9 April 2024 – Alan Bates
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(10.00 am)
Sir Wyn Williams: Mr Beer, can I explain that one of our assessors is joining remotely this morning and I understand that, before we begin hearing evidence, you wish to raise the issue of disclosure.
Statement by Mr Beer
Mr Beer: Yes. It’s a matter of importance that I wanted to update you and the Core Participants on, before we called Mr Bates to give his oral evidence and commence the substance of the hearings in Phases 5 and 6. The Core Participants were sent an email via the solicitor to the Inquiry yesterday that contained relevant correspondence from the Post Office, that dates between 28 March and 5 April, sent to the Inquiry, that consists of nine letters.
I would propose to give you a brief background before moving to the current issue. I am going to try and keep it as succinct as possible but I also think that putting the current issue in context may assist you.
Sir, you will recall that the Post Office’s late and problematic disclosure of documents has been a constant theme in this Inquiry, resulting in you ordering that we hear oral evidence from the Post Office and its Inquiry representatives in two disclosure related hearings held in July and September last year. On 12 January this year, the Inquiry held a further hearing on disclosure, and called Post Office’s recognised legal representative, Mr Jackson of Burges Salmon LLP, to give oral evidence.
You will recall that, by and large, the key issue that was discussed at that hearing was how the Post Office had discovered a further Post Office repository or data source known as Microsoft Exchange/365.
You will recall that the Microsoft Exchange/365 repository was brought to the Inquiry’s attention during the Phase 4 hearings and, as a result, the Inquiry received numerous, sometimes voluminous, last-minute disclosure of documents said to relate to Phase 4 witnesses, on some occasions only days before some witnesses were to you to give their evidence.
During the January hearing, Mr Jackson said that such last-minute disclosure by the Post Office during the Phase 4 hearings had been “suboptimal”. Those late disclosures had put immense pressure on the Inquiry counsel and solicitor teams who worked extremely hard to ensure that the Phase 4 hearings could, in fact, continue as planned. In some instances, regrettably, a decision was made to postpone or reschedule a witness at short notice, including, you will remember, Mr Jenkins and Mr Longman, both of whom the Inquiry has now scheduled to hear during Phases 5 and 6.
Whilst other matters were discussed at the hearing held on 12 January, the focus was on the Post Office’s work related to the Microsoft Exchange repository.
On 31 January this year and following the hearing, you made directions which were published on the Inquiry website. Those directions provided that, firstly, a meeting would be held between the representatives of the Inquiry and the Post Office to discuss disclosure issues as soon as reasonably practicable and, in any event, well before the commencement of oral hearings in Phases 5 and 6. You directed that the meeting would be minuted and that the minutes should be agreed and thereafter disclosed to Core Participants.
Secondly, you ordered that a further disclosure hearing should be convened either before or during Phases 5 and 6 of the Inquiry.
On 28 February 2024 members of the Inquiry Team and Information Management Team met with the Post Office and its representatives in this building, as directed by you, and the Inquiry later circulated a copy of the minute of that meeting, as agreed with the Post Office, to Core Participants.
I will not read the minute in full but I note that paragraph 3 of the minute, as circulated, says as follows:
“At the outset of the meeting, leading Counsel to the Inquiry [that’s me] noted that, from the Inquiry’s perspective, the aim of the meeting was to ensure that the Post Office are doing as much as possible to ensure Phases 5 and 6 can proceed in accordance with the Inquiry timetable.
“Mr Jackson confirmed that the Post Office agreed and noted that the Post Office’s starting point for the meeting was prioritising and clarifying what needed to be done in line with your directions, ensuring reasonable and proportionate disclosure whilst minimising and hopefully avoiding disruption to the hearing timetable and the Inquiry’s proceedings.
“Counsel to the Inquiry confirmed that the aim was not minimising disruption to the hearings but eliminating it, given the Post Office’s highly disruptive late disclosure in Phase 4.
“Mr Jackson confirmed that the Post Office also aspired to eliminate disruption wherever it was possible to do so and that the Post Office’s recent structural work should have mitigated the likelihood that a new disclosure issue would come from left field.
“In order to achieve that objective, prior to the meeting, the Inquiry had provided the Post Office with a series of deadlines for any further late disclosure of Microsoft Exchange documents in correspondence.”
In summary:
“For all oral witnesses but for those listed in the for your weeks of the Inquiry timetable, the Inquiry directed that any late disclosure must be provided by the Post Office no later than six weeks before the date on which the witness is due to be called to give evidence. For the witnesses listed in the first four weeks, separate specific deadlines had been set in March 2024.”
The Inquiry and the Post Office also discussed other, what the Inquiry understood to be, relatively ad hoc and less significant potential document sources, ie other than Microsoft Exchange. This was outlined in the meeting minute at paragraph 10:
“Mr Jackson then took the Inquiry Legal Team through the work completed by the Post Office regarding other potential document sources, including Mimecast, SMS, and instant messaging, and e-media sources (corporate devices, servers, back-up tapes and file stores). Post Office’s representatives confirmed that they had sent and were still sending questionnaires regarding data sources to specific former Post Office employees and board members. Material held by third-party advisers and material relating to whistleblowing was also discussed.
“In short, the Inquiry understood that work was still ongoing in relation to some of the additional data sources but should Post Office have any material update and, in particular, should any particular data source contain highly relevant material, Post Office would alert the Inquiry as soon as possible.”
On distributing the minute to Core Participants, the Inquiry noted that, as the disclosure process by the Post Office was continuing and the disclosure of additional documents to the Inquiry had only recently started, I had advised you that the Inquiry Legal Team ought to continue to monitor the Post Office’s compliance with the Inquiry disclosure requirements and report to you at regular intervals.
The reporting ought to include whether the Post Office continued to meet the deadlines the Inquiry had set in order to enable the Phase 5 and 6 oral hearings to proceed and thereafter continued as scheduled.
At that stage, I and the solicitor to the Inquiry advised that we considered it premature for the Inquiry to hold a further disclosure hearing prior to the commencement of Phases 5 and 6 today. You considered our advice and confirmed you agreed with it but, in the light of the historic disclosure issues and the disruptive nature of the Post Office’s late disclosure of Microsoft Exchange material in Phase 4, you noted that you wanted to keep this issue under very close consideration. You also noted that you would not hesitate to hold a hearing should it become necessary in due course.
Throughout February and March, the Post Office continued to disclose a large volume of material, as a result of its Microsoft Exchange disclosure failings and the remediation exercises put in place to rectify them. The last of these productions was made on 22 March 2024.
Can I turn to the present issue then.
On Thursday, 28 March the legal representatives for the Post Office notified the Inquiry that the Post Office would be providing the Inquiry with documents that day and the following week, in relation to witnesses giving evidence during the first week of Phases 5 and 6 of the hearings and in the latter part of April or documents which might otherwise be “of interest to the Inquiry”.
The volume of documents was said to be in the low hundreds and no more than 1,000 and to have come from “a last check scoping exercise”, particularly in relation to documents from third-party advisers. Some such documents were in response to the Inquiry’s Section 21 notice, issued as long ago as 21 July 2023, known as section 21(3). Others were not responsive to a notice or a request from the Inquiry but were otherwise of interest.
As I say, section 21(3) was sent by the Inquiry to the Post Office back on 21 July last year, in which the Inquiry mandated that the Post Office disclose several categories of material relevant to Phases 5 and 6 of the Inquiry, ie documents addressing what was defined in the notice as “relevant issues”. The relevant issues including reviews of Horizon carried out by Ernst & Young, Deloitte, KPMG and Linklaters. The notice expressly stated that the documents be those created by, sent to or received by, recorded a conversation or meeting involving, or otherwise made reference to 19 specific individuals within the Post Office.
The individuals named in the notice included but were not limited to: Paula Vennells, Alice Perkins, Alwen Lyons, Angela van den Bogerd, Mark Davies, Tim Parker and Susan Crichton.
At 5.32 on Thursday, 28 March, the Post Office sent a covering letter for a production of 1,071 documents. The cover letter noticed that the Post Office had “initiated two assurance exercises”, the first being a review of specific third-party adviser material, and the second being search and review of email inboxes of personal assistants (PAs) to the Section 21(3) individuals, and other email inboxes of potential relevance where considered appropriate for this exercise.
The letter further explained that the Post Office’s Section 21(3) search methodology focused on the relevant individuals’ data sources, third-party adviser files and personal assistant emails have previously been reviewed or other Rule 9s and Section 21s, as explained in previous interim disclosure statements. However, as part of assurance, Post Office has now run such searches across specific third-party adviser files, as was set out in the letter.
So such third-party advisors included those who the Inquiry had specifically named in the Section 21 notice, including Linklaters, Deloitte and KPMG.
The Post Office explained that, within the production of 1,071 documents, 788 of them were said to be relevant to Section 21(3), of which 583 related to witnesses and 15 documents were said to be “of high relevance and material”.
44 documents were said to be documents of interest, being documents that the Post Office said were not directly responsive to the notice but were otherwise of relevance to the Inquiry’s terms of reference. Of those, six related to witnesses; the remaining 239 documents were family members of such documents.
The Post Office noted that a number of the documents could be apparent duplicates of previous documents already produced but that information to assist in identifying duplicates would be provided separately.
Sir, the Easter break then took place between Friday, 29 March and Monday, 1 April. At around 10.00 am on 2 April, the Post Office’s legal representative contacted the Inquiry legal team to note that further documents were to be expected. The Post Office requested a meeting with the Inquiry to provide an update and discuss how the Post Office intended to disclose further documents.
At 11.47 on 2 April, the Inquiry confirmed it would be grateful if the Post Office could please provide the Inquiry with the information it should have, or would be assisted in having, in relation to the late disclosure that was relevant to hearings or witnesses this week. At 6.58 pm that day, the Post Office sent the Inquiry a four-page letter seeking:
“… to provide a brief update regarding the Post Office’s further urgent witness-focused review to best assist the Inquiry with anticipated time meetings for further productions.”
That letter has been provided to cops and I’m not going to repeat it.
However, it was in this letter, received after hours on Tuesday, that the Inquiry was informed that the Post Office intended to make “a small number of further Burges Salmon/Field Fisher productions in the near future of further documents relevant to Phases 5 and 6”. It was said that most will be directly relevant to witnesses scheduled to appear later in April and then in May to July, but a limited amount will relate to witnesses scheduled to appear during this week, ie starting today.
The letter said that the Post Office anticipated that the documents that relate to witnesses appearing this week are likely to be low in number and/or not likely to contain many documents that will give rise to potential questions for those witnesses but will rather, particularly for non-Post Office or Royal Mail Group witnesses, for the most part be documents that refer to them.
Importantly, the letter said that the Post Office anticipated making yet further productions of material following five further reviews. It confirmed that the reviews were not related to the Microsoft Exchange remediation process but, as noted already, the documents were relevant to Phases 5 and 6 and to witnesses scheduled to be called as early as this week.
Those five reviews were summarised by the Post Office as follows: first, the third party adviser and personal assistant review; secondly, the NAS drive and FileShare review; thirdly, the supplementary precautionary Mimecast review, arising from the Phase 5 and 6 remediation review; the hard copy documents review; and, finally, the Patrick Bourke 2017 Mimecast data review.
The Post Office did not provide the numbers of documents for witnesses commencing this week, although they anticipated providing those numbers shortly.
Between 2 April and 5 April, the Inquiry received seven further letters about one or more of those reviews. Those letters have also been provided to Core Participants and I shouldn’t repeat them.
Within those letters, the Post Office disclosed a number of additional documents as follows:
On 3 April, 196 documents were disclosed, said to be from the NAS drive. The Post Office said they were continuing to collect material from the Post Office FileShare that might be relevant to the Phase 5 and 6 hearings. However, the Inquiry understands such a measure to be out of an abundance of caution.
Also on 3 April, 3,188 documents were disclosed, said to be from:
“… further material identified from third-party adviser files and material identified as part of a second assurance review, involving searches of email inboxes of personal assistants to Section 21(3) individuals and other inboxes of potential relevance where considered appropriate.”
This was further to the 1,071 documents already disclosed to the Inquiry back on 28 March.
On Friday, 5 April, so the Friday that’s just passed, the Post Office disclosed 189 documents following a review of Post Office’s hard-copy material, 200 documents following an additional precautionary Mimecast review, a further 374 documents were disclosed said to be the third tranche of documents, including “further material identified as part of a second assurance review involving searches of email inboxes of personal assistants to Section 21(3) individuals”. This was in addition to the 1,071 documents disclosed on 28 March and the 3,188 documents disclosed two days further.
The Post Office said that it was now “urgently reviewing data for personal assistants to the Section 21(3) individuals who are witnesses and are due to give evidence from 23 April onwards”, and they anticipated they would provide the documents to the Inquiry on or before this Friday, 12 April.
Sir, taking the five reviews, about which the Inquiry was informed on 2 April in turn, I understand the position to be as follows: the third-party adviser and personal assistant review has seen the disclosure of a total of 4,633 documents since 28 March alone, the Post Office has told us that review is not yet complete.
The NAS drive and FileShare saw the disclosure of 196 documents from the NAS drive last week but the review is ongoing in relation to other witnesses.
The supplementary precautionary Mimecast review arising from the Phase 5/6 remediation review saw the disclosure of 200 documents but that’s now said to be complete.
The hard copy documents review saw the disclosure of 189 documents last week, it’s unclear if that review is complete or remains ongoing.
The Patrick Bourke 2,017 Mimecast data work appears to be ongoing. We understand the data is being selected and processed urgently. The volume and timing of such disclosure is unknown but the Post Office said they were working to disclose any further documents well in advance of Patrick Bourke’s hearing on 7 May.
Sir, we in the Inquiry Team wish to inform you and the Core Participants of these developments without delay. They present issues with which the Inquiry has become extremely and unfortunately familiar with over the past three years.
I should also put the developments in a wider context. Since the end of the Phase 4 hearings alone, so that’s since the closing submissions on 2 February 2024, the Post Office has disclosed 73,720 documents to the Inquiry, of which the Inquiry Legal Team have characterised 67,210 documents as possibly relating to Phases 5 and 6 of the Inquiry.
The Inquiry has received documents from other providers during that time, albeit none as substantial in volume as the Post Office, and the Inquiry’s information management team have confirmed that, as of late yesterday, at least 78,211 documents, including but not limited to the Post Office’s documents, that likely or potentially relate to Phases 5 and 6 of the Inquiry may fall for disclosure to Core Participants.
The matters that the Inquiry is investigating span two decades and a number of detailed issues. In order to proceed with hearings in a meaningful way, the Inquiry has needed to prioritise its disclosure to Core Participants and will continue to do so.
It’s with this in mind that we in the Inquiry Team specifically set deadlines for the receipt of the late exchange material likely to be relevant to the Phase 5 and 6 hearings on a witness-by-witness and week-by-week basis, in order to ensure that the hearings could go ahead as planned.
This was communicated to the Post Office and the Inquiry understood that the Post Office considered that it had completed its Phase 5/6 exchange remediation exercises by 22 March.
The obligation of disclosure to the Inquiry is, of course, ongoing. The Inquiry had expected and indeed anticipated ongoing disclosure from providers of documents in certain instances – documents can be found late, hard copies or electronic files or messages may turn up in unexpected devices – but the issues that the Post Office’s disclosure to this Inquiry have presented have been much more than minor, ad hoc or additional disclosure.
In particular, the Post Office’s assurance review, as it has called it, of personal assistant emails and other inboxes of potential relevance in response to the Inquiry’s Section 21(3) notice of last year is very concerning. As I say, that notice was sent in July of last year. It lists a number of senior key Post Office individuals. Such individuals would undoubtedly communicate via their personal assistants. The inboxes of what are called “inboxes of potential relevance” have not been explained by the Post Office so we don’t know to whom they relate.
Even more concerning, the Inquiry emphasised that the Post Office ought to apply a common-sense approach to senior custodians, as far back as a meeting with the Post Office in April 2023.
Sir, you asked for your team closely to monitor the Post Office’s disclosure to the Inquiry, we have done so and so will continue to do so. Whilst these new developments are, to use a Parliamentary word, unwelcome, your team is not unprepared. We are committed to doing all that we can to ensure that the hearings can go ahead as planned and, subject to your views, that’s what we intend to do: to continue with the hearings. The alternative – further delay to allow the Post Office to get its disclosure house in order – is not one which is acceptable.
It, of course, follows from that approach that there may be a need to re-call some witnesses to ask them questions about documents which have not been processed in time for them to be asked questions about such documents in the coming weeks. Sir, that’s the approach we intend to take and that’s all I say at the moment about this latest late Post Office disclosure.
Sir Wyn Williams: Thank you, Mr Beer.
The substance or a summary of what Mr Beer has just explained publicly was provided to me late last week, together with Mr Beer and his team’s advice that, despite the problems which have occurred, we should carry on.
I have had the weekend to think about that and also whether it would be necessary to invite Core Participants to provide their views to me about that. The decision I have reached is as follows: first of all, I don’t wish to hear from the Core Participants and, secondly, we’re going to carry on.
Now, that is perhaps a bold thing to do because it does mean that there may be occasions in which witnesses are giving evidence where the documents haven’t caught up with the witnesses, so to speak, and that is a highly undesirable state of affairs but, as Mr Beer has explained, that can be cured, albeit with some cost to the witness, by re-calling them if necessary.
The alternative is to have a substantial break and, in my opinion – dare I say judgment, even though I’m not a judge anymore – that is not desirable.
Make no mistake, everyone, I understand fully that the problems with disclosure are capable of creating very significant pressures for all participants in the Inquiry but protracted adjournment, so as to ensure that every relevant disclosable document is in the hands of all Core Participants prior to a witness giving evidence would also cause very damaging stresses to all the participants, and so I have to exercise judgement and come to a balanced decision.
As I’ve said, my view is that, at the moment, the problems are not such that we need to call a halt and my intention is to continue with the evidence sessions in accordance with our published timetable, so far as is reasonably possible. I stress, as Mr Beer has stressed, that the monitoring of disclosure, which I promised would continue throughout, will continue throughout and, if I deem it appropriate, I will certainly use one of our days off, a Monday or sometimes a Friday, to hold a disclosure hearing. So there’s a threat to you all.
I want to publicly acknowledge – and this is the last of the observations which I wish to make – that, at least in part, I may be to blame for some of the problems relating to disclosure. There may be some in this room – in fact there are some in this room and, certainly, there are some in the Inquiry Team – who consider that the timetables which I set for the hearing of evidence are unrealistically tight.
On any view, the volume of material to be disclosed to the Inquiry and then by the Inquiry to Core Participants is enormous. I acknowledge that, if the hearing phases had been spread out with greater breaks between them, as some have advocated, then some of the disclosure pressures would be eased. However, I am acutely conscious that this Public Inquiry has been in existence for very nearly three years. Although by the standards of some inquiries, that is a comparatively short period of time, I am unshakable in my belief that this Inquiry should not last for a day longer than is strictly necessary and, if that means that the pace at which we proceed causes significant work pressures for us all, then I’m afraid that’s a price we’re all going to have to pay.
So thank you for your words, Mr Beer, and I think we’re ready for some evidence.
Mr Beer: Well, just before we do that, can I turn to a brighter note?
Sir Wyn Williams: All right, a brighter note. Thank you.
Mr Beer: As you know, sir, and as was publicly announced by the Inquiry on 9 January this year, the Inquiry jointly appointed Dame Sandra Dawson and Dr Katy Steward to the role of governance expert witnesses.
Dame Sandra is Professor Emerita of management studies, University College Cambridge, and a Fellow, formerly the Master of Sidney Sussex College Cambridge. She acted as an expert member on organisation, governance and leadership on the Expert Advisory Group on the Windrush Lessons Learned Review and regularly advises viruses on leadership, governance and organisation structure.
Dr Steward is a policy governance expert and was a visiting scholar at Sidney Sussex College Cambridge.
Dame Sandra and Dr Stewart have been instructed to produce two reports addressing issues relating to leadership, management and governance. The first of those reports has been disclosed to Core Participants. It’s dated 27 March 2024 and has the URN EXPG0000006. It sets out the expected and best practice in relation to the standards of governance, management and leadership in companies such as the Post Office in the period 1999 to 2019. It’s a substantial body of work, being 133 pages in length, including its appendices.
A copy of that report, the first report, is to be treated as being having read into the record today and, therefore, a copy will be uploaded to the Inquiry’s website today.
Dame Sandra and Dr Steward will be considering the evidence given in Phases 5 and 6 of the Inquiry, both the written evidence and the oral evidence and will produce a second report in the light of that evidence when Phases 5 and 6 have concluded.
Sir Wyn Williams: Thank you, Mr Beer. I think we can all agree that is a brighter note.
Mr Beer: Can I call Alan Bates, please.
Sir Wyn Williams: Yes, of course. Ah, he has appeared.
Alan Bates
ALAN BATES (sworn).
Questioned by Mr Beer
Mr Beer: Good morning, Mr Bates.
Alan Bates: Good morning.
Mr Beer: My name is Jason Beer, as you know, and I ask questions on behalf of the Inquiry. Can you tell us your full name please?
Alan Bates: Alan Bates.
Mr Beer: Thank you very much for previously providing a comprehensive and detailed witness statement to the Inquiry and for coming to London today to give evidence to assist the Inquiry in its work. Can we start by looking at your witness statement, please.
Alan Bates: Sure.
