Official hearing page

28 September 2023 – Mandy Talbot

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(10.00 am)

Mr Blake: Good morning, sir. Can you see and hear me?

Sir Wyn Williams: I can. Thank you.

Mr Blake: Thank you very much. This morning we’re going to hear from Mandy Talbot.

Sir Wyn Williams: Yes.

Mandy Talbot

MANDY TALBOT (sworn).

Questioned by Mr Blake

Mr Blake: Thank you very much. Can you give your full name, please?

Mandy Talbot: Mrs Mandy Talbot.

Mr Blake: Mrs Talbot, you should have in front of you a witness statement?

Mandy Talbot: That’s correct.

Mr Blake: That has your name on the front, dated 31 May 2023; is that correct?

Mandy Talbot: Correct.

Mr Blake: Can I ask you to turn to the final substantive page on that witness statement, that’s page 36. Is that your signature at the bottom of that page?

Mandy Talbot: It is.

Mr Blake: Thank you very much. Is that statement true to the best of your knowledge and belief?

Mandy Talbot: It is as, at the time.

Mr Blake: Thank you. I believe there are some small changes that you would like to add now?

Mandy Talbot: That is correct.

Mr Blake: Please do feel free to make those amendments now.

Mandy Talbot: If I may, I wish to make some additional comments, having received 1,661 pages of further disclosure that affects my original statement. I’m now aware that I was updated on the case of Wolstenholme in March 2004 by Mr Jim Cruise. This was after Mr Coyne’s initial review and his comments upon the response from Fujitsu had been received. As can be seen from the documentation now disclosed to me, Mr Cruise had concerns about the case and Mr Coyne’s initial opinion and response to Fujitsu. It was for that reason that counsel was instructed by agents.

I’ve now also seen FUJ00121724, email to Colin Lenton-Smith, and report on Cleveleys, FUJ00080715, of Mr Holmes. I was very surprised by the contents of the former and agree that, if Fujitsu had been brought into the matter earlier, it could have resulted in a possible preservation of relevant data and a more conducive engagement with Mr Coyne.

Paragraph 24 of my statement, refers to my request to Bond Pearce not to issue cases involving Horizon. It meant cases where subpostmasters had alleged that the Horizon System was at fault in response to an action to recover debt. As now disclosed to me from September 2005 at POL00107426, email to David Smith of POL, I was seeking to set up an appropriate system for compiling data and investigating cases prior to the business sending matters out to civil litigation agents. Despite pressing, this was ultimately rejected on the basis of cost.

Mr Blake: Thank you very much Mrs Talbot, that statement, which is WITN08500100 will be published by the Inquiry in due course. Those amendments have been made because, as you’ve said, the witness statement was taken some time ago now.

I will take you thematically through various things and if any of those points jump out at you at any relevant time then please do feel free to say as well.

Thank you. You are here today because you were lawyer at the Post Office. One thing that isn’t entirely clear from your witness statement is whether you qualified as a solicitor and when that was. Are you able to assist on that?

Mandy Talbot: Ooh, I am qualified as a solicitor. I joined the Post Office in 1990, I believe I qualified about 18 months before that. I can’t, after this period of time, recall the precise date.

Mr Blake: You’ve said in your statement that you worked at Cameron McKenna and Wilde Sapte?

Mandy Talbot: Yes.

Mr Blake: Were those training as a solicitor or some other role?

Mandy Talbot: No, that was as a junior solicitor. I did my training contract or articles, as it was then referred to, at Douglas-Jones Mercer of Swansea, a provincial firm.

Mr Blake: Thank you. You joined the Post Office in 1990 as a legal assistant; is that right?

Mandy Talbot: Correct.

Mr Blake: You were in the Civil Litigation department?

Mandy Talbot: Correct.

Mr Blake: During your time, it became Royal Mail Legal Services as well?

Mandy Talbot: Yes.

Mr Blake: I think you spent over 20 years in the department; is that correct?

Mandy Talbot: Correct.

Mr Blake: Briefly, can you tell us what kinds of cases that you were involved in, working for the Post Office, other than the kinds of cases that we’re going to be talking about today?

Mandy Talbot: A whole range. Usually small County Court matters under the Postal Services Act, injunctions, giving training courses, issuing proceedings on debt actions, but I’d also done personal injury work, rent arrears cases. Also used to assist the chairman’s office if they wanted information and Freedom of Information action cases.

Mr Blake: In 2011, you became part of the regulation team at the Royal Mail Group?

Mandy Talbot: Correct.

Mr Blake: Was that something different?

Mandy Talbot: Entirely. I no longer functioned as a solicitor. I became – within Legal Services Department, I was somebody with legal knowledge working for Royal Mail Group itself, in a team set up to arrange for the flotation of Royal Mail Group as a company.

Mr Blake: I think you took redundancy in 2014?

Mandy Talbot: In the September, yes.

Mr Blake: Yes. Did you work elsewhere after that, or …?

Mandy Talbot: No, unfortunately for family reasons it was necessary for me to help support my father-in-law, my mother and, ultimately, other relatives.

Mr Blake: Thank you. I want to begin by looking at the structure of your team. During Mr Castleton’s case, you’ve been described, I think, as the litigation team leader or, at one point, principal lawyer.

Mandy Talbot: Mm.

Mr Blake: Can you assist us with that role?

Mandy Talbot: Prior to 2004, Legal Services had a large number of in-house solicitors. In 2004, the then solicitor, who was, in effect, the Head of Legal Services, offered everybody and anybody who wanted it redundancy on quite good terms.

I think, to the best of my recollection, only four members of staff in the whole of Legal Services were prevented from accepting the offer of redundancy. There was no structure involved at all and so teams were, in effect, decimated. So that was 2004.

I had been a team leader in the Postal Services team which, as the name suggests, dealt primarily with matters pertaining to the Postal Services Act, items lost in the post, County Court actions, some debt action against parties who had contracted with Royal Mail for postal services. But, after 2004, in effect, although I had the title, the number of people working within Legal Services meant the title was a nonentity.

Mr Blake: So you had general counsel, did you?

Mandy Talbot: She was referred to, this is Catherine Churchard, as “the” solicitor but, in effect, performed the role of general counsel, though I don’t believe she ever had a permanent position on the board.

Mr Blake: Underneath the general counsel, would it be right to say you were the principal lawyer dealing with civil matters?

Mandy Talbot: No, that’s not correct. There was the Head of Civil Litigation and I was never the Head of Civil Litigation.

Mr Blake: Who was that, sorry?

Mandy Talbot: At the beginning, Mr Joe Ashton, Clare Wardle, Biddy Wyles, Rebekah Mantle, so I was there for a long time, and then when I was a team leader, I was on a direct report to Joe Ashton but, after that role disappeared, I was on a direct report to Clare Wardle, Biddy Wyles, Rebekah Mantle and they, in turn, would report upwards.

Mr Blake: So although described as the litigation team leader or principal lawyer, it was, in fact, the case that you weren’t the leader at all?

Mandy Talbot: No.

Mr Blake: Was there somebody in an equivalent position dealing with criminal matters?

Mandy Talbot: The – equivalent to myself? There were – prior to the reduction in headcount, there were many caseworkers like myself in the Criminal Law Department, but the Head of Criminal Law was Rob Wilson.

Mr Blake: Who would his equivalent have been in your team?

Mandy Talbot: That would have been Joe Ashton, Clare Wardle, Biddy Wyles and Rebekah Mantle.

Mr Blake: The impression that you’ve given is that those who remained in the team after 2004 were few in number and quite stretched; is that fair?

Mandy Talbot: That is correct.

Mr Blake: Do you know why the redundancies were offered at that stage?

Mandy Talbot: To the best of my recollection, this is probably my opinion, in 2004 there was a desire on the part of the corporation to have a reduction in headcount and I believe that is the reason for the offer of mass redundancy.

Mr Blake: In respect of actions against subpostmasters, whether they be criminal or civil, was there anybody in the team that had an overview of the work that was going on?

Mandy Talbot: Neither in the – not in Civil Litigation or – this just speculation – or Prosecution team, because prosecution was an entirely different specialism.

Mr Blake: In the Civil Litigation Team, we’re going to see that you were involved in a number of actions against subpostmasters. Did anyone have oversight or a general view of all of those cases?

Mandy Talbot: No.

Mr Blake: In terms of Horizon, did you receive any training on the system?

Mandy Talbot: I received a one-hour training course very, very early on with people trying to explain lots of moving parts on a whiteboard, and that was it.

Mr Blake: Do you think that was a similar experience of your colleagues within the team?

Mandy Talbot: Within Civil Litigation, yes. I can’t speak as to any of the other teams.

Mr Blake: I want to talk about your knowledge of bugs, errors and defects in the system. You’ve said this morning you’ve been receiving a number of different documents before today. But apart from the corrections that you made this morning, are you content with the words that are in your witness statement?

Mandy Talbot: Generally, yes.

Mr Blake: Did you give consideration to terms that were used? For example, you have described, in respect of the Horizon System, that it was “infallible”. Is that something that you were told?

Mandy Talbot: Possibly not the word “infallible” but I was given the distinct impression that it was a perfect system and that any minor bug or glitch was quickly identified, its footprint made plain and that these were things that Fujitsu would search for if we ever asked them for information as to the running of a particular branch.

Mr Blake: “Infallible” is quite a strong word?

Mandy Talbot: It is.

Mr Blake: Were you given such a strong assurance and who by?

Mandy Talbot: I cannot put a name but I got the distinct impression that this was a system of which Fujitsu were incredibly proud and, as I say, anecdotally in my statement, there was a suggestion that they were so proud that there was a desire to sell it to other organisations.

Mr Blake: You said you got the impression. Where did that impression come from?

Mandy Talbot: Numerous dealings with Fujitsu over the years.

Mr Blake: Who, in particular, did you deal with at Fujitsu?

Mandy Talbot: Usually, when I dealt with Fujitsu, it would be in respect of a particular piece of litigation or case but, also, as you can see from the correspondence, they were copied in to numerous matters that I was dealing with, both with themselves and POL.

Mr Blake: Who in particular do you think gave you the impression that the system was “infallible”?

Mandy Talbot: I would be lying if I tried to put a name to it after this period of time. I’m very sorry.

Mr Blake: Can I take you to your witness statement, that’s WITN08500100, please. It’s page 27 of that statement. It’s paragraph 62. Thank you.

You say there, at the bottom of the page:

“Looking back, I obviously have concerns about the cases I was involved in knowing now that there were problems with the Horizon System but that is with hindsight and the knowledge that has come into the public domain. At the time when Civil Litigation was instructed to obtain repayment of money by POL via legal agents, we genuinely believed the position adopted by Fujitsu.”

Can you tell us when it is that you have obtained – you say “with hindsight”, with the information from the public domain, since – since when did you know that it was not infallible.

Mandy Talbot: The case of Bates, and the increasing amount of publicity about the Horizon System in the press.

Mr Blake: Do you really think that it was not until Bates that you didn’t have sufficient information to cast serious doubts on the reliability of the Horizon System?

Mandy Talbot: I left Civil Litigation in January 2011 to go into a very different world, a very labour intensive job. I didn’t really think anything about Horizon, from the time I entered Royal Mail Group as a non-lawyer to the time of the eventual class action.

Mr Blake: During the years that you were working in Civil Litigation though – 2004, 2005, 2006, 2007, 2008, 2009, 2010 – did you not feel you had enough information to cast doubt on the reliability of the Horizon System?

Mandy Talbot: I really, really didn’t. In 2010, looking at the additional documentation that’s been supplied, I believe – and this is just my opinion – that concerns were maybe arising within POL itself but, you know, even through to the summer of 2010 with the Rod Ismay report – and I know there has been serious criticism of that – we were still being assured that the system was robust and fit for purpose.

Mr Blake: Who by?

Mandy Talbot: Well, there were – there was Mr Rod Ismay himself and the other senior partners to which his report were copied to.

Mr Blake: Okay, we’ll get to that report in due course but is it your evidence then that, internally within the Post Office, you were being convinced that the Horizon System was robust?

Mandy Talbot: I can only speak as to the situation within Civil Litigation. I cannot speak as to the actual position in Post Office Limited at the time.

Mr Blake: But you spoke earlier of being reassured by Fujitsu and now you’ve mentioned Mr Ismay. So was it from outside and also within that you were being reassured about the robustness of Horizon?

Mandy Talbot: From within Post Office Limited and Fujitsu. Yes.

Mr Blake: I want to begin with the Cleveleys case that we looked at before the summer break. Can we look at POL00118236, please. We’re here in March 2004. Could we scroll down, please. There’s an email from Jim Cruise to you. Can you tell us who Jim Cruise was, please?

Mandy Talbot: He was a member of my team. Formerly, he had been a member of the Prosecution team and, very unusually, a number of years earlier, he had transferred from that specialism over into Civil Litigation.

Mr Blake: He is there summarising the case of Mrs Wolstenholme. He says that it started back on 17 January 2001. He says there in the first paragraph:

“At that time the losses were £14,000 and the [subpostmistress] was refusing to make them good blaming the losses on the Horizon System which had been introduced in February 2000 at her office.”

If we look at the third paragraph, the final sentence there, it says:

“[Mrs Wolstenholme] asked for proof that the losses were her fault and caused by computer failure. She also asked for copies of all error notices but Chesterfield said that these were not available.”

Can we go over the page, please. The second line there says:

“The CC [that’s the counterclaim] is that the contract was wrongly terminated; the computer system was unfit for its purpose and throws in the Human Rights Act”, and other regulations as part of the counterclaim.

If we go down to the fourth paragraph he summarises there at the end of that paragraph, he says:

“She declined to settle saying the losses were not accepted as her fault but let [the Post Office] remove all the equipment other than the computer equipment.”

The next paragraph, if we could scroll down slightly, thank you very much, says:

“Since then …”

So this about an offer to settle:

“… the report of the computer expert, Best Practice [Limited], based on the available call logs has been received and as you are all aware is unfavourable and unflattering to Fujitsu if not actually hostile. In light of the report, which cannot really be challenged, I do not think that POL will be able to prove, even on the balance of probabilities that the losses were the fault of the [subpostmistress] and our agents are still concerned about the lack of evidence for the losses.”

Next paragraph, he says the advice that he is going to give the Post Office, he says, about halfway down that final paragraph:

“I intend therefore to advise that [the Post Office] should pay [Mrs Wolstenholme] or pay into court the figure of 3 months’ remuneration plus interest on the basis that although it is unlikely that POL can now prove the losses were her fault alone, as per the contract for services, [the Post Office] can give 3 months’ notice without giving reasons and this is all she will be able to obtain by way of damages in any event if she takes the matter to trial.”

So you were aware, in March 2004, that there was this case against Mrs Wolstenholme and that it was her case that the Horizon System was at fault; is that right?

Mandy Talbot: Yes, correct.

Mr Blake: And also that there was an expert report that was unfavourable to the Post Office?

Mandy Talbot: Correct.

Mr Blake: Why is Mr Cruise updating you in this email? Is this your first involvement in that case?

Mandy Talbot: I believe it was my first involvement and it would have been part of Jim’s preparation for leaving Legal Services via the mass redundancy.

Mr Blake: So is he passing the case on to you?

Mandy Talbot: The case was actually out with Weightmans who were one of the firms of external agents. In effect, he was passing on to me the in-house role in respect of the case.

Mr Blake: That somewhat minimises the role of the Post Office, though, because you are instructing Weightmans, aren’t you?

Mandy Talbot: At that time, because of the mass redundancy, Post Office Limited were entitled to take matters directly out to our external legal agents, without referring the matter to in-house solicitors. This case, I believe, might be slightly different in that, I believe, from the – from this document that Jim himself had issued proceedings for the return of Post Office Limited property at her branch and it was only thereafter that it was referred out to Weightmans, our agents.

Mr Blake: Trying to understand how things would operate in the generality of cases, are you saying, then, that the external law firms had significant discretion as to how they carried out their practice and were not instructed?

Mandy Talbot: There was this massive redundancy, followed by quite a lot of work that wasn’t conducted by myself, setting up agreements with a network of external agents, under which Post Office Limited could give instructions directly to external agents and, insofar as we within civil litigation were usually involved, it was a matter of keeping an eye on the costs and, if anything unusual or untoward occurred, we would then try and assist the external agents to the best of our ability to achieve a successful resolution for POL.

Mr Blake: Is it, therefore, your evidence that you weren’t in some way directing the actions of the law firm, with regards to, for example, settlement.

Mandy Talbot: Until such time as this email, I would have had no involvement in this case whatsoever. Thereafter, given the concerns expressed, I probably would have endorsed their decision to go to external counsel.

Mr Blake: Can we look at the actual report from Best Practice Group, that’s Mr Coyne’s report. It is WITN09020115. It’s a report that’s well known to the Inquiry. We’ve heard from Mr Coyne. If we look at page 2, please. He says:

“I have been contacted by Weightman Vizards a law firm representing ‘Post Office Counters Limited’ and Mrs Julie Wolstenholme, an individual …”

Were you aware that Mr Coyne had been instructed jointly both by the Post Office and Mrs Wolstenholme?

Mandy Talbot: Not at the time of the email that we previously looked at. Not at the time I made my original statement but, with the additional disclosure, I am now aware.

Mr Blake: Were you aware at the time? I mean, this report is January 2004. Presumably, you would have received this report?

Mandy Talbot: Personally, no, not until such time as I received the email communication from Jim Cruise. Then I would have been made aware of this report.

Mr Blake: So on receiving his email of the 17 March 2004, did you then read the expert report?

Mandy Talbot: I did.

Mr Blake: You did. Were you, therefore, aware that it was a jointly-appointed expert report?

Mandy Talbot: At that time, I would have been, yes.

Mr Blake: Were you aware of what that meant in respect of the importance of it, in respect of the fairness of it?

Mandy Talbot: Yes.

Mr Blake: What did you understand by the importance of it and the fairness of it?

Mandy Talbot: That the report or initial observations, as he actually terms it, would have been created for the assistance and benefit of the court.

Mr Blake: Can we scroll down the page, please. I’ll just highlight some parts of this report. We’ve already looked at them. This is where Mr Coyne refers to the statement from Ms Elaine Tagg, the Retail Network Manager, and it’s a section from her witness statement in those proceedings, where she said:

“Mrs Wolstenholme persisted in telephoning the Horizon System Helpdesk in relation to any problems which she had with the system generally, these problems related to the use and general operation of the system and were not technical problems relating to the system.”

Mr Coyne then says:

“This, in my opinion is not a true representation on the evidence that I have had access to. Of the 90 or so fault logs that I have reviewed, 63 of these are without doubt system related failures. Only 13 could be considered as Mrs Wolstenholme calling the wrong support helpdesk requesting answers to ‘How do I …?’ type training questions.”

He says:

“The majority of the systems issues were screen locks, freezes, and blue screen errors which are clearly not a fault of Mrs Wolstenholme’s making, but most probably due to faulty computer hardware software, interfaces or power. In fact, on a detailed view of call 11021413, dated 2 November 2000, Ms Tagg may have witnessed firsthand the style of system problems that Mrs Wolstenholme experienced in her operation of the system. The fault log notes that: ‘Elaine reports that one of the counters has a blue screen with the message [and it gives the message]’ and was advised by the operator to ‘reboot’.”

Could we go over the page, please. He then gives his opinion. He refers, for example, to system freezing:

“‘System freeing’ which is most probably due to either the hardware or interfaces crashing; or alternatively fully saturated communication lines.”

If we scroll down to the final three paragraphs on that page, he says:

“It is interesting and certainly warrants further examination that in November 2000 the ‘system freeing’ is reported again with the support operator stating: ‘They all freeze, but if it gets bad give us a call and we will investigate’.

“From 31 October … there seems to be a number of logs which talk of ‘large discrepancies’ in stock figures, trial balances with ‘all sorts of figures showing minus figures’ …”

He references a call log and he says:

“… there is a comment noted by the support operative that ‘[the postmistress] advised that this is an intermittent problem occurring since the counters were upgraded …’ Although the documents do not list an upgrade taking place, it does seem that these ‘large’ reported discrepancies occur very frequently and shortly after the noted upgrade.”

If we go over the page, please, he then summarises his opinion and he says:

“From a computer system installation perspective it is my opinion that the technology installed at the Cleveleys sub post office was clearly defective in the elements of its hardware, software or interfaces.”

“Clearly defective” is quite a strong term, isn’t it?

Mandy Talbot: Yes.

Mr Blake: Did that not surprise you at the time?

Mandy Talbot: Mr Coyne had created this report, or so I believe, on the basis of a review of the pleadings and the HSH logs. Subsequent to this document being received, Fujitsu then took the opportunity to comment upon the same. I believe, though I haven’t been shown a copy, but Mr Coyne then commented upon their opinion and, ultimately, Fujitsu wrote to Legal Services, again disputing the conclusions reached by Mr Coyne, but being open to inviting him to come and visit engineers and their facilities, to take him through the Horizon System.

