29 November 2023 – David Pardoe
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(9.15 am)
Ms Price: Good morning, sir, can you see and hear us?
Sir Wyn Williams: Yes, thank you.
Ms Price: Please may we call Mr Pardoe.
Sir Wyn Williams: Yes.
David Pardoe
DAVID JOHN PARDOE (affirmed).
Questioned by Ms Price
Ms Price: Can you confirm your full name, please, Mr Pardoe?
David Pardoe: David John Pardoe.
Ms Price: You should have in front of you in a bundle a hard copy of a witness statement in your name, dated 24 October 2023. Have you got that?
David Pardoe: Indeed.
Ms Price: If you can turn to page 55 of that document, please –
David Pardoe: Yes.
Ms Price: – you should have a copy with a visible signature; is that right?
David Pardoe: It is indeed.
Ms Price: Is that your signature?
David Pardoe: It is.
Ms Price: Are the contents of that statement true to the best of your knowledge and belief?
David Pardoe: They are.
Ms Price: For the purposes of the transcript, the reference for the statement is WITN08170100.
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.
Starting, please, with an overview of your career with the Post Office, I understand you have not had the benefit of seeing any written records confirming the exact dates for which you held relevant roles; is that right?
David Pardoe: Unfortunately that’s correct.
Ms Price: The account of the roles you held set out in your statement is you doing your best from memory?
David Pardoe: Indeed.
Ms Price: Is it right that you first joined the Post Office as a Crown Office counter clerk?
David Pardoe: Yes.
Ms Price: Can you help with what year that was? You’ve said how old you were in the statement. Can you help with which year that was, roughly?
David Pardoe: It would have been sometime in the ’80s.
Ms Price: You then progressed to hold a number of administrative roles within the Liverpool district. One of these roles was designing and delivering training for subpostmasters; is that right?
David Pardoe: It was.
Ms Price: What did that training cover?
David Pardoe: So that was a significant shift, I think I say in the statement that, historically, a new subpostmaster had effectively sat with the outgoing subpostmaster and been trained on site. And the ramification of that on occasion is that some bad habits were being picked up right from the get-go. So it was decided that there would be bespoke, classroom-driven training by skilled trainers, who would then take the new subpostmaster through a standard suite of training requirements, and they would then supplement that by onsite training.
So I think, from memory, there’d be a week or so spent in a training facility and then there would be at least one week spent working each day at branch with the subpostmaster, and I was one of two trainers who were actually trialling that approach nationally on behalf of the Post Office.
Ms Price: There came a point when you were approached by the Post Office Investigation Department to take up a specific role. Before you explain what that role was, can you help with the remit of the Post Office Investigation Department at that time?
David Pardoe: So the Post Office Investigation Department, we’d refer to them as POID at the time, and they had group-wide remit. So they would conduct investigations impacting Royal Mail Group and, from memory at the time, that would have consisted of Post Office, Royal Mail, of Cashco, who were the cash-carrying arm of Post Office, and Parcelforce Worldwide, as well, who were obviously the parcel-carrying arm of the Post Office and they would conduct the full range of investigation activities on behalf of those business units.
Ms Price: What was the role you were offered when you were first approached by the POID?
David Pardoe: Yeah, I was approached by two gentlemen that I already knew were members of POID. I think ironically one had interviewed me for a counter shortage a year or so before that, and they approached me, and they outlined that there was a branch in inner city Liverpool, that it was a sub office branch or a modified branch, I think it was referred to at the time, run by a subpostmaster, that was having a series of significant losses and suspected benefit book payment fraud.
They knew the subpostmaster was not involved and they asked if, effectively – and it sounds a little bit grandiose – if, effectively, I’d go undercover in that branch, run that branch on behalf of the subpostmaster whilst at the same time being the conduit for them to perform covert surveillance.
And this was the day when the covert surveillance couldn’t be done remotely, couldn’t be done by IP cameras, it was simply a pinhole camera in a false ceiling, connected to a video recorder and my remit was to run the branch on a day-to-day basis and to change the video tapes and to meet one or other of the two gentlemen, early morning in branch, to hand over videotape product from the previous two or three days.
Ms Price: You were then offered the role of the Investigation Liaison Officer; is that right?
David Pardoe: That’s right.
Ms Price: That was in around 1991?
David Pardoe: It would have been, yes.
Ms Price: What did the role involve?
David Pardoe: So I’ve referenced POID as being the – obviously the group-wide body that would drive investigations. So, for each business unit, there needed to be some form of conduit to take suspected cases of dishonesty and report those cases into POID. And that liaison role, that’s exactly what that did. So it would take prima facie cases concerning potential staff dishonesty, it would put those into a reporting format, submit with that outline of evidence, and submit that for consideration for further investigation into POID.
So it would not have been performing first officer, certainly, would not even have been performing second officer type activity; it was purely an administrative role that would be the conduit between the Liverpool district, as I remember at the time, and National POID or certainly the Liverpool branch of POID.
Ms Price: Is it right that there was no formal training for the POID interface role?
David Pardoe: None whatsoever, and I’ve – if I can go on, I feel I say in the statement that I didn’t feel disadvantaged by that. It was purely – I’d have a report from an audit function from a Regional Manager, an Area Manager and I would report that into POID. It was as simple as that; it was more administrative.
Ms Price: Is it right that there came a point when you were encouraged to become more involved in investigations being submitted to the POID?
David Pardoe: This is where I’m really going to have to search back into my memory. There came a time when I had elements of formal training, with a view that, rather than just simply piecemeal hand this investigation product over to POID, that we would start to support as second officers.
I never fully understood the politics behind that. I suspect that’s some way above my pay grade but you’re right: there was certainly a time when we were being encouraged to sit closer with POID and that would involve performing second officer type activity for interviews under caution.
Ms Price: You say at paragraph 11 of your statement that this was the start of your formal training. Can you recall even roughly what year this would have been?
David Pardoe: I think we’d be coming towards the mid-1990s, I would have thought for that, potentially coming into the late 1990s, that would seem to ring a bell with me.
Ms Price: Is it right that this training was classroom-based training delivered by Royal Mail Group?
David Pardoe: It was indeed. I do recall that, yes.
Ms Price: You say at paragraph 11 of your statement that you had access to other materials; is that right?
David Pardoe: Yes.
Ms Price: You also say at paragraph 11 that you were very heavily mentored by an experienced and far more senior Investigation Manager in this role?
David Pardoe: Absolutely, yes.
Ms Price: You then became an Assistant Investigator in the newly formed Regional Security Department; is that right?
David Pardoe: Correct.
Ms Price: Again, roughly speaking, how many years after taking on the second officer role did you become an Assistant Investigator?
David Pardoe: It would have been a matter of years. It certainly wasn’t a short few months; it would have been a matter of years.
Ms Price: At this stage, you underwent further training; is that right?
David Pardoe: Absolutely.
Ms Price: You say that included classroom training as well as electronic and paper handouts; is that right?
David Pardoe: From memory, yes.
Ms Price: You also have a recollection of meeting members of the Criminal Law Team in your training; is that right?
David Pardoe: Yes, in Croydon, Impact House, as they were based at the time, yes.
Ms Price: You say at paragraph 21.2 of your statement that you recall training sessions from both in and out of house lawyers as well as training staff from the Post Office Investigation Department; is that right?
David Pardoe: Yes, it is.
Ms Price: Can you recall roughly how long you were an Assistant Investigator before you became a substantive lead Investigator?
David Pardoe: It would have been two, three years, something like that.
Ms Price: You deal with becoming a lead Investigator at paragraph 16 of your statement. Could we have that on screen, please, it is page 6 of WITN08170100. You say here:
“Again, I would need reference to Post Office HR details, but I then became a substantive lead investigator. This move was supported by additional training and my lead work (first officer interviews, file preparation and so on) was highly supervised to the extent that even grammatical errors within reports would be returned for correction – that was the standard of supervision. Even after this promotion to lead investigator I remained in supervision for many, many months and certainly longer than for any professional role I have held subsequently. I don’t think this was any reflection on my ability to progress at pace, it was just the way it was. There was a recognition that the role was unique and required a high level of interpersonal skill and confidence to deploy effectively.”
You deal further with this role at paragraph 21(iii) your statement. Could we turn to that, please, it’s page 9, and scrolling down, please, to (iii), you say:
“The investigator role was regionally based. My training detailed above was supplemented by significant levels of supervision and general oversight. In this role I was performing the role of lead investigator and discharging activity from interviews under caution through to case paper and committal preparation. To the best of my knowledge all my tenure in this capacity was pre-Horizon.”
Is it right, then, that you stopped conducting investigations yourself before the introduction of the Horizon system in the year 2000?
David Pardoe: Yes, it is. I certainly recall that to the extent, if I may add, that I think I was deployed doing other activity when formal Horizon training was being undertaken and I had to have, effectively, a supplementary oversight course to that.
Ms Price: From the position of being a Regional Lead Investigator, is it right that you then became an Investigation Team leader, also regionally?
David Pardoe: I do wonder if that wasn’t superseded by another role, albeit there was a period obviously when I became an Investigation Team leader.
Ms Price: Can you recall what that other role might have been in the interim?
David Pardoe: I know that there was a role where I was seconded, I think it was for around about 12 months, on the creation of Post Office Limited. So that was project management work, working from London. As I say, I don’t know if that came before or after – I apologise, I don’t know if that came before or after the team leader role. Certainly, yes, became a substantive Investigation Team Leader.
Ms Price: You deal with the team leader role and the national roles you held at paragraph 21(iv) of your statement. Scrolling down a little, please, you say:
“I don’t recall me holding National Investigator role (I thought this was a title afforded to a former line manager Mr Tony Utting). There was a period when I was responsible for leading a small team of Investigators, again a regional role. This role was leading on complex investigations and supporting a team to ensure effective casework delivery. Again, this was mainly pre-Horizon and was interspaced with a period supporting Tony Utting as National Investigation Manager for Post Office Limited; I also supported Mr Utting at this time with the draft of policy documents and also was seconded for a 12-month period as a project head to the creation of Post Office Limited from Post Office Counters.”
David Pardoe: Correct.
Ms Price: In terms of the role you held supporting Tony Utting with the draft of policy documents, there is a document which has been provided to you relatively recently which may assist with dating this role. Could we have that on screen, please. The reference is POL00166569. This document is undated but it appears to set out the roles and responsibilities of a role you held at one point, that of Internal Crime Policy and Standards Manager. Do you recognise this document now?
David Pardoe: I do, yes.
Ms Price: Did you hold this role, Internal Crime Policy and Standards Manager?
David Pardoe: I did. I wonder how much of the substantive role actually undertook those deliverables but I certainly held a role with that title, yes.
Ms Price: Looking, please, to the last section towards the bottom of the page, “Role of Assurance”, to the last bullet point, this is:
“To provide assurance to the National Internal Crime Manager in own areas of accountability.”
Is this the role you were referring to in your statement when you say you supported Tony Utting as a National Investigation Manager?
David Pardoe: It is, I’ve clearly used the wrong title. Apologies, yes.
Ms Price: So do you think it is this role that involved you supporting Mr Utting with the draft of policy documents?
David Pardoe: As required, yes.
Ms Price: At the top of this document, please, the “Scope of Area” is set out. The first thing listed is “MI access/flows/adequacy”. Can you help with what “MI” is an acronym for?
David Pardoe: Management information.
Ms Price: Then the second bullet point there, “Legal Services (Criminal Law) conduit” and “Internal crime risks and issues”. Under the “Role of User for Own Operations Teams”, that first heading, there’s this:
“Ensure that MI flows and sources are identified that facilitate the identification and prosecution of internal crime.”
Second bullet point:
“Establish the adequacy of MI flows in the support of the above.”
Thirdly:
“Ensure that MI access is identified to enable data retrieval in line with demands above.”
Pausing there, can you help with what data was to be retrieved?
David Pardoe: I – sorry, I – simply, reading that, I don’t recall that. I think that’s an element of the role that was clearly there within the design of the role that just didn’t come through to fruition. I don’t recall at that stage having a substantive role where I’d be the conduit for MI access at all. Sorry.
Ms Price: The next bullet point says this:
“Through Legal Services (Criminal Law Team) establish the legal status of the Branch Trading Statement.”
Is this a reference to the introduction of branch trading?
David Pardoe: I’m assuming it is but, again, I have no recollection that I deployed any element of that.
Ms Price: So this would have been after the introduction of Horizon –
David Pardoe: Yes.
Ms Price: – trying to date this document.
David Pardoe: Yes.
Ms Price: The Inquiry understands branch trading to have been introduced in around 2005. Does that fit with your recollection of things?
David Pardoe: I’d have to go with that, I thought this would be slightly earlier but, if that’s the case, that’s the case.
Ms Price: It appears that one of your responsibilities was to establish the legal status of the branch trading statement. Can you recall why there was a need to establish the legal status of the branch trading statement?
David Pardoe: And, again, that is an element of the role that I do not think came through to fruition. I do not recall a piece of work – in fact, I don’t know why that would even sit with that type of policy and standards role.
Ms Price: Were you given any kind of briefing for this role?
David Pardoe: Well, of course there would have been a job description. There would have been a remit to that role. But, after the passage of so much time, I can’t say with conviction the precise elements of the role and its deliverables.
Ms Price: In the context of branch trading statements, were events at Marine Drive Post Office, relating to a subpostmaster called Lee Castleton, raised with you by anyone, either in a briefing when you took up the role or at any point before or after you took up this role?
David Pardoe: From memory, no.
Ms Price: To the extent that you can recall, was the focus on the branch trading statement as a result of a desire to ensure that the branch trading statement had the status of an unimpeachable record of the cash and stock which an Auditor should find when they audited a branch?
David Pardoe: I don’t recall it ever being outlined to me in that context unfortunately, no.
Ms Price: Can you recall what the Criminal Law Team’s role was in relation to establishing the legal status of the branch trading statement?
David Pardoe: No, I can’t.
Ms Price: Looking at the next bullet point please:
“Through Legal Services (Criminal Law Team) research alternative criminal charges to accompany change in status of Cash Account to Trading Statement.”
Why was there a need to research alternative criminal charges to accompany the change in status of cash account to trading statement?
David Pardoe: I’ve absolutely no clue. I’ve not a clue. Again, I wouldn’t know why that would sit with a policy standards role, it seems completely outside of that. You know, that should sit firmly with the Criminal Law Team.
Ms Price: Can you recall there being any discussion of alternative criminal charges?
David Pardoe: No, I can’t.
Ms Price: The next bullet point says this:
“Comment on trading and communication needs to operational investigators and other identified stakeholders.”
Was this referring to training and communication required because of the introduction of branch trading, or more generally?
David Pardoe: More generally, from recollection.
Ms Price: Did you provide any comment on what the training and communication needs for operational investigators were –
David Pardoe: I would assume that I did during that period, yes.
Ms Price: The last bullet point here:
“Identify and comment on internal crime risk issues within scope.”
Can you recall if there were any new crime risk issues which you identified on taking up this role?
David Pardoe: The only thing that springs to mind is if this was towards the cessation of the benefit book as a method of payment which, from memory, would have been around about 2005, then there would have been quite a significant tranche of work to risk assure the withdrawal of that Post Office product.
Ms Price: Going to the next section, please, the “Role of Planning”. It says here you were to:
“Feed into the Planning Team information on:
“issues
“risks
“concerns
“training & comms requirements (for operational investigators & other stakeholders).”
Then the last section deals with assurance. We’ve touched on that last bullet point already.
Could we have paragraph 33 of Mr Pardoe’s statement on screen, please. It is page 15 of WITN08170100. You say at paragraph 33:
“Very early in my Security career I worked with Tony Utting as National Investigation Manager. I held for a very brief period a policy and standards role. I do not recognise any of my work from this period in the supplied documents. This would certainly have been a pre-Horizon role. Any of my work from that time I suspect would predate materials available to be given to the Inquiry.”
Having seen the roles and responsibilities document since making your statement, I think you now accept that the policy and standards role was, in fact, a role you held after the rollout of the Horizon system?
David Pardoe: Absolutely, yes.
Ms Price: Although you could not recognise any of your policy drafting work in the documents supplied to you by the Inquiry, can you recall what type of policy documents you worked on?
David Pardoe: I think, logically, there’d have been documents around case file construction, documents of that nature. I can’t be more specific, unfortunately.
Ms Price: Accepting that it is difficult to recall exact dates now, can you recall whether you took up the role of Senior Security Manager before or after you held the policy and standards role?
David Pardoe: I think that would have been a more senior role, so logically that would have been after the policy and standards role.
Ms Price: So assuming that you held the policy and standards role at the point when branch trading was introduced in around 2005, would that mean you took up the role of Senior Security Manager –
David Pardoe: It would.
Ms Price: – after that?
David Pardoe: It would.
Ms Price: You address at paragraph 22 of your statement the varied positions you held when you were a Senior Security Manager, which included Commercial Security Manager and Fraud Strand or Security Operations Manager, the title, it seems, varying depending on the terminology used to describe this strand of the Security Team; is that right?
