsibility.
May I commence with the significance of the Inquiry, sir, and that significance is obvious. Mr Beer said on 14 February that the Inquiry may, in due course, conclude that the prosecution and conviction of our clients is the worst miscarriage of justice in recent British legal history.
We agree, sir, and say that the Inquiry may well conclude that what happened after the introduction of Horizon was the worst miscarriage of justice in modern legal history and, while it may have taken decades for the Post Office and the Government to accept that Horizon was not remotely robust, the Post Office has since accepted that it secured a great many convictions based on Horizon data. The Inquiry, sir, we say, has admirably encouraged those who may have been affected to come forward.
For example, you, sir, noted on 15 February that the number of people who have had their convictions quashed is considerably less than those who were convicted and in Phase 1 of the Inquiry, sir, you encouraged witnesses who gave evidence to share how it was that they came to speak out.
We also say, sir, that the role of the Criminal Cases Review Commission must not be forgotten in all of this. It similarly has taken significant steps to try to secure justice for those who continue to live with a wrongful conviction.
As I’ve said, we represent subpostmasters whose convictions have been quashed. We recognise that the 80 convictions quashed so far represent only a fraction of the total number of lives destroyed – and they were destroyed – by the Post Office’s approach to Horizon.
The opening of this next stage of the Inquiry’s work presents a further opportunity to encourage others to come forward to be heard to tell their stories and clear their names. But, sir, we, and those we represent, appreciate that many may not have had the resilience to reopen a now decades old trauma. Our experience is that our clients have great difficulty speaking about the things that happened to them and, as our clients have been, others may be mentally and physically broken by the impact of their conviction and what followed.
So our clients ask the Inquiry to remember that, for those who may never come forward, the Inquiry will be a genuinely important public statement, capable of reiterating the truth, and that the scale of the scandal and its wider impact beyond the Core Participants represented in these hearings should not be forgotten.
The Inquiry is to build on what we now know. The Inquiry does not start with a blank page and, as Mr Beer said and indeed Mr Stein said, we welcome – and we welcome Mr Beers acknowledgement that the judgments of Mr Justice Fraser and the Criminal Appeal Courts form the building blocks for this Inquiry’s work.
The Inquiry’s terms of reference provide that to establish a clear account of the implementation and failings of Horizon and the Post Office’s actions in respect of alleged shortfalls, it must build upon the findings in the civil and criminal courts. What we know already is substantial from the Common Issues judgment, the Horizon Issues judgment and the judgment in Hamilton. Since then, more information even has come to light, both in the extensive disclosure to this Inquiry and through research and Freedom of Information Act requests by others.
It would be disproportionate, and so we don’t do it, to underline all of the facts relevant to Horizon already established. But there are several critical facts which are worth clear emphasis from the outset, in terms of providing the basis upon which this Inquiry builds.
Firstly, the Post Office can no longer deny the existence of a great many bugs in Horizon. Legacy Horizon was not remotely robust and Horizon Online still had a significant number of bugs, errors and defects, and its robustness was questionable, and did not justify the confidence routinely stated by the Post Office was how it was summed up in the Horizon Issues judgment.
There were numerous bugs, errors or defects in Horizon capable of causing, and which did, in fact, cause, shortfalls in Post Office branches. There were problems experienced with Horizon almost from the outset, as was observed in paragraph 39 of the judgment in Hamilton and Others from the Court of Appeal Criminal Division.
The Post Office knew that there were problems with Horizon and Post Office knew that different bugs, defects and errors had been detected well beyond anything which might be regarded as a period of initial teething problems. In short, they knew that there were serious issues about the reliability of Horizon. Perhaps the question for you, sir, is who knew, when.
The persistence of reports also made it impossible to assume that all the initial problems and any subsequent teething problems had been resolved and Horizon itself did not alert subpostmasters to the existence of any such bugs.
Fujitsu had the ability, as has been mentioned a number of times already during these openings to you, sir, and facility to inject, insert, edit or delete transaction data or data in branch accounts.
Those concerned with the prosecution of subpostmasters clearly wished to be able to maintain the assertion that Horizon data was accurate and effectively steamrolled, said the Court of Appeal, over any subpostmaster who sought to challenge its accuracy, astonishingly using the number of convictions that were secured to demonstrate how reliable Horizon was and how there should be no concerns.
The human impact aspect of this Inquiry is very important. The Core Participants we represent appreciate the Chair’s message, your message, sir, of 30 September 2022, which acknowledged both the significance of Phase 1 and its deep impression.
Our clients were genuinely grateful, sir, for the opportunity to speak about their experiences and to be heard. The human pain and suffering which was laid bear for the Inquiry by their testimony is the true tragedy of the last two decades of the Post Office’s conduct in respect of Horizon.
Many lives were destroyed – were destroyed for no good reason – and this pain and suffering, despite the question of the convictions, despite whatever compensation might come, continues for many subpostmasters and their families.
Things have happened which can’t just go away and the evidence as to human impact, we say, sir, must remain at the heart of each phase of this Inquiry. We ask that it sit behind the exploration of every issue, and it’s that continuing human impact which must inform the Inquiry’s work to ensure that every avenue to secure true transparency and accountability is now explored.
That’s the opportunity we wish to take on behalf of our Core Participants during the course of this Inquiry, sir.
Some of these convictions of the people that we represent were decades old when they were overturned. Horizon had been the subject of controversy for many years and yet the Post Office continued to publicly and vocally defend its integrity, often at the expense of the Core Participants that we represent. It was not before December 2019 that the course of the litigation in Bates and Others forced the Post Office to face reality. But that didn’t happen without the most heroic of struggles. Time and again, the Post Office took steps to repeatedly reiterate their indefensible position that Horizon was robust, our clients’ convictions were safe: they were dishonest, they were criminals.
This was the stance which had been taken consistently by the Post Office over many years, as recognised by Mr Justice Fraser and by the Court of Appeal. We don’t repeat the examples here, sir, the Inquiry will hear them all repeatedly as we come to the later phases. But the Post Office’s defence of Horizon extended to statements to the press and to Parliament.
Perhaps the important work for the Inquiry now is to consider that position, the statements made and the motivation behind those statements, when and how and why did the preserving of the integrity of the Horizon System become more important than the Post Office’s integrity as a prosecutor and its commitment to its subpostmasters?
Were the statements that were made to Parliament, to the press, were they made in good faith and did they evidence poor judgment or was there another explanation for them?
Sir, just to reiterate the attacks that had been made on the Core Participants that we represent, the Inquiry will recall that the Post Office expressly made submissions to Mr Justice Fraser on the credibility of subpostmasters, alleging at least one had lied frequently and brazenly. You, sir, will have in mind the remarks of Mr Justice Fraser in terms of the attitude that was taken by Post Office through the GLO.
On the wider impact of the Inquiry, sir, while the detailed and forensic judgments of Mr Justice Fraser in the GLO marked a departure from the past, those judgments were based necessarily on evidence which was limited. They could not consider of necessity material later disclosed to the criminal appeals, and now available to this Inquiry, so that, for example, Mr Justice Fraser was unaware of the Clarke Advices explained by Mr Beer during the course of his opening and the consideration of our clients’ criminal appeals was limited to the evidence addressing the safety of their convictions.
So in both the GLO litigation and the criminal appeals, there was limited opportunity to look at all of the relevant parties in play, or the relevant evidence they might hold. There was essentially no role for Fujitsu, other than to either be praised in the GLO by Post Office Limited or blamed in the criminal appeal process by Post Office Limited, or for Central Government, despite the key roles that both played.
But, as has been made abundantly clear in the introduction by Mr Beer, there are no such limits placed on this Inquiry and our Core Participants genuinely welcome that.
The wider public significance of this Inquiry, therefore, cannot be understated. The full financial and human cost of this public scandal is as yet unknown and, importantly, no individual or institution has been truly been held accountable for what happened to those we represent or the damage which resulted to them and their families – who must not be forgotten at any point during the course of this Inquiry – or for the harm to the Post Office as an institution or for the cost to the public purse.
The key commercial players in Horizon continue to play an important and, on one view, expensive role in public life in the UK. In recent months, the Government has reportedly concluded new multimillion-pound commitments to Fujitsu in respect of a range of crucial public services. On 24 September, the Daily Mirror reported that the Home Office has concluded a four-year, £48 million contract for the police national computer. His Majesty’s Revenue and Customs, HMRC, has reportedly concluded a five-year deal worth £500 million and the Foreign and Commonwealth Office has reportedly awarded a £44 million telecommunications project to Fujitsu.
Those deals follow on the heels of a £6.1 million bill for services provided during the Commonwealth Games, a deal has also reportedly been reach with Northern Irish Libraries, reportedly worth £27 million, and, in the last 5 years, Computer Weekly reports that Fujitsu has signed deals worth £673 million with HMRC, £456 million with the Home Office and £572 million with the Ministry of Defence.
So, whilst it may be entirely justified, sir – that’s for your Inquiry to establish – the understanding that Horizon was not remotely robust has so far seemingly had little or no impact on the commercial relationship between the Government and architects of that program.
The true impact of these events on the Post Office can only be determined after the conclusion of this Inquiry and the full and fair compensation of all affected. The Post Office, whatever it may have done, continues to provide a vital public service in communities across the United Kingdom, important to people of all ages, of all occupations, of all classes, of all races, supported by the energies and commitment of a network of branches operated by subpostmasters. It remains an entity essentially owned by the public and so, as citizens and taxpayers, we all have an interest in the outcome of this Inquiry, sir.
Sir, we also, in considering the overall direction of the Inquiry, we note, sir, the overriding duty you’ve referred to. You recently made a statement that you hoped to complete the evidence gathering in 2023 but our clients welcome your recognition, sir, that any desire to provide answers quickly must be tempered by an overriding duty to lay bare who knew what, when did they know it and what did they do with the knowledge they acquired.
Sir, those we represent appreciate fully that there must be a balance to be struck between speed and efficiency, on the one hand, and effective searching scrutiny, on the other.
They appreciate that your task, sir, is considerable and would not favour speed over a full and fearless examination of the events of the last two decades.
In that vein, sir, that’s one of full and fearless examination of the events in the last two decades, those we represent welcome the commitment of all Core Participants to the Inquiry. We have welcomed the decision by the Post Office to waive legal privilege, a taster of the importance of which was provided yesterday afternoon during the opening by Mr Beer, King’s Counsel and we note the commitment to now bring to light the full history of the scandal.
After decades of apparent obfuscation and denial, our clients remain understandably cautious and would resist any attempt on the part of any Core Participants to undermine the ability of the Inquiry to finally uncover the truth by becoming defensive in their approach to this Inquiry.
Sir, that’s our overall submissions as to the scope of the Inquiry. In the time that remains to me, may I just spend a short time on identifying priorities for Phase 2, as that is what is to come over the next few weeks, as well as then move on to some important questions for the remainder of the Inquiry before turning to redress.
So turning to what are our priorities for Phase 2, sir, which is the development, rollout and the early days of the Horizon System. As has been recognised, this necessarily begins with technical evidence from the Inquiry expert, Mr Cipione, designed to support public understanding of the operation of Horizon and later evidence yet to come.
We now briefly focus on two themes which go beyond the technology. Firstly, why was it that Horizon became a reality?
Mr Cipione includes in his written statement a reminder of how very different the world was in the mid-1990s, something Mr Beer alighted upon yesterday and, in order to appreciate and effectively scrutinise the evidence in Phase 2, we will all have to be reminded of the state of the world almost two decades ago.
We’re not going to repeat the detailed introduction by Mr Beer to the inception of Horizon, but it’s well known that Horizon did not start its life only as an accounting system for the Post Office but that is what it ended up as. After all you’ve heard in opening, and it may be that you’ll hear more, sir, an obviously important question for the Inquiry may be why the decision was taken to proceed with Horizon at all.
Also of great importance in this phase of the Inquiry, sir, is what was known when and by whom, because we say, sir, that that then colours decisions that were taken later that directly affected the Core Participants that we represent.