Mr Blake: You, at this stage, a qualified solicitor, who had been practising for some time, you receive an independent expert’s report, jointly appointed, that says that the technology installed was clearly defective. Did that not cause you to pause a little on your view of the robustness of the Horizon System?

Mandy Talbot: It was expressed to be an initial report, and I took the view that Fujitsu being so open to inviting him in to discuss the matters further was further evidence of their conviction of the robustness of their system.

Mr Blake: It didn’t cause you to be worried in any way about the impact that this might have?

Mandy Talbot: I was advised by Fujitsu that the system in 2004 was very different to the system in 2000, under which – the 2000 system – data was disposed of, I believe, after a period of 18 months. The system in 2004, I was assured was much more robust.

Mr Blake: Who told you that?

Mandy Talbot: That would have been the people I was speaking to in Fujitsu.

Mr Blake: Can you please give their names?

Mandy Talbot: Oh. After this period of time, I’m sorry, I can’t.

Mr Blake: Okay, well, perhaps over the lunch break you can look at the papers you’ve been given and you might –

Mandy Talbot: Yes.

Mr Blake: – recall more. But, in respect of say, the period, then, 2000 to 2004, were you not worried about the impact that this opinion may have had?

Mandy Talbot: No, because I was assured it was on a unique set of facts that had occurred in 2000 and, in 2004, it simply couldn’t happen.

Mr Blake: So you weren’t at all worried, no?

Mandy Talbot: No.

Mr Blake: Well, can we look at FUJ00121637, please. This is an email from Jan Holmes of Fujitsu to Colin Lenton-Smith, and he says:

“Jim Cruise has taken early retirement so I ended up speaking to Mandy Talbot, who was his boss.”

Now, you’re described there as Jim Cruise’s boss; is that right?

Mandy Talbot: Correct.

Mr Blake: That’s correct.

“The [postmistress] rejected the offer that was made to her some time ago and a trial date has been set … [The Post Office] are still taking advice as to how best to deal with this and Mandy’s view/belief was that the safest way to manage this is to throw money at it and get a confidentiality agreement signed. She is not happy with the ‘Experts’ report as she considers it to be not well balanced and wants, if possible, to keep it out of the public domain. This is unlikely to happen if it goes to court.

“She was talking about taking the option to admit the report and concede the contents are an accurate reflection of what happened (the [Horizon System Helpdesk] transcripts are an accurate reflection of what happened it’s just the ‘Expert’ opinion is the problem). The liability question is removed and it’s then just about ‘how much to go away and keep your mouth shut’.”

Now, Stephen Dilley’s evidence to this Inquiry is that you speak in a way that is “eminently quotable”, was his words. Now, are your words that are quoted there, “how much to go away and keep your mouth shut”?

Mandy Talbot: It’s a minute created – sorry, it’s a communication created by Jan Holmes. It really doesn’t sound like me. Possibly, I am “eminently quotable” but I really don’t think I’d have expressed myself in those terms.

Mr Blake: Why would that be the best approach if you weren’t at all worried about the report from Mr Coyne?

Mandy Talbot: We had a situation with the original documentation in Castleton – I’m sorry, the original documentation with Mrs Wolstenholme was relating back to 2000. The original documentation, plus the original records on the Horizon System, were no longer available. All that was left was the HSH logs.

We had members of Fujitsu who were happy to create witness statements to go to court to adduce to the effective working of the system, but we did also have a jointly-appointed expert, albeit creating only a preliminary view.

I took the view that, if the matter went to court, it was unlikely that the evidence of Fujitsu would be persuasive. As such, the effective way of dealing with such a litigation is try to resolve it by making an economic settlement.

Mr Blake: That all sounds very reasonable, Mrs Talbot, if I may say. But why confidentiality agreement? Why “keep your mouth shut”? Why would you want to hide what had happened in this case?

Mandy Talbot: I had absolutely no desire to hide what had happened in this case. If the matter was settled, there would be no need for the expert’s report to be disclosed in court. If the matter were not capable of being settled, then it would have been disclosed in court.

Mr Blake: It was an unhelpful statement. You are describing here to Mr Holmes that you would like Mrs Wolstenholme to sign a confidentiality agreement and the words there, whether they’re exactly the phrase you used or not, are effectively to silence her. If this was simply a matter of not having the right documentation to prove the case, why would that have been necessary?

Mandy Talbot: The settlement negotiations, I believe, were dealt with by Weightmans. I’m not certain how much more involvement I had in this matter after this time.

Mr Blake: So you did not mind if publicity were shined upon this case?

Mandy Talbot: No. I mean –

Mr Blake: Nothing to hide?

Mandy Talbot: In effect, if it had gone into court, at that time, then it might well have had an impact upon POL and its relationship with Fujitsu but so be it.

Mr Blake: Absolutely nothing to hide?

Mandy Talbot: No.

Mr Blake: Didn’t want to hide it from the public view?

Mandy Talbot: No.

Mr Blake: Can we please look at POL00118229, please. This is an advice on evidence and quantum. If we turn to the final page, page 18, if we look at the bottom of the page, we can see it’s written by counsel at 9 St John Street in Manchester. Can we turn back, please, to the beginning and perhaps we can start at page 2, paragraph 4. 26 July 2004. The author, counsel, writes:

“The Horizon computer system did not operate smoothly at all times, and a support help line was set up manned by personnel from the company which supplied the system.

“Mrs Wolstenholme claims that she had enormous difficulties with her computer system, and that it frequently malfunctioned, causing inaccuracies in stock and other figures to arise. She claims that she repeatedly contacted both the helpline and the Post Office about problems she was encountering, but little effective was done to assist.

“In November 2000, Mrs Wolstenholme became so disillusioned with the computer system that she decided to stop using it. This was in breach of her obligations to the Post Office and she was duly suspended.”

“Prior to this point, a number of errors and/or deficiencies had arisen in relation to Mrs Wolstenholme’s Post Office accounts.”

If we continue over the page to paragraph 10, please. Counsel continued:

“Mrs Wolstenholme has defended the proceedings, claiming the computer system installed by the Post Office was defective and this was, in fact, the cause of the losses recorded within her accounts.”

Paragraph 11:

“The trial of this matter is now about one month away. A joint computer expert’s report has been obtained. This report concludes, from the limited records available, that the computer system installed by the Post Office did appear defective.”

Over the page, please, to paragraph 13:

“I am asked to advise in relation to quantum and evidence. I am asked to take into particular account that the Post Office is anxious for the negative computer experts’ report to be given as little publicity as possible.”

Now, that is directly contrary to the evidence that you have just given. Why do you say that was not your instruction?

Mandy Talbot: I did not instruct counsel in this matter. It would have been our external agents. It’s true that adducing the report in court would have not been great for Post Office Limited but, ultimately, if it had to happen, it had to happen.

Mr Blake: If your view at the time was nothing to hide –

Mandy Talbot: Mm-hm.

Mr Blake: – why on earth would your solicitors have got the impression that the Post Office is anxious for the negative computer expert’s report to be given as little publicity as possible? Where do you say that was coming from?

Mandy Talbot: I can’t comment.

Mr Blake: You did nothing to give them that impression that that was your instruction?

Mandy Talbot: I genuinely cannot remember, after this period of time, I’m sorry.

Mr Blake: We’ll continue going through the report and perhaps some of that might refresh your memory. Can we look at paragraph 17, please:

“In view of the negative expert’s report in this case regarding the computer system in place, Mrs Wolstenholme’s suggestion that the errors that arose were the result of defects in the computer system must be taken seriously. It is sufficient to place genuine and significant doubt on the evidence relied upon by the Post Office.”

Was that communicated back to you, counsel’s position that there was genuine and significant doubt on the evidence being relied upon by the Post Office?

Mandy Talbot: I cannot recall.

Mr Blake: Can we look at paragraph 49, please. That’s the bottom of page 15, top of page 16. It says there:

“On the basis of the above it can be concluded that the Post Office claim against Mrs Wolstenholme will fail, save for the return of the equipment which she has possibly retained. Her claim against the Post Office in respect of failure to give proper notice is likely to succeed. What is the appropriate course of conduct in the circumstances, particularly given the desire of those instructing me and the Post Office to avoid, if possible, publication of the negative experts’ report in the public arena?”

Now, if the Post Office had as much confidence in the Horizon System as your evidence has been earlier today, why on earth would they want to avoid publication of that expert’s report?

Mandy Talbot: Because I think it might have affected the relationship between Post Office Limited and Fujitsu, but that is purely my opinion. I can’t speak to Post Office’s intentions.

Mr Blake: Having read Jim Cruise’s email, having read the expert report, at this point in time was it not dawning on you that the Horizon System might not be as infallible as you indeed thought?

Mandy Talbot: I can categorically say no. At that time, it certainly didn’t.

Mr Blake: I’m going to move on to the case of Lee Castleton. I’m going to start in 2005. Can we look at POL00107423, please. Thank you. Can we start at page 7 of this. It’s a chain of emails. Thank you. At the bottom of that page we have an email from Stephen Dilley to Cheryl Woodward and copied to you. Can we just scroll slightly above that, please, just to see who it’s to and from. Can you tell us the relationship, why Cheryl Woodward and I think – is it to Cheryl Woodward and copied to you?

Mandy Talbot: Cheryl Woodward worked in one of the departments in Post Office Limited that were entitled to instruct regional agents, like Bond Pearce, directly. Ergo the instructions to issue proceedings against Mr Castleton were authorised by Ms Woodward.

Mr Blake: So that’s a direct instruction from somebody within the Post Office who is not a lawyer –

Mandy Talbot: Correct.

Mr Blake: – but copied to you, who is a lawyer?

Mandy Talbot: No. This is a communication from Stephen Dilley after he had taken over conduct of the Castleton matter going back directly to his original instructing – to his firm’s original instructing party, Cheryl Woodward, copied in to me because of the concerns over his firm permitting judgment in default on a massive potential counterclaim being issued.

Mr Blake: You were a lawyer involved in civil litigation in the Post Office –

Mandy Talbot: Correct.

Mr Blake: – being copied in to an email from Mr Dilley, who was acting for Bond Pearce, the law firm instructed in this case –

Mandy Talbot: Right.

Mr Blake: – presumably copied in because you were a lawyer; is that right?

Mandy Talbot: I was copied in because of the fact that they had permitted judgment to be entered in default. This meant that it wasn’t being dealt with as business as usual. They had to come back to us at Legal Services and explain what had occurred. For that reason, I was now being copied in.

Mr Blake: So was there a threshold of seriousness before which it wouldn’t get to the legal team but beyond which it would have to be copied in or the legal team involved in some way?

Mandy Talbot: I had nothing to do with setting up the contracts for outsourcing. But, by any ream, permitting a potential counterclaim of £250,000 to be entered against your client would justify contacting Legal Services, yes.

Mr Blake: We’re here in October 2005, was this the first involvement that you had with the Castleton case?

Mandy Talbot: There’s a possibility that I might have been asked for contact of people within Post Office Limited via the solicitor who was dealing with the case prior to Mr Dilley.

Mr Blake: If we look at the first paragraph in his case summary, he says:

“The Post Office’s claim is for approximately [£27,000] plus interest and costs in respect of net losses. Clearly, Mr Castleton is contractually responsible for any losses that the Post Office makes caused by negligence or error. However, the real issue is whether there has been any real shortfall, or whether this shortfall has really been generated by computer error. To win, the Post Office must show that there has been a real shortfall.”

If we go over the page, he summarises some reports that – sorry, over one more page, thank you, to page 9. There’s a blank page that follows but it’s over the page, thank you.

He refers to some reports that have been obtained by Mr Castleton, one from Bentley Jennison and one from White and Hoggard, and he says about halfway down that bottom paragraph that:

“Mr Castleton’s Defence, ‘appears to hold potential merit based on the limited documentation’ …”

This is a quote from Bentley Jennison in their report. He is passing on that information to you. He says:

“White and Hoggard reach a similar conclusion in their report.”

Can we go back, please, to higher up the email chain, page 5. At the bottom of page 5, please, this seems to be you forwarding that email to various people. Can you assist us with who the recipients are? Carol King, Nicky Sherrott, Jennifer Robson.

Mandy Talbot: Clare Wardle was my immediate line manager at the time. Nicky Sherrott was, I believe, Head of Commercial, might even have been performing the role of Acting Head of Legal. John Legg and Carol King were Post Office Limited employees.

Mr Blake: I’m going to read from your covering email, if we could scroll down the page over to page 7, please.

It’ll be over the page again. I think these were original hard copies, which were photocopied, which explains the blank pages. You say:

“This is a case where the adequacy of the evidence which [the Post Office] has in support of it case against Castleton is being challenged and his counterclaim dwarfs the size of the claim. The adequacy of the records obtained from the Horizon System is being challenged. As the business chose to give summary termination instead of three months’ notice it is required to physically prove the loss. If the Horizon evidence is not up to the job this will have serious ramifications for the business.”

You were recognising there that, if there was a successful challenge to the Horizon System, it would have serious ramifications; is that right?

Mandy Talbot: Correct, yes.

Mr Blake: Yes. Is that following your experience from the Cleveleys case, where the Horizon case was – the reliability of Horizon was called into question?

Mandy Talbot: No, it really wasn’t. I mean, my major concern about the matter of Castleton was the sheer size of the counterclaim, £250,000, and the cost of putting a full defence together, because I was concerned the proceedings had been issued in the first place because the paper documentation that should have been in place prior to proceedings being issued wasn’t.

Mr Blake: But the final sentence there:

“If the Horizon evidence is not up to the job this will have serious ramifications for the business.”

It seems as though your concern, actually, is about the adequacy of the Horizon System and the ramifications that that may have; is that wrong?

Mandy Talbot: That’s what I said at the time but, in reality, it was the sheer size of the counterclaim and the cost and expense that we knew we would be put to in defending a full challenge.

Mr Blake: We’ve seen before counsel’s advice about the Post Office wishing to avoid publicity. We saw that time and again in relation to the Cleveleys case. Isn’t this much of the same thing?

Mandy Talbot: No.

Mr Blake: Can we look at the first page of this chain, please, and the bottom of the first page. We have there an email from Dave Hulbert to Carl Marx – not the Karl Marx, a different Carl Marx. Can you tell us who they were?

Mandy Talbot: I have no idea who Carl Marx was, which is surprising, given his name. Dave Hulbert, I believe, worked in – I believe worked in Fujitsu or was a liaison between POL and Fujitsu.

Mr Blake: We also have there Keith Baines. That’s higher up the chain, in effect.

Mandy Talbot: I can’t remember their title.

Mr Blake: He was the Horizon Contract Manager at the Post Office; do you recall that?

Mandy Talbot: (The witness nodded)

Mr Blake: Looking at that bottom email, though, can we scroll down, please. Carl to Dave, it says in the second paragraph:

“I’ve also copied below a response you provided some weeks ago relating to a different case, (Smallbridge) about the system creating discrepancies and it would be worth having your view on whether this provides useful supporting evidence, particularly in countering the Experts’ Reports (referred to in Stephen Dilley’s email).”

Now, do you recall a case of Smallbridge, where there were discrepancies?

Mandy Talbot: Absolutely not but what you have to appreciate is that there was never, ever an overriding system that gave Civil Litigation visibility of all Post Office Limited matters.

Mr Blake: If we look at the top, if we go back a page to page 1, we see Carol King at the Post Office, Jennifer Robson, Debt Recovery Section Manager. They’re all in receipt of this chain of emails.

Mandy Talbot: Mm-hm.

Mr Blake: Was that not something that was ever bought to your attention?

Mandy Talbot: I cannot recall after this period of time.

Mr Blake: If we stick with page 3, please, we can see at the bottom of page 3, this is Carol to Dave, and he says that he’s copied certain wording from the Smallbridge case, and it says there at the bottom:

“In summary, the system is very robust. In our experience it very seldom loses transactions unless equipment is physically removed from site; if it does lose transactions Post Office procedures should quickly identify discrepancies and they should be followed through with Helpdesk assistance within a week.”

Now, do you know where that draft wording came from? Are you able to assist? Is that a phrase that you heard, a form of words that you heard repeated?

Mandy Talbot: No. It’s not.

Mr Blake: At this time, were you telling people about, for example, the Cleveleys case that you had, where a joint expert had said that that simply isn’t right?

Mandy Talbot: I wasn’t telling people about the Cleveleys case. As far as we were concerned, that had been concluded.

Mr Blake: You had an independent jointly-appointed expert who was saying that describing it as robust simply wasn’t right. Do you think it might have been worth, during that period of time, to have told more people within the Post Office?

Mandy Talbot: It was expressed to be a preliminary report. I viewed it as a case in isolation.

Mr Blake: Can we look at POL00070574, please. This is 7 November 2005, so we’re still in 2005, an email from Stephen Dilley to Stephen Lister, and he summarises much the same. He says:

“As you are the relationship partner for the Royal Mail, I thought it would be helpful to update you in relation to a case I am dealing with for them in case Mandy Talbot mentions it. I recently inherited this case from Denise Gammack when she left the firm, who in turn inherited it from [somebody else].”

If we scroll down to the third paragraph, please, he says there that:

“[Mr Castleton] has obtained 2 experts’ reports which conclude that the [Post Office’s] Horizon computer System, despite the suspense account entry, has failed to recognise the entry on the daily snapshot and that Mr Castleton’s Defence, ‘appears to hold potential merit based on the limited documentation’ they have so far reviewed.”

They say further down the page:

“We take instructions from Cheryl Woodward, Agents Debt Team, Chesterfield but Mandy Talbot is copied in on emails. I spoke to Mandy last week to take instructions and her first question was why Bond Pearce had issued the claim when reliability was unclear.”

So it seems clear that you did provide instructions to Stephen Dilley, from that phrase?

Mandy Talbot: At that stage, yes.

Mr Blake: “I informed Mandy that my colleagues had expressed concern to Cheryl about issuing.”

Then, if we could scroll down, there’s a paragraph there about snapshots missing, certain information missing, and then it says this, it says:

“Mandy’s next comment was that Cheryl may not have had authority to tell Laura to issue a claim but I was able to tell Mandy that Cheryl had referred this question to her Managers before instructing Laura to proceed.

“In any event, Mandy has instructed me to put forward an offer of mediation to try to settle the claim.”

Now, did your previous experience in the Cleveleys case influence you in some way on receiving that email, on receiving that information, to want to settle this case as quickly as possible?

Mandy Talbot: No, we wanted to settle the claim because it was one where a counterclaim had been issued for £250,000 and, even in 2005, that was a serious amount of money. I was also concerned by the fact that, when proceedings had been issued, the paper in support of the claim wasn’t in apple-pie order. That was why I was concerned that instructions had been issued given to issue proceedings in the first place.

Mr Blake: So it continues to be your evidence that the Cleveleys case was in no way relevant to your thinking –

Mandy Talbot: That was my evidence.

Mr Blake: – in the Castleton case? Can we look at POL00072402, please. We’re still in November 2005. This is an attendance note made by Bond Pearce. JMS1 is Julian Summerhayes. I believe he is from Bond Pearce. It says there:

“JMS1 want to know whether there was any evidence at all of the monies that were alleged by Royal Mail to be outstanding? MT [that’s you, I believe, Mandy Talbot] indicating that she had gone through the file but was certainly not able to find any manual documents to confirm this. JMS1 talking through a few of the issues in the Reply and Defence to Counterclaim and saying he had slightly amended that from the version that had been sent through earlier.”

It ends on this, it ends:

“She was still not sure why the firm had been given instructions to issue. She will revert soonest.”

In fact, it also says:

“MT [that’s you] talking about getting tired with this case.”

Why were you tired with this case at that time?

Mandy Talbot: It was taking up an awful lot of resource. Ordinarily, subpostmasters’ cases, for me personally, would take up one/two hours a week maximum. This case was beginning to take up substantial periods of time.

Whether I expressed being tired with it, it’s quite possible I did use that word.

Mr Blake: Was it that Mr Castleton wasn’t accepting a payout at that stage, like in the Cleveleys case?

Mandy Talbot: Absolutely not.

Mr Blake: We’re going to move now to 2006.

Sir, that might be an appropriate moment to take our mid-morning break. It’s slightly early but I think it is a natural break. Perhaps we could –

Sir Wyn Williams: That’s fine, Mr Blake what time shall we resume?

Mr Blake: If we resume at 11.30, please.

Sir Wyn Williams: Okay, yes.

(11.08 am)

(A short break)

(11.30am)

Mr Blake: Thank you, sir.

Mrs Talbot, before we broke – I’m going to summarise the position as far as I understand it – on Cleveleys, your evidence is you didn’t have anything to hide; is that right?

Mandy Talbot: Correct.

Mr Blake: In respect of Castleton, you wanted to settle Castleton because of the size of the counterclaim; is that correct?