David Pardoe: Correct.
Ms Price: Is it right that it was in this role as a Senior Security Manager leading the Fraud or Security Operations strand of the Security Team, that you made decisions on prosecutions as the nominated representative?
David Pardoe: I believe so, yes.
Ms Price: A position that we’ve also heard referred to as the designated prosecuting authority?
David Pardoe: Correct.
Ms Price: You say that your training continued when you held these roles, and you qualified as a Proceeds of Crime Act Senior Appropriate Officer; is that right?
David Pardoe: It is.
Ms Price: At paragraph 20 of your statement, you suggest that Iain Murphy was the Fraud Strand leader for a period throughout 2010 and you think he was your successor; is that right?
David Pardoe: I do and, from recollection, this is where the waters become muddied, so there would have been Iain Murphy. I then think that the role handed over to, potentially, Andy Haywood and then onwards from that, it’s certainly about ‘10, ‘11, going into ‘12, where I probably lack some clarity around succession.
Ms Price: Is it right, therefore, that you think you moved to the crime, intelligence and administrative function titled Grapevine in 2010?
David Pardoe: I think it may have been later than that. If I may, the piece that throws me is that there is clearly, within the papers, a prosecution decision made by myself, there is then a prosecution report addressed to Iain Murphy but then the decision precedes Iain Murphy, so I’m confused there about the exact time that Iain would have been in post and why it appears I’ve ebbed and flowed out of that post.
Ms Price: If we can have paragraph 20 on screen, please, it’s page 8. Scrolling down a bit, please, about halfway down this paragraph. You refer to Mr Murphy here and you say, in relation to the Senior Security Manager in leading the Fraud Strand, you think Mr Murphy held the position throughout 2010. So what do you think you were doing in 2010?
David Pardoe: That’s the bit I’m really struggling to recollect.
Ms Price: You say in this paragraph that you think you returned to Security Operations for a period in 2011; is that right?
David Pardoe: Correct.
Ms Price: But you say you had certainly taken up the substantive Grapevine Senior Security Manager role by 2012?
David Pardoe: Correct.
Ms Price: We’ll come on to the detail of that role in due course. Finally, for around nine months before you left the Post Office in late 2014, you say you were removed from your role, and you deal with this at paragraph 22(v) of your statement. It’s page 12, please.
You say:
“Around 9 months or so before I left in late 2014, I was effectively being removed from my role and asked to design a structure that would again support a reduction in headcount as well as accommodate my departure. I wasn’t exactly placed on gardening leave, but my operational career with Post Office was at an end and I was more or less omitted from all other activity.”
Restructuring and repeated reductions in headcount feature in a number of places in your statement. Could we go back, please, to page 6 of the statement, to paragraph 17. Here you say this:
“There followed a further series of team restructures, building moves and boundary moves. The function throughout the years if not decades always struck me as an easy target to drive headcount reduction. Indeed, later in my career I was performing the role of consultation manager for a long serving colleague who had been subject to redundancy. I was to follow a party line around change being a business necessity … when the colleague abruptly stopped me and proceeded to produce a piece of paper and recount the 14 restructures they had been personally impacted by since joining the Post Office – the majority in the Security field. That was the regularity of structure change.”
You address this theme further at paragraph 30 of your statement. Could we go to that, please. It’s page 14. You say here:
“Function changes could be significant. I seem to recall organisational charts with 80 or so colleagues, quickly depleted over the years. There were several significant changes that led to sizeable redundancies, strand renaming and functional job titles changing.”
Do you think that the depletion of numbers within the Security team had a detrimental impact on the adequacy and sufficiency of investigations.
David Pardoe: Without a shadow of a doubt.
Ms Price: One example you give in your statement of resourcing changes impacting upon the scope of investigation work is at paragraph 43. Could we have that on screen, please. It’s page 18. You say:
“There was also a period when resources would have been applied to suspected thefts from SPMR assistants. By this I mean cash thefts and not simply fraud against customers and/or clients. This ceased when I was new in role and ended with the transition of Districts to Regions that I mention earlier in the statement. On an aside, I do think that was a retrograde step as it left SPMRs isolated and with the unenviable task of attempting to engender police support to counter and evidence suspected employee theft.”
This retrograde step had a direct impact on subpostmasters who experienced an apparent loss in branch and suspected their staff of theft, didn’t it?
David Pardoe: Absolutely.
Ms Price: Was it a step taken to save money?
David Pardoe: Yes, it was.
Ms Price: To your knowledge, where there was a shortfall in a subpostmaster’s branch and the evidence pointed to theft on the part of a member of a subpostmaster’s staff, was it the Post Office’s approach to seek to recover the shortfall under the subpostmaster’s contract?
David Pardoe: On every occasion.
Ms Price: Before the resourcing change you address at paragraph 43, would the Post Office have prosecuted the staff member and sought to recover the money from them directly through the criminal courts?
David Pardoe: From memory, yes. So the logical steps that would be taken would be an out-of-hours onsite meeting with the subpostmaster, a review of the trading accounts, at which that stage would be paper based, daily and weekly trading accounts and then, logically, there would ordinarily be – a covert camera would be installed at branch.
When we referred to the stage when I was the liaison officer, that would be another element of my role. I would view the ensuing video product, as and when theft was identified – and I must add, in the majority of cases, theft was identified – and that product would be passed into the Post Office Investigation Department for their direct investigation.
Ms Price: Was a material factor in the resourcing change a view within the Post Office that it was easier to recovery money from a subpostmaster under their contract than to go after the thief directly?
David Pardoe: I think element, yes, but I think the primary driver, which has already been touched on, is that that is undoubtedly a resource-hungry approach and a decision was taken some way above my pay grade that that was no longer a suitable application of investigation resource.
Ms Price: Were you or your colleagues ever consulted about business restructures or reductions in headcount?
David Pardoe: So if I can just break that down. In terms of consultation, we would be very much handed the fait accompli. So I tended to take a lead on the majority of the restructures once I reached a suitable grade. You would be told that there would be a number of hours and an associated financial cost that had to be lost from the function, and I would go away and work with other strand leads and with the Head of Security about repopulating a function that would achieve those cost reduction demands.
Ms Price: Did you ever raise concerns about the impact of restructuring or headcount reductions with your seniors?
David Pardoe: Absolutely.
Ms Price: Can you elaborate on that?
David Pardoe: There was a step taken on every occasion that it was better to put your hand up and volunteer to lose resource, rather than wait for the business to come after you and demand that that resource be left – be reduced. So we would always be on the front foot of almost offering up resource. And, to my mind, there was no correlation between the resource we were offering up and the demands on the function in terms of the numbers of cases that were being raised and the demands on individual Investigators. And I think both myself and other senior security personnel had some real concerns about the functions that were being lost and the increased demands that were being placed on Investigators, particularly as a result.
Obviously, there were other functions of the Security family that were being impacted but certainly on the operational Investigators. Because it just – it followed no logic, you know. This was not a function that was experienced in less caseload. There were some significant changes going on for subpostmasters during this time. UK Plc were changing in the way that they were customers of the Post Office, so that gone were the days when customers would queue up every quarter to pay a phone bill or a gas bill, or queue up every six months to pay a car tax.
The result of that is that, in my opinion and fact, is that subpostmasters’ salaries were reducing year on year. That increased the financial demand. Logically, that could increase the demand on an investigation function because of wrongdoing. So there’s a complete anathema there that that then would then lead to a function that’s reducing in size because obviously activity would have to cease.
Ms Price: What was the response of those you raised concerns with?
David Pardoe: We marched on regardless and we lost the heads accordingly.
Ms Price: I’m sorry, can you say that last bit again?
David Pardoe: We marched on regardless and we lost the heads accordingly.
Ms Price: What was it that led to you being removed from your role nine months before your departure?
David Pardoe: I said removal: so this is not a physical removal. This was just – you just sense and you know that you are being omitted from future plans, from future strategic development. So I’d still be within the workplace but it’s just a sense, isn’t it? You just know that, I guess, you know, my light was about to extinguish and that I was – by that stage I’d had a leaving date from the business and that I knew that I would be leaving that business imminently.
Ms Price: Did you get any impression of why it was that this plan for you had been formed?
David Pardoe: I think it was common practice, to be honest. I’d seen it before with other peers, that once, if you want, they were out of favour, that there would be almost a discarding of them, they were no longer seen to be useful and that it was just a matter of time until they exited the business and the function just continued.
Ms Price: Do you know why you were out of favour?
David Pardoe: I think we use an expression, don’t we, about falling out of love. I was incredibly proud of my Post Office career. I was proud of the things that I’d achieved, the way that I’d developed personally and professionally.
I became tired with the prevailing culture. I became more conscious of the impact that the culture was having on both my peers’ direct reports and direct reports to direct reports. I became more sensitive as an individual, in that the decisions that we were quite coldly making were having significant personal impacts on individuals, and I think it’s probably fair to say that it’s a culture I wanted to step away from.
With hindsight – and hindsight’s always 20:20 – it’s probably a decision that I should have taken some years previously.
Ms Price: You also say at paragraph 20 of your statement that you have an issue with several prosecution decision-making activities and subsequent inputs, which you address later in your statement. We’ll come on to those parts of your statement in more detail in due course but, broadly speaking, do these relate, in the main, to the messaging of the Post Office around the reliability of the Horizon system?
David Pardoe: No.
Ms Price: No. What do the concerns or did the concerns with the prosecution decision-making activities and subsequent inputs relate to?
David Pardoe: I think it’s a – sorry, if there’s any confusion. I think it refers to the continuity of my involvement once the decision had been made.
Ms Price: Can you explain that a little more?
David Pardoe: Absolutely. So, yes, I could have been in that post. Again, we come to that 2010/11 when a decision has been made. Again, without a definitive suite of organisational charts, I don’t know when I would have left that role. So a decision could be made, there then could, say, be a request for further evidence or there could be a twist and turn in that decision-making process. I may not have been in post then to actually see that through to fruition.
Ms Price: You refer at paragraph 19 of your statement to having worked with some individuals at the Post Office who were highly capable and committed to doing their role to the best of their ability, and others who were less so and would be managed accordingly. Can you recall any examples of an individual being less capable and committed to their role?
If I can ask you to pause there.
(Pause for fire alarm)
Ms Price: Our apologies for that interruption.
My question before the alarm was: can you recall any examples of an individual being less capable and committed to their role, with the effect that they were managed?
David Pardoe: Absolutely, yes.
Ms Price: Would you share those with us or an example with us?
David Pardoe: Absolutely. So we used to use an expression, which I guess is somewhat distasteful, but we’d – irrespective of the support that we’d give an individual. So this was all – if you’d look at the Investigator, this was always a role that it was accepted there would be a significant lead-in time to perform competently. But there would be an expression that would be used if an individual was “tackle shy”, and what that would translate to is that an individual could not quite get over that hurdle of making introductions to a suspect, sitting them down, performing a competent interview, if that whole part of the process just filled them with so much turmoil because of what they were facing, that they just couldn’t perform the role effectively.
I know of at least two, if not three individuals, who, probably even after the probationary period, we had to draw a line in the sand, almost, with one of them, for their own benefit, to say “This clearly is not working, you’re full – you know, the anxiety that you’re exhibiting, you know, even with the thought of sitting somebody down and interviewing them is so much so that, you know, the view is taken that the role is not going to be for you”. And that happen on at least two occasions, if not three.
Ms Price: Could we have on screen, please, paragraph 13 of Mr Pardoe’s statement, this page 4. So this is going back to the period in time in relation to your training that you received when you were an Assistant Investigator, so the bottom of paragraph 12 before there, and at paragraph 13 you say this about your training:
“This period saw me receive significantly more training both formally and informally. It’s difficult to recall the timeline, but at various stages in an operational role I received classroom investigative training, internally and externally delivered courses around search awareness (using Metropolitan Police facilities), interviewing course with Lancashire Constabulary, PACE training, RIPA awareness and CPIA awareness. Elements such as PACE, RIPA, HRA and CPIA were supplemented with various materials that were intended for retention. PACE and CPIA Codes of Practice would have been available within every interview kit. I still recall having the codes in my investigation kit. In my Post Office career, I also studied and passed my Proceeds of Crime Act Senior Appropriate Officer. This was a pass fail one-week course delivered by the National Police Improvement Agency.”
The training you describe here, with the exception of your POCA training, was this all training you received as an Investigator pre-Horizon?
David Pardoe: From memory, yes, and, logically, it would have been.
Ms Price: So at the time you were an Investigator, you recall there being copies of the PACE and CPIA Codes of Practice available in an interview kit; is that right?
David Pardoe: So CPIA, you need to refresh my memory, is that ‘97, is it?
Ms Price: ‘96.
David Pardoe: ‘96, then, yes, there would have been.
Ms Price: What was an interview kit?
David Pardoe: So an interview kit would be a ring binder, similar to the one I’ve got in front of me, you would have witness statements in there, you’d have bank authority disclosures blanks in there. You’d have the introduction to tape recorded interviews. Logically, you’d have the most up-to-date copy of PACE, you’d have the CPIA Codes of Practice. You may carry with you the Police Almanac, as well, in there. So there’d be a variety of blank templates that could be useful for any particular investigation activity along with the Codes of Practice and Police Almanac.
Ms Price: How was this kit used? Where did you take it?
David Pardoe: Everywhere with you. So if you were going out doing an operational investigation that could have resulted in an interview under caution, we would use a two-tape Neal tape recorder and, as well as the tape recorder with you, you would carry – I think the vernacular was the “tackle kit”, you would carry this kit with you. So, traditionally, it would have been kept in the boot of Investigators’ cars, ready to be used on various operational activities.
Ms Price: When you were a Senior Security Manager, were Investigators still provided with copies of the PACE and CPIA Codes of Practice and an interview kit?
David Pardoe: Absolutely. So if there’d been any change to that, that would have been given to existing Investigators and then new hires to the function traditionally would have been given that through their formal training.
Ms Price: You refer at paragraph 35 of your statement to a suite of policies and procedural standards, listing the legislation and codes you refer to at paragraph 13 here. Where was this suite of policies and procedural standards held and how would Investigators access this material, so both when you were an Investigator and later, when you were a Senior Security Manager?
David Pardoe: I think, from memory, it was electronic.
Ms Price: Was there an electronic repository for training materials which Investigators could access in the same way as that suite of policy documents could be?
David Pardoe: I seem to recall that there was.
Ms Price: You don’t mention the Attorney General’s Guidelines on disclosure at paragraph 13 of your statement, which may be explained because you’re referring there to training pre-Horizon, so pre-2000, but when you were in the roles you held after you stopped conducting investigations yourself, were you aware of the Attorney General’s Guidelines on Disclosure?
David Pardoe: I was aware of them, yes, but I’m struggling to recall what format they would have been available to the Investigators.
Ms Price: Do you think they were available to Investigators or not?
David Pardoe: I couldn’t answer that with absolute accuracy, unfortunately.
Ms Price: Both when you were an Investigator and when you were a Senior Security Manager, was there any method for updating Investigators about changes in the law or applicable codes or guidance?
David Pardoe: Yes, there was. So at earlier stages when we were still part of the Group, I seem to recall that would have been a group function, and then at later stages, I seem to recall that would have come through the Criminal Law Team.
Ms Price: You deal in a little more detail with the training you had in interviews and search at paragraph 62 of your statement, and you make clear there that the courses you attended personally and reference in your statement may well have subsequently been made obsolete or replaced by other training interventions.
In particular, your training on investigative interviewing was done under Lancashire Constabulary and your search course was led by the group trainers at the Met Police training college, using their search houses; is that right?
David Pardoe: It is right, yes.
Ms Price: Do you know whether that external provided training continued after the year 2000, so when you were in other roles?
David Pardoe: I’m fairly sure that the relationship with Lancs Constab didn’t continue. That was particularly looking at a piece model for investigative interviews. I’m fairly sure that didn’t continue. The search awareness piece using Met Police facilities, I’m not sure about that one. I think there may have been – it was a key area for Investigators. I think there may have been a replacement to that one. I’m unsure whether that continued to use Met facilities.
Ms Price: You undertook some further academic learning yourself, didn’t you, culminating in the completion of an MSc in security and risk management?
David Pardoe: That’s correct.
Ms Price: Is it right that that was completed with the submission in September 2000 of an academic study on the reasons why subpostmasters committed offences, including theft?
David Pardoe: Correct.
Ms Price: Was the study based on your experiences as an Investigator with the Post Office?
David Pardoe: So it was partially that, and it was also through legitimised access to historic investigation reports and précis of interviews.
Ms Price: What were the key themes covered in your study?
David Pardoe: So the study looked at verbalisation and rationalisation, and it proposed that there were three main types of offenders that the Post Office were dealing with during that period. Would you like me to go through those, or?
Ms Price: If you’d like to, yes.
David Pardoe: Absolutely. So number 1, I think I detailed within the dissertation, were highly acquisitive, so these would include subpostmasters who had direct links with organised crime groups, or were being influenced by organised crime groups. I go into some details around that.