It’s clear from the early stage that concerns were expressed over the technical aspects of the ICL bid. The National Audit Office noted, reflecting the documents referred to by Mr Beer in opening over the last two days, that:
“Pathway submitted, narrowly, the cheapest of the three bid but the purchasers ranked their proposal third on 8 of 11 technical and management criteria.”
Then the Inquiry may wish to consider whether there were adequate systems in place throughout the life of the project to ensure that the technical performance of Horizon was adequately and consistently scrutinised, both by the Post Office Counters Limited and by Government.
The Inquiry, as an important part of that, may also wish to consider whether there is evidence to support the proposition that the highest levels of Post Office Counters Limited were well aware of bugs, errors or defects, even in the late development of Horizon, and that these were bugs and flaws which were capable of affecting accounting integrity, and which did directly impact upon the integrity of branch accounts.
The Inquiry might consider whether there’s evidence that these were apparent before the decision taken on 24 May 1999 that Post Office Counters Limited would continue its work on the Horizon contract with ICL and whether, indeed, those were apparent after the decision taken on 24 May 1999 and things were continued with.
The Inquiry may want to pay particular attention to what was being communicated to decision-makers in Post Office Counters Limited, at ICL and within Government.
If we could just alight on one aspect of there is, sir: the question of acceptance issues, of which POCL and ICL were aware before contractual acceptance of Horizon, and the start of the national rollout. As Mr Beer explained, these included concerns both about the support available to subpostmasters and the operation of the helpdesk, as well as specific concerns about the integrity of accounting data, including incidents arising as a result of receipts and payments failing to balance on the cash account, fundamental to the prosecution of our Core Participants in the years that followed, in the decades that followed.
As the Horizon Issues judgment found, these bugs, errors and defects went beyond teething problems. Obviously, the Inquiry will wish to consider the extent to which these Acceptance Incidents were known to POCL, in particular those incidents relating to accounting integrity, and will wish to consider whether they were ever resolved satisfactorily before or during rollout.
After rollout, we would ask the Inquiry to consider what action was taken by ICL or POCL to address those continuing incidents, indicative of bugs, errors and defects and whether or not there were systems in place which could effectively address those issues.
In that context, we’d ask the Inquiry to consider whether there was ever any evidential basis for the mantra of POL that Horizon could be considered robust.
If the Inquiry is satisfied that there was evidence of bugs, errors and defects from the outset, what reason or motivation there might be for Horizon to be viewed with such confidence by the key players.
The Inquiry is likely to hear, and we hope it will hear, pertinent evidence on the commercial motivation for the original Horizon project. It may hear evidence from ministers and officials and from Fujitsu on why the project was continued in the summer of 1999, rather than terminated. In particular, the impact of the withdrawal of the Benefits Agency and the termination of plans for the Benefit Payment Card is something that the Inquiry, we hope, will consider for the business strategy and future plans of POCL.
The Inquiry is likely to hear that POCL had estimated that if all Benefits Agency income were lost, up to half of the then current network of 19,000 offices could close and the remaining offices would need a subsidy to stay open, and we give the reference to that, without turning it up at this stage, which is HMT00000034 at page 5, and at bullet point 1.5.
At the same time that those concerns were being expressed in 1999, the Government was consulting on the future of the Post Office, a White Paper “Post Office Reform: A World Class Service for the 21st century”, was published by the Blair Government in July 1999. That’s two months, sir, after Post Office Counters Limited had agreed to continue its relationship with ICL. In the introduction, the responsible manager, Mr Stephen Byers, focused squarely on a Post Office building its future in technology.
Then in March 1999, the Government published its White Paper “Modernising Government”, which focused on the Government’s commitment to deliver just that, including a commitment to Information Age Government, or the digitisation of Government services. It read:
“We must modernise the business of government itself, achieving joined-up working between different parts of government and providing new, efficient and convenient ways for citizens and businesses to communicate with government and to receive services.”
That White Paper expressly included a commitment to:
“… Information Age services for Post Office customers: the Post Office will be equipped with a modern, online, IT platform to facilitate electronic provision of government services across Post Office counters.”
That is in March 1999.
The Inquiry hopefully will hear evidence as well that Post Office Counters Limited and ICL had been exploring commercial opportunities which could be built on the back of a successful Horizon rollout from an early stage. For example, disclosure to the Inquiry refers to work done preparatory to participation in tenders for Government gateway work or work in partnership, what came to be known as Golden Cloud work, sir. For example, an ICL document includes a Post Office client director’s monthly report, prepared in December 1998 which provides:
“Work has started with government division on planning, how Gateway/Golden Cloud should fit with ICL’s Government market plans.”
The reference for that is FUJ00058198, page 47.
It appears from the disclosure received, sir, that there may be at least some evidence that this intention for further commercial partnership formed part of the negotiations in spring of 1999, which led to the continuation of the ICL and POCL relationship.
In April ‘99, that’s just before the Prime Minister, Mr Blair, met with Fujitsu, sir, the director of posts commented on good progress in negotiations, including the revised version of the Golden Cloud.
Indeed, the Inquiry will also hear that, at the time that Post Office Counters Limited was being asked to scrutinise whether known faults in Horizon had been successful resolved, POCL and the Post Office Board were invested in the development of options for the further commercial exploitation of the Horizon platform.
They were considering network banking and the further exploitation of Horizon for potential government Gateway contracts. The Inquiry may wish to consider whether, on all the evidence, this kind of expansive consideration was premature and the Inquiry may wish to explore the knowledge, understanding and motivation of the key players.
We ask a number of questions arising out of this, sir. Firstly, whether the Post Office Board was on notice of problems with accounting integrity and whether it took any adequate steps to satisfy itself as to the future management and integrity of Horizon, and whether or not commercial considerations, dependent on the success of Horizon, had an impact on decision making by the key parties.
Was Horizon considered simply too important to the Post Office and others to accept that it continued to be plagued by bugs, errors and defects? The Inquiry may wish to consider the relevance of this bigger picture to decisions which were taken on the rollout of Horizon, and the seriousness attributed to continuing technical problems with Horizon.
We ask whether or not Post Office Board members and ministers were appropriately informed of risks, and were known and continuing technical difficulties overlooked or were they obfuscated?
Finally, sir, the extent to which knowledge of those flaws and errors in the development of Horizon did or ought to have informed the later actions of Post Office prosecutors, and the actions of the sponsoring department should be a question for further exploration with witnesses, both in Phase 2 and beyond, because we know that people were sued and prosecuted; an utterly central question is: with what knowledge?
Briefly, sir, questions for Phase 3 and beyond before going briefly to redress. We don’t propose to rehearse in full the crucial issues for the Inquiry. Instead, we provisionally highlight just a few matters which the Inquiry may wish to explore in the evidence yet to come. Those are matters, just to highlight the importance of Phase 2, sir, which we say will necessarily be informed by the evidence heard in Phase 2.
Firstly, reliance on professional reports advice and reviews.
The reliance on such reports and advice and reviews will be a repeated theme for consideration by the Inquiry and the engagement of Second Sight to the role of legal advice from legal practitioners, who have been named already a number of times during the course of the openings.
The core Participants we represent consider that there will be repeated questions for the Inquiry to consider over the role of professional advisers and reviewers engaged by the Post Office or others to inform their position on Horizon.
In the consideration of expert or independent input, the Inquiry may wish to subject the substance of any advice given to close scrutiny, such as what were the instructions given and the scope of any adviser’s role? Were they given a full and accurate picture by those instructing them and were they constrained in their task, whether by resources, time, access, skill? If so, were those constraints due to the actions of Post Office, Fujitsu or any other actor?
What happened to their reports when they were completed? To whom were they communicated or circulated? Were they secret? By whom were they read, for example, ministers? Were advisers able to operate in a way which was truly independent, and did they exercise apparent and de facto independence from the parties? Were there any conflicts of interest, and did they have the relevant skills?
The Inquiry may ultimately wish to consider whether advice supportive of Horizon was too heavily or readily relied upon, and the advice critical of Horizon ignored or diminished.
Secondly, sir, why there was such delay in Post Office Limited and Fujitsu accepting the irresistible truth about Horizon. It should be without a doubt that this is one of the most significant concerns for our clients: the missed opportunity for the Post Office to accept, at an earlier stage, that the treatment of our clients was wrong.
The Inquiry will of course revisit these issues in later stages, including the work of Second Sight and the Mediation Scheme led by Sir Anthony Hooper, as well as the Post Office’s conduct of the GLO litigation. It will be a repeated theme for the Core Participants we represent.
There were many occasions when the Post Office refused to accept that the bugs, errors and defects in Horizon were known and relevant to its treatment of our clients. We hope it will be an important exercise for the Inquiry to consider the reasons why the Post Office took the actions it did, and who took them, against the background of what was known about Horizon.
The importance of Phase 2 again. For those we represent, this may be one of the most critical exercises for this Inquiry. As the Inquiry has heard, each of the years that they had to wait were exceptionally hard years, financially and emotionally, for them and their families. Many did lose loved ones during that time. They died without knowing that the subpostmaster in question would be vindicated. As the Inquiry knows, not all subpostmasters have been able to survive to see the all-important decisions of 2019, or the apparent sea change in approach by the Post Office. So the question of why it took so long has many implications.
Finally, sir, recovery, redress and responsibility. The Inquiry has, from the outset, recognised the importance of prompt and tangible compensation for affected subpostmasters. Those we represent, sir, have repeatedly welcomed the proactive approach taken by you, sir, and the Inquiry team, to the question of compensation for all – including, importantly, those whose convictions have been quashed but have not yet received an interim payment, members of the GLO, and those who have applied the Historical Shortfall Scheme.
Again, we welcome on their behalf, sir, the decision to revisit the matter of compensation in a further hearing on 8 December this year. We are able to say at this stage, sir – perhaps as some encouragement – that whilst matters are ongoing and confidential, we have made progress in relation to issues affecting our clients in the months since you first heard submissions in relation to compensation, sir.
Now while full and fair compensation for every person affected remains an urgent priority for our clients, it’s by no means the only priority. This Inquiry serves an undeniable public service in seeking answers to questions our clients have relentlessly pursued for decades in the face to defensiveness, dismissiveness, aggression and personal condemnation. Every review for report which previously failed to look behind the fiction that Horizon was robust, compounded the trauma of our clients and their families. Failures in accountability and transparency cemented in the public record and in the public eye that they’d been judged both dishonest and criminal. That they were offenders, not only against the public good, but against the most trusted and respected public institution, the Post Office. Yet they were not criminals, and they were not dishonest. And together, they were mothers, fathers, sons, daughters and grandparents. They were former policemen, bankers, and accountants, and many others of good character committed to building a strong business serving their local communities. They were community volunteers and local counsellors. They were parents starting out in life, building on hope for their young families, and those preparing for an enjoyable and well-planned retirement. Retirements that have, in many cases, have been awfully denied them. They were first and second-generation immigrant families. They were first and second-generation Post Office families committed to public service in the institution over a number of generations. They were all committed to the Post Office and what they thought it stood for. They all trusted the Post Office. They were all broken by their experience. And ultimately, they and their families all want to know why the Post Office, ministers, and so many others, appeared to have failed them.
In considering how this most unprecedented of miscarriages of justice came to pass, there may be, sir, in a broader sense, important learning on the role of trust, good faith and candour in the provision of public services. And it’s only in seeking now to understand why these prosecutions were allowed to happen, and why it took over two decades for the Post Office to acknowledge it was wrong, that lessons might be learned. It is only in gaining an understanding of why they were made to suffer as they did, that many of our clients will genuinely be able to start to truly recover and start to rebuild their lives; and it is only in finding those answers that damage done to the public trust might begin to be repaired.
Our clients are fully involved in this Inquiry, sir. They will be represented in the hearing room, and they will be online watching the proceedings, as well as here in the room at various points.
They hope that lessons will be learned, and that individuals and organisations accept accountability and responsibility where such is due. They hope that no other person or family is failed again, nor indeed jailed again, like they were absolutely failed, and in some cases jailed, by publicly-owned systems, public agencies, and public officials. And they do place their trust in you, sir, and in the Inquiry team. They are committed to this Inquiry. They intend to work with the Inquiry team and other Core Participants to ensure that the full story of Horizon and its key players is finally told.