Mandy Talbot: And because of missing paper documentation.

Mr Blake: But in respect of Castleton, like Cleveleys, is it your evidence you had nothing to hide?

Mandy Talbot: Absolutely nothing to hide.

Mr Blake: Can we look at POL00072669, please. This is an attendance note we looked at with Mr Dilley, 24 February 2006. He summarises a telephone conversation that he had with you. Can we scroll down a little bit, I’ll just read those two paragraphs.

He’s recalling a discussion with you. He says:

“Internally the Post Office feels conflicted about which direction to go in with the Castleton case. The Post Office believes the Horizon System is robust, but the downside is the cost (in Post Office’s time and money) in proving a negative (ie that there are no faults) and that is expensive. For example, Mandy would need to get a report from Fujitsu (who apparently have difficulty writing in plain English) and get someone in the Post Office to review Fujitsu data to see if there are any anomalies.”

It goes on to say:

“It is Mandy’s view that the Post Office must not show any weaknesses and even if this case will cost a lot, there are broader issues at stake than just the Castleton claim: if the Post Office are seen to compromise on Castleton, then the ‘the whole system will come crashing down’ ie it will egg on other subpostmasters to issue speculative claims.”

Pausing there, is that what you told Stephen Dilley in February 2006?

Mandy Talbot: It may have been, as expressed in paragraph 1, Post Office genuinely believed that Horizon was a robust system and it felt – I believe Post Office felt the need to demonstrate that it would take a firm line with any and all challenges to Horizon.

Mr Blake: We have there in speech marks, so similar to the speech marks we saw earlier in respect of “keeping your mouth shut” it says, “the whole system will come crashing down”. It says:

“Mandy knows that Mr Castleton is talking to Barjarge (the other subpostmaster bringing a Horizon based claim). The Post Office’s clear line to the industry must be that we are taking a firm line with Castleton. She even said she thought it might be damaging to settle the claim on confidential terms rather than fight it and lose.”

So there seems to be a strengthening of the line towards Mr Castleton. We’ve gone from 2005 potential settlement to now making an example of Mr Castleton.

Mandy Talbot: Yes, that is correct. It went from being a case, to the best of my recollection, that started off small subpostmaster deficiency, massive potential counterclaim, based on, so we believed, unsupported allegations about the Horizon System.

By February 2006, however, it had sort of morphed into a test case on Horizon, despite itself. We believed that it was a pure accountancy issue, in effect, but because of publicity sought, as I say, it was becoming a test case on Horizon, even though our – that is not what we believed the case was about.

Mr Blake: If you had such confidence in Horizon and nothing to hide, why would you need to take such a hard line against Mr Castleton?

Mandy Talbot: It wasn’t necessarily against Mr Castleton. I really do think it was driven by the size of the potential counterclaim and that, if he had accepted any of the offers to mediate, I think things could have been resolved on a round table basis.

Mr Blake: Where there does it refer to the counterclaim being your motivation, driving force, in your case strategy?

Mandy Talbot: This is a document created by Mr Stephen Dilley and the disclosure to this Inquiry has been very partial. I don’t know whether, in February 2006, I was in the position of expressing strategy. There was no litigation strategy within the Civil Litigation Department on how to deal with these cases. There was no strategy coming down from on high, from Post Office Limited, on how to deal with these cases.

Mr Blake: Doesn’t paragraph 2 there precisely set out the strategy that you wanted to adopt in Mr Castleton’s case?

Mandy Talbot: In this instance, this particular piece of litigation.

Mr Blake: Where were you getting those instructions from?

Mandy Talbot: It says here I was getting them from Post Office Limited.

Mr Blake: Who was telling you that you needed to send a message to the industry? Was this your own view? Did it come from somewhere else?

Mandy Talbot: I think it was coming from Post Office Limited. But it was a very long time ago.

Mr Blake: Post Office Limited is a company name, it must have come from an individual. Who was it coming from – or individuals?

Mandy Talbot: I can’t recall after this period of time, as I hadn’t had the advantage of having access to full sequential documentation.

Mr Blake: There is a conversation between yourself and Stephen Dilley in February 2006, where he is quoting what he considers to be your view that the Post Office must not show any weakness. Is the strategy coming from you? I mean, it’s quite a significant strategy that has implications for somebody’s life. Can you try and assist with where the strategy is coming from?

Mandy Talbot: I believe it was coming from Post Office Limited, as expressed through me, and it was not personal, it was just dealing with an individual litigation case.

Mr Blake: You have no recollection whatsoever where that direction was coming from?

Mandy Talbot: No.

Mr Blake: Can we look at POL00070811, please. We are now in May 2006, an email from Stephen Dilley to you:

“Dear Mandy,

“I refer to our telephone conversation this afternoon and attach our draft cost schedule, for your information. As discussed, this is partly a tactical document: Mr Castleton wants to postpone mediation. The estimate should bring home the costs implications of doing that.”

If we continue to scroll down – sorry, if we can scroll up to the top, you’re the only name from the Post Office that’s in the addressees there.

Mandy Talbot: Yes.

Mr Blake: Yes. So he seems to be discussing tactical approaches to the litigation with you; is that a fair summary of what this email is aimed at?

Mandy Talbot: In this document, though I may well have sought instruction on it from my line manager and/or POL.

Mr Blake: If we scroll down to number 4 and 5, please, thank you, he says there:

“I’ve estimated the total global costs at nearly £223,000 including VAT and disbursements. As discussed, the costs will be disproportionate to the amount of the claim [which is circa £27,000] but not as it currently stands the counterclaim which is unspecified but put at not more than £250,000. However, I would value the counterclaim as much lower. There is a risk therefore that if the [Post Office] win, a significant proportion of costs may be disallowed on assessment because of proportionality.”

So disproportionate costs may be being spent on this litigation. He says:

“As previously discussed [presumably with you], even if [the Post Office] wins, you may well find it difficult to enforce any judgment because of Castleton’s asset position which is at best unclear. However, from the [Post Office’s] view there are importance broader implications at stake such as the message it will send out to other subpostmasters if the [Post Office] settle or are seen to pursue it vigorously.”

So, once again – the earlier message was from February, we’re now in May – a message to other subpostmasters being sent out in this litigation. Is that your recollection of the tactical approach that was being taken to that litigation at that time?

Mandy Talbot: At this stage, it had morphed, I think, from becoming a technical test case to an actual test case and, therefore, that is the position and the message that POL wished to put out.

Mr Blake: Had you and the Post Office lost sight, by that point, of the fact that Mr Castleton, an individual, was involved in this case?

Mandy Talbot: I don’t believe so because I seem to recall that, at the beginning of the litigation, he did have insurance cover. I do not know whether that had expired by this time.

Mr Blake: But you are clearly spending what might be disproportionate costs on a case in order to pursue it for a wider goal. Is that a fair summary of the tactical approach that was being taken?

Mandy Talbot: This is still potentially a counterclaim for £250,000 where Horizon had now been put in to question, therefore POL thought it was the appropriate tactic to take.

Mr Blake: Paragraph 5 suggests that, actually, the counterclaim isn’t the real important matter that was at stake but it was sending a message out to subpostmasters?

Mandy Talbot: The counterclaim had not been amended at that stage.

Mr Blake: Can we look at POL00090437, please. This is a pile of different documents. So it’s not in – I know the first page says, “Advice” but if we look at page 65, there’s an email chain that appears there.

At the bottom of page 65, please. We’re now on 21 August 2006 and this is an email from Tom Beezer of Bond Pearce to yourself, copied to Stephen Dilley. Again, you’re the only Post Office name at this stage that’s being copied in to these emails. Are we to read into that that you had a significant handle on this case by that time?

Mandy Talbot: I was the person within Civil Litigation that was dealing with the matter vis à vis Bond Pearce but I was seeking instructions upwards from senior officers within Post Office Limited and keeping my line manager copied into relevant communications.

Mr Blake: Are you still unable to name any of those senior managers?

Mandy Talbot: Well, I’ve already given you the raft of managers within Civil Litigation.

Mr Blake: But in terms of who was providing you with the significant instructions to pass to Tom Beezer and Stephen Dilley, who was that?

Mandy Talbot: I would have to go through what little disclosure there is to see who I was getting instructions from, if that correspondence hasn’t already been disclosed.

Mr Blake: If we scroll down over to the next page, please, this is the contents of Tom Beezer’s email. It says:

“As we discussed last week I am writing to update you on certain points that came out of my discussions on the Castleton case with Richard Morgan of Maitland Chambers.”

He gives an “Overview” and he says:

“A further point made by Richard Morgan was that we should endeavour to move the main area of focus in the case away from the Horizon System if possible.”

He then addresses, further down the page, Fujitsu. He says:

“In this matter, Fujitsu are clearly going to play a role. I understand that Fujitsu are currently looking at the matters raised in a letter of 25 July 2006 from Castleton’s lawyers … One of the pivotal issues in this matter will be the arithmetic used throughout and I would like to go the answer from Fujitsu as soon as possible to the points raised by Castleton’s lawyers. Is there any pressure you can bring to bear upon Fujitsu to cause them to answer this letter in the near future? I would be most grateful if you would consider this.

“One other point raised by Richard was the integrity of the Fujitsu product generally. Just to confirm, I understand that Royal Mail/Post Office know of no issues with the Fujitsu system and are confident that it operates correctly. Please discuss this with me if you have a different view.”

Did you at this point say, “Well, I had this case, the Cleveleys case, a joint expert was instructed independently and he questioned its integrity”?

Mandy Talbot: No, I did not.

Mr Blake: Why at this stage did the Cleveleys case seem to simply be forgotten about?

Mandy Talbot: Because I was of the opinion that the preliminary view by Mr Coyne was created in a unique set of circumstances, given that the original data was no longer available. I didn’t consider it to be a full report because the offer from Fujitsu for him to come and visit their sites and look all over the data was never communicated to him. So I didn’t consider that it was a full and comprehensive report.

Mr Blake: Did you consider that only a full and comprehensive report would have been sufficient to require passing on to your lawyers, who were dealing with a complaint about the Horizon System?

Mandy Talbot: In all events, that full and comprehensive report never came into creation.

Mr Blake: And anything less than a full and comprehensive report you didn’t think was sufficient to pass on to your legal advisers?

Mandy Talbot: That’s correct.

Mr Blake: They had asked you directly here whether – well, he says there:

“… I understand that Royal Mail/Post Office know of no issues with the [Horizon System].”

Did you not think at that point “Well, maybe I should be raising some issues with the Horizon System that I’ve learnt about in my experience of other cases”?

Mandy Talbot: There isn’t any communication in the document that has been – documents that have been disclosed in which any conversation between myself and Stephen on that point is itemised. I do not believe, to the best of my recollection, that I did mention the case of Wolstenholme to him.

Mr Blake: Can we now POL00069592, please. This is a document I took Mr Dilley to. I know you saw Mr Dilley’s evidence and you’ve had sight of this document today.

Mandy Talbot: Yes.

Mr Blake: It’s dated 5 September 2006. It’s from BDO Stoy Hayward, who were instructed in the Castleton case on behalf of the Post Office. Could we go to the final page there, please. Sorry, if we could scroll up to the previous page, thank you, it’s that paragraph there, “Early indications of problems with the Horizon System”.

So it’s on 5 September that they contact Mr Dilley and say:

“We have found that there is some indication of possible problems with Horizon from our initial review of the electronic information you sent us.”

Was that communicated to you at the time?

Mandy Talbot: I have no recollection of this document at all, until a hard copy of it was handed to me this morning.

Mr Blake: In terms of the BDO report, I’ll take you to that shortly – you ultimately saw the BDO report, didn’t you?

Mandy Talbot: In the additional disclosure, yes.

Mr Blake: So you hadn’t seen it before this Inquiry?

Mandy Talbot: I cannot recall seeing it.

Mr Blake: I’ll get to the report shortly. But you are seen here on a number of different emails between the solicitors acting for the Post Office and you. Is it likely that, on receiving a letter of this significance from BDO, that they would have passed on or summarised that information for you?

Mandy Talbot: I can’t answer that.

Mr Blake: Can we look at POL00113909, please. If we scroll to the bottom, we’re now in November, 9 November 2006. There’s an email from you. Can you assist us with that distribution list and why you would have been sending information about the Castleton case to that distribution list?

Mandy Talbot: Okay. Biddy Wyles by this time was my immediate line manager; Clare Wardle, head of Civil Litigation; Rod Ismay has already given evidence to this Inquiry. I used to communicate with these people regularly but, after so many years, I’m afraid I can’t assist.

Mr Blake: Are you able to assist, not with what their specific roles or duties were but simply why it is that you would have chosen that group of individuals? Was there a particular group dealing with subpostmaster cases, was there a particular group that was interested in Horizon cases or something else?

Mandy Talbot: I cannot recall after this period of time why this selection. I can only conclude that they are people who had shown an interest and it was for that reason – shown an interest or possibly participated because I recall that Keith Baines had given witness evidence, and so I felt that they were an appropriate selection of parties to contact to communicate this information.

Mr Blake: You haven’t so far named any individuals who were providing you with instructions to pass on to the Post Office’s solicitors. Does this assist in any way with identifying who it may have been who was providing you with the instructions or information or direction in the Castleton case?

Mandy Talbot: There would have been a whole selection of people who, in turn, would have raised it further on up their reporting structures. So it was, to a certain extent, a movable feast.

Mr Blake: No individuals stand out in particular there?

Mandy Talbot: Not particularly.

Mr Blake: Could we go over the page, please. You’re passing on some good news – and, over the page again, thank you – about the Castleton case. It’s about the potential of settlement in that case. We’re in November 2006. This settlement doesn’t ultimately happen but can we go over to page 5, please. Thank you. It’s the second paragraph there. You say there, about halfway down:

“The benefit of having a judgment against him [against Mr Castleton] in the full amount is that we will be able to use this to demonstrate to the network that despite his allegations about HORIZON we were able to recover the full amount from him. It will be of tremendous use in convincing other postmasters to think twice about their allegations.”

So again, that seems to be a significant driving factor in respect of the Post Office’s approach to this report.

Mandy Talbot: By this time, it had become, in fact, a test case. Therefore, if a judgment were obtained, it would have been of benefit to Post Office Limited.

Mr Blake: We saw a moment ago that in September 2006, BDO, the accountants, had written their initial concerns and sent a letter to Mr Dilley. You’re not sure whether you received that or not but, at this time, when you were talking about using his case as a message to other subpostmasters, do you think it likely that, in fact, you knew that there may, in fact, be problems with the Horizon System, as highlighted by BDO Stoy Hayward?

Mandy Talbot: Excuse me, can you just scroll back as to the date of this? Oh, this is November, isn’t it?

Mr Blake: Yes, this is 9 November 2006. The BDO letter was 5 September 2006. If it assists – and I’m going to take you to it shortly – the actual report from BDO, the draft report, was received on 29 November. So the final report was shortly after this email correspondence but there had been correspondence from BDO to Mr Dilley.

Mandy Talbot: Excuse me, can you repeat the question again you want me to answer?

Mr Blake: At this time, the strategy seems to be convincing other postmasters to think twice about their allegations. Might you, by this stage, have known that, in fact, your own experts had raised an issue with the Horizon System, very similar to the Cleveleys case?

Mandy Talbot: An issue but we had a whole selection of witness statements from Fujitsu employees who were confident that their evidence was going to be persuasive.

Mr Blake: Can we, please, look at POL00069775, please, 10 November. So this is the day after that email.

Mandy Talbot: Mm-hm.

Mr Blake: Can we please look at page 3. So if we scroll slightly up the bottom of page 2 we have an email from you, 10 November, to that distribution list, so we have names such as Rod Ismay on there. If we scroll down, you are proposing that Mr Castleton signs a form of words and the proposal there is as follows, for him to say:

“I Mr L Castleton the former postmaster at Marine Drive Post Office admit that a sum of money was owed by me to Post Office Limited as a result of errors which arose whilst I was the postmaster at the above office. I had [must be ‘thought’] that this debt arose due to a malfunction of the HORIZON System but I now accept that I was mistaken and the debt arose out of human error. I declare that the HORIZON System did not contribute to the errors in any way and formally withdraw all statements I made to the contrary.”

So there is a form of words there that clearly suggests that the Horizon System didn’t contribute to the errors. It says that the debt arose out of human error. What evidence was there that the debt arose out of human error?

Mandy Talbot: The evidence of the witnesses from Fujitsu and Post Office Limited who had recreated the accountancy side of this debt action.

Mr Blake: Why do you say “human error”, though? Why is it not something else? How can you be sure, have sufficient certainty, that the debt arose out of human error? First of all, how can you be sure that there was a debt at all? If there was a wrong button pressed, for example, how could you be sure that there was an actual loss to the Post Office?

Mandy Talbot: Because Post Office Limited staff had gone through the accounts and the materials at the branch and recreated various cash accounts and other documentation to demonstrate that there was a valid debt.

Mr Blake: There may have been figures showing that there was a debt but, in terms of an actual loss to the Post Office, how could be sure of that?

Mandy Talbot: If they were of the opinion that there was a valid debt and there was sufficient documentary evidence in support, I was prepared to accept that position.

Mr Blake: You mentioned earlier that the case was about the size of the counterclaim and that’s why you wanted to settle the case. If it was about the counterclaim, why would you be seeking to get Mr Castleton to sign up to this statement?

Mandy Talbot: Because, as I’ve said earlier, by this time, it had become, due to publicity, a test case in its own right.

Mr Blake: Was it very much like the Cleveleys case: that you wanted to silence him?

Mandy Talbot: No.

Mr Blake: Why get him to sign up to a statement such as that if you didn’t want to silence?

Mandy Talbot: Because it would have – I didn’t seek silence. It would have been of use to Post Office Limited in dealing with other suggestions that there might be issues with the Horizon System.

Mr Blake: Isn’t that entirely consistent with, for example, counsel’s advice in the Cleveleys case that I took you to earlier about the Post Office seeking to avoid publicity?

Mandy Talbot: I don’t accept that.

Sir Wyn Williams: Whose idea was it to ask Mr Castleton to use those form of words? Was it yours or was it someone else and, if so, who was it?

Mandy Talbot: I genuinely can’t remember after this period of time. Supporting the Horizon System was very important to Post Office Limited at the time.

Sir Wyn Williams: But –

Mandy Talbot: On the balance of probabilities, I think it was something that emanated from Post Office Limited but that’s purely my opinion.

Sir Wyn Williams: Like Mr Blake, the expression “Post Office Limited” doesn’t give me very much information because, ultimately, there must have been a person or persons within Post Office Limited. So is your evidence to me that probably this form of words was suggested to you and you acted, in effect, as the go-between in passing it on but you can’t remember who it was that suggested the form of words to you?

Mandy Talbot: I’m very sorry but I can’t assist you any further on this.

Sir Wyn Williams: All right.

Mr Blake: Mrs Talbot, it may assist, if we look at the email again, if we go to the top of the email with the distribution list – sorry, it’s the bottom of page 2. We have there the distribution list. So it’s an email from you to various people within the Post Office.

Mandy Talbot: Mm-hm.

Mr Blake: Were those people, on the whole, more senior to you, less senior?

Mandy Talbot: Biddy Wyles and Clare Wardle, certainly within Legal Services. I think that Mr Ismay, Richard Barker were more senior to me. I don’t know the status about the others.

Mr Blake: If we scroll down, we can see, you say above the highlighted passage:

“I have prepared a short statement but would be very grateful for any improvements which you can suggest.”

So it certainly seems as though that form of words was your drafting.

Mandy Talbot: It may well – it – it’s a possibility.

Mr Blake: Would you have said, “I have prepared a short statement”, if somebody else had drafted it?

Mandy Talbot: Probably not.

Mr Blake: If we go to the first page, we then have Mr Dilley commenting on it and he seems to want to strengthen it further. I think the additions he has, for example, are “unreservedly withdraw the untrue allegations” and also, the words at the bottom:

“… allegations about the Horizon System and/or its functioning.”

Do you remember having any views as to that form of words?

Mandy Talbot: No, it was just an alternative draft.

Mr Blake: Knowing what you already knew from, for example, the Cleveleys case, did you think that then might have been an appropriate time to raise any concerns you had about the functioning of the Horizon System?

Mandy Talbot: As I’ve said previously, I draw distinction under the Cleveleys case and I did not think that that was the time to draw distinction.

Mr Blake: Ultimately, the approach there and the approach in the Cleveleys case was similar, in that you were getting somebody to effectively “shut up”, to use the words from – or “keep their mouth shut”, I think was the expression in the Cleveleys case. Was this again an attempt to get Mr Castleton to keep his mouth shut?

Mandy Talbot: No. It was a way of drawing litigation to a conclusion on the best possible terms for Post Office Limited.

Mr Blake: Would Mr Castleton have been free to continue saying that the Horizon System was not functioning properly?