I particularly recall dealing with a subpostmaster who had stolen money to buy a Ferrari. I dealt with a subpostmaster who had stolen money to travel the world watching Formula One. Subpostmaster who had stolen money, travelled Europe with a Michelin Guide to Fine Dining. So they were, at the top tranche highly, highly, acquisitive.
I dealt with a sub office assistant who was on the equivalent of minimum wage who was renting a Georgian manor house with a swimming pool. I still remember that with some clarity. I remember disclosing that pre-interview with his legal representative and his legal rep actually put his head in the hands because I disclosed the estate agent’s details to where his client was renting. So that’s very much at the top tier.
The second category I’ve already touched on these, and these were absolute victims of us, as customers of the Post Office changing. My father was a subpostmaster, it’s within the statement, he’d been a subpostmaster since the 1950s. I remember talking to my father before he passed – and that would have been in the 2000s – and he would tell me that in the 1960s, ’70s, ’80s, he enjoyed financial pay parity at a level that his professional acquaintances, doctors, dentists, lawyers, were also enjoying. That level of remuneration was completely changing. Postmasters were paid a form of commission, the more transactions that were conducted, the higher their salary would be and, year on year, salaries were dropping.
So that second tranche of individuals that I was actually talking about during the dissertation were purely forced into an offending cycle because they were seeing the Post Office salary reduce year on year.
And the Post Office, not too subtly, went away from saying to potential subpostmasters “Become a postmaster and have a fantastic standard of living, based solely on Post Office salary”. They shifted towards saying, rather, “Become a postmaster because it’s a fantastic opportunity to drive additional footfall into what should be your buoyant retail business”. They are two completely different propositions.
And around about this period leading up to the dissertation, we were dealing with a number of subpostmasters – I go on in my statement to say that we were dealing with repeat subpostmasters, at the same site on some occasions, who were just simply victims of a dwindling Post Office remuneration without the benefit of a buoyant retail side to prop up the viability of that business.
So that was very much the second tranche.
At that time, there had been a number of rudimentary audit models that were being deployed, really basic models that had something I like a return rate of around about 70, 80 per cent. I was running one myself in North West/North Wales.
So there was no machine learning or AI in these models, these were simple models, saying to an Area Manager “Report back if you go into a sub post office and the retail side is depleted of stock”, “Report if you’re going into a CTN” – confection, tobacco, newsagents – “with a sub post office and there’s no daily newspapers”, because the newspaper suppliers put you on stop very quickly if you fail to pay your newspaper bills. And the return rate on that was absolutely staggering, that was an incredibly busy time for the Post Office.
That was tranche number 2.
Tranche number 3 would be individuals who you would interview under caution, who would admit readily their involvement in falsification of, at the time, paper-based accounts but would deny wholeheartedly being responsible for the thefts. And I always found those the most difficult out of the three to deal with. I had very little sympathy or empathy with that top tier. If you’re stealing money to buy a Ferrari or a Porsche, you deserve everything that’s coming your way. I had sympathy with the second tranche, who were victims of a change in UK Plc and changing model of remuneration.
But that third bit was incredibly difficult to deal with because it felt like, if I was to believe the account, and on many occasions I did believe the account, it became evident that, as you were dealing with that individual, you’d go through the mechanics of the tape recorded interview and our average interview duration would be around about 45 minutes, and they tended, as ironic as it sounds to be quite cordial and, if you were sat down after that interview, and you’d have refreshments whatever, you’d outline the next steps around suspension, transfer of office, you would slowly start to see dawn on that individual that their downfall was wholly attributed to either theft by family member, theft by assistant, and you’d left that family at the end of the day in complete and utter turmoil.
And out of everything I dealt with within my Post Office career, that’s the one thing that changed me as an individual, and probably not for the better, because I’d walk away from a situation and you’d just say “How can anybody willingly, knowingly, place an individual in this type of insidious position?” And I remember we dealt with – it was quite ironic, we dealt with a whole series of cases where it was the younger son, youngest, and he would just absolutely, for want of a better word, pillage the Post Office; the older son would want to take all the blame for whatever reason; and it would – there were just – it was such a difficult series of investigations to deal with.
I say, I think, in the statement from memory – I can’t locate a copy of the dissertation, unfortunately – but that was certainly a significant element of the three tranches.
I then break it down – just to come to an end – I break it down to a difference between male and female offending as well, at the time. We found very little females who were in that top tranche, where the thefts were purely just for greed. We found more in categories 2 and 3, and that’s a brief summary of the dissertation.
Ms Price: The title of your study was “There must be some mistake”. Is it fair to say that your study was proceeding on the premise that there was no mistake?
David Pardoe: Absolutely. Absolutely, yes. I think it was more – well, it was actually – somebody actually said that to me, so when we sat down and they were logically asking about next steps, and you would go through, quite legitimately – there’d be nothing outside of PACE, outside of a captured recorded interview, you’d go through the logical next steps. So “The logic is you’ll be suspended from duty, you’ll be asked to offer your premises to an interim subpostmaster, the arrangements between you and them as regards rent is a private matter between you and them”, so on and so on, and an individual actually said to me, “There’s just got to be some mistake”.
Ms Price: You say in your statement at paragraph 22(iii) that training continued when you were a Senior Security Manager. What training did you receive when you were a Senior Security Manager in addition to the POCA training?
David Pardoe: Can I see that paragraph for context, please?
Ms Price: Yes. It is page 11 of the document on screen –
David Pardoe: Thank you.
Ms Price: – and subparagraph (iii).
David Pardoe: Thank you. I’ve got that one, thank you. So, save for the POCA Senior Appropriate Officer, I think there was some additional training on evidence in court. I think I probably just tagged along to that one because I had team leaders who were attending and a number of Investigators.
It’s fair to say that there would have been less formal operational training at that time because, at that time, I’d moved away from day-to-day operational investigation activity.
Ms Price: At paragraph 63 of your statement, you say that all Investigators would have received instruction in the use of Horizon. Did you receive instruction or training in the use of Horizon?
David Pardoe: I did indeed, and I think I’ve referred to earlier, I know, for whatever reason, I absented the formal training session, but I seem to recall, on a one-to-one basis, we had a number of counter training schools across the UK. I’m not sure whether I didn’t actually go to Chester to actually have some one-to-one training just to gain a brief overview.
We’d also at that time as well – yes, we would, so during the various bouts of CWU industrial action, as Senior Managers we would be expected to work at Crown branch offices. So I’d have undertaken Horizon activities then, firsthand dealing with customers.
Ms Price: You also say at paragraph 63 that you would have envisaged case file construction training for Investigators, including obtaining evidence from third parties, but you say you don’t recall any specific reference to Horizon data. Just to be clear, are you talking about your recollection of the training you received or the training that was provided to Investigators operating under your lead?
David Pardoe: Again, could I see that part of the statement?
Ms Price: Yes, it’s page 25.
David Pardoe: Yeah, so that would have been Investigators within the function. That would not have been applicable to myself.
Ms Price: Did you ever provide any training to Investigators?
David Pardoe: Me personally?
Ms Price: Yes.
David Pardoe: Not from recollection, no.
Ms Price: Did you attend the trained provided to Investigators?
David Pardoe: Again, from recollection, yes, I think at that time Post Office had a bespoke training facility just outside Rugby. I certainly seem to recall going there. It may not have been for the full duration but, certainly, those training courses which were residential in nature, members of the senior security group would drop into that training at various times within that training week.
Ms Price: Scrolling down a little, please, to paragraph 64. You say here that:
“Formal training would have been supplemented with significant levels of supervision in terms of operational activity and case paper construction and submission. This was a role that traditionally had a longer lead in time given the uniqueness of activity undertaken.”
We’ve looked at an earlier paragraph of your statement where you stress that you had a high level of supervision when you started investigatory roles. Was that the case for Investigators operating under your lead throughout the time you were in Security Operations?
David Pardoe: I think probably a lot of my experiences were by virtue of the person who was being mentored at the time. I can’t imagine many of the new Investigators would see a written report underlined in red and thrown across the room to them. I think it was probably just by virtue of different era, a different type of personality that I was being mentored with at the time, who certainly wouldn’t hold back from niceties of giving you a constructive sandwich, in terms of feedback. The casework literally would be physically thrown back at you and you were told to sort out if there were grammatical issues within the paperwork, or anything of a similar ilk.
But I nevertheless – remove the differences in decades to one side, I would expect that new incumbents would have had a decent level of supervision. It was always recognised, if you weren’t coming into the function from an investigative or policing background, this was not a function that you were expected to be up on your feet in a short few months. It was a completely unique role and there was some cognisance and allowance given for that fact.
Ms Price: Sir, I’ve finished one topic and I wonder whether that might be a convenient moment for the morning break, just a short 15-minute break, if we may, please.
Sir Wyn Williams: Yes, sure.
Ms Price: I don’t know what your watch says, sir, the clock here is a little fast on counsel’s table.
Sir Wyn Williams: Well, it’s actually 10.26 according to me, so 10.40?
Ms Price: Yes, sir, thank you.
(10.27 am)
(A short break)
(10.41 am)
Ms Price: Hello, sir. Can you see and hear us?
Sir Wyn Williams: Yes, thank you, yes.
Ms Price: Mr Pardoe, in terms of policy, when you first started as an Investigator, were you given a copy of any documents setting out the Post Office Prosecution Policy?
David Pardoe: I suspect I must have been. I don’t have that detail of recollection but, logically, I must have been given that policy. If I may, I think that was a group policy at the time. So yes, I would have been given that policy.
Ms Price: Did anyone cover what the prosecution policy was in your initial training or set out a rationale for it?
David Pardoe: Again, initial training, I don’t recall, unfortunately, that level of detail. I’d be surprised if it wasn’t touched upon but I don’t recall the specifics, sorry.
Ms Price: Later, when you were a Senior Security Manager, do you recall any discussion of the prosecution policy and the rationale for it or were you given any briefing about that?
David Pardoe: I think, by that stage, I’d have been in the function for some time. It would have just been something instinctively that you were aware of, if a case had been produced where there was that prima facie evidence of wrongdoing, then it would go up to Criminal Law Team for the advice as regards the prospect of realistic prospect of conviction, in terms of prosecution.
Ms Price: Were you aware of any discussions within the Security Team in the context of action against Post Office employees or agents about the deterrent effect of prosecution?
David Pardoe: Absolutely, yes.
Ms Price: What was the substance of those discussions?
David Pardoe: So there was a period in the function where the function started to rely quite heavily on academic underpinnings. If you look at the conditions that exist to entailing what’s referred to as a motivated offender, one of those things that needs to be in presence is the – what’s called the absence of a capable guardian, and that can be a physical individual, an entity that stops you from doing something.
Likewise, it was recognised that a policy that was unwavering in its approach towards prosecution could act as that capable guardian but then, hopefully, would influence correctly those individuals who may be tempted to commit wrongdoing against the business. And I think it’s probably fair to say that that was being recognised, during that time, as being something that was important to set the scene, set the standard and, as I say, act, as that policy-driven capable guardian.
Ms Price: To what extent was this a relevant factor for those making decisions, including you, on whether or not to prosecute?
David Pardoe: I don’t know if that actual element would be a relevant factor and I know I cover it in the statement. From my perspective, offering that sign-off towards prosecution, wrongly or rightly, I suspect for me – and I suspect other signatories in the period as well – was almost a fait accompli, dependent on what the Criminal Law Team were actually advising.
I never felt in a position, certainly not professionally, to go into absolute battle with Criminal Law Team around a decision that they’d made in terms of prosecution.
Ms Price: At any point that you had involvement in Post Office investigations and prosecutions, did you understand that the Post Office was unusual, in that it was the alleged victim of the crimes which it investigated, it investigated such suspected crimes itself and it decided whether to prosecute such suspected crimes itself?
David Pardoe: Absolutely, and I think, if I recall, that was covered at various iterations of formal training that would have been given to Investigators.
Ms Price: So it was victim, investigator and prosecutor?
David Pardoe: Correct.
Ms Price: At the time, were you conscious of the risks that may arise on account of the Post Office being simultaneously victim, investigator and prosecutor?
David Pardoe: With honesty, not at the time, but obviously I am now.
Ms Price: When you look at it now, do you see the risk that might attach in particular to the Post Office’s disclosure obligations as a prosecutor or its use of expert evidence?
David Pardoe: Absolutely.
Ms Price: Were these risks ever discussed within the Security Team, as far as you’re aware?
David Pardoe: Never.
Ms Price: Were they acknowledged in any Post Office or Royal Mail policy that you have seen?
David Pardoe: Not to my knowledge, no.
Ms Price: Were any particular steps taken, to your knowledge, in recognition of these risks by way of training for Investigators, first of all?
David Pardoe: In terms of – sorry, can you just expand on that, please?
Ms Price: Were any steps taken, to your knowledge, in recognition of these risks in training for Investigators?
David Pardoe: Not to my knowledge, no, other than obviously going through the mechanics of case preparation.
Ms Price: Were any particular steps taken in your training in relation to being a prosecution decision maker?
David Pardoe: So I recall being given guidance during a period when I was acting for one of the security leads, so I wouldn’t have been promoted substantively to the level of signing those off. I remember acting for a period and I also remember discussions around responsibilities with one or other of the principal lawyers within the Criminal Law Team at the time.
But, certainly, there was no – nothing I could point to that said this was a formal training brief or formal aide memoire about how you actually deal with that type of case. No, there was nothing.
Ms Price: Did you consider, at the time you worked within the Security Team, the extent to which prosecutions served the Post Office’s broader commercial interests, such as the reduction of debt and the increase of income?
David Pardoe: Not so much that, no. But, certainly, to go back to the earlier point, that whole concept of capable guardian, ie something that exists that hopefully drives individuals to keep, as we saw at the time, onto the straight and narrow, I saw that as being more paramount than a focus on actually balancing recovery versus loss in that commercial way.
Ms Price: The Inquiry has heard evidence that in late 2005 you put Paul Whitaker and Mick Matthews forward for a new role for the Security Team, that of Financial Investigator; is that right?
David Pardoe: Paul Whitaker?
Ms Price: Paul Whitaker and Mick Matthews. It was Mr Whitaker’s evidence that you had put him and Mr Matthews forward for a new role in the Security Team, the Financial Investigator role, in around late 2005?
David Pardoe: I don’t actually recall that; I mean, obviously I know the individuals. I don’t recall Mr Whitaker being put forward for that role. Thought at the time there would have been Ged Harbinson –
Ms Price: Apologies, this is entirely my fault: Ged Harbinson?
David Pardoe: Yeah, absolutely, yeah. Mr Harbinson, yes, definitely.
Ms Price: Mr Harbinson provided evidence that this new role was campaigned for by you; is that right?
David Pardoe: No, I wouldn’t – there’s absolutely no way in my wildest dreams I’d have had that amount of influence within the business to actually design and to populate a role like that. Absolutely not, no. There would have been – I thought those functions existed within Group.
There would have been perhaps a role that I had in the design of a Post Office structure that had to map over those roles from Group to a self-sufficiency within Post Office Limited, if that makes sense, but I didn’t see any of the Exec boarding or the type of levers you’d need to exact to populate those roles and commission or canvass for those roles to exist within the Post Office, certainly not.
Ms Price: Do you recall the introduction of that new role of financial investigation?
David Pardoe: I do.
Ms Price: Was the intention to recoup losses through the Proceeds of Crime Act?
David Pardoe: It was.
Ms Price: So before you took up the role of taking prosecution decisions, the business desire to recover losses was something you were aware of and involved, as a Senior Appropriate Officer; is that right?
David Pardoe: It was.
Ms Price: Does it remain your position that commercial considerations were not something you were conscious of when taking prosecution decisions?
David Pardoe: I never saw those as being paramount.
Ms Price: Do you see here a potential for a conflict of interest arising?
David Pardoe: Yes, most definitely.
Ms Price: While we are on the topic of financial investigation and recovery, you say in your statement at paragraph 27 – if we can have that on screen, please, that’s page 13, about halfway down – that John Scott, Head of Security, had overarching responsibility for the strategy around recovery and you say here you recall conversations with him around calculations concerning recoverable amounts in defendants’ benefit.
You recall a specific challenge raised by the National Federation of SubPostmasters around the calculation of the recoverable amount in a particular case. Can you help with what it was that was being challenged?
David Pardoe: I seem to recall that the calculation that was being applied had resulted in confiscation of an amount some way in excess of the Post Office loss.
Ms Price: You refer at paragraph 34 of your statement to three Royal Mail Group policies which would have come across your desk, as you put it, and, whilst you do not specifically recall them, you say would have been applicable to your team. One of these is the December 2007 Royal Mail Group Limited Criminal Investigation and Prosecution Policy.
Could we have that on screen, please. The reference is POL00030578. This is, as you have noted in your statement, a Royal Mail Group policy. The “Purpose” is set out at the top, it describes the:
“… Royal Mail Group Limited response to crime and suspected crime against the organisation.”
If we can look, please, at point 4 on page 4 of this document, under “Deployment”, it says:
“This Policy is published on the Royal Mail intranet site as policy number S2.”