Mr Beer: It’s the only hard copy document I’m going to be asking you to refer to. It’s got, for the purposes of the transcript, the URN WITN00050100 and it’s up on the screen. It’s 59 pages long, excluding the exhibits page, and is dated 29 February.
I have picked up a couple of typos. I wonder whether we could just correct those first. If we look at page 23, the foot of page 23, at paragraph 75, it says:
“The CWU were not provided in this period, as I recall. The NFSP, in the letter …”
Should that say “from Colin Baker” –
Alan Bates: Yes, it should.
Mr Beer: – “dated 13 January”? So cross out the words “January 200” and put in the word “Baker”?
Alan Bates: Yes, please.
Mr Beer: Page 32, paragraph 102. It says:
“In my letter to Mr O’Neill dated 9 September 2009 …”
I think that should be 2004.
Alan Bates: The original letter? Yes, it would be. Yes, you’re right.
Mr Beer: Yes. So if that can be corrected to 2004, thank you.
If you can turn to page 59, please, in the hard copy, do we see your signature there?
Alan Bates: Yes, you do.
Mr Beer: With those two typos corrected, are the contents of the statement true to the best of your knowledge and belief?
Alan Bates: They are.
Mr Beer: Thank you very much, Mr Bates. I’m not going to ask you questions about every aspect of your witness statement because it’s long and detailed and a copy of it will be uploaded to the Inquiry’s website today, so the public can read it.
The statement can come down, please.
Can I start with a little bit about your background. You tell us in your witness statement, it’s paragraph 5, no need to turn it up, that before you became a subpostmaster, you worked for 12 years in the heritage and leisure project management sector; is that right?
Alan Bates: That’s correct.
Mr Beer: Is it right that, in the course of that work, you developed experience in Electronic Point of Sale (EPOS) systems?
Alan Bates: Yes, I did.
Mr Beer: You developed experience in the development of site-specific business software and the provision of staff IT training?
Alan Bates: That’s correct.
Mr Beer: To what extent, if any, did that background assist you when you became a subpostmaster and were later required to work with the Horizon IT System?
Alan Bates: I think when Horizon came in, I think I was quite positive about it because I knew what technology and these sorts of systems could do, so I was quite positive. But I found it a bit frustrating, once the system was installed and we were operating, I found there were many shortcomings in the system and, knowing what these systems could do, it just seemed a bit of a lost opportunity.
Mr Beer: You were a subpostmaster, I think, between 31 March 1998 and 5 November 2003 –
Alan Bates: Yes.
Mr Beer: – by my reckoning, so a period of five and a half years or so?
Alan Bates: That’s correct.
Mr Beer: By comparison, if you don’t mind me saying, to other subpostmasters, that’s a relatively short period, isn’t it?
Alan Bates: It is. Sorry, it is but it’s due to Post Office, not to myself.
Mr Beer: Quite. Also, I suppose, ironically, you spent more than four times that period campaigning?
Alan Bates: Oh, yes, yeah.
Mr Beer: Why has that been necessary?
Alan Bates: Because – well, initially it was because Post Office terminated my contract, giving me three months’ notice and not giving me a reason for doing so. Purely because, in my belief, is that it was – I kept raising problems and concerns over its Horizon system, due to a number of faults I’d found over the years.
Mr Beer: You tell us in your statement that you spent that period of time seeking justice, accountability and redress for not just yourself and your wife but also on behalf of a much wider group of people; is that right?
Alan Bates: Yes, I did. Once I’d started my individual little campaign in there, we found others along the way and, eventually, we all joined up, and so the JFSA was born and onwards went the campaign.
Mr Beer: You say in your witness statement that you have “dedicated this part of my life to this cause”. Is that how it has seemed or felt –
Alan Bates: Well, yeah –
Mr Beer: – firstly, that it has required dedication but, secondly, that it’s a cause?
Alan Bates: Yes, I think it’s also stubbornness as well. But it’s – I mean, as you got to meet people and realised it wasn’t just yourself, and you saw the harm and injustice that had been descended upon them, it was something that you felt you had to deal with. It’s something you felt you had to deal with. It’s something you couldn’t put down and you had the support of the rest of the group in there as well. Sorry.
Mr Beer: Do take a moment to clear the frog in your throat.
Alan Bates: Yeah, I have. Hopefully not a Welsh one.
Mr Beer: Talking of which, you ran a post office in North Wales?
Alan Bates: I did.
Mr Beer: What was the name of the post office and in which town was it?
Alan Bates: It was Craig-y-Don post office in Llandudno.
Mr Beer: Say that again?
Alan Bates: Craig-y-Don post office in Llandudno.
Mr Beer: What kind of Post Office – what kind of post office was it?
Alan Bates: It was a three-position counter in that it was – when we first bought the property, it was very much at the back of the property in there and it was a bit run down, and it also had another side, a retail side to the business which was a whole variety of things: crafts, knitting, haberdashery, a whole range of things. So, for the first year or two, we just ran the business as it was and slowly developed it from there, putting on a big extension, updating the – updating a lot of the stock. But, more importantly, we actually saw it as a big potential to grow the Post Office business and we brought it right to the front of the building and – with a large queueing area for people, unfortunately it seems what post offices need, and so we invested quite heavily in developing the post office and that was at the time Horizon came in.
Mr Beer: Thank you. I think you and your wife Suzanne were 44 years old when you took it over; is that right?
Alan Bates: About that, yes, it would have been.
Mr Beer: You tell us in your witness statement – there’s no need to turn it up, it’s paragraphs 9 to 13 – in summary terms about your decision to become a subpostmaster, your decision to pick this post office, your hopes and aspirations and the process by which you applied and by which your application was approved.
I just want to look at an account you’ve given in the past in more detail about that –
Alan Bates: Sure.
Mr Beer: – if we may. Can we look, please, on the screen at POL00024194. This is a witness statement you made in the course of the Group Litigation proceedings in the High Court, and we’ll deal more about that later today; is that right?
Alan Bates: Yes, it is, yes.
Mr Beer: We can see the date on it in the top right, 9 August 2018. So this witness statement was made for the purposes of what came to be known as the Common Issues trial; is that right?
Alan Bates: That’s correct.
Mr Beer: So the process by which you applied to become a subpostmaster, the documents that were or, in fact, were not given to you, were important issues and addressed in this witness statement in very great detail; is that right?
Alan Bates: That is right, yeah.
Mr Beer: Can we look, please, at page 3, and pick up at paragraph 11, please. You say:
“A key attraction to working with Post Office was that it would provide secure employment, based upon the fact it provides a community service and has an established brand in the community. From among the various small business options available, a Post Office branch would, in my mind, be a safe option. I was also encouraged by the fact I could run a secondary business, such as a retail shop, alongside the Post Office branch.”
That sets out, in summary, your reasons for picking Post Office as a future enterprise with your wife; is that right?
Alan Bates: That’s correct.
Mr Beer: Now, paragraph 12 on this page, right through to paragraph 23 on page 5, addresses the initial enquiries you made with the existing or the outgoing subpostmaster – Peter Savage, I think his name was –
Alan Bates: That’s correct.
Mr Beer: – and the planned visits that you made and, indeed, some unannounced visits you made to the post office in question as part of your due diligence; is that right?
Alan Bates: That’s correct.
Mr Beer: Can we just look at paragraph 21 on page 5, please.
You say you do remember that:
“… during one of my visits to the Branch Mr Savage explained that he had a practice of keeping ‘unders and overs’ in a tin in the safe as a system to deal with any odd shorts or overs. I remember this because I thought it to be rather casual and unusual for a business. Nevertheless, I was not particularly concerned and considered it to be a matter for Mr Savage and his staff and I did not understand it to involve large figures or to be problematic.”
Is that right?
Alan Bates: That is right and it was very odd and very strange, I thought, for a cash-based system where you didn’t actually record anywhere the amounts and you didn’t provide Post Office with returns of the position each week in there as well. But that seemed to be the way it operated.
Mr Beer: But these were small sums of money; is that right?
Alan Bates: They were small sums of money, yeah.
Mr Beer: From paragraph 24 if we scroll down, please, right through to paragraph 33, at the bottom of page 7, you deal with the agreement to purchase the Post Office, yes?
Alan Bates: Yes.
Mr Beer: Then if we go forward to page 8, please, from paragraph 34 on this page, right through to paragraph 86 on page 19, you deal with the following issues – I’m just going to summarise them without reading the text: firstly the application to the Post Office to be a subpostmaster; secondly, the interview at the regional office in Bangor that you and your wife attended; thirdly, the confirmation that your application had been successful and the material that you were then given. Yes?
Alan Bates: Yeah.
Mr Beer: If we just go forward to page 15, please, and look at paragraph 62, you say:
“… at no stage during the process of my application, appointment and branch opening … was I ever sent a copy of the [subpostmaster contract]. I first obtained a copy of the [subpostmaster contract] much later, in the circumstances I explain below … At no point during my appointment process was it mentioned or explained to me that the [subpostmaster contract], which was a lengthy document of 114 pages, governed the terms of my appointment.”
Now, we will hear later that, is this right, that the Post Office robustly challenged you on that issue, alongside other issues, at the trial, and then the trial judge, then Mr Justice Fraser, held that you were an honest witness, that you were telling the truth and that, like many other subpostmasters, you did not receive a copy of this document?
Alan Bates: That’s correct.
Mr Beer: You address later in this section of your witness statement your initial classroom training and then lastly, the transfer of the branch to you and the opening of it, correct?
Alan Bates: Correct, yes.
Mr Beer: Can we turn to the introduction of the Horizon system into your branch and can we go to your Inquiry witness statement, please, at page 5. At paragraph 14 you tell us that:
“In October 2000, [the Post Office] introduced Horizon at my branch and imposed upon me the requirement that I use it to record transactions at the branch and to submit branch accounts. To the best of my recollection, Horizon was installed from 2 October 2000. I remember that the branch was closed around this time to allow for this.”
So Horizon installed under two years after you took up the position as subpostmaster of this office?
Alan Bates: Correct, yeah.
Mr Beer: Then scroll down to 15, please. You say:
“I did not have any involvement in discussions about the introduction of Horizon, I had no choice but to accept and accommodate this variation. Obviously, this was also a huge change in how I operated the branch, as many of the previous processes that I had been trained on and had operated at the branch were made obsolete not only for me, but also for my assistants.”
Paragraph 16, please. You say:
“When Horizon was introduced, given my background with [Electronic Point of Sale] systems … I regarded the introduction of Horizon at first as a positive innovation.”
You have told us that in summary this morning.
Alan Bates: Yes.
Mr Beer: “However, I did not expect there to be any apparent discrepancies shown on the system that I was unable to identify the cause of and resolve, either by myself or with support or information from [Post Office Limited]. Certainly, I did not expect discrepancies to occur for which [the Post Office] would try and hold me liable without the cause being investigated and established. To that point, I had been preparing accounts manually, using the Capture system.”
Just going back to what you say on the previous page, you say in the third line:
“… I did not expect there to be any apparent discrepancies shown on the system that [you were] unable to identify the cause of and resolve …”
What do you mean by that?
Alan Bates: Well, I expected to be able to track down any transaction that I’d undertaken – myself or my staff had undertaken at the branch, one way or another. There were a variety of ways of interrogating systems and the data on the systems and I presumed that the system would enable you to do that at the outset but – I mean, in previous roles, you know, before Post Office, I’d used something like Crystal reports on software packages to extract information, using certain parameters in there. But there was very little flexibility in Horizon, as I saw it at that time, for reports that you could control the parameters of your searches for.
There were a set of reports, don’t get me wrong, there were a set that were already built into the system but they were quite restrictive in there, and it did seem to cause problems.
Mr Beer: We see this as a feature in the correspondence that we’re going to turn to a little later –
Alan Bates: Sure.
Mr Beer: – today and a constant theme that you pursued, ie the visibility of transactions and the auditability of transactions from a subpostmaster’s perspective was lacking in the Horizon system; is that correct?
Alan Bates: Very much so, yes.
Mr Beer: Can we turn, please, back to your High Court statement, POL00024194, and turn to page 32, please. Can we pick it up at paragraph 144. You say that you’ve been referred to a part of the Post Office’s defence and to its defence and counterclaim and you say that you understand from this that the Post Office’s case for the purposes of the Common Issues trial is that “losses do not arise in the ordinary course of things without fault or error on the part of the subpostmasters and their assistants …” and – this what the Post Office said:
“… ‘it would not be right to infer or presume that a shortfall and loss was caused instead by a bug or error in Horizon’ and that the truth of whether a shortfall did or did not result from losses for which the subpostmaster was responsible ‘… lies peculiarly within the knowledge of subpostmasters as the person with the responsible for branch operations and the conduct of transactions in branches’.”
You say:
“… these things were in my own experience very far from the case.”
Then you set out, from your own experience, by comparison, what you say, by reference to what the Post Office suggest. Can we look at paragraph 145, please. You say:
“… I did not expect there to be any apparent shortfalls that [you were] unable to identify.”
That’s essentially what you said in your Inquiry witness statement.
Then 146, you say:
“… one of my fundamental concerns when Horizon was introduced, which [you] clearly communicated … through various letters, was the lack of transparency and control available to me in reviewing transactions when trying to balance.”
You refer to a letter and you say:
“I could not fully access data that I needed in order to properly track and, if necessary, to correct transactions.”
Your concerns came to a head in December 2000 following a particularly difficult balance. You were therefore dependent, you say, upon the Post Office for this sort of information and, therefore, in order to ascertain the cause of any apparent shortfall and whether it was in fact a real loss.
Then you say in 147, although Post Office later moved to monthly balancing, during your tenure you were required to produce weekly accounts, which meant you had to conduct a weekly balance on a weekly basis on a Wednesday:
“When carrying out this balance on Wednesday, 13 December 2000, the Horizon system showed there was an unexplained variance of over £6,000 relating to Giro deposits.”
That can come down. Thank you.
So the first substantial unexplained variance was over £6,000; is that right?
Alan Bates: Yes, and it was only a number of weeks after the system had gone live.
Mr Beer: I was going to ask you that: system live about 2 October?
Alan Bates: Yeah.
Mr Beer: We’re now talking about 13 December, so two months or so after the system –
Alan Bates: Yeah.
Mr Beer: – had been installed, this variance arose?
Alan Bates: Yes.
Mr Beer: If we go back to paragraph 148, please, of POL00024194, so over the page, please, you say:
“As you mention [in a paragraph above], I contacted the helpline seeking support and help as to why this apparent variance had occurred. They were unable to assist in any meaningful way. I tried to investigate the matter myself. I printed various reports from two of my three counter terminals. I left the third terminal for use to serve customers as we were very busy in the branch, with customers queueing out of the door.”
You cross refer back to paragraph 143.1 – I’m not going to go there – but, essentially, you tell us in that paragraph that, on that day, 13 December 2000, you contacted the helpline seven times; is that right?
Alan Bates: That’s correct.
Mr Beer: And one of the calls was about an hour in length?
Alan Bates: Yeah.
Mr Beer: Were they of any assistance at all in those seven calls?
Alan Bates: Not really. “Stating the bleeding obvious”, I think, really, is one description I might use, but it was all things that I’d tried. There –
Mr Beer: Did they suggest anything –
Alan Bates: No, and the other impression I got is they couldn’t access the system any further than I could at that time.
Mr Beer: Just by way of an aside, I think you tell us in your statement that Post Office records subsequently disclosed to you show that in the two year and nine month period, up until November 2003, ie when your contract was terminated, you and your assistants made 507 calls to the helpline –
Alan Bates: Correct.
Mr Beer: – of which 85 related to Horizon and balancing problems?
Alan Bates: Yes.
Mr Beer: And that you found the helpline to be ineffective, indeed of no help?
Alan Bates: Very much so and often we never bothered ringing it.
Mr Beer: Can we go on to paragraph 149 of your High Court witness statement here. You say using the limited reports you were able to print, you ascertained that around £5,000 of the alleged shortfall related to Giro items that had become wrongly duplicated on Horizon:
“These reports were in the form of lengthy, multi-line, narrow till receipts and were many metres long making them difficult to review in any event. At the time, I believed that a majority of the remaining alleged shortfall, being one £1,182.81, was also attributable to Giro errors. However, I was unable to track these potentially smaller sums in the absence of proper reporting functions on Horizon. Therefore, far from being within my knowledge, I was unable to ascertain the root cause of the apparent shortfall at all.”
You have your thoughts, which you set out later:
“I also called my Retail Network Manager, Gerry Hayes, the following day to inform him. In the absence of a proper response from the Post Office, I carried over the apparent shortfall from that week’s cash account to the following week’s cash account, by transferring it to a suspense account, which was visible to Post Office.”
So £5,000 of the £6,000 was attributable to wrongly duplicated giros, the loss which had been left, about £1,100, you couldn’t account for on the information available to you. Is it that sum, £1,100 that you ended up in dispute with the Post Office over?
Alan Bates: At that time, yes, it was, yeah.
Mr Beer: I think the first thing you did was to write a detailed letter to the Post Office about it?
Alan Bates: I did. Yeah.
Mr Beer: Can we look at that, please, POL00004598, at page 134, please. We can see this is dated 19 December 2000, so about six days after the balancing issue emerged, and, again, about two and a bit months after the installation of Horizon at your branch and it must be noted, I think, very early in the life of the Horizon system taken as a whole; would you agree?
Alan Bates: Yes, I would.
Mr Beer: You’ll see that the heading of it is “Horizon Faults”. Can we read the letter together because this sets out what might be an important account, early in the life of Horizon. You refer back in the first paragraph to a conversation and, as is good practice, you confirmed it in detail in writing. You say:
“The balance at this office on [the 13th] was not only very stressful but also very worrying. The evidence that appeared during that day proved beyond any doubt that the Horizon system cannot be relied upon to give 100% accurate figures. The problem which was highlighted to this office that day was with regard to Giro Deposits and at one point the weekly returns were showing a variance to the addition of the daily returns, of over £6,000.
“The whole of that afternoon was spent making a number of phone calls to the different helplines, one of almost 1 hour long, and kept two of the three terminals producing nothing but reports, at a peak trading time when we had can you see out of the door, though eventually I did manage to track down the majority of the money. That said, the cash account for that week is still showing a shortage of £1,182.81. I can without any doubt attribute £368.50 of that to Giro items that have been double entered and that I am unable to track because of the way Horizon is set up. Of the remaining £814.31 shortage, I am presuming that £409.15 of that is the shortage from the previous week that has become added to the total. This leaves a difference of £405.16 which I am unsure of where it comes from. It may well be a Giro system error as might be the previous weeks £409.15 shortage or it may be something else. Unfortunately, the current Horizon system does not let you access previous transactions adequately enough to track problems with shorts or overs at the end of the week.”
Continuing:
“Having spoken to the local Branch Secretary of the Federation of SubPostmasters on these problems and realising the problems I am experiencing are being found by others around the country I really do believe it would be unreasonable for Post Office Network to hold me liable for losses on the cash account until such time as 100% guarantee can be given about the accuracy of Horizon.
“I had been hoping to leave any comments in writing about Horizon until the office is quieter in January and then write a detailed submission about the cost we have incurred with it (around £1,000), the problems with the counter (staff working with money and stamp books on chairs or on the shelf behind them), the very poor layout of the screen and menus, the slowness of the printers, the lack of report writing facilities, the chaotic end of day and end of week procedures and the problems of having to do ‘office work’ at a terminal on the counter. Given time I shall produce the report for you.
“Please do not think that I am being nothing but negative about the system. I am a firm believer in the way forward being through such a system. But bear in mind my comments are made by someone who has had considerable experience of [Electronic Point of Sale] systems before joining the Post Office 1998. I first began working with them in 1986 and have used a variety of systems …”
Reading on:
“So I do have some insight into those systems and would gladly be willing to offer constructive feedback if asked.
“With regard to the current deficit showing on our cash account for last week how do you want me to progress this week’s balance? Shall I just roll it through and see what happens, or what?”
Then you ask for assistance.
So in that letter you make it clear, on a number of occasions, that Horizon is at fault and you explain in detail why, so far as you could tell, that was so; is that right?
Alan Bates: That’s correct.
Mr Beer: You tell the Post Office that you’re not alone and that this was happening around the country.
Alan Bates: That’s what I understood, yeah.
Mr Beer: Did that information come from your local branch Secretary of State at the NFSP?
Alan Bates: It did.
Mr Beer: Was that Dave Foster?
Alan Bates: It was Dave Foster.
Mr Beer: You ask a question “What should I do?”, at the end?
Alan Bates: Yes.
Mr Beer: Did you ever get a reply –
Alan Bates: No.
Mr Beer: – a written reply, to the raft of the points?
Alan Bates: No, I never did.
Mr Beer: No reply to this letter at all?
Alan Bates: Never.
Mr Beer: Can we move on, please, to page 140 in this bundle. This is a follow-up letter of 7 January 2002, so now over a year has passed. You’re writing to the Post Office about this long in the tooth alleged shortfall. You say:
“As you are aware, the cash account for this office is still showing an amount of £1,041.86 in the suspense account. This cumulative figure was placed in the suspense account towards the end of 2000 and I have no doubt at all that it was due to errors in the Horizon system over a number of weeks at that time. In my letters to Gerry Hayes [of] 19 December [which we’ve just looked at] and 16 July 2001 [I’ve skipped over that one because of time], neither of which did I receive a written reply to, I gave further details on this matter.