Mandy Talbot: If he had been prepared to sign the Tomlin Order, that is maybe something we would have taken into consideration later. As it was, he instructed his solicitors that he wasn’t prepared to sign the Tomlin Order.

Mr Blake: Had he signed up to that, would he have been free to say that the problem was the Horizon system?

Mandy Talbot: I can’t tell. That’s not a situation that occurred.

Mr Blake: You’ve said that it wasn’t intended to shut him up but, in reality, if he had signed what you were asking him to sign, would he have been free, in reality, to continue to make allegations –

Mandy Talbot: It’s a hypothetical. It didn’t occur.

Mr Blake: I agree but can you answer the question?

Mandy Talbot: It didn’t occur.

Mr Blake: I’m trying to get to your thinking behind this form of words. You’ve said that it wasn’t to shut Mr Castleton up. Surely, if he had signed it, he could not have criticised the Horizon System, so the effect was intended to shut him up, was it not? I’m asking about your thinking behind the effect of asking him to sign up to such a stringent form of words.

Mandy Talbot: If he had signed it, which he didn’t, the litigation would have concluded. He would not have been able to comment further upon the Horizon System and Post Office Limited would have been free to comment upon the Castleton situation as it chose.

Mr Blake: Do you not see parallels between the strategy that was adopted in the Cleveleys case and the strategy that is being adopted here, that you are effectively ensuring that somebody does not publicly criticise the Horizon System?

Mandy Talbot: There was no diktat from on high dictating strategy within these two separate litigation cases.

Mr Blake: So you were an individual who was involved in both cases; the strategy seems to be the same. Was that therefore coming from you?

Mandy Talbot: I dealt with both cases separately and individually and came to the same advice in both.

Mr Blake: Was it entirely a coincidence that the strategy adopted in both was to try to prevent public criticism of the Horizon System?

Mandy Talbot: Post Office Limited was concerned to preserve the integrity of the Horizon System. There is no doubt about that.

Mr Blake: As the Chair has said, “Post Office Limited” is not a very helpful description of who it was that was concerned. You were involved in both of these cases. Was this your strategy?

Mandy Talbot: It is, I believe, the strategy of Post Office Limited – though I cannot speak to Post Office Limited – communicated through myself as the solicitor dealing with these two litigation cases.

Mr Blake: Can we please look at POL00069955, please. This is the draft report from BDO Stoy Hayward and it’s page 4. You’ll have seen this is a document that I took Mr Dilley to. We have the summary there and the very first of BDO’s conclusions is:

“The only indications of possible computer problems that apparent from the accounting records are three very small differences in the cash account …”

So having identified there that there are possible computer problems, were you aware of that?

Mandy Talbot: I would have seen a copy of this report at the time it was created.

Mr Blake: Is that in some way consistent with the expert report in the Cleveleys case of possible computer problems?

Mandy Talbot: Based on two wholly different sets of facts, BDO Stoy Hayward were ostensibly a firm of accountants, not IT experts.

Mr Blake: Two cases in two years, two expert reports, both identifying possible computer problems. Did that not cause you to pause for thought?

Mandy Talbot: At the time, no.

Mr Blake: Why wasn’t this report ultimately disclosed to Mr Castleton?

Mandy Talbot: I’ve seen an email exchange between Stephen Dilley and myself and I’ve wracked my brains and I cannot recall why it wasn’t disclosed.

Mr Blake: Did you discuss that report with anybody at the Post Office?

Mandy Talbot: I genuinely cannot recall, after this period of time.

Mr Blake: Did that report not make you question whether the infallibility of the Horizon System was now in question, in doubt?

Mandy Talbot: The sums in the report are tiny in the extreme and we had become aware of potential glitches but were assured by Fujitsu that they were rare, unusual, extreme, capable of being identified and, therefore, excluded when Fujitsu were asked to look at Horizon data.

Mr Blake: Given that there were potential glitches, do you think it was right to be trying to get Lee Castleton to sign an undertaking not making allegations about the Horizon System when your own expert had identified at least one issue and, as you say, Fujitsu themselves had accepted that there were potential glitches?

Mandy Talbot: At that time, I was tasked with obtaining a satisfactory resolution of this litigation from the perspective of Post Office Limited.

Mr Blake: Were you personally satisfied that that was the correct approach, the ethical approach, for example?

Mandy Talbot: It was the approach I adopted at the time.

Mr Blake: We know you adopted that approach but did you think it was right at the time?

Mandy Talbot: I don’t think I considered it.

Mr Blake: Do you now, looking back at it, think it was the right approach?

Mandy Talbot: Given the information that has become aware in the public arena since the Bates trial, I do not any longer consider that that was the right approach to have adopted but then, given the information that’s become public since Bates, I think it was wrong the proceedings were ever issued against Mr Castleton.

Mr Blake: Bates, of course, was much later.

Mandy Talbot: Yes.

Mr Blake: You’re here in 2006. You’ve got the BDO report. You’ve got, as you said, acceptance from Fujitsu that there were potential glitches. Looking back at it then, with the information you had then, do you consider that it was right to try to get Lee Castleton to try to sign an undertaking not making allegations about the Horizon System, in light of the information you had at that time?

Mandy Talbot: I believe that it was because my job was to conclude litigation in a satisfactory fashion as far as Post Office Limited were concerned.

Mr Blake: Can we look at POL00070160, please. We’re now on 5 September 2006, so quite close to the trial in the Castleton case we have there an email from yourself to Stephen Dilley talking about a case called Brown and you say:

“Apparently Brown is going to be a problem because it is a case where [the Post Office] admitted there was a problem with the system and replaced it. I am hoping this is a one-off event like a power outage or something of the like. I will investigate further tomorrow.”

Very close to trial, did this cause you to pause for thought at all?

Mandy Talbot: The consequence of the list of parties, including Mr Brown, who I believe Mr Castleton had indicated he was going to call to trial, and some information about what they were likely to say, made me go to Post Office Limited and Fujitsu to try to investigate, to acquire as much information about these cases as I could and to relay what information I acquired to Mr Dilley.

Mr Blake: I’m going to move on to a different topic and that’s the topic of costs. Can we please go back to a document we’ve already looked at, which is POL00070811. This was the email, I think you’ll recall, from Stephen Dilley to you and, at the bottom, where he says that, as previously discussed, essentially, costs would be disproportionate but there will be broader implications.

This is just to refresh your memory of that particular document. I’d now like to go to POL00119897. This is a documents from 18 August 2006, from Cheryl Woodward to Stephen Dilley. She says:

“I’ve passed the case on to a Senior Manager who is going to speak to Mandy Talbot regarding not being happy about the costing of this matter going to trial.”

Do you remember about the costing – you not being happy about the costs?

Mandy Talbot: No, I – I’d never seen this email before disclosure.

Mr Blake: Okay. I’m going to look at a policy. It comes later, it’s POL00084977. This is a policy that – the copy that we have, the version that we have – post-dates this particular case. It’s December 2009. I’d like to take you to page 17 of this. Is this a document that you’re familiar with at all?

Mandy Talbot: I have no recollection of this document whatsoever and, although the coversheet is December ‘09, if you look at the date at the bottom of most of the appendices, it is August 2010.

Mr Blake: Yes.

Mandy Talbot: Therefore, I have no knowledge whether this was actually ever implemented at all.

Mr Blake: There’s something I’d just like your view on, it’s page 17.

Mandy Talbot: Mm-hm.

Mr Blake: If we scroll down, it says there:

“The write-off authority levels are fairly transparent … The decision-making process to write-off debt is usually where the cost of recovery outweighs the debt (ie very high legal costs) and/or the debt is unrecoverable (eg insufficient evidence, legalities, [et cetera]). It is important to note that every case is unique, and therefore all cases are assessed on a case by case basis.”

It seems to suggest that certainly a consideration in writing off debt is whether the case would be very high legal costs and whether the debt was unrecoverable. Were those considerations that you were asked to take into account in relation to Mr Castleton’s case, irrespective of the fact that this policy comes later, but those considerations, do they feature in your thinking at all?

Mandy Talbot: No. On the basis that the case and having a judgment that would be beneficial to POL was considered to be so important to the business. The document you’ve just referred to was, in my opinion, the very first attempt by Post Office Limited to, in effect, take an overview as to the whole subpostmaster estate. I think before that, there was no single strategy behind anything.

Mr Blake: So there was no policy in place about, for example, the expenditure of disproportionate costs in a case?

Mandy Talbot: No.

Mr Blake: Was there no policy on when matters needed to be raised with senior management within the Post Office?

Mandy Talbot: No. Although I had worked for two City firms for a very short period of time, I didn’t really have any experience of management. When I first came into Post Office Legal Services, I wasn’t aware of the lack of structure that would be apparent in most firms and most organisations, in terms of reporting matters upwards, or obtaining instructions coming downwards. It just wasn’t there.

Mr Blake: So what was your view of the Post Office as an organisation, in the way it was run in respect of the bringing of actions, management of actions against subpostmasters?

Mandy Talbot: This is my own personal opinion. I could never understand why, in some cases, actions were taken because, as I’ve said, the way the system was set up enabled departments to go out straight to external lawyers without referring to in-house legal assessment at all. And why, on other occasions, the appropriate thing considered was to get the Security teams involved and, thereafter, refer it to the Prosecution or Criminal Litigation department.

Mr Blake: I want to move on to a different topic, which is Mr Castleton’s health and costs and issues of bankruptcy?

Mandy Talbot: Mm-hm.

Mr Blake: Can we look at POL00069766, please. Thank you. If we go to the bottom email, please. We have an email from Mark Turner, solicitor in the commercial group of Rowe Cohen solicitors and he is emailing Stephen Dilley and this is forwarded on to you. He says:

“I have just tried to speak to Mr Castleton but have been informed by his wife that he is rather unwell, is in bed on his doctor’s instructions, and is on some pretty strong medication to treat the stress-related condition that led to his hospitalisation last week. As a result of the medication, he is somewhat ‘out of it’ and apparently not in any fit state to provide me with instructions.”

That’s 15 November 2006 and, if you scroll up, you can see that Stephen Dilley forwarded that to you by way of an update.

There’s another email POL00069722, two days later, 17 November. This is when settlement was being discussed with Mr Castleton’s solicitors. If we look at the email at the bottom, it says:

“Dear Mandy,

“Please see below from Castleton’s solicitors. I have spoken to him and chased him to sign the content order. He is going to call Mr Castleton’s GP today to check that Castleton has the mental capacity to give him instructions …”

Then if you look at the top email from you to Stephen Dilley, you say:

“Noted. It’s frustrating given that hopefully the settlement will be concluded shortly.”

Were you aware of any policies within the Post Office addressing what to do if a party was hospitalised through stress?

Mandy Talbot: I wasn’t aware of any policy within Post Office Limited itself relating to the physical or mental health of a party.

Mr Blake: If we look at POL00070210, please. There is an agreement between the Post Office and Bond Pearce, and this is called a “Subpostmaster and Commercial Litigation Protocol”; do you remember this document?

Mandy Talbot: I didn’t until the additional disclosure. I don’t know if this was created before the Castleton case or as a consequence of the Castleton case. I just can’t remember the date of it.

Mr Blake: It has you down as the Legal Services representative?

Mandy Talbot: For subpostmaster cases.

Mr Blake: Yes. So does that suggest that you were responsible within the Post Office for subpostmaster cases?

Mandy Talbot: Within my small area of Civil Litigation, I was the liaison between Bond Pearce over these matters. Whether I was the liaison with all of the other regional firms on subpostmaster cases, I can’t recall.

Mr Blake: Could we go down to the second page, the bottom of the second page. There’s reference there to “Significant/Sensitive Cases”, and it says that:

“Bond Pearce shall notify the client and [you] of all significant and sensitive cases …”

Then it gives some examples.

Now “stress/bullying/harassment”, am I right to understand that that is not in the context of the litigation? That means the topic of the litigation, whether it’s –

Mandy Talbot: I’m trying to recall whether Bond Pearce dealt with employment cases, where a provision like that would have been far more relevant.

Mr Blake: If we scroll down the list of significant and sensitive cases, do you consider the Lee Castleton case to have been a significant or sensitive case, falling within any of those criteria?

Mandy Talbot: As it developed, yes.

Mr Blake: Which one would that be?

Mandy Talbot: Although it refers to case values in excess of 500,000, I actually am of the opinion that any case involving £250,000 is also something that should have been reported on.

Mr Blake: We know that you were, of course, aware of this particular case.

Mandy Talbot: Mm-hm.

Mr Blake: I mean, if we scroll up, all this agreement means is that you would be notified. Was there an equivalent policy within the Post Office to notify those within management, for example, of those kinds of cases?

Mandy Talbot: No, there wasn’t, that I am aware of.

Mr Blake: I want to address now his bankruptcy. Can we look at POL00113487, please. It’s page 7 of this pack of documents. Page 7., thank you. It’s that middle email from yourself to Martyn Mitchell of the Post Office. Do you recall who that was?

Mandy Talbot: I assume someone within the Error Resolution Team because I think that, as a subpostmaster deficiency, theirs would have been the department tasked with recovering the deficiency.

Mr Blake: Thank you. We’re now in 2007, so it’s after the original court case in the Castleton case, and you say there:

“He has declared himself bankrupt which was expected and we are still awaiting details of the valuation. After a year if he has not sold the property the rights of his kids to have a house over their heads becomes an irrelevance and as the largest creditor we can put the property up for sale through a trustee in bankruptcy.”

You say there it was expected that he would declare himself bankrupt. Was that something that you were aware of during the proceedings?

Mandy Talbot: During the proceedings?

Mr Blake: Yes.

Mandy Talbot: No. I think in the period after the trial, it was suggested.

Mr Blake: Given the value of the claim and given the strategy that the Post Office adopted, which was to essentially, as you’ve accepted, make an example of Mr Castleton for wider purposes to dissuade other subpostmasters from bringing actions, did you think it was proportionate for the Post Office to seek to recover its costs through the sale of Mr Castleton’s home?

Mandy Talbot: There had been opportunities at the time of the proposed Tomlin Order to have settled the matter without the then additional costs of the trial. As we had been – as Post Office Limited had been put to the cost of the trial, it was just normal litigation tactic to try to recover whatever costs we could using legal methods.

Mr Blake: There’s an email from Stephen Dilley that I can take you to. It’s POL00072206. This is even later. This is now 2009. You may recall from Mr Dilley’s evidence, it’s the bottom email, where he says:

“It is frustrating that there is no financial recovery in this instance although we knew that the prospects were slim particularly after he was made bankrupt. Post Office Limited’s main goal in pursuing Mr Castleton was achieved in that we have a good judgment precedent which helps us to defend the Horizon System.”

Do you think it was fair to bankrupt Mr Castleton in pursuit of that wider goal?

Mandy Talbot: Mr Castleton chose to bankrupt himself but it was a legitimate – it was legitimate on the part of Post Office Limited as the major creditor to seek to recover what costs it could.

Mr Blake: You’ve been very frank about this in your witness statement and I’d like to turn that up, please. So could we have a look at WITN08500100. That’s Mrs Talbot’s witness statement. It’s page 19 I’d like to look at. It really draws the themes that I’ve been exploring just now of cost and bankruptcy together. It’s page 19 of the witness statement. Thank you.

At the end, at the bottom of that page, please. You say there at the bottom, it begins at the very last line:

“The tactic of [the Post Office] was to draw the costs position to the attention of Mr Castleton … then to overwhelm Castleton with evidence and preserve the trial date of early December. I refer to the telephone attendance note [et cetera]. These would have been standard tactics in high … litigation cases.”

Pausing there, do you see the Post Office as in any way different to a normal litigating partner?

Mandy Talbot: I don’t think that I do see it as different to any other client.

Mr Blake: Can we go on to the next paragraph, in fact paragraph 44, page 21 – sorry, it’s 43, in fact. Thank you.

You say at the top of that page, page 21, so over to the next page, please. You say:

“A Defendant’s wellbeing was not considered by [the Post Office] as relevant to the manner in which litigation was conducted unless or until the Defendant or those acting on his behalf made a relevant application to the Court assuming that litigation had already commenced.”

Can you assist us with what you mean there? Did at no stage the Post Office consider the wellbeing of a party, unless that party had made an application to the court?

Mandy Talbot: I can’t speak as to Post Office Limited but, within Civil Litigation, we wouldn’t, unless and until the defendant or those acting for him had made the appropriate formal application to the court. I don’t know what consideration POL took before deciding to send the matter out to external solicitors to issue proceedings. I just don’t know whether they took somebody’s physical or mental health into consideration.

Mr Blake: So if we look at paragraph 44 below, you say:

“In general the physical or mental wellbeing of a subpostmaster may well have been considered a relevant factor prior to the decision to refer a matter out to agents but that was a matter for [the Post Office]. I would not have been aware of any decisions taken in this respect and do not know if this was considered in this case. Civil Litigation were never asked to the best of my knowledge …”

Mandy Talbot: Yes.

Mr Blake: So to try to understand the process, you would receive a case from somewhere within the Post Office. Where, in particular, would you receive a case relating to a subpostmaster?

Mandy Talbot: It could have come from the teams dealing with subpostmaster deficiency debt. In the case of Mr Castleton, it was already sent out by Ms Woodward to Bond Pearce without us in-house solicitors having any knowledge of it.

Mr Blake: So would the in-house solicitors not have a say as to whether the physical or mental wellbeing of a subpostmaster was a relevant factor in continuing a case?

Mandy Talbot: Continuing with the case?

Mr Blake: Yes.

Mandy Talbot: As I referred into my statement several paragraphs before, it would only have become an issue if a formal application had been made to the court. I never knew of a case where we were asked by Post Office Limited to keep them apprised of what may be happening with a physical or mental condition of a defendant.

Mr Blake: Do you think you did or didn’t keep people appraised of Mr Castleton’s wellbeing in the broader –

Mandy Talbot: I was never asked to do so specifically and it would not have been normal in general high value litigation.

Mr Blake: Can we look at POL00072991, please. It’s the second page. We have an email there from Joseph Napier, who was a partner in Napier & Sons. We’re now in December 2010, so further on, a year on.

Mandy Talbot: Mm-hm.

Mr Blake: He says there, in the second paragraph:

“I have had discussions with [this is somebody called Katherine McAlerney, with her solicitor]. They’re still making some noises [regarding] the Horizon System but I am not getting the impression that they expect their arguments to bring them very far.

“McAlerney is in financial difficulty. She is trying to sell land”, et cetera.

Then your response above is:

“Joe

“Thank you for the update in this matter. We recently won a prosecution of a subpostmistress by the name of Misra and as a result we anticipate that the complaints about the Horizon System may decline. I presume that her complaints about Horizon are generic rather than specific.”

This is a later case, dealing again with complaints about Horizon, and there is mentioned in that email from the solicitor about financial difficulties. Am I right to read into that that Mr Castleton’s case was not unusual in the respect of the ultimate result causing significant financial difficulties to a subpostmaster?

Mandy Talbot: I have no idea. We were never tasked with keeping any sort of financial record or any other sort of record about subpostmaster deficiency cases, until such time as the Andy Greening document, end-to-end postmaster debt, in the August 2010 and, even then, I don’t know whether that was ever properly implemented.

Mr Blake: So, throughout your years in the legal department at the Post Office, did you not yourself see trends rising in relation –

Mandy Talbot: I was never asked to look for trends.

Mr Blake: You weren’t asked to look for trends but did you not sense any trends yourself?

Mandy Talbot: As I said earlier, ordinarily, when I wasn’t dealing with cases like Mr Castleton, that were truly extraordinary, I would spent one maybe two hours a week on these matters, subpostmaster deficiency. It was a very, very small part of my caseload.

Mr Blake: I’m going to move on to a different topic.

Sir, I think I’ll continue. We have 20 minutes before 1.00. I think I’ll press on.

Sir Wyn Williams: By all means. You take it as you think appropriate, Mr Blake.

Mr Blake: Thank you.

Involvement in criminal cases. You address this in your witness statement. It’s paragraph 54 of your statement, where you say:

“Civil Litigation solicitors would have no interest or involvement in a criminal case until it had been concluded.”

Can you assist us with how those teams were separated? Were they physical separations?

Mandy Talbot: When I first joined Legal Services, we were in a tower block in Croydon and the Legal Services Departments were spread out on two separate corridors, two separate floors. The Criminal Department was down another corridor, in effect physically separated from the general Civil Litigation Team and, by about 2006 – and I’m basing this on disclosure that was made on Tuesday – the Prosecution criminal team was based in Victoria in Central London.

So we were geographically in separate places for the middle to latter portion of 2000 to 2010, and physically separated in terms of being two separate ends of a divided corridor, when we were all working together in Impact House.

There is a sort of landing with two sets of double doors and Criminal and Prosecution were down one end and Civil down the other end.

Mr Blake: Did you share any joint meetings?

Mandy Talbot: I think it extremely unlikely, until possibly the 2000s, because –

Mr Blake: Do you mean 2000s or do you mean post-2010?