When you worked within the Security Team, did you have access to the Royal Mail intranet site?
David Pardoe: I don’t recall that, sorry.
Ms Price: You don’t recall whether you did or you don’t recall having access?
David Pardoe: I don’t recall whether I had access to the Royal Mail intranet site.
Ms Price: You say you don’t specifically recall this document. Do you think you read it at the time that it applied to the work of your team?
David Pardoe: I would have been surprised if I hadn’t.
Ms Price: Taking some of the principles set out in this policy and starting with paragraph 3.1.4, that’s back a page, please – and again, and again – under “Conduct of Investigations”:
“The conduct, course and progress of an investigation will be a matter for the investigators as long as it is within the law, rules and priorities of the business. Investigators will ultimately report to the Director of Security with regard to the conduct of criminal investigations.”
So this document here was not purporting to give any guidance to Investigators about how they should conduct an investigation, was it?
David Pardoe: Correct.
Ms Price: Some legislation is identified within this policy, so, for example, under 3.2.2, please, on page 2, you can see there:
“Evidence will be gathered and retained in accordance with the Criminal Procedure and Investigations Act 1996 Codes of Practice.”
Under 3.2.8 on “Casework” – this is page 3, and under “Casework”:
“Investigations leading to potential prosecution will be reported in accordance with the Criminal Procedure and Investigations Act 1996 [and the] Code of Practice.”
There’s no explanation in this document, is there, about the requirements that are set down by the Act and the Code, is there?
David Pardoe: Absolutely none whatsoever.
Ms Price: There is some suggestion the detail might be contained elsewhere, going back to the section on deployment, that’s page 4, section 4. It says:
“Investigation Procedures and Standards relating to this policy are included in the induction and ongoing training courses and material provided to investigators. Any changes to the procedures and standards are notified to investigators via investigation circulars and communications.”
There is also a specific section applicable to the Post Office, paragraph 3.2.12, just above section 4, which applies to “Post Office Limited Investigation”:
“While adhering to legislative and group policy requirements, the POL Investigation Team have additional and, in some cases, alternative Procedures and Standards, and supporting documentation with which Post Office Limited colleagues will comply. Post Office Limited Investigation Team will maintain a separate casework procedure and database.”
Do you recall there being a separate casework procedure and database?
David Pardoe: Not specifically, no.
Ms Price: Do you recall there being a database?
David Pardoe: No.
Ms Price: In relation to the prosecution policy, page 2 again, please, at 3.1.6, the heading is “Prosecuting Criminals”:
“This policy supports the Code of Business Standards in normally prosecuting those who commit theft or fraud and where appropriate offences under the Postal Services Act 2000 Sections 83 and 84.”
Stopping there, the heading here, and what follows, rather assumes that it has already been established that the person suspected of committing a crime is guilty of it, doesn’t it?
David Pardoe: It does.
Ms Price: They are a criminal, those that commit theft or fraud?
David Pardoe: It’s clumsy. It does.
Ms Price: Was this the way that those being prosecuted by the Post Office were spoken about by those within the Security Team?
David Pardoe: On occasion, yes.
Ms Price: Do you think, looking back, that this might have reflected a mindset that, if there was, on the face of things, a loss, a subpostmaster or employee was guilty of theft, fraud or false accounting?
David Pardoe: I think there was an element of groupthink in that, yes, I do.
Ms Price: Moving then to paragraph 3.2.9 on page 3, “Prosecution”:
“Suspect offenders will be prosecuted where there is sufficient evidence and it is in the public interest in accordance with the Code for Crown Prosecutors. Decisions to prosecute in non-Crown Prosecution Service cases will be taken by nominated representatives in the business with consideration to the advice provided by the Royal Mail Group Criminal Law Team.”
In relation to responsibility for deciding whether to prosecute an individual or not, we can see the position, as set out here, is that the decision would be taken by the nominated representatives in the business, consideration to the advice from the Criminal Law Team. This is in 2007.
As far as you can recall, does the position set out here in the policy accurately reflect who was, in fact, making decisions on prosecutions in 2007?
David Pardoe: In terms of nominated representatives, yes, it would have done.
Ms Price: This document is the first prosecution policy document the Inquiry has seen which sets out with any specificity who will take the prosecution decision. Could we have on screen, please, paragraph 55 of Mr Pardoe’s statement. That is page 22 of WITN08170100.
Under the heading here “Decisions about prosecution and criminal enforcement proceedings”, you say this at 55:
“There was a period when I dealt with prosecution decisions, both as a conduit between the Post Office Investigation Department and line managers making the decision and then as a period myself as the nominated representative. I’m unsure why the switch was made between line manager and Security as a nominated representative, but it occurred.”
When you refer to line managers taking prosecution decisions, who were you referring to?
David Pardoe: So there would have been a time, and it would really be going back to the earliest days of my career within the Security function, where at a local district level, line managers within the district would make a recommendation on the back of an investigation conducted by the Post Office Investigation Department and an advice offered by the Criminal Law Team about whether prosecution would be signed off. It was dealt with on such a local level. I certainly remember that.
That was outside of the security line. That was dealt with dependent on seniority, maybe not line manager. It may be more accurate with hindsight to read line manager’s line manager but I certainly recall, in my earliest days, decisions being made by an out of the Security function line manager.
Ms Price: Can you recall when the switch was made?
David Pardoe: So we moved from districts, we moved to regions. I suspect that, even then, a regional representative was signing off the prosecution element. So we’d probably be coming into the start of the 2000, probably maybe even coming into the date of that policy document.
Ms Price: Do you recall the reason for the change?
David Pardoe: I was never apprised as to the reason, no. Never.
Ms Price: At paragraph 57, going over the page, please, you deal here with a document which the Inquiry understands to date to around 2012. Unless you wish to go to it, we needn’t have that up on screen but the document reference for the transcript is POL00104929.
This document suggests that it was the Head of Security who would make the prosecution decision. Is it right that you don’t recall this being the case while you were in a Security Operations role?
David Pardoe: Correct and, indeed, from the evidence that I’ve seen through the Inquiry, that was not the case. It was – I think I say there, it was at the latter end of my career.
Ms Price: As to the process you would follow when you were in the prosecution decision-making role, you deal with this in general terms at paragraph 56, going back a page, please.
You say this:
“A decision to prosecute would only ever be made in the face of supporting advice from the Criminal Law Team. CLT would have seen all the facts appertaining to the case, including audit reports, Investigator report, supporting evidence and interview précis. My expectation was that the CLT, as an integral part of Post Office Security, would have made all the due considerations in line with Code for Crown Prosecutors and applied each necessary test in reaching their decision. I took a stance that the decision will have been checked by CLT for fairness and objectivity. I saw my role to confirm their decision and place the case into prosecution status via the Investigation Team leader.”
Moving over the page, please, to paragraph 59. You say:
“In terms of test around the correctness of prosecution and charging decisions, then I firmly expected this to have been considered at the CLT stage. If they had felt that public interest factors tended against prosecution then my expectation was that this would have been clearly stated. I am genuinely not attempting to be evasive but I fail to see what additional input I was providing around correctness when a principal or senior lawyer had carefully made the charging decision.”
Then at 60:
“The question around charges was solely within CLT; whilst towards the ending of my tenure I’m aware that investigators would recommend charges when submitting papers into the CLT, the ultimate recommendations sat with CLT. Again, in terms of prosecution decision then my expectation was that all elements had been considered by CLT in reaching a decision.”
Do you recall ever declining to provide your authority when the Criminal Law Team’s advice was that the prosecution test was met?
David Pardoe: Not by authority, although I do reference in the statement I recall with some clarity when a case came into the district, early days of my career, with a prosecution consensus from the Criminal Law Team, and that was returned as being not agreed with, yes.
Ms Price: What was the reason for not agreeing?
David Pardoe: Ironically, it was a case I had some detailed knowledge of. I know that I’d supported POID in the case. It was an individual who took over the running of a post office in, I guess, one of the less salubrious areas of the northwest of England. For whatever reason, the local community had taken almost an immediate dislike to him.
He’d been subject to quite serious physical assault on a number of occasions when going about his day-to-day life in the community. His backyard to the Post Office had actually, effectively, been booby trapped, in so much, as if he’d have opened the rear gate into his backyard, two large concrete blocks would have dropped onto whoever opened the gate. That was spotted, fortunately, by his partner as she was taking a child of probably no more than one or two years of age in a pram out into the backyard. You could only imagine if that hadn’t been spotted what the ramifications could have been.
It’s fair to say that individual probably lost their head, which is understandable. They moved their infant child and wife away from the premises, incurred additional rental demands on their income as a result of that, went into complete state of disarray, and I apprised the – it was, at the time, the Head of Services for the district of the facts to that, even to they’d been detailed comprehensively within the Post Office Investigation Department report and, between us, it was decided that it served no useful interest to place that subpostmaster into prosecution for the false accounts that had been completed to cover the fact that monies had been stolen to support his wife and child as they lived away from the premises.
Ms Price: Would you have seen the advice of the Criminal Law Team where the advice was that the prosecution test was not met?
David Pardoe: Yes.
Ms Price: Was there ever a case where you pushed back against the advice that the test for prosecution was not met?
David Pardoe: I don’t recall when not met no. I think it’s probably fair to say that the vast majority of cases that went forward, where there was felt to be a prima facie case to answer, probably came back with a prosecution decision from the Criminal Law Team.
Ms Price: Looking back now, do you think you were conscious – truly, actively conscious – that, as a prosecution decision maker, you had a different and distinct role to that of the Investigators in your strand of the Security Team?
David Pardoe: Yes, I was conscious of that. I would still – I have no truck with taking responsibility for decisions that I was making during that period. I still thought that I was, in effect, rubber stamping and placing back into an operational casework environment a decision that had been made by a highly qualified, on occasion, principal lawyer within the Criminal Law Team and, sat here now, that may sound a weak approach but I think, if you compare and contrast five/six years of legal training, plus principal law status within the Group and then Post Office Criminal Law Team, and you compare that to my own experience, I think it’s probably understandable why I’d take that viewpoint.
Ms Price: Looking back now, do you think it was appropriate for a non-legally-qualified Post Office employee to be the sign-off for a decision as significant to the lives of individuals, and to the business, as a prosecution?
David Pardoe: So if I just – almost replaying that through my mind. So a Criminal Law Team lawyer would make the overview in the first instance. Should that then have sat with somebody else who was suitably legally qualified to effectively rubber stamp that decision? I think probably the element that’s missing, with respect, there is that element of true independence. I couldn’t sit here and argue or debate that I was an independent oversight in that whole process; of course I wasn’t. I was heavily employed – heavily invested in the function.
So I think what was missing there, again, with respect, would be an element of true independence to that process.
Ms Price: How did you satisfy yourself that there was a genuine loss to the business in cases where you were being asked to approve the prosecution, or did that not enter your mind as something that was a question for you?
David Pardoe: So the case papers would obviously come across my desk at some stage. I think there was a period when casework may have been performed electronically but, nevertheless, I would see the Investigator’s report, and that would be a structured report, and part of the demands of that report is that it would outline the most current loss, known loss to the business.
I’d read through that report. So I’d be fully aware that we were stating there was a loss to the business at that stage, and that’s even before it found its way to the Criminal Law Team. So when the advice came back from the Criminal Law Team with whatever charges were felt to be appropriate, I’d have been aware that certainly the Post Office was stating that there was a particular loss attached to that case.
Ms Price: Did you ever give consideration to whether a shortfall might have been caused by a user error stemming from inadequate training on the Horizon system?
David Pardoe: No, and I think what there was, there was almost a mentality, not just from myself but probably from an Investigator perspective as well, that the admission to false accounting, that was almost stated and that’s what should have been reported. So I think there was probably less focus given to the root cause than there was to actually submitting a set of case papers that outlined the fact that there was that admission to false accounting, and the standard way would be you’d detail the date when the first account was prepared falsely, one in the middle, and then the last account was prepared falsely.
So I think that was probably something that was occurring at the time, yes.
Ms Price: So were you simply taking it as a given that there was a loss?
David Pardoe: Yes.
Ms Price: You say at paragraph 40 of your statement that you recall there being a template around the construction of case files to standardise casework; is that right?
David Pardoe: Correct, yes.
Ms Price: You then deal at paragraph 67 to 76 with a number of casework compliance documents. One document which the Inquiry sent you for the purposes of preparing your statement was a document entitled “Casework Management”, and there are two versions of that: one dated March 2001 dated October 2002. Is it right that you do not specifically recall receiving either version of this document before they were provided to you by the Inquiry?
David Pardoe: Yes, but again, logic would dictate that they – at some stage, I’d have been aware of those.
Ms Price: This document in both versions sets out the need for two separate reports: one the conduct report, to go to the discipline manager, and another the legal report, to go to the Criminal Law Team. Sensitive information should only be included in the legal report, not the conduct report, and there are also paragraphs dealing with both operational and procedural failures identified during an investigation. Is that a fair summary of the nature of the document?
David Pardoe: Absolutely, yes.
Ms Price: If we could have paragraph 68, please, on screen, this is page 26. You’ve addressed your understanding of the document at some length in this paragraph. Without going through line by line and taking it fairly shortly, is it right that you never read this document as being applicable to bugs, errors or defects in the Horizon system?
David Pardoe: Absolutely.
Ms Price: You provide an example of what the instructions contained within the document might apply to. In short, is it an example of weakness in a product which, if known about by unscrupulous people, might be exploited to commit fraud?
David Pardoe: Correct.
Ms Price: You say at paragraph 71 of your statement – and that’s page 27 over the page – that it was also your understanding that:
“… every single document and Investigator comment on organisational weaknesses should have been subject to review by the [Criminal Law Team] and the disclosure test applied accordingly.”
You say that you recall the Criminal Law Team specifically advising you that this would be the case; is that right?
David Pardoe: It is.
Ms Price: Who was it who advised you of this? Can you recall?
David Pardoe: Yeah, Rob Wilson.
Ms Price: The Inquiry has provided you with a number of emails from 2011 and 2012, from David Posnett, relating to casework compliance. Is it right that you recall something of the introduction of compliance checks in 2011?
David Pardoe: It is. I recall the concept yes, I do.
Ms Price: Can we have the first of the emails from David Posnett on screen, please. This is document reference POL00118096. Looking, please, at the email starting about halfway down the page from David Posnett to a number of Security Team recipients, including you, it’s dated 23 May 2011, and the subject is “Casework Compliance”. The email reads as follows:
“All
“Most of you are aware that case files submitting for legal advice will become subject to compliance checks. This process is due to commence in June and is designed to raise standards of files submitted (including their contents – reports, taped summaries, appendix enclosures, recoveries, stakeholders, etc) and ensure there is a consistent approach across the team. It is also probably an opportune time given that we have recently recruited new people to the team.
“I’ve associated relevant documents that feed into the compliance process. Please familiarise yourself with these documents.”
A number of compliance documents were attached to Mr Posnett’s email in a zip file. Presumably, given the instruction in Mr Posnett’s email to “familiarise yourself with the documents attached”, would you have read them all when you received this email?
David Pardoe: I think it would probably be fair to say, at best, they would have been scan read. I wouldn’t have expected them to go into them in the same level of detail and I recognise obviously all the names there in the “to” box. I wouldn’t expect to go into the same level of detail as, say, an existing team leader but, yes, I’d have given it the due attention of opening those and just scanning them.
Ms Price: One of the documents which Mr Posnett asked recipients of his email to familiarise themselves with was the Identification Codes document, and this is a document which you comment on at paragraph 75 of your statement.
The Inquiry is familiar with this document and I do not intend to display it on screen. But do you know the document I’m referring to?
David Pardoe: It’s absolutely abhorrent. I do indeed, yes.
Ms Price: Does it remain your position that you do not recall reviewing the document at the time?
David Pardoe: I think it remains my position. Had I been consciously aware of that document at the time, I’d have vehemently challenged that document. It’s completely unacceptable.
Ms Price: You say at paragraph 76 of your statement – and could we have that on screen, please, that is page 29 of Mr Pardoe’s statement – you say here:
“We did instruct Investigators to record identification codes. My recollection was that these were required to complete any submission into Police to have details of subsequent convictions ended onto the PNC. These were referred to as NIB type details. I certainly don’t recall the horrendous language on the form or the obsolete country names.”
Do you recall there being a specific form used by the Post Office as a non-police agency to notify the police of criminal proceedings?
David Pardoe: I think I probably recall a number of variations of that form. I would have referred – I think “NIB type details” would have been appertaining to when I was an Operational Investigator. I think that they changed then to NPA details.
Ms Price: Could we have on screen please document reference POL00118374. This is a blank copy of the form NPA01; do you recognise that now?
David Pardoe: I do indeed.
Ms Price: We can see the agency name, Post Office Limited, at the top left. Then there are boxes for various identifying details of the person being charged or summonsed. The prosecuting agents are identified about halfway down the page as the Post Office Legal Services Criminal Law Team.
Then over the page, please. There are a number of options there for ethnic appearance and there are seven boxes for those options.
