20 October 2023 – Marie Cockett
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(10.28 am)
Ms Price: Good morning, sir, can you see and hear us?
Sir Wyn Williams: Yes, thank you very much.
Ms Price: May we please call Ms Cockett.
Sir Wyn Williams: Yes.
Marie Cockett
MARIE COCKETT (affirmed).
Questioned by Ms Price
Ms Price: Could you confirm your full name, please, Ms Cockett?
Marie Cockett: Marie Cockett.
Ms Price: You should have in front of you a hard copy of a witness statement in your name dated 15 May 2023. If you can turn to page 14 of that statement, please.
Marie Cockett: Yes.
Ms Price: Do you have a copy with a visible signature?
Marie Cockett: I do, yes.
Ms Price: Is that your signature?
Marie Cockett: It is, yes.
Ms Price: Are the contents of that statement true and accurate to the best of your knowledge and belief?
Marie Cockett: They are yes.
Ms Price: For the purposes of the transcript, the reference of the statement is WITN08960100. Thank you for coming to the Inquiry to assist it in its work and for providing the witness statement that you have. As you know, I will be asking questions on behalf of the Inquiry.
You were with the Post Office for 25 years, from March 1986 to February 2011; is that right?
Marie Cockett: That’s correct.
Ms Price: You started as a Postal Assistant –
Marie Cockett: Yes.
Ms Price: – and, by the time you left the Post Office, you were a Senior Manager?
Marie Cockett: That’s correct.
Ms Price: You have set out the various roles you held with the Post Office –
Marie Cockett: Yes.
Ms Price: – at paragraph 1 of your statement. The period we will be focusing on today is the period from 2006 to May 2009, when you held the role of Branch Accounting Manager in Product and Branch Accounting. You address this role at paragraph 2 in your statement top the Inquiry, can we have that on screen please, that’s WITN08960100, page 2, please. Scrolling down, please, to paragraph 2.
About two-thirds of the way down. You say here this is the role you took over from Jennifer Robson –
Marie Cockett: That’s correct.
Ms Price: – and a role that you handed over to Alison Bolsover when you moved in 2009?
Marie Cockett: That’s correct.
Ms Price: Dealing with your team, you say this:
“I managed a team of around 5 managers, who managed around 50 administration staff.”
Marie Cockett: That’s correct.
Ms Price: In relation to your team’s responsibilities you say this:
“In my role, my team and I were responsible for: addressing non-conformance; recovering monies owed; documenting processes; developing Service Level Agreements; building and managing relationships with partners (eg WHSmith) and the National Federation of SubPostmasters. My main focus was building relationships and documenting processes and agreements. My teams managed the day-to-day debt recovery and non-conformance.”
Taking the first of the team’s responsibilities listed here, addressing non-conformance, can you help us with what you mean by that?
Marie Cockett: One of my teams was the – I think it had a number of different titles but I think something like the Fraud and Conformance Team, and they were responsible for looking at branch analysis, for want of a better terminology, and they looked at the number of errors, the amount of debt, and all that sort of thing and, if they saw that a branch was continually doing the same sort of mistake, they would speak to the branch and try and educate them and determine whether a trainer was needed.
So they would work with the branches individually and would also send reports out to the network about the branches and the different elements of errors being made, for want of a better description.
Ms Price: Could we have on screen, please, document reference POL00084012. This is a document entitled “Transaction Correction/Debt Recovery Process”. It is undated but appears to post-date July 2006, based on the content of the document. So if we can scroll down a little, please, there’s a reference in the middle there, “Transaction Correction identification and issue”, to a document dated 17 July 2006.
Do you recognise this document?
Marie Cockett: No, I don’t, I’m sorry.
Ms Price: The part of this document which I would like to ask you about is the first section under the heading “Background”. This reads as follows:
“The objective of Product and Branch Accounting (P&BA) is to balance the ledgers between clients and Post Office branches, in order to produce accounts for clients and Post Office Limited that accurately reflect the transactions that are conducted over our branch counters. If any discrepancies are found during this process of matching the data, a Transaction Correction is issued to the relevant Post Office branch to rectify the account. This usually has a financial impact on the branch, by either the subpostmaster having to make good any shortfall in cash, or receiving a credit for mistakes that have been identified.
“If the Post Office branch makes a mistake that cannot be identified and linked to a client, ie too much change has been given to a customer, this would result in a Branch Discrepancy which would be realised at Branch Trading. The subpostmaster would be responsible for making good any losses.”
Does this broad summary of the objective of Product and Branch Accounting and the general principles guiding the interrelationship between branch discrepancies and transaction corrections accurately reflect the position when you held the role of Branch Accounting Manager between 2006 and 2009.
Marie Cockett: Yes, I believe that was the objective, the whole of Product and Branch Accounting, not just my area but the whole of the group, yes.
Ms Price: Picking up on the last sentence on the second paragraph that I’ve just read out:
“The subpostmaster would be responsible for making good any losses.”
This statement is made here in the context of the branch making a mistake which cannot be identified and linked to a client and the example here given is too much change being given to a customer.
I’d like to deal, please, with the broader question of the position in relation to the contractual liability of subpostmasters for apparent shortfalls during the period you held the role of Branch Accounting Manager.
Marie Cockett: Yes.
Ms Price: You deal with your understanding of the contractual position at paragraph 4 of your statement. Could we have that on screen, please. WITN08960100, page 3 of that statement, please. About a third of the way down the page, paragraph 4 here, you say:
“When I worked in the P&BA team, my understanding of the contractual position was that Subpostmasters were responsible for all shortfalls or losses within their branch, caused by negligence, carelessness or error. This is my recollection from my training in 2006 and is also documented in ‘Losses at SPSO’s: Guidelines on responsibilities and recovery arrangements’ (understood to be issued in 1988)”, with the reference there and the reference to paragraph 2.
Could we have on screen, please. The document reference is POL00083939. About halfway down the page is the heading “Contractual Position”, and the paragraph underneath reads as follows:
“In strict legal teams a subpostmaster is responsible for all losses caused through his own:
“Negligence, Carelessness or Error
“and for losses of all kinds caused by their Assistants.
“In practice the full contractual right to recover the total loss is not always exercised where losses occur, and relief, in full or part, is often given even where negligence has facilitated a loss. However, there is a need to try to ensure, as far as possible, that SPSO loss cases are dealt with uniformly and fairly throughout by POC Limited.”