Thank you, sir.
Sir Wyn Williams: Thank you, Mr Moloney. If I may say so, that is a masterful compression of your opening statement, between the time you started and lunchtime. So well done.
Mr Moloney: Thank you, sir.
Sir Wyn Williams: Thanks again for your submissions. And we will be ready to start again at, say, 2.05. Is that all right with everyone?
Mr Henry: Yes, thank you very much, sir.
Sir, would you mind if I addressed you sitting down, or would that compromise the visuals?
Sir Wyn Williams: Mr Henry, I’m very happy for you to do that, because I’m conscious, from having seen you both on Tuesday, that you may be slightly taller than Mr Stein, and he was having difficulty directing himself into the microphone. And so I’d be very grateful to hear you from a sitting position.
Mr Henry: Well, I’m very, very grateful to you, sir. Thank you.
Sir Wyn Williams: Right. See you all at 2.05.
(1.03 pm)
(Luncheon Adjournment)
(2.05 pm)
Mr Beer: I see that you’re on the screen but I’m not sure that Mr Henry has noticed.
Mr Henry: Good afternoon sir, can you hear me?
Sir Wyn Williams: I can.
Mr Henry: May I begin?
Sir Wyn Williams: I was about to tell you that you weren’t yet on my screen but now you are.
Mr Henry: Ah.
Sir Wyn Williams: But before you begin, can I just say, Mr Henry, that it is possible that this afternoon’s session won’t take until 4.30. I would just like to reassure those who are scheduled for tomorrow that I will stick to the timetable so that if we do finish earlier than 4.30, so be it.
Opening statement by Mr Henry
Mr Henry: Thank you, sir.
Sir, can I outline from the very beginning that I’m going to be, as it were, responding not in any legal sense, but reflecting upon the magisterial opening that Mr Beer, King’s Counsel, delivered. I’d like to thank him for the immense care, detail and effort he and his team have so obviously demonstrated in that opening as Counsel to the Inquiry.
It was rendered more powerful by Mr Beer’s restrained and sober delivery and yet, in spite of that, sir, the more one listened, ever and ever more disquieting became the matters he addressed.
The United Kingdom is a nation of laws. The quality before the law, indeed in our very conception of ourselves as a just society, is founded upon that premise. But as Mr Beer’s told his tale, it almost began to seem as if he’d made it up.
It was if we’d become a Ruritanian dukedom or principality, where undue respect for hierarchy and judicial deference towards an institution had reduced people to serfdom and economic servitude, in which that trusted institution, the Post Office, had taken every advantage, just and unjust, when exercising almost totalitarian control over those it pursued to custody and beyond, destined, as Tracy Felstead was, to be sent to an adult women’s prison even though she was but 19 years old or, as Seema Misra and Janet Skinner were, to incarceration in adult prisons where Seema was only kept alive by the knowledge that she was pregnant and where Janet refused to see her children because she could not bear to let them have a memory, that indelible image of seeing her across a formica-topped table wearing prison scrubs.
But the injustice did not end there. It went beyond that, reducing its victims to destitution by bankruptcy or criminal confiscation.
For those in the dock and also for society itself, the depressing truth which, sir, you will not find difficult to establish, was that the Post Office strictly controlled the flow of information and denied exculpatory material to those it had accused. In civil matters, it deprived those it pursued of the means to bring counterclaims or defend unmeritorious claims that had been brought against them. That it was enabled to do so, lay in part in the naive belief that computer evidence is reliable and that the Post Office could itself be trusted, that a multinational household name, Fujitsu, was also acting with integrity.
How wrong those assumptions were. The Post Office scandal reveals that, notwithstanding the legal burden of proof that lay upon it, again and again, it successfully shifted the evidential or tactical burden upon its innocent victims, that they were to establish, as it were, that the computer was not working reliably at the relevant time. A defendant is utterly unable to discharge that burden unless they coalesce and act as a concerted group. I refer, of course, to the Horizon litigation before Mr Justice Fraser.
But in criminal courts up and down the country, there was a huge disparity of resources and obviously a disparity of information. This is starkly revealed by the cases of Lee Castleton – one of the Core Participants that together with Ms Page, I am honoured to represent – and Mrs Misra.
In both cases, as Paul Marshall has said in his evidence to the House of Commons back in July 2020, civil and criminal respectively, both Mr Castleton and Mrs Misra positively averred that they believed the problems they had experienced, accounting shortfalls at their Horizon terminals, might lie with the computer system. In neither case was the Post Office required by Judge Havery Queen’s Counsel, as was, or Judge Stewart, to prove affirmatively that the Horizon System was working properly, reliably, at the relevant time.
Had the Post Office, in either case, been required to prove that the Horizon System was working reliably, it could not have done so. That is so, as a necessary consequence of the factual findings of Mr Justice Fraser. He found that from its introduction, the Horizon System was: (a) unreliable; and (b) apt to generate accounting errors and shortfalls of the kind alleged in the Bates Group Litigation, and as had been alleged by Mr Castleton in 2006 and Mrs Misra in 2010. You’ll be familiar, I’m sure, sir, with that extract from Mr Marshall’s statement.
One never expected or imagined that POL could act in this way. One had a right to expect far more, much, much more from a state institution. If its brutal policy of raw claw civil litigation wasn’t bad enough, how on earth had an agent of the state, a government dominion, as it were, decide to prosecute hundreds of subpostmasters after it had realised – indeed knew – that Horizon wasn’t safe? Why, apparently not content with aggressive, old school civil litigation tactics, had it deliberately chosen to harrow, indeed terrorise, loyal subpostmasters, criminalising hundreds of innocent people? How could it have countenanced exposing so many of these loyal, blameless, already broken victims to the risk of being put behind bars?
Such callousness reveals a corporate mentality that branded subpostmasters as a liability rather than POL’s biggest asset. The subpostmasters were no more than a number, equivalent to the phantom balance they supposedly owed: a disposable commodity, a debt to be pursued, an example to be made of.
So it is, sir, and you know this already, but it is your imperative duty to examine POL’s conduct of litigation from the County Court to the High Court, and the Magistrates Court to the Court of Appeal Criminal Division.
This requires the investigation to discern not simply the unjustified faith in Horizon and the origin of that false belief but to establish when that hardened into brutal realpolitik, the ends justifying the means, that that crumbling, corrupt IT system had to be defended at all costs.
The question of the Post Office as a private prosecutor will no doubt, of course, be central to your considerations. The Post Office failed, except in one instance, in all its responsibilities as a private prosecutor. First, as an investigator, it failed to investigate. It boorishly and oppressively went all out for a confession. Witness how it treated, sir, Nichola Arch, Tracy Felstead, Seema Misra and Janet Skinner. Each one was hectored, bullied, stigmatised as a thief. This wasn’t investigative and impartial interviewing but an interrogation and when it couldn’t brow beat a confession it then, from the very beginning, negligently failed, indeed refused, to investigate the defence raised by those subpostmasters that Horizon was to blame.
But negligence, at some point, went further into active, unforgivable misfeasance and in this it was aided and enabled by Fujitsu. Witness the shameful conduct, as related by Ms Felstead in her evidence before you, sir, and Mr Turner, her then expert, who was told at court that it required a payment of £20,000 in order for the disclosure to be produced. You will remember Counsel to the Inquiry, Mr Beer, King’s Counsel, asking her those questions earlier, I think it was, in February this year or March, when that was revealed.
Subsequently, we had tried to contact Mr Turner but unfortunately we believe that he has died but he did submit a note when he became aware of this and he was struck at the time at the injustice she suffered. It remains a mystery why he was not called at her trial but we shall endeavour to ensure that you have an appropriate answer where that is concerned.
But it brings me now to the second role that POL had, as a litigator and, as a litigator, it behaved atrociously. It did not simply fail to discharge its duty of disclosure but deliberately disregarded it and suppressed it, playing hazard with the lives of those it prosecuted.
It therefore connived at securing wrongful convictions. Worse than that, it adhered to a practice that the Court of Appeal deprecated as long ago as 1971, when the Court of Appeal had obdured the Post Office to abandon charging both theft and false accounting. Even though that guidance was obiter, it was plainly not followed and, sir, you will no doubt recall the case of R v Eden, 55 Criminal Appeal Reports, 193, (1971), in which the practice of the Post Office charging both theft and false accounting received the following “observations”, if I can put that in inverted commas, by Lord Justice Sachs. He stated:
“It seems to this court to be rather odd that two counts, theft and false accounting, should be put in parallel setting if it is the object of the prosecution to secure a conviction on the first, only if the second is proved, or on the second, only if the first is proved. There would seem, in those circumstances, but little point in putting two separate counts. It would be better in future that the prosecution should make up its mind as to whether or not it really wants a conviction on account for false accounting, only if theft is proved. If so, reliance should be placed on one count only. On the other hand there may be cases when it is wise to have account for false accounting where, for instance, a temporary gain could be the object of the dishonest act.”
Well, as stated, sir, of course, that is obiter, and thus the reference to adding an account to redress a temporary gain is likewise obiter. But, in this case, there was no temporary gain. In this case, this was the subpostmasters being tormented by false results provided by a defective system, Horizon, and subpostmasters accepting balances, simply in order to continue to trade.
In those circumstances, sir, which prosecuting authority would really wish to proceed against them? Would it really be necessary if evidentially, as we now know, the evidential test was clearly suspect with this nascent and evolving system subject to so many bugs, errors and defects. In any event, these people having candidly explained their difficulties, and had sometimes been advised, as you learnt from my learned friend’s opening statement as Counsel to the Inquiry, to just balance the books, advice given by the helpline: how could it possibly be right to prosecute them?
The Post Office, however, was not looking at this as an independent prosecutor. That brings me to the third point: the Post Office as witness, aided by Fujitsu. It was guilty of the most egregious wrongdoing, aided and abetted by Fujitsu, of course, in relation to expert evidence.
You, sir, will remember the decision of Mr Justice Cresswell in The Ikarian Reefer, the concerns over abuses in both civil and criminal courts as to expert evidence, the civil and criminal procedure rules which were drafted in response to that and, in particular, so far as the criminal domain is concerned, formerly Part 33 but now Criminal Procedure Rule 19.
It’s a very serious business. In the late 1980s/early 1990s, in a series of landmark appeals, the case of Judith Ward, the Birmingham Six, the disgraceful misconduct of experts came to light. The idea that the expert was somehow independent and impartial was, in fact, shown to be a lie, hence the necessity of the Royal Commission and hence the very real importance that our system of justice is not corrupted by false evidence.
But, unfortunately, sir, because of the desire to defend Horizon at whatever cost, with the raw material for that being human misery, expert evidence was abused, time and again, and you will see that in Lee Castleton in the evidence of Ms Hobbs, and you will see that in the case of Mrs Misra in the evidence of Dr Jenkins, which brings me to the fourth point.
POL as a minister of justice. It could not be trusted to act in accordance with those duties that fell upon it, as a minister of justice. In particular, objectivity, impartiality, and restraint, as opposed to what Mr Justice Avery described in the case of Banks as “acting as an avenging angel”.
So, ultimately, POL only excelled in its role as a querulous, slightly paranoid and vengeful victim. But that was entirely performative. It was never a victim, just as its prey were never criminals.
Inquiry, sir, however must consider more than POL’s role as a private prosecutor. Professor Richard Moorhead, who gave evidence before you on 8 November 2021 as an interested party, cogently described the manner in which the law in whatever jurisdiction, was abused as central, indeed fundamental, to this Inquiry, he argued, even more important than the software itself. This was because the law created, indeed sanitised, these myriad injustices. He stated and I quote:
“We don’t think that there can be any argument that Horizon harms directly arose from the way legal work was managed and conducted. People were threatened, sued, fired and prosecuted via partly or wholly legal work. When Post Office and Horizon in particular came under scrutiny, denials, non-disclosure and harm visited on the subpostmasters and the legal work supported” –
Forgive me, sir, I’m going to start that again.
“People were threatened, sued, fired and prosecuted via partly or wholly legal work. When Post Office and Horizon in particular came under scrutiny, denials, non-disclosure and harm visited on the subpostmasters and the legal work supported or failed to challenge the corporate governance failures that marked this scandal so profoundly.”