Is this the form that you understood investigators to use to notify the police of proceedings?
David Pardoe: At that time, yes. It certainly – from memory, it would have been different in the form I would have been completing as an Operational Investigator but, certainly at the time that I was in the strand, that’s the form I recognise Investigators would complete.
Ms Price: Was this the form on which they would identify the identification code which applied in any given case for the police?
David Pardoe: I’m failing to see the actual field where that’s actually inserted.
Ms Price: Well, the ethnic appearance boxes, there are seven options there: “White European”; “Dark European”; “Afro-Caribbean”; “Asian”, “Oriental”; “Arab”; and “Unknown”?
David Pardoe: Correct.
Ms Price: Do they accord with the options, as you understood them, for submission to the police, or not?
David Pardoe: Correct. They do.
Ms Price: So is it right then that no reference to the Identification Codes document circulated by Mr Posnett in 2011 was necessary to provide identity code information to the police?
David Pardoe: Absolutely correct, yes.
Ms Price: Turning back, then, to Mr Posnett’s zip file of compliance documents. Could we have document reference POL00118101. This is one of the attachments, this is the “Guide to the Preparation and Layout of Red Label Case Files, Offender reports & Discipline reports”. I think you had the opportunity of reading this for the purposes of preparing your statement?
David Pardoe: I did.
Ms Price: Starting on page 4 of that document, please, we see a preamble for the policy template of an offender report, scrolling down a little, please. Going over to the top of the next page please, at the top right we see “Identification Code: (Numbers 1 to 7 only)”, and the Identification Codes document which Mr Posnett had circulated had seven options, didn’t it, in terms of identification codes?
David Pardoe: It did.
Ms Price: So Investigators were being instructed to enter an identification code limited to options 1 to 7?
David Pardoe: Correct.
Ms Price: They were being provided with the Identification Codes document sent in the same compliance zip file, which you describe as utterly abhorrent?
David Pardoe: Correct.
Ms Price: Was there any other way for Investigators receiving Mr Posnett’s suite of compliance documents to interpret the instruction, other than “Use this Identification Codes document to complete the identification codes space on the offender report”?
David Pardoe: I think the only exception to that would be the more long-serving Investigators who may hold an alternative version of the identity codes document, without reference to such offensive terms.
Ms Price: Given that it was not necessary to use this document, the Identification Codes document circulated by Mr Posnett for police notification purposes, because the options were there on the face of the form, can you help us with why it was being used to populate the offender report?
David Pardoe: Absolutely no idea, sorry. No.
Ms Price: Turning, please, to the involvement of Post Office Investigators following the identification of an apparent shortfall at audit. In relation to cases where an apparent shortfall was discovered at audit, you recall there being a triggers and timescale document that covered the monetary loss value at which Investigators would get involved; is that right?
David Pardoe: It is.
Ms Price: Is it right that you recall, at least at some stage, a £1,000 loss being the minimum level or the involvement of investigators?
David Pardoe: Yes.
Ms Price: Do you recall what the rationale was for there being a minimum level of apparent loss for the commencement of a criminal investigation?
David Pardoe: Sheer volume of work.
Ms Price: What were the other triggers for a criminal investigation in addition to the level of an apparent shortfall?
David Pardoe: I think it would have been a victim impact. So I would expect that an investigation would have been triggered if, say, the alleged fraud was directly impacting a customer of Post Office. I can’t really think of any others outside of that.
Ms Price: You say at paragraph 6 of your statement that:
“In the face of reductions in investigator numbers, lower level cases would not have been progressed.”
We’ve heard evidence from Tony Utting that there came a time when restructuring of the Security Team and a reduction in headcount led to a rising of the triggers for a criminal investigation; do you recall that?
David Pardoe: I don’t recall the explicit instruction but I wouldn’t challenge that. I certainly, as an Operational Investigator, dealt with lines of operational investigation that simply would not have been taken on, for want of a better expression, after, say, 2000/2005.
Ms Price: Where the level of an apparent shortfall identified on audit wasn’t sufficient to trigger a criminal investigation, what steps were taken by the Post Office in relation to the apparent shortfall?
David Pardoe: So my understanding and expectation is that would have been dealt with by the local line management in various monikers, whether that’s the area sales manager or early support manager. I think that title changed over the years, although the functionality remained broadly similar. It would have been dealt with at a local level but still with a focus on repayment back to the business.
Ms Price: So were attempts made to recover the apparent shortfall under a subpostmaster’s contract?
David Pardoe: The contract, that clause in the contract, “The subpostmaster is responsible for all losses no matter how they occur”, would have been pursued relentlessly.
Ms Price: Absent the criminal investigation machinery, did the Post Office consider itself under any obligation to get to the bottom of the cause of an apparent shortfall or was it sufficient for debt recovery purposes that there was one?
David Pardoe: In terms of a case that the investigation function was taking forward or where it sat with –
Ms Price: Where it wasn’t being taken forward.
David Pardoe: Where it wasn’t being taken forward. I think that would probably depend on the tenacity of the Area Manager. I don’t think that there was any formal policy document or expectation that that would be the case.
Ms Price: You refer at paragraph 49 of your statement to the steps which were taken once a reportable audit discrepancy had been identified. By reportable audit discrepancy, do you mean one which triggered the involvement of Investigators?
David Pardoe: I do.
Ms Price: Who decided whether an audit discrepancy was reportable?
David Pardoe: So I think if it was in excess of the prevailing triggers document at that time, then the mechanics would be that the audit function would report that into an investigation contact point.
Ms Price: You discuss the purpose of an Investigator attending a branch at paragraph 45 of your statement and you say it was to secure and examine evidence and take an account from the person responsible.
You then set out at paragraphs 49 to 54 some more detail in terms of the process, which you say Investigators would follow following identification of a shortfall at audit.
Were you ever an Investigator in a case where a reportable discrepancy was discovered on audit of a branch after the introduction of the Horizon system?
David Pardoe: As an Operational Investigator?
Ms Price: Yes.
David Pardoe: No, never.
Ms Price: Is the detail at paragraphs 49 to 54 based on your practice when you were an Investigator?
David Pardoe: Broadly, yes. I think probably the only add-ons for that would be source documentation post-Horizon that the Investigator would obtain from the Auditor at branch. But the mechanics of, you know, the use of a pocket book, the mechanics of invite to tape recorded interview with all that entailed under PACE, would be the same, yes.
Ms Price: When you were leading the Fraud Strand and Security Operations function, what documents would you have expected Investigators operating under your leadership to secure when they attended a branch in an apparent shortfall case?
David Pardoe: The relevant documentation that would evidence the shortfall at branch obtained from the auditor to enable production at the first account type of interview under caution.
Ms Price: Are you referring there to the Horizon reports which could be printed from the counter in the branch?
David Pardoe: Yes, plus any supplementary evidence that the Auditor had brought to the branch, because a risk audit may have been triggered by other elements such as a reluctance to return, ostensibly, excess cash held by the branch. So, obviously, if those type of details were held by the Auditor, my expectation is that they would have been taken into the interview as well and an account asked for that form of scenario.
Ms Price: You say at paragraph 45 of your statement that an Investigator would have engaged with the Retail Line in terms of the future of the office, immediately post-audit. Would the views of a Retail Line Manager ever had had any bearing on whether a criminal investigation was commenced in the first place?
David Pardoe: No, never.
Ms Price: In terms of investigatory steps taken after interview of a suspect, where the only evidence of a loss was the Horizon record available in branch, or later on Credence, when compared with the Auditor’s findings, what further enquiries would you have expected an Investigator to make as part of their investigation before sending their report to casework?
David Pardoe: And, again, I think that would have been based on the account that had been given at the interview under caution. If there’d been quite a full and frank account, it’s fair to say there would be less back research to support the submission to the Criminal Law Team. If the account had been vague, particularly in terms of when shortfall existed and first commenced, and so on and so on, I’d have expected them to be more tenacious in obtaining ARQ logs and the like.
Ms Price: When you were an Investigator in an apparent shortfall case, did you understand it to be any part of your role to make enquiries into the liability of the core evidence which was being relied upon to prove the loss to the business?
David Pardoe: When I was an Investigator?
Ms Price: When you were an Investigator?
David Pardoe: So when I was an Investigator, I’d have been faced with a number of scenarios. Number 1 would have been the production of daily and weekly handwritten ledgers, which were the daily and weekly books. The other scenario is that, at that stage, there was the advent of those books being transcribed electronically, so there were a number of IT systems that did the job of those two handwritten ledgers. I was aware that I was to examine those ledgers, and confirm the veracity of the audit findings, yes.
Ms Price: When you led the Fraud Strand or the Security Operations function, did you expect your Investigators to make enquiries as to the reliability of the core evidence which was being relied upon to prove loss to the business in an apparent shortfall case?
David Pardoe: In terms of reliability, then I – my belief is that the Investigator would have accepted the audit findings.
Ms Price: When you were an Investigator in an apparent shortfall case, where the suspicion was that someone had stolen money, would you investigate where the money had gone, try and follow the money, so to speak, by making financial enquiries relating to the suspect?
David Pardoe: On occasion, yes.
Ms Price: When you led the Fraud Strand or Security Operations function, did you expect your Investigators to make financial enquiries to try to establish where the money that gone?
David Pardoe: If they felt that appropriate, yes.
Ms Price: Was there a checklist of steps to take or any other guidance to ensure all relevant information was identified, collected and sent to the Criminal Law Team in proceedings brought by the Post Office against subpostmasters and relevant staff?
David Pardoe: I seem to recall there was something that the investigator would be able to rely on, certainly in that case file construction, and the contents of the various appendices within that case file construction.
Ms Price: When did you first become aware of a case where a Post Office employee, a subpostmaster, or a member of a subpostmaster’s staff, attributed an apparent shortfall to problems with the Horizon system?
David Pardoe: I think it would have been the early part of the 2000s. I can’t give any greater clarity than that, unfortunately.
Ms Price: You address your understanding of the purpose of and process for acquiring ARQ data starting at paragraph 77 of your statement. Could we have that on screen, please. It is page 29 of Mr Pardoe’s statement. You say at 77:
“I personally was not an operational Investigator from the inception of Horizon. I don’t recall supporting or certainly leading a Horizon type investigation. I did obviously lead the Fraud Strand and Security Operations function during the pertinent periods, so will respond with that in mind.”
You go on at paragraph 78 to say this:
“I appreciate that this is a view that will have been expressed previously but, throughout my tenure, the opinion firmly expressed at every turn, internally, was that Horizon was fit for purpose. I recall with an element of clarity updates from John Scott assuring the Security function that the system was reliable, and we were to continue with BAU activity. I appreciate that there became a more measured approach towards the end of my tenure, but I certainly don’t recall being involved in those conversations. I also seem to recall an internal Paula Vennells communication in response to the increasing noise around Horizon; obviously I can’t recall word for word, but the thrust was that Post Office were defending the system and refuted the claims. My point is that with honesty the use of tools such as Credence data and ARQ logs were to my mind used as much to evidence guilt than innocence and particularly utilised when false accounting was admitted but not theft. My understanding is the Investigator would analyse logs to attempt to evidence theft and wrongdoing particularly in terms of cash balance declarations and redeclarations; I’m not even sure how the log would denote a bug, error or defect. It’s certainly not an area we had any training in, ie to spot a bug, error or defect these are the data patterns you should search for.”
You then say:
“The language at POL00055590 in terms of Horizon bashing expressed by a senior lawyer was not uncommon.”
Pausing there, could we have the document referred to here on screen, please. The reference is POL00055590. This is an email from Jarnail Singh to a number of individuals on the 21 October 2010, following the conclusion of the Seema Misra trial. You are not, in fact, by the looks of things, on the email circulation list here. The email reads as follows:
“Dear All,
“After a lengthy trial at Guildford Crown Court the above named was found Guilty of theft. This case turned from a relatively straightforward general deficiency case to an unprecedented attack on the Horizon system. We were beset with unparallel degree of disclosure requests by the defence. Through hard work of everyone, counsel Warwick Tatford, Investigation Officer Jon Longman and through the considerable expertise of Gareth Jenkins of Fujitsu we were able to destroy to the criminal standard of proof (beyond all reasonable doubt) every single suggestion made by the Defence.
“It is to be hoped the case will set a marker to dissuade other defendants from jumping on the Horizon bashing bandwagon.”
Is it the language used in the last line of this email that you say in your statement was not uncommon?
David Pardoe: Absolutely.
Ms Price: Not uncommon for this particular lawyer or not uncommon in general?
David Pardoe: I believe that was a theme.
Ms Price: At what level within the business was this language being used?
David Pardoe: That type of sentiment, at every level.
Ms Price: Could we have page 30 of Mr Pardoe’s statement up on screen, please. Paragraph 79 of your statement reads as follows:
“My understanding is that Fujitsu was contracted to provide Audit Record Query data, on demand, using an agreed secure process. I seem to recall that the data provided a full log at keystroke levels for the period specified by the Investigator and providing transactional and branch reporting detail. I’m aware that this data could be used to identify singleton transactions (like the use of a certain credit card) or a full and complete series of transactions using a date range specified by the requester.”
Going then, please, to paragraph 91 of the statement, this is page 33, here you say this:
“In line with my response at 78, my belief is that there was a cynicism in terms of the steps that were taken to support any assertion that Horizon was the root cause of discrepancies. Horizon data from my perspective was primarily a tool to either evidence how false accounting took place or to support a charge of theft and particularly when theft was denied at interview. I’m struggling to understand how the ARQs would identify a bug, error or defect and particularly if their presence was subtle and sat beneath obvious keystroke data.”
At 92:
“I’m not aware of circumstances where an ARQ was provided to an SPMR, save for prosecution cases when I would have expected the data to be disclosed.”
Should the Chair understand from the paragraphs of your statement that we’ve just looked at that ARQ data was primarily obtained in order to support a prosecution once the decision had been made to prosecute?
David Pardoe: I think there may have been a variety of approaches to that.
Ms Price: So the purpose of obtaining ARQ data was not, at least in your mind, for an Investigator to test the reliability of the core evidence being relied upon to prove an offence?
David Pardoe: That’s correct.
Ms Price: Or to pursue a line of inquiry which might lead away from the guilt of a suspect?
David Pardoe: That’s correct.
Ms Price: Do you recall ARQ data ever being obtained before a decision had been made to prosecute? You just referred to a variety of approaches?
David Pardoe: I think, on occasion, it would be, yes.
Ms Price: You recall there being limits in respect of ARQ requests and you address that at paragraph 80 of your statement. Could we have that on screen, please, it’s page 30. You say here that a document has refreshed your memory and you can recall that:
“… as a function we were capped, within contract, at 720 requests [per annum].”
Was that per annum, “PA”?
David Pardoe: It is, yes.
Ms Price: “I seem to recall that this changed during mediation, but I wasn’t involved in discussions around this and am not aware what the uplift was. I seem to recall that additional requests were around £500. I don’t specifically remember being involved in uplift conversations that authorised these; it certainly wasn’t a budget that I held, and I presume that John Scott would have addressed this with the wider business.”
Then at paragraph 81:
“I don’t recall specifically any specific changes between Legacy Horizon and Horizon Online I do not recall Investigator noise that this was proving to be problematic.”
By “Investigator noise”, do you mean you were not aware of Investigators complaining about the limits on ARQ requests?
David Pardoe: I think an element of that and also any difficulties in investigation, because the business had changed from Legacy Horizon with local storage and transmission to rather towards Horizon Online. I don’t recall any noise for either of those instances.
Ms Price: Do you recognise, however, that the existence of limits was likely to impact upon the number of cases in which ARQ requests were made?
David Pardoe: I do indeed, and I think, probably earlier to this, there was a greater demand on the limits because the demise of the benefit book as a method of payment, a decision was made by the, at the time, DWP to cease reconciliation of subpostmaster submissions, and so the business took a risk-based view that they would sit that reconciliation within house, so that in itself, because of the findings of the reconciliation function, if I recall, also led to a greater demand on ARQ requests.
Ms Price: Sir, I have reached the end of one topic and the next topic is a little larger. Would now be a convenient time to that have an early lunch?
Sir, I think you’re on mute.
Sir Wyn Williams: How are we doing, generally, in terms of closing at 2.00 because that is, I’m afraid, an unmovable cut-off point.
Ms Price: Sir, we’re making good progress. If we take 30 minutes for lunch, we should be fine to finish at 2.00, including, I hope, Core Participant questions.
Sir Wyn Williams: Well, it will have to include them, so to speak. So between you and them, you’ll have to arrange the rest of the programme to permit that to happen, if I can put that in that way, all right?
Ms Price: Yes, sir, understood.
Sir Wyn Williams: Fine. Okay. So what do we make the time now? 11.54, I make the time. So 12.25?
Ms Price: Yes, please, sir.
Sir Wyn Williams: Fine.
(11.54 am)
(A short break)
(12.26 pm)
Ms Price: Hello, sir, can you see and hear us.
Sir Wyn Williams: Yes, thank you.
Ms Price: Mr Pardoe, do you recall the first iteration of Horizon being rolled out to branches?