There was another document which was sent to you by the Inquiry for the purposes of preparing your statement. This document appears to date to around 1988, the one we’re looking at now, so well over a decade before the Horizon system was rolled out. But the other document I’d like to look at, please, is one that was authored by you, shortly after you became Branch Accounting Manager in April 2006, and it is entitled “Losses Policy – Overarching”. Could we have that on screen, please? The reference is POL00030562.
Starting with page 2, please, about two-thirds of the way down the page, we have “Document Information”, and we see here “Title, Losses Policy for Post Office Limited branches”; “Category, Standard”; “Subject, Treatment of branch trading losses at Post Office branches”; “Version Control”, number “9”; “Author, Marie Cockett, Branch Accounting and Control Manager”; “Owner, Dave Miller”.
Over the page, please. The policy was managed by Lynn Hobbs and its purpose was “To document the overarching policy for losses at branches”. We see the effective date there was said to be April 2006 but, if we go over the page here, we can see here from the “Version Control” that version 9, this version, was still in draft form.
Marie Cockett: Yeah.
Ms Price: Over the page again, please. We see “Section 1 – Scope and Exclusions”, and the first paragraph under this heading reads as follows:
“This policy defines Post Office Limited’s actions in respect of losses associated with cash, cheques and transactional stock (whether in branches, in transit or in central processing locations) and in respect of the counter transactions or remittance transactions themselves. It also considers assets, in branches, that have been partly or fully paid for by Post Office Limited.”
Then towards the bottom of the page we have “Section 2 – Liability”, and this section reads as follows:
“In general, agents are liable for all losses, including counterfeits, under their contractual responsibilities, DMB staff are covered by the conduct code.”
So this is your draft document and in it you have stated that, in general, agents are responsible for all losses, including counterfeits, under their contractual responsibilities. This doesn’t seem to limit, does it, responsibility to losses stemming from negligence, carelessness or error, does it?
Marie Cockett: It doesn’t, no.
Ms Price: Was it, in fact, the case that, by 2006, the date of this document at least, the principle being applied by the Post Office was that, in general, agents were responsible for all losses occurring in branch?
Marie Cockett: No, I don’t think it was. I assume – and I can’t honestly remember, but I would have thought the final version would have had the negligence and errors within it, carelessness within it. I think it’s an oversight in the draft.
Ms Price: I’d like to turn, please, to Product and Branch Accounting processes, which applied to branch discrepancies and transaction corrections. Could we have on screen, please, POL00085794.
This is a document entitled “Debt Recovery Processes under Branch Trading”. We can see from the bottom of the page it was produced by Product and Branch Accounting and is dated October 2005. You say at paragraph 12 of your statement to the Inquiry that, when you took over as Branch Accounting Manager in 2006, this document was still in use; is that right?
Marie Cockett: That’s correct.
Ms Price: Going over the page to page 2 of this document, please, and if we can zoom in a little, please, going back, please, apologies, to the page before, please. The top of the next page, please. Scrolling down just a little bit. Bit further up, please. We’re aiming to have the first title in this document in the body of the text. Thank you.
So we see here the title, “Debt Recovery Processes under Branch Trading”, and the first sentence under that title reads as follows:
“With the introduction of Branch Trading the error notice is replaced by the Transaction Correction (TC), which is sent to your Horizon system.”
This document reads as though it is intended to be read by subpostmasters; is that right, that this was guidance for individuals?
Marie Cockett: It is prior to my time on that team but that would be my assumption.
Ms Price: This first sentence reflects, doesn’t it, the change from error notices to transaction corrections, both of which you discuss at paragraph 10 of your statement?
Marie Cockett: Yeah.
Ms Price: Your understanding is that these were similar processes, both being based on the comparison of two streams of data, one stream being the cash account and the other a client source or supporting document sent by the branch; is that right?
Marie Cockett: Yes, that’s correct, although sometimes there were three streams. So, for example, cheques to processing centre, there would be the physical cheques, the summary and the cash account. So sometimes there were three but mainly two, and certainly two through the automated system.
Ms Price: Where there was a mismatch between the data streams, Product and Branch Accounting would look into the difference?
Marie Cockett: That’s correct.
Ms Price: It is your evidence at paragraph 10.3 and 10.4 of your statement that, where Product and Branch Accounting could find a branch error a transaction correction would be created and sent to the branch via Horizon to correct that error?
Marie Cockett: That is my understanding but I have never worked on a Transaction Correction Team. That was another team within Product and Branch Accounting.
Ms Price: Can you give us an example of the type of error you’re talking about here when you refer to a branch error?
Marie Cockett: So, for example, I just mentioned cheques, I’ll use that as an example, if that’s okay. So we would have the summary of the cheques come through on the system, we would have the cheques sent to processor from the accounts. If the two differed, we would go to the physical cheques – we used to have microfilms or images of the cheques – make sure that they added up to the summary, and then we would – if the cash account was incorrect, we would then issue an error to the branch with the detail of what they’d actually dispatched. Did that make sense? Sorry, that sounded –
Ms Price: Yes.
Marie Cockett: – sounded confusing to me.
Ms Price: Reading on, this document goes on to say:
“On receipt of a TC you will have 3 options:
“Accept and make good – cash (or remove cash)
“Accept and make good – cheque
“Accept and Settle Centrally.
“NB For some TCs you may have the option to seek more evidence.
“This leaflet explains more about the process.”
Then the bullet points here are addressed in a bit more detail. So under the heading “Accept and make good (cash or cheque)”:
“You accept the TC and choose to make good by either cash or cheque. Your cash or cheque figure will automatically be adjusted. All amounts up to and including £150 must be dealt with in this way.”
Then under the heading “Accept and Settle Centrally”:
“Remember: This option will only be available for amounts over £150.”
Pausing there, does that accord with your understanding at the time that amounts up to and including £150 had to be made good by either cash or cheque, the settle centrally option not being available for an amount of £150 or under?
Marie Cockett: That’s my understanding, yes.
Ms Price: This section goes on:
“By choosing the option to Accept and Settle Centrally you are moving the shortage or surplus to a central account held in your name.
“You will then receive a request for payment from Product and Branch Accounting. The request for payment will usually be issued on a monthly basis.