You will be aware that we say some of that work was probably done incompetently or unethically, in our view. Certainly, there are serious questions that need to be looked at.
Professor Moorhead opined and was correct in submitting to you, we submit, that you could not get at the truth without analysis, sir, of the individual cases. We pay tribute to the fact that you have heard and encouraged so many of the victims to come before you and speak, where they are able to, as to the profound suffering they experienced.
But Professor Moorhead continued:
“We know from the Hamilton and Bates judgments that shortfalls were pursued oppressively, prosecutions were pursued unconscionably and the safety of those convictions was considered or reviewed, it seems, inadequately. But we do not know how and by whom oppression and unconscionable approaches were put in place. I said, in essence, Horizon is not solely or even mainly a computing scandal; it is also a lawyering scandal but it is, above all, a corporate governance scandal.”
I return to the individual cases now. The Core Participants we represent are paradigms of the evil that was done. Tracy Felstead and Nichola Arch, right at the beginning of this disastrous era in criminal justice, right at the beginning.
Lee Castleton, the civil case heard in December 2006 and January 2007. The precedent, the illustrious scalp that was brandished before anybody else who wanted to challenge the Post Office. They took him to the High Court in London, having failed to appear at the Scarborough County Court and then having had the matter successfully transferred from the High Court Registry in Leeds to the Royal Courts of Justice, pursuing a £25,000 claim, and the costs in connection with it came to £321,000.
It is staggering. They bankrupted him. They very nearly destroyed him. He told you, sir, that if he had been a braver man, he would have killed himself.
Seema Misra: her case demonstrates every conceivable mischief of non-disclosure, perjury and oppression.
Then, finally, Janet Skinner, a paradigm case of an honest woman broken by this discreditable charging practice, particularly since they could not under any circumstances have proven theft, owing to the defects in the system. She enters a plea, an unequivocal, I suppose, but false plea, because she had been crushed.
There must be and there are, sir, hundreds just like her. So therefore, she is vitally important as well, her story, to the issues that you are required to determine.
Serious criminal charges emerged from this scandal, we submit. Perjury is one; perverting the course of justice, the vital administration of justice is another; contempt of Parliament, quite possibly even another. So far as legal professional privilege being vitiated, Professor Moorhead stated that “Evidence of iniquity was in abundance”: evidence of the iniquity in abundance.
What and how brought POL to this? What motivated POL? Was it arrogance, hubris, paranoia that an epidemic or endemic theft and false accounting had suddenly, like a wildfire, burst out at branches up and down the country?
Or was it far more sinister than that: the narrative, the narrative of a computer-driven Utopia and so, to serve its own ends, corporate, commercial, political and reputational, it had to subjugate all those who might challenge it together with Fujitsu, and thus condemn those innocent people into a never-ending, dystopian nightmare.
Does it come to that?
I mentioned Fujitsu. What about its sidekick? The naked triumph of Fujitsu’s commercial interests trampling over the innocent, seemed, and still does seem, utterly incredible.
As Mr Beer’s opening continued, it was delivered with appropriate pathos for the victims of this tragedy, pathos which never compromises independence or dispassionate objectivity, and yet a staggeringly surreal element began to emerge at times, sir, from his almost prosaic exposition of the facts. There is no need now to name the great and the good who Mr Beer mentioned, the “Don’t you know who I ams”, who then populated the Central Criminal Court in the east and formerly the Supreme Court in the west with One Essex Court almost plum in the middle? But it seems that the establishment writ large with all its weight was brought to bear on the little people.
Among the putrid story that emerges, are these questions which we now pose for your consideration. How had this country, the oldest democracy in the world, failed so many, approaching somewhere between 800 and 1,000? How had its institutions not merely failed but had become complicit in tearing up the lives of these decent, law abiding, entirely innocent victims? Those isolated individuals – because they thought they were isolated – dare I say ordinary people who suffered so much and still suffer to this day. They can be counted in their hundreds.
They may be the so-called “ordinary people” but their lives as you recognise, sir, are precious and have value. They’re not ennobled. No accolades, letters or chivalric insignia follow their names but extraordinary wrongs were done to them and those wrongs still continue.
The causes of their suffering must be arrived at by you, sir, root and branch. Your root cause analysis will be multi-systemic and multifactorial and you will only overcome the many obstacles you face if, in accordance with the hope fervently expressed – and “fervent” was the actual word you used – that you might receive cooperation from all parties. You expressed that wish on 8 November 2021, but only by adherence to candour and transparency by all the Core Participants acting in good faith and with goodwill, shall you be enabled to arrive at a sound conclusion.
In doing so, in reaching your conclusions, the accountability of each branch of Government that allowed this to happen, indeed, perhaps doomed it from its inception, must also be determined.
So I come to that aspect, a common theme of failed public sector IT projects – and, of course, this was a public PFI IT project – is the lack of proper governance and oversight by government, and Horizon was no exception. But what took the troubled history of Horizon’s procurement out of the commonplace, such as the viability of the project itself, was diplomatic pressure, expedient responses to threats of litigation, and continuing internecine struggles between government departments.
It now seems clear that the project had objectively failed before it was inflicted on Post Office branches and Crown Offices nationwide. We submit that because, of course, it did not meet the standards agreed and the functions specified were subject to inherent vulnerabilities. The writing was on the wall and, predictable by the burgeoning costs, repeated delays, and failures to meet completion deadlines.
It is understood, and this is a matter, no doubt, upon which Mr Page will be able to assist you, and also other evidence that you well hear, that projects with long development time frames have a very high probability of failure and, in fairness to Fujitsu, repeated alterations to the specification by government, exacerbated the problem of delivering this mammoth, so oftentimes repurposed project, on time.
There were undoubtedly system failures, the bugs, errors and defects that meant that Horizon did not perform as expected and was subject to unpredictable, at times unknown, in other words latent and entirely unforeseen, so far as the subpostmasters were concerned, errors. In blunt terms, it didn’t work properly.
As Hulme said, the fact that 19 matches ignite is no proof that the 20th shall, David Hulme.
As Mr Justice Fraser outlined, so clearly in his judgment, the fact that it works most of the time does not mean to say that it works all of the time.
Then, of course, from the very beginning, there was a failure to ensure that the needs and expectations of the subpostmasters were met, considered or even taken into account. The arrogance is breathtaking. The subpostmasters, the end users, were not front and centre of the development process. How could they? If they were to find out that they were to lose control of balancing out their accounts, that they would have to bow before the computer and surrender their control, no doubt there would have been uproar.
How can a programme, we ask, which requires a user manual of more than 800 pages, be remotely practicable? Doesn’t that speak for itself? What budget was allocated for training? How likely was the rollout going to be fit for purpose, given the lack of staff to implement so-called user awareness sessions that were brief and inadequate? Was this euphemism for training another ominous sign? Was it destined to fail? How convenient; blame it all on the subpostmasters, as user error.
We submit that rolling Horizon out in such circumstances was the height of folly. It was an act of political and reputational expedience, instead of listening to its frontline staff and subpostmasters, POL and Fujitsu decided, we suggest, at some point, sir, to enter into a pact by which subpostmasters were to blame. They were to be sued or prosecuted on the grounds that Horizon was infallible. It was a policy founded on a ruthless disregard for the facts, motivated by mutual self-interest and political expediency.
It was easier to blame the subpostmasters than to give the most remote credence to their concerns. The alternative was devastating. They would have had to have gone back to the drawing board, ripped it all up, and started again.
So POL’s corporate governance and how it came to weaponise civil and criminal litigation must be examined by you, sir, in the context of who knew what and when.
There are clues, however. Clues can be discerned from, of course, evidence that still exists, evidence that was destroyed, and matters that never ever existed, because nobody put their minds to it. But, generically, an effective business must have robust internal controls to identify deficiencies in the IT system that it had to work with. These management systems would necessarily involve ensuring that problems, if unresolved, would be escalated to the senior management committees and ultimately the board, and senior management committees, with the board’s oversight, would then properly engage in order to rectify these defects, supervising those delegated to resolve such issues.
Senior management committees with the board’s oversight would also engage with the corresponding management of the third-party IT provider, in other words Fujitsu.
Had such structures existed – and surely they ought to have been in place – it is difficult to imagine how anyone at POL and Fujitsu could have been unaware of the crisis engulfing the innocent.
Now, sir, prophecy, however honest, is generally a poor substitute for experience. Ms Page and I nevertheless predict that the corporates in this case, and perhaps their former directors and officers, may well follow a studied and studiously well rehearsed routine that you, given your very considerable experience, will be astute to.
Leaving aside equivocation and casuistry, because one mustn’t pre-judge, but one can easily see a line taken upon reliance on the faults of others, rationalisations concerning almost Byzantine lines of command, lack of co-ordination and communication between divisions, departments and the like, “If only we’d known, if only we’d been told”. We trust, sir, that you will see this for what it is, because this is the governance issue that Professor Moorhead powerfully alluded to.
It was incumbent upon the board and senior management of Fujitsu and POL, indeed government, to take ownership of this burgeoning crisis to embrace accountability, to ask the difficult questions.
Had they asked those very necessary questions, then there would have been no need for this Inquiry to do so. But now, sir, you must ask and answer those difficult questions in their stead because of the appalling consequences of their failure to do so, because of the catastrophic impact upon those that were scapegoated.
Those who constituted the directing mind and will of the corporates may rest the blame on middle management or seek to pass responsibility to their internal legal department and, ultimately, given what Mr Beer, King’s Counsel, has already alluded to, point the finger at each other and government, in a sort of three-way “The good, the bad and the ugly” Mexican stand-off.
We suggest to you, sir, however, that this is a self-defeating strategy. They had a fiduciary duty. They had a duty to enquire and, of course, they had a duty of care towards the subpostmasters. How POL blithely accepted and regarded as truth that well over 700 staff had turned base after years of loyal and honest service, founded largely or mainly upon a defective computer system, Horizon, ought to have been documented and explained. It ought, sir, to have been a red flag.
Were any concerns or warnings expressed at any stage, citing the manifest improbability of all these worthy individuals becoming criminal? What about the helpdesk? Then, returning to head legal office, why was there no central file of those who had maintained that Horizon was the cause of the shortfall or deficiency?
Would that not have been assiduously kept, a register of each dispute with the litany of complaints against Horizon? But apparently not so. Again, one has to ask whether this may have been a deliberate policy so that the picture emerging, the mosaic we allude to in our opening statement, with each little shard or fragment being a broken life wrongly prosecuted or sued, that they didn’t want that; they simply wanted chaos, without an index.
It all comes to their own management of data and, if you do not wish to be briefed and if you do not ensure that there are systems in place that you can be properly briefed, then you have to wonder whether that is by accident or design.
What we submit to you, sir, is that the more these responsibilities or duties of accountability are evaded, the more untenable POL’s and Fujitsu’s position will become. If there were hermetically sealed boxes, if left did know what right was doing, if a need-to-know, divide-and-conquer culture existed in those institutions, this is no excuse. The tone and structure, the apparatus of governance and accountability is set by the senior management and comes from the top not the bottom.
If there were rigidly hierarchical or labyrinthine structures impeding communications that, being left uncorrected, may reveal a desire to exploit the ulterior advantages that always come with such overcomplex and ineffective corporate architecture, the means by which those in authority are enabled to say, “We did not know”, to make plausible denials. Ultimately, however, the buck should stop with those at the top.
To the cynical, however, the best form of reassurance is to retain the service of the most eminent silks, even a retired justice of the Supreme Court. Their once privileged position, pun intended, may become distinctly uncomfortable given the tight corner in which POL now finds itself, together with its former senior management. The legal advice POL happily once received may now fall within the crosshairs.
One cannot say for sure, especially after so many years have passed and especially with the expression of contrition at the beginning of POL’s opening statement, that POL might now choose to blame those who were prepared professionally to stand on their heads and perform cartwheels for them, ranging from panel firms who prosecuted, to those august persons Mr Beer, King’s Counsel, mentioned.