Mandy Talbot: No, sorry, 2010. Because from 2000 to the end of 2009, and possibly way in to 2010, our only real connection with Prosecution was cases where they had not been able to achieve recovery of outstanding debt. Therefore, they would prosecute an individual and if they forgot to apply for a compensation order or the court wasn’t minded to grant it then, and only then, would a case from Prosecution be referred to ourselves.

Mr Blake: How about management? Did you share the same management structure?

Mandy Talbot: As I say, I worked to either my team leader or to the Head of Civil Litigation. Criminal and Prosecution worked to Mr Rob Wilson. So we didn’t share a management structure in that respect.

Mr Blake: Did their managers share a manager, if you’re able to assist us with that?

Mandy Talbot: I believe that Rob Wilson – if I can go back to the early days, I believe that Rob Wilson and Joe Ashton, who were respectively Head of Criminal and Head of Civil Litigation, reported directly to Catherine Churchard, who was the solicitor to the Post Office at that time. And I believe that that’s a structure that was maintained subsequently.

Mr Blake: Thank you. Can we look at POL00083161_002, please. It’s page 2 of that document. Again, I’m going to take this broadly chronologically, looking at involvement in criminal cases. If we could look at the bottom email. There is an email forwarded by you, but it’s originally from Graham Ward, who was Graham Ward? I think if we scroll down, we can actually –

Mandy Talbot: There’s possibly his title on the next page.

Mr Blake: There is. It says “Casework Manager, Post Office Limited Investigation Team”?

Mandy Talbot: Yeah.

Mr Blake: So he was part of the Investigations team, was he?

Mandy Talbot: Yes, and they worked primarily on criminal cases.

Mr Blake: Thank you. If we go up to the bottom of the page before, so the bottom of page 2, a little bit further, so the bottom of that page. Thank you. He says:

“Mandy (Keith – for info) …”

That’s Keith Baines?

Mandy Talbot: Mm-hm.

Mr Blake: “As discussed yesterday … please find attached the statement from Jan Holmes which was used in a prosecution of a counter clerk at Camberwell Branch Office in 2002.”

Pausing there, we know that was Tracy Felstead, who was 19 years old at the time and her conviction has subsequently been overturned.

Mandy Talbot: Mm-hm.

Mr Blake: It says:

“I would suspect that Jan Holmes’ statement is more or less exactly what you’ll need should the ‘Castleton’ case proceed all the way (however I seem to recall that at the time, as it was out of the normal this statement did cost us an ‘arm and a leg’ … but I maybe wrong).”

Did you on occasion, therefore, have sight of statements and other documents that were used as evidence in criminal proceedings?

Mandy Talbot: Very, very rarely. At this time, we were trying, and Stephen Dilley was trying, to obtain witness statements and I think Graham thought it might be of assistance if Stephen got in touch with Jan Holmes because he had prepared a witness statement in another case. Looking at it, it appears possibly the witness statement from Jan Holmes was attached to this email – oh, yes, it was: “Revised witness statement, Jan Holmes”. Yes, so I would have seen a copy of that witness statement at the time.

Mr Blake: Was this particular to you in your role that you are being involved or sent matters relating to criminal prosecutions? You’ve said that your team had little involvement?

Mandy Talbot: No, this was as a consequence of Stephen trying to identify people within POL and Fujitsu who were capable of giving witness statements on this type of case.

Mr Blake: So is this relatively isolated, then?

Mandy Talbot: Oh, yes, absolutely.

Mr Blake: Can we look at POL00067487, December 2006. So before we were December 2005, so a year later. We have a letter and it’s relating to Josephine Hamilton, sent to Cheryl Woodward in the Agents Debt Team and it says, as follows – if we could go halfway down the page to that middle paragraph it says:

“Ms Hamilton is likely to allege that she was inadequately trained on the Horizon System. It is possible that she may also contend that there were errors with the Horizon software although her Solicitors have not specifically said so. Her letter does however hint at it. In light of that I am copying this letter to Mandy Talbot.”

Now, these were the criminal proceedings against Josephine Hamilton, again another case that we know has subsequently been quashed. It was written, in fact, the day before she first appeared in a Magistrates Court and it refers there to her potentially challenging Horizon, and copied to you in light of that. Why would matters challenging Horizon be copied to you?

Mandy Talbot: I’m not 100 per cent certain, though as this is Cheryl Woodward and she was the lady who gave instructions to begin proceedings in Castleton, she may have thought it appropriate to tell Hugh James to keep me copied in for that reason.

This was something that was referred to me for information, as far as I was concerned. No more.

Mr Blake: I mean, sorry, if we could zoom out slightly. This is a letter from Hugh James. The fact that they knew that you would be interested in cases relating to errors within the Horizon software, shall we not read anything into that?

Mandy Talbot: Hugh James had informed me of the possibility of an embryonic class action. As such, I may have been copied in on that basis.

Mr Blake: Were you starting, at this point, to coordinate cases?

Mandy Talbot: No, no.

Mr Blake: This is precisely the time when, of course, the Castleton case was going on. Did you tell Hugh James that you had a similar case, Mr Castleton’s case: a similar case where Horizon software was being challenged?

Mandy Talbot: I believe that I asked Bond Pearce to liaise with Hugh James and any – by implication, any other external agents on subpostmaster cases, because I wanted to ensure that proceedings were not issued again where the documentary evidence wasn’t in apple-pie order and that we wouldn’t be able to prove on the arithmetic that losses had been sustained at individual branches.

Mr Blake: Undoubtedly a serious matter, Ms Josephine Hamilton being prosecuted, shortly before her appearance in court. You’re being told about it.

Mandy Talbot: Mm-hm.

Mr Blake: Did you think at that stage to raise, for example, that you had, by then, received two expert reports where allegations were being made about the Horizon System or concerns were being raised about the Horizon System?

Mandy Talbot: No, I did not.

Mr Blake: Did you tell them, for example, that you had that Cleveleys case, where the independent expert had raised concerns about the Horizon System?

Mandy Talbot: I believe I merely read the letter and probably filed it.

Mr Blake: Did you think, with criminal cases being brought to your attention, that you had any duties of disclosure in respect of those cases of your – in respect of your knowledge of any problems with the Horizon System?

Mandy Talbot: No, at the time, I dealt with each and every case on its particular facts and as a singular item.

Mr Blake: Can we please look at POL00053778, please. Thank you. Can we turn to page 5, the bottom of page 5. An email from you to, is it Michele?

Mandy Talbot: Michele.

Mr Blake: Michele Graves. Who was Michele Graves?

Mandy Talbot: Somebody within Post Office Limited but, unfortunately, I cannot remember which department after this period of time.

Mr Blake: The subject there is an Eleanor Dixon. We’re in January 2010, and you say this. You say:

“As you know, the business is prosecuting a former subpostmistress who is adducing all sorts of statements and comments from former postmasters in support of the contention that Horizon is the cause of all evil and that they were perfect postmasters.”

Mandy Talbot: Mm.

Mr Blake: Is that a little sarcastic?

Mandy Talbot: I do very much regret the language I used in this and, as I’ve said in my statement, with perfect hindsight, they were right to so adduce.

Mr Blake: You say:

“I attach a statement from Dixon along those lines. Please can you locate any material which [the Post Office] may still have on this lady so we can assist the barrister who is prosecuting the case on our behalf.”

So having said that getting involved in criminal cases was quite rare, we again have another case here where you seem to be involved in the –

Mandy Talbot: I believe what I said was it was quite rare until 2010. If I didn’t say that –

Mr Blake: Yes, I think you’re absolutely right. Why was it in 2010 that you became involved in criminal proceedings?

Mandy Talbot: In 2010, the Criminal department began the prosecution of Ms Misra and, for the first time I can ever recall, I was approached by a clerk in the prosecution team, on behalf of a criminal barrister, and asked to provide him with information about civil cases that had been dealt with in the civil courts where Horizon was challenged or, alternatively, he may have provided me with a list of cases that he wanted additional information on. I can’t quite recall which of those approaches were taken.

Mr Blake: I have a document that may assist you in that regard. It’s POL00055212. This is 2 September 2010. Can we scroll down, please. This is the case of the Crown v Gurdeep Dhale, and it’s Jarnail Singh writing to you. Jarnail Singh, the senior lawyer in the Criminal Law Division, writing to you and saying:

“I have [this case]. Can the Defendant have identified previous cases where the Horizon case system has been criticised, namely Lee Castleton Jo Hamilton, Noel Thomas, Amar Bajaj, Alan Bates, Alan Brown and Julie ford.

“I understand that you and Counsel Warwick Tatford looking at a number of cases in similar circumstances in my case of Misra and I would be grateful if you could give me details of that and whether you can identify any other cases listed above as to there were any questions or criticisms of the Horizon System.”

Does that assist you?

Mandy Talbot: Yes.

Mr Blake: Can you tell us then what it was you were being asked to do or what you understood the task to involve?

Mandy Talbot: I believe that Mr Phil Taylor of the Criminal Law Department contacted me, it would either have been very late December 2009 or early January 2020, and asked me for information, I believe, on the Castleton case, and I tried to retrieve what information we had and supplied that to the barrister.

I think, from other internal documentation, that the barrister may even have spent a couple of days at our office looking at materials on the case of Castleton.

Now, Jo Hamilton, as you say, was a Prosecution case, so I would never have had any information on that.

Callendar Square, the only information I had was that provided by yesterday’s witness about a particular glitch that, you know, became known as the Callendar Square issue, Callendar Square problem.

So, although Mr Singh has asked me for information across all of these cases, I would only ever have been able to provide information about civil actions to him and I believe that my ultimate response in December 2010 was along the lines of “I would have thought you already had this material as your barrister in the case of Misra spent a number of days with us”.

Mr Blake: Those are all specific named cases. I think he also says “whether you can identify any other cases listed above and whether there are any questions or criticisms of the Horizon System”. Did you at that point carry out any exercise to look back at the cases you had been involved in over the years to see if there had been any issues involving the Horizon System that might be disclosable in those criminal cases?

Mandy Talbot: No, I didn’t.

Mr Blake: Sir, I think that’s an appropriate time to pause for lunch.

Sir Wyn Williams: Yes.

Mr Blake: Can we come back at 2.00, please?

Sir Wyn Williams: Yes, of course.

Mr Blake: Thank you very much.

(1.00 pm)

(The Short Adjournment)

(2.00 pm)

Mr Blake: Good afternoon, sir.

Sir Wyn Williams: Good afternoon.

Mr Blake: Thank you.

Mrs Talbot, when we left off before the break we were on POL00055212 and that was a letter from Jarnail Singh in relation to the case of Dhale, requesting certain information from you. That should be brought up on the screen. Thank you. Do you recall that letter, yes?

Mandy Talbot: Yes, I do.

Mr Blake: Thank you. I’m going to move on but I’ll come back to that particular topic shortly but can we, before I do that, go to POL00107242 and it’s page 3. It this is 9 December 2010 and an email from yourself to all and it says:

“Dear All,

“Now that the Misra prosecution has concluded we now have to pick up civil Horizon cases to see whether or not we should be bringing proceedings in respect of them.”

Had civil cases been paused pending the decision in the Seema Misra case or the judgment – the verdict even, in the Seema Misra case?

Mandy Talbot: I think some had, yes.

Mr Blake: Looking down to a message to Dave, you say there:

“This was a chap who worked as a postmaster 2007 to 2008.”

This is about David Bristow, a subpostmaster:

“He refuses to believe that he has done anything wrong and that it was the fault of Horizon which led him to be threatened with summary termination – he eventually resigned.”

You say halfway through the next paragraph:

“He has jumped on the Postmasters for Justice Bandwagon. I appreciate that the complete printout would be very expensive. Given your knowledge of Fujitsu, can you estimate what the cost would be or suggest whether there is any other way of proving that the system was working correctly and that therefore the losses it showed were real losses?”

You seem there to be getting slightly tired of the “bandwagon”; is that a fair summary of your mindset at that time?

Mandy Talbot: Within Civil Litigation, I was beginning to feel frustrated and I think I’ve alluded to that in my statement, because Fujitsu and POL were constantly assuring us that there was absolutely nothing wrong with the Horizon System and, yet, every time – well, every time a matter was referred to Civil Litigation – and this would only have been a tiny proportion of postmaster deficiency cases – the response was becoming regular that the subpostmasters were not at fault, it was Horizon.

So we were frustrated because we’d been given assurances there’s nothing wrong on one side and yet people are claiming there’s something wrong on the other.

Mr Blake: You say there it would be expensive to get a complete printout. I mean, by that stage were you having so many cases brought by subpostmasters or so many complaints about Horizon being brought that you didn’t want to waste money on it?

Mandy Talbot: No, that’s – pardon me. No, that’s not what I mean at all. I’m not a commercial lawyer but, under the contract between POL and Fujitsu, Fujitsu were only obliged to provide their services in analysing cases 100 times a year.

Now, I’m not a prosecutor but I did come to know that Prosecution would, in their own investigations, utilise an awful lot of that 100 opportunities. Therefore, if you’re dealing with a civil case and you want an analysis of data from Fujitsu, you would then have to go back to POL the business and get them to authorise that they were prepared to pay for the same. So that’s why I’m talking about cost in that particular extract.

Mr Blake: At this stage, you’ve said you were frustrated. It seems as though it seems all a bit of a bandwagon to you and you don’t want to go through the expense of having to get information from Fujitsu?

Mandy Talbot: No, I was asking for Dave’s opinion as to what he thought and I think this is probably Dave Hulbert, what he thought Fujitsu would charge to obtain that information. I wasn’t rejecting it at all. I wanted information.

Mr Blake: At this stage, 2010, were you aware of, for example, the article in Computer Weekly? That was a 2009 article?

Mandy Talbot: I didn’t read it personally but I have seen additional disclosure making reference to it.

Mr Blake: Can we move on to POL00055894, please. When we just started after lunch I took you back to that document, where it was a request in the case of Dhale, that request was the 2 September 2010, and this was, I think, your response, dated 16 December 2010. Do you recall why it took such a long time to respond to Jarnail Singh?

Mandy Talbot: I think it’s because there was another exercise going on within Legal Services this time, to try to reduce headcount and, during that process, I was informed there was no more role for me within Legal Services and it is on that occasion that I moved over in the following January to Royal Mail Group, the business.

Mr Blake: So, by that stage, how small had the legal team within the Post Office become?

Mandy Talbot: In terms of permanent members of staff, quite small, because a process had begun under which the – some of the regional agents but certainly a lot of the London agents would provide lawyers for a period of six to nine months to come and work with the in-house team, ergo reducing the actual employee numbers.

Mr Blake: I don’t quite understand that, sorry.

Mandy Talbot: Sorry. There was an exercise going on to reduce headcount within Legal Services –

Mr Blake: Yes.

Mandy Talbot: – and I think, as part of trying to fulfil obligations to our clients, in place of some of us who were going, a process began under which our external legal agents began to supply members of their firms to come and work within Legal Services for a period of time, I think a minimum of six months, sometimes longer.

Mr Blake: So a secondment of some sort?

Mandy Talbot: A secondment, that’s the word I was –

Mr Blake: So they were reducing the size of the legal team and replacing people who were experienced in dealing with these kinds of cases with external lawyers for a temporary period of time?

Mandy Talbot: That’s correct.

Mr Blake: You say in that response:

“I thought that your barrister on the case of Misra would have copies of everything which he considered to be relevant from the time he spent two days here. I only have email folders on Lotus Notes insofar as they can be retrieved and in Outlook but you are welcome to come over and search them.

“There are numerous boxes in respect of Castleton most of which are still with Stephen Dilley … who can let you know how much it would cost retrieve them from their storage facility.”

Then you say this:

“There are ongoing cases every month which raise the issue of Horizon so it’s a movable feast. I’m endeavouring to pull together a list of those cases currently with us where allegations have been made in respect of Horizon. Most of these cases have been on hold awaiting the decision on Misra. The transcript of that case is now being created and should be with us shortly …”

Why was it that Misra was so significant at this time?

Mandy Talbot: Misra was significant for the business. It was a criminal case, so, logically, looking back, it shouldn’t have had an impact on civil matters at all. I can only conclude that a decision was made that any embryonic subpostmaster deficiency civil cases should be stayed pending that decision – pending the conclusion of the Misra case, sorry.

Mr Blake: I’ll go on to draw your attention to a number of other documents relating to the Seema Misra case but, before I do that, might it be the case that like Lee Castleton, Seema Misra’s case was being held out as an example to dissuade future claims?

Mandy Talbot: It was a criminal prosecution, so I can’t comment on that.

Mr Blake: But the fact that cases seem to have been stayed, on hold, awaiting a decision on Misra sounds as though Misra would have been very significant for the Post Office?

Mandy Talbot: I think it was significant to the Post Office, yes.

Mr Blake: “There are ongoing cases every month which raise the issue of Horizon …”

Was that not indicative of a wider problem with Horizon at that stage?

Mandy Talbot: The Mr Greening document that we referred to this morning, if that had begun to be implemented, would have required us to begin reporting on subpostmaster cases and there’s a possibility that I might have been concerned about numbers arising out of that. But, as I say, that document was created in August 2000. We’re still only in December 2000. Probably –

Mr Blake: 2010.

Mandy Talbot: 2010, sorry. Probably hadn’t got off the ground as yet.

Mr Blake: We have quite serious criminal proceedings going on against Mr Dhale and Ms Misra. Do you know if they were told that there were ongoing cases every month which raised issues of Horizon?

Mandy Talbot: I don’t know.

Mr Blake: By this time, 2010, you knew about the report in Cleveleys, you knew about the BDO report in the Castleton case. You knew about complaint after complaint about the Horizon System, so much so it seems that cases were put on pause awaiting a decision in the Misra case. Was all that knowledge that you had relevant to the Misra case and what was to become a precedent? Did you feel any burden on yourself knowing that this significant case was taking place to provide information about your knowledge of the complaints that had been made about the Horizon System over the years?

Mandy Talbot: I didn’t see that as my role at the time. I think I assumed, and this is only a personal assumption, that Criminal would have been aware, given their involvement with Security, Fujitsu and POL.

Mr Blake: You’ve said that the Criminal Divisions and the Civil Divisions were kept very much apart?

Mandy Talbot: They were.

Mr Blake: You seem here to be a conduit for information in some ways to the Criminal team. Did you see any responsibility on yourself to inform the Criminal team about, for example, the Coyne report in the Cleveleys case or the doubts that were raised in the Castleton case or other complaints, civil complaints, that you had received in relation to the functioning of Horizon?

Mandy Talbot: I didn’t.

Mr Blake: Was there any process in place for drawing all of those civil strings together and providing that information to the Criminal team?

Mandy Talbot: No, there wasn’t.

Mr Blake: Can we look at POL00055716. I think this is a letter here – is this from you or – yes, if we look over the page, it’s a letter from you to Guildford Crown Court. If we go to page 1, you write to enquire whether the court will be prepared to authorise the release of the tapes of the hearing to arrange for them to be transcribed:

“We need the transcript to us in other cases where Fujitsu and the Horizon System are challenged on similar facts. If the Judge is prepared to release the tapes to us or the transcribers for this purpose I would also want them to include details of the sentencing hearing.”

It does seem to some extent that you were a conduit for these criminal matters and gathering evidence to use against postmasters who were involved in civil claims.

Mandy Talbot: I don’t think I was a conduit for civil – for criminal matters. I had other clients within the business and I believe, if I was a conduit for anybody, it was to provide information to them, parties such as Mr Rod Ismay and Mike Granville, who was Head of Regulatory Relationships.

I can’t now recall whether or not any order was made for Misra to pay over any money to Post Office Limited, so, therefore, it may be that part of the reason for me writing to Guildford Crown Court was to obtain this documentation with a view to taking further civil proceedings, but –

Mr Blake: You’re there writing to the Crown Court and you say:

“We need the transcript to us in other cases where Fujitsu and the Horizon System are challenged on similar facts.”

So it does seem, like the Castleton case, that this was an important case for the Post Office to win to dissuade others that were waiting in the wings.

Mandy Talbot: This was a criminal case and therefore I have very limited information about it. I believe – I know that I was asked to apply to the Guildford Crown Court for the transcript. For what use it was going to be put to, other than that – other than to be of benefit to Post Office Limited, I can’t really comment.

Mr Blake: Who asked you to do that?

Mandy Talbot: I’m very sorry but, without access to my papers, I can’t tell you.

Mr Blake: You recall being asked to do it. It wasn’t of your own volition –

Mandy Talbot: Oh –

Mr Blake: – but you don’t recall who asked you?

Mandy Talbot: I would never have written a letter like the one on the screen at my own volition.

Mr Blake: But you can’t remember who asked you?

Mandy Talbot: Not without additional disclosure.