“If you do not respond to this request within 10 days you will be either sent a reminder or will receive a phone call requesting payment. If you still fail to respond or settle the account within 7 days, as a last resort, deductions will start from your remuneration.”
So are we right to understand from this that the act of accepting a transaction correction and settling centrally would, as a matter of course, trigger a process whereby a request for payment of the apparent discrepancy would be made by P&BA, such payment usually being made – sorry, such request usually being made on a monthly basis.
Marie Cockett: That was the process when I took over, yes.
Ms Price: There would be a reminder if there was no response within ten days and, if the person still failed to respond or settle the account within seven days, as a last resort, deductions would start from their remuneration?
Marie Cockett: Yeah, that was my understanding when I took over. There is a little bit more detail to that, in that the Contract Manager or Retail Line Manager, or whatever they were called at the time, but the person in the Network that looked after the branches would be involved in that decision, in that discussion.
Ms Price: But as a matter of principle, did the option of deducting the debt, if you’re calling it that, from remuneration continue for the period of time until 2009?
Marie Cockett: No.
Ms Price: No –
Marie Cockett: Well, yes, it did but I developed with my team processes to stop the deductions from remuneration if there are a challenge on the TC, or help to try to see if we could find a compensating transaction correction for branches. I suppose when I took over this process was relatively new, as you said, I think was the October 2005 this came in? So part of my role was really about getting to grips with some of the issues, being one of them that, you know, we didn’t want to start taking money from postmasters without absolutely making sure that we’d done everything we could to help find a compensating amount for them.
Ms Price: It is described in this document as a “last resort”.
Marie Cockett: Yeah.
Ms Price: Did it remain there as an option as a last resort –
Marie Cockett: Absolutely.
Ms Price: – until you left the role?
Marie Cockett: Yes.
Ms Price: Over the page, please. Apologies, could we go back to the previous page.
Towards the bottom of this section, “What if I want to challenge a TC?” The paragraph underneath this heading reads:
“Prior to the issue of a TC you may receive a phone call from Product and Branch Accounting to either clarify a transaction under investigation, or discuss what appears to be a discrepancy to ensure that you understand the TC when it arrives.
“This is aimed at preventing disputes.”
Then over the page, please:
“However, if you do receive a TC which you do not understand or wish to challenge you should do so immediately using the telephone number given on the TC. If the issue can be resolved at the time then you will either …”
Then we have the options here, the first one in first box here, to:
“Process the TC and follow the options available.”
Pausing there, those options were to make good using the person’s own money or to settle centrally and trigger the payment request, absent any further investigation?
Marie Cockett: Yeah, or to take the cash out.
Ms Price: So if there was a gain rather than a loss?
Marie Cockett: Yeah.
Ms Price: The second option is then set out in the second box on this page:
“If you provide additional information, and Product and Branch Accounting agree, a second TC will be issued to offset the original TC. Both TCs must be processed to ensure no effect on the branch accounts.”
So is it right that a second transaction correction to offset or cancel the first would only be issued where the caller could provide additional evidence then and there?
Marie Cockett: At this point, yes.
Ms Price: Looking then to the third option in the box below:
“You will be courts to Accept and Settle Centrally and you will be given a reference number to acknowledge that further investigation is due, Product and Branch Accounting will then hold the amount on your central account and will block recovery of that amount until the investigation is complete. Once complete you will be informed either that the TC has been cancelled and removed from your central account or that the amount will be added to your next request for payment for the outstanding amount.”
Then there’s reference to Appendix A for an example of request for payment.
So the upshot of this third option is that, where a subpostmaster did not immediately have evidence to challenge a transaction correction, there was a block on the recovery of the amount held in the central account, while further investigation took place; is that right?
Marie Cockett: That’s correct.
Ms Price: Who conducted this further investigation? Was it Product and Branch Accounting?
Marie Cockett: It would have been Product and Branch Accounting, yes.
Ms Price: What would that further investigation involve?
Marie Cockett: It depends on how much we knew. If we were aware of the product or the transaction or something like that, then we would direct the investigation to the relevant team. If it wasn’t, then it would sit on one of my teams, either with the Fraud and Conformance Team because they looked generically across all products, or with – I had a Relationship Manager work to me as well – or with him, and they would look in all the different areas of the accounts to see if they could find the issue.
Ms Price: Was it any part of this further investigation for Product and Branch Accounting to look behind the Horizon data stream to determine whether the data produced by the Horizon system was correct?
Marie Cockett: No.
Ms Price: The sections in this leaflet we have been through so far have dealt with the position where the usual Product and Branch Accounting process of data stream comparison has led to the discovery of an apparent discrepancy in the accounts?
Marie Cockett: Yeah.
Ms Price: This last section, we’re turning to now, appears to relate to the situation where a subpostmaster discovers an apparent discrepancy in the accounts?
Marie Cockett: Yeah.
Ms Price: So that heading:
“What are my options at the end of the Branch Trading Period if a discrepancy is identified and committed to local suspense?”
Marie Cockett: Yeah.
Ms Price: Under that heading, it says:
“Branch Trading does not change the requirement to make good losses nor does it replace the liability for losses policy agreed with the National Federation of SubPostmasters. If you have a discrepancy for less than £150 you will always be required to make it good by cash or cheque.”
Over to the top of the next section, please, further up this page:
“If you have a discrepancy for over £150 and you can provide evidence that you should receive a TC for the error, you will need to contact the NBSC helpline. They will assess your request and allocate a priority rating dependent upon when you are due to roll into the next Trading Period. NBSC will then advise Product and Branch Accounting to contact you. If Product and Branch Accounting agree you will be asked to Settle Centrally and given a reference number. The amount will then be held in your central account whilst the issue of the TC is pursued. If a TC is issued you will be given only 1 option – to Accept and Settle Centrally. This option cancels the value held on your central account.
“If after investigation, Product and Branch Accounting find no discrepancy to compensate for the amount held, you will be informed that the item will be unblocked from your central account and recovery sought via your next request for payment. If you do not have evidence to support your claim you will remain liable for the [shortfall].”
Just breaking this down, where a subpostmaster was challenging an apparent discrepancy of over £150, that they had discovered, they should first contact the Network Business Support Centre helpline, so that the NBSC could assess what priority rating the caller should have, based on when they were going to roll into the next trading period. Pausing there, what was the length of the trading period when you were Branch Accounting Manager?