The Post Office, of course, may double down but it would not be surprising were they to repudiate, with the utmost sincerity, the advice they had once received, whether to strictly control information being provided to Mrs Seema Misra, removing her eligibility, along with Ms Felstead, from the mediation process, with the intention of depriving her of information which was critical not only to her appeal but everyone else’s, or, in the civil proceedings, so absurd as the effrontery now seems, to seek to recuse the one judge who seemed determined to demand answers from their counsel, trial counsel, who himself, it appears, seemed to be oblivious of the recusal application that was about to take place, sir, when Lord Grabiner entered the court.
So it could be this position, and again, this has been alluded to by Professor Moorhead, that the executives will blame the lawyers and, no doubt, the lawyers will blame the executives. So you are confronted, I respectfully submit, with that classic problem that was identified so long ago by the then Mr Justice Leggatt in Gestmin v Credit Suisse, which is that legal proceedings – and although this not a legal proceeding, the same inherent biases will exist – tend to distort the memory and so, therefore, you’re forced to go to the contemporaneous documents.
But beware, because you will have already noted from what was put up on the screen yesterday, that some of those contemporaneous documents are Janus faced. They make a statement of principle and then derogate from the statement of principle thereafter.
So, as libel lawyers or defamation specialists frequently say: don’t just look at the headline. The headline may sound the right tone, whereas the rest of the advice or review may not. And that brings me, sir, to three matters before I will very briefly go through the submissions that we have submitted already.
Disclosure. Your disclosure protocol of 28 July 2021 is, I respectfully submit, inextricably bound up with the fervent hope you expressed in November of last year. The disclosure protocol, which you’re very familiar with, sir, stated:
“Wherever possible the chair intents to rely on voluntary cooperation for production to the Inquiry of the documents he considers necessary to fulfil his terms of reference. The Chair will normally make a request for voluntary production of documents by means of a letter [et cetera, et cetera]. The chair expects that all parties to whom a request of this kind is addressed will cooperate with the Inquiry and will provide all relevant material without the need for him to exercise his powers of compulsion of documents or evidence.”
Then I omit words:
“… providers of documents including legal representatives should provide documents requested by the chair together with any other documents they consider to be relevant to the Inquiry’s terms of reference without delay and within the time limits specified by the Inquiry in any relevant request. PODs are expected to undertake comprehensive, thorough and rigorous searches in response to the request of documents”, and I need not say anything further.
Well, unfortunately, sir, that was a bit of a dead letter, and we respect the decision you made on Tuesday of this week and I don’t seek in any way to go behind it. I fully understand the fact that you did not wish to lose momentum. But the fact of the matter is, without disclosure, justice is smothered and, when there is non-disclosure, injustice flourishes.
Now, none of Mr Altman’s documents, advices or reviews were disclosed in the criminal appeals. The existence of his 2013 review was known, but not disclosed. It is jaw dropping, when one considers POL00006485 – and I will not ask for any document to be put up on screen, sir – Mr Altman’s consultation which took place on 9 September 2013. Jaw dropping.
That is, I regret to submit, one of those Janus-faced documents. Six years later, his advice on settlement, POL00006401. Again, hair raising, paragraphs 19 to 22, 25, 27, paragraph 31, 17 June 2019. Utterly inimical to the very grave and onerous responsibility on the Post Office as prosecutor that, by that time it knew, or at the very, very least suspected, that innocent people had either gone to prison or had been criminalised for nothing.
In fact, really, that ought to have been clear as far as back the Clarke Advice and the shredding advice. It ought to have been clear. What the Post Office ought to have done was to have self-reported to the CCRC and, for good measure, it probably ought to have written to every court in which it had brought a prosecution, and it ought to have perhaps even self-referred to the DPP. But it did not. There was raw claw litigation in both the civil and the criminal litigation, at appellate level.
The ineluctable conclusion, we submit, is it was because they were wanted to suppress. They wanted to smother the truth from ever getting out; they wanted to manage things.
Now, we have to return to the issue of knowledge, and I would now be very grateful, sir, if you could just note that the solicitor for the Inquiry wrote to those who instruct Ms Page and myself on the 27 September 2022, because we – perhaps out of an abundance of caution, and perhaps unnecessarily, for which I ask your forgiveness – had written to the solicitor of the Inquiry expressing concerns about the terms of reference. The solicitor to the Inquiry wrote back in these terms, and it states:
“In relation to the matters set out in paragraphs 1(a) and 1(b) of your submissions, ‘Was evidence as to the unreliability of Horizon hidden from public scrutiny and, if so, who was responsible for doing so?’ I would draw your attention to the following issues:
“Issue 49 …”
Your issue 49, sir:
“What information and knowledge did Post Office Limited, Royal Mail Group Limited, Fujitsu Services Limited, the National Federation of SubPostmasters, the Communication Workers Union, UK Government Investments and the Government have about the following facts and matters during the relevant period? Read with (a) the existence and extent of bugs, errors and defects in the Horizon IT System; (b) the ability of such bugs, errors and defects to cause apparent discrepancies or shortfalls in branch accounts; (c) the ability of such bugs, errors and defects to undermine the reliability of the Horizon IT System accurately to process and to record transactions; (d) the extent to which apparent discrepancies or shortfalls arose in branch accounts as a result of bugs, errors and defects in the Horizon IT System.”
Then continuing with our point:
“… the non-disclosure by Royal Mail Group Limited and Post Office Limited of the existence of problems with and/or concerns about the reliability of Horizon when bringing criminal proceedings against persons alleged to be responsible for those shortfalls.”
We were then directed to issues 50, 51, 52 and 59, namely at what level within the organisations named at question 49 and the Government, were these known? When and in what circumstances had they first become aware of these matters? How did their knowledge develop over time? What, if any, steps were taken by the organisations named at question 49 and the Government to bring these matters to the attention of subpostmasters, managers and assistants?
Well, we submit that knowledge, of course, is central. We can start out, of course, with the obvious statement that Fujitsu knew. They knew. They must have known and if those in senior management did not, there must have been an active policy of Nelsonian blindness, which is, of course, dishonest.
We submit from the very beginning the Post Office knew enough at the outset, to exercise caution and restraint and not proceed as it did against the innocent Nichola Arch and Tracy Felstead. Whilst they may not have known the full picture at the start, they knew enough that it wasn’t working.
Why do we say that? Because of the difficulties in procurement, delivery, rollout and training.
The rollout, as we submit, was a premature rollout. The defective advice that Mr Beer took you to, where subpostmasters were advised to proceed to balance, a sort of force majeure forced upon them by the inherent instability of the system, the advice to sign off an inaccurate account from the helpline beggars belief.
What about the training? The training. How on earth, on top of everything else, to get on top of the 819-page training manual and also the fact that there was no continuity in the training? We know again and again that somebody comes and trains, a glitch, a defect is noticed and then they never come back. It’s almost as if they’re not sent back so that there is no continuity of care and, if anybody did take up arms on behalf of a subpostmaster, they would seem to have been moved on.
Sir, we respectfully submit that the helpline, as well, all of this must have been fed back. So the Post Office must have realised, at a relatively early stage, that the innocent were being put in jeopardy, that the innocent were being potentially broken on a wheel just so that they could pursue what they believed to be a debt.
But the Post Office knew subsequently, and we respectfully submit they knew at a deep level, that Horizon was subject to these bugs, errors and defects. But did they reverse their policy of prosecution? No. Did they remediate this appalling injustice? No.
They stopped at the beginning of 2014 because they received an advice from Mr Altman, King’s Counsel, which reveals that Mr Altman cannot have been in the know, because he was advising them that they had to have proper protocols in relation to prosecution and also the reliability of Horizon and, as we put in our opening, that could not be done without blowing the lid off what they already knew. So it was far easier for them, far, far easier for them, to simply stop prosecuting, because the terms upon which Mr Altman said they could only continue to prosecute satisfactorily and in safety, were obviously toxic, so far as they were concerned.
But that, of course, is far down the line. When did the Post Office know? We will submit that you must concentrate carefully on two matters, sir: the first is the removal of the suspense account and the second is the pitiless destruction of Lee Castleton and his witness statement is, of course, WITN03730100. These matters arose, of course, long before the Computer Weekly document in 2009.
Let us deal first of all with the removal of the suspense account, the way in which subpostmasters could park the discrepancy and, as it were, be allowed to continue to trade so they wouldn’t have to accept the balance and it could remain, as it were, in abeyance.
The document upon which we rely for this is POL 000 – and if I’m wrong about that, forgive me; it might be 000 – but 38870.
We know from the properties that it was composed on 16 September 2003. Mr Nick Wallis, in his book on this scandal, addresses the terrible dilemma that confronted subpostmasters when it was withdrawn, where they would have to accept Horizon, accept the balances, the shortfalls or be dismissed.
We respectfully submit that that was a result of the fact that Horizon was unfit for purpose, that debts were building up and that cupidity, rapacity, call it what you like, on behalf of the Post Office, triumphed over justice to its loyal subpostmasters.
The second thing, of course, is Mr Lee Castleton. Mr Lee Castleton: his story is unutterably tragic.
This is far more than a legal injustice. This destroys people’s mental, physical health; takes away their good name; they’re branded as a thief; their daughter gets gobbed at in the street: mucus, phlegm, saliva. Mr Castleton told me she had beautiful long hair and she would come back, having been abused that her father was a thief, with spit and phlegm in her hair.
The Post Office needed a precedent and, as I’ve said, they brandished his story, his fate, before others, to deter. He was, as I’ve already submitted, an illustrious scalp.
A witness called in the case to give evidence of the Horizon System was Ms Anne Chambers, a system specialist employed by Fujitsu. Her evidence was that she found no evidence of any problem. Judge Havery, Queen’s Counsel, was impressed by her; he described her as “clear, knowledgeable and a reliable witness”. That was not, however, Mr Justice Fraser’s conclusion. This is what Mr Justice Fraser stated:
“At least Anne Chambers, in early 2006, and all those with whom she was corresponding, knew that this problem, now admitted to be a software bug, had been around ‘for years’. Horizon support were telling the subpostmasters, whose branch accounts were affected by discrepancies, that they cannot find any problem. The SMC, the part within Fujitsu responsible for providing corrective action for event storms, would not always notice these had occurred in time, and by then, the damage may have been done. I find by ‘the damage’ that this can only mean impact upon branch accounts.”
Well, none of that, of course, was before His Honour Judge Havery. They pursued Mr Castleton and they pursued him as a precedent. It is absolutely clear that the expenditure of 321,000 to pursue a debt of about 25,000 is utterly ludicrous, as a commercial case. It ought to have been dealt with by financial controls. It ought to, we suggest, have been escalated. It is a mark of the oppressive culture and it is unconscionable that such costs were generated.
Mr Castleton, a litigant in person, did not even know that he could require their bill to be taxed and so, therefore, he was saddled with that and remained saddled by that in bankruptcy. He did not even know – nobody informed him – that the bill could be assessed. It is an appalling, a most discreditable episode and it ought never to have been countenanced.
I now come, if I may, to compensation. I want to briefly deal, if I may, sir, with some of the thoughts that have been expressed and given in evidence before you about this. I will not refer to Mr Castleton’s evidence. He was nearly destroyed but with tremendous courage he now tells you that he is happy, but he is only happy because he is a person of profound faith and stoicism, and it is humbling that a man who has been subjected to so much, together with his wife and children, can reach that level of acceptance. I suppose, basically, it was submission. He was powerless to do anything in front of this juggernaut that crushed him.
Nichola Arch, mentally, physically, emotionally broken, unending pain. She and her husband even considered committing suicide together. They now have a child but, after their child was born, she had a massive operative procedure and she is beset with health problems, emotional and physical.
Ms Felstead, who had to go somewhere else out of the bosom of her close-knit family, leaving the area in which she’d grown up because of the shame, she asked in front of you:
“Do they have children? What if it was their daughter? My 15-year old son said to me last week that he’s glad he doesn’t have the same surname as me. He sits in school and, you know, he hears people talking. He sees stuff in his school. They have TVs that project the news. He’s happy that he doesn’t have the same surname as me. I’d like for somebody to be held accountable. It’s not just one person. There’s not just one person that knew what was going on here. Somebody needs to be held accountable. I want them to sit here and feel what we feel. We’re having to do this again, we’re having to tell our stories over and over. We just need answers so that we can move on with our lives.”