Mr Blake: I’m going to move on to a different topic, which is the awareness or involvement of the Post Office leadership and senior management. Can we please look at WITN04600211, please. I’m going to start with Keith Baines who was the contract manager with Fujitsu. So we’re moving now far back in time back to where we started today, the Wolstenholme case, 4 August 2004. Can you assist us with what involvement Keith Baines had in the Wolstenholme case and these cases more broadly?

Mandy Talbot: I can only conclude from this that Keith Baines had access to a statement that would have been in general form useful in terms of creating a witness statement specific to the facts of the Cleveleys case.

Mr Blake: Do you recall Keith Baines having been involved in the early development of the Horizon project?

Mandy Talbot: I don’t know anything about the early development of the Horizon project.

Mr Blake: Did Keith Baines ever raise with you any concerns he had about the functioning or reliability of the Horizon System?

Mandy Talbot: Never.

Mr Blake: We’ve seen his name on a few documents today.

Mandy Talbot: Mm-hm.

Mr Blake: What was his level of involvement generally in these civil proceedings against subpostmasters?

Mandy Talbot: I’m sorry, this is 2004. I dealt with thousands of managers over the 23 years I was working for Royal Mail Group. I can’t recall his specific function.

Mr Blake: Okay. I’ll move on, then, to Rod Ismay and others. Can we start by looking at POL00107426, please. Can we look at page 3 of this document. We have an email there from yourself to David Smith, Jennifer Robson, Tony Utting, Rod Ismay, and copied to certain people. In this, you summarise the facts of the Castleton case. Can you recall why this distribution list was being used to summarise the facts of the Castleton case in 2005?

Mandy Talbot: I believe that David Smith was the most senior officer on that list. Tony Utting was Head of Security. Rod Ismay, you’ve already heard of. Jennifer Robson, I think, was within the subpostmaster deficiency collection team.

Mr Blake: Was this a group that you communicated regularly with?

Mandy Talbot: No, these groups, as I’ve said before, they really were a movable feast. People would move in and out of these contractor lists.

Mr Blake: I mean, there are some names that crop up time and time again in documents we’ve seen, such Rod Ismay. Is there a particular reason why these kinds of emails were going to him?

Mandy Talbot: I can’t remember what his title was at the time.

Mr Blake: I’d like to read you briefly from this email.

Mandy Talbot: Mm-hm.

Mr Blake: It goes:

“Summary of Facts

“Castleton.”

Perhaps we could scroll down a little bit further. He says at the bottom of that, bottom paragraph:

“As part of the claim the solicitors for [Lee Castleton] have stated in the allocation questionnaire that they intend to call evidence from other existing and former postmasters about the problems with the Horizon System. They have asked for disclosure of data about all calls or complaints logged from postmasters about the Horizon System, presumably from the inception of the system. They have called for disclosure of all documents removed from the Branch Office during the investigation. There is an issue over locating all of those documents.”

Then you summarise the case of Bajaj, and perhaps we can look at the final paragraph on that page. It says:

“Mr Bajaj has taken the step of writing an article in the SubPostmaster November 2005 edition, seeking information from other postmasters in a similar situation.”

Then you highlight there “Issues”:

“In each case the postmasters are challenging the validity of data provided by the Horizon System and the cases became litigious before that evidence could be properly investigated.

“In each case it was known that Horizon was going to be challenged but there was no procedure in place to

“(a) acquire the necessary data

“(b) identify somebody with the relevant knowledge and capacity to interpret the data and report on the same.

“If the challenge is not met the ability of [the Post Office] to rely on Horizon for data will be compromised and the future prosperity of the network compromised.”

What did you mean by “the future prosperity of the network compromised”?

Mandy Talbot: POL’s ability to rely upon the Horizon System was absolutely crucial for the continuation of POL as a business.

Mr Blake: So you had challenges from subpostmasters, here Castleton and Bajaj, that you were concerned about. The future of the network was at stake and you make five suggestions, and I’d just like to take you through those suggestions. The first:

“A robust procedure is set up and communicated to all relevant parties for extracting necessary data from Horizon at an early stage in all cases leading towards possible termination of contract in each case where the Horizon data is challenged.”

Second, you talk about:

“… identifying a small team and training them in interpretation and investigation techniques.”

Third:

“Fujitsu and the [Post Office] to liaise on identifying a number of individuals or specialist computer firms who could provide a professional and independent report upon the Horizon System in general and in the two cases to hand if necessary.”

Just pausing there, the evidence this morning was very much that you took each case as it came, each case individually, you weren’t coordinating the various cases. This is quite, it seems, a significant suggestion that the Post Office and Fujitsu should identify an external firm to carry out an independent report. Do you recall making that recommendation?

Mandy Talbot: This is my communication. I wish to ensure that for each and every case that we always litigated on a purely independent basis and, by that, I mean on the facts of every single case, that we would be in the best possible position to litigate by having all relevant data. I was somewhat frustrated by the fact that proceedings had been issued in the matter of Mr Lee Castleton without all appropriate data being present.

I was seeking, therefore, to try to persuade the powers that be within POL – I can’t now recall to whom entirely this communication went – but I was trying to persuade the business that they really should put procedures in place that would give solicitors, such as myself, a better chance of being able to litigate successfully. But I was just a case worker.

Mr Blake: If we look at page 3, that has the recipient list that we’ve already been through. You say you can’t recall, but –

Mandy Talbot: Mm.

Mr Blake: – whose responsibility within that list would it have been to take forward the recommendation of identifying an independent external firm who could carry out an investigation of Horizon?

Mandy Talbot: I think, this is just to the best of my recollection and opinion, that David Smith was the most senior person on that list of contacts.

Mr Blake: As at the end of 2005, going into 2006, 2007, was that independent report commissioned?

Mandy Talbot: No.

Mr Blake: Were you concerned that it wasn’t commissioned?

Mandy Talbot: Of the, I think, five or so recommendations that I made, I was less concerned about the commission of an independent report than I was about the creation of a team or even an individual who would gather sufficient knowledge of the system so as to be able to give proper instructions on each case to external solicitors, so that we didn’t end up in another situation where proceedings were issued without all the relevant material being present.

Mr Blake: Was that coordinating role established as at 2005/2006 and onwards?

Mandy Talbot: It was – it – the nearest it ever got was an offer by Mr Tony Utting, who is third or fourth on the communication list, who said that he was prepared to do so, but then – I think he referred to it as “the sting in the tail”, his department had been tasked with reducing headcount by a percentage. So, ultimately, no such position was ever created and I think that late on in 2000, when Andy Greening was trying to get a grip of the whole subpostmaster estate, that was still outstanding.

Mr Blake: Thank you. If we look, just to complete this document, on that page you were on before, page 5, there were two other recommendations there. The fourth and fifth, if we scroll down, thank you: one was investigating whether or not they hold any data of the number of complaints; and the fifth was identifying members of staff who can provide witness statements.

Can we move on to POL00070496, please. This is a similar time, this is a couple of days earlier. If we look at the bottom email from Tom Beezer. This is updating various individuals about the position of the Lee Castleton case and he outlines there some concerns you had. It says:

“I spoke to Mandy. She is … a little disturbed that this matter has wide implications …”

This I talking about the default judgment and it references there:

“As we were talking about this morning, Hugh James are trying to contain an embryonic and not yet issued class action relating to the Horizon System.

“A judgment in relation to it is currently very bad news.”

Then there are requests from you and it says:

“Mandy has made a number of requests that I feel we MUST comply with …

“1) that [you are] kept fully informed on [the Castleton] matter …

“2) that [you] be sent a full set of proceedings … and a full set of correspondence …

“3) due to the matters handled by Hugh James relating to Horizon, Mandy asks that we speak to them to ensure we are all pulling in the same direction. This is even more important given the threatened class action. Who makes this call is partly dictated by how many Horizon related cases we currently have. More on this below.”

Then 4:

“Mandy asks that we NEVER issue proceedings on a claim based on Horizon evidence … without her specific consent.”

Now, that role not having been created, the Horizon co-ordination role, were you in some way filling the vacuum and fulfilling that role?

Mandy Talbot: In respect of cases that were being dealt with by Bond Pearce, yes. But that was purely in respect of litigation. It was not my role to coordinate anything on behalf of POL or Fujitsu. This was just my concern as a litigator to understand what – which cases Bond Pearce were already instructed to issue proceedings upon. I did not want another repeat of Castleton.

Mr Blake: At 4, you asked that they never issue proceedings without your specific consent. Why was that?

Mandy Talbot: Because, as I’ve just said, I didn’t think it was appropriate on the case of Castleton, under proceedings had hadn’t been issued before without – with missing documentation in place, leading to a very expensive defence of a counterclaim. If they were to issue proceedings on a subpostmaster case, I wanted to make certain that all the appropriate documentation was going to be in place and I was still hoping at this time that it would be possible for POL to commission a team to, you know, facilitate that going forward.

Mr Blake: You’ve described in your evidence earlier that you were just a case worker.

Mandy Talbot: I was.

Mr Blake: This doesn’t sound much like the role of a case worker. It sounds as though you were applying some management of the Horizon cases; is that fair?

Mandy Talbot: I was never a manager of the Horizon cases. I just tried to deal with cases that came into my inbox.

Mr Blake: Who were you doing this for?

Mandy Talbot: Usually Error Resolution Team at Chesterfield.

Mr Blake: They’re specific and quite – the language used is rather mandatory. Was this you on your own asserting control or were you acting on somebody else’s behalf in instructing Bond Pearce in this way?

Mandy Talbot: No, this was me trying to fill my role as a solicitor, in-house solicitor for Post Office Limited in this case. This – yes, this was me acting to try to ensure that a repetition of issuing proceedings in a Castleton situation didn’t occur again.

Mr Blake: Can we look at POL00090437. It’s page 63. This is a bundle of papers that we’ve looked at already. Can we look at page 63, please. Still sticking with the theme of management knowledge, page 63 is an email from you to a very similar list of names, common names that we’ve seen before. David Smith, Rod Ismay, et cetera. This is you passing on the good news about the Castleton case. It’s a document I think we looked at earlier and it’s where you update them about the progress of the negotiations.

Why this particular list on this particular occasion? It’s quite a detailed note of negotiations. It’s not a summary of what’s happened. It’s very much contemporaneous: this is happening. Why would people in other parts of the Post Office’s business be interested in that or why would they have received that?

Mandy Talbot: This is really rather similar to the list of the document we looked at two documents back.

Mr Blake: Yes.

Mandy Talbot: Therefore, these were individuals who had an interest in the case of Mr Castleton.

Mr Blake: Do you know why they were particularly interested in the case of Mr Castleton?

Mandy Talbot: I can’t speak to that, I’m sorry.

Mr Blake: Can we look at page 33 of the same document. It’s the second half of the page. Sorry, the bottom page, even. You’re there updating the entire group, 2007 now:

“This is just to let you know that we have been completely successful in defending all the allegations made by Mr Castleton. You will recall that he contended that no genuine losses occurred whilst he was a postmaster and that any losses were manufactured by the HORIZON System. The judgment has entirely vindicated the HORIZON system.”

Again, similar, if not the same, distribution list. Was it common for updates of cases to be sent to this distribution list or is there something particularly special about the Castleton case?

Mandy Talbot: The importance of the Castleton case was the size of the counterclaim and the, in effect, attack on the Horizon System.

Mr Blake: If we look above, we have a response from Rod Ismay. Rod Ismay there says:

“Thanks Mandy – great news.”

Then in the next paragraph:

“What can we do on a proactive comms front here? We’ve watched the various inflammatory letters in the SubPostmaster letters page and wanted to be able to assure branches and clients that they can rely on the integrity of Horizon.

“Any thoughts on comms following this case?”

What role did Rod Ismay have in respect of comms, communications? He was the head of Product and Branch Accounting, would you have understood it to be part of his job to be promoting communications there?

Mandy Talbot: I don’t know what the extent of his function was at the time. It may well have included comms. There was a Comms team at Royal Mail Group Headquarters.

Mr Blake: Let’s look at a document that makes a similar point. It’s POL00113488. We’re now on 20 February 2007 and this is where Mr Castleton has agreed to pay the costs. If we scroll down, please, to the second half of the page. Similar names on this distribution list. Keith Baines, John Cole, Rod Ismay, et cetera. It says:

“Castleton has … agreed our total bill for costs in writing which means that we do not have to go to Court to have them taxed which incurs additional legal costs in its own right. This response also indicates that Castleton has no intention of appealing against the decision of the Court and that the judgment is the final comment on the matter.

“As such, we need to get on with making as much use of the judgment as possible. Stephen Dilley has asked for permission to publish an article in a legal journal about the case which I have no objection to as long as we maintain editorial control as the more publicity the case is given, the greater should be its effect upon postmasters who take legal advice about defending claims for repayment.

“Outstanding matters are:

“communicating the matter to the Fed – agreeing a suitable form of words possibly with the assistance of external relations.

“arranging a meeting with Fujitsu – [proposed form of words].

“agreeing with the auditors that they will formally ask for, examine and refer to at least three months worth of branch trading statements [in future cases]”, et cetera.

Do you think it was appropriate for somebody who describes themself as “just a case worker” to be making suggestions on how to publicise the result of a court case?

Mandy Talbot: It wasn’t, in retrospect. I can only assume that that has something to do with the document that we looked at previously.

Mr Blake: In 2007, you hadn’t moved on to your 2010 role in the wider Post Office. You were still managing Civil Litigation at this stage?

Mandy Talbot: Yes.

Mr Blake: Why do you think you were drawn into making use of the judgment and commenting on ways in which it would be publicised?

Mandy Talbot: I don’t know. I can only assume there is a missing minute of a conversation where possibly I was asked to assist on this matter. I agree with you, this is not the role of an ordinary civil litigator and this was possibly the one and only time that this ever occurred.

Mr Blake: Do you think it was inappropriate to be doing that?

Mandy Talbot: As an ordinary civil litigator, yes, it was but I can only conclude that I was asked to do so by some of the parties to whom that communication is addressed.

Mr Blake: You were asked to, you say, by one of those people, but –

Mandy Talbot: I assume.

Mr Blake: You assume. Did you ever raise any concerns with anybody about the position that you were being put in?

Mandy Talbot: No.

Mr Blake: Can we please look at POL00104618, please. We’re now in August 2008. Can we please look at the second page, at the bottom half of the second page. We have an email from Andrew Winn and we’ll see in due course that this is forwarded to you. Do you recall Andrew Winn?

Mandy Talbot: I don’t recall Andrew Winn and I don’t believe I ever dealt with this email, as the writing on it isn’t mine. It could well have been dealt with whilst I was away on annual leave.

Mr Blake: Let’s just have a look at what it says. It says:

“Coms to branches

“I think we still do not have clear sign-up around who would be communicated to. My understanding is that the business only wants to contact branches who have reported the discrepancy or who have suffered financial loss by making good an inflated amount.”

We’ll see in due course through the later email what this is all about. It’s about a software glitch within Horizon and this email is a discussion about who to tell about the software glitch, whether you tell the individual branches who have suffered the glitch or whether you communicate it more widely. Do you recall this at all?

Mandy Talbot: No. I believe it could have been dealt with by my line manager, given the manuscript comments on the document.

Mr Blake: It says there:

“This accepts the risk that other branches may raise the issue with [the Post Office] at a later date.

“In terms of communication script I would have thought something on the lines of – Singleton makes good loss – ‘Your branch received a software change to Horizon. This has caused a stock unit discrepancy to be calculated incorrectly and as a result you have made good a loss of [X amount] whereas the correct loss/gain should have be [Y amount].

“Post Office Limited need to compensate you for the loss and will send you cheque for the above amount. Can I confirm [the name that is required].”

Then over the page, if we could scroll down, so we can just see the top of the page before. Where a branch has actually made a gain, the proposal there is:

“Post Office do not intend to recover the gain.”

If we go to page 1 of this document, please – sorry, if we go over the page to page 2 we have an email from Rod Ismay who says there:

“Hi Andy – before anyone sends any comms anywhere please can you get confirmation that Mandy Talbot/Biddy Wyles in Legal have seen and are OK with proposed wording.”

Now, why was Rod Ismay suggesting that you comment on wording that was sent to branches, following the identification of a software glitch?

Mandy Talbot: My reading of these communications is a request by Rod Ismay for myself or Biddy, who was my line manager at the time, to look at the drafting of the letter. It’s headed “Comms” but I would have interpreted it as a letter that they proposed to send to individual branches who had suffered from this particular glitch. It was really – it was also part of our function, although we were a Civil Litigation Department, to assist many departments within POL and Royal Mail Group with drafting correspondence if they felt they needed assistance.

Mr Blake: Did Rod Ismay put your name forward in particular because he knew that you were dealing with issues relating to the Horizon System?

Mandy Talbot: I think you would have to ask him on that point.

Mr Blake: Is it something that you would typically be asked about, irrespective of your involvement in the Horizon System or is it more likely that this was being provided to you because of your knowledge of the Horizon System?

Mandy Talbot: We were asked to draft, in some cases, comment and edit letters from all different departments in the whole of Royal Mail Group.

Mr Blake: Let’s look at the first page. This is the email that is sent to you. So it’s sent to you and Biddy Wyles. It says:

“Not sure if you are the right people to contact regarding this.

“Basically, we recently suffered a software glitch within the Horizon System which resulted in various over/under payments (both actual and virtual) to certain (but definitely not all) [Post Office] branches.

“We are trying to come up with suitable wording to use in explaining these over/under payments and how we intend on correcting them, and were wondering if you are the right legal people to run this past first?”

Is it your evidence that you never saw this email, despite it being sent to you?

Mandy Talbot: If I were away on holiday but my line manager Biddy – whose handwriting I think I recognise on the documents that were disclosed to me – had already dealt with it, I would have been very grateful that that was something I didn’t have to look at.

Mr Blake: Do you recall in 2008 it being brought to your attention that there was a software glitch with Horizon, which resulted in various over/under payments?

Mandy Talbot: Until such time as this material was disclosed, no, I do not. I’ve no recollection of it.

Mr Blake: Are you aware of any similar references to software glitches around this time that was communicated throughout the department or throughout senior figures within the Post Office, for example?

Mandy Talbot: I can’t speak as to senior members of the Post Office. Legal Services were a distinct unit in their own right. I can only speak as to what I personally knew.

Mr Blake: You’re not aware of that having been communicated amongst your team?

Mandy Talbot: No.

Mr Blake: Can we look back at a document that we have already looked at today, and that is POL00053778, and can we look at page 5, please. Thank you. It’s the bottom of that page. So we saw there, that is the email from you to Michele Graves and others about the prosecution of a former postmistress and allegations about the Horizon System. If we turn to page 1 of this document, we have an email being forwarded from you to Warwick Tatford and it says:

“Warwick

“I have made enquiries of our Chairman’s Office team which deals with high profile correspondence and they know nothing of Mrs Nixon or Dixon of Highcliffe.”

It’s signed by you there. I think now it says “Dispute Resolution, Company Secretary’s Office”. By this stage were you in a different team?

Mandy Talbot: I was in exactly the same department, it’s just we’d stopped becoming litigators and we were now dispute resoluters.

Mr Blake: You’re there mentioning enquiries of the Chairman’s Office?

Mandy Talbot: Yes.

Mr Blake: How often was it part of your job to liaise with the Chairman’s Office?

Mandy Talbot: It wasn’t – it was not part of my job to liaise with the Chairman’s Office, but quite often we would receive requests for assistance from the Chairman’s Office and, therefore, I knew the names of people to ask in the Chairman’s Office who did indeed deal with high profile correspondence sent to the group. I knew their identities so I knew who to contact there to see if they had any record of Mrs Nixon or Dixon.

Mr Blake: Who, in particular, would you liaise with in the Chairman’s Office?

Mandy Talbot: In this instance, it appears to be Michele Graves. But, again, there were lots of different team members over the 20-odd years I was dealing with the Chairman’s Office.

Mr Blake: If we stick to 2010, who, in particular, would you deal with in the Chairman’s Office?

Mandy Talbot: Well, on this occasion, I think it’s apparent that it was Michele Graves.

Mr Blake: Was there anybody else who you liaised with in the Chairman’s Office during this period?

Mandy Talbot: I cannot recall. Possibly if there’s other emails, I might recognise the names.

Mr Blake: In this period, to your knowledge, was the Chairman’s Office aware of complaints from those who were being prosecuted about the Horizon System?

Mandy Talbot: I cannot speak to what the Chairman’s Office or their staff knew. This is merely an example of me seeking information from them.

Mr Blake: Do you think it’s likely that, when you were seeking information from them, you would have told them that there is a case ongoing that is making a complaint about the Horizon System?

Mandy Talbot: It’s possible.

Mr Blake: Do you recall what the enquiries were that you were making at that time?

Mandy Talbot: This was in connection with the case of Misra, judging by the time period.