“I really do think that enough time has now passed for Post Office to have resolved this issue and unless I receive a written comment to the contrary by the end of this month I will take it that this matter is closed. When I signed my contract with Post Office Counters I did not sign to accept the liabilities arising from the shortcomings of a less than adequate Horizon system, all liabilities from such a system are clearly the responsible of Post Office Limited or ICL Pathway.
“Allowing this issue to drag on not only continues the stress and strain of the original problems but I fear also continually casts doubt over my honesty and that of my staff. Therefore I would greatly appreciate it if you would bring this matter to a head in order that we can move on.”
Can we turn to your Inquiry witness statement, please, at paragraphs 39 and 40, which are on page 12. You say:
“Finally, by letter of 6 March 2002 I was notified that ‘Post Office … has decided to take no further action in respect of the loss’ at my branch and that this will be written off. No reason was given, but I have since seen a copy of a ‘Write Off Authority’ voucher disclosed by [the Post Office] which gives the reason for the write off as ‘Disputed Horizon Cash Account Shortage’.
“The letter of 6 March also said that [the Post Office] had taken time to respond because ‘… it has been necessary to formulate a consistent response to all such cases’. I take from this that [the Post Office] was aware at the time of many such complaints. I also take from the fact that [the Post Office] was willing to write off the considerable apparent discrepancy I had disputed that my complaints were valid, and that [the Post Office] was aware that was the case and wished to avoid the controversy on this matter, given that I was willing to assert my legal rights.”
Can we turn up, please, POL00004598, at page 143, please. Just look back at page 142, please. This is the letter of 6 March 2002 that you were referring to in your witness statement.
Alan Bates: Yes, that’s right.
Mr Beer: If we look at the third paragraph, there’s the passage that you cited:
“After due consideration of the facts surrounding [your] loss and of your report, Post Office has decided to take no further action in respect of the loss which will be written off.”
The Write Off Authority, if we just look at the second page that was included, if we could just scroll down a little bit, thank you. This is the unsigned version –
Alan Bates: Yes.
Mr Beer: – essentially:
“I have received a Write Off Authority Voucher to the value of [the amount] which has been cleared from my suspense account … and the voucher has been cleared in the appropriate manner in the cash account number week number …”
Was that amount, £1,041.86, actually cleared out of your suspense account so you went back to zero in balancing terms?
Alan Bates: Yes, yes, it did.
Mr Beer: So it didn’t remain thereafter a shortfall which you were required to roll over?
Alan Bates: No.
Mr Beer: Then can we look at the loss authorisation document, which you also referred to in your witness statement, that’s POL00328099, page 3, please. I think that’s “Loss Authorisation” document, if we just pan out so we can see all of it, please.
I don’t think this is something that you saw at the time; is that right? This is an internal Post Office document.
Alan Bates: That’s correct, yeah.
Mr Beer: But you got disclosure of it later; is that right?
Alan Bates: That’s right.
Mr Beer: We’ll see that it seems to be in standard form. It’s got your branch name and your FAD code, the amount of money, and it says:
“The following decision has been made with regard to the loss at the above office which relates to an aged shortage which the subpostmaster insists was attributable to a Horizon system/software/equipment/training failure.”
Then three boxes or three options are given, the second of which was the subpostmaster makes it good, the third of which was an amount of it must be made good, an amount of it will be written off, and the first of which was the full amount will be written off and the subpostmaster has been sent the appropriate voucher with which to clear the loss of the amount. Yes?
Alan Bates: Yes.
Mr Beer: Did you see this document, the writing off of a loss because you said the loss was attributable to the Horizon system, at the time of the dispute with the Post Office in 2002 and 2003, ie before termination of your contract?
Alan Bates: No, no, I didn’t see it. No, I didn’t see it.
Mr Beer: So were you aware at that time that the Post Office seemingly used a standard form with “delete as appropriate” boxes on it?
Alan Bates: No, I didn’t, but, now that you mention it, I do recall a conversation that the Retail Network Manager had at the time with this department at my office, so I only heard one side of the conversation, and it was about arranging for this write off amount or a write off voucher. And I seem to recall, and it stuck in memory because of what it was, he said “Oh, it’s another one of the Horizon losses”, and it’s just one of those little things that, you know, sticks in the back of your mind that was said at the time, when the Retail Manager was speaking to this department on the phone, arranging the voucher.
Mr Beer: In any event, there existed a form in which a loss could be authorised to be written off on the grounds that the subpostmaster said the loss was attributable to Horizon –
Alan Bates: Yes, it did.
Mr Beer: – and that’s what happened in your case?
Alan Bates: Yes.
Mr Beer: Thank you. That can come down.
Now, before you had authorisation to write this loss off, you continued to roll it over from week to week?
Alan Bates: Yes, I did.
Mr Beer: Was that done with the knowledge and approval of your then Retail Line Manager?
Alan Bates: Well, they were aware of it, they were certainly informed that that’s what I was doing, so …
Mr Beer: We’ve heard from some Post Office staff, the evidence of Susan Harding springs to mind particularly to me, that the Post Office believed that the suspense account was used by subpostmasters to cover up theft and fraud. Your evidence is that you were being transparent from an early stage in the life of Horizon in your complaints about Horizon discrepancies, about the use of the suspense account, to hold over disputed sums whilst continuing to assert that the money wasn’t owed and ought not to be made good; is that right?
Alan Bates: That’s correct.
Mr Beer: Did there come a time when that practice was challenged?
Alan Bates: Not during my tenure. I understand it was later on.
Mr Beer: I think after this write off, there continued to be some shortages/shortfalls shown on Horizon; is that right?
Alan Bates: That is. That’s right, yes.
Mr Beer: And –
Alan Bates: It’s not just – sorry, you say shortages. It was also overs and under. It was –
Mr Beer: So surpluses as well?
Alan Bates: Surpluses, yeah.
Mr Beer: Did you seek to discover the cause of both the surpluses and the shortages?
Alan Bates: Yes. As much as we could.
Mr Beer: Did you encounter success?
Alan Bates: On occasion, yes.
Mr Beer: Did it remain the case, however, that a sum just over £1,000 was carried as shortage in the suspense account?
Alan Bates: No, not to my recollection. There was a claim at the very end of my contract that I think they said that the office was owing something in the region of £1,200 or £1,400 but –
Mr Beer: It’s that I’m referring to.
Alan Bates: Sorry?
Mr Beer: It’s that I was referring to.
Alan Bates: Yeah, but that wasn’t carried as such. What happened was that I refused to – when we undertook our weekly balance, you were then meant to put in money to make up to the figure or take money out, if it was over in there. I refused to do that. I rolled through the shortages or the losses in there – sorry, the shortages or the overs each time. So it had a running total, it was adjusted from week to week, because I really did not know where the office was up to, you know, I had no idea.
And often, some of these, where there had been an error, might come back in a week or two weeks or something of that – that sort of time, or it could be a lot longer, when the actual error was discovered elsewhere and it can be corrected. But no, I never, actually, reset, or zeroed the system but I just kept rolling through the shortages and losses, and Post Office were aware of what I was doing.
Mr Beer: Did the installation of a new Retail Line Manager, Mike Wakley, cause matters to be brought to a head in that respect?
Alan Bates: Eventually, yes.
Mr Beer: Can we look at that “eventually”. POL00004598, page 144, please. This is a letter to you dated 14 April 2003, “Reference: Losses and Gains”. Just want to read the first part of the first paragraph:
“Further to our conversation, you confirmed that you have been rolling over losses and gains for the past two years or more.”
That’s what you just described.
Alan Bates: Yes.
Mr Beer: He says:
“I was unaware of this practice”.
Then, in the second paragraph, he says:
“I am now instructing you, that with immediate effect, you are required to make good the outstanding loss and to cease with this current practice of rolling over any losses and gains.”
Can we see your reply, please, page 145. You say:
“I am in receipt of your letter … 14 April [that’s the one we just read] confirming our conversation regarding losses and gains at our office which have always been rolled over since the installation of Horizon. I appreciate that you may well have been unaware of this practice but can assure you many other Post Office staff knew of it.
“My comments regarding this were all well documented in a number of letters … such as that dated 19 December … which like all letters was sent recorded delivery.
“The problem with rolling over the losses and gains is that I presume I would be accepting liability for them which is something that I have pointed out in writing to you since the introduction of Horizon here, I am unable to do until such time I am able to access the data that I am being asked to be responsible for. As I have written previously ‘The totally inadequate report system has been made so complex it lacks the ability to interrogate the system when you know the information is inside’, if I am unable to access the data to check items it is totally unreasonable to expect me to accept the liability from uncheckable data.”
I think that reply speaks for itself but did this exchange of correspondence, the new-ish, I think, Retail Line Manager, raising the issue, requiring you to make good the shortfall, to cease the practice, ultimately lead to your contract being terminated?
Alan Bates: I believe so, yes.
Mr Beer: Can we look, please, at page 147 of this bundle. Letter from Mr Wakley, 2 May. Scroll down.
“Thank you for your letter of 16 April [that’s the one we’ve just looked at], the content of which has been noted.
“Nevertheless, I must point out that you are bound by the Terms and Conditions of your Contract for Services, which was acknowledged by you on 31 March 2003”, and somebody has written in, correctly, I think, 1998.
That was you, was it?
Alan Bates: Yes.
Mr Beer: “1998!”:
“… accepting your appointment.
“To this effect you are charged with ensuring that all accounts entrusted to you are kept in the form prescribed by Post Office, by using the approved accounting system … and, therefore, in the event of any losses occurring, these should be made good without delay …
“Accordingly, failure to comply with these obligations can be construed as a breach of contract, which could ultimately put your Contract for Services ‘at risk’.”
Over the page:
“I would therefore request that you acknowledge the content of this letter within 10 days of its date of posting confirming that your accounts are being maintained in the correct fashion [and make good the losses] as per your Contractual Obligations.”
Then 149, please. Your reply to that letter:
“With regard to your letter [of] 2 May …”
The first paragraph, I think you pick him up on the typo:
“You refer me to section 12 of the contract …”
Rather than what he has suggested to you, you’re liable to repay all losses, you point out that section 12, in fact, states:
“‘The subpostmaster is responsible for all losses caused through his own negligence, carelessness or error, and also for losses of all kinds caused by his Assistants. Deficiencies due to such losses must be made good without delay.’
“You rightly point out that I have agreed these terms and I can confirm that I would gladly make good any losses caused in these manners. But I can see nothing in this clause which states that I am also liable for data that I am unable to check.”
That’s a summary of the position you had been maintaining, I think, consistently since installation.
Alan Bates: Yes.
Mr Beer: “To take an extreme, if the Horizon system said I owed £1 million, you would say I would have to make good the loss without delay and without question.
“There is no way I will agree to be held responsible for data I have input until such time as I am able to access the data that I am being asked to be responsible for. In trying to state that I have acknowledged such things in the Terms and Conditions of my Contract … you are, in effect, purporting to vary this contract.”
We can skip over the next paragraphs, which are about something else, and then go to the next page, 150, and then the letter ends.
So you correct the Post Office on the terms and conditions, you make it clear the point that many have missed – that the contract does not oblige you to repay all losses – and then you make the point of emphasis, the £1 million example, in your third paragraph. Was there any effort by the Post Office to engage with the points that you were making in this letter?
Alan Bates: None at all, never addressed them.
Mr Beer: Can we turn, please, to POL00004598, page 30, that’s the same bundle. Page 30, scroll down, please. Mr Wakley:
“In accordance with [your contract] I am writing to issue you with three months notice of termination of [your contract].
“The termination … will take effect on 5 November 2003.”
So this is the letter that brought your contract to an end; is that right?
Alan Bates: That is, correct, yes.
Mr Beer: The letter, of course, speaks for itself. It gave you no explanation for the reason for termination of your contract?
Alan Bates: That’s correct, yeah.
Mr Beer: Was any such explanation given to you by the Post Office at this time?
Alan Bates: Never.
Mr Beer: It may seem an insensitive question, but how did receiving this notice make you feel?
Alan Bates: Well, I was annoyed with them, but – to put it mildly, but I think it was partly expected in a way because it was pretty obvious they were determined to – they were after me, one way or another, and the build-up of correspondence over the period was certainly pointing in that direction. But I always find it quite interesting that I pulled them up on the point about trying to terminate me and my contract under clause 12 of the contract, but they didn’t do it that way. They decided to go for – they didn’t to go just under this, you know, any reason they wanted, three months’ notice, without giving a reason.
Mr Beer: So it’s a without-fault, without-reason –
Alan Bates: That’s right.
Mr Beer: – termination, just on three months’ written notice?
Alan Bates: Yeah, that’s it.
Mr Beer: But you’d had the £1,100 written off?
Alan Bates: Mm-hm.
Mr Beer: You’d had the Post Office acknowledging that it was because of a genuine dispute over whether Horizon was to blame for it, over the operation of Horizon. You’d been rolling over other shortfalls and surpluses since then with Post Office knowledge, and then this arrives?
Alan Bates: Well, it was – it was a bit strange in a way because we were a very busy post office. In fact, it was a time when a lot of post offices were losing trade but our sales figures were extremely high in the region, we’d developed a lot of new business in there. But, you know, it was their decision to do it and so be it. I mean, I did offer, I did offer at one point, when there were discussions between the Retail Manager and myself, when we were heading in this direction, he was saying, “Come on, Alan, you know, change your mind, do this, do that”, and all the rest of it, and I said, “Look, if you’re unhappy with the way that I’m providing your service, then pay us back our initial investment and take the post office away”. I would have been quite happy for them to do that and I probably wouldn’t have been here today on that basis.
But, I mean, it’s – they just decided they were going to – I felt they were going to make a lesson of my case because a number of other people knew what was going on at that time, and I think it was something that Post Office liked to try to give lessons of how they were in charge.
Mr Beer: Can we just look, before the morning break, at some reasoning that the Post Office gave subsequently for terminating your contract. To start with, can we look at POL00107538. Page 11, please. This is a letter written to an MP, Betty Williams, in relation to a letter that she wrote as a constituency MP to Allan Leighton, the then Chairman of the Post Office. It’s 29 October. If we just go to the second page, scroll down, we can see who it’s written by: Dave Barrett, Head of Commercial Urban Area for Wales, The Marches and Merseyside.
Back to page 1, and look at the second paragraph.
“Briefly, we’ve given notice to Mr Bates, the present subpostmaster, that we’re withdrawing from our contract with him.”
Then this:
“This is because we’ve lost confidence in his willingness to conduct the job in the manner expected.”
Was that ever explained to you, that they had lost confidence in your willingness to conduct the job in the manner expected?
Alan Bates: No, not at all.
Mr Beer: Can we look, please, at POL00031815. This is a presentation on Horizon integrity prepared by Dave Smith. It’s undated and it seeks to tell a story about the integrity of Horizon. It’s, we may find in due course, an interesting account overall but I just want to look at what it says about you on page 6. Scroll down, please.
Mr Smith says:
“On the cases I am aware, Bates had discrepancies, was dismissed because he became unmanageable.”
Was that ever explained to you, that you became unmanageable?
Alan Bates: No, not at all.
Mr Beer: Then Mr Smith says of you that you:
“… clearly struggled with accounting and despite copious support did not follow instructions.”
Firstly, did you struggle with accounting?
Alan Bates: No, not at all.
Mr Beer: Were you given copious support?
Alan Bates: No.
Mr Beer: Did you seek to follow the instructions that you had been given by the Post Office?
Alan Bates: Basically, try and bankrupt myself? No, I didn’t, not to that extent.
Mr Beer: If these after-the-fact reasons or justifications for the termination of your contract are not, on your understanding, correct, what do you understand to be the reason for the termination of your contract?
Alan Bates: Well, I mean, basically, I think it was because: (a) they didn’t like me standing up to them in the first instance; (b) they were finding it awkward; and (c) I don’t think they could answer these questions and I think they had a feeling I was going to carry on in a similar vein going forward.
Mr Beer: Just lastly then, can we look at POL00024194. This is your witness statement. Can we look at paragraph 170. I’m afraid I haven’t written which page that is, try about 25 – hopeless, try about 30 – try about 35. Then if you can scroll forward to paragraph 170, please. You say – this is your High Court statement for the GLO Common Issues trial:
“I have little doubt that the reason for my termination is that I had not only uncovered limitations and potential errors with the Horizon system but that I continued to question the Post Office on the contractual relationship between subpostmasters and the Post Office.”
Was that your belief at the time?
Alan Bates: Yeah, it is a good summary of how I felt.
Mr Beer: Does it remain your belief now?
Alan Bates: Oh, yes.
Mr Beer: Mr Bates, thank you.
Can we take the morning break, please. There is a slight glitch with the transcription service, which I think means we need to take 20 minutes rather than our usual 15.
Sir Wyn Williams: All right, so what time shall we resume?
Mr Beer: I think that means 11.55.
Sir Wyn Williams: 11.55. All right, see you all then.
(11.34 am)
(A short break)
(11.55 am)
Mr Beer: Sir, good morning.
If we continue, please, Mr Bates with August 2003. You remember where we are in the narrative. You’ve been given notice of termination of your contract. I think one of the first things you did was to write to the Chairman of the Royal Mail Group Plc; is that right?
Alan Bates: That’s correct.
Mr Beer: Can we look at that letter, please, POL00107538. We will see this is dated 7 August 2003 to Mr Allan Leighton, Chairman of Royal Mail Group Plc. We will look at the detail in a moment but can I ask you in general terms what the purpose was in writing to the chairman of Royal Mail Group Plc. By this time you’d received Post Office’s decision to terminate your contract; what was the point?
Alan Bates: Well, I was still in post, if you like, for the next few months. So I thought it was well worth trying to write to the Chairman to make him aware of what was going on because he may well have not known. So I’m hoping that he might be able to undertake some sort of review into it and look at the case for us, or whatever, take it on board a little bit more seriously.
Mr Beer: This is, of course, still, taking a step back, relatively early in the entire narrative of the scandal, August 2003.
Alan Bates: Yeah.
Mr Beer: Horizon had only been rolled out for three years or so?
Alan Bates: Yeah. But it was wrong. Sorry, I knew it was wrong then, there were things wrong with it and, having heard that others had had problems with it as well, surely someone should have been looking at all of this and taking these things into consideration.
Well, in that sense, you’re obviously right because many people were yet to be terminated; many people were yet to be prosecuted; many people were yet to be convicted; and many people were yet to go to prison.
Alan Bates: Mm.
Mr Beer: Can we look at what you said to the Chairman. First paragraph.
“I am writing to you with regard to a letter I have just received from Post Office Limited giving me formal notification of their decision to terminate my subpostmaster contract. As Chairman of the Group responsible for Post Office Limited, I thought it important that you should be aware of what is being undertaken in your name.”
You very much personalised things in that first paragraph.
Alan Bates: Yes.
Mr Beer: Did you expect this letter to at least be seen by the person to whom you wrote it?
Alan Bates: I certainly hoped it would be. I can’t do more than draw their attention to it. I can’t force them to read it but, if you don’t write to them, then they’ll never know.
Mr Beer: At paragraph 2:
“Please find enclosed a copy of that letter, as well as copies of previous correspondence and notes regarding the problems in question …”
I’m not going to go through the previous correspondence or your notes upon it:
“… which I’ve tried to keep in a chronological order. In reality, this matter should never have reached this stage but the extremely poor handling by Post Office Management in the past has led to the situation which could result in us not only losing our business but [something else]. Unlike the Post Office, I do not have endless funds to fight this injustice through the courts.”
Why was that in your mind at that stage, the relative funds available to each side to fight a case through the courts?
Alan Bates: Well, I suppose, realistically, I had been speaking with lawyers at that time and I was being advised that you probably wouldn’t be able to afford to take Post Office on. It just – you know, it was just an impractical situation from a financial point of view, more than anything else, regardless of the case.
Mr Beer: Moving on to the rest of the paragraph:
“I do realise it’s imperative for as many people as possible to have an opportunity to see in detail the management style applied by Royal Mail Group to the very public face of the local post office. It is again trying to use what seems to be so often described as its outdated Stalinistic management approach, in order to bludgeon its will onto the poor subpostmaster with an issue that could bankrupt every sub post office in the country. Whilst I appreciate that principles can be expensive, I cannot agree to any position which would leave me and every other subpostmaster liable for claims of millions of pounds from the Post Office without any redress or access to data to check such claims.”
Is that a reference to the auditability or visibility, the reporting function available to subpostmasters on the system?
Alan Bates: Well, certainly the lack of it, yes.
Mr Beer: “My only defence until I can find an organisation willing to offer support is to ensure that the media and all those politicians who represent a ward with a sub post office, as well as everyone who runs a sub post office or who uses one, has an opportunity to read all the facts.
To that end, these documents enclosed and others will shortly be available online, once the hoarding at the front of our building advertising our website, www.postofficevictims.org.uk is ready in a week or so. Originally, I had registered postofficevictim.me.uk to use but as the launch will undoubtedly bring up many other cases from across the country, it was thought a larger and less personal site would be more appropriate.”
Over the page.
“It is important to make clear I have not breached my contract. I will not be ceasing to trade on 5 November 2003. If I did, I certainly would be in breach of my terms.