Marie Cockett: Initially, it was weekly but I seem to remember it going to monthly but I can honestly say I don’t know when, whether that was at the beginning or after my time or even after I’d left.
Ms Price: The Network Business Support Centre would then get Product and Branch Accounting to call the subpostmaster?
Marie Cockett: Sorry?
Ms Price: The Network Business Support Centre would then get the Product and Branch Accounting team to call the subpostmaster?
Marie Cockett: Yes, that’s correct.
Ms Price: If the Product and Branch Accounting team agreed, the postmaster would be allowed to accept and settle centrally and the subpostmaster would be given a reference number –
Marie Cockett: That’s correct.
Ms Price: – and recovery would be blocked pending investigation?
Marie Cockett: That’s correct.
Ms Price: Product and Branch Accounting would carry out the same type of investigation, would they, as would happen where a transaction correction was being challenged?
Marie Cockett: That’s correct, yes.
Ms Price: If Product and Branch Accounting could find no compensatory discrepancy in the data streams they had, then the debt recovery process would kick back in; is that right?
Marie Cockett: That’s correct, yes.
Ms Price: The last line of this leaflet says, if the subpostmaster did not have evidence to support their claim, they would remain liable for the shortage. What was a subpostmaster to do if they suspected that the figures being generated by one of the data streams, the data stream generated by Horizon, was wrong?
Marie Cockett: I would imagine that they would have to escalate it to the Network Business Support Centre.
Ms Price: Because they wouldn’t have access, would they, to the kind of detailed data they would need to challenge the apparent discrepancy, would they?
Marie Cockett: I don’t believe so.
Ms Price: Product and Branch Accounting wouldn’t have access to that kind of data either, would they?
Marie Cockett: No, they wouldn’t.
Ms Price: The Inquiry has heard evidence of delays in the transaction correction processes so that it could sometimes take months for a transaction correction to be issued. Do you recall that being the case?
Marie Cockett: I do, and part of – I think it’s called an Operating Level Agreement that’s in here somewhere. I developed Operating Level Agreements so that we could get data out to the branches as quickly as possible and, also, we did a – I’d set up a high-value process, so if there was a high value transaction correction that was going to go out to branches, we did the investigation work beforehand and tried to at least issue the two together, or understand from the branch what they might have done to try to make sure that we didn’t leave branches with just high-value errors that they’re waiting weeks and months for the compensating one for.
Ms Price: We have just seen in the leaflet we were looking at that priority for a subpostmaster being contacted by Product and Branch Accounting, where they were seeking a transaction correction –
Marie Cockett: Yeah.
Ms Price: – was determined by when they were due to roll into the next trading period?
Marie Cockett: It was at that point, yes.
Ms Price: The reason for this was that, before they could roll over into the next trading period, subpostmasters were expected to either make good an apparent discrepancy by putting money in the till or a cheque in the till, or they needed to settle centrally?
Marie Cockett: Yeah.
Ms Price: The subpostmaster faced a difficult choice, didn’t they, where they disputed a discrepancy emerging in the trading period? Given the time it took for transaction corrections to be issued, an issue was unlikely to be resolved before they were required to roll into the next trading period?
Marie Cockett: In some instances, yes.
Ms Price: So the choice was to accept and settle centrally or don’t roll over into the next trading period?
Marie Cockett: That’s correct.
Ms Price: If they chose to accept and settle centrally, that meant, on the face of the accounts, accepting a discrepancy and confirming a final account for the trading period that showed that discrepancy, didn’t it?
Marie Cockett: Yes.
Ms Price: Without Product and Branch Accounting putting a block on recovery of the amount in the central account pending further investigation, they would be pursued for that debt?
Marie Cockett: That’s correct.
Ms Price: You say in your statement to the Inquiry at paragraph 15 that you understood that settling centrally signified acceptance of debt liability, except in circumstances where further investigation was being undertaken and a block had been put on the debt recovery?
Just to be clear it’s right, isn’t it, that further investigation by Product and Branch Accounting would only lead to the cancellation of that debt where a compensatory discrepancy could be found on the data streams available to Product and Branch Accounting –
Marie Cockett: That’s correct.
Ms Price: – which they would not find, would they, if one of the data streams, the data stream produced by Horizon, contained figures that were wrong?
Marie Cockett: No, I don’t suppose they would, no. I think the assumption was that the error would show up if it was through careless, negligence or error, which is what we believed, in providing the evidence to the branch in the first place. We would expect a compensating amount to come through.
Ms Price: That’s what you were looking for –
Marie Cockett: Absolutely.
Ms Price: – weren’t you, the evidence of negligence, carelessness or error?
Marie Cockett: Yeah.
Ms Price: Sitting here now, do you see a problem with the process and the system that was in place?
Marie Cockett: I think, initially, the initial process was very black and white and I think part of what I put in during my time in there was, like I said, to try and negate certainly some of the big amounts and make sure that we did everything we could to provide the branch with the compensating errors but sometimes they weren’t forthcoming.
Ms Price: The draft “Overarching Losses Policy” that we’ve just looked at had number of documents embedded within an appendix.
Marie Cockett: Yeah.
Ms Price: Two of those documents dealt with the process for awaiting transaction corrections. Going first, please, to the document which applied to “singletons”, could we have this on screen, please, the reference is POL00083952, and this is a document that you were said to be the owner of?
Marie Cockett: Yeah.
Ms Price: Were you also the author of this document, can you remember?
Marie Cockett: I can’t remember for certain but I would suggest so yes.
Ms Price: There is a flowchart at the top and then the process is set out in the text underneath that. Just reminding ourselves that this is an appendix to the April 2006 draft of the “Overarching Losses Policy”, and the process set out here is this:
“Branch Trading does not change the requirement to make good losses nor does it replace the liability for losses policy agreed with the National Federation of SubPostmasters.
“If you have a discrepancy for an amount over £150 however, if you can provide evidence that you should receive a TC for a mistake that has been made at your branch then the process is similar to now but you will not have a suspense table in which to hold authorised amounts.