Mr Blake: Thank you. I’m going to move on to another document, POL00106867, please. This is a pile of correspondence and I’m going to go through three or four emails within this pile. Can we start, please, with page 27. Thank you. Can we scroll down to the bottom half of that page. You’re not, at this stage, copied in, although you are within the chain and I’ll take you to the relevant email. But this is an email from Andrew Daley to Jason Collins, Graham Brander. We have Andy Hayward bcc’d in. Andy Hayward was from the Security team. Do you remember him?

Mandy Talbot: It’s a name I recognise.

Mr Blake: It says:

“Jason/Graham,

“Andy called me and asked whether you guys … could put together some stats on these cases where the accused’s defence was/is the Horizon data is unreliable for any amount of reasons given the accused.”

He attaches there an article which is titled there “Horizon blamed.pdf”. This is February 2010. I mean, this sounds like much kind of thing that you were recommending in 2005, wasn’t it?

Mandy Talbot: I was – I was recommending in 2005 that a sensible process be put up to assist us with civil litigation cases.

Mr Blake: This is 25 February, 11.49. Can we now turn to page 25 in the bottom email. We have the same date now, 4.10 pm, and it says:

“Andrew/Jason

“I’m aware of two ongoing cases at West Byfleet … & Orford Road … and also some historical cases … but as FIs …”

Do you understand what that means at all?

Mandy Talbot: For information, possibly.

Mr Blake: “… we wouldn’t have Horizon disputed cases other than those reported by the investigators, who will have far more details on the issues than us.”

Then he says this:

“I have attached an article from an IT magazine which may have brought this issue to the fore in the 1st place and which may be of interest to Ian.”

Do you remember the article that’s referred to in this correspondence at all?

Mandy Talbot: I’ve seen reference to it but I can’t remember ever reading it.

Mr Blake: Can we please look at page 3 of this chain. Thank you. If we look at the bottom half, we’re now at 26 February and Andy Hayward has included you as the first recipient of this email. I’m going to take you through it. Do you recall receiving this email?

Mandy Talbot: Not until it was disclosed, no.

Mr Blake: It says, as follows:

“All,

“Following our conference call today, below is a brief summary of the agreed key activities to progress the next steps in relation to the above piece of work …”

The above being the subject, “Challenges to Horizon”. Do you recall that conference call taking place?

Mandy Talbot: I don’t.

Mr Blake: “AH & MT …”

Presumably the “MT” is you, Mandy Talbot.

Mandy Talbot: I believe so.

Mr Blake: “AH” is presumably Andy Hayward; is that right?

Mandy Talbot: I assume so. I think there is a list of our initials at the end of this document.

Mr Blake: Absolutely. If we scroll down, we can see exactly who was in attendance. It’s over the page. Then we have: MT, Mandy Talbot; RI, Rod Ismay; RM, Rebekah Mantle; Dave King; Sue Lowther; Dave Posnett; Andy Hayward.

So if we go back, it has you providing information on past and present cases with reference to the Horizon challenges, and it says:

“Note: I have asked the fraud team to review [approximately] the past 2-3 years case file although these challenges are of a more recent nature.”

Do you recall the decision to review two to three years of case files?

Mandy Talbot: No. All that would have concerned me, on receipt of this email, is to try to provide Andy, on behalf of Sue, with any information I had that could assist them with this piece of work.

Mr Blake: The case of Castleton, for example, and the case of Cleveleys, they were older than two to three years.

Mandy Talbot: Mm.

Mr Blake: Do you recall, around the 2010 time, talking to these individuals about the Cleveleys case or about the Castleton case?

Mandy Talbot: No, and I wouldn’t have. I would only have provided what information I had about civil litigation cases. The reference to the fraud team there, they were the investigators that fed into the Prosecution department. So that really wouldn’t have involved me.

Mr Blake: Then:

“Information Security … to conduct initial investigations and provide Terms of Reference outlining remit and requirements to carry out full investigation.”

So the proposal seems to be that the Information Security team conducted an initial investigation but that is then followed by what’s called a full investigation. Do you recall that?

Mandy Talbot: I don’t recall the conference call but, as it is recorded on this document, then that must be what happened.

Mr Blake: If we look at the third piece of work:

“Subject to agreement of 2 above, conduct full investigations into integrity issues, with conclusions/report provided. Once investigated and conclusions drawn, gain external verification to give a level of ‘external gravitas’ to the response to these challenges (Recommend Ernst & Young as most suitable partner to complete this).”

Was there in fact a full investigation into integrity issues that was verified in some way by an external firm?

Mandy Talbot: If that ever occurred, I was never made aware of it.

Mr Blake: In fact, you don’t recall this meeting?

Mandy Talbot: I don’t, but I suspect that it was probably a telephone conference call and we had lots and lots of those.

Mr Blake: Do you recall, in February 2010, the discussion about a full investigation into integrity issues?

Mandy Talbot: I cannot recall it but, as it is recorded on this document, it must have occurred. I can’t unfortunately assist the Inquiry any further on this point than what is already written on the document.

Mr Blake: Isn’t that entirely consistent with your recommendation back in 2005, that there be a full investigation?

Mandy Talbot: And that is why I was very happy to support it.

Mr Blake: What did you do in respect of supporting it?

Mandy Talbot: I believe, though I would have been prepared to provide what information I had about civil subpostmaster deficiency cases to Sue Lowther but I do not think, because of an intervention by the Head of Criminal Law, that this piece of work proceeded any further. But that is just my opinion.

Mr Blake: Being consistent with your suggestion in 2005, do you recall having spoken out in favour of this full investigation into integrity issues?

Mandy Talbot: Given that I had originally suggested something similar in 2005, although I cannot recall it, I suspect that I probably did.

Mr Blake: Do you recall any conversations?

Mandy Talbot: I’m sorry, I can’t.

Mr Blake: Can we look at page 1. This is the email, the intervention that you’ve referred to. Actually, sorry, if we look at the bottom of page 1 you’ll see that Dave Posnett there forwards the earlier chains to Rob Wilson, and he says:

“Can we please ensure that Rob Wilson (Head of Criminal Law, [Royal Mail Group]) is kept appraised of the situation …”

If we scroll up, this is his response. Do you recall why Rob Wilson wasn’t invited to that original meeting?

Mandy Talbot: No, I don’t. As I say, I don’t actually recall the telephone – I really do suspect that it probably was a telephone conference. I’ve no idea why he wasn’t invited to that original conference.

Mr Blake: Having been what you described as just a case worker up until this point, was it not significant to you that you were being drawn into what was quite a significant step on behalf of the Post Office?

Mandy Talbot: Well, both I and my line manager, Rebekah Mantle, were litigators and, in effect, we had an interest in the business being able to litigate as efficiently as possible and, given my recommendations in December 2005, I wasn’t too surprised to be involved in this.

Mr Blake: Is it not something that you would have had quite a good recollection of, given that it was one of the more recent incidents, 2010 – we’re not going to back to 2005 now – and that you were being involved in what is quite a significant enterprise on behalf of the Post Office?

Mandy Talbot: I wish my memory were that good. I’m sorry, I can’t assist any further.

Mr Blake: Can we look at the top of page 1, and this is the email response from Rob Wilson. I’m going to read from quite a lot of it. It says:

“Dave,

“If it is thought that there is a difficulty with Horizon then clearly the action set out in your memo is not only needed but is imperative. The consequence however will be that to commence or continue to proceed with any criminal proceedings will be inappropriate. My understanding is that the integrity of Horizon data is sound and it is as a result of this that persistent challenges that have been made in court have always failed. These challenges are not new and have been with us since the inception of Horizon as it has always been the only way that Defendants are left to challenge our evidence when they have stolen money or where they need to show that our figures are not correct.

“What is being suggested is that an internal investigation is conducted. Such an investigation will be disclosable as undermining evidence on the defence in the cases proceeding through the criminal courts. Inevitably the defence will argue that if we are carrying out an investigation we clearly do not have confidence in Horizon and therefore to continue to prosecute will be an abuse of the criminal process.”

Pausing there, is that something that you recall being said to you in these discussions?

Mandy Talbot: I don’t remember the discussions and this is the opinion of a criminal prosecutor.

Mr Blake: The concern that appears to be being raised in this email is that, by carrying out an investigation, that will be disclosable as undermining evidence. Would you not remember something that significant?

Mandy Talbot: I’m afraid I don’t.

Mr Blake: If we continue, the third paragraph:

“To continue prosecuting alleged offenders knowing that there is an ongoing investigation to determine the veracity of Horizon could also be detrimental to the reputation of my team. If we were to secure convictions in the knowledge that there was an investigation, where the investigation established a difficulty with the system we would be open to criticism and appeal to the Court of Appeal. The Court of Appeal will inevitably be highly critical of any prosecutor’s decision to proceed against Defendants in the knowledge that there could be an issue with the evidence.”

Again, quite, you might think, a significant statement, that it could be detrimental, that if they secure convictions in the knowledge that there was an investigation where the investigation established a difficulty, they’d be open to criticism. This is 2010. So quite a long time before the Court of Appeal ultimately heard these cases. Given the significance of such a statement, do you still not recall receiving this, discussing it?

Mandy Talbot: I’m afraid I don’t, but I can see that the second person to whom this document is addressed, Mr Doug Evans, was the solicitor at the time.

Mr Blake: There is, of course, reference below to civil litigation. It says:

“What we really need to do is impress on Fujitsu the importance of fully cooperating in the provision of technical expertise and witness statements to support the criminal and civil litigation now and in the future.

“Given the nature of the discussions that took place on 26 February, I am staggered that I was not invited to take part in the conference.”

In light of the implications of this potential report, I think you said that it wasn’t ultimately pursued, the independent investigation and you linked it in some way to this email. Can you assist us with how you link the two?

Mandy Talbot: Given the concerns raised by Mr Wilson, this is only my opinion, I assume that this dissuaded the Information Security Department from proceeding with their original intention. But that is just my opinion.

Mr Blake: We can look at another email you were copied into on page 9 of this chain. It’s an email from Susan Lowther of the Information Security team, and she says:

“All,

“As was discussed on the conference call and taking into account Rob’s comments to confirm that what we’re looking at is a ‘general’ due diligence exercise on the integrity of Horizon, to confirm our belief in the robustness of the system and thus rebut any challenges.”

Looking back at that original email where the discussion had been taking place to carry out an exercise, is that a fair description of what seems to have been discussed at the original meeting? That it was simply going to be a general due diligence exercise?

Mandy Talbot: I’m afraid, as I’ve said before, I cannot remember the original conference call meeting.

Mr Blake: There’s one final document that I’ll take you to in this pack and I’ll leave it at that. It’s page 15. The final. Thank you very much. Dave King, Security Architect, continues on this email chain. You’re still copied in, 8 March, 3.27 pm.

“As discussed, I can confirm that we are in no way questioning/investigating the financial integrity of Horizon, or of the accounting system as a whole. The Information Security review is to look at the ways in which messages are sent at a system level …”

Again, is that consistent really with what was being proposed at the meeting at which you attended?

Mandy Talbot: I’m afraid I cannot recall the precise detail of that meeting. I’m sorry, but I can’t assist further.

Mr Blake: Okay. Eventually, we have something that we refer to as the Ismay report. Can we look at POL00026572. You’re copied into this report from Mr Ismay. The date is 2 August 2010. You may not be able to assist us but is this something that arose out of that meeting or is this something else?

Mandy Talbot: I do not know whether this document arose directly out of the original Sue Lowther proposal just discussed.

Mr Blake: Were you involved in the drafting of this report in any way?

Mandy Talbot: No. I may have been asked for information by Mr Ismay, but I had no involvement in the drafting of it whatsoever.

Mr Blake: All of the things that we’ve been talking about today, the Cleveleys case, the report from Jason Coyne, the Castleton case, the report from BDO, all of the various reports to you over the years where people were complaining about the Horizon System, are these matters that you passed on to Rod Ismay as part of his investigation?

Mandy Talbot: If he had asked for information as broadly as you’ve just defined it then I would have provided that to him. But, after this period of time, and with no documentary evidence recording what I sent or did not send to him, I cannot assist further.

Mr Blake: Your evidence today was that you dealt with each case individually.

Mandy Talbot: That is correct.

Mr Blake: Do you think you took that attitude in respect of enquiries that were made by Rod Ismay?

Mandy Talbot: I don’t know. It all depends what he asked me for. I would have done my best to provide him with what information I had.

Mr Blake: Can we please now look at POL00055418. We’re still in 2010. We’re now in October, 8 October 2010. This is an email from you to Jarnail Singh, copied to Mike Granville and Rod Ismay. The subject is “The Horizon trial”. It seems as though this may be the Seema Misra case. It says:

“Mike and Rod are very interested in any developments at the trial next week which impact on Horizon. You promised to let me know if anything unfortunate occurred in respect of Horizon. Please can you copy Rod and Mike into any messages. Incidentally, I assume that you have briefed external relations. Can you let us know who you have briefed because Mike and Rod may wish to have input into any story relating to Horizon. They may give you call on [and it gives a number]. Incidentally Postmasters for Justice met with the Minister this week and were accompanied by Issy Hogg and the lady from Shoosmiths.”

We spoke earlier about whether it was appropriate to get involved in matters relating to publicity, et cetera. What exactly was your role here in relation to the Horizon System and in relation to more senior members of the Post Office?

Mandy Talbot: I didn’t recall this document until it was disclosed. I believe, to a large extent, I was just performing the role of being a conduit between more senior members of the POL business and Mr Jarnail Singh, who was dealing with the case of Horizon, which had become the next – the case of Misra, which had become the next test case on the Horizon System.

Mr Blake: Was Misra – I think we’ve discussed this already – very much seen as that test case, very similar to Castleton in that respect?

Mandy Talbot: I believe that it was, although I had much less knowledge about it, simply because it was a prosecution not a civil action.

Mr Blake: Do you think here you’re once again being used in a policy role, rather than a legal role?

Mandy Talbot: I have never been involved in a policy or a strategy role. I can only assume that I had been asked by Mike Granville and Rod Ismay to keep them updated with developments in this case.

Mr Blake: You’ve told us that you weren’t involved in criminal prosecutions and rarely came across them. Why are you, in particular – why were you dealing with this on behalf of Mike and Rod?

Mandy Talbot: This was an unusual case, because, as I referred earlier, the barrister in the case of Misra had been in touch personally to ask for information and, therefore, I believe, on this case alone, I was performing that conduit function.

Mr Blake: Can we move on to POL00062075, please. Here we’re in 2014, so you now are in your regulatory role –

Mandy Talbot: Yes.

Mr Blake: – and you’re receiving information relating to a criminal prosecution.

Mandy Talbot: Excuse me. If I can interrupt. I suspect that I was copied in to that by mistake. I assume I was on original template and they just never bothered to remove me. I would have had nothing to do with any prosecution case in 2014. I was firmly embedded in the compliance team within Royal Mail Group by then. It might have had my CC on it, but I would never have come across this document.

Mr Blake: But even in 2005/2006, or onwards, prior to your moving roles, why would you be copied into a – the result of a criminal case?

Mandy Talbot: I would have been copied in to the result of a criminal case in the pre-POCA days, where there’d been a failure to obtain an order for compensation, so that Civil could assess on behalf of the business whether there was any viability of bringing civil proceedings to achieve a recovery.

Mr Blake: Thank you. I have two more topics to address. I should finish them hopefully before the break otherwise we’ll take a break and I’ll finish the final topic. There will then be a small number of questions on behalf of Core Participants.

I want to briefly address the general strategy that was pursued against Mr Castleton. Can we look at POL00072432. This is an attendance note that we saw that I went through with Mr Dilley and it’s paragraph 3, about halfway down, that I’d like to look at. It’s 16 October 2006. It says there:

“Counsel therefore wants to play some brinkmanship with the other side, ie push for a December trial, but preserving our ability to get that adjourned if they serve a late report that we need to deal with. I said that we could prepare for a December trial if necessary and I was happy to do so, but I was concerned to make sure that we could reply to any expert reports served by Castleton. I also think that our Counsel was effectively trying to ambush the other side because he thinks that when we serve these fifteen witness statements on them, they will be knocked reeling a bit. Mandy appreciates the tactics of this. She said that the only thing with a December trial is that the Post Office get very busy”, et cetera.

Were you happy with the general approach that was taken in Mr Castleton’s case?

Mandy Talbot: As detailed in the paragraph we’re looking at, yes, I was.

Mr Blake: It seems there as though Stephen Dilley certainly thought that you were providing instructions. I think the answer is going to be no because we’ve been over this a few times today, but can you recall who in the Post Office, other than yourself, who driving this strategy?

Mandy Talbot: I’m afraid I can’t. I would have obtained instructions, but after this period of time, I’m sorry, I can’t assist.

Mr Blake: Can we look at POL00069453, please. This is another attendance note. This time the 18th, so two days after. It says:

“I had a conversation with Mandy Talbot. She has spoken with Claire and Catherine at the Post Office. They are happy to follow counsel’s advice and go for a December trial purely as a tactic, even though acknowledging that it is an unlikely event.”

Et cetera.

Does that assist you with identifying who at the Post Office, at least in respect of that particular strategy, was providing the instructions?

Mandy Talbot: This was a reference to Clare Wardle, my immediate line manager in Legal Services, and Catherine Churchard, who was the solicitor to the Post Office, as the whole organisation was known as back at that time.

Mr Blake: Does that assist you in respect of any of the evidence that you’ve already given today? I know you asked to be pointed to specific documents. Does that assist you?

Mandy Talbot: This is an example of me escalating up within civil litigation the advice that I’d been given to ensure that they were satisfied with the same. I would imagine that there would have been a similar escalation within the POL side of the business at the same time. But I –

Mr Blake: You say the POL –

Mandy Talbot: I can’t assist with the identity of those parties after this period of time.

Mr Blake: Okay. The final topic before we take a break is the difficulty or issues relating to obtaining information from Fujitsu.

Can we look at POL00082080. And it’s page 6. This is an email from Stephen Dilley to yourself.

Mandy Talbot: Mm-hm.

Mr Blake: If we could scroll down, please, it says:

“Both

I copied you into my epic email … but the response to the same has been limited in the extreme.

“I attach the responses of Graham C Ward and David Hulbert. I have also been contacted by John Cole asking for assistance in preparing a spec for external expert or experts but I think this is of limited use until we have reports completed by Fujitsu on the system and POL on the data provided. However in respect of an external expert from the field of computer systems and accounting can you suggest any names …”

Then it says:

“Stephen

“In the collation of evidence did you come across anyone who you believe could actually interpret the information which was obtained from Fujitsu via Graham or the paper documents which were available from the Post Office. As you can see I am still getting the run around on these cases by people who are not prepared to assist.”

Do you recall any issues with getting people to assist and if so, who?

Mandy Talbot: In the matter of Castleton, I believe that Stephen Dilley was able to eventually provide – obtain assistance and witness statements from persons within Fujitsu. However, I’ve alluded to the fact that in ordinary civil cases, it could be very challenging to obtain information and evidence from Fujitsu.

Mr Blake: There’s a message passed on it’s forwarding a message from Graham, the casework manager at the Post Office. If we scroll down a little bit, and this is addressed to you, Mandy, and it says there, at the bottom:

“With regards to my knowledge of Horizon, I can obtain data as and when required being the SPOC between [Post Office] and Fujitsu, but I do not have the working knowledge of the system to analyse data and comment on whether Horizon was working correctly or not, or whether transactions have been processed correctly and may still affect the office balance. I know Tony U has agreed to have a look at the Marine Drive data, but he is still waiting to hear exactly what information needs analysing.”

Over the page it says:

“Fujitsu should be able to offer a technical perspective of the system working properly. I have searched my records of previous statements received and have found one where Brian Pinder’s predecessor Bill Mitchell provided a statement (see below)” – and we’ll see that below – “commenting on individual calls to the [Helpdesk] and then including a general paragraph stating that ‘None of these calls would have had an effect on the integrity of the data on the system …’.”

If we scroll down, he says at the top there “Presumably Dave will” – sorry, no. If we scroll up to the top of the page, sorry, he says:

“Perhaps I should ask Fujitsu to provide a similar type of statement in respect of Marine Drive … what do you think?”

Then if we scroll down to the bottom, near the bottom of this email, it’s a little confusing as to who everything in this email comes from, but he says:

“Fujitsu’s responses thus far haven’t really helped answer the questions posed in each case, their written responses have been brief to say the least.

“My own opinion therefore is that PO Ltd needs to cover off all questions relating to office misbalancing and transaction details … and that Fujitsu should provide us with a general statement for each case (as per the statement above from Bill Mitchell) detailing calls estimate to the [Helpdesk].”

Did you have any concerns about using a generic form of words in these cases, such as the one that is at the top of this page?

Mandy Talbot: I don’t think we did use a generic form of words. I think they were prepared to begin with a generic, and then make it specific to the events at Marine Drive.