“If you read the enclosed documentation, it is all self-evident. I am sure you can tell my back is up against a wall but until the hoarding is ready and in place and all the web pages are downloaded to the server, I’d welcome any option that would resolve this matter with the minimum of fuss, without the national publicity this matter is bound to draw, hence my letter to you as a last attempt to reach a sensible conclusion.”
Now, I don’t think you got a reply from Mr Leighton, did you?
Alan Bates: No, I got one from his office. Somebody did acknowledge it, if I recall.
Mr Beer: Can we look at POL00040354. You can see this is 27 August:
“Thank you for your letter dated 7 August addressed to Allan Leighton, which has been forwarding to me for reply.”
Can we look at the second page, please, and scroll down. You can see that it is from somebody in the Operations Department, Ria MacQueen, a Case Liaison Manager. Go back to the first page, please.
Then if we look in the second paragraph, she says:
“I have now completed my enquiries … they have taken longer than expected.”
She says:
“I have spoken with a number of the personnel involved in the search for a solution to the situation at the branch. Although I regret that the situation has reached the point of termination of your contract, I am confident that the various teams concerned in the events have worked hard to provide support and assistance to you in a consistent and sympathetic manner.”
Was that your experience?
Alan Bates: No, but this is Post Office’s view. It’s not mine.
Mr Beer: “This support included a number of onsite attendances to assist with balancing …”
Did that occur?
Alan Bates: I had two people visit to try to assist with balancing but they could access the system no further than I could, so it was absolutely no help at all.
Mr Beer: “… and also to provide extra training on the Horizon system.”
Did you get additional training on the Horizon system?
Alan Bates: Not that I can recall.
Mr Beer: “The aim was always that of achieving a solution to the difficulties you were experiencing in managing transactions and processes at the branch.
“The Horizon system [at the branch] has been reviewed and interrogated in response to your complaints and the reports from the Horizon Field Support Team and the NBSC have confirmed that there is nothing inherently wrong with the Horizon system installed at the branch.”
Was the system installed at the branch, to your knowledge, reviewed and interrogate?
Alan Bates: Not that I’m aware of. No one ever came to the place. I’ve always been confused over “nothing inherently wrong”, that turn of phrase. It just seems a little unusual. “Nothing wrong” I can understand but “inherently wrong” seems like a back-covering sort of phrase.
Mr Beer: Then read on, please, if we scroll down, thank you:
“The subpostmaster contract is clear on the requirement that postmasters must make good losses or gains when misbalances occur.”
In fact it isn’t clear on that at all, that’s a complete misstatement of the contract:
“It is evident you have consistently refused to do this, even when specifically requested to do so by the Area Management Team. The contract also states that either party … may terminate it with three months notice without a reason being given.”
That’s what we’ve done.
Then:
“I am sure you have carefully considered the idea of your website. I feel you should be aware that the use of the Post Office Limited’s imagery on your website may constitute trademark infringement.”
You say in your witness statement that, despite you having sent the Chairman a full clip of the relevant correspondence with notes about each item within it, to quote your witness statement:
“… predictably, the response of the Post Office was to ignore the content and predictably to fail to investigate the real issues.”
Why, in your view, was that the predictable response of the Post Office?
Alan Bates: It was the way they tried to deal with things, which you experienced through their Area Manager – I mean, it was constantly Post Office was in the right and you were always in the wrong, and it was – it just seemed to be their nature.
Mr Beer: You tell us in your witness statement that this reply was the “usual box ticking exercise written entirely from the Post Office’s perspective”?
Alan Bates: Of course, yeah, that’s what it was.
Mr Beer: The last paragraph concludes:
“The management team has been wholly professional in the management, deliberation and investigation of your issues.”
Had, in fact, the issues that you raised been investigated at all?
Alan Bates: Not that I’m aware of.
Mr Beer: Can we turn to paragraph 52 of your witness statement, please, your Inquiry witness statement, which is page 16.
We asked you a question of what data you believed you needed to access in order to determine the cause of discrepancies in the Horizon generated branch accounts. You say:
“… I required access to all data, even in a read-only format, held on the system in relation to all input by me and my staff which happened at the branch … in respect of verifying information regarding those transactions, or the accounts that they ultimately formed a part of, I could only check transaction logs that were available on Horizon for limited periods of time or use the limited range of information and reports I had access to, and which could be printed from Horizon terminals, comparing them to stock in the branch. I had no real way of checking information held in Horizon that came from Post Office itself, or from its clients such as Camelot or indeed the way in which those had been reconciled with transactions in the branch.”
Then if we go further on, please. Scroll down, please, to 54:
“Whilst the position as stated in the letter [that’s the letter we just read] is that they had reviewed and interrogated and concluded that there was nothing ‘inherently wrong with the Horizon system’, I had seen no evidence of the apparent review and interrogation they had claimed to carry out. I was still without the data which I had been requesting for a number of years. Nor had they discussed their findings with me. I do not believe that there was any investigation or evidence that the purported investigation had taken place.”
Have you seen any evidence to date that the purported investigation, that’s referred to in the letter sent on behalf of the Chairman, had taken place?
Alan Bates: No, I haven’t. I’ve only ever seen claims that it had taken place.
Mr Beer: So far as you know, was the data that you are speaking about in these paragraphs, that you needed access to in order to understand the cause of an apparent shortfall or an over, common to all cases in sub post offices that you later came across, ie that no one could, actually, in the Post Office branch, get access to the data they needed to see what had happened?
Alan Bates: Not that I’m aware of, anyway.
Mr Beer: You, I think, wrote to your MP; is that right?
Alan Bates: Correct.
Mr Beer: Can we look, please, at POL00040368. You tell us in your witness statement that you wrote to your MP about your case – that’s Ms Williams, is that right –
Alan Bates: That’s right.
Mr Beer: – on 27 October 2003, and she in turn raised it with Post Office and with the Minister. She received a reply saying that they had taken a decision to review the case in its entirety. You say that was carried out behind closed doors and didn’t involve any contact with you; is that right?
Alan Bates: That’s correct.
Mr Beer: Then she wrote again to Post Office and your MP, as a result of which Post Office wrote this letter on 19 January 2013. If we look at the second page – sorry, just scroll up to the bottom of the first page. We can see that it’s written by Richard Barker, the then General Manager of the Commercial Network. Go to the top, please. He says to Betty Williams MP:
“I promise to write to you once a comprehensive review had been undertaken of the issues raised by [you]. That review has been completed by a senior manager within Post Office, with considerable experience in the handling of disputes and subsequent appeals.
“The conclusions of that review, which I fully endorse, are that the termination of [your] contract was done with proper investigation, coupled with proper warnings and appropriate offers of additional training and support. No evidence was found which in any way substantiates the various claims being made by Mr Bates.”
Mr Barker goes as far as saying that:
“The decision to terminate [your] contract was not only correct it was the only sensible option. The best way is to consider the matter closed.”
Were you involved in any such comprehensive review?
Alan Bates: No, and that was one of my big objections. No one ever came and spoke to me about it or tried to speak to me about it or tried to understand what the problem had been, as has been said for or as has been recorded; it was carried on behind closed doors.
Mr Beer: So we’ve seen you write to your MP, we’ve seen you write directly to Allan Leighton and the reply, we’ve seen your MP write to Post Office, and we’ve seen this reply trying to ask questions. It’s suggested in some parts of your witness statement that they were being shut down or fobbed off by the Post Office; is that your view?
Alan Bates: That seems to be the way the business works, yeah.
Mr Beer: Can we turn, please, to POL00328099. If we just pan out a little bit, it may be that these five paragraphs on this undated piece of paper are the comprehensive review that has been referred to in the correspondence.
Alan Bates: It may be but I hadn’t seen them until recently.
Mr Beer: No. I just want to look at what the author, Sandy Stephen, says. They say:
“I have reviewed [if we scroll to the top paragraph, please] all the files from the date of Horizon installation until the termination of Bates’ contract and read all the subsequent correspondence. I have summarised the salient points.
“… following Bates’ assertions against the Horizon system, there were clear attempts made by several people to ascertain if there were systems problems. Eventually it was decided to write off the debt and a clear signal was given to Bates that all future losses would be recovered. Significantly, further training and support was given to Bates at that time.”
Is that true?
Alan Bates: Well, it’s true that that’s what it says, yes.
Mr Beer: I meant in reality?
Alan Bates: Yeah, no, I’m afraid it wasn’t that way, no.
Mr Beer: “Later it transpired, and Bates admitted, that he continued to roll over losses.”
Did you have to admit to this or were you, in fact, telling your line managers –
Alan Bates: Sorry –
Mr Beer: – that you were doing –
Alan Bates: – I had already informed them, and I wasn’t hiding the fact at all. They were well aware of what –
Mr Beer: So:
“Later it transpired and [you] admitted that you continued to roll over losses and had done so since the introduction of Horizon. He received a formal letter instructing him to stop the practice [that’s true, we’ve seen that, from Mr Wakley] and make good any losses [that’s also true]. He did not [that’s also true]. Losses continued to be made and rolled over and the Retail Line Manager sought advice from Contracts and Legal Services before terminating the contract.
“From the evidence contained in the files it’s clear that Retail Line conducted themselves correctly and acted in accordance with the rules.”
Then this:
“Leaving aside the anecdotal evidence on file which demonstrates Bates’ unsuitability as a postmaster …”
Was that ever put to you, that you were unsuitable to be a postmaster?
Alan Bates: No, but they’d appointed me in the first instance.
Mr Beer: Are you aware of what anecdotal evidence there might be which demonstrates your unsuitability to be a postmaster?
Alan Bates: If – I mean, I have records of that time, which were statements from the Retail Network Manager or my current Retail Network Manager at that time, which was Mike Wakley, to say how well the office was doing, and well done for all the hard work. I mean, it’s a nonsense.
This was just them flexing their muscle and just deciding they’re right and I was wrong.
Mr Beer: They point out Post Office has the absolute right to terminate a contract with three months’ notice. That’s also one of the true statements in this document:
“It was done in this instance following proper investigation, formal warning, coupled with support and additional training. Yet [you] continued to flaunt and ignore the legitimate instructions from your Retail Line Manager.”
Then we see a sentence that gets cut into the letter that we just read:
“The decision to terminate was not only right, it was the only sensible option”, which is what led me to think that this was the comprehensive review and investigation that had been referred to.
It says that you continued to “flaunt the legitimate instructions of the Retail Line Manager”. Did you “flaunt” his instructions?
Alan Bates: No, I just pointed out what I was doing and the reasons why I was doing it but they’d never respond to me. They’d never discussed the issue about data and data access and liability and holding – and how long that liability lasted for, and all the rest of it. When I went into Post Office, it was sold to me at the time as you were in partnership with the business but you very soon learnt that this was a very one-sided partnership. I mean, basically you do whatever you’re told, was your side of the partnership, and they just didn’t seem to like it if you raised any queries even – no matter how justified they were.
Mr Beer: In relation to this part of the narrative, can we lastly, please, look at POL00004598, page 3, please. Scroll down, please.
This is part of a slew of correspondence, that I’m not going to investigate in detail, over whether you would continue to provide a service within the Post Office as an interim measure and the arrangements that were being made for the Post Office to come into the branch and take away what they say belonged to them. You say:
“At no time did Post Office ever ask me if I would continue providing a service as an interim measure. I would not deny you did make a sort of request to use our premises and our facilities to have someone else come in to provide a service at a time when you had taken away our livelihood, investment and savings but, as you don’t seem to live in the real world, I can tell you that this was just received as an insult.
“It seems your ‘organisation’ will do anything and everything to try to keep the failures of Horizon hidden, regardless of who they have to trample down on the way, such as us or our community.
“I can assure you of my continued and now increased resolve to bring the real facts of what is going on to those who will have no choice but to act, regardless of whether it takes years.”
In relation to the penultimate paragraph there, that the Post Office would do anything and everything to try to keep the failures of Horizon hidden, why did you think that they were trying to keep the failures of Horizon hidden?
Alan Bates: I think a number of reasons. First off, I think their field personnel didn’t understand it to any great depth and they just seemed to follow the corporate mantra that Horizon is robust, and that’s it, and everyone else is wrong. They didn’t seem to want to engage in useful discussions about how to try to improve things. Any that they did make, any approaches they made, were very much a surface. It was just for show, rather than to change things in many meaningful way. It was a variety of things at that time.
Mr Beer: Was what you wrote in that paragraph based on your own experience or were you drawing from wider experiences of others, then?
Alan Bates: Well, first off, it – I had some experience of those types of systems, and it was obvious it was extremely poorly designed, and it didn’t really do the job it was meant to and there were a huge amount of problems. I kept on hearing problems, little problems, from all sorts of people. Other subpostmasters, because I used to go to regional Federation meetings as well, and you did sit and chat and everyone had a moan and a whinge about it, and you heard of stories where people were literally taking their computers and the whole systems and leaving them on the pavement outside and telling Post Office to come and collect it. Those were the sort of stories that were running around at the time in there.
But I think it was the lack of real engagement in all of this to try to resolve the problems, address the problems, and resolve them, which made me think that they’d just, you know, they’d just put up a stone wall on the whole thing.
Mr Beer: Your last paragraph might be considered to be prophetic –
Alan Bates: Yeah. Yeah –
Mr Beer: – I don’t suppose when you wrote it, you would end up 20 years later sitting here answering my questions.
Alan Bates: No.
Mr Beer: In the clip of materials that identified or led to the Sandy Stephen comprehensive review that we saw, the five paragraphs on the one page, in that clip of material is a note from Mike Wakley, your Retail Line Manager, contributing to that document and he said that:
“At this time Alan believes his actions are now a matter of principle.”
Is that how you felt?
Alan Bates: It was because it goes back to an earlier letter that they could hold me liable for any amount in there. That’s what I – that’s what they wanted me to agree to and that was wrong.
Mr Beer: That can come down. Thank you.
I think one of the first things you did after termination of your contract was to set up the website, the www.postofficevictims.org.uk.
Alan Bates: Yes, I did and I also wrote to the local newspaper to explain to the local community what had gone on and, fortunately, the local paper printed my letter in full to explain what had happened with Post Office. I also had large-scale posters blown up of that letter which were attached to the front of the door of our premises and remained there for quite a time.
Mr Beer: Postofficevictims.org.uk was the nascent group that subsequently became the JFSA; is that right?
Alan Bates: It – I suppose it was like a seed. I wouldn’t say organisation. It was what I set up initially there to try and attract and draw other cases, and also as a warning to others about getting involved with Post Office: this is the type of organisation you are planning to get involved with. And there were other things I did, as well, around that time to try to raise the profile of the issue.
Mr Beer: Can we turn to page 28 of your witness statement, please, paragraph 92. If we could zoom in on that, please, you say:
“My main objective for creating the JFSA was to expose the truth. I wanted to create a body of former and current subpostmasters and branch assistants which could provide a community for all those going through the same experiences with the Post Office. I knew that I was not alone in my dealings with the Post Office and the JFSA was set up in order to ensure that other people in the same situation as myself knew that they too were not on their own. As mentioned above, there was a complete lack of support from Post Office and I believe those in similar circumstances required support.”
I have read elsewhere that one of the reasons that you set up the group was that you and others had felt that you had been abandoned by every other organisation so that you had to group together; is that right?
Alan Bates: Yeah, and I think that’s true what you’re saying there: it was myself and others as well. It wasn’t – I know that – I seemed to take the lead in it but there were a lot of others – certainly in the early days, there was a great deal of support from –
Mr Beer: Which other organisations had abandoned you and others?
Alan Bates: Well, certainly the Federation. The Federation was absolutely useless. I mean, they were just another department of Post Office, as I believe it still is these days as well. But they –
Mr Beer: Why do you think they’re just another department of the Post Office?
Alan Bates: Well, I – at one time, I believe they had an office in Post Office headquarters but, ignoring that, it depends which bit we’re going – if you go right back to the early days, the 2002s, 2003s, and when I was going to the Federation meetings, I know I tended attended one meeting where a subpostmaster at the back of the meeting group, he started saying, “I’ve just had my post office taken off me and I’d had problems with Horizon”, and all the rest and the Federation – the Federation Exec people who were there escorted him out of the back of the place. They took him away, out of that meeting.
I know perfectly well, when my contract was terminated, I went to a Federation meeting to try – well, a local branch one. I went to a Federation meeting where I tried to speak on behalf of that, and there was one of the National Executive Federation members at that meeting and he stopped – tried to stop me speaking. He refused to say this – I should be allowed to talk about such things at the meeting and, if it hadn’t been for the local Chairman, who was Noel Thomas, at that time, if it hadn’t been for him, talking and moving this chap out of the way, I’d never have been able to get over what had happened to me and explain to the others in there.
So there was an awful lot of pressure from the Federation to support Post Office. In fact, there is – I don’t know if you are going to show it, there is correspondence from the Federation where they actually support Post Office’s position in terminating my contract. I don’t know whether you’re going to cover that.
Mr Beer: Slightly out of order but I think I know what you’re talking about.
Alan Bates: Sorry, you asked me about the Federation.
Mr Beer: I’m the one that’s supposed to bowl the fast balls!
I think, if I can cover drive it back, it’s POL00215384.
Sir Wyn Williams: If you’re right, that’s a good slip catch!
Mr Beer: Is that the document you’re talking about, a letter to you from Colin Baker the General Secretary of the NFSP?
Alan Bates: Yeah, I think that’s the one, yeah.
Mr Beer: You had written a couple of letters to him, I’m not going to show now –
Alan Bates: No.
Mr Beer: – of December 2003 and January 2004 and he notes that Betty Williams has written to Allan Leighton. We’ve seen that. He says:
“I can go no higher within the Royal Mail Group than Allan Leighton. I am sure that your Member of Parliament will have had as much if not more success than I would. Hopefully you will have more information from that route.”
Then the last paragraph, I think, is the one you’re referring to:
“We are not in a position to provide information regarding other subpostmasters’ dealings with Post Office Network. We are aware there are some disputes from around the time that offices migrated from the manual system to the Horizon system but we are now of the view that Horizon works well and there are no real problems with post offices which are operated by the Horizon system.”
Was that essentially the NFSP position as communicated to you: Horizon works well, there are no problems in post offices with it?
Alan Bates: Yeah, and it was very much – I mean, the Federation always seemed to try to manage any of the problems around Horizon, I can recall a conference, Federation conference, main conference, I think it was in 2002, around there, in – it was in Llandudno, which is why went to it, and there are a whole host of people raising queries, delegates raising queries about Horizon during conference, and it got to such a state that they couldn’t move on with conference and conference decided to set up a separate committee to look into a Horizon issues, and for members to report to them, and they would then discuss them with Post Office.
Mr Beer: To what extent has the NFSP assisted you in establishing the facts in your case?
Alan Bates: None.
Mr Beer: To what extent has the NFSP assisted you in seeking redress in your case?
Alan Bates: None.
Mr Beer: To your knowledge, what role did the NFSP play in assisting other subpostmasters when it was alleged against the subpostmaster that they had a shortfall?
Alan Bates: I have not heard of one instance where they have successfully done anything of that nature.
Mr Beer: I think you tell us that you’ve been informed that the Post Office would often only allow a representative of the NFSP or a friend to sit in on interviews where suspension or termination was contemplated?
Alan Bates: That’s correct.
Mr Beer: You tell us in your statement that the NFSP nearly always agreed with the Post Office and said sometimes to the subpostmaster “Come on, own up, tell them what you did with the money”?
Alan Bates: Yeah.
Mr Beer: Are these accounts that other subpostmasters have given to you?
Alan Bates: Yes, they are.
Mr Beer: To your knowledge, has the NFSP ever once helped a subpostmaster in any court case in which the operation of the Horizon system or the integrity of the data which it produces has been questioned?
Alan Bates: No.
Mr Beer: To what extent did the NFSP assist in the Group Litigation?
Alan Bates: None at all.
Mr Beer: To what extent has the NFSP assisted others following the Group Litigation in obtaining redress?
Alan Bates: I don’t know.
Mr Beer: Thank you. If we can go back to where we were in the account. That can come down from the screen. Thank you. You’d set up the JFSA and you tell us that, from the late 2000s onwards, so from about 2009 onwards, you have spent an estimated 30 to 40 hours a week campaigning in relation to Post Office and Horizon; is that right?
Alan Bates: Easily, yes.
Mr Beer: Can we look, please, at page 27 of your witness statement, and paragraph 87 at the top. You say:
“The challenges were faced at every step of the way since the Post Office would obstruct me. The gravity and the enormity of the problem was not recognised by others in power, including Government, and it became clear that the only way to achieve progress was through a formal legal route, which has its own challenges, including obtaining the necessary funding for this route.”
You say there that “challenges were faced at every step of the way, since the Post Office would obstruct me”; what had you got in mind when you were saying that?
Alan Bates: Well, disclosure is a good one. They – I mean, we went through – before we got to the court case, we went through a whole host of schemes and they always used to say, “Yes, we’ll be supportive, yes, we’ll try and” – you know, with MPs and all the rest of it – “Yes, we’ll get on board with it, yes, we’re looking for the truth”, and all the rest of it, but all they did is cause problems. They were not forthcoming with the details in there. Certainly disclosure is a very good example of that.
I mean, cases used to take months and months to progress. I am thinking of the initial Mediation Scheme, for example, and it – you just felt you – though they were there, you were still banging your head against a brick wall to try to get anything out of them, because they were determined to protect the brand at any cost and they didn’t want anything coming out or being disclosed that might cause damage to Post Office.