David Pardoe: Broadly, yes.
Ms Price: At the time, did you have any awareness of there being bugs, errors or defects or Acceptance Incidents during the rollout?
David Pardoe: I did not, no.
Ms Price: Did you become aware of such issues occurring during that rollout at any point later in your career?
David Pardoe: Yes.
Ms Price: Can you remember when?
David Pardoe: Unfortunately, not, no.
Ms Price: There is a sentence which you use in a number of places in your statement about your awareness of bugs, errors or defects in the Horizon system.
Could we have on screen, please, paragraph 111 of Mr Pardoe’s statement, it’s page 37. This is the first time that you use the sentence and you do so in the context of commenting on the Josephine Hamilton case?
David Pardoe: Could it be enlarged please?
Ms Price: Yes, of course.
David Pardoe: Thank you.
Ms Price: Is that large enough or shall we zoom in?
David Pardoe: No, that’s fine, thank you.
Ms Price: So in the context of Josephine Hamilton’s case you say this:
“Clearly the prosecution was wholly wrong as was the continual Post Office refutes that the system was not at fault. Had I been aware that there was knowledge of bugs, errors and defects, that could ultimately and significantly affect the cash values required to perform an acceptable balance and I was expected to remain mute around these and continue any form of role within the Security function, then I would have considered my position untenable.”
There are a number of parts to that sentence. First, what do you mean by “bugs, errors and defects that could ultimately and significantly affect the cash values required to perform an acceptable balance”?
David Pardoe: So I think there I refer to the concept of systematic week in, week out, week in, week out, bugs, errors or defects impacting the same branch with the result that every single week, losses were being generated by that branch, either because the bug, error or defect was artificially reducing the payments line or artificially increasing the receipts line, and then I go on to say I’d have considered the position – my position to be untenable if I was expected to say, “Look, Mr Pardoe, David, we’ve discovered this, but let’s just keep it quiet. We know it’s going on, let’s just keep quiet about it”.
Ms Price: Just focusing first on what you were aware of, were you aware of bugs, errors or defects which could cause discrepancies in accounts?
David Pardoe: I think that there was an awareness that this was increasingly being cited, but I was still relying on the refutes that were being given back to me from the business.
Ms Price: Could we have on screen, please, document reference POL00104593. This is an email chain with recipients from Post Office Legal Services on both the civil and criminal sides, and a number of people from the Security Team. The legal contingent included Mandy Talbot and Rob Wilson. The Security Team contingent included David Posnett, Tony Utting and yourself. The top email here is dated 30 September 2004, and is from Mandy Talbot.
You are, as you can see, on the copy list. Her email addresses a number of points arising from the proposed changes to Post Office accounting practices and, in particular, the proposed introduction of the branch trading statement. So we can see the subject “Trading statement”.
Is it likely that you were included on the copy list because of the policy and standards role that you held reporting to Tony Utting?
David Pardoe: Potentially, that would be the case, yes.
Ms Price: Looking, please, to the seventh paragraph in this email, scrolling down a bit, please. It starts “If POL is going to”. It says:
“If POL is going to rely on data produced by the Horizon system in court, then it will need to put in place a standardised witness statement signed by a party who can confirm that the system was working accurately during particular periods of time and that the information supplied by the same is reliable. Post Office Limited and Horizon will have to identify named individuals who are prepared to undertake this task, and if necessary who are prepared to attend court.”
Do you recall this suggestion from Mandy Talbot?
David Pardoe: Not specifically from that document, unfortunately, no.
Ms Price: Do you remember it at all, whether in this document or elsewhere, the suggestion that, if POL were going to rely on data produced by the system, then someone would have to produce a statement that the system was working accurately and the information supplied was reliable?
David Pardoe: I recall that theme, yes, but, as I say, unfortunately not from this specific document.
Ms Price: Did you understand, either from what Mandy Talbot was saying here or from anything said by others, that there may be occasions on which the Horizon system was not working accurately and the information supplied was not reliable?
David Pardoe: I don’t interpret that, no.
Ms Price: Could we have on screen, please, document reference POL00172808. This is an email from Mark Dinsdale, dated 12 March 2010, attaching something called a “Security – 4 Weekly Report”. You are one of a long list of recipients. What role did Mark Dinsdale hold at this time?
David Pardoe: I can only be triggered by the salutation that he was the Security Programme Manager.
Ms Price: What was the “Security – 4 Weekly Report” and who did go to?
David Pardoe: I think it was a stakeholder-focused report around key activities performed by the Security Team for that period.
Ms Price: Could we have on screen, please, the report itself, which is document reference POL00172809. The date of the report is the same as the email, 12 March 2010. Going, please, to page 3 of this report, there is a heading here “Security programmes for products” and, under this, the fifth bullet point, please, refers to Horizon Online. It says this:
“Due to live service issues, the decision has been made not to migrate any further branches until these issues are fully understood, necessary actions agreed and success criteria met. In effect, the Pilot ‘stabilisation’ period has been brought forward in order to assure the quality before proceeding. This will allow Fujitsu some time to resolve issues, including a higher than expected number of screen freezes and resultant recovery transactions.”
Did that cause you any concern at all when you read it?
David Pardoe: Not that I can recollect, no.
Ms Price: What did you understand at the time, if you can recall, by the reference to screen freezes and resultant recovery transactions?
David Pardoe: I don’t recall, sorry.
Ms Price: Did you understand from this or from any other discussions that there were technical problems with the rollout of Horizon Online?
David Pardoe: I suspect I would have done, yes.
Ms Price: Could we have on screen, please, document reference POL00165450. This is an email dated 4 June 2014, and if we scroll down a bit, please, we can see that there is a title “Update, Service/Systems Down or Offline”, and there is an incident title there. Just scrolling back up, please, there’s a long list of recipients again, including you.
Was this is an email sent to the Grapevine function, given the date it is being sent?
David Pardoe: It seems to have been sent to a number of the security function and to other key stakeholders in the business, as well, from what I can read through.
Ms Price: This is one of a number of documents which appear in this format. Is this a standard format email which was sent when there was a service or systems problem?
David Pardoe: I don’t recall that specifically.
Ms Price: Scrolling down, please, the “Incident title” here reads as follows:
“Issues with transfer acknowledgement in the National Lottery system – this is causing duplicate tickets.”
The “Current business impact” says this:
“All Camelot branches will not be able to balance as they have duped transactions.”
Under “Case summary”, scrolling down, please, we have this, update 3 June:
“CGI”, do you know who CGI were?
David Pardoe: I don’t, sorry, No.
Ms Price: “CGI are process of raising FIX86 to negate the duplicate Camelot data within Credence. This should corrected once the overnight batch jobs have processed.”
Update earlier that day below:
“POL are currently looking at providing branches with Transaction corrections.
“We are in the process of raising FIX86 to negate the duplicate Camelot data within Credence.”
On its face, this seems to be reporting a systems issue, meaning that Camelot branches would not be able to balance; is that your understanding of it?
David Pardoe: It does, yes.
Ms Price: Do you recall receiving this email or any like it now?
David Pardoe: Not at all, no.
Ms Price: Since you are on the copy list for this, do you think there was anything about this that might have concerned you on reading it at the time?
David Pardoe: With hindsight, yes, but I don’t recall that feeling at the time, no.
Ms Price: Could we have on screen, please, document reference POL00165493. This is an email dated 10 July 2014, and scrolling down, please, the title, the subject, is “Service/Systems Performance Degraded – Reference Data Integrity Not proven error in Horizon”. Again, it is sent to a long list of recipients including you. So scrolling up, please.
Does that appear to you to be the same varied make-up of stakeholders within the business?
David Pardoe: It does.
Ms Price: Under “Incident Summary” it says this:
“Incident title: Reference Data Integrity Not proven error in Horizon.”
Next to “Current business impact”, this under “Incident summary”:
“Fujitsu have confirmed that currently 658 [Post Office] branches are affected. This number is currently increasing.”
Next to the “Case summary” here, we see an update, it probably makes more sense to start at the bottom:
“INITIAL 10 July 2014 7.42
“Fujitsu have been engaged to investigate.”
“Next Update to be at 10.00.
“Fujitsu have logged the incident with BT.
“Fujitsu believe this to be a BT WAN Failure and are currently trying to correlate information in relation to the PO branch locations to identify the geographical nature of the incident.”
Then above, update at 8.47:
“ATOS Incident Management have agreed to raise this incident to a P1.”
Again, can you recall receiving this email now?
David Pardoe: Not at all, no.
Ms Price: What do you understand the problem to be in this instance?
David Pardoe: Even reading it now, live, I’m absolutely – I’m not sure what to make of that.
Ms Price: Do you have any idea why the author of this alert chose to use the words “Not proven error in Horizon”?
David Pardoe: Not at all.
Ms Price: Could we have on screen, please, POL00165581. This is a case closure report, dated 9 October 2014, from Robert Daily. It is sent to Denise Reid, Brian Trotter and John Breeden, copied to you, among others. Can you help with why you were being copied into this case closure report, given what you have told us about your role by this point in 2014?
David Pardoe: I suspect that could be custom and practice. I looked through that, I can see the majority, if not all, of the senior lead team for Security being copied into that, the names I recognise there, Rob King, Sally Smith, John Bigley. I assume it’s just an email cascade.
Ms Price: We can see that this case relates to a case set up on 3 December 2012, relating to a branch named Gorbals. The “Enquiry Type” is “Cash Loss”. The “Primary Stakeholder” is Denise Reid, the “Identified ‘Criminal Loss’”, scrolling down a bit, please, is £34,179.54.
Scrolling down, please, to “Final Outcome”, and that’s in highlight there at the top of that page:
“PF has decided not to proceed.”
Can you help with “PF”? What does that stand for.
David Pardoe: Procurator Fiscal, I suspect.
Ms Price: Then under “Procedural and organisational failings”, we see “Yes”, is recorded. Under this, a date given is on which procedural and organisational failings are said to have been discussed with the primary stakeholder, on 29 January 2013.
Then under “Any other comments”, a little further down, please, it says:
“Angus Crawford PF has cited issues with Horizon for not proceeding with case.”
Do you recall receiving this case closure report?
David Pardoe: I don’t, no. I don’t recall that.
Ms Price: It appears from it that a case was being dropped because of issues with Horizon; is that right?
David Pardoe: Absolutely.
Ms Price: Can you help with what those issues were at all?
David Pardoe: Not at all, no.
Ms Price: The form of words you use in your statement, that you were unaware of bugs, errors and defects that could ultimately and significantly affect the cash values required to perform an acceptable balance, does this reflect that you were aware of bugs, errors and defects which might affect a branch’s ability to balance, but you assumed that, where such problems arose, they were either fixed or did not create balancing issues which were significant?
David Pardoe: I think, yes, they were fixed or did not create those systematic balance variances.
Ms Price: When do you think you first became aware that systems problems could arise which could cause balancing problems for banks?
David Pardoe: Again, I wouldn’t be able to state that with any great certainty, unfortunately.
Ms Price: Was it before you started making prosecution decisions?
David Pardoe: No.
Ms Price: Was it before you ceased in that role?
David Pardoe: I don’t recall that.
Ms Price: Having the awareness that you did, when subpostmasters being criminally investigated and prosecuted attributed apparent shortfalls to the Horizon system, why did you dismiss these claims out of hand?
David Pardoe: I think that was following on from the repeated business assertions that Horizon was fit, robust.
Ms Price: The Inquiry has heard evidence that Fujitsu were able to access the systems in a branch remotely, and alter the data. Were you aware of that?
David Pardoe: No.
Ms Price: Had you been aware, would this have concerned you?
David Pardoe: I’d have expected that the sufficient safeguards would have been in place to maintain the probity of the system. I wouldn’t have felt technically competent to be able to challenge that, per se.
Ms Price: The Inquiry has also heard evidence that there were occasions on which the Post Office did not tell Horizon users, who had been identified as affected by a bug, error or defect, that they had been so affected. Were you aware of this?
David Pardoe: Not at all, no. No.
Ms Price: Had you been aware, would this have concerned you?
David Pardoe: Absolutely.
Ms Price: As far as you are aware, did the Post Office ever consider that there might be discrepancies which had been caused by an issue with the system, of which the user was unaware, and the relevance this might have had to an investigation or prosecution?
David Pardoe: No.
Ms Price: It’s right, isn’t it, that, at the point of advising on whether the prosecution test was met, the Criminal Law Team would have been reliant on Investigators to provide them with all relevant material in the case?
David Pardoe: It was, yes, yes.
Ms Price: They would be reliant on your Investigators pursuing all reasonable lines of inquiry?
David Pardoe: Correct.
Ms Price: The same is true at the point of disclosure, should a prosecution be brought, isn’t it, because, if reasonable lines of inquiry are not pursued, then there is a risk relevant material will not have been obtained?
David Pardoe: It is.
Ms Price: When you were an Investigator, were you conscious that there was an obligation on you to pursue lines of inquiry which pointed away from, as well as towards, the guilt of the suspect?
David Pardoe: Correct, yes.
Ms Price: When you led the Fraud Strand or Security Operations function, were you satisfied that your Investigators understood their obligation to pursue lines of inquiry which pointed away from, as well as towards, the guilt of the suspect?
David Pardoe: I was at the time.
Ms Price: How did you satisfy yourself that that was the case?
David Pardoe: I think there was a blanket belief that some of the explanations being given, as astounding as it sounds, were not relevant to the case.
Ms Price: When you were an Investigator, were you aware that there was a duty on you as an Investigator to obtain and consider third-party material from, for example, financial institutions and Fujitsu, in appropriate cases?
David Pardoe: As an Investigator, not from Fujitsu. That would not have been applicable. But certainly we’d seek with authority information from financial institutions.
Ms Price: So you’re saying Investigators would not have sought material from Fujitsu?
David Pardoe: Apologies, I thought you said when I was an Investigator.
Ms Price: Ah, when you were an Investigator, I see. When you led the Fraud Strand and Security Operations function, were you satisfied that your Investigators understood there was a duty to obtain and consider third-party material, in an appropriate case?
David Pardoe: At the time, yes.
Ms Price: How did you satisfy yourself that that was the case, that your Investigators understood that obligation relating to third-party disclosure or material?
David Pardoe: Again, I’d have expected that to have been covered through formal training. I’d have expected that to have been reiterated by team leaders and I would have expected that to be directed, as well, by the Criminal Law Team, if they could see there was a particular absence or omission within a set of case papers.
Ms Price: In terms of disclosure, it’s right, isn’t it, that the Investigator in the case was normally also the Disclosure Officer?
David Pardoe: Almost without exception, yes.
Ms Price: Do you recall the three Rs which apply to disclosure: retain, record, reveal?
David Pardoe: I do.
Ms Price: What were the provides within the Post Office to ensure that these fundamental disclosure principles – retain, record, reveal – were applied to information held by the Post Office?
David Pardoe: I think across the piste, with hindsight, that was seen as an administrative case preparation function, as opposed to forming a pivotal component of the criminal investigation.
Ms Price: What processes existed within the Post Office Security Team to ensure that there was collation of information held by the Post Office, going to the operation of Horizon?
David Pardoe: Again, I think that would come back to the fact that the relevance of the information was simply just not considered.
Ms Price: What processes existed within the Post Office Security Team to ensure that there was proper recording of information held by the Post Office going to the operation of Horizon?
David Pardoe: Can you just repeat the question, please?
Ms Price: What processes existed within the Post Office Security Team to ensure that there was proper recording – as opposed to collation of information, recording of information held by the Post Office, going to the operation of Horizon?
David Pardoe: I’m not aware of that, sorry.
Ms Price: Does it follow that you can’t help with whether there are any processes in the Post Office Security Team to ensure that there was proper recording of information going to the operation of Horizon which had been raised in prior prosecutions?
David Pardoe: I can’t, yes, that’s correct.
Ms Price: Which part of the Post Office was the repository for information or evidence about bugs, errors and defects in Horizon?
David Pardoe: It would have sat with one of the IT functions. I can’t be more specific than that unfortunately. There would have been functions that would have phased into Fujitsu. I can’t be more specific.
Ms Price: Were Investigators informed or kept updated about significant changes to Horizon or about any problems, bugs, errors or defects, that the Post Office was aware of?
David Pardoe: I suspect from documentation that’s been produced as part of the Inquiry that that was not always the case.
Ms Price: Was there, as far as you were aware, any formal coherent approach across prosecutions as to what the investigative approach should be when a subpostmaster sought to rely on Horizon as explaining losses which formed the basis of a prosecution?
David Pardoe: No, there wasn’t.
Ms Price: Turning, please, to the witness evidence which was provided by Fujitsu in support of prosecutions brought by the Post Office, in terms of the people who you recall from Fujitsu, who provided prosecution support, is it right that you recall Penny Thomas being involved in ARQ requests –
David Pardoe: I do.
Ms Price: – and these requests being provided by the return of password-protected CD-ROMs?
David Pardoe: I do.