“You will need to contact the NBSC helpline who having assessed your request will allocate a priority rating dependent upon when you were due to roll your branch trading. NBSC will then advise Product and Branch Accounting to ring you. If agreed you will be then asked to accept and settle centrally the amount of the discrepancy and be given a reference number (similar to the process for TC queries). The amount will then be held on your account whilst the issue of appropriate TC is pursued. Once the TC is available you will be given only 1 option – to accept and settle centrally. By choosing this option you then effectively cancel the debt held on your account.”
So we see there, don’t we, a reference to not having a suspense table in which to hold authorised amounts. Is this a reflection of the availability of local suspense for subpostmasters to hold amounts in, which was removed and replaced by the settle centrally option?
Marie Cockett: I honestly can’t remember, I’m sorry. It would appear so.
Ms Price: Apart from this reference, the process remains unchanged, doesn’t it, from that set out in the leaflet we were just looking at?
Marie Cockett: It does, yeah.
Ms Price: Do you recall the process – speaking specifically of this process – changing in any significant way before you left the role of Branch Accounting Manager in 2009?
Marie Cockett: In terms of this process, no. As I said earlier, we tried to be pro-active so that it didn’t get to this point.
Ms Price: Once someone had chosen to settle centrally and there was no block in place to recovery the amount held centrally, what process was followed to recover the debt?
Marie Cockett: From my memory, we would send a statement of debt and request for payment, either by cheque or credit card. We would then send a reminder and contact the branch’s – and, again, forgive me, I don’t know the terminology at the time but it was Contract Manager, Retail Line Manager, Branch District Manager, or whatever, to ask for their opinion on the fact that we hadn’t had a response and, ultimately, they gave the okay to deduct from remuneration, if that’s where we got to.
But, hopefully, in most instances, I would say we would have spoken to the branch and actually got a response from them.
Ms Price: In what circumstances would you reference a case to the Legal team?
Marie Cockett: Only if there was a debt from the former subpostmaster who no longer had a branch and therefore no longer had remuneration. We would send statements, letters, reminders and then ultimately pass a pack on to the Legal team to make – to decide whether or not there was a case to answer.
Ms Price: What level of involvement did you have in cases once they had been referred to the Legal team and civil proceedings for recovery of the debt were issued?
Marie Cockett: Very little. I wasn’t senior enough. I had to make sure my teams got the block on any debt recovery. I had to make sure that my teams provided evidence as required. My line manager, Rod Ismay, took the lead on a lot of the discussions with Legal. I may well have answered a couple of emails or got involved if Rod was absent.
Ms Price: I’d like to turn, please, to a meeting which took place on 6 December 2005 about Horizon integrity, a meeting which you attended. Could we have this on screen, please, POL00142539.
This is the meeting agenda, we can see at the top. We can see the date there, 6 December 2005. We can see the attendees for the meeting: Keith Baines, Fujitsu Contract Manager. Do you remember Keith Baines?
Marie Cockett: I remember the name. That’s about as much as I can remember, sorry.
Ms Price: Then you were listed and the role description here is Project Manager, Finance. Does this description mean you attended this meeting before you took up the Branch Accounting Manager role –
Marie Cockett: That is correct.
Ms Price: – when you were in project management in Finance?
Marie Cockett: That’s correct.
Ms Price: Other attendees at the meeting included John Legg, Agency Contracts manager; Jennifer Robson, who was your predecessor, wasn’t she, in the Branch Accounting Manager role?
Marie Cockett: That’s correct.
Ms Price: Mandy Talbot, who is described as Litigation Team Leader from Legal Services. Do you remember Mandy Talbot?
Marie Cockett: Again, I remember the name and I would have known she was Legal but that’s it, really.
Ms Price: Graham Ward from the Investigation Team, further down, second to last. So representation at this meeting from a range of teams within the Post Office?
Marie Cockett: Yes.
Ms Price: We see the subject of the meeting, “Horizon Integrity”, about halfway down the page. Then there is some background to the meeting:
“There have been several recent cases where subpostmasters have cited errors in the Horizon system as explanations for discrepancies in their accounts – either as part of a challenge against termination of their contracts, or in challenging the Post Office’s right to recover error notices/transaction corrections from their remuneration.
“Recently, a letter was published in ‘The SubPostmaster’ in November (see enclosure) asking readers to send in details of incidents where they believe that Horizon has caused errors in their accounts. Lawyers acting on behalf of a subpostmaster currently in dispute with Post Office have written stating they are contemplating a joint action on behalf of a number of current and former subpostmasters. This would challenge the accounting integrity of the Horizon system and Post Office’s right to make transaction corrections and recover resulting debts based on Horizon data.
“In one past case (Cleveleys branch), Post Office settled out of court following an adverse report on Horizon’s potential to cause errors from an expert appointed by the court. Fujitsu advised that the report was not well founded, but Post Office and Fujitsu were not able to persuade the expert to change it. This report was largely based on a review of Helpdesk logs, since it related to events more than 18 months prior to the case, and Horizon transaction data was retained for 18 months only. (It is now retained indefinitely.)
“There are well-defined (though costly) procedures for analysing Horizon data and getting evidence and witnesses from Fujitsu in support of investigations for potential criminal cases. This is not so for civil cases (unless there has been a related investigation) and external lawyers acting on Post Office’s behalf have found it difficult to obtain information of sufficient quality from Post Office in timescales needed for these cases. No one seems to hold budget to fund provision of such information.
“The above was discussed at a meeting called by Dave Smith on 25 November and as a result urgent actions have been taken to support current live cases, and this workshop was organised to recommend further actions to reduce this risk area in future.”
Under “Meeting purpose”, we have this:
“To review the above issues and recommend on the following:”
“[First] Who manages dealings with subpostmasters and their lawyers relating to actual or potential civil cases? What processes are required to identify as early as possible those cases that with a Horizon aspect? Who needs to be involved in such cases, and how will they be coordinated?
“[Secondly] Are there any new processes required with Fujitsu to obtain data, analysis reports or witness statements for civil cases?
“[Thirdly] Is there a need for an independent expert to be appointed in advance who could on request provide evidence to the court in such cases? If so, what exactly would the expert’s role be, what qualifications and qualities are needed in such an expert, and how would we go about appointing one? What preliminary work would be required by the expert to ‘get up to speed’?
“[Fourthly] Who will act as the client briefing external lawyers and facilitating their information in these cases?
“[Fifthly] What are the budget implications of the above?”