Mr Beer: You ceased work as a subpostmaster in November 2003.
Alan Bates: Yeah.
Mr Beer: Yes?
Alan Bates: Yes.
Mr Beer: I think you’ve not returned to other work since then because, instead, you’ve dedicated to campaigning for accountability, justice and redress; is that right?
Alan Bates: Yeah, I mean, I think the key issue has always been to expose the truth, right from the outset, because the other thing sort of always felt – they followed on. Once you know the truth about issues, the rest will hopefully follow on afterwards.
I mean, I didn’t set out to spend 20 years doing this. I hadn’t expected to be doing this so much by myself, but it got more and more complex and it was very – it was harder and harder to share out and work as a bigger group to take things forward. So, yeah, I did finish up sort of leading, in a way, in there but, obviously, going back to the others when there was an opportunity for their endorsement.
It was encouraging along the way, one of the things we did do is bring people together and a lot of people – it was a bit like – I don’t mean this in a derogatory way but it’s a bit like stray lambs. People were lost out there. They were the only ones, they were wandering around wondering, you know, what have I done wrong? They’re suffering so badly. But once you manage to bring them together to meet others in a similar situation, it had enormous effect on their lives.
Mr Beer: You spent two decades undertaking this work, presumably thousands of hours?
Alan Bates: Yes.
Mr Beer: Why, in your view, has that been necessary?
Alan Bates: Because the further down the road you went with it, the more you realised you couldn’t let it go.
Mr Beer: I think you at one stage attempted the strategy of speaking to Government about this?
Alan Bates: Yeah, yeah.
Mr Beer: Can we turn, please, to correspondence with Ed Davey MP in May 2010. That can come down from the screen. Thank you.
So to put this into context, to orientate ourselves, May 2010, JFSA was well established now.
Alan Bates: Yeah, yes.
Mr Beer: The Computer Weekly article had been written by Rebecca Thomson on the 11 May 2009?
Alan Bates: Mm-hm, yes.
Mr Beer: And I think you were indeed interviewed by her as part of her work?
Alan Bates: Yes, that’s correct.
Mr Beer: Her work drew together the facts about a number of cases?
Alan Bates: Yes.
Mr Beer: Can we look then at the letter you wrote to Ed Davey MP on the 20 May 2010, UKGI00016119. As we can see from the way you’ve addressed the letter at the top, Minister for Postal Affairs within the Department of Business, Innovation and Skills sometimes called BIS. So I think to put his position in context there, he was the then Minister for Postal Affairs, the new government having been formed 14 days earlier on 6 May 2010 – general election that year was 6 May, so he’s 14 days in.
Can we read the letter together. You say:
“I am writing to you with regard to your position as Minister on behalf of JFSA. We are an independent group of ex and serving subpostmasters who have suffered at the hands of the Post Office and their Horizon system ever since it was first installed. Our website outlines how we came about and our aims, as well as offering sample cases that were provided by some of the group.
“Currently the group numbers close to 100, although we continue to be joined by others who have learnt of JFSA and have found that there is nowhere else to turn for help.
“In every instance, the Post Office acts as judge, jury and executioner and the individual is deserted by their reputed representative organisation, the National Federation of SubPostmasters. Invariably, these cases all stem from the flaws of the Horizon system that the Post Office introduced and which they refused to admit has ever suffered from a single problem.
“The evidence is there to be found by anyone in a position of being able to unlock doors, instead of placing barriers in the way of those pursuing the information. Our organisation has access to a number of specialists who could provide the questions and analyse the resulting data if required, though an independent external investigation instigated at ministerial level would be most appropriate and will, without doubt, easily find evidence of the error ridden system.
“I am sure you will appreciate that there is not a single computer system that does not, from time to time, suffer from errors, especially when the size and level of complexity of the programs associated with the Horizon system. The Post Office blindly state that there are not, nor have wherever been, any system errors, so subsequently anything wrong is entirely the responsibility of the subpostmaster, as that is what they have agreed to when signing their contract. This is a contract that was produced in 1994 and does not address nor identify new technology but they are still using it to intimidate and prosecute subpostmasters.”
Over the page:
“The weight of evidence we have been collating over the years continues to grow and gain in standing. It is only the flat refusal of the Post Office to allow experts to examine the system which is holding back this major scandal from breaking. But with the growing numbers in JFSA and the support we are now finding from the IT community and the media, it is just a matter of time until the real truth about the Post Office and Horizon is exposed.
“Over the years, I have personally submitted written details of all of this to the Select Committee of the DTI, and then on two other occasions to that of BERR and, put simply, the information has either been buried or disappeared. Others of JFSA have followed the route of contacting their MPs who would take the matter up with the Post Office on their behalf. Subsequently, they are stonewalled or ‘handled’ by the Post Office often with off the shelf answers where they only change the name and address.
“I writing to you on behalf of the group, I am asking for a meeting where we can present our case to you. Much has appeared in the press over the last few days that Government is going to change and I only hope that is true. If it is, the abuse of subpostmasters that has been going on under the protection of the previous Government may well come to an end.”
So your letter to Mr Davey MP provides some detail, either in the body of the letter or through cross-referencing to your website as to the issues that subpostmasters were facing and informs Mr Davey that the Post Office’s conduct amounted to a scandal.
Alan Bates: Yes, very much so.
Mr Beer: Can we look at the reply please ABAT00000001:
“Dear Alan Bates,
“Thank you for your letter of 20 May requesting a meeting. Since 2001, when the Royal Mail (which includes Post Office Limited) was set up as a public limited company with the Government as its only shareholder, the Government has adopted an arm’s length relationship with the company so that it has commercial freedom to run its business operations without interference from the shareholder.
“The integrity of the Post Office system is an operational and contractual matter for the Post Office and not government and, whilst I do appreciate your concerns and those of Alliance members, I do not believe that a meeting would serve any useful purpose.”
You tell us in your witness statement that you took offence at the term “arm’s length” to describe the role that the Government played in relation to overseeing and monitoring the Post Office. Why?
Alan Bates: Well, it’s because of the structure, wasn’t it? The Government was the sole shareholder, they were the owners, as such, of all of this, and how can you run or take control or – sorry, take responsibility for a – an organisation without having some interest in there, or trying to be in control? In fact, Government were pumping huge amounts of money into Post Office, year after year. So, you know, they need to be held responsible for it, they need to be addressed, really, about the way that they’ve been going on, and it’s very hard to engage them in it. Not nowadays, they’re a bit more interested these days but, I mean, at that time, to try to get Government to take it on board seriously, it was –
Mr Beer: Before a four-part drama on ITV?
Alan Bates: Well, no – in fairness, yes, the drama was great and did a lot for us but we’ve had enormous cross-party support from many MPs over the years and some of whom I think you’ll see, you know, shortly. But, I mean, you know, the time this letter was written was in 2010, and I think at that time we were involved with a firm called Shoosmiths, a law firm called Shoosmiths, and there had been a number of meetings bringing people together and, in fact, Shoosmiths had been working with the MPs, so we were growing a body, we were growing an interest, and a number of the other MPs were finding their own constituents who’d had problems, subpostmaster problems. So it was starting to become a little more gelled as an organisation, and the number – with a substantial number – and growing number in there.
And it was very much why we felt government should have been involved at that time. I mean, you show me this letter from Ed Davey and I – I don’t know what your script is but I’m more concerned about another letter that came in response from a letter I wrote to Ed Davey, and I’m not sure whether you’re going to go to that.
Mr Beer: Let’s see.
Alan Bates: Let’s see, yes.
Mr Beer: You tell us in your witness statement – I’m not going to turn it up, it’s paragraph 104 – that this response from Mr Davey was disappointing because he had not taken account of anything which you had said in your letter and indeed appeared to be a standard template form of response; is that correct?
Alan Bates: Yes, yeah.
Mr Beer: I think you didn’t keep those feelings to yourself at the time. You, in fact, sent a reply to Mr Davey on 8 July 2010. Can we please look at UKGI00016099. You say:
“I have to say that your response to me dated 31 May [the one we just looked at] regarding the very serious issues I had raised was not only disappointing but I actually found your comments offensive. It seems, that, though there are new politicians in post, the Government hasn’t changed. The letter you sent is little different to the one I received seven years ago from the Minister responsible for post offices at that time and so many more lives have been ruined in the interim because of that same attitude.
“It is not that you cannot get involved or cannot investigate the matter. After all, you do own 100 per cent of the shares and, normally, shareholders are concerned about the morality of the business they own. It’s because you’ve adopted an arm’s length relationship that you have allowed a once great institution to be asset stripped by little more than thugs in suits, and you have enabled them to carry on with impunity regardless of the human misery and suffering they inflict.
“You can listen to your civil servants telling you that these are really an operational matter for the Post Office to deal with. You can even listen to the Post Office telling you Horizon is wonderful, that there’s never ever been a problem, it is inherently robust, and these are just a few malcontents trying to cause trouble, or you can meet with us and hear the real truth behind Horizon and what the Post Office is actually up to.
“Your civil servants in the Post Office will not tell you about Post Office staff harassing sick ex-subpostmasters, demanding written promises of money or they will send the police around. They won’t tell you that the Post Office, watching post offices heading into trouble, fails to provide any help and then waits until the problem shows a loss of £20,000 plus so that the subpostmaster then falls foul of the Proceeds of Crime Act. They won’t tell you that when someone wants to sell their post office and has a suitable buyer, Post Office will turn down the applicant to drive that business into the ground. You won’t hear about subpostmasters endingly requesting audits of their offices and having to wait for up to five years for someone to turn up in offices turning over £5 million a year. Neither will they tell you of the cases where the Post Office have run an audit, closed the Post Office, bankrupting the owner who loses his business, house and family, holds a pending court case over him for 18 months, then drops the charges and walks away. Nor will they tell all about how they are stopping subpostmasters selling on the Post Office side of their business in order to recover the original investment. They won’t even tell you that the Horizon system is designed to entrap subpostmasters so that they can easily finish up in prison, just by trying to open up the day after a trading period balance.
“This is just a taste of some of the practices your company is carrying out in your name day after day. They brandish decision a big legal stick, fail to provide evidence in court and rely on a clause in the 1994 contract about a subpostmaster being liable for any loss from their office, however it occurs. Yet their shoddy Horizon system is the root cause of all of this. Post office themselves lose thousands of to pounds from each of the Crown Offices that they run using Horizon although their staff are not treated as guilty until proven innocent but a subpostmaster is. The whole of this scandal is teetering on the edge of a precipice at this point but it’s still not too late for you to reconsider convening a meeting to discuss this issue involved if you are prepared to keep an open mind.”
It seems that, following your letter, Mr Davey agreed to a meeting?
Alan Bates: Yes. I think so.
Mr Beer: At paragraph 105 of your witness statement, there’s no need to turn it up, you confirm that you attended a meeting with Mr Davey on or about 7 October and you tell us that you don’t, in fact, have a note of the meeting and can’t recall details of the meeting.
The Inquiry is in possession of a briefing document for Mr Davey for the purposes of his attendance at that meeting with you. Can we see whether we can look at that please, UKGI00000062. It’s dated, as you’ll see, 5 October 2010, and the purpose of the document is a rescheduled meeting with you on 7 October to discuss the JFSA’s claims that endemic flaws in the Horizon system have resulted in a number of subpostmasters having their contracts wrongly terminated and, in many cases, prosecuted for false accounting.
If we scroll down, please. It sets out the background to the meeting, recalling the history of your two letters, describing the second as being more confrontational. Then it says, this the fourth line of that paragraph:
“That letter was followed by reports that Channel 4 were planning to run a news item on the JFSA campaign. We then recommended offering a meeting in response to this second request [that’s the letter we’ve just read] ‘for presentational reasons’, against the background of potential publicity playing heavily on Government Minister ‘refusing to meet victims of government owned Post Office Horizon system which has systemic faults resulting in wrongful accusations of theft/false accounting’.”
So this records that the recommendation to Mr Davey was that he should offer to attend a meeting for presentational reasons against the background of potential publicity, ie the Channel 4 News item. When you attended the meeting, can you recall whether Mr Davey appeared to engage with the substance of the issues that you were raising?
Alan Bates: I don’t recall.
Mr Beer: You don’t recall whether he did or not –
Alan Bates: No, I –
Mr Beer: – or you don’t –
Alan Bates: – I don’t recall the detail of the meeting and I’m quite certain that, if there had been something positive that was coming out of it, I’d have remembered that.
Mr Beer: If we scroll on on the briefing note for Mr Davey, it sets out the objectives. He is to:
“… seek to establish at a very early stage whether legal action against Post Office is imminent or planned and it will be prudent to adopt a sub judice approach in the comments you make. [He] should emphasise the issues raised by the JFSA are operational or contractual matters … should make the point about government having an arm’s length relationship; establish whether the JFSA is committed or planning to initiate action against the Post Office; note that it will be for the relevant legal process to decide on the JFSA case; demonstrate you are prepared to hear the JFSA’s side of the story but make it clear you are not in a position to offer substantive comment and avoid committing to setting up an independent or external review of Horizon.”
Do you recall whether Mr Davey responded to the points you made in detail in your letter of 8 July?
Alan Bates: No, I don’t recall, sorry.
Mr Beer: To your mind, was Mr Davey aware at the conclusion of your meeting that a scandal, in your view, had taken place and was in the process of still taking place?
Alan Bates: I don’t recall.
Mr Beer: Did Mr Davey alter the position that he had set out in the letter, that the Government enjoyed an arm’s length relationship with the Post Office in the light of the concerns that you had raised?
Alan Bates: I don’t know.
Mr Beer: What was the outcome of the meeting?
Alan Bates: I can’t think of anything startling that came out of it, otherwise I’d probably recall it but I suppose – this has been like a long journey, you sort of – you finish one thing, you move on to the next – been there, done that, tried that, so let’s just keep going. So I think it was just another step along the way.
Mr Beer: Did you walk away from the meeting with Mr Davey having said that he was going to do anything at all?
Alan Bates: Not that I can recall, which I can recall from other ministers that I’ve met.
Mr Beer: Are you able to remember any positive development arising from the meeting?
Alan Bates: No.
Mr Beer: Thank you. That can come down.
Looking at the way that the Horizon scandals developed, what view do you take of the arm’s-length approach that the Government took in relation to its oversight of the Post Office?
Alan Bates: I think it should have been involved or got involved far earlier on and, in fact – I don’t want to pre-empt where you’re going but there was – I think one of the responses I think I got from Ed Davey’s office at a later time, which – oh no, it might have been a different minister, I’m sorry. I may be jumping the gun then.
It was a response that I’d written to one of the ministers for a meeting but the – and to inform them that full letters of intent had been issued by the lawyers, Shoosmiths, at that time, but the response didn’t come from the Minister; it came from the Shareholder Executive, ie Government. So they were fully aware that legal proceedings were potentially about to begin.
Mr Beer: Throughout your statement, you refer to the responses of Government Ministers across the years – Pat McFadden, Ed Davey, Norman Lamb, Jo Swinson, and others, on being repeatedly informed about the concerns of subpostmasters and Crown Office employees, the formation of the JFSA, and indeed the GLO, in which they say that the Post Office is an arm’s length body, that the matters raised were matters for the Post Office to deal with and that the Post Office was independent of Government.
Alan Bates: Mm. I mean, I do think a lot of the ministers, a lot of them come in for stick in the Inquiry, and all the rest of it, and I’m sure some of it is deserved, but I actually hold the Department and I hold the Civil Service more to blame in a lot of these instances, why things never progressed at the time. Because I’m sure between them and Post Office briefing ministers, they were briefing them in the direction they wanted to brief them in, not that was for the benefit of the group or the individuals in there, because of the positions that they felt they were in and that should be taken at that time. And also knowing that they probably have other organisations hammering away and nagging at them, but they were going to probably wait and see who got the further – who got the furthest. But do think it’s – I do certainly hold the officials far more guilty in all of this than the politicians.
Mr Beer: You tell us, finally before lunch, in paragraph 298 of your witness statement, that around this point, the point being after the settlement of the Group Litigation, the Government abandoned the line that this was all a matter for the Post Office and moved on to the new line that it had been misled by the Post Office. Is that your view?
Alan Bates: Yeah, I don’t think they could deny anything else, could they really?
Mr Beer: Thank you very much, Mr Bates.
Sir, if that’s an appropriate moment, can I ask that – I think it’s 1.05 now. Can we reconvene at 1.55?
Sir Wyn Williams: Yes.
Mr Beer: 1.55, please.
Sir Wyn Williams: 1.55 everyone, yes.
(1.03 pm)
(The Short Adjournment)
(1.54 pm)
Mr Beer: Good afternoon, sir.
Sir Wyn Williams: I think we’re about to start, if we may, please.
Mr Beer: Mr Bates, we left off before lunch by looking at correspondence with Ed Davey. Can I turn to Mr Davey’s successor, Norman Lamb MP, and on 25 February 2012, you wrote to him. Can we look at that letter, please, POL00107331. Thank you.
I think, from public records, that –
Sir Wyn Williams: Just hang on a second.
Mr Beer: I think from public records it’s the case that Mr Lamb had taken over as Minister for Postal Affairs on 3 February 2012, Mr Davey having been promoted to become Secretary of State for Energy and Climate Change, and so you were here writing again shortly after a change in post; is that right?
Alan Bates: Yes, yes.
Mr Beer: If we look at the letter, you say you’re writing on behalf of the JFSA, as you did with the former Minister:
“On that and subsequent occasions I wrote to draw his attention to the plight of subpostmasters at the hand of Post Office Limited [the reference number was given] and it will provide an outline of our concerns.
“During November 2010 I met him at his office …”
I think that was October 2010.
“… to raise many of the issues which have been causing devastation and distress in the subpostmaster community. Following the meeting, I understand he queried a number of points with Post Office Management and he seems to have taken them at their word.”
On what was that based? Can you recall, that following the meeting you understood that Mr Davey had queried a number of points with Post Office Management and he seems to have taken them at their word.
Alan Bates: Well, nothing changed. Nothing changed.
Mr Beer: “I write to you on this occasion to request a meeting to discuss this matter further with you. As you will see from previous correspondence, solicitors are now acting on behalf of a number of victims of Post Office Limited but the law moves slowly and, in the meantime, many more subpostmasters will suffer. Whilst JFSA very much reflects the views of those who have fallen victims to the failures of Post Office Limited’s Horizon system, I want to draw your attention to the enclosed survey, which has just taken place. As you will see, it has been completed by serving subpostmasters, with their anonymity ensured to safeguard them from reprisals. I am sure you will find the results disturbing and in total conflict with the assurances given by Post Office Limited to your predecessor and no doubt yourself, if you were to raise our concerns with them.”
Who conducted the survey?
Alan Bates: Well, I did, really, via the website. I think we only had it up for about a week. It was a very short, sharp survey, just to get some sort of feedback from subpostmasters of what extent things happened before people started to abuse the survey.
Mr Beer: I think, on the subsequent pages, if we just quickly look at them in the interests of time, we look at page 3, you tell us in the second paragraph:
“The survey remained online for eight days.”
Alan Bates: Yes.
Mr Beer: It was a SurveyMonkey led survey. Then, over the page to page 5, some examples. I’m not going to go through all of this:
“Do you have regular balance shortages that you have to put money in to address?”
77 per cent of respondents said yes.
Alan Bates: Yes.
Mr Beer: Going back to page 1 of the letter, please. The last paragraph or penultimate paragraph:
“Previously, we offered to work with your department to assist with uncovering this major scandal and I now extend that offer to you.”
You got a reply to this letter, I believe.
Alan Bates: Yes, yes.
Mr Beer: Can we look at that, UKGI00016112? If we just blow up the main text, from Norman Lamb. I think you’d followed it up in the meantime with a chaser on 20 March, which is why it refers in the first paragraph to letters of 25 February, which is the one we’ve looked at, and 20 March, which we haven’t. He apologises for the delay in replying, and he says:
“As you’re aware from your contacts with my predecessor, Ed Davey, the concerns raised by the JFSA relate to operational and contractual matters for the Post Office and, as the shareholder, Government has an arm’s length relationship with the company and [‘does not’ I think that should say] have any role in its day-to-day operations. I also understand that legal action against Post Office is under way [‘on behalf’, I think that should say] of a number of JFSA members.
“Taking into account that any meeting would take place within this overall context, I would ask you to contact my diary manager, if you would still like to arrange a suitable date.”
Taking the point about an arm’s length relationship meaning that the Government has no role in operational and contractual matters but, nonetheless, offering a meeting.
You, I think, know that you attended the meeting that’s referred to in that paragraph, although you can’t recall the date. You say it was mid-2012. We know from other evidence that it was on 27 June 2012, so you’re exactly right. You tell us in your statement – that letter can come down, thank you – that Mr Lamb appeared to be willing to listen to you.
Alan Bates: Yeah, it’s the first time I thought a minister was actually taking on board the concerns we were raising with him and he did seem to be genuinely concerned about it.
Mr Beer: Did you form the impression at the meeting with Mr Lamb that he understood that a scandal had developed?
Alan Bates: I think – I think he was starting to recognise there was a real problem.
Mr Beer: Did you form any view as to whether or not Mr Lamb was going to continue to rely on the justification that the Government had an arm’s length relationship with the Post Office?
Alan Bates: I don’t think that’s the way his support, if it was support, for our cause, went. I think it probably manifested itself in a different way, but I could be wrong on that.