You know, sir, that she is now, as she has expressed, unable to take any further part in the provision of evidence.
Mrs Misra:
“The Post Office scandal made me feel this is a land of two law. There is a separate law for the rich and in authority and then there’s a separate law for people in – the common people. And another thing, you know, like I’m really thankful for the Inquiry, you know, so we can put a point forward but, at the same time, I don’t want Post Office to hide behind the Inquiry and saying that ‘Okay, we’ll make a decision when the Inquiry is done’. Inquiry are going to find out who know what, and what punishment they like, but they don’t – for whatever decision they need to, whatever caution they need to answer, they should still carry on. Every time we go to court, we find a new evidence where there’ll be a Clarke Advice shredding document and there will probably, like, some more coming up as well.”
Well, I’ve already referred this afternoon to the Altman documents.
“Can they be sincere for once”, Mrs Misra said, “and say the truth, and accept it and to be honest? I say it for myself and probably the same for everybody: not just physically. We are mentally tired. We are mentally tired. We want to enjoy life, whatever we got left. Can’t just like – it’s not easy thing but that doesn’t mean we’re going to give up. We do want the answer. I just say please get this sorted.”
Mrs Skinner, Janet Skinner:
“There’s too many people involved in what’s gone wrong. Either it’ll be within the Government, the Royal Mail, the Post Office, the legal system, the defences, the legal teams. So many people that have wronged all these people and destroyed so many people’s lives. We need answers from it. People think that we’re here because of money, and people automatically think that all we’re bothered about is compensation. The only thing that compensation will ever change is our financial stability. We’ve got a life sentence for what’s been done. We will never erase the memories of what’s happened over these past 20 years, and it won’t. We’ve got to live with that, but yet you get the people at the top who just basically say ‘I’m sorry, we made a mistake’. You made a mistake by destroying people. Do you know, Seema was right in what she said. There’s a split between them and us. So why is it that the people at the top think they have more power? What makes them above the law, above anybody else? If we break the law, we get penalised. They’re breaking the law, and nothing comes of it.”
So, sir, I’m going to ask you to take the opening statement as read.
Sir Wyn Williams: I should tell you that it has been read.
Mr Henry: Yes. Well, thank you. There is no point repeating that which has been so ably addressed by all counsel who preceded me. You have our opening statement. But, sir, you know your august responsibility. You know it well.
The best expression of sorrow or contrition is not a legally rehearsed and trite expression. It is not the tight body language of somebody sitting by their lawyer. It actually comes from acts, from deeds, from actually complying with disclosure deadlines so that we do not have – it would be trivial to call it a rigmarole, given the destruction it has caused, but the same monotonous, repetitive, non-compliance, wrongdoing, that has dogged this appalling episode in British history, British legal history, from the outset.
These broken people trust in you, but they confide in you, that you will go thorough, and root out the truth. That you will not entertain any further excuses or rationalisations that were advanced before you on Tuesday of this week. And we respectfully submit, sir, that you are more than able, and very well able, to achieve justice for those we collectively – Mr Stein, Mr Moloney and myself – represent.
Sir Wyn Williams: Thank you very much, Mr Henry.
We will now have our afternoon break, and then I think we will hear the opening submission on behalf of the Federation. So I will see you all in 15 minutes.
(3.22 pm)
(A short break)
(3.37 pm)
Opening statement by Ms Watt
Ms Watt: Good afternoon, sir.
Sir Wyn Williams: Good afternoon.
Ms Watt: I’m Catriona Watt and I appear on behalf of the National Federation of SubPostmasters this afternoon.
Sir Wyn Williams: Thank you.
Ms Watt: Thank you very much for allowing us to make this opening statement which has been provided to you, sir, in advance and I intend to substantially read from it and comment and add as I go along. I also may call up some documents.
Sir Wyn Williams: Certainly.
Ms Watt: First of all, in making the opening statement the National Federation of SubPostmasters welcomes the opportunity to assist the Inquiry and its chair in any way it can in order that the failings of the Horizon IT System at the Post Office and the miscarriages of justice in the prosecutions of postmasters and other Post Office staff which followed can be fully addressed. I would just want to acknowledge, as counsel who spoke before me did, the detailed and sometimes shocking information provided in the opening statement of Counsel to the Inquiry, so clearly given.
The NFSP appreciates that the chair has had the benefit of already having its Core Participant status submission, also its statement on issues and evidence of the hearing on that in November 2021, when Calum Greenhow appeared before you. But, notwithstanding this, the NFSP seeks to encompass the key issues for it by making this opening statement. The NFSP recognises the scale and importance of the work of the Inquiry and, in particular, the care and time taken by it to give voice to those affected through the human impact testimony sessions and, of course, here, with the statements that have been given by counsel on behalf of those Core Participants.
The devastating effect on those individuals and their families of what happened to them as a result of the Horizon IT System and the operation of it by Post Office Limited, was laid bare in those sessions.
While the NFSP has no direct involvement in the setting up or delivery in respect of the compensation scheme, in its written contribution to the Inquiry’s compensation hearings, the NFSP urged the Government and the Post Office to make interim payments to those affected without further delay. In this regard, it is the strongest possible hope of the NFSP that all of those who suffered as a result of Horizon and were wrongfully prosecuted and/or dismissed will have their reputations restored – although, as we’ve heard, how difficult, if at all possible, that may be – and all of their financial losses including consequential losses, refunded.
In applying for and being granted Core Participant status, the NFSP is able to participate in and hopefully contribute to the proceedings in a way in which they could not, for instance, in the litigations which gave rise to the issued judgments of Mr Justice Fraser. In particular, Bates and Others v Post Office Limited [2019] EWHC 606 (QB) judgment number 3 (Common Issues) which discussed and commented on the role of the NFSP, and I will say a little bit more on that later. But this was because neither the NFSP nor any of its officers were asked by any of the parties to give evidence to the court, leaving Mr Justice Fraser without the benefit of direct evidence on matters involving the NFSP and on which he went on to comment, such as those discussed by him in part F of his judgment number 3.
The NFSP recognises it is one of only a number of representative organisations, such as trade bodies – which the NFSP is – unions and others, whose members were affected by the Horizon IT System and the actions of Post Office Limited in relation to it.
Now I think what I go on to say next is important because we have heard, of course, about many victims but there are also a number of organisations of which they may have been members.
Only postmasters can be members of the NFSP. As a result of information obtained from a Freedom of Information request – and I understand that was from the journalist, Nick Wallis, who has shone a light on so much that has gone wrong here – it is understood by the NFSP that of the 766 who were prosecuted, approximately 56 per cent were postmasters leaving the other 44 per cent of those prosecuted as assistants and Post Office employees.
This means a sizeable number of prosecutions were bought against people who were not postmasters and therefore did not come within the ambit of membership of the NFSP or another trade body, such as the National Federation of Retail Newsagents, the NFRN. I understand that at least one of the Core Participants discussed in earlier submissions, for instance, was a member of that organisation.
This, of course, actually makes it even more difficult, as I’ll go on to say, to put the whole picture together by these organisations. There are several different representative bodies whose members were affected here.
The NFSP considers it is important for the Inquiry to encompass this wider group within its work and its ultimate findings. In order to ensure that the public understands the reality of the risk which was faced and, in many cases, one which came to pass, for anyone, not only postmasters, who worked in a post office during this period.
This is because what happened as a result of the introduction and consequences of the Horizon IT System is not a postmasters-only issue; it is one which affected a wider set of employees of the Post Office.
In addition, it is understood by the NFSP that many of those prosecuted were likely to have been members of other unions or trade bodies, such as the Communication Workers Union, the CWU. The NFSP understands and appreciates that the Inquiry is aware of these different representative bodies and will be considering the roles, opportunities, actions in respect of involvement, for instance in the working group, highlighting issues with Horizon and supporting their members.
As well as assisting with giving evidence at the forthcoming Phase 2 of the Inquiry’s work, where two former senior officers of the NFSP will be giving evidence before you, sir, the Phase 2 of the Inquiry’s work on the Horizon IT System itself, the procurement, design, pilot rollout and modifications, the NFSP sincerely hopes to contribute by way of giving evidence at the following phases.
While the NFSP’s role in the area covered by Phase 2 was more limited, it is true to say that it had more involvement in the areas covered by Phases 3 and 4, as well as also 5 and 6, and more will be said by the officers of the NFSP should they be called to give evidence in those phases before you, sir.
As a representative body representing postmasters across the UK – and just to be clear, in terms of comments made this morning in submissions by counsel, postmasters are self-employed. They are not employees of the Post Office and, therefore, it’s incorrect, as I’ll go on to say, that the NFSP was on the side of or sided with the employer; postmasters were self-employed – are self-employed.
The NFSP considers it has a genuine contribution to make to the Inquiry also in terms of Phase 7 on current practice, procedure and recommendations for the future. In particular, the NFSP remains concerned about the extent to which Post Office Limited is open to dealing with change which the NFSP believes is required. That includes governance issues, such as, for instance, whistleblowing, the concerns of postmasters and dealings with the NFSP itself.
I’ll say a little bit more about that later on.
In other words, as said by Calum Greenhow, the current chief executive of the NFSP, when he appeared at the hearing on issues on the 8 November 2021:
“Can a leopard change its spots?”
As he said on that day, if any of those responsible for the GLO strategy remain in post, is it possible for the relationship between those who own and operate (and work in) the Post Office Network to be reset? Through the work and ultimate reporting of the Inquiry, the NFSP wants to finally understand what went wrong and why.
Although, as mentioned in the opening of Counsel to the Inquiry, that has already now been laid bare in its detail.
The NFSP both hopes and believes the fullness of the present Inquiry and the commitment of the Chair to it will have a significant impact on the change which is necessary for all those in charge, from government departments to Post Office Limited. This will include action to right the wrongs of the past and recommendations to ensure such a devastating scandal cannot happen again.
In dealing with the various chapters for the NFSP, these will firstly set out the history and the relationship of the NFSP with the Post Office because, if nothing else, some comment has been made, sir, in these last few days about that, and the NFSP wants to make it clear to you, sir, that it is, in fact, independent of the Post Office.
Thereafter, the opening statement will consider the involvement and position of the NFSP in relation to the Horizon IT System, what it could do and what it did do in relation to it. That’s in the earlier days with which Phase 2 is concerned.
There will also be reference to the issues and the evidence it can give on the further phases of the Inquiry and, it’s hoped, to provide recommendations to the Inquiry which will create trust in the systems of working and the relationships between postmaster, employees, Government and the Post Office, for the future.
In closing these introductory remarks, the NFSP wants to make it clear that, while it has supported many members over the years in disputes with the Post Office, and noting some of what was said by counsel who spoke this morning, where there were any of the NFSP members who did not receive the help that they considered necessary, that will always be a matter of regret for the NFSP.
But as I will go on to say, without the knowledge that, it turns out, Post Office and Fujitsu had, the NFSP was limited in what it could do and it is, of course, with hindsight, with all of the information that is now available to it, that the NFSP and others can look and say “Well, why did we not know this? If we’d known it, we could have done something”.
Much of what took place for the NFSP was done at local level, and as with other organisations, it’s really only when it moves up the way and becomes collective that it’s clear what the picture is, but that wasn’t possible here and we say that’s because of how the Post Office was conducting itself.
But the NFSP sincerely regrets that its belief in the Post Office Limited, the Government, Fujitsu and the justice system, was so misplaced, and we’ve heard comment on that from others as well today. The current chief executive and board of the NFSP have expressed and continue to express considerable regret that more assertive action was not taken by its past leadership to challenge the Post Office in a way which may have prevented some postmasters from falling victim to miscarriages of justice.
It continues to be a source of regret to the current leadership of the NFSP that for some of those postmasters who came to them for help in the past, they have had to wait many years to successfully defend their names through the general litigation. In participating fully in this Inquiry, and in seeking answers to pertinent questions from the Post Office, IT businesses and contractors, government departments and the criminal justice system, the NFSP can represent the interests of subpostmasters to full effect.