Mr Blake: So the suggestion at the top, if we could go to the top, is that there was some general form of words. And we may or may not, during the course of this Inquiry, come to a number of statements that look very similar in how they’re formulated, certain forms of words. Do you have any recollection of general statements being used in witness statements?

Mandy Talbot: No. This may have been something that was utilised in the prosecution’s sphere, but they were tailored and unique insofar as we were dealing with civil litigation.

Mr Blake: Can we look at POL00072692, please. This is the last document that I’ll take you to myself, and the last document before the break. This is the attendance note of 7 April 2006 from Stephen Dilley. It’s a document that we have seen before. It says:

“Before the Post Office joined the call, Stephen Dilley and Tom Beezer had a telephone conversation with Ian Herbert. Agreeing that [Post Office] … had difficulty obtaining information from Fujitsu and that the strategy should be to identify key individuals at Fujitsu who could provide the relevant information …”

It then says:

“The [Post Office] joined the telephone conversation and Tom Beezer outlined our proposal to Mandy Talbot. Mandy broadly agreed …” et cetera.

Do you recall problems obtaining information from Fujitsu?

Mandy Talbot: As I mentioned earlier, prosecution was entitled to 100 reports or analyses per year. We were left in a situation where, if they hadn’t utilised that 100, we were entitled to request. Anything over and above that, Fujitsu would charge. And sometimes POL, I suspect, was not prepared to bear that cost.

Mr Blake: Did you understand the difference in various types of information that was available from Fujitsu, such as ARQ data, audit trail, raw audit data, enhanced ARQ?

Mandy Talbot: I’m not an expert in that field. I knew there were four lines of calls that a subpostmaster could make to various help desks, et cetera, and I knew that there was a data that only Fujitsu had access to, but I didn’t know the detail and I couldn’t distinguish one type of data from another.

Mr Blake: And contractually I think it’s your evidence that essentially the Civil Litigation Team were an afterthought in respect of –

Mandy Talbot: Correct.

Mr Blake: – the ability to obtain it?

Mandy Talbot: Correct.

Mr Blake: Thank you.

Sir, we do have some questions from recognised legal representatives. Not a huge amount, but, if you’re content, I think this may be the appropriate moment to take a 20-minute break.

Sir Wyn Williams: Twenty minutes would take us to 3.50.

Mr Blake: Sorry, 15-minute break, sorry.

Sir Wyn Williams: Well, okay, 3.45.

I just want to give notice to everyone that just as in the case of Mr Dilley, I do find it difficult to retain proper levels of conversation (sic) after about 4.15, so those questions need to be tailored with that in mind.

I can see you, Mr Blake. What’s the reaction amongst your fellow barristers?

Mr Blake: A fair few smiles. They agree.

Sir Wyn Williams: All right. Fine. So 15 minutes then, between 3.45 and 3.50. Yes.

(3.32 pm)

(A short break)

(3.46 pm)

Mr Blake: Thank you, sir, we have questions from Ms Page and Mr Stein.

Questioned by Ms Page

Ms Page: Mrs Talbot, I act for a number of the subpostmasters in this case, including Mr Castleton. There would be little point in putting documents to you and asking you who gave you instructions in the Castleton case because you won’t tell, will you?

Mandy Talbot: It’s not that I won’t tell, it’s that I cannot recall, after this period of time, and it was a revolving selection of managers within Post Office Limited.

Ms Page: Well, somebody needed to approve the expenditure of £321,000 in legal costs for the sake of a precedent. Which department? Will you tell us at least that, which department of POL could have possibly justified that?

Mandy Talbot: I cannot after this period of time, I’m sorry.

Ms Page: There was a clear advantage to your own department, wasn’t there, because by bankrupting Mr Castleton, you could threaten other subpostmasters who disputed Horizon shortfalls and you could threaten them with the same fate, couldn’t you?

Mandy Talbot: I didn’t run a department, and it was an advantage for Post Office Limited, not myself or my colleagues.

Ms Page: But it was your job, wasn’t it, to use the precedent that you had achieved?

Mandy Talbot: I don’t personally ever recall using the case of Castleton as a precedent.

Ms Page: Well, it was a very expensive precedent. It must have been used sometimes?

Mandy Talbot: I assume it was, by Post Office Limited and departments in that.

Ms Page: Do you recall Mr Morgan gave an advice at the end which was of use as a precedent for POL?

Mandy Talbot: Excuse me, Mr Morgan gave an advice?

Ms Page: That’s right.

Mandy Talbot: Yes, I do recall that and I remember feeding recommendations back to POL.

Ms Page: So at least that was of use to them, wasn’t it?

Mandy Talbot: Correct.

Ms Page: What about the cases of Mr Bajaj and Mr Bilkhu? What did you instruct your external lawyers to say to them about the Castleton case?

Mandy Talbot: I don’t recall instructing external agents on Bajaj or Bilkhu. I suspect that Post Office Limited would have sent those cases directly out to our external agent.

Ms Page: Do you think they were authorised to refer to the bankruptcy proceedings as well as just relying on the judgment?

Mandy Talbot: I have no idea.

Ms Page: I’m just going to refer you to one document, one document only. It’s part of the large document POL00090437. And when we get there, if we could just straddle pages 33 and 34, please, there’s an email there. We’ve looked at it in part already. I’m just going to draw your attention to one bit.

If we scroll down a little bit and we sort of spread over the pages of 33 and 34, this was you telling a group of ten people within POL about the great news, the successful result in the Castleton trial, and that the judgment had entirely vindicated the Horizon System.

If we scroll down a little bit further, the final paragraph of your email was:

“Mr Castleton appeared to be stunned by the result and did not apply for leave to appeal against the decision.”

“Stunned”. Why do you think you would have mentioned that?

Mandy Talbot: I wasn’t present in court at the case involving Mr Castleton, so this would have been based on a report given to me by Bond Pearce.

Ms Page: And why did you feel that those ten people needed to hear that Mr Castleton was “stunned”?

Mandy Talbot: I was just recording the report as had been provided to me by external agents.

Ms Page: The next point is:

“[He] … did not apply for leave to appeal against the decision.”

That was a piece of good news, wasn’t it?

Mandy Talbot: Yes, because it meant, as far as Post Office Limited was concerned, that that was the end of the matter.

Ms Page: And he had been told that he would need to lodge some £50,000 in order to appeal, hadn’t he?

Mandy Talbot: That I cannot recall. I believe that that may have had something to do with –

Ms Page: Security for costs; yes?

Mandy Talbot: Security for costs, that’s correct.

Ms Page: Exactly. So this was good news, and it seems, from the way that you’ve written this email, that you expected your audience of ten, your readership of ten, to be pleased to hear that he was stunned, that he was completely overcome, that he was unable to appeal and that was that.

Mandy Talbot: I think they were more interested in the fact that we had brought the case to a satisfactory conclusion, as far as POL was concerned. That last paragraph is just me reporting verbatim from a report which I received from Bond Pearce.

Ms Page: Yes. You reported that he was overpowered, utterly defeated, and that that was what POL wanted, wasn’t it?

Mandy Talbot: No, that was not POL’s objective.

Ms Page: It was part of a culture at POL?

Mandy Talbot: Abs –

Ms Page: Those who stood up to the institution must be utterly overcome and defeated?

Mandy Talbot: Absolutely not.

Ms Page: Your task was effectively, metaphorically, to put Mr Castleton’s head on a spike. And you did that, didn’t you?

Mandy Talbot: Absolutely not.

Ms Page: And it was somebody’s idea, not yours, wasn’t it? Somebody in POL came up with that idea, did they not?

Mandy Talbot: No. This began as a small, relatively small, deficiency case. It expanded out of all proportion because of the size of the counterclaim, and then became a virtual and then actual test case due to the allegation that there were substantial defects with the Horizon System.

Ms Page: Do you still maintain that this case was about the counterclaim by this point?

Mandy Talbot: It was about the counterclaim up until the time the counterclaim was reduced to the level of about £11,000 or so. Thereafter, it was indeed about the desire on the part of POL to have a substantial judgment dealing with allegations about the Horizon System.

Ms Page: That’s what you delivered for them, wasn’t it?

Mandy Talbot: Yes.

Ms Page: Thank you.

Sir Wyn Williams: Mr Stein?

Questioned by Mr Stein

Mr Stein: Mrs Talbot, my name is Sam Stein, I represent a very large number of subpostmasters and mistresses.

You’ve mentioned in your evidence, and I just read at a little bit of what you were saying this morning, you said, I think at about 11.30, 11.35, you believed that the “Post Office felt the need to demonstrate that it would take a firm line with any … challenges to Horizon”.

Then you’ve answered a number of questions from Mr Blake, and then, more recently, on the question of whether you have any evidence that you can tell us about, about where that direction came from, that firm line.

Again, you said this earlier: no idea where that direction would have come from.

Now, Mrs Talbot, you don’t come across, if I may say so, as someone that seems to be having any problems with your memory. So the large number of people that I represent are finding it very hard to believe that you cannot recall where you got this direction from. Is it your evidence that you simply can’t remember who told you what the POL line was? Is that actually your evidence?

Mandy Talbot: The line would have come from POL as an organisation. There were many different managers in that organisation, and I was given instructions by many people during the course of litigation. Can I put my hand on my heart and come up with a name of a person? I’m afraid I can’t. I wish I could, for the subpostmasters who you represent.

Mr Stein: Okay. So no one single name comes to your recollection?

Mandy Talbot: No.

Mr Stein: Not one?

Mandy Talbot: I’m sorry.

Mr Stein: Okay. If I can take you to your statement, please, which you should have there.

Mandy Talbot: Yes.

Mr Stein: It’s WITN08500100. If we can have on screen paragraph 7, which is page 2. If you can scroll down to paragraph 7, I’ll be very grateful. Right.

Now, here we have you saying that:

“By 2004 I was the Team Leader of the Postal Litigation team within the Civil Litigation Department. At no time did the team work predominantly for the Post Office Ltd … or on cases involving Sub Post Masters, that was a small proportion of the work.”

Then you go on to say in the next sentence that:

“… the Postal Litigation team ceased to exist and was absorbed into the Dispute Resolution Department which was the new name of the Civil Litigation Department.”

Now let’s concentrate on the next couple of sentences:

“There was no formal structure for upward report within the Department although my line managers operated an open-door policy. We were never provided with guidance on what issues should be reported.”

Okay. So let’s see if you can help us understand the way this worked.

Mandy Talbot: Sure.

Mr Stein: You’re saying clearly in your statement that there was no formal structure reporting upwards?

Mandy Talbot: Correct.

Mr Stein: Right. But you’re also saying in your evidence that there was a structure for you getting the line or the policy from POL in relation to subpostmasters. You said repeatedly, as you did to me a few minutes ago, that POL made it clear what their attitude was toward issues with the Horizon System. So are you saying in your statement no upwards policy or guidance system but there certainly was a downwards one?

Mandy Talbot: My paragraph 7 describes the position purely within the Civil Litigation Department. There was neither a formal upwards escalation for seeking guidance, neither was there a downwards sequence of guidance from the solicitor down to caseworkers.

What you’re describing I believe is on the Post Office Limited side of affairs, and during the duration of the Castleton litigation, the identity of the parties that you’ve seen in the correspondence to whom I was reporting backwards, in effect developed. Day 1, Castleton legislation, there was merely Ms Woodward from the Error Resolution Team at Chesterfield.

Mr Stein: I see. Well, let’s then turn to the last part of that paragraph, paragraph 7. Page 3 of your statement. Let’s go through the people that we have here. See if this helps you.

So we’ve reached the end of the sentence:

“We were never provided with guidance on what issues should be reported.”

Then you go on to say:

“My first line manager in the Civil Litigation Department was Joe Ashton …”

Okay, let’s just go through these people and see if you can help.

Mandy Talbot: Sure.

Mr Stein: Did you get the steer about the Post Office and its line towards people doubting the Horizon System through your line manager, first of all Joe Ashton?

Mandy Talbot: No.

Mr Stein: Right. Clare Wardle, same question.

Mandy Talbot: No.

Mr Stein: No?

Mandy Talbot: No.

Mr Stein: Right. Biddy Wyles?

Mandy Talbot: No.

Mr Stein: Right? Rebekah Mantle?

Mandy Talbot: No.

Mr Stein: Right. So you are saying very clearly none of those individuals provided you the POL line; is that right?

Mandy Talbot: Well, they couldn’t because they were members of the Civil Litigation Department.

Mr Stein: Were they your managers?

Mandy Talbot: Each and every one of them was my manager.

Mr Stein: Right.

Mandy Talbot: Sequentially.

Mr Stein: Right. So, these individuals, which were your managers, sequentially, over the period of time when you were dealing with litigation, none of those provided you with the POL line you’ve been asked many questions about?

Mandy Talbot: No.

Mr Stein: So it didn’t come through them?

Mandy Talbot: No.

Mr Stein: And you remember very clearly it didn’t come through them?

Mandy Talbot: They were my colleagues who I worked with on a daily basis.

Mr Stein: Do you remember, as clearly as the rest of your apparent – the rest of your evidence, that this POL line didn’t come through them? Is that what you’re saying?

Mandy Talbot: I genuinely do not believe it came from them.

Mr Stein: Right. So, eliminating those, as far as we can, it’s come from some other source; is that correct?

Mandy Talbot: That would be logical, yes.

Mr Stein: Yes, okay.

Now, can I take you then please to how things developed in relation to 2010. I’ll take you to the document which is the Rod Ismay report, it’s been called generally a whitewash report.

That’s POL00026572. Very grateful. If we can just enlarge the top. Thank you.

Now you described yourself in your evidence as being a conduit. Our understanding of what you’re trying to say there is you’re a conduit for the wishes of the Post Office. Yes?

Mandy Talbot: Correct.

Mr Stein: I assume you’re not trying to portray yourself as some sort of evil robot?

Mandy Talbot: Absolutely not.

Mr Stein: No, okay. So you’re a conduit for the Post Office’s intentions and wishes in relation to the way that matters are dealt with regarding Horizon. Is that what you’re trying to say?

Mandy Talbot: I think what I said was by 2010 I was performing some conduit actions in respect of information about the Misra case, and relaying that back to Mike Granville and Rod Ismay.

Mr Stein: Okay. Let’s have a look at the heading of this particular part of what becomes the Ismay report. Now, obviously under the word “Confidential” it’s got that it’s going to Dave Smith, managing director. It’s from Rod Ismay. And then the other people that are referred to here.

Now we see yourself referred to:

“Mandy Talbot, Principal Lawyer (Civil)”

Yes?

Mandy Talbot: Mm-hm.

Mr Stein: Was that a title you gave yourself?

Mandy Talbot: No, it was a title that emerged.

Mr Stein: Yes, because it’s “Mandy Talbot, Principal Lawyer (Civil)”, which is distinguishing itself from “Rob Wilson, Head of Criminal Law”?

Mandy Talbot: Yes.

Mr Stein: So it appears, so far as we can tell in this document, that you are being portrayed as the principal lawyer in the civil department?

Mandy Talbot: That is incorrect. That is incorrect.

Mr Stein: Your boss at this time, was that –

Mandy Talbot: That –

Mr Stein: Rebekah –

Mandy Talbot: Rebekah Mantle at this time, yes.

Mr Stein: She’s not on this email, is she?

Mandy Talbot: No.

Mr Stein: No. Can you help with why it is that she would have been not referred to within this email chain?

Mandy Talbot: I’m afraid I can’t.

Mr Stein: Because the report that follows the Ismay report is a report that looks at the question of whether there should be a review or investigation into the Horizon System. Why isn’t your boss involved in that?

Mandy Talbot: I didn’t create the report. I cannot give you any information about the distribution list.

Mr Stein: You see, this suggests, as does other evidence that you’ve gone through with Mr Blake, who asked you questions first of all, that in fact you’re taking a principal lawyer role in relation to Horizon errors, issues. It’s correct, isn’t it?

Mandy Talbot: No, it’s not. That is merely a title that was attached to my name. You will see me referred to as “Mandy Talbot, Principal Lawyer” without the “Civil” in brackets in some internal correspondence. In the same way that Royal Mail Group at one time became Consignia, it was quite open to changing titles.

Mr Stein: Mrs Talbot, you’ve made reference a couple of times in your evidence to the limitations on the disclosed material you’ve seen. You’ve commented on it being partial. You’ve commented on the fact that if any you had access to your own files, electronic files and electronic data. Mrs Talbot, are you trying to say that somewhere within all this missing material there might be a document that would portray you in a more sympathetic light? Is that what you’re trying to say?

Mandy Talbot: No, I think the documentation that has been disclosed portrays me in an accurate light.

Mr Stein: Well, Mrs Talbot, there I think my clients would agree.

Thank you.

Questioned by the Chair

Sir Wyn Williams: Mrs Talbot, when you used the word “partial” in relation to disclosure, do I understand that to mean incomplete as opposed to selectively left out?

Mandy Talbot: I think I used the word “partial” only in respect of the initial report created by Mr Coyne.

Sir Wyn Williams: Well, I may have misunderstood that so let me be clear about it. Let me try and get to it in this way. When you either sought instructions about a course of action where you felt the need to seek instructions either from your line managers or from some other department within the Post Office, did you generally seek those instructions in writing or orally?

Mandy Talbot: It would have been a combination of both.

Sir Wyn Williams: Well, that I’m prepared to consider to be quite likely, at the very least. So one can take it that in respect of some of the things you’ve been asked about, where you’ve been unable to identify personnel, there ought to be at least some written exchanges between you and that person about whatever it was that you were then seeking instructions and receiving instructions?

Mandy Talbot: Undoubtedly. That’s correct.

Sir Wyn Williams: And so far as you are concerned at least, you haven’t been shown any of that documentation? Do I understand you correctly on that?

Mandy Talbot: That is correct, though I did have to assimilate a large amount of material on Tuesday of last week. But to the best of my knowledge, no.

Sir Wyn Williams: So that, for example – and I’m just using this as an example – when the strategy in Mr Castleton’s case was being discussed between Mr Dilley and you, can I take it that, at least on occasions, you would have escalated what was being discussed either to your line managers or to some other department before giving Mr Dilley an answer –

Mandy Talbot: Absolutely.

Sir Wyn Williams: – as to the strategy to be followed?

Mandy Talbot: Absolutely. Both internally up to – up the line within civil litigation, and across to POL, the business.

Sir Wyn Williams: Yes, and just so that – because as you know, I am enquiring, so I’d like, if I could, to understand who it was that would have been giving you instructions in the sense of knowing who that person was. All right?

So I understand that you’ve said you can’t remember, and I’m not going to probe that any further, but can you at least say, apart from your line managers, what other departments might you have sought instructions from? In other words, commercial, security? I’m just naming them at random, but can you tell me the likelihood of the departments you would have sought instructions from?

Mandy Talbot: The answer I can give categorically is the Error Resolution Team at Chesterfield.

Sir Wyn Williams: Right, so that’s a department that I might want to investigate. That’s number 1. Number 2, if any?

Mandy Talbot: That is the one I can be absolutely certain about, because they were the parties that sent it out for litigation in the first place.

Sir Wyn Williams: Yes, but don’t worry about being certain about it. In an Inquiry, you might say, “Well, I think I might have done this”, and then it’s up to me to decide if I want to follow it up. Do you see what I mean?

Mandy Talbot: Indeed.

Sir Wyn Williams: So if there are other departments that you think it at least likely that you may have sought instructions from, I’d be grateful if you’d name them.

Mandy Talbot: I sought assistance from a lot of departments like Security; information from Fujitsu.

Sir Wyn Williams: Can I just stop you there. When you say you sought information from Fujitsu, did you do that directly in the sense that you had a contact in Fujitsu that you could contact directly, or did you have to go through some other process?

Mandy Talbot: There were some people eventually, as the litigation progressed, but initially an awful lot of that material was sought by Mr Stephen Dilley as a consequence of his letter addressed to Fujitsu; and then people started responding to that, sometimes copying me in to those responses, ultimately, the material being sent to Stephen. I really wish I could pin it down to a department or even some persons. Undoubtedly, Dave Smith was one of the most senior people within POL who was fairly regularly copied in to the emails. Indeed, he is often first on the list on a number of those early emails. And I think he was possibly managing director of one of the POL departments at the time.

Sir Wyn Williams: Well, unless I’m wrong about it, there were two Mr David Smiths in Post Office in the relevant period.

Mandy Talbot: David X Smith – oh, pardon, sir. David X Smith is –

Sir Wyn Williams: No, one of them was certainly – yes. I follow. All right. Thank you very much.

The Witness: Thank you, sir.

Sir Wyn Williams: So all that remains is for me to thank you for making a witness statement and for coming to the Inquiry to answer a good many questions during the course of the day.

The Witness: Thank you, sir.

Mr Blake: Thank you very much, sir. 10.00 tomorrow.

Sir Wyn Williams: Yes, fine. Thank you.

(4.14 pm)

(The hearing adjourned until 10.00 am the following day)