Mr Beer: It’s fair to point out that this meeting on 27 June 2012 ought to be viewed in the context of some other developments that had taken place in the meantime?
Alan Bates: Yeah.
Mr Beer: If we can just reference those without going into the details, there had been meeting with James Arbuthnot and Oliver Letwin?
Alan Bates: Yeah.
Mr Beer: A small group of MPs had joined and had met with senior Post Office Management and, on 18 June 2012, they had agreed to commission an independent review?
Alan Bates: Yeah.
Mr Beer: Did you know those things at the time of the meeting with Mr Lamb?
Alan Bates: I was aware of what was going on there and I think – I could be wrong, this is my reading of the situation. I would not be surprised at all whether – this is what I’m saying, that Norman Lamb perhaps showed his support somewhat differently, maybe putting a quiet word with Post Office that maybe they should support some sort of MP or whatever investigation. That was my impression. I could be wrong. It’s just that the timings seemed to work quite well. Everything seemed to slot into place there.
Mr Beer: After Norman Lamb was replaced – he was in this office for a short period of time, six months or so –
Alan Bates: Yeah.
Mr Beer: – did you pursue the matter immediately with his successor?
Alan Bates: I don’t recall. I think we were following another route at that time, weren’t we?
Mr Beer: Ie the Second Sight –
Alan Bates: Yeah, that’s right.
Mr Beer: – Review?
Alan Bates: Mm.
Mr Beer: Can we turn, then, to the appointment of Second Sight. We know from your written evidence and the documents that we’ve got how it was that the idea of an independent review came to be conceived and carried into effect and that Second Sight were to be appointed in order to conduct the investigation or the review. How did you first feel when it was suggested that Second Sight be brought in to undertake an investigation or a review?
Alan Bates: We’re talking now of the MP case review.
Mr Beer: Yes.
Alan Bates: Suspicious. We were highly suspicious of it because where they’d been brought in to, if you like, whitewash it on behalf of Post Office, because Post Office brought them forward to ourselves to see how we thought they would get on. But, I mean, as time went on with Second Sight, we had more and more confidence in their independence in it, but initially, we were highly wary of them.
Mr Beer: Was that because they were being paid for –
Alan Bates: Yeah, in a lot of things –
Mr Beer: – by Post Office?
Alan Bates: By Post Office, yeah. And that’s been a concern down the line with all the different schemes, that Post Office has been funding them. I’ve always said, and I continue to say now, throughout the whole of the period with all of this sort of scandal that’s been going on, it’s been about control of the narrative and it’s something that Post Office was incredibly keen to do. They had the money, they had the powers. They wanted to brief the MPs, they wanted to do X, Y and Z, they wanted to sit on the committees of all of these things. They wanted to pay for everything in there.
And it was – it always has been the concern, this controlling the narrative. I mean, I think they lost that at the time we got to the GLO or just after the GLO but, I mean, up until then, they – I think it was their approach to managing the whole of this situation.
Mr Beer: Looking at the work of Second Sight as a whole and, in particular the Post Office’s approach to it, did you form a view on the basis of what the Post Office said and what the Post Office did –
Alan Bates: Well, I –
Mr Beer: – as to whether the Post Office wanted the investigation to succeed to engage openly and transparently with it and for the truth to emerge?
Alan Bates: I don’t know. They used to say at the meetings that they wanted the truth as well but, I mean, I had a lot of faith in James Arbuthnot, who was like the lead MP supporter for us, and I think, actually, as it quotes in the drama, what other choice did we have at that time as well? And it seemed a way of taking it forward, at least people starting to investigate and look seriously at these cases, and, you know, let’s see how it went, let’s see how we get on, yeah.
Mr Beer: You said, “What other choice did we have”?
Alan Bates: Yeah.
Mr Beer: Why did you feel you had no other choice?
Alan Bates: Well, we had no money, the legal option wasn’t available to us at that time, there seemed a willingness. There seemed, by Post Office, albeit it might have been a reluctant willingness, but there did seem to be a willingness by Post Office at that time, and I mean the MPs were quite positive about it at that time, obviously wary, but they were quite positive. So it did seem a good way forward, at least to start with.
Mr Beer: Can I just briefly explore the extent of the JFSA and your involvement in the appointment of Second Sight. You tell us in your witness statement, it’s paragraph 109, that you and the JFSA were not involved in the appointment of Second Sight, albeit MPs were keen to seek your approval of Second Sight’s appointment. Can we look at a few documents please on that, starting with POL00107174. We can see that, if we scroll down a little bit, just to get the email, an email from Ron Warmington of Second Sight to Susan Crichton, Simon Baker and copying in his colleague, Ian Henderson on 4 July. It’s a report of a meeting that day with MPs and it says in the second paragraph:
“As well as James and Janet …”
That’s James Arbuthnot and Janet Walker; is that right?
Alan Bates: Correct.
Mr Beer: His Chief of Staff?
Alan Bates: Yes.
Mr Beer: There were the following, and all four MPs set out, and a representative of Andrew Garnier. Oliver Letwin sent his apologies. Then scrolling down a bit, about halfway down the page:
“JA [James Arbuthnot] stated that it was a pity that, having cleared it that the JFSA leader Alan Bates could attend, in the end he was unable to do so at short notice.”
So it’s right, is it, that you were invite to attend the meeting with MPs to discuss whether Second Sight should be appointed?
Alan Bates: Yes.
Mr Beer: Then:
“JA clearly wanted to and now wants to get some buy in from Alan Bates and seemed genuinely disappointed that the whole thing couldn’t be buttoned up today. He asked whether Ron Warmington would be prepared to come back for a three-person meeting in James Arbuthnot’s office. Ron Warmington of course offered to do that.”
Then if we go to page 3, please. If we scroll down a little bit, just three paragraphs from the bottom:
“In regard to Alan Bates and the JFSA, whilst James Arbuthnot clearly wants Alan Bates’ buy-in, he doesn’t want to give Alan Bates the impression that he, Alan Bates, has a power of veto over who carries out the review, its scope and how it is to be carried out.
“The meeting concluded with James Arbuthnot confirming on behalf of all present that they are satisfied that Second Sight is a suitable choice and it now remains to get Alan Bates and JFSA concurrence.”
So it seem, would you agree, that the MPs wanted your approval on behalf of the JFSA, in order to, as its put “button up” Second Sight’s appointment.
Alan Bates: Yes.
Mr Beer: Would you agree that it wasn’t therefore necessarily a done deal, the appointment of Second Sight, without your approval?
Alan Bates: No, but I don’t think we were going to be able to hold them sort of hostage over it, as well. I think they’d have gone on without it but, obviously, they preferred to have our blessing.
Mr Beer: I think you therefore attended a meeting with scale Kay Linnell and Second Sight.
Alan Bates: That’s right.
Mr Beer: Can we look at that, please, POL00096817. At page 2, at the foot of it, please, an email from James Arbuthnot to Paula Vennells:
“I have just completed a very good meeting with Ron and Ian from Second Sight and you. You were accompanied by a forensic accountant, Kay Linnell. Both asked some challenging questions of Ron and Ian, which they answered to Mr Bates’ and Ms Linnell’s satisfaction.”
Do you recall attending that meeting and coming away with it having expressed satisfaction that Second Sight were suitable appointees?
Alan Bates: Yeah, I think so, yeah.
Mr Beer: Therefore, you essentially agreed to their appointment?
Alan Bates: Oh, yes.
Mr Beer: So, to that extent, would you accept that you and the JFSA were both, therefore, involved in the appointment of Second Sight?
Alan Bates: To that extent, yes.
Mr Beer: Can we turn to Second Sight’s remit, please. You tell us in paragraph 111 of your statement that you don’t recall being involved in setting Second Sight’s remit or terms of reference. Again, can we look at some documents in relation to that. POL00143976. If we look at the email at the bottom of the page, from Simon Baker to you on 14 November, Mr Baker, the Head of Business Change, saying he works for the Post Office and is involved in supporting the Second Sight investigation:
“Following on from your conversation with Paula Vennells and James Arbuthnot, we have updated your draft immunity agreement so that it addresses both your concerns.
“This is a draft document. Please call me once you have had a chance to review.
“We will also send a copy to Kay Linnell to ensure she is kept in the picture.”
What was the immunity agreement about, please?
Alan Bates: I don’t clearly recall but I know there was – we had concerns about anyone coming forward to any of the schemes there that there might be some sort of – Post Office may well, I don’t know – there might be some sort of retribution by Post Office for anyone that – and what we wanted was some sort of agreement that such an instance wouldn’t happen in there, and I think that hopefully – and I’m pretty certain they did approve something in the end, as well.
Mr Beer: Can we look, please, at the document that was attached to that email, the “Raising concerns with Horizon” document, at POL00143977. The draft document says:
“This is a paper that has been issued by the agreement of Post Office Limited and the Justice for Subpostmasters Alliance.”
Is it right that it was intended that the raising concerns with Horizon document, which was a foundational document for this part of the review, was to be a document that was issued with the agreement of both Post Office and JFSA?
Alan Bates: Well, yeah, we wanted to agree the wording of it and it encompassed all the issues involved. It’s quite an interesting document with some of the comments that are in it, nowadays, as I –
Mr Beer: Can I take you to the things that I found interesting?
Alan Bates: Yeah, sorry.
Mr Beer: Then you add if there are any others. I was looking at page 4 of the document, under the heading “The remit of the Inquiry”?
Alan Bates: Yeah.
Mr Beer: “The remit of the inquiry will be to consider and advise on whether there are any systemic issues and/or concerns with the ‘Horizon’ system, including training and support processes, giving evidence and reasons for the conclusions reached.
“Inquiry is not asked to investigate or comment on general improvements which might be made, it’s not a mediation or arbitration.”
Does the remit described there essentially set out the terms of reference?
Alan Bates: I think it does. I mean, it was early days for us as a group to be involved with this type of scheme, so we’re a little bit led by what was thought in there but we felt it encompassed the main concerns at an early stage, yes.
Mr Beer: Here the remit is said to consider and advise on whether there are systemic issues or concerns with the whole system?
Alan Bates: Yeah.
Mr Beer: Was that JFSA’s aim?
Alan Bates: Well, it was to try to establish the truth about it, yeah.
Mr Beer: Is that how it ended up?
Alan Bates: Well, I think there was a slight disagreement over the word “systemic issues” and how far they extended and all that issue but, yeah, basically that’s where it started from.
Mr Beer: Can we move – sorry, was there anything else in here you wanted to draw attention to?
Alan Bates: What, on that document?
Mr Beer: Yes.
Alan Bates: Well, it was on page 1 of the original document. We’ve gone on to the appendix though, haven’t we? Yeah. Yeah, I think – I’m sorry, I probably shouldn’t do this but it was some of the wording in there. “We all recognise” – sorry, third paragraph:
“We all recognise that Post Office Limited cares about its agents and thousands of subpostmasters. Post Office Limited is committed to the highest standard for corporate openness, brevity and accountability and is happy to sensibly challenge and believe that …”
I can’t see the next bit, sorry. Can I see the next, the full page, please? Thank you.
Yeah, I it was a statement underneath “Post Office Limited would like to take this opportunity to emphasise that these fears are unfounded”, and they’ve been going on about – sorry, it’s the top paragraph or second paragraph down, “where there’s been persistent assertions that the Horizon system, Horizon, may be the source of unresolved shortages in Post Office”, and then they’re trying to dismiss it afterwards.
It’s just that I think it’s quite important for what was known by Post Office at that time, and they were quite happy to put their name to a statement like that. That’s – sorry, that was just the point on there.
Mr Beer: Thank you, Mr Bates. I think you sent a reply to this request for comments on the draft –
Alan Bates: Yeah.
Mr Beer: – to Simon Baker. I’m not going to turn it up but the reference is POL00183679. That was on 20 November 2012 and your only major change was to extend the deadline for concerns to be lodged until 31 March 2013, I think. So I think it’s fair to say that, looking at that exchange of emails and the drafts attached, that you, on behalf of JFSA, had agreed the remit of the initial Second Sight investigation?
Alan Bates: I think we’d agreed with the remit, yes.
Mr Beer: I’m sorry, I missed that?
Alan Bates: I think we agreed with the remit.
Mr Beer: Yes. Thank you. That can come down.
Can we turn to your statement, please, page 35. In paragraph 110, you say something similar to that which you’ve said already today:
“We had real concerns as they [that’s Second Sight] had been chosen by the Post Office. We were concerned as to whether they would undertake a whitewash and were in the Post Office’s pocket in a similar way to that of the NFSP.”
Then paragraph 112:
“I was suspicious of the Post Office at this point and the whole scheme in general, after having engaged in countless communications with the Post Office over a long period of time, all of which were sent with the hope of receiving some support from the Post Office. No one felt as if we could trust the Post Office in all of this.”
I think it’s right that, despite your initial suspicions, your impression of Second Sight improved –
Alan Bates: Yes.
Mr Beer: – once you had had direct engagement with them; is that right?
Alan Bates: Yes.
Mr Beer: We can see that by looking at page 37 of your witness statement, paragraph 118 at the foot of the page.
“My impression of Second Sight improved from initial contact with them. I felt more confident in their ability and can see them operating more independently from the Post Office. My main reservation at the start had been the fact they had been selected by the Post Office. However, I came to see that they were keen on working as an unbiased third party, which improved my confidence in them as an investigating body.”
Was that as a result of your direct engagement with Second Sight?
Alan Bates: Yeah. I did used to spend quite a bit of time, certainly in the early days as well, providing background information to how things had come about, and also contact information about individuals or any queries about those in the group, as well.
Mr Beer: I think you had a concern, nonetheless, that information was not getting back to Paula Vennells on the Post Office side; is that right?
Alan Bates: Yeah, I did, yeah.
Mr Beer: You tell us about that in paragraph 123 of your witness statement on page 39. You say:
“There was a concern that perhaps the information was not getting through to Ms Vennells as I did not think her staff were feeding back to her. I was concerned she was not being told the full story so I wanted to ensure she was being accurately informed of the whole situation. This was perhaps a failure in the way Ms Vennells handled the situation, in that I did not feel confident that she had been receiving accurate updates and was truly invested in the investigation and the subsequent events.”
We are going to explore with other witnesses, including Ms Vennells and including, of course, by reference to recordings of conversations that the Inquiry is in possession of, the extent to which she was not or was not being properly briefed and was challenging of the information that she received. But can we look at a direct communication between the pair of you.
Alan Bates: Yeah.
Mr Beer: It’s POL00098418.
Look at the email at the foot of the page, please. Thank you. So this is 21 May 2013. You copy Kay Linnell in and it’s a direct email to Paula Vennells. You say:
“Hello Paula,
“It has been a while since we met at James Arbuthnot’s office but at that time you did say if I had any concerns I should contact you directly, hence the reason for this email.
“Would it be possible for Kay Linnell and I to meet with you? You will recall that Kay is an independent forensic accountant who, on behalf of JFSA, has been monitoring the work Second Sight has been undertaking.
“The main purpose of the meeting is to ensure that you have been receiving the full details of what has been occurring with the Second Sight investigation. Bearing in mind what has been discovered so far, I, for one, am surprised that we haven’t yet met to discuss the implications. Whilst I appreciate that the majority of the issues began under previous regimes and you have expressed a genuine willingness to address the concerns that JFSA has been raising, these issues are still continuing. I have little doubt that it is now feasible to show that many of the prosecutions that the Post Office have pressed home should never have taken place, and I believe this is a view shared by Kay.”
Then you suggest some dates.
Overall, what was the purpose of making such direct one-to-one contact with Paula Vennells?
Alan Bates: I don’t remember clearly at that particular time for that particular issue but I certainly – we obviously did have concerns at that point about what was going on and what was being reported back but I can’t actually place exactly where it lies in every –
Mr Beer: In the chronology?
Alan Bates: Yeah, yeah.
Mr Beer: Just trying a little harder on some of the details in the email, you say:
“Bearing in mind what’s been discovered so far, I am for one surprised we haven’t yet met to discuss the implications.”
Do you know what that refers to?
Alan Bates: I’m just wondering whether that’s after the interim report had been produced.
Mr Beer: The interim report hasn’t come out yet.
Alan Bates: Hasn’t come out.
Mr Beer: That’s not until 8 July 2013.
Alan Bates: Okay.
Mr Beer: I think this must be early emerging information from Second Sight.
Alan Bates: I wonder if it was a draft of it.
Mr Beer: I don’t think a draft had emerged by 21 May.
Alan Bates: I’m not sure. I’m not sure. I can’t say. Actually, I can’t recall clearly the instances there. Perhaps Kay can.
Mr Beer: Can you remember what happened as a result of this?
Alan Bates: It depends where it drops in to the chronology of the other issues, unfortunately, and I don’t clearly remember off the top of my head, no.
Mr Beer: If we look at the top of the page we can see that Ms Vennells’s assistant asks Alwen, Alwen Lyons, the then Company Secretary –
Alan Bates: Yes.
Mr Beer: – to then draft some words. Can you recall whether this resulted in a meeting?
Alan Bates: We did have a meeting with her and also I’m not sure whether Paula was also there at that meeting but I do remember a meeting in Old Street.
Mr Beer: The reason why I’m asking these questions in particular is that one of the covert recordings that we have is from 22 May 2013, which is the day after you sent an email to Paula Vennells and in that covert recording there is a discussion over the extent to which Paula should or should not be told certain things.
Alan Bates: Certain items right. Sorry. I can’t help you further.
Mr Beer: Okay, if you can’t remember, I’ll move on.
Alan Bates: Yeah.
Mr Beer: To what extent did you understand that, at the time of the Second Sight, the MP cases investigation, as you called it, Fujitsu was involved in the process?
Alan Bates: I wasn’t aware of anything at that time, not as far as the discussions that were going on about the system and all the rest of it. I had no idea of them being involved.
Mr Beer: Did you know whether the Post Office was going back to Fujitsu to check or verify information being given?
Alan Bates: I think I’ve seen a later document more recently, which does seem to suggest that, that Fujitsu were involved and in part of discussions with Post Office on the system.
Mr Beer: Although this will be a question for Second Sight in due course, what was your understanding of the extent to which underlying data and information held by Fujitsu, including ARQ data, for example, contractual relationships between Post Office and Fujitsu policies and correspondence between the two organisations was obtained and analysed as part of Second Sight’s work?
Alan Bates: It depends at what date you’re saying about – I did become aware of it at some point, that – but I think this was probably during the Mediation Scheme itself, when we became aware that – I think it was something like the 700 requests a year could be made by Post Office for ARQ data from Fujitsu, without any other charge being inflicted. But then, after that, I think there was a charge involved. But I think that was during – as I say, during the time of the Mediation Scheme itself.
Mr Beer: Can I fast forward to after the draft of the Second Sight Interim Report was being circulated, and look at POL00115961. This is an email from Paula Vennells internally to a whole group of people within the Post Office. So it’s not something you will have seen at the time. If we look at the first paragraph, she says that she has had two very constructive telephone conversations with you, which confirmed your willingness to:
“… work collaboratively with the Post Office in taking forward our response to the review. In particular he agreed to participate in a new user forum to provide feedback on training and support issues related to Horizon and bring the existing review process to a conclusion.”
Is that right? Can you remember whether you gave such a commitment?
Alan Bates: I did have a – I did have some telephone conversations with Paula and I do remember one quite long one, really. It was about – but it was after the – after the interim report had been published. That’s the one I really do recall, that phone call. The others I’m afraid I don’t recall.
Mr Beer: She says:
“It is worth emphasising that your main issue is not the computer but the human aspect, how, in his view, the Post Office failed to support and help vulnerable and ‘muddle headed’ subpostmasters.”
Was that your view?
Alan Bates: Well, it wasn’t just the computer but it was also the way that – I mean, she’s put it down not the computer, but I’d say it definitely was the computer in there, as well. But it’s also the way that Post Office dealt with these sort of problems and dealt with subpostmasters in an unconstructive way. I mean – and I think that was one of the big problems and that – we’ll probably get to it, but something further on, but I’ll wait for that.
Mr Beer: Can we turn to the next bullet point, please:
“He [that’s you] also raised the idea of setting up a new independent third party that subpostmasters can approach if they after facing issues with Horizon, which cannot be resolved through the normal Post Office processes.”
Alan Bates: Yeah.
Mr Beer: She says that aligns with some of her own thinking and they’re therefore inclined to agree with the idea.
Does that accurately reflect what you were suggesting.
Alan Bates: Yes, it does. I mean, I’ve long felt there should be a totally independent third party that subpostmasters could go to, when they have problems, and that – who could then request Post Office records to check things in there. It’s an alternative scheme in there, so as not to expose subpostmasters to the wrath of Post Office straight off, and one of the reasons I used to suggest something like that was because I was being contacted over the years by a number of subpostmasters who had serious losses – I’m talking about £30,000, £40,000 of losses – which they’d never declared to Post Office because they were so terrified of what was going to happen to them, and they didn’t know what to do or how to move on from that position. And I could see something like a third party that they could have gone to directly that might have been able to assist or direct their concerns might have been useful.
Mr Beer: If we just go lastly over the page, please. The last bullet point:
“In terms of the report itself, we received a full draft from Second Sight yesterday …”
This was Saturday, 6 July, so it would have been Friday, the 5th:
“… and we sent them back a version with tracked changes on a number of sections which we (and Fujitsu) believed our either factually inaccurate or open to misinterpretation.”