Looking at the NFSP as an organisation in order to understand what it is and where it comes from, it is an independent, professional, not for profit trade association representing Post Office operators, postmasters. The board of the NFSP is made up of serving postmasters who are nominated by their peers, bringing with them the understanding of the operation and running of Post Offices with all that entails.
The history of the NFSP shows that it is a long-established body, established on Easter Monday 1897 by a group of around 90 subpostmasters who wanted to improve the conditions for all subpostmasters in the UK. This was perhaps indicative of a historically strained relationship with the Post Office and one might ask how much has, in fact, changed since then.
The letter of invitation to subpostmasters read:
“The importance of forming a national association is evident from the fact that, whilst our conditions of labour have so little improved, the head postmasters, the clerks and the postmen have each obtained important concessions through their respective associations.”
The new Federation secured official recognition in 1906 and, in its early years, the Federation was able to achieve some minor successes for subpostmasters. It started organising an annual conference and the production of a monthly newspaper called The SubPostmaster.
It is from there that today’s NFSP represent members – that’s postmasters, self-employed postmasters – who own and operate around 8,500 post offices across the UK, from inner cities to the remotest corners of the countryside. Notwithstanding this though, the NFSP is actually a small organisation with just 26 employees.
The current objects of the NFSP include but are not limited to, regulating relations between subpostmasters and the Post Office, by negotiating rates of pay and conditions of service, variations to subpostmaster contracts; participating in any form of consultation or negotiation relating to conditions of service for subpostmasters; and endeavouring to settle collective or individual disputes between members and Post Office Limited, promoting such settlement through joint participation, conciliation or arbitration.
Now, the status of the NFSP and its funding arrangements have changed over time. We say this is relevant in respect of both the litigation that followed and how the organisation developed. Until January 2014, the NFSP was a trade union but this status was removed when the trade union certification officer advised that the organisation did not meet the legal requirements necessary to be a designated trade union.
In 2015 the change of status meant member subscriptions had to come to an end and, instead, the Federation then received its funding from Post Office Limited, which consisted of a 15-year Grant Framework Agreement, known as the GFA, paid annually, which is currently being renegotiated to ensure it is clear and that the NFSP can challenge the Post Office and that the GFA is made open and transparent and, of course, that all arises from what I’m going on to say next.
As a result of all of this, it was in October 2016 that the NFSP changed to trade association status following a membership vote.
Just before I go on to look at the Common Issue judgment, I want to be clear that the NFSP is not beholden to the Post Office nor is it afraid to speak out about the Post Office and, as I will show, the NFSP has at times, in its review, been misrepresented by the Post Office, and perhaps therefore others have come to the view that it is somehow siding with the Post Office on matters.
In 2021 Judgment Number 3, Common Issues, Mr Justice Fraser was considering the evidence of the Post Office in support of its position in the litigations. In particular, the evidence of Mr Nicholas Beal, that the NFSP allegedly did not support the litigation. No evidence was offered for that.
In this passage of his judgment, apparently on the basis of Mr Beal’s evidence, Mr Justice Fraser described the NFSP as “not remotely independent of the Post Office”, and then went on to focus on the GFA and the funding arrangements.
Within the litigation itself and what was provided to him by the Post Office – or not provided, as the case may be – he was concerned by the failure of Post Office Limited to make the GFA available in full to the court.
In addition, Mr Justice Fraser also discussed changes to the NFSP’s website during the course of the court hearings, finding this to be suspicious because he had received no evidence from the Post Office as to why this had happened.
As already mentioned, the NFSP were not party to any of this, and it must be said that Post Office Limited has no control over at all, or say in, the NFSP’s website. All that had happened during this period was that the NFSP’s communication officer was updating the website as to tone of voice, colour and location of content and it had been decided that the GFA should be moved from the “About Us” section to another section where it appeared to fit better.
The NFSP was entirely unaware of the way in which this would end up being interpreted in the ongoing court action, as it did not know this was an issue.
As already mentioned, the NFSP was not a party to or called to give evidence in this case.
It had no opportunity to correct the record, or the way in which the Post Office put forward its position on the litigation or the GFA, or how some of these other comments that were made about it ended up being interpreted.
As can be seen from the explanation of the development of the NFSP from trade union to trade association, it was funded by its members until 2015 when its trade union status was withdrawn. The Freedom of Information request I mentioned earlier showed that around 80 per cent of the prosecutions with which this Inquiry is concerned took place between 1999 and 2010, with around 20 per cent from then until 2015 and, as we have heard this afternoon, with none after 2015, and counsel who spoke before me set out why that was.
The GFA was therefore not in place during the time of those prosecutions with which that litigation was concerned. There was no evidence produced by Post Office Limited about the position of the NFSP on the litigations.
The NFSP has been, and remains, concerned about the reputational damage done to it by the way in which this was presented to the court by Post Office Limited and, as a consequence, discussed in the judgment without evidence from it. The NFSP seeks to correct this at the Inquiry, in particular in evidence at Phase 4.
All of that being said, the NFSP wishes to make clear that it otherwise fully supports the judgment and the outcome from these cases and the way in which Mr Justice Fraser dealt with those.
It is concerned at the way in which certain evidence and material about it were presented to the court by Post Office Limited without an opportunity to correct the record, which resulted in the comments about it.
Turning to Horizon, in the period with which this Inquiry is concerned, there was a combination of a decline in footfall and income, changes to technology, changes in the way customers dealt with their money. In summary, this saw several cost cutting exercises resulting in Post Office closures through what’s called, or is termed “network reinvention” in 2003, “network change” in 2007, and “network transformation” from 2012. But before all of this came, the need to introduce a network-wide IT system was clear and the NFSP supported this, recognising it was necessary to secure the future of the Post Office businesses in the digital age.
Can I add, the NFSP wanted to ensure a proper and fully functioning network of post offices was kept open across the UK. That was a major issue for the NFSP.
As part of the research into Phase 2 of the Inquiry, what has struck the current NFSP personnel is the number of prominent MPs from the last 25 years of British politics who, it transpires, were involved in the procurement, rollout and working group in relation to Horizon. The NFSP considers it is therefore important that the Inquiry is able to establish their roles and responsibilities in how this whole affair led to so many postmasters, assistants and employees of the Post Office Limited, having their reputations destroyed, suffer such financial hardship and, in some cases, endure a custodial sentence.
In setting out some of the information which follows, the NFSP refers to events, meetings and, in some cases, documents which are recordings of meetings and issues arising from the procurement and rollout.
So this really concentrates on Phase 2.
In 1995 the NFSP’s records show the number of system providers, as we heard earlier from Counsel to the Inquiry, down to three companies, one of which was ICL Pathway, which that then goes on to become Fujitsu, in due course.
Each of those attended an NFSP exhibition in Manchester where members were able to see the potential options available.
So the NFSP were taking an active role on behalf of their members to find out about what was going to be coming forward.
In February 1996, in a letter to the Executive Committee, the negotiating committee of the NFSP met with three companies and asked questions about certain matters: the ease of use of equipment; the impact on transaction times; acceptability to customers; the extent to which the design will help postmasters to prevent fraud; the extent to which suppliers’ proposals guide the postmasters through transactions; proposals for training; the timescale for rollout; the extent to which the design is foolproof; what plans do they have for ongoing marketing; what plans for distant office transactions; agent encashment; and change of office procedure.
The NFSP did not express any preference in which systems should be chosen and, indeed, it was not technically equipped to do so. But it did have an interest in how such a system would work for their members.
In May 1999, the NFSP were made aware that the DSS and the Treasury were considering pulling out of the Horizon project. Again, we heard about that in some detail from Counsel to the Inquiry in his opening.
It’s understood the DTI wanted the project to continue and, after intervention by Stephen Byers, the then Secretary of State for Trade and Industry, it remained on the table.
The NFSP asks the Inquiry if this suggests that there was discord between government departments which led to mismanagement of the project, and/or a lack of oversight, or that some departments may not have been working together.
Can I add that, in light of all that has been said by Counsel to the Inquiry over these last couple of days, what is clear now is that from the outset, there were doubts and difficulties, and the NFSP has listened with concern to all of that.
On 14 June 1999 the DTI report on the Horizon project stated:
“We understand that the Benefits Agency failed to prepare itself and its system sufficiently in order to be compatible with Horizon.”
The NFSP asks the Inquiry if incompetence at Government and departmental level contributed to the failure in procurement from the start.
In June 1999 the DTI Horizon project report says – and I should say, sir, that some of these documents have been provided recently to the Inquiry by the NFSP and therefore do not, as yet, have Relativity reference numbers and that may come in due course. I simply wish to let you know that.
Sir Wyn Williams: Yes, thank you very much.
Ms Watt: It says:
“While it makes evident sense for ICL to continue with the work it has already begun, the impression remains of an essentially political deal to ensure that ICL has a substantial contract with the Post Office at a price which seems to have been largely determined in advance of contractual renegotiations as a means, however inadequate, of making up some of the 180 million written off by ICL in their 1998/1999 accounts.”
Notwithstanding the documents referred to and available to the Inquiry for the procurement exercise, the NFSP has found little to no evidence of its direct involvement in the procurement of Horizon.
In terms of the rollout, the NFSP understands that the automation project can be traced back to around 1992, when the DSS began a trial of a new benefit entitled claim form, which omitted the use of post offices.
Following extensive campaigning by the NFSP at that time, the claim forms were withdrawn.
The concern from Government was around the drawbacks of the paper-based methods of payment, namely cost, fraud, liability and lack of customer level accounting information.
According to the September 1999 DTI committee report, slippage of the rollout programme began to occur and it was delayed. Similarly, the Montague report suggested that in 1997, a formal default letter was sent to ICL Pathway, who rejected it. That report went on to highlight that the rollout was unlikely to begin by the end of 2001 without improved management and uncertain costs.
What happened next was the pilot scheme and the pilot began on 12 April 1999 with 200 offices in the northeast and southwest of England being involved. These offices were a mixture of both Crown Offices, under the responsibility of the Communication Workers Union, while others were independent offices under the responsibility of the NFSP.
On 29 April 1999, 113 post offices completed their first cash account via Horizon, and these offices were split into two groups: those who were supported during the balance and those who were not. Of those who were supported, 47 completed their cash accounts while 23 did not, a figure that the NFSP found concerning.
The NFSP was watching this pilot carefully in order to challenge the Post Office Limited, where ongoing results of the pilot showed that issues needed to be challenged and also to support its members where needed.
On 30 April 1999 Pam Jervis, the late executive officer for the Midlands region, raised concerns about training and installation of Horizon. Now, this I’m going to, sir, at least attempt to call up document NFSP0000340 on the screen.
We move to the second page of this document, beyond the fax cover. Thank you.
It’s noted at section 1:
“The first day of training is okay but the second day is bad because it is rushed. They are not finishing on time, but they are rushing to finish before 3.30 pm because otherwise they have to buy lunch. Why did they use the most expensive hotels?”
It goes on to say:
“Many subpostmasters have not received assessment or certificates on completion of the course.
“In every training session, nobody had done a main balance. Nobody had been trained to do a full balance. The trainers are people who have only received the same training that they are giving out. It’s too narrow a field and no one can answer questions.”
Continue on to the page that follows, scrolling down the way, and the paragraph just below the bullet points, she reports:
“In general, subpostmasters are extremely happy. They think it’s a great, sophisticated system, but it is being pushed out too quickly and the people doing the training know no more than the subpostmasters. There is no managerial back-up, no definitive answers are given what is needed is a system helpline.”
So that’s back in 1999, with the comments coming as part of this initial pilot. So things are being picked up and commented on and then being fed back by the NFSP to the Post Office.
You can take that document down now, thank you.
In June 1999 the NFSP prepared questions for Stephen Byers, the Secretary of State for the Department of Trade and Industry, and Stuart Sweetman, the managing director of Post Office at that time, about training modification, migration, operations, balancing, the helpdesk and bar coding, all due to the issues that had been raised from the pilot, some of which were highlighted in the document just shown there.