Ms Price: Could we have paragraph 84 of Mr Pardoe’s statement on screen, please. That’s page 31. Towards the bottom of the page, at 84, you say:
“In terms of additional prosecution support then I obviously recall that Fujitsu would provide expert witness testimony presented by Gareth Jenkins. I’m unsure what the contractual basis for this was.”
Your recollection of the involvement of Penny Thomas and Gareth Jenkins, does that come from your time as a Senior Security Manager, heading up the Fraud or Security Operations strand, or does that come from your time when you headed up the Grapevine function?
David Pardoe: I think Penny Thomas resonates more from heading up the Grapevine function. I think that Gareth Jenkins will resonate from both Grapevine function and from the Fraud Strand function, as well.
Ms Price: When you were in Security Operations and making decisions on prosecutions, did you understand that the prosecution had specific responsibilities when they instructed an expert to ensure that the expert was properly instructed to provide an opinion or questions on issues between the parties?
David Pardoe: Not specifically, and I would have relied heavily on the Criminal Law Team to ensure that those duties were fulfilled.
Ms Price: The same question in relation to whether you were aware that such instructions should be confirmed by anyway of a written document?
David Pardoe: I’m not aware of that.
Ms Price: And that the expert understood what the expert’s duties to the court entailed?
David Pardoe: I would make an assumption that that was the case.
Ms Price: Did you know that the instruction of an expert gave rise to distinct disclosure obligations on the part of the prosecution, including that the prosecutor was required to bring to the attention of the defence and to the court any material which the prosecutor was aware of being reasonably capable of undermining the expert’s opinion?
David Pardoe: I was not advised of that, no.
Ms Price: Were you aware that there was a particular duty to retain communications between the police and experts, such as forensic scientists, reports of work carried out by experts and schedules of scientific material prepared by the expert for the Investigator for the purposes of criminal proceedings?
David Pardoe: Appertaining to that particular case or to a theme of cases, sorry?
Ms Price: So in the context of the provision of expert evidence, specifically by Fujitsu, were you aware that there was a duty on prosecutors, a disclosure duty, to retain communications between the Investigator and the expert?
David Pardoe: Yes. I would have been.
Ms Price: Were you aware that there was a duty to record the existence of such communications on a disclosure schedule?
David Pardoe: Yes, I would have been.
Ms Price: You address your role in relation to Grapevine at paragraph 82 of your statement. Could we have that on screen, please. It’s page 31. Here, you say this:
“There was a period towards the end of my career when I managed the crime intelligence function under the heading Grapevine. This function acted as the conduit between the Operational Investigators and Fujitsu in terms of ARQ requests. This was a stringent process and covered by a policy that unfortunately hasn’t been presented to me within supplied documents. I didn’t act as the gatekeeper to requests. I do recall that Dave Posnett would get involved in out of course requests in terms of size.”
Turning, please, to paragraph 99 over the page – apologies, it’s not over the page. Page 34, please. At 99, you say:
“Other than acting in a role that had team members who acted as the conduit between Post Office Investigators and Fujitsu then I can’t recall any regular contact with them. Contact historically was via the Information Security Team.”
Can you recall the Casework Management Team having a role as being the point of contact between Investigators and Fujitsu.
David Pardoe: Yes, they would be.
Ms Price: Was that casework management function something that came to be part of the Grapevine function?
David Pardoe: There was a period when that was the case, yes.
Ms Price: You say you cannot recall regular contact with Fujitsu but your team had a role in liaising with Fujitsu over the production of witness evidence. Did you know when you headed up the Grapevine function that there was certain things which were necessary inclusions in an expert report, for example, a statement setting out the substance of all instructions received –
David Pardoe: I did not. No.
Ms Price: – the materials provided and considered and the documents, statements, information or assumptions, which are material to the opinions expressed –
David Pardoe: I did not.
Ms Price: A statement to the effect that the expert has complied with his or her duty to the court to provide independent assistance, by way of objective, unbiased opinion, in relation to matters within their expertise –
David Pardoe: No.
Ms Price: And an acknowledgement that the expert will inform all parties and, where appropriate, the court in the event that his or her opinion changes on any material issues?
David Pardoe: Again, no.
Ms Price: It is your evidence that you did not know the contractual basis for Mr Jenkins’ involvement in cases and you had no regular contact with Fujitsu. Does it follow that, although you were aware that Mr Jenkins would provide expert witness testimony, you had no involvement in the instruction of Mr Jenkins in any case?
David Pardoe: Absolutely. I had no involvement in his instruction whatsoever.
Ms Price: Did you yourself check whether Mr Jenkins had been properly instructed, according to the principles relating to expert witnesses that we’ve just been through?
David Pardoe: No, I’d have made that assumption that that check had been conducted end to end by members of the Criminal Law Team.
Ms Price: Is the same true in respect of whether you yourself checked whether Mr Jenkins understood the expert duties as were required?
David Pardoe: Correct. The same would be true.
Ms Price: And, again, in relation to whether Mr Jenkins’ witness statements had the necessary in conclusions for expert evidence?
David Pardoe: And again, the same would be true.
Ms Price: Turning, please, to some of the specific case studies with which you had involvement, is it right that, in relation to all of the Inquiry criminal prosecution case studies you comment on in your statement, that is the cases of Josephine Hamilton, Susan Rudkin, Julian Wilson, Peter Holmes, Seema Misra, Alison Hall, Lynette Hutchings, Grant Allen, Khayyam Ishaq, Angela Sefton and Anne Neild, you now consider that the prosecution was wholly wrong, as was the continual Post Office position that the system was not at fault?
David Pardoe: I would have more confidence in making that assertion if I’d have been approached prior to this with examples of the bugs, errors and defects that had actually applied to those cases that you’ve just recounted to me. In the absence of those, then yes, I must make the assertion that those prosecutions were wholly wrong.
Ms Price: Well, the question is based on a summary of the same paragraph that you’ve included and that wording –
David Pardoe: It is.
Ms Price: – in relation to each and every one of those case studies.
David Pardoe: It is.
Ms Price: Does that remain your position, that you consider that the prosecution was wholly wrong?
David Pardoe: The prosecution was wholly wrong. If I may just go on, there should have been more care and attention in supporting the impacted subpostmasters to uncover the root cause.
Ms Price: I do not propose to take you through the papers relating to all of these cases but, in relation to some cases, you appear to have had greater involvement in the progression of the case. In particular, I’d like to deal, please, with the case of Josephine Hamilton. You note in your statement that this is a case where the prosecution was authorised by Tony Utting, who is listed on the suspect offender report as the Designated Prosecution Authority.
So this wasn’t a case which you authorised prosecution in but you did become involved, you say in your statement, at a later stage, specifically when consideration was being given to whether pleas to false accounting charges should be accepted; is that right?
David Pardoe: That’s right.
Ms Price: This is a case where the charges brought were of both theft and false accounting. It is a case in relation to which you say you were aware of the allegations being made by Mrs Hamilton around Horizon IT issues; is that right?
David Pardoe: It is.
Ms Price: You say in your statement that you would have read the suspect offender report produced by Graham Brander in this case. Would this have been when you became involved in consideration of plea or before that?
David Pardoe: I think the former, in consideration of plea.
Ms Price: You’ve had a chance to reread Mr Brander’s report for the purposes of preparing your statement for the Inquiry; is that right?
David Pardoe: It is.
Ms Price: Could we have the report on screen, please. It is POL00047955. We see here, as you note, Tony Utting is listed as the Designated Prosecution Authority. Going to page 5 of this document, please, scrolling down, please, we see here the author is the Investigator in the case, Graham Brander, and the report is dated 17 May 2006.
Just pausing there, did Graham Brander report to you?
David Pardoe: He would have been, from memory, a direct report to direct report. So he would have reported via a team leader into myself.
Ms Price: Going, please, to page 3 of this document, at the top, Mr Brander says this:
“Having analysed the Horizon printouts and accounting documentation I was unable to find any evidence of theft or that the cash figures had been deliberately inflated.”
This was a case in which the prosecution was for theft as well as false accounting. Did it concern you, when you read this report, that a prosecution for theft had been brought by the Post Office in a case where the Investigator in the case was unable to find any evidence of theft?
David Pardoe: From memory, that was – I don’t think this case is isolated in that approach. I think that there was quite a common practice by the Criminal Law Team.
Ms Price: What was that practice?
David Pardoe: That there would be a charge of theft and then also charges of false accounting.
Ms Price: Could we have on screen, please, document reference POL00049083. Starting, please, with the email about halfway down this page. This is an email from Jennifer Andrews from the Criminal Law Team to the SD Prosecution Office, dated 9 October 2007. Can you help with what the SD Prosecution Office’s role was?
David Pardoe: No, I can’t, no. No. Sorry, I’m not familiar with that term.
Ms Price: This email is copied to Graham Brander, Colin Price and Juliet McFarlane. As we can see from the subject of the email, it relates to the case against Josephine Hamilton. Ms Andrews is forwarding an email from counsel for the Post Office in the case, Richard Jory. So scrolling down, please, to the next page. We see there Richard Jory. It his email reads as follows:
“Juliet/Jenee
“Counsel defending has offered pleas to false accounting in this matter (I presume counts 2-9 inclusive) and asked me to take instructions as to whether this might be an appropriate offer. My view is that there is evidence she has taken the money and that there is sufficient evidence to support theft, but Royal Mail may be content with guilty pleas to dishonesty matters if she undertook to repay the amount of the shortage at audit, ie £36,444.89. It might be worth speaking to the officers, Graham Brander and Colin Price, to canvass their views.”
Scrolling up, please, to the top of the page, the first page, we see an email from Graham Brander to Jennifer Andrews and Juliet McFarlane, dated 10 October 2007. This email is copied to you, among others. Mr Brander says this in his email:
“Jenee/Juliet
“I agree with counsel. In my opinion, the evidence clearly shows theft (charge 1), however, if the defence are offering up guilty pleas to all false Accounting charges (2-15 on my copy of the indictment), then I would suggest we accept this on the understanding that Mrs Hamilton agrees to repay the full amount …
“Any decision in respect of whether we accept this would need to be made by Dave Pardoe.”
Should we take it from this that, at least in this case, the decision on acceptance of a plea needed to come from you?
David Pardoe: Yes.
Ms Price: Was that always the case, that the Senior Security Manager needed to agree any plea agreement?
David Pardoe: No, absolutely not. Many of these decisions would have been made quite dynamically on the day, so they would have been made in court on the day without any reference to myself and rather with reference to the Criminal Law Team.
Ms Price: Could we have on screen, please, document reference POL00049154. This is a memo dated 15 November 2007 from Juliet McFarlane. If we scroll down, please, at the bottom there, to the Investigation Team. Going back up, please, copied to Graham Brander, Ged Harbinson and you, it reads as follows:
“I refer to previous correspondence regarding this matter.
“As you know there has been some discussion as to whether or not pleas to false accounting would be acceptable. I note this would be agreeable, providing that Mrs Hamilton were to repay the full amount.
“On counsel’s request, this matter has been listed for mention on 19 November 2007. The purpose of this is to see whether or not the trial can be vacated. It is possible that Mrs Hamilton may wish to enter pleas to false accounting. I understand however that she is not yet in a position to repay and has not given a date as to when this can be done.
“One option would be for the theft count to be left on file pending payment by the date of trial or some later date.”
Ms McFarlane is essentially saying that pleas to false accounting would be agreeable, conditional upon Mrs Hamilton repaying the full amount of the apparent shortfall, isn’t she?
David Pardoe: Absolutely.
Ms Price: This is in circumstances where, regardless of the assessment of counsel and the Investigator in the case at this point, originally in the investigator report the Investigator had found no evidence of theft or even the cash figures being deliberately inflated.
David Pardoe: Correct.
Ms Price: You say in your statement at paragraph 108 that you link the ultimate agreement to drop the theft charge to the lack of theft evidence. Is that a fair summary of your paragraph 108?
David Pardoe: Absolutely, yes.
Ms Price: We can see that Ged Harbinson’s view was being sought – if we scroll down a little, please – on the prospects of recovery by a confiscation order should pleas be entered on the false accounting. Is it fair to say that the prospects of recovery of the money was a key consideration for the Post Office when considering what plea might be agreeable?
David Pardoe: It would have been one consideration. I wouldn’t describe it as key but, certainly, it would have been one consideration. I do recall it would have been more problematic to secure confiscation based on the false accounting piece, than on a conviction for a straight theft charge, yes.
Ms Price: At the time, did you think it was appropriate to make acceptance of pleas to false accounting dependent on Mrs Hamilton repaying the full amount of the apparent shortfall?
David Pardoe: I didn’t, no, because that had been almost custom and practice from myself being quite a junior investigator all the way through my tenure with the Post Office, that had been an adopted practice. This by no means struck me as being a one-off case.
Ms Price: So, in answer to that, you think at the time you thought that it was appropriate?
David Pardoe: I didn’t think any different. It’s something that I’d – my professional career within the security function had grown up with.
Ms Price: You’re aware now, aren’t you, that the way this was dealt with, making repayment a condition of dropping the theft charge, was criticised by the Court of Appeal when it overturned Mrs Hamilton’s conviction. They said that it placed undue pressure on Mrs Hamilton. You’re aware of that now, aren’t you?
David Pardoe: Indeed, yes.
Ms Price: There is a memo from Juliet McFarlane also – well, dated 19 November 2007, which you were copied into. Can we have that on screen, please. The reference is POL00044388. We can see that the memo goes to the Investigation Team, copied specifically to Graham Brander, Ged Harbinson and you. It reads as follows:
“The Defendant appeared before the court today. The prosecution was represented by Mr Richard Jory of 9-12 Bell Yard, London … and the Defendant was represented by Anita Saran.
“The Defendant pleaded guilty to the false accounting counts 2-15 on the indictment. The case has been adjourned … for pre-sentence reports.
“The Defendant has been informed that full payment must be made prior to that date. The theft count has remained on file on the understanding that it should be proceeded with if the money is not repaid.
“It is believed that the Defendant has monies which will be available at the end of the year. If the Defendant does not repay then consideration will need to be given to the practicalities of proceeding with the charge of theft or whether confiscation proceedings should pursue.
“I not that the compensation outstanding is [and there’s the figure].
“I note that the figure canvassed [the higher sum] is a sum which includes interest, the greatest sum will no doubt be pursued should confiscation proceedings be brought.”
Then this, at the penultimate paragraph:
“It has been made clear to the Defence that there must be some recognition that the Defendant had the money short of theft and that a plea on the basis that the loss was due to the computer not working properly will not be accepted.”
You were aware that Mrs Hamilton had raised allegations that the Horizon system was not working properly and this memo is making clear the Post Office position, that a plea on the basis the loss was due to the computer not working properly would not be accepted. We’ve seen reference in the email of 10 October from Mr Brander to the decision on plea ultimately being a matter for you. Was this a stipulation which came from you or not?
David Pardoe: Absolutely not.
Ms Price: Was it a stipulation with which you agreed?
David Pardoe: I’m not sure I thought that at the time, whether he agreed or disagreed with it. It was a stipulation. I’m fairly sure it wasn’t in isolation just towards this case. I think it was part of the whole Horizon defence piece that was being practised across the Post Office at the time.
Ms Price: Was this is an example of a Post Office line to take, that the computer not working properly was not to be entertained as a defence to a criminal allegation?
David Pardoe: I think that’s fair to say, yes.
Ms Price: You say in your statement at paragraph 138 that you can say that dropping the theft charge in relation to acceptance of falsification of accounts was certainly not unheard of. Is that the same point that you’ve already made that this is –
David Pardoe: It is indeed, yes.
Ms Price: – part and parcel of a wider picture?
David Pardoe: It is indeed, and it certainly wasn’t a recent thing, you know. As I said, even from being a junior investigator, it would be custom and practice.
Ms Price: Was this practice to bring charges for theft, as well as false accounting, intended to put pressure on a defendant to plead guilty to a lesser plea – to a lesser charge, forgive me?
David Pardoe: I can only make that assumption that that’s the case, yes.
Ms Price: The concluding paragraphs in your statement are set out at 180 to 181. Could we have that on screen, please. This is page 54 of the statement. You say at paragraph 180:
“The more I see and hear from the Inquiry, then the further I despair. It strikes me that no one, at a suitable level of seniority, had the conviction and gumption to say enough is enough and to drive a timely, truly independent review whilst ceasing all prosecution activity and having the courage to be prepared to support the application and lessons of a truly independent Horizon review to both historic prosecutions and non-prosecuted repayment of accounting shortfalls. As someone that held several investigatory roles in the Post Office, I feel utterly deceived.”
You go on to say:
“With hindsight there should have been a team of skilled analysts working on behalf of branch errors, conducting full error analysis using complete and unabridged Fujitsu data including all reversals. This level of transparency would have supported SPMRs to come forward at low level loss stage rather than being pushed into systematic false accounting series.”
You have made fairly plain your position in relation to the Post Office stance relating to the Horizon system. Looking back, do you think that you bore any responsibility for the perpetuation of the Post Office stance in relation to Horizon?
David Pardoe: I was part of that groupthink and it would be remiss of me to sit here today and say that I didn’t.