We then see an agenda setting out some timings.
Going, please, then to the notes of the meeting itself. Could we have on screen, please, POL00119895. About halfway down the page, please, we have “Findings”. The first finding was this:
“There is no generally understood process for identifying emerging cases in which the integrity of accounting information produced by Horizon may become an issue.
“[Secondly] There are a number of channels by which such cases may enter Post Office (see flip chart list) and there is no process making information about them available to all relevant functions. This increases the risk that different parts of the business may be dealing with the same issue and not coordinate responses.”
So there is a recognition here, isn’t there, that there was no process of collating information about cases in which the integrity of accounting information produced by Horizon was being raised or to make it available to all functions across the Post Office?
Marie Cockett: That’s what it says, yes.
Ms Price: The risk identified here was that there may not be a coordinated response but there was another risk, wasn’t there, that the whole picture was not being assessed by anyone within the Post Office, so the number of people raising the issue overall was not being assessed. Did you recognise that at the time as a risk?
Marie Cockett: No, not at all.
Ms Price: Was there any discussion at the time of that risk?
Marie Cockett: I don’t remember this meeting at all, I’m terribly sorry.
Ms Price: Point 3 deals with the audit query requests which could be made of Fujitsu and the fact that interpretation of the data was not simple and required a considerable level of understanding and technical skill.
Point 4, over the page, please. This deals with the high price of Fujitsu providing such data. It says this:
“Fujitsu’s price for providing the data and for skilled resource to analyse and report on it is high, and the capacity provided in the contract currently is fully used to support investigations relating to potential criminal cases.”
Then point 5:
“To date, the number of cases in which the integrity of Horizon data has been an issue is small; however, recent correspondence in The SubPostmaster may well cause an increase; also there may also be an effect from the introduction of transaction corrections, replacing error notices.”
Pausing here, why would there be an effect from the introduction of transaction corrections replacing error notices on the number of cases in which the integrity of Horizon data was being raised?
Marie Cockett: I don’t know, I’m sorry. I don’t remember this meeting or any outcome from it. I don’t understand why there would be an increase.
Ms Price: Moving to point 8:
“If all potential cases were to require Horizon data to be analysed early in the process, then the workload would be considerable – and much would later prove unnecessary; currently there are around 12 suspensions per week, and a significant proportion of them will relate to financial discrepancies. Most of these are subsequently settled by agreement, or are not contested.”
Point 9:
“Where a case does go to court, it is essential that Post Office is able to refute any suggestion that Horizon is unreliable (in general) or that it could have caused specific losses to the subpostmaster bringing the case. The evidence needed for these 2 points will be different.”
Paragraphs 10 to 13 deal with the type of expert evidence which might be needed. Then point 14:
“The Castleton (Marine Drive branch) case, scheduled for 7 February is the first of the current cases that may require expert testimony; this will not be needed on 7 February, but could be needed next time this case is in court; internal analysis of the data by POL and Fujitsu will be required before 7 February to confirm that POL’s position is valid.”
Was this the first time that you became aware of the Castleton case or do you think you may have been made aware of it before?
Marie Cockett: As you quite rightly said at the beginning, I was at this meeting as Project Manager, so I wouldn’t have needed to know – well, I wouldn’t have needed to know about it then, but I certainly – I’d heard the name and I’d certainly been – exchange of emails but all after this point. So I would suggest that this was probably the first time.
Ms Price: Turning then, to the “Recommendations”, first:
“A coordination role should be established to maintain a list of all current civil cases and potential civil cases where accuracy of Horizon accounting information may be an issue, and ensure that all relevant business functions are made aware of these cases.”
Was a coordination role established, as far as you know?
Marie Cockett: Not as far as I’m aware.
Ms Price: Then point 2:
“Briefing is required – primarily for the Contracts and Services Managers, but for all staff dealing with subpostmasters – setting out business policy, lines to take and how to identify potential emerging cases.”
What were the lines to take?
Marie Cockett: I don’t know, I’m sorry. I really don’t remember this meeting or any subsequent actions from it.
Ms Price: Point 3 deals with who should analyse the data from Fujitsu.
Point 4 – over the page, please – then recommends the appointment of an external expert with a proposal that discussions with Fujitsu should be initiated on this role.
Then at point 5:
“There are some issues relating to the BIMS process, Post Office staff dealing with the BIMS reports from Fujitsu are sometimes unclear what action is appropriate in response to the report, and no contact details are provided for clarification to be obtained. These reports can result in transaction corrections being issued and this may be challenged by the subpostmaster.”
Can you recall discussion of this last point now at all?
Marie Cockett: No, not at all.
Ms Price: It appears to have led to an action point for Jennifer Robson and you –
Marie Cockett: Yeah.
Ms Price: – under “Specific Actions”. The first of these:
“JR/MC – to look at internal POL issues on handling of BIMS reports from Fujitsu and brief DH on issues that need to be raised with Fujitsu.”
“DH”, was that –
Marie Cockett: My guess would be it would be Dave Hulbert.
Ms Price: What were the adverse consequences of Post Office staff not knowing what to do with the BIMS report?
Marie Cockett: I really don’t know. I don’t know what the BIMS report is. I can’t remember that at all. Like I say, I can’t remember the actions from this. I can’t remember doing that at all. I’m sorry; it’s such a long time ago.
Ms Price: Does it follow that you can’t help with what involvement you had on this action point after the meeting?
Marie Cockett: I don’t remember any involvement at all.
Ms Price: So you don’t know how this was taken forwards, if at all?
Marie Cockett: No, I don’t I’m sorry.
Ms Page: We needn’t go to it but, for the record, the flip charts that are referred to in this meeting are at reference POL00119896.
Sir, I wonder if that might be the appropriate moment for the morning break.
Sir Wyn Williams: I was just completing my note.
Yes, that’s fine. What time shall we recommence?
Ms Price: At 11.50, please, sir.
Sir Wyn Williams: Yes, that’s fine.
(11.30 am)
(A short break)
(11.49 am)
Ms Price: Hello, sir. Can you see and hear us?
Sir Wyn Williams: Yes, I can, thank you.
Ms Price: Ms Cockett, the meeting we have just been discussing, there was a reference to the Castleton case at that meeting, and you say in your statement to the Inquiry at paragraph 35 that you have no recollection of the civil cases which were listed in the request from the Inquiry, one of those cases was the Castleton case.