On 14 June the NFSP appeared before the DTI Select Committee. The Chair asked if the NFSP was being alarmist in suggesting that thousands of post offices were threatened by closure. At question 6, Colin Baker, then General Secretary of the NFSP – and I appreciate, sir, that you’ll be hearing from him later in this phase – was asked: “Do you really think that there had been anything more than lip service being paid to the concept of sustenance to the network of sub post offices being kept going by the Horizon project?”
Mr Baker replied:
“I think it is easy for successive governments to make a commitment to a nationwide network of post offices and yet not be in any way specific about what is meant by that.”
The NFSP says that is as true today as it was in 1999.
At this DTI Select Committee, the Communication Workers Union and the CMA explained they had a valuable role to play, not only in protecting members’ incomes and security but also in protecting public interest. They highlighted that the Crown network represents 15 per cent of the total volume of the transactions in the network. They emphasise that the Post Office could deliver the project but raised concerns about the commitment of the Government to the network. They explained that without commitment from the Government, the business would be in a downward spiral.
On 30 June 1999, there is a briefing to Colin Baker of the NFSP, and I’ll call up another document, sir: NFSP00000027. I hope I’ve got that correct. Again, we’ll go beyond the fax cover page to the next page.
Now this is a personal briefing to Colin Baker of the NFSP and it is from Liam Foley who was the business development director and you see that at the top of the page, ICL Pathway.
Now, that’s third paragraph down. It begins “Officers”:
“Officers have experienced problems with the balancing process both in stock unit balancing and the cash account. There have also been printing problems. We have taken these problems very seriously and are making significant effort to improve the situation for the subpostmaster.”
Then he goes on to talk about what actions he has put in place as a result of the NFSP’s points to him.
There’s a set of bullet points there setting out the system changes that are going to be made, major changes in the managers’ training course, major work being undertaken to ensure that all documents are at the same level as the system, and the taskforce in place to identify the specific nature of the printing problems.
Now, from the NFSP’s perspective, what is happening in theory is that the points that it is putting to those in charge of Horizon from its members are being taken on board. That’s what it thinks is happening.
We go on to the next page, please. Mr Foley then goes on to tell Colin Baker:
“You may be interested in some specific feedback from one of the offices visited last week. The postmistress commented that this was the second week in succession we had balanced more quickly than we would have done using the old method, even allowing for the minor glitches. Whilst they were commenting openly on how difficult they had found balancing and that they had raised many objections, they freely admitted that it might be easier for them if they had followed the quick guides and manuals. They now have little fear of the system and are standing thing to better appreciate its benefits.”
He then goes on further down the page, in the final paragraph:
“I believe it is very important that a positive, constructive perspective is maintained by us all. I know I can count on your support to achieve that. I will, as ever, be happy to listen to any specific feedback from the executive council.”
Thank you, you can take that document down now.
As I said, what the NFSP was thinking was that Pathway and others were taking on its feedback, hearing that changes were being made and that the system was being improved and would be fit for purpose.
On 10 August 1999, the NFSP held a special Horizon meeting in Newcastle with over 150 postmasters in attendance. This is all part of the early days of the introduction, the pilot of Horizon.
David Miller of the Post Office was in attendance along with Jean Kendall, the national president, and Colin Baker of the NFSP.
David Miller and Colin Baker highlighted that automation was the future for postmasters. The concerns from colleagues who were part of the pilot were highlighted and these included the stress on the workforce, the strain on people’s lives and marriages, there was enforced cancellation of planned holidays, there was low additional income provided by the Post Office to postmasters who were on the trial.
On this point, these rates had not been agreed with the NFSP but brought in by the Post Office and the NFSP were able to ensure that those payments were doubled. Those on the pilot also raised concerns that the installation project lacked management at every stage and highlighted the number of reboots of the system that was required, especially on balance day.
Now, here I’ll call up NFSP00000237, please. If we can scroll down just to the bottom half of that page, please, you’ll see the general points that I have just mentioned were being made, agreed by all on the trial: the stress on the workforce; strain on people’s lives and marriages; lost holidays; the small amounts paid by Post Office Counters Limited, as it was:
“Of the 44 Horizon officers present, in a vote 30 officers said they suffered stress.”
If we can go on past the next two pages, to the final page. If we scroll down – I’m sorry, that’s me. If we can scroll back up to the bottom part of the previous page, the last two paragraphs of that page.
At the end of the questions, David Miller summed up the evening and asked one question: should he authorise the national rollout?
“All officers agreed there was nothing fundamentally wrong with the system however they did not want to rollout until further improvements had been made.”
On the final page, I don’t need to turn to it, its there, simply that there was a request for urgent training, “urgent provision must be made for training reliefs”, that’s relief workers, because without training for those relief workers, the postmasters themselves could never be away from the Post Office.
Now, I highlight all of that to show simply that in the pilot and the rollout phase, there were points regularly being made by the NFSP to Post Office and to ICL. Of course, it could not have been known at that time what was to come.
From the NFSP’s perspective, what is clear is that throughout the rollout of the Horizon programme, the NFSP supported colleagues where they could and challenged the Post Office on behalf of the network to improve. In June 1999, after concerns were raised by the NFSP over the quality of training, the Post Office invested a further £8 million to improve the training programme. These improvements arose from the points raised by the NFSP, as outlined in my earlier paragraph.
For the NFSP, this all provides clear evidence of their headquarters helping colleagues across a multitude of areas during the rollout. That’s prior to the full implementation and all that happened subsequently.
The NFSP would ask the Inquiry to consider where the losses occurred in the cases, and the figures that I go on to give are a breakdown of examples as submitted by the NFSP to the Inquiry. I simply have them there for illustrative purposes.
But what those figures show is that where members were contacting the NFSP at a national level for help, internally, the Post Office was being challenged. However, that does not mean that in every case, the outcome that the postmaster wanted was achieved. It also shows that not all issues were software or branch accounts related. For example, the 200 cases of REMs, counterfeit and fraud, in the main, focused on a number of fraudulent giro cheques that were being cashed at post offices in the mid-2000s.
This resulted in many transaction corrections being issued to postmasters by the Post Office, which were subsequently overturned after intervention by the NFSP.
Others involved hardware such as computer screens, printers or base units not working.
Moving on to touch on the working group, the NFSP considers that it is important to note that the working group which had been set up by the Government to seek to involve interested parties on the decision-making process consisted of the Government, the Post Office, the CMA, the CWU and the NFSP. The NFSP considers, therefore, it will be important for the Inquiry – which you already just heard from counsel who spoke before me regarding the terms of reference – what the involvement of each of the three representative bodies did on the working group.
Throughout June 1999 there were issues arising with Horizon which the NFSP were aware of. For instance, a fax from Fujitsu to NFSP outlined software changes due to postmasters finding the balancing process difficult to follow, unnecessarily restrictive, and time consuming. This was discussed at a balancing workshop between the Post Office and Fujitsu on 11 May 1999.
One particular issue was data entry errors during migration. There was a recognition that incorrect figures were used at migration to Horizon, resulting in a mismatch between payments and receipts. As a result, a change in the MiMan software was proposed at migration to ensure the correct figures were transferred over. Any mismatch would be highlighted with a warning at migration.
On 8 June 1999 the first working group meeting between Government, the Post Office, CWU, CMA and NFSP was chaired by Ian McCartney MP, Minister of State at the DTI. At this meeting, terms of reference were circulated, and these included – and I set that out – overseeing negotiations between Post Office and ICL, facilitating solutions to the development stage of the Horizon project, maximising the commercial potential of Horizon, concerns by the group the Government did not come out of recent developments in a good light. Payment for Horizon would be about 550 million, paid with an initial 68 million and then four payments of 120 million, and 480 million would come from the Post Office liquidated assets, with the remaining coming from its working budget. And there would be potentially a further 400 million of costs to ICL Pathway, which would be part of the Post Office’s future commercial challenge.
There’s then a second meeting of the working group on 22 June, and we can see, from that, that there is attendance from Ian McCartney, the Minister of State, as mentioned; representatives from the Post Office; Derek Hodgson of the CWU; Tony Kearns, CWU; Terry Deegan, CMA; Tony Harris, CMA; and Colin Baker and John Peberdy of the NFSP, and others.
As can be seen from the minutes of that meeting, there was discussion around the removal of the benefits card from the process, and from the NFSP’s perspective, it appeared that ICL were preventing the Post Office from seeing exactly what they were buying.
The NFSP notes from the time was that there was a general discussion from all parties in relation to costs, around 80 million per year, and the Post Office’s ability to afford the system. With the loss of the Benefit Payment Card was a question if there was sufficient business to make the whole system financially viable, with negotiations between the Post Office and the Benefits Agency apparently not going well, as it appeared there was a financial gap of around £400 million.
On 11 October 1999 the fifth meeting of the working group took place, and this had representatives from the DSS, the DTI, the NFSP, the CMA, and the CWU. And at that meeting, the NFSP was raising concerns about the Benefits Agency trying to encourage benefit claimants to move to the bank, despite the NFSP having understood there was a commitment not to do that before 2003.
Mr Beer: I hesitate to interrupt whilst Ms Watt takes a pause in her submissions. The Federation submitted a time estimate of 30 minutes for their submissions, and we’ve been going for just under an hour. It didn’t feel as if we were reaching a point of winding up from the pace and tone, and I wonder if I’m correct in that assumption. It’s 4.30 now, and I interject to give you the opportunity to give some direction as to the way forwards.
Sir Wyn Williams: Well, I’ve been following the submissions, and unless there is to be substantial additions to the written statement, in fact we are about three or four paragraphs from the end. But maybe I could be enlightened.
Ms Watt: That’s correct, sir. I am literally almost at the end. I do apologise for the overrun. I’m grateful.
Mr Beer: An unnecessary intervention, then. I’m sorry.
Sir Wyn Williams: No, that’s fine, Mr Beer. It’s always good to be rigorous about these things, but I did presume that you were reaching the end.
Ms Watt: That is correct, sir.
Just by way of going slightly off script, I do want to touch on comments made by Counsel to the Inquiry yesterday, where he picked out comments of George Thompson of the NFSP at the BEIS Select Committee of 2015, regarding the system being robust, and simply wanted to add, although I don’t have the document reference for the BEIS 2015 Select Committee with me to hand, but simply to note that elsewhere at that same Select Committee, the CWU’s representative had said that the Horizon System had served the community and the wider electorate well.
“By definition, there will always be bad apples in the barrel, and it’s a robust system.”
I simply wanted to draw that to your attention, sir.
In conclusion, on the forthcoming Phase 2, the NFSP has reviewed a series of meeting minutes and DTI reports, and has concluded that at the early stages there were concerns about the finances of the project, the rollout, and the issues identified throughout the pilot, and matters underpinning the whole operation, for instance the changes in relation to benefits payments.
The NFSP recognises that it is for the Inquiry to review documents, hear evidence, and reach its own conclusions. However, the NFSP considers that from the outset, from the procurement stage to the rollout, there were identifiable issues. It had a role in raising these issues and seeking resolution of them, and did achieve extra funding for training and other changes, as outlined.
All of that said, it is clear that what is known now is that there were significant issues and failings, and ultimately of the Post Office chose to prosecute postmasters and others, rather than face what was clearly a problem following the actual introduction of Horizon throughout the network.
In closing, the NFSP repeats something said at the beginning: that it regrets sincerely that its trust in Government, the Post Office, IT businesses and the Criminal Justice System was so misplaced. The NFSP sincerely hopes that the Inquiry can illuminate in full all that happened, what went wrong, how and why it happened, and to ensure that it can never happen again.
Thank you, sir, for your time this afternoon.
Sir Wyn Williams: And thank you for your submissions.
So Mr Beer, can I just check with you that we’re due to start again at 10.00 tomorrow morning, and that unless I am very liberal in my approach to overrunning, we are due to finish at about lunchtime?
Mr Beer: Both of those things are correct, sir, yes.
Sir Wyn Williams: All right, then we’ll meet again at 10.00 tomorrow morning, and thank you all very much.
Mr Beer: Thank you very much indeed.
(4.37 pm)
(The hearing adjourned until 10.00 am the following day)