Ms Price: Looking back, do you think you bore any responsibility for what happened to the individuals who were affected?
David Pardoe: I think, in the absence of a more complete ability to conduct investigations into those conditions, then yes.
Ms Price: Sir, those are all the questions that I have for Mr Pardoe. There are some questions from Core Participants.
Sir Wyn Williams: All right. Who is going first?
Ms Price: Mr Jacobs, sir.
Sir Wyn Williams: Yes.
Questioned by Mr Jacobs
Mr Jacobs: Thank you, Mr Pardoe.
I don’t know if you can hear me, I don’t have the microphone switched on.
David Pardoe: I can.
Mr Jacobs: You can. Good.
I’m going to be asking you about Peter Holmes and Marion Holmes, his widow, sits next to me today. You deal with the prosecution of Peter Holmes at paragraphs 130 to 134 of your statement. In Mr Holmes’s case, the Court of Appeal found that his prosecution had been an abuse of process, there was no evidence to corroborate the Horizon evidence, there was no investigation into the integrity of the Horizon figures and there was no proof of any actual loss to the Post Office. Were you aware of that or are you now aware of that?
David Pardoe: I’m now aware of that but I’m only aware through my involvement today in the Inquiry.
Mr Jacobs: Yes. You say at paragraph 131 of your evidence that you were the nominated representative in the case.
David Pardoe: For prosecution purposes, yes.
Mr Jacobs: Yes. Is that the same as the Designated Prosecution Authority because I think that’s how your name appears on some of the documents?
David Pardoe: It is, it is.
Mr Jacobs: Just for completeness, you say at paragraph 56 of your evidence that the job of the Designated Prosecution Authority or nominated representative was to confirm the CLT decision, check the decision for fairness and objectivity and place the case into prosecution status; is that right?
David Pardoe: Correct.
Mr Jacobs: So you’re effectively authorising a decision that’s already been made?
David Pardoe: Correct.
Mr Jacobs: Would you describe it as a rubber stamping exercise in any way?
David Pardoe: I think I’ve already referred to it in that manner.
Mr Jacobs: Okay, thank you.
David Pardoe: The position I adopted – apologies, for talking over you – is that I would have not felt professionally equipped to counter a decision that’s been made by a senior or principal lawyer in the matter.
Mr Jacobs: Well, that’s helpful. Thank you.
David Pardoe: Thank you.
Mr Jacobs: At paragraph 132 of your statement, in relation to Mr Holmes’ case, you say:
“I can see that Horizon difficulties have been cited. Again, these assertions would have been transacted with the fact that a steady stream of denials were being issued by Post Office.”
So your position is that it was the Post Office’s repeated assertions, as you’ve said, that was factoring into these prosecution decisions; is that right?
David Pardoe: Absolutely.
Mr Jacobs: You make a statement at paragraph 134 in relation to Mr Holmes’ case, which is similar to the statement in fact – it’s worded the same –
David Pardoe: It is.
Mr Jacobs: – as what you say in relation to others. You say the prosecution was wholly wrong, which of course the Court of Appeal have found, and you say, “Had I been aware that there was knowledge of bugs, errors and defects”, and you go on to say, “that could ultimately affect significantly cash values, require to perform an acceptable balance”, and you were expected to remain mute around these, and continue in your Security function, you would have considered your position untenable.
Now, the Inquiry has heard evidence that there was knowledge of bugs, errors and defects within Post Office and Fujitsu, certainly at the time of Mr Holmes’ prosecution. Is that something that you’re aware of, isn’t it?
David Pardoe: I’m not aware of it at that time.
Mr Jacobs: Right. No, at the time you weren’t aware of it but have you become aware of that now through following the Inquiry?
David Pardoe: Sorry, absolutely.
Mr Jacobs: We understand, then, that your evidence is that information of the knowledge of bugs, errors and defects that Post Office had was withheld from you; is that right?
David Pardoe: I can only assume that, yes.
Mr Jacobs: Then it must follow from that, that had this information – and Mr Holmes had repeatedly, in his interview, blamed and criticised the Horizon system – had this information not been withheld from you, it must follow that you would not have authorised Mr Holmes’ prosecution?
David Pardoe: Correct.
Mr Jacobs: Well, thank you for that.
If I could then ask you to turn to paragraph 78 of your witness statement. Now, that’s page 29 of 62, and the reference is WITN08170100. You should have that on the screen in a minute, unless I’ve given the wrong number of course. Here it is, 78. So if we could perhaps scroll down and you say here:
“I recall with an element of clarity updates from John Scott assuring the Security function that the system was reliable, and we were [able to] continue with BAU activity.”
I assume that’s “business as usual”?
David Pardoe: It is.
Mr Jacobs: So in relation to the clarity of your recollection, what can you tell us the Inquiry about the detail of these updates, their dates, their frequency?
David Pardoe: I couldn’t go into that level of granularity, apologies.
Mr Jacobs: But when you say “with clarity”, are you able to say the wording, what was being said, how often? Who it was addressed to?
David Pardoe: I’m unfortunately not, no.
Mr Jacobs: Okay.
David Pardoe: There was a persistent sentiment that the system was fit for purpose. I was never in a meeting when it was discussed with me the concept of putting the brakes on prosecution activity. It’s clear that there was a fear that, to do that, would immediately cast doubt on prosecutions that had been completed that had gone before. I was never privy to that type of conversation, no.
Mr Jacobs: But I think we can see from your statement that this was coming from John Scott?
David Pardoe: It’s coming from John Scott. The one I remember probably with greater clarity is the Paula Vennells communication.
Mr Jacobs: I was going to ask you about that, yes, if you can carry on.
David Pardoe: I’m sure that that preceded known media interest that was imminently about to go public, and I’m sure that there was some form of written communication to say, you know, “Look, folks, this is likely to be out within the public domain and the approach we’re taking is this, this, this and this”, to paraphrase.
Mr Jacobs: Would that have been before the Computer Weekly article in 2009, perhaps?
David Pardoe: It could have been around about the same time.
Mr Jacobs: But it was a clear communication, and who was it addressed to, or –
David Pardoe: I think it went to everybody. It wasn’t Security family specific. I’m sure it went to everybody.
Mr Jacobs: So the whole organisation was told “There’s going to be something in the media about Horizon and it is to be disregarded because everything is robust and” –
David Pardoe: I certainly recall a – reading a written rebuttal and position that the business were adopting, yes.
Mr Jacobs: You said in your evidence at around about 11.45 this morning, when you were taken to Mr Jarnail Singh’s email after the Seema Misra trial, you said that Horizon bashing sentiment was being used at every level. How frequently were you hearing this and what sort of people and what sort of roles were responsible?
David Pardoe: I just recollect it being a consistent organisational theme, that there was nothing wrong with Horizon; it was simply a hook that individuals were attaching themselves to, to try to explain unexplained losses that were being incurred at branch. It was almost the modern theme, rather than place blame on employees. It was, you know, almost more palatable just to place blame on the Horizon system. It was just a whole sentiment at the time.
Mr Jacobs: Does this arise from what the Chief Executive Officer had been saying and what John Scott had said?
David Pardoe: It was all – everything that was building up to form of sentiment, yes.
Mr Jacobs: Right. Now you were taken a moment ago by Ms Price to what you say at the end of your statement at paragraphs 180 and 181. What you end with in paragraph 180, is you say:
“As someone that held several investigatory roles in the Post Office, I feel utterly deceived.”
Now, as the person who authorised Mr Holmes’ prosecution, do you have anything to say to Mrs Holmes and to other subpostmasters about that deception?
David Pardoe: Absolutely. I was omitted from – I believe, from key information that would have helped me to direct investigation resource and support individuals.
Mr Jacobs: Do you have anything you wish to say to Mrs Holmes herself?
David Pardoe: I wonder if any words I could express would help to resolve what happened. I really do, genuinely do.
As I said, you know, I go back to my time at district days when we were supported and encouraged to support on a one-to-one basis subpostmasters, and the business, fast forwards 10, 20 years, rather than improve that level of support, it appears to have just stepped backwards from it.
Mr Jacobs: Thank you. I haven’t any further questions.
The Witness: Thank you very much.
Sir Wyn Williams: Anyone else?
Mr Henry: Thank you, sir, Mr Henry, please.
Questioned by Mr Henry
Mr Henry: Mr Pardoe, I represent number of subpostmasters whose lives were destroyed by the Horizon IT scandal. You would agree, as a general principle, that you cannot put a price on justice –
David Pardoe: I would.
Mr Henry: – and that, in the discharge of the Post Office’s duty as a private prosecutor, money ought to have been no object in ensuring that it fulfilled and complied with its obligations?
David Pardoe: I would.
Mr Henry: So you were aware – maybe not the Section of the Criminal Procedure and Investigations Act – but you were aware that material which might reasonably be considered capable of undermining the case for the prosecution against an accused or of assisting the case for the accused, ought to be disclosed?
David Pardoe: I think there was a view being taken around the relevance of that and that it simply – as astounding as it sounds to sit here today, that it simply was not relevant.
Mr Henry: Well, that is a decision which is either so irrational or it is taken in bad faith. Is there anything you’d like to say about that?
David Pardoe: I think the issue of disclosure, there was a focus on that on the administrative discharge, as opposed to it being a fundamental part of a proper and correct investigation.
Mr Henry: So in other words lip-service, administrative tick box, saying one thing but meaning or doing another, as opposed to a profound adherence to the principle of disclosure?
David Pardoe: From all levels, yes.
Mr Henry: Right. Were you aware that, in conducting an investigation, an Investigator should pursue all reasonable lines of inquiry, whether they pointed towards or away from a suspect?
David Pardoe: Of course, yes.
Mr Henry: You were. So you agree with me that it ought not to be about money; it ought to be this is a very important obligation which rests on our shoulders and we should discharge it to the best of our ability, whatever the cost? You agree with that in principle?
David Pardoe: I do.
Mr Henry: And that matters that pointed away from the suspect ought to have a high value, so far as the investigation is concerned?
David Pardoe: Where considered relevant, I do, yes.
Mr Henry: Now, I want to ask you, please – we’re just going to concentrate on one document and it’s POL00064033. It’s a Financial Investigation Policy log, compiled by a man called Mick Matthews, whom I think you recall.
David Pardoe: I do.
Mr Henry: You do. Well, I wonder if that could be put up on screen so that you can see it. If we just go through it briefly, this is what Mr Matthews says. He has:
“… commenced an investigation into Ms Janet Louise Skinner, ex-subpostmaster of North Bransholme Post Office. She is under investigation for the suspected theft of [nearly £60,000] whilst she was employed as a subpostmaster. This investigation is for the purpose of identifying money laundering offences and confiscation. The investigation will be proportionate, have a legal framework, accountable and necessary.”
Then it says:
“It will follow of the legal requirements of the Proceeds of Crime Act, the Police and Criminal Evidence Act, Criminal Procedure and Investigations Act and Regulation of Investigatory Powers Act. It will also be European Convention on Human Rights compliant”, et cetera, et cetera.
What I want to put to you, sir, is that the prosecution is not what it says or the Post Office is not what it says, but what it does. It’s got to be judged on its actions; do you agree with that?
David Pardoe: I do.
Mr Henry: You do. On 7 December 2006, Diane Matthews, who recently gave evidence, reported that Wendy Lyell, the replacement subpostmaster at North Bransholme, had been suspended on suspicion of theft and that Diane Matthews was to establish the details. So it followed that Ms Skinner was accused of the suspected theft of nearly £60,000 pounds and, at the time, she was in negotiations to settle this by way of a plea to false accounting. You may not have been aware of that.
David Pardoe: No.
Mr Henry: But let me just briefly ask you to consider this: Ms Skinner had been ringing up the Helpdesk time and time again, complaining about the system, and then, lo and behold, her replacement is then, a few weeks after that, suspended on suspicion of theft. Those two facts were capable, were they not, of suggesting that the system was at fault, not the individual; do you agree?
David Pardoe: I don’t understand the full context of the case, but that’s a potential, yes.
Mr Henry: That’s a potential. Now, that was as long ago as December ‘06. On 22 May, Mr Matthews spoke to a person called Juliet, as it occurred to him that the defence would say that Ms Skinner has not benefited from crime, as it was a member of staff.
Sorry, could you scroll down, I do apologise.
I’m scrolling my screen, but unfortunately yours is not.
What I want to go to is that on 22 May 2007, and this is page 2 of 3, Mr Matthews says:
“It occurred to me that I had not made any enquiries about Wendy …”
He describes her there as “Liddell”; in fact it’s Lyell.
“I looked through the event log and read the entry date, 7 December. I had overlooked, pursuing the matter. Decided to find out what the current position was.
“Received an email from Dave Pardoe my new Line Manager to the effect that no further resources were to be expended on the case in respect of Wendy Lyell.”
Do you recall contacting Mr Matthews and telling him not to pursue his enquiries into Wendy Lyell.
David Pardoe: Absolutely not.
Mr Henry: 27 August:
“It occurred to me that in the interests of justice we could be rightly criticised for not carrying out a comprehensive investigation into Wendy Lyell. I spoke with and asked him [that’s you, Mr Pardoe] to reconsider allocating resources in order for the matter to be further investigated.”
You are reported to have said, Mr Pardoe, that:
“… if we are criticised, so be it, no further investigation resource was going to be allocated.”
Do you recall saying that to Mr Matthews?
David Pardoe: I don’t recall that position and it wouldn’t be something that I’d adopt within my leadership style.
Mr Henry: It’s not a question of costs, as you rightly said at the outset, because costs shouldn’t have anything to do with the discharge of justice. Were you aware, Mr Pardoe, of the problems with the system and that this might reveal, with stark clarity, the problems in the system?
David Pardoe: Not at all.
Mr Henry: Further, 27 August:
“Following the conversation it occurred to me that the defence in the interests of justice may well be entitled to a comprehensive investigation and it is my view that one should be carried out. Spoke with Dave again and he said he did not agree and he was maintaining his position.”
Mr Pardoe, do you recall that conversation?
David Pardoe: Absolutely not.
Mr Henry: It’s been put there fairly and squarely in this report by Mr Matthews. How would this report be circulated, sir? It’s obviously got a purpose, hasn’t it?
David Pardoe: Well, it’s a log of Proceeds of Crime type activity, of POCA activity.
Mr Henry: Right:
“Following the conversation it occurred to me that the defence in the interests of justice may well be entitled to a comprehensive investigation …”
He was spelling this out to you, wasn’t he?
David Pardoe: Until it was presented to me as part of the Inquiry bundles, I had no knowledge of this document.
Mr Henry: It is not a question of you having knowledge of this document. I am now asking you to recall, on your oath or affirmation, what was said on 27 August 2007 when Mr Matthews was saying that, in the interests of justice, the defence may well be entitled to a comprehensive investigation and that one should be carried out. Are you saying you do not recall that?
David Pardoe: From 16 years ago, absolutely.
Mr Henry: Do you think this is a demonstration of the groupthink of the siege mentality in action, the very thing –
David Pardoe: Sorry. I apologise. I would need to understand the context of that. I really would.
Mr Henry: You would. You would agree?
David Pardoe: No, I said I’d need to understand the full context. I do not recognise – we all have a certain leadership style. I do not recognise my leadership style within that. I do not see what I would have to gain from reducing activity in that area by one of my, at the time, Financial Investigators. I don’t understand the context of that whatsoever.
For me, it seems such a cursory thing that I would just authorise further investigations as required. There was nothing to be gained by me in saying that, you know, under no circumstances should resource be applied to that. There would simply be nothing to be gained.
Mr Henry: Well, isn’t this actually a way for you to acknowledge what you have, by implication, accused others of, which is the groupthink, which is “We have to protect” – this is the theme, “we have to protect Horizon at all costs”?
David Pardoe: Not at all.
Mr Henry: Because there it is. It’s simple, unambiguous language. It occurs to Mr Matthews that, in the interests of justice, the defence may well be entitled to a comprehensive investigation and that one should be carried out. You contradict him, state you do not agree, and maintain your position that you are not going to fund that inquiry?
David Pardoe: Allegedly contradict him.
Mr Henry: Nothing is served by repetition but I’m, for the last time, just now, asking you, knowing the solemnity of this moment and knowing what happened to the people I represent, is there anything you would like to say arising from what you have read and what I have put to you in this document?
David Pardoe: I do not recall the document whatsoever.
Sir Wyn Williams: Is that it, Mr Henry?
Mr Henry: That is it. Thank you.
Sir Wyn Williams: Any other questions from anyone?
Ms Price: No, sir. I think those are all the questions from Core Participants.
Sir Wyn Williams: Thank you.
Then thank you, Mr Pardoe, for a comprehensive witness statement and answering a good many questions today. I’m sorry if it was inconvenient for you to start at 9.00. That was because I have to go somewhere shortly.
Those who were listening to your evidence with a personal interest in it, I hope they found it informative.
So thank you all, everyone, and we will begin again at 10.00 tomorrow morning.
Ms Price: Yes, sir. Thank you.
(1.50 pm)
(The hearing adjourned until 10.00 am the following day)