Did you know at this time that Fujitsu were working with the Post Office to provide answers to concerns raised during the Second Sight investigation process?
Alan Bates: Not at this time.
Mr Beer: Did you at this stage have an opportunity to meet with Fujitsu Senior Managers and any technical specialists within Fujitsu to discuss directly your concerns?
Alan Bates: No, it was never an offer made and Post Office always used to take the position that we were contracted to them, to Post Office, and Fujitsu was a third party, if you like, contracted to Post Office. So we weren’t directly contracted to Fujitsu or had control over anything that went on there, unfortunately.
Mr Beer: So the report, the Second Sight Interim Report, is published on 8 July 2013. If we turn up page 41 of your witness statement, please, at paragraph 128, you say:
“I am not sure how many of the group [that’s the JFSA] saw the report or whether it was discussed. Overall, the interim report was positive in general, as it showed that there were issues occurring but we had a real concern over the interim report stating there were no systemic flaws.”
What was your concern about the report stating that there were no systemic flaws?
Alan Bates: Well, I actually thought there were systemic flaws in there and there were systemic flaws in the way that Post Office operated and the way it dealt with people, and all the rest of it, perhaps not being interpreted in the way that they were with the computer system, even though there were flaws of that nature in there. But I knew perfectly well that, out of a 30-odd page report, that Post Office would jump on one particular line or one particular comment, and that’s what would be appearing in the media and in their press releases, and it was that –
Mr Beer: To what extent did they deploy that line?
Alan Bates: – and they did, and they basically – they kept saying that Second Sight, you know, independent investigators, found that there were no systemic flaws in Horizon. You know, they just kept on picking that one line out of a 30-odd page report, which identified many other concerns right across the whole of the issue.
Mr Beer: Did it take until the judgments of Mr Justice Fraser for anyone in a decision making role to acknowledge the existence or find the existence of systemic faults and failures in the Horizon system?
Alan Bates: Well, we’re going back now to controlling the narrative and that was the first time Post Office lost control of the narrative, once we got into the High Court. So yes, that’s when the truth started to come out, at that point.
Mr Beer: Had you previously, ie months before then, ie months before the 8 July publication, drawn attention to the problems with using the phrase “systemic flaws”, “systemic failures” or “systemic faults” to Second Sight?
Alan Bates: Yes.
Mr Beer: Can we look, please, to POL00098315. The bottom email, please. Thank you. This is two months before publication time, so 12 May, where you write to Ron Warmington of Second Sight, and there’s a whole heading, “System Errors v Systemic Failures”.
You point out – I’m not going to go through exactly what you say here in the interests of time because we’ve still got a lot of ground to cover but in short order, what was your point?
Alan Bates: Well, one of the points was that I’ve just made to you there, that Post Office would jump on it as being the – no systemic failures with Post Office and their Horizon system, which it says in there. I mean, there were system failures in there but I just – I couldn’t understand why they felt that was so important to put in something of that sort in there, when it was obvious that there were systemic failures in the way Post Office dealt with subpostmasters and the way they processed things and the support they gave. It was a total failure of Post Office throughout all of that and I just found it a bit frustrating and I think, even to this day, Ron will remember this in great detail, and we have a lot of discussions over it at the time. And I think he feels that they got it wrong, the one thing they got wrong in that report was that.
Mr Beer: Thank you. That can come down. Thank you.
The interim report is published on 8 July 2013.
Alan Bates: Yes.
Mr Beer: Did you know at the time that, shortly after the publication of Second Sight’s Interim Report on 8 July that the Post Office was informed that a witness that it had used in a series of prosecutions, Gareth Jenkins, had failed to disclose to the court material which undermined the opinions that he gave, that he had not complied with his duties to the court, that his credibility as an expert witness was fatally undermined, that the Post Office had been in breach of its duties as a prosecutor and that there were a number of convicted subpostmasters to whom disclosure of these facts should have been given but was not given?
Alan Bates: Not at that time.
Mr Beer: When was the first time that you learned that the Post Office had been given that information?
Alan Bates: It was quite late on.
Mr Beer: So, essentially, I’ve summarised the Clarke advice, the first Simon Clarke advice there?
Alan Bates: Yeah. I think it was probably at the time of the appeal court hearings for the overturned convictions. I think that’s when it really started coming to light.
Mr Beer: So 2021?
Alan Bates: Yeah.
Mr Beer: Was anything ever discussed or even hinted at in all of the meetings you held, all of the conversations you were a party to, all of the letters that you wrote, all of the email exchanges that you had, with everyone at the Post Office, from Alice Perkins and Paula Vennells down, about such problems with convictions?
Alan Bates: No.
Mr Beer: Were there convicted subpostmasters within the JFSA at this time?
Alan Bates: Yes.
Mr Beer: I read somewhere that it was about a third of them, that must vary over the course of time?
Alan Bates: It did, it –
Mr Beer: What was the proportion?
Alan Bates: Yeah, by the time we court to the GLO, of the 550, as such, in there, I think about 60 of them – it was about 10 per cent, roughly, had convictions. In fact, that had been the issue that had caused problems with the original lawyers that were supporting us, Shoosmiths, back in 2010. It’s because they couldn’t obtain ATE insurance because we had convictions in the group.
Mr Beer: Just winding forwards a little bit before the break, that cohort of people – I’ve said it was about a third at this time –
Alan Bates: Yes.
Mr Beer: – changed in number by the time you got up to 550 –
Alan Bates: Yes.
Mr Beer: – at the time of the GLO. What approach did the Post Office take in relation to that group of people, the convicted subpostmasters, in terms of whether they could take their claims to the Mediation Scheme or have their claims adjudicated within a mediation?
Alan Bates: They actually agreed that they could go forward into the Mediation Scheme.
Mr Beer: Were such claims adjudicated upon in the mediation?
Alan Bates: I don’t recall specifically on that basis. That’s a whole other discussion.
Mr Beer: One of the consequences, indeed one of the only substantial consequences, of the interim report was the setting up of the Initial Complaint Review and Mediation Scheme –
Alan Bates: Yes.
Mr Beer: – sometimes called the ICRMS or sometimes the Mediation Scheme. Can we look, please, at page 45 of your witness statement, please. At paragraph 133 at the bottom, you say:
“The purpose of the Mediation Scheme was to address subpostmaster complaints and individual cases, so that there could be an exploration into the way they had been treated with a view to finding a solution for the subpostmasters, which was likely to involve compensation. It was also set up to establish what had been the truth behind the circumstances.”
Is that a complete summary, essentially, of your –
Alan Bates: It’s a fair comment, it’s a – yeah.
Mr Beer: If we go over the page, please. You say in 134 that:
“At the outset, we thought that the Mediation Scheme might well achieve the aims it had set out, provided that the Post Office would enter it in good faith. We entered into this process as we didn’t have any viable alternative at this time.”
Then paragraph 137, over the page, please. You say:
“Unfortunately, the financing of the scheme came from the Post Office and so it provided the Secretariat and administrative support which were supposed to be independent. However, we were not aware at the time that Belinda Crowe was also a member of the Post Office’s covert Project Sparrow team as was the Post Office’s General Counsel, as indicated from some minutes [that you refer to].”
At this time, at the setting up of the Mediation Scheme, did you know of the existence of Project Sparrow?
Alan Bates: No.
Mr Beer: Thank you.
If that’s a convenient moment, sir, I wonder whether we could break until 3.05, please?
Sir Wyn Williams: Very well.
(2.47 pm)
(A short break)
(3.04 pm)
Mr Beer: Good afternoon, Mr Bates.
Could we continue with the Mediation Scheme and look, please, at page 50 of your witness statement, at paragraph 146. I’ll just wait for that to come up. It says:
“It was never agreed that the working group would discuss individual cases.”
Just stopping there, can you briefly explain what the working group was, in the context of the Mediation Scheme?
Alan Bates: The Mediation – sorry, the Working Group was a combination of the JFSA and Post Office and we had an independent Chair, Sir Anthony Hooper, and then Second Sight were employed to work for the Working Group to do the investigations and report back to the group accordingly and produce the reports as required.
Mr Beer: Thank you. You say:
“It was never agreed that the Working Group would discuss individual cases and make decisions on whether to mediate, it was down to Second Sight to decide this, then there was the Mediation Scheme which would undertake the process of mediating between the Post Office and the subpostmasters. However, two example cases were discussed prior to Second Sight starting to produce reports but only to agree a format in which case reports were to be produced.”
I just want to explore this issue briefly of who would make decisions on whether to mediate and whether that was down to Second Sight.
You, I think, wrote an email about this to Sir Anthony Hooper. Can we see POL00107151. In fact that’s a letter rather than an email. You can see this is dated 10 November 2014 to Sir Anthony, and you say in the second paragraph:
“JFSA is now of the opinion the scheme has strayed so far from the original purpose for which it was intended that the few applicants who have actually reached a mediation meeting through CEDR …”
Just explain what CEDR was?
Alan Bates: I can’t remember what it stands for now. It was a –
Mr Beer: A professional centre for dispute resolution?
Alan Bates: Dispute, yeah.
Mr Beer: “… have expressed such disappointment within the scheme that at least one applicant has withdrawn.”
Then under numbered paragraph 1 you ask that it is noted:
“As has been stated on many occasions, it is JFSA’s view that it’s not the role of the Working Group to approve which cases go to mediation for the following reasons, which are contained within the main document;
“That each of the applicants received within that they were promised …”
Then you set out some extracts from it.
Alan Bates: Yes.
Mr Beer: Was that your view, that it wasn’t the role of the Working Group to decide or approve which cases should go to mediation?
Alan Bates: Only in specific instances. For example, if not enough information had been supplied by an applicant as whether to fully understand or investigate his case, would it go forward there. Or other – other perhaps – I don’t – variations on that thing. But the main bulk of them should go through on their own, dependent on Second Sight’s recommendation.
Mr Beer: Whilst we’re on it, on page 4 of the letter, please. In the top paragraph there, second line, you say:
“The further the scheme progresses, the more entrenched and defensive Post Office has become, and the original concept of actually seeking the truth has long since been abandoned, replaced by denial and a culture of blaming the applicant time after time. The underlying fact that it was the failure of the Post Office to correct the shortcomings of the Horizon system and its associated issues is ignored by Post Office again and again.”
That’s plainly how you felt at the time. What material or evidence was that view based upon?
Alan Bates: Oh, one of the key ones, I suppose a favourite one of the hearing, is the failure of disclosure. It was holding up cases time and time again, and it was also the amount of time Post Office – sorry, the way the scheme worked, basically, was someone applied to go into the scheme. If it was shown – Post Office quickly looked at their application to ensure that they were a subpostmaster and they had been there during the period they say. At that point, they’d been accepted into the Mediation Scheme, then they would have the option of having an independent expert work on their case, either a forensic accountant or a solicitor, at a set fee. They would produce a report about their – this person’s case. At the same time, Post Office would be providing their own report on that person’s case. Both of these reports would then go to Second Sight, who would investigate and put together and make a recommendation to the Working Group on its findings. Simple as that.
But once these cases were being investigated in theory by Post Office, they were asking for more and more time. There was meant to be a turnaround period of about four to six weeks for them to undertake an investigation, but they were asking for extension after extension to investigate each of these cases and, in some cases, they were going on for six months or seven months, asking for extensions whilst they were investigating. So it just dragged on and on and on and on, and that was one of the big frustrations with all of it. We had very little control of the flow at that point.
Mr Beer: Thank you.
Just on the issue of who made a recommendation and who made a decision on whether a case was suitable for mediation, can we just go back and look at one of the founding documents of the scheme –
Alan Bates: Yeah.
Mr Beer: – at POL00022120. This is an overview of the Complaint Review and Mediation Scheme and is one of the originating documents published by Post Office at the time of the initiation of the scheme.
If we look, please, at page 2, and three paragraphs from the bottom, it says:
“As a result of this investigation, Second Sight will produce a case review summarising its findings, and a recommendation on whether the case is suitable for mediation. A copy of the case review will be provided to you. The Working Group will however take the final decision on any cases that may not be suitable for mediation.”
What would you say to the suggestion that this makes it clear that it was the Working Group that took final decisions on which cases should and should not proceed to mediation?
Alan Bates: No, I think what you’re missing here is a document which is – is it Q&As, or something of that – that went with it, as well, key points. And there’s one of the questions in it asks, “Will my case go to mediation?” And I think the answer to that is it says in the majority of cases they will go to mediation. I think where it takes the final decision on any cases, that’s those controversial cases where there wasn’t enough information at all that had been supplied as part of the application.
Mr Beer: I think maybe you’re referring to page 5 of the document. Are they the FAQs that you’re talking about?
Alan Bates: Yeah, that’s right. FAQs, yeah.
Mr Beer: Is the one that you’re thinking about on page 8: “Will my case definitely be referred to mediation?” Is that the one?
Alan Bates: That’s the one, yeah. It’s the second paragraph down I was trying to clarify.
Mr Beer: That second sentence of the paragraph, the second paragraph, gives us an example: the ability of the Working Group to decide that the case is not one which requires resolution?
Alan Bates: Yeah, if there was in – yeah, exactly.
Mr Beer: Didn’t that give the Working Group the ultimate power of veto?
Alan Bates: In those circumstances. In those circumstances. If there’s insufficient information about a case, we may decide then that it wasn’t worth it going to mediation. But, as it says, in most cases if you provide detailed and accurate information, it’s likely in most instances, and that was where we were relying on Second Sight to –
Mr Beer: I think, in the course of the work of the mediation, you wrote a number of letters to the then Minister, Jo Swinson?
Alan Bates: Mm.
Mr Beer: – about its operation; is that right?
Alan Bates: Yes, I did.
Mr Beer: Can we look at some of those, please. POL00144511. You will see it’s dated 17 April. I’m not going to read the first page. If we can skip to the second page, please. Look at the last paragraph on page 2 and on to page 3:
“There is no doubt at all that the systemic failures identified so far have been brought to Post Office’s attention through their regular meetings with Second Sight, and this alone raises the question as to why Post Office is continuing with their prosecutions of subpostmasters, when it is now so much more obvious that they are standing on very shaky legal ground. As I have mentioned before, the systemic failures are proven facts which are at the root of many of the subpostmaster cases, although from the Second Sight briefing document presented at the Portcullis House meeting, they’re only going to be treated as an adjunct to the issue of individual cases, to the point where only a few of them may be featured in their forthcoming report.”
“It is evident to us that these systemic failures should become the yardstick that the individual cases are measured against, as they are significantly easier for others to comprehend without the requirement of an in-depth knowledge of the finer points of Horizon. The refocusing of the investigation on the systemic failures would not only offer a quicker and far more efficient method of addressing the whole issue, but would minimise the information required from Post Office, which has been the main cause of the slow, and at times no progress, Second Sight has made with the individual cases.”
Did you get any reassurance back from the Minister?
Alan Bates: I don’t recall.
Mr Beer: No, can we –
Alan Bates: Yeah, sorry.
Mr Beer: Can we move on then, please, to POL00145664 and look at page 3, please. Foot of the page. We’re now on 18 July. This is another communication from you to the Minister. You refer to a reply of 11 July where you confirm that further cases can be put forward to review. You say that you recently wrote to MPs, who raised questions about 47 cases that only ever seemed to be commented on, and you say:
“The 47 cases referred to in the report comprise of …”
Then you give a breakdown.
Then if we scroll up the page, please, a bit further, please. Do you see that your email to the Minister’s correspondence address has found its way to the ShEx, the Shareholder Executive within the Department of Business, Innovation and Skills?
This is as the email has been produced to us. We can’t see how it got there. Addressed to Martin Edwards and Susan Crichton and two members of the ShEx. If we can take that off, please.
Mr Whitehead within BIS says:
“Martin, Susan,
“The email letter below from Alan Bates at JFSA to Jo Swinson raises a number of issues which it would be helpful for us to discuss with you before drafting a reply. I think a meeting within the next week or so might be the best way forward, given the range and complexity of some of the issues [involved].”
Did you know, or did you appreciate, at the time, that, notwithstanding what had been said by Government Ministers about operating an arm’s length relationship with the Post Office, there was nonetheless a back-channel of communications between the Government and the Post Office?
Alan Bates: No. I can’t say I was aware of that, no.
Mr Beer: With your correspondence being copied from the Government to the Post Office?
Alan Bates: I could understand them perhaps having some concern, because I was in regular contact with many of the MPs there. But no, I can’t say I was aware of it.
Mr Beer: If we just go to page 1, please. We can see, on this page, emails within the Post Office, starting in the middle of the page, from Alwen Lyons to Mark Davies, Martin Edwards and Susan Crichton, and she says, when discussing what reply to give:
“The problem we have is that he [that’s you] doesn’t know we have seen the letter and we need to be careful that the Minister is not seen to be aligning with us by asking us to help her respond.”
I will read that again:
“The problem that we have is that he [that’s you] doesn’t know that we’ve seen the letter [that’s your letter] and we need to be careful that the Minister is not seen to be aligning with us [the Post Office] by asking us to help her respond.”
So they’re discussing, essentially, how to play it with you without revealing that the Government has sent on your letter to the Post Office, correct?
Alan Bates: Seems to be that way, yeah.
Mr Beer: You say in your witness statement that there were no changes as a result of your letter, the one we’ve just looked at. Did Jo Swinson in fact respond to you?
Alan Bates: I don’t recall. I can’t – no, I don’t recall.
Mr Beer: Can we turn to another letter you wrote to Jo Swinson a year later on 16 April 2014 when she was still the Minister for Postal Affairs, POL00022683. We can see the date and to whom it’s addressed. For some context, by that date, was it right that no Post Office investigation had been completed to a sufficient state for Second Sight to complete its own reports?
Alan Bates: Yeah.
Mr Beer: You set out how the scheme was meant to work, if we just scroll down and keep scrolling. You say:
“The above structure was agreed and published at scheme launch … and the documentation is still available for downloading at …”
Essentially, that’s the documentation that I showed you earlier.
Alan Bates: Yeah.
Mr Beer: “Unfortunately, the reality of where the scheme is actually at is very different.
“As at the date of writing [this is mid-April 2014] during the time the scheme was open for applications, 150 cases were accepted, although it should be noted that, since the scheme has closed, there have been others who would have applied if they’d been aware of its existence.
“Of the 150, the earliest that POL became aware of the names of individuals and the identities of the post offices that were to be involved was [as follows].”
Next bullet point:
“Once the criteria to enter the scheme had been met and the Working Group had approved the initial application, the personalised CQR …”
Can you explain what the CQR was?
Alan Bates: It was the initial report. I can’t –
Mr Beer: “… was sent out to the relevant applicant for completion with the assistance of their PA. So far, the returned, completed CQRs are as follows …”
You set them out over the page.
Then you say, top of the next page:
“Yet to date, POL has not finalised a single case report to the point where it is ready for the Working Group to consider its suitability for being sent to mediation, and realistically that could still be a considerable time off.”
If we scroll down further and keep going, third paragraph, you say:
“Regardless of what it says publicly, POL in practice seems not only to be hardening its corporate defence, but now seems to be prepared to invoke the protection of the public purse as their last line of justification for not righting the wrongs they have inflicted on so many. It appears that whatever POL can block, it does; for some reason [the Post Office] is the only one that doesn’t seem to be able to recognise what everybody else can see so clearly.”
Then you talk about:
“The only way we’re going to resolve this is through the media and the courts.”
So what was your principal concern by the time you were writing this letter?
Alan Bates: I think this is a time when they, Post Office, had changed their General Counsel. I think this was at the point where Chris Aujard had come along. Do correct me if I’m wrong in getting the –
Mr Beer: I think that was September 2013, from memory.
Alan Bates: Yeah, was coming along, and I think, when he turned up, I think he had a very clear remit to get rid of the Mediation Scheme or to change it, or to bin it, or whatever, because he was also a part of this Project Sparrow, which was, as we later to find, monitoring what was going on in that scheme and how it was going ahead.
Now, I had a big discussion with Chris Aujard over the interpretation of the aims and the objectives of the scheme, and that was earlier on in the year, that year, and I remember I had to detail him – to him the whole scheme, how it was meant to work, and I also copied in Sir Anthony Hooper on that correspondence, as well. But basically, it seemed they were trying to twist it, twist it, twist it, the whole time to take away its effectiveness. And it just wasn’t – it didn’t feel wholesome any more. It didn’t feel like we were after the truth any more. It just felt like we were trying to defend Post Office’s position in all of this.
Mr Beer: You tell us in your witness statement, paragraph 145 – no need to turn it up – that, as a result of writing this letter, there was no change as a result; is that right?
Alan Bates: Yeah, that’s correct.
Mr Beer: I think, in fact, you got a letter back from Paula Vennells which criticised you for writing in those terms –
Alan Bates: For writing –
Mr Beer: – to Jo Swinson; is that correct?
Alan Bates: Yeah.
Mr Beer: Let’s have a look at that, please. POL00116501. I think this is a draft but I think it’s in the terms it was sent. No doubt we can chase that down if I’m wrong:
“Your letter of 16 April to the Minister has been passed to me for reply …
“Since the publication of the Second Sight Interim Report, the Post Office has worked collaboratively with JFSA as an organisation …”
Is that true?
Alan Bates: To a very small degree.
Mr Beer: “… and you, as its Chair, to design the Initial Complaint Review and Mediation Scheme. The Scheme documentation was agreed with you and put on your website.”