There are a number of emails relating to that case, which you were provided with at the time that you made your statement, but, more recently, you’ve been provided with some further emails showing your involvement on an email circulation list and some involvement in discussions internally within the Post Office of the Castleton case and you’ve had a chance to look at those emails now, haven’t you?
Marie Cockett: That’s correct, yes.
Ms Price: I’d like to start, please, with an email from Mandy Talbot, dated 1 March 2006. Could we have this on screen, please, the reference is POL00071202, and it’s page 9 of that document, please. The email is from Mandy Talbot, we can see the date there, 1 March 2006, and a couple of lines down from that we can see your name as a recipient, can’t we?
Marie Cockett: We can, yes.
Ms Price: About halfway down the page, the first line of that email, Mandy Talbot refers to the meeting in December 2005 and explains that she is bringing those who attended up to date with the current state of play. She asks for a progress update on the business case for the appointment of someone to analyse data from Fujitsu for the benefit of the Post Office.
Then four paragraphs down she addresses the Castleton case. She then proceeds to set out in some detail, going over two more pages, the details of the case. When you saw this email, it was one of the ones provided to you when you were given a request for a statement, when you saw it then, did you recall Mr Castleton’s case at all?
Marie Cockett: No, I recall the name, but I would have been involved very minimally, I wasn’t senior enough to make any decisions on it and I don’t recognise this email at all. Clearly, I had it and saw it but I don’t recognise it, I’m sorry.
Ms Price: Mandy Talbot also raised some other cases in this email. Could we go, please, to page 11 of this document, about two-thirds of the way down. The case of Bajaj, current postmaster at Torquay Road. We see there reference to the case:
“… complaining about the HORIZON system since Christmas 2004 and has alleged that it has manufactured errors which have resulted in him to date paying 14,000 to POL, which he claims was not justified.”
Then, over the page, please, about a third of the way down:
“New case – Bilkhu, postmaster at Bowburn Post Office.”
Then five paragraphs down:
“Keith and Dave Hulbert have brought the case of Hughie Noel Thomas to our attention as being yet another discipline case where HORIZON is being blamed.”
So you were, by this email, being told about four different cases where there was a challenge to the integrity of the Horizon data being used by the Post Office to recover money from subpostmasters. It may follow from the fact that you don’t remember this email now but did this concern you at all, that there were four cases in which this issue was being raised?
Marie Cockett: No, because I trusted the people who worked with Horizon, ie Keith Baines and Dave Hulbert, to do the analysis and tell us whether there were a problem, and they kept saying that the system was robust and there were no issues.
Ms Price: Quite apart from whether you remember this particular email, do you remember there being cases like this?
Marie Cockett: No, I don’t, I’m sorry.
Ms Price: You don’t remember being made aware of cases where the integrity of Horizon was being challenged?
Marie Cockett: I don’t remember specific cases, no, and I certainly don’t remember any outcomes to say that Horizon was less than robust.
Ms Price: Setting aside the specifics of any cases, in general terms, were you aware of there being cases like this, where the integrity of Horizon was being challenged?
Marie Cockett: I think, given the fact that I was copied in on these emails, yes, I must have been aware of but I don’t remember them now.
Ms Price: When it came to the question of whether the Castleton case should be settled, you were included on some correspondence relating to this, weren’t you?
Marie Cockett: Yes.
Ms Price: We’ll come to that in a moment but could we first have on screen, please, document reference POL00158374. This is one of the documents that you have seen very recently and it appears in a somewhat odd format. It’s unclear exactly who it is being sent to or on what date. But it appears to be an email from you; would you agree?
Marie Cockett: Yes, that’s correct.
Ms Price: It reads as follows:
“Both
“Just to let you know I have just spoken with Mandy Talbot regarding Marine Drive and agreed we will push back to him asking for full payment and a waiver saying there is nothing is wrong with Horizon data.
“Watch this space.
“Cheers
“Marie.”
Do you remember having a discussion with Mandy Talbot about the settlement terms of the Castleton case now.
Marie Cockett: No, I don’t, I’m sorry.
Ms Price: On this case, and cases of this type, what role would Mandy Talbot typically play?
Marie Cockett: From my memory, Mandy Talbot was leading the legal cases. She was our contact in Legal. That’s as much as I know, really. That’s as much as I can remember, I’m sorry.
Ms Price: What was the reason for wanting a waiver which said that there was nothing wrong with Horizon data?
Marie Cockett: My recollection is that we had not established – sorry, we were still being told that Horizon was robust and, therefore, that’s why we wanted a waiver, because there wasn’t anything that we’d found that was wrong with the Horizon data. That was my understanding at that time.
Ms Price: Given that you knew there were a number of cases where the integrity of Horizon data was being challenged, did you feel it was appropriate for the Post Office to be seeking such a waiver?
Marie Cockett: Clearly, I did because that’s what I’ve put there. Again, we were just being told categorically that the Horizon data was robust.
Ms Price: Where was that message coming from?
Marie Cockett: I was – I would guess it would be coming from the IT guys, so such as Dave Hulbert, Keith Baines, from Fujitsu. That would be my understanding. They were our main contacts.
Ms Price: Could we have on screen, please, POL00158375. Starting, please, about halfway down the page. This is an email from Mandy Talbot to a number of people, 10 November 2006. Richard Barker is the first recipient of this email. Who was he?
Marie Cockett: I’m honestly not sure. There was two Richard Barkers, one – no, there wasn’t. No, sorry, I’m getting confused. I’m not sure, he was certainly one of the top Senior Managers. I’m not sure what he was responsible for.
Ms Price: We have Keith Baines, Rod Ismay, you, Clare Wardle, Biddy Wyles and Stephen Dilley as the other recipients, and this email reads as follows – I should say the subject line is “Castleton’s counter of PO v Castleton URGENT URGENT”, and the body of the email reads:
“You will all be pleased to know that the solicitors acting for Castleton have substantially accepted our counter proposal. I attach a copy of their letter.
“Castleton is not prepared to have judgment entered against him because he claims it would prejudice his future career prospects and so the claim will be settled by way of a Tomlin Order. This means that if anybody searched the Court records all they would see is a record that the claim was resolved but the detail of the same is kept private.
“Castleton is prepared to make an open statement that POL can use as it chooses exonerating the HORIZON system. I now need your assistance over the form of wording that POL would like to see in that statement.
“I have prepared a short statement but would be very grateful for any improvements which you can suggest. We need to have a settled form of words to go back to Castleton’s solicitors as soon as possible. This settlement is still without prejudice and does not formally conclude the action until it is signed so we must endeavour to get it signed as soon as possible.”
Over the page, please, and this is the wording being proposed:
“‘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 though that this debt arose due to a malfunction of the HORIZON system but I know accept that I was mistaken and that 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.”
If we can go back, please, to the top of the first page of this document. This appears to be a reply from you to Mandy Talbot, and it reads:
“Mandy
“Looks ok to me
“Regards
“Marie.”
Do you recall commenting on the draft waiver being proposed in this case?
Marie Cockett: No, I don’t. I’m sorry.
Ms Price: But it appears from this that you did comment on it and considered that that wording that we’ve just looked at was acceptable?
Marie Cockett: It does, yeah.
Ms Price: Would you accept now that proposing that wording in the circumstances of Mr Castleton’s case was not an appropriate thing to do?
Marie Cockett: I don’t know, is the answer. I really don’t know. I’m not a legal person and I don’t know if that’s the right wording or not. There’s certainly some grammatical errors in it but that’s another story.
Ms Price: You say at paragraph 38 of your statement to the Inquiry that during your time working for the Post Office you were not aware and did not have any concerns regarding the robustness of the Horizon IT System and saw no evidence of bugs, errors or defects. Could we have on screen, please, another document which was received by the Inquiry very recently and you have seen very recently. The reference is POL00158371, starting, please, with the email from Dawn Brooks, dated 13 December 2006, sent to Dave Lancashire and copied to you. We see the cc, to you.
Marie Cockett: Yes.
Ms Price: Who was Dave Lancashire?
Marie Cockett: Dave Lancashire worked on one of my teams, reporting to Carol King, and they managed the discrepancies in remittances – in cash remittances between the branches and the cash centres.
Ms Price: The subject of this email is “Mismatch of cash holdings at some branches between Flexible Planning and POLFS”.
Marie Cockett: Yes.
Ms Price: If you can just decode that acronym for us, “POLFS”?
Marie Cockett: POLFS was – basically, it was the back end financial system to Horizon. So it was POL’s financial system, basically. So it was what Horizon interfaced into.
Ms Price: The email reads:
“Dave
“I have updated Doug based on the information you have provided, sounds like good news. My concern is that there remain a number of anomalies which clearly require investigation.
“In readiness for period 9 reporting, and Carol’s return, could we pull together some kind of summary of the offices where we still have difference, the 49 in question. I think we need to understand …”
Then there are number of bullet points:
“Month on month is the value of the difference consistent, or does the difference vary over time? Could your summary include trend analysis from period 3 onwards.
“Can we isolate this to a particular day or transaction/rem?
“What is the overall value of the difference, is Flexible Planning greater than POLFS or the other way around?
“What is the impact of this difference? Do we need to make any kind of provision for this difference? Without knowing the value of the difference I’m not sure if its material.
“If you could pull this together over the next few days then could you go through this with Carol or Marie, in the first instance or myself if they are not around. My understanding is that Carol is aiming to come into work on Monday although this is not 100% certain at this stage. We need a decision around provisions by around next Wednesday so if Carol does not come in you may wish to speak to Marie and walk her through your findings.”
Going back up to the top of page 1 of this document, this is then forwarded to Cathy. Is that Catherine MacDonald?
Marie Cockett: I presume it is Catherine MacDonald but I don’t know why Cathy was involved in it. I wonder if it should have been Carol and was a typing error but I can’t see the people it was sent to, so …
Ms Price: And to you.
Marie Cockett: Yeah.
Ms Price: It reads:
“See the attached, period 08 (26/11/2006) Flexible Planning v POLFS differences.
“I have been unable to isolate the particular day, only the period. Also see the emails from Anne Chambers (Fujitsu) regarding the differences.
“Dave.”
You were sent the lengthy email chain underneath the emails we’ve just looked at.
Marie Cockett: Yeah.
Ms Price: Going to page 7 of this document, please, we see here an email from Sujith Pooja to Julie Dart, dated 18 July 2006.
Did you know these two individuals?
Marie Cockett: Julie Dart, yes; the other lady, no.
Ms Price: Scrolling down to the body of the email, please. This email, several lines down starts:
“There was a bug in S60 where EOD failed to summarise correctly and left the balances set to incorrect values.”
Scrolling a bit further down, please. We see in the penultimate paragraph “A fix to correct this was applied”, with some details with that.
Did you recognise at the time that the emails you were being sent related or appeared to relate to a bug in the system and a fix.
Marie Cockett: I don’t remember the emails at all. Certainly Carol King would have dealt with this on my behalf. She was the expert in that area. But I – interpreting this today as I’ve read it this morning, I’m not sure the problem was Horizon because the flexible planning was the remittance – I believe it was in the remittance centres and it was basically advising them to send cash to the branch because they were low, and I think it was that that was the error but I’m – like I said, I don’t remember the email but that’s my interpretation of that.
Ms Price: Okay. So does this alter your evidence at all in paragraph 38 of your statement, in terms of –
Marie Cockett: No, because I don’t think it’s Horizon.
Ms Price: Okay.
Sir, those are all the questions that have for Ms Cockett. I’m looking around the room to see …
It doesn’t appear that there are any questions from Core Participants.
Sir Wyn Williams: All right.
Well, thank you, Ms Cockett, for providing a witness statement and for giving oral evidence and I think that brings this session to a conclusion; is that right?
Ms Price: Yes, sir, that’s correct.
Sir Wyn Williams: We now have a break of two weeks, so that everybody can draw breath and get ready for the next set of hearings. Is that also correct, Ms Price?
Ms Price: Yes, sir.
Sir Wyn Williams: All right, well, I’d just like to thank everyone in the room for helping to ensure that the sessions which began in the middle of September have gone as smoothly as they have and we’ve kept on track, so to speak. So thank you all for your cooperation, and I will see you in a fortnight’s time or thereabouts.
The Witness: Thank you, sir.
(12.12 pm)
(The hearing adjourned until Tuesday, 7 November 2023)