That is correct, isn’t it?
Alan Bates: Yes.
Mr Beer: “The Post Office has remained true to the aims of the scheme …”
Is that correct?
Alan Bates: To a degree.
Mr Beer: “… committed substantial resource to ensure its success and respected the confidentiality of the Working Group.”
Then there’s about sharing a platform on 24 March:
“Against that background, your action in sending your letter [the letter to the Minister] has come as a shock and disappointment to her. I find two things troubling: the content of your letter would appear to breach the confidentiality of the Working Group and furthermore paints a picture which is inconsistent with the position as I understand it to be.”
Alan Bates: Well, that’s another one of these things where, you know, is she getting the right information from her staff? She never attended these meetings, never ever attended one of the Working Group meetings, to the best of my knowledge.
Mr Beer: Of course, this to be set against the context of the email discussion –
Alan Bates: Oh yeah.
Mr Beer: – that I took you to, which is how do we inform the Minister’s reply to this letter without disclosing –
Alan Bates: That –
Mr Beer: – that we’ve informed the Minister’s reply to this letter, without disclosing that fact?
Alan Bates: Mm.
Mr Beer: The second point you make is the fact you’ve bypassed the structure of the Working Group to raise your concerns:
“The Post Office has displayed a strong commitment to the scheme over a prolonged period of time and have remained committed in principle to making the scheme work but your letter has damaged the trust the Post Office has invested in you, as a member of the Working Group. There are a number of specific points in your letter the Post Office will need to address. I have asked Chris Aujard to prepare a more detailed response. In the meantime, I will need to consider the Post Office’s position in relation to the Scheme over the coming days.”
Did you know that the Post Office was having an internal debate at this time over whether your letter presented a golden opportunity, because of your alleged breach of confidentiality, for the Post Office to back out of the scheme and bring it to a quick close?
Alan Bates: No, I wasn’t aware of that. I mean, I presume this was something that was discussed in Project Sparrow. I don’t know. It may be a question for them. But I mean, my concern has always been the group first, what’s best for the group, and not what’s best for Post Office in all of this. So I was representing the group in these discussions and – with what was going on, and I had to stand up for what right, at the time, for them.
Mr Beer: Can we turn to paragraph 157 of your witness statement, please, which is on page 53. You say in paragraph 157 that:
“[You] believe the Mediation Scheme failed as it was part of the cover up by POL. I expect the Post Office discovered things that they did not like and did not want to come out. There was definitely an element of not wanting to accept fault. I believe the Post Office had no intention whatsoever of getting to a mutually acceptable and fair decision. If anything, it seemed as if the Post Office had been using the Scheme as a fishing expedition to see what evidence subpostmasters actually had about Horizon.”
Was what you say there based on information from subpostmasters?
Alan Bates: No, it was – I suppose it’s the feedback from working on the scheme for that many months, or those years, and knowing the way Post Office operated. I mean, I’d been dealing with them then for many, many years, and I certainly could see the way they operated and what they were up to, and whether they were forthcoming on issues.
Mr Beer: In what circumstances did the Post Office terminate the scheme?
Alan Bates: I got a phone call. I got a phone call just to say, “Oh, we’ve decided to send all the cases to mediation now, so there’s no need for the Working Group to meet”.
Now, interestingly, that was the day before a meeting was due to be held in which we were going to see the draft of the Second Sight part 2 report, which was damning, and I think one of the reasons they did that was to stop that report from coming out.
Mr Beer: What was your view of the decision of the Post Office to terminate the scheme?
Alan Bates: I suppose publicly, I was very dismayed about it. I think privately, I was ecstatic about it, because I’d been thinking of pulling out of that scheme for about 12 months and I’d been sitting in there the whole of that period to get as much information and reports out of them in order for us to move on to the next step of legal action.
Mr Beer: Did you then make a decision that it was necessary to commence legal proceedings?
Alan Bates: We had been looking around for a little while. I think the writing was on the wall, or had been for a number of months, and we’d spoken to a few firms, a few firms. Initial discussions –
Mr Beer: The first claim, turning to the Group Litigation, was issued in April 2016?
Alan Bates: The first claim?
Mr Beer: Yes.
Alan Bates: Yeah, I – well, we eventually found Freeths in September 2015.
Mr Beer: Yes.
Alan Bates: That’s when they came on board and when they really took over.
Mr Beer: One of the first steps was an application by the claimants for a Group Litigation Order?
Alan Bates: That’s correct.
Mr Beer: That was opposed by the Post Office; is that right?
Alan Bates: That’s correct.
Mr Beer: Despite that opposition, the court ordered that the claim should be managed under a Group Litigation Order from 22 March 2017; is that right?
Alan Bates: Yes.
Mr Beer: I think the JFSA made an announcement by press release of the making of the Group Litigation Order, didn’t it?
Alan Bates: I don’t recall it. They probably did.
Mr Beer: Do you remember if there was a time, if people wanted to join in the Group Litigation, a date by which they had to do so, a cut-off date?
Alan Bates: Yes, there was. I mean, with Freeths – and Freeths took quite an active role in this – we had to find the funding and then we had to go out and recruit far more claimants in there, and so then they – a whole batch of PA and advertising was undertaken for a few months in there to bring forward the numbers that were needed to – I think the – I don’t know what they’re called – the schedules or the names that go forward to be attached to the GLO, I think there were about three that were attached to eventually finish up with the 550 that went forward to the –
Mr Beer: Can we briefly look at the release that you made, the press release that the JFSA made. POL00248057.
Go to page 2, towards the bottom, please. This is an email from Melanie Corfield, a name we will become familiar with in these phases, and she is a member of the Post Office’s Communications Team. Just going back to the email, you’ll see she emails Rodric Williams, Andrew Parsons of Bond Dickinson, and others, saying:
“We’ve been alerted by a trade mag to a statement issued by the JFSA.”
Then if we go down the page a little bit, there is the JFSA statement cut into her email. Can you see that?
Alan Bates: Yeah.
Mr Beer: You say –
Alan Bates: That’s right.
Mr Beer: – in the statement:
“JFSA announced today that the Group Litigation Order against the Post Office has now been approved by the President of the Queen’s Bench Division of the High Court, which means that the case will continue through the court as a group action. The Post Office Limited is defending the claim. Over 1,000 subpostmasters from across the UK have now applied to join the action.”
Alan Bates: I think about 1,200 eventually applied but I think by the time they’d sifted through them, we finished up with 550.
Mr Beer: At the second paragraph on the second page there, you can see a quote from you:
“Alan Bates of JFSA said the case is now up and running and we have had over 1,000-plus candidates come forward so far. Subpostmasters have until 26 July to join the action before the cut-off, which prevents new claimants joining the claim thereafter.”
I just want to ask you some questions about the rest of this email chain, even though you weren’t copied into it, because they are relevant to later witnesses. If we scroll up the page, please, you will see that Mel Corfield sends it to, amongst others, Andrew Parsons. Then, in the email, there is a reply from the Head of Portfolio, Legal Risk and Governance, Mark Underwood, saying:
“JFSA have issued a statement that has been picked up by Nick Wallis in Computer Weekly, the statement is included in Mel’s below note. I don’t think there is anything ‘new’ included within it, save for the claim that ‘over 1,000 subpostmasters from across the UK have now applied to join the action’.
“Though concerning they have chosen to use the word ‘applied’ rather than just ‘joined’ or similar.”
Then further up, Jane McLeod – who we’re to hear from – the Group Director of Legal Risk and Governance, says:
“I think the key words are underlined below – they haven’t joined yet!”
Then further up the page, Andrew Parsons says that he is happy with the comms. That’s a draft reply:
“Plus let’s not forget that Alan Bates has a somewhat loose relationship with the truth …”
Just two questions on that, if I may. Firstly, was what you were saying in the press release accurate?
Alan Bates: Yes.
Mr Beer: Secondly, had you ever had any dealings with Mr Parsons?
Alan Bates: Oh, yes.
Mr Beer: Had you had any dealings with Mr Parsons that might properly allow him to form the view that you had a somewhat loose relationship with the truth?
Alan Bates: No. I mean, Andrew Parsons is one of those that used to appear at the Working Group meetings, one of the many lawyers that Post Office used to send to them and, I mean, I don’t know why he’s come up with that. I mean, I might embellish but I don’t lie. I mean, anything to promote it. I suppose I spent too much time around lawyers from now and then, so the wording or phrasing sometimes can seem a little bit that way.
But it was quite right: we’d had over 1,200 people that did apply to join the scheme and, out of that, as I say, 550 were signed up to it.
Mr Beer: I think, in the course of the litigation, there was an application to strike out passages from your witness statement; is that right? You know, the long 41-page witness statement we looked at earlier?
Alan Bates: Yeah.
Mr Beer: The Post Office applied to strike it out and that application was dismissed. The reference is POL00004094. In the course of that judgment, is it right that the judge, and in a previous judgment, delivered warnings about aggressive litigation tactics?
Alan Bates: Yes.
Mr Beer: From your perspective, as a litigant, what, if any, litigation tactics were being used by the Post Office?
Alan Bates: Oh, they were definitely trying to outspend us. I mean, we’d had to raise commercial funding from it. They had a bottomless pocket, as such, being a Government organisation. So anything they could do to spin it out, or anything they could do to recuse the judge, or whatever, they did, and anything to cost us money and try and get us to stop the case. That was obvious.
Mr Beer: You gave evidence in the Common Issues Trial?
Alan Bates: I did.
Mr Beer: The reference is POL00022936. For reference, between pages 44 and 51, the judge deals with your evidence and the findings that he made about your truthfulness and honesty, which I’m not going to display at the moment.
In your witness statement, you provide examples of what you say was the Post Office trying to prevent the truth coming out in the Group Litigation.
Alan Bates: Okay, yeah.
Mr Beer: Can you assist us with what those tactics were?
Alan Bates: Well, obviously, to outspend us. That was the key one throughout all of that, and I think I’ve just sort of listed the main points that they’ve gone through.
Mr Beer: I think it’s right that you have yourself made an application for redress?
Alan Bates: Yes, I have.
Mr Beer: When was the application made?
Alan Bates: Gosh, it was – it must have been – I think it was October last year.
Mr Beer: I’m not going to ask you what any of the figures are or the offers are. When did you first receive an offer?
Alan Bates: I received an offer I think it was 77 working days after my claim had gone in, which – against the target of the Department responding in 40 days. I mean – and the offer that they actually made was only about a sixth of the claim that had gone in there, and it’s – I mean, you know, I’m trying to fight for everyone’s financial redress in this but I’ve also got to fight for my own, as well, and I have no doubt that there’s a bit of vindictiveness coming in from the Department and the Post Office on this.
And the reason I say that is quite simple: they don’t think there’s any worth to any of the work that I’ve done over the years. I mean, my claim has gone in and it’s been treated exactly the same as everyone else’s. They all have these heads of claims in there. There are some heads of claim that apply to some people and not to others: so I was never made a bankrupt, so that doesn’t apply to me; I was never suspended, and so on and so forth. So they do vary. But – and this was without me knowing – the lawyers representing or dealing with my claim, and also the forensic accountants dealing with my claim, put it together – and I was not involved with the figures – and they put it together and they included an amount for the work that I’d done over the 20 years – it’s like another column heading – and that’s been totally negated by them. In other words, Government doesn’t think anything I’ve done is worth anything.
Mr Beer: I think the first offer you received was shortly before your appearance before the Select Committee in January –
Alan Bates: Yeah.
Mr Beer: – and you said publicly that it was derisory?
Alan Bates: It was. Still is.
Mr Beer: Have you received any further offer since then?
Alan Bates: No. A challenge letter went in from my lawyer but – and they were meant to hear last week a response, which they never did receive, and so I still don’t know anything.
Mr Beer: From your perspective, has the process of seeking and obtaining redress been efficient and effective?
Alan Bates: No.
Mr Beer: In your case, what have been the principal problems, aside from the timeliness of the reply with the operation of the scheme of redress?
Alan Bates: The initial problem was disclosure by Post Office. I mean, once again, they just would not come forward with it and, considering they knew the names of all of those people involved in that scheme from the date when the Minister announced the scheme, which was, I think, March ‘22, so there’s no reason they couldn’t have started at that point.
Mr Beer: You mean had a head start?
Alan Bates: A head start on it, yeah, obviously. I thought it was quite fortuitous, the comment made by Sir Wyn first thing this morning about disclosure and that you should just carry on regardless and just ignore it. If it hasn’t come through, just get on with the job, and I think that’s really what should have happened quite a while ago.
Mr Beer: Standing back, what’s your experience of the culture of the Post Office in your dealings with it over the years?
Alan Bates: They’re an atrocious organisation. They need disbanding. It needs removing. It needs building up again from the ground floor and, as I’ve been quoted quite commonly, the whole of the postal service nowadays, it’s beyond – it’s a dead duck. It’s beyond saving and, to be quite fair, it needs to be sold to someone like Horizon – sorry, I said “like Horizon”. Last thing I’d say! Sold to someone like Amazon. It needs a real big injection of money and I only – I think that can only happen coming in from outside. Otherwise, it’s just going to be – it’s going to be a bugbear for the Government for the years to come.
Mr Beer: Mr Bates, thank you very much for answering my many questions today.
Sir, there is only one set of questions from subpostmaster groups, and they’re from Mr Henry and I think will take under ten minutes.
Sir Wyn Williams: Well, I’m just going to move over here so I can see Mr Henry unimpeded by a large pillar.
Questioned by Mr Henry
Mr Henry: Thank you, Mr Bates.
You’ve exposed over many years the Post Office’s suppression of disclosure and covering up the truth over Horizon’s flaws but you have also exposed, have you not, the Government’s reckless indifference to the Post Office’s misconduct over many years; would you agree?
Alan Bates: Yeah, I think that is the case and, I mean, since all this – well, since this year, I suppose, since the drama, we’ve had far more publicity about the issue nationally. I mean, I’ve noticed there’s a general frustration with many other organisations that have that problem with Government, as well. It seems to be a fundamental flaw in the way Government works, that they can’t deal with these types of things easily and sensibly.
Mr Henry: Could I take you to a letter you received, and we’ll deal with it very briefly, but it’s POL00102385. This is a letter you received shortly after 19 March 2015 from the Minister, Jo Swinson. You had written to her on 10 March regarding the Post Office Mediation Scheme. Have you had a chance to look at this letter before coming here today?
Alan Bates: Possibly.
Mr Henry: Would you care to read it to yourself and, when you have done so, could you let me know because I want to take you to just one passage in it. But I want to give you the opportunity to refresh your memory in case there is anything you would like to point out. (Pause)
Alan Bates: Yeah.
Mr Henry: Thank you. You can see, at the conclusion, that the Minister states:
“To conclude, I note that through Second Sight’s Report and the subsequent investigations, there is no evidence of system-wide problems with Horizon. This conclusion has stood firm through nearly two years of investigation.”
When did you become aware that the Post Office had, in fact, written to their insurers nearly two years before that to notify them of issues with Horizon, potential issues with Horizon, which were originally going to be described as financial discrepancies that have occurred in Horizon? When did you become aware that the Post Office had written to their insurers?
Alan Bates: Well, there are two parts to that answer. The first one, I think, is when a lot of people became aware of it, which was during the – it was the overturning of convictions over those cases, the Appeal Courts. I think that’s when it – one of the times it arose. But also, I mean, there’s a similar reference that I’ve seen recently in a document disclosed to me for the hearing, and there was – I’m trying to think of the date. It was July …
Mr Henry: 2013?
Alan Bates: It might be 2013 or – was this the one – this is about the – what do they call it, the officer’s and – D&O insurance?
Mr Henry: Shall I take you to it?
Alan Bates: Yes, that would help.
Mr Henry: If we could go to POL00145716, please. I’m going to ask you to look at some correspondence between Charles Colquhoun – and this is at page internal numbering 4 of 6 – Charles Colquhoun, Susan Crichton and Andrew Parsons, whom, of course, you know.
So if we go to page 4 of 6, Charles Colquhoun, Wednesday, 24 July 2013:
“Been discussing this with Miller, what we should tell JLT re Horizon issues. We have worked up the attached version which hasn’t been sent – any comments?”
Up a little bit:
“Andy, could you take a look at this draft letter to go to our insurance broker re the Horizon issue. I have not looked at it.
“Thanks,
“Susan.”
So that’s Susan Crichton.
Then we have Mr Parsons, 24 July 2013, at 6.51 in the evening:
“Susan,
“The letter does nothing more than put POL’s insurers on notice of the Horizon issues. It’s very bland. My own hesitation is whether this is strictly necessary to do. From a PR perspective it would look bad if this got into the public domain – sign of guilt/concern from the board.
“I’d be happy to have one of our insurance lawyers look over the D&O policy [directors’ and officers’ policy] to see if POL is required to notify the insurers. If not, then we might want to hold fire on this.
“I would recommend tweaking the first paragraph. The current version suggests that there are problems with Horizon – when at present there are no systemic problems to report.
“It should just say that the press have reported on ‘potential issues with Horizon’ rather than ‘financial discrepancies have occurred in Horizon’.”
If we could then go, please, to page 1 of the internal numbering. We can see again, this time on 29 July, a further email from Mr Parsons and a bullet point summary at the top. Six bullet points. Would you be kind enough, Mr Bates, to read those six bullet points to yourself. (Pause)
Alan Bates: Yes.
Mr Henry: Do you see anything in there which you consider to be symptomatic of the Post Office’s habitual problem with disclosure?
Alan Bates: Yeah, certainly the fifth bullet point – oh no, the fourth and the fifth:
“The risk of notification is that it would look bad for POL if it ever became public knowledge that POL had notified its insurers. To reduce this risk, it is recommended that rather than sending a formal written notification, POL speaks to Chartis (renamed AIG) and verbally notifies them so as not to leave a paper trail. In our experience, AIG may be prepared to accept a verbal notification.”
Yes, exactly, yeah.
Mr Henry: So with a view, I suppose, thereafter to plausible deniability over the issue, since there isn’t anything written down?
Alan Bates: No paper trail.
Mr Henry: No paper trail.
Could I now, Mr Bates – and this is my final topic – ask you a few questions about the litigation that bears your name. I realise that Mr Beer has already asked you some, but I want you to consider whether the ‘no holds barred’ approach adopted by the Post Office may not have been motivated not simply to win at all costs to defeat you and your fellow claimants but to kill the prospects of any future criminal appeals that rested on the outcome of your litigation.
Now, have you formed a view – bearing in mind all that has passed, have you formed a view that the conduct of the way in which they approached the Horizon Common Issues and the Horizon Issues Judgment may, in part, have been influenced by the fact that, rather than just being concerned about losing a money claim, they were also concerned that, if they lost that money claim that you had brought against them, they would then be exposed to potential criminal appeals concerning people who had been wrongly prosecuted, some of whom, of course, had been wrongly imprisoned? Have you formed any view about that?
Alan Bates: I’m quite certain that they were very concerned on a whole number of fronts and, certainly, that would have been one of them, and the other one would have been protecting the brand at any cost, I think that was a key one, and protecting the roles of those involved with making the decisions over the years that they took so wrongly.
I think there’s a whole batch of reasons that they went ahead with it, and I heard a comment that was meant to have come from the board at that time that it should be buried at any cost, this court case. I think we saw that, or saw them trying to do that, along the way. So I have no doubt that they were desperate to get rid of it, and for a whole raft of reasons.
Mr Henry: That would include those criminal appeals –
Alan Bates: Oh absolutely.
Mr Henry: – which rested on the outcome?
Alan Bates: Absolutely, and that they had known they were wrong for many, many years.
Mr Henry: Thank you, Mr Bates.
Sir Wyn Williams: I suppose, following Mr Henry’s point – and I think I have got this right – the claims in the GLO on behalf of some of the claimants included claims for malicious prosecution. So, inevitably, the propriety of the prosecutions were in issue, in effect, in the civil proceedings?
Alan Bates: Yeah, yeah.
Sir Wyn Williams: Thank you, Mr Bates.
Mr Beer, anything else?
Mr Beer: No, there’s nothing arising. That’s the end of Mr Bates’ evidence.
Sir Wyn Williams: Well, thank you very much for coming.
The Witness: Thank you.
Sir Wyn Williams: Thank you for your witness statement and thank you for providing answers to a great many number of questions.
I can see hands preparing and I know what’s coming, because it’s inevitable, and I fully understand why they want to applaud you, Mr Bates, but I’m going to ask you not to for this reason, that there will be witnesses who are coming in the next so forth who may not be as attractive to many of you and I would hate to think that I would have to intervene, when they are here, to prevent bad behaviour. So in the interests of people being even-handed, I am asking you to remember that this is not a public meeting but a public inquiry. It’s not a court of law but it’s a judicial process. So please leave it there.
Tomorrow morning, we will resume at 10.00.
As you know, I appeared on the first day of Phase 4 and then disappeared completely in the sense that I conducted the hearings remotely. I fear my circumstances are such that that will still be necessary, ie that I will conduct most of the hearings remotely during this passage. I do intend to appear as often as I can but I wanted to be frank with you: it won’t be very often. I find that I can do this acceptably but I want to be open with you about what’s happening henceforth. All right?
So we will resume tomorrow but I’ll be on a screen, not sitting here.
Mr Beer: Thank you, sir.
(4.01 pm)
(The hearing adjourned until 10.00 am